SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    ---------

                                    FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended March 31, 2004
                                     --------------

                                       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  333-57212, 333-104539, 333-104546, 333-104547,
                              333-104548


                     ING USA ANNUITY LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

Iowa                                                                  41-0991508
--------------------------------------------------------------------------------
(State or other jurisdiction of                (IRS employer identification no.)
 incorporation or organization)

1475 Dunwoody Drive, West Chester, Pennsylvania                       19380-1478
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip code)

Registrant's telephone number, including area code (610) 425-3400
                                                   --------------

--------------------------------------------------------------------------------
Former name, former address and formal fiscal year, if changed since last report


Indicate by check ___ 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 [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock,  as of the latest  practicable  date: As of May 14, 2004,  250,000
shares of Common Stock, $10 Par Value, are authorized,  issued, and outstanding,
all of which were directly owned by Lion Connecticut Holdings Inc.

NOTE:  WHEREAS ING USA ANNUITY AND LIFE  INSURANCE  COMPANY MEETS THE CONDITIONS
SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10Q, THIS FORM IS BEING
FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION H(2).


                                        1
<PAGE>
                   ING USA Annuity and Life Insurance Company
          (A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
                    Form 10Q for period ended March 31, 2004


                                      INDEX
                                                                           PAGE
PART I.     FINANCIAL INFORMATION  (Unaudited)

Item 1.     Financial Statements:
            Condensed Statements of Income                                   3
            Condensed Balance Sheets                                         4
            Condensed Statements of Changes in Shareholder's Equity          6
            Condensed Statements of Cash Flows                               7
            Notes to Condensed Financial Statements                          8

Item 2.     Management's Narrative Analysis of the Results of
              Operations and Financial Condition                            42

Item 4.     Controls and Procedures                                         54


PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings                                               55

Item 6.     Exhibits and Reports on Form 8-K                                55

Signatures                                                                  56


                                        2
<PAGE>



                   ING USA Annuity and Life Insurance Company
          (A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)


PART I.   FINANCIAL INFORMATION (UNAUDITED)

Item 1.   Financial Statements

                         Condensed Statements of Income
                                   (Unaudited)
                                   (Millions)

<TABLE>
<S>                                                                             <C>              <C>

                                                                                  Three months ended March 31,
                                                                                     2004              2003
                                                                                ---------------  ---------------
Revenue:
  Premiums                                                                        $    5.6          $     7.4
  Fee income                                                                         128.9               80.6
  Net investment income                                                              298.5              279.9
  Net realized capital gains (losses)                                                  0.5               (6.7)
  Other income                                                                         2.2                3.8
                                                                                ---------------  ---------------
Total revenue                                                                        435.7              365.0
                                                                                ---------------  ---------------
Benefits, losses and expenses:
  Benefits:
    Interest credited and other benefits to policyholders                            291.0              300.8
   Underwriting, acquisition, and insurance expenses:
     General expenses                                                                 51.8               52.3
     Commissions                                                                     112.3               53.4
     Policy acquisition costs deferred                                              (122.6)             (84.0)
   Amortization of deferred policy acquisition costs and value
     of business acquired                                                             66.3               60.0
   Other:
     Expense and charges reimbursed under modified
       coinsurance agreements                                                          0.6                0.2
     Interest expense                                                                  3.7                3.3
                                                                                ---------------  ---------------
Total benefits, losses and expenses                                                  403.1              386.0
                                                                                ---------------  ---------------
Income (loss) before income taxes and cumulative effect
  of change in accounting principle                                                   32.6              (21.0)
Income tax expense (benefit)                                                          10.0               (7.5)
                                                                                ---------------  ---------------
Net income (loss) before cumulative effect of change
  in accounting principle                                                             22.6              (13.5)
Cumulative effect of change in accounting principle                                   (2.3)                 -
                                                                                ---------------  ---------------
Net income (loss)                                                                 $   20.3         $    (13.5)
                                                                                ===============  ===============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>

                   ING USA Annuity and Life Insurance Company
          (A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

                            Condensed Balance Sheets
                                   (Unaudited)
                          (Millions, except share data)


<TABLE>
<S>                                                                             <C>                <C>

                                                                                   March 31,       December 31,
                                                                                     2004              2003
                                                                                ---------------  ---------------
Assets
Investments:
   Fixed maturities, available for sale, at fair value (amortized cost of
      $15,695.6 at 2004 and $15,558.3 at 2003)                                    $  16,441.5      $  16,075.5
   Equity securities, at fair value:
     Common stock (cost of $13.5 at 2004 and 2003)                                       13.8             13.7
     Preferred stock (cost of $5.2 at 2004 and $1.5 at 2003)                              5.3              1.7
     Investment in mutual funds (cost of $35.3 at 2004 and $100.5 at 2003)               36.9            104.8
     Mortgage loans on real estate                                                    3,475.6          3,388.7
     Real estate                                                                          4.5              4.5
     Policy loans                                                                       173.4            177.1
     Short-term investments                                                              10.0              0.3
     Other investments                                                                   83.8             56.0
   Securities pledged to creditors (amortized cost of
     $357.8 at 2004 and $22.2 at 2003)                                                  374.6             22.3
                                                                                ---------------  ---------------
Total investments                                                                    20,619.4         19,844.6
Cash and cash equivalents                                                               168.1             65.1
Short-term investments under securities loan agreement                                  396.7             22.9
Accrued investment income                                                               196.3            185.7
Reinsurance recoverable                                                                  20.8             15.4
Receivable for securities sold                                                          288.2             11.7
Deferred policy acquisition costs                                                     1,356.4          1,826.7
Value of business acquired                                                               90.8            111.5
Sales inducements to Contractholders                                                    467.3                -
Due from affiliates                                                                     367.5            117.7
Deferred income tax asset                                                                   -             28.6
Other assets                                                                             21.8             20.1
Assets held in separate accounts                                                     19,714.9         18,220.1
                                                                                ---------------  ---------------
Total assets                                                                      $  43,708.2      $  40,470.1
                                                                                ===============  ===============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>

                   ING USA Annuity and Life Insurance Company
          (A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

                            Condensed Balance Sheets
                                   (Unaudited)
                          (Millions, except share data)


<TABLE>
<S>                                                                             <C>              <C>

                                                                                   March 31,       December 31,
                                                                                     2004              2003
                                                                                ---------------  ---------------
Liabilities and Shareholder's Equity
Policy liabilities and accruals:
  Future policy benefits and claims reserves                                      $  19,461.0      $  18,781.1
Notes to affiliates                                                                      35.0             35.0
Due to affiliates                                                                        56.1             60.7
Payables for securities purchased                                                       289.4                -
Borrowed money                                                                        1,206.0            607.1
Current income taxes                                                                     14.4             19.4
Deferred income taxes                                                                    32.2                -
Other liabilities                                                                       229.0            209.5
Liabilities related to separate accounts                                             19,714.9         18,220.1
                                                                                ---------------  ---------------
Total liabilities                                                                    41,038.0         37,932.9
                                                                                ---------------  ---------------
Shareholder's equity
   Common stock (250,000 shares authorized, issued and outstanding;
     $10.00 per share value)                                                              2.5              2.5
   Additional paid-in capital                                                         3,812.7          3,812.7
   Accumulated other comprehensive income                                               302.7            190.0
   Retained deficit                                                                  (1,447.7)        (1,468.0)
                                                                                ---------------  ---------------
Total shareholder's equity                                                            2,670.2          2,537.2
                                                                                ---------------  ---------------
Total liabilities and shareholder's equity                                        $  43,708.2      $  40,470.1
                                                                                ===============  ===============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        5
<PAGE>

                   ING USA Annuity and Life Insurance Company,
          (A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

             Condensed Statements of Changes in Shareholder's Equity
                                   (Unaudited)
                                   (Millions)


<TABLE>
<S>                                      <C>            <C>             <C>             <C>             <C>

                                                                             Accumulated
                                                             Additional         Other                           Total
                                               Common         Paid-In       Comprehensive      Retained      Shareholder's
                                                Stock         Capital          Income          Deficit          Equity
                                            -------------- --------------- --------------- --------------- ----------------

Balance at December 31, 2002                  $     2.5      $   3,724.0     $      135.1    $(1,512.9)      $    2,348.7
  Contribution of capital                             -             88.7                -            -               88.7
   Comprehensive loss:
     Net loss                                         -                -                -        (13.5)             (13.5)
     Other comprehensive loss net of tax:
         Unrealized loss on securities
            ($154.5 pretax)                           -                -           (100.4)           -             (100.4)
                                                                                                           ----------------
   Comprehensive loss                                                                                              (113.9)
                                            -------------- --------------- --------------- --------------- ----------------
Balance at March 31, 2003                     $      2.5     $   3,812.7     $      34.7     $ (1,526.4)     $    2,323.5
                                            ============== =============== =============== =============== ================

                                              $      2.5     $   3,812.7     $     190.0     $ (1,468.0)     $    2,537.2
Balance at December 31, 2003
   Comprehensive income:
     Net income                                        -               -               -           20.3             20.3
     Other comprehensive income net of tax:
         Unrealized gain on securities
           ($173.4 pretax)                             -               -           112.7              -            112.7
                                                                                                           ----------------
   Comprehensive income                                                                                            133.0
                                            -------------- --------------- --------------- --------------- ----------------
Balance at March 31, 2004                     $      2.5     $   3,812.7     $     302.7     $ (1,447.7)     $   2,670.2
                                            ============== =============== =============== =============== ================

</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        6
<PAGE>

                   ING USA Annuity and Life Insurance Company
          (A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

                       Condensed Statements of Cash Flows
                                   (Unaudited)
                                   (Millions)

<TABLE>
<S>                                                                             <C>              <C>

                                                                                  Three months ended March 31,
                                                                                     2004              2003
                                                                                ---------------  ---------------
Net cash provided by operating activities                                         $     950.2      $     887.6

Cash Flows from Investing Activities:
   Proceeds from the sale, maturity, or repayment of:
     Fixed maturities available for sale                                              4,919.8          5,332.7
     Equity securities                                                                   69.0                -
     Mortgage loans on real estate                                                       67.2            128.2
   Acquisition of investments:
     Fixed maturities available for sale                                             (5,381.5)        (6,387.1)
     Equity securities                                                                   (3.8)               -
     Mortgage loans on real estate                                                     (154.1)           (88.9)
     Short-term and other investments                                                  (419.5)          (654.8)
   (Increase) decrease in policy loans                                                    3.7              2.5
   Proceeds from sale of real estate                                                        -              1.8
   Purchase of property and equipment                                                    (0.4)               -
   Other invested assets                                                                    -            (28.1)
                                                                                ---------------  ---------------
Net cash used in investing activities                                                  (899.6)        (1,693.7)
                                                                                ---------------  ---------------

Cash Flows from Financing Activities:
   Deposits for investment contracts                                                    646.7            419.4
   Maturities and withdrawals from insurance and investment contracts                  (475.4)          (328.2)
   Cash received from reinsurance recapture                                                 -            134.4
   Transfers from (to) separate accounts                                               (118.9)          (254.2)
   Borrowed money                                                                           -            698.9
   Contribution of capital from parent                                                      -             88.7
                                                                                ---------------  ---------------
Net cash provided by financing activities                                                52.4            759.0
                                                                                ---------------  ---------------
Net increase (decrease) in cash and cash equivalents                                    103.0            (47.1)
Cash and cash equivalents, beginning of period                                           65.1            199.1
                                                                                ---------------  ---------------
Cash and cash equivalents, end of period                                          $     168.1            152.0
                                                                                ===============  ===============

Supplemental cash flow information:
   Income taxes (received) paid, net                                              $       5.0             (2.4)
                                                                                ===============  ===============
   Interest paid                                                                  $       2.0      $       2.6
                                                                                ===============  ===============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        7
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

1.   Significant Accounting Policies

     Basis of Presentation

     ING USA Annuity and Life Insurance Company ("ING USA" or the "Company"),  a
     wholly-owned  subsidiary  of Lion  Connecticut  Holdings  Inc.  ("Lion"  or
     "Parent"),  is a stock life insurance  company  organized under the laws of
     the State of Iowa.  ING USA was originally  incorporated  under the laws of
     the State of  Minnesota  on January 2, 1973,  in the name of St.  Paul Life
     Insurance Company.  On December 21, 1993, the Company  redomesticated  from
     Minnesota to Delaware.

     On January 1, 2004,  the Company  redomesticated  from Delaware to Iowa. In
     addition, on January 1, 2004 (the "merger date"),  Equitable Life Insurance
     Company of Iowa ("Equitable  Life"), USG Annuity & Life Company ("USG") and
     United Life & Annuity Insurance  Company ("ULA") (the "Merger  Companies"),
     merged  with and into  Golden  American  Life  Insurance  Company  ("Golden
     American").  Immediately after the merger, Golden American changed its name
     to ING USA Annuity and Life Insurance  Company.  As of the merger date, the
     Merger  Companies  ceased to exist and were merged into ING USA. Lion is an
     indirect,  wholly-owned  subsidiary  of ING Groep  N.V.  ("ING"),  a global
     financial  services  holding company based in The  Netherlands.  ING USA is
     authorized to do business in the District of Columbia and all states except
     New York. ING USA is licensed as a life insurance company under the laws of
     the State of Delaware  until  December  31, 2003 and Iowa since  January 1,
     2004.

     Prior  to the  merger  date,  ING  USA  was a  wholly-owned  subsidiary  of
     Equitable Life from December 30, 2001 through December 31, 2003.  Formerly,
     from  October  24,  1997,  until  December  30,  2001,  Equitable  of  Iowa
     Companies,  Inc. ("EIC" or "Former Holding Company") directly owned 100% of
     Golden American's stock.

     Statement   of   Financial   Accounting   Standards   No.  141,   "Business
     Combinations" ("FAS 141"), excludes transfers of net assets or exchanges of
     shares  between  entities  under  common  control,  and notes that  certain
     provisions  under  Accounting  Principles  Board Opinion No. 16,  "Business
     Combinations"   ("APB  16"),   provide  a  source  of  guidance   for  such
     transactions.  In  accordance  with APB 16,  financial  information  of the
     combined  entity is presented as if the entities had been  combined for the
     full year,  and all  comparative  financial  statements  are  restated  and
     presented as if the  entities had  previously  been  combined,  in a manner
     similar to a pooling-of-interests.

     The unaudited condensed financial statements have been prepared in a manner
     similar to a pooling-of-interests, in accordance with the provisions of APB
     16 in order to present  the  condensed  financial  position  and results of
     operations of the Company and the Merger Companies,  as if the entities had
     previously  been  combined.  The  unaudited  condensed  balance  sheets and
     statements of income give effect to the consolidation  transaction as if it
     had occurred on December 31, 2003 and January 1, 2003, respectively.


                                       8
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     The  financial  statements  and notes as of March 31, 2004 and December 31,
     2003  and for the  three-month  periods  ended  March  31,  2004  and  2003
     ("interim  periods"),  have been  prepared in  accordance  with  accounting
     principles  generally  accepted  in the United  States of  America  and are
     unaudited. The condensed financial statements reflect all adjustments which
     are in the opinion of management,  necessary for the fair  presentation  of
     the  financial  position,  results of the  operation and cash flows for the
     interim periods.

     Description of Business

     The Company  offers  various  insurance  products  including  deferred  and
     immediate annuities, variable annuities, interest sensitive and traditional
     life  insurance,  and health  insurance.  All health  insurance is ceded to
     other  insurers.  The  Company's  products are marketed by  broker/dealers,
     financial  institutions,  insurance agents,  and a career agency force. The
     Company's primary customers are consumers and corporations.

     Recently Adopted Accounting Standards

     Accounting   and   Reporting   by   Insurance   Enterprises   for   Certain
     Nontraditional Long-Duration Contracts and for Separate Accounts

     The Company  adopted  Statement of Position  ("SOP") 03-1,  "Accounting and
     Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration
     Contracts  and for  Separate  Accounts,"  on  January  1,  2004.  SOP  03-1
     establishes several new accounting and disclosure  requirements for certain
     nontraditional long-duration contracts and for separate accounts including,
     among other things,  a requirement  that assets and liabilities of separate
     account  arrangements that do not meet certain criteria be accounted for as
     general account assets and  liabilities,  and that the revenue and expenses
     related to such  arrangements  be  consolidated  within the respective line
     items in the Condensed Statements of Income. In addition,  the SOP requires
     additional  liabilities be  established  for certain  guaranteed  death and
     other benefits and for products with certain  patterns of cost of insurance
     charges,   and  that  sales  inducements  provided  to  contractholders  be
     recognized on the balance sheet separately from deferred  acquisition costs
     and  amortized as a component of benefits  expense  using  methodology  and
     assumptions  consistent with those used for amortization of deferred policy
     acquisition costs.

     The Company  evaluated all  requirements of SOP 03-1 and determined that it
     is affected by the SOP's requirements to establish  additional  liabilities
     for  certain  guaranteed  benefits  and  products  with  patterns  of  cost
     insurance  charges  resulting in losses in later policy  durations from the
     insurance   benefit  function  and  to  defer,   amortize,   and  recognize
     separately, sales inducements to contractholders.  Requirements for certain
     separate account arrangements that do not meet the established criteria for
     separate  asset and liability  recognition  are  applicable to the Company,
     however,  the Company's policies on separate account assets and liabilities
     have  historically  been,  and  continue  to be,  in  conformity  with  the
     requirements  newly  established.  Upon  adoption  of the SOP,  the Company


                                       9
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------
     recognized  a  cumulative  effect of a change in  accounting  principle  of
     $(2.3) million on January 1, 2004.

     Accounting for Derivative Instruments and Hedging Activities

     In June 1998,  the FASB  issued FAS No.  133,  "Accounting  for  Derivative
     Instruments and Hedging  Activities," as amended and interpreted by FAS No.
     137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
     Deferral of the  Effective  Date of FASB  Statement  133," and FAS No. 138,
     "Accounting  for  Certain   Derivative   Instruments  and  Certain  Hedging
     Activities - an  Amendment of FASB 133, and certain FAS 133  implementation
     issues."  This  standard,  as  amended,  requires  companies  to record all
     derivatives  on the  balance  sheet as  either  assets or  liabilities  and
     measure those  instruments at fair value. The manner in which companies are
     to record  gains or losses  resulting  from  changes in the fair  values of
     those  derivatives  depends  on the use of the  derivative  and  whether it
     qualifies for hedge accounting. FAS No. 133 was effective for the Company's
     financial statements beginning January 1, 2001. Adoption of FAS No. 133 did
     not have a material effect on the Company's  financial  position or results
     of operations given the Company's limited derivative  holdings and embedded
     derivatives.

     The Company  occasionally  purchases a financial instrument that contains a
     derivative that is "embedded" in the instrument. In addition, the Company's
     insurance  products  are  reviewed to  determine  whether  they  contain an
     embedded   derivative.   The  Company   assesses   whether   the   economic
     characteristics of the embedded  derivative are clearly and closely related
     to the economic characteristics of the remaining component of the financial
     instrument or insurance  product  (i.e.,  the host  contract) and whether a
     separate  instrument with the same terms as the embedded  instrument  would
     meet the definition of a derivative instrument.  When it is determined that
     the embedded  derivative  possesses economic  characteristics  that are not
     clearly and closely  related to the  economic  characteristics  of the host
     contract and that a separate  instrument  with the same terms would qualify
     as a derivative  instrument,  the embedded derivative is separated from the
     host contract and carried at fair value.  However,  in cases where the host
     contract is measured at fair value,  with changes in fair value reported in
     current period  earnings or the Company is unable to reliably  identify and
     measure the embedded derivative for separation from its host contracts, the
     entire  contract is carried on the  balance  sheet at fair value and is not
     designated as a hedging instrument.

     In 2003,  the  Derivative  Implementation  Group  ("DIG")  responsible  for
     issuing guidance on behalf of the FASB for  implementation  of FAS No. 133,
     "Accounting  for  Derivative  Instruments  and Hedging  Activities"  issued
     Statement  Implementation  Issue No. B36, "Embedded  Derivatives:  Modified
     Coinsurance  Arrangements and Debt Instruments That Incorporate Credit Risk
     Exposures  That Are  Unrelated  or Only  Partially  Related  to the  Credit
     Worthiness of the Obligor under Those  Instruments" ("DIG B36"). Under this
     interpretation,  modified  coinsurance and coinsurance  with funds withheld
     reinsurance  agreements as well as other types of receivables  and payables
     where  interest is  determined  by  reference  to a pool of fixed  maturity
     assets or total  return debt index may be  determined  to contain  embedded
     derivatives that are required to be bifurcated. The Company adopted DIG B36


                                       10
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     on  October  1,  2003  and  has  modified  coinsurance  treaties  that  are
     applicable  to  the  guidance.  The  applicable  contracts,  however,  were
     determined  to  generate  embedded  derivatives  with a fair value of zero.
     Therefore, the guidance,  while implemented,  does not impact the Company's
     financial position, results of operations, or cash flows.

     Variable Interest Entities

     In January 2003,  the Financial  Accounting  Standards  Board (FASB) issued
     FASB  Interpretation 46,  "Consolidation of Variable Interest Entities,  an
     Interpretation of ARB No. 51" (FIN 46). In December 2003, the FASB modified
     FIN  46  to  make  certain   technical   corrections  and  address  certain
     implementation  issues that had arisen. FIN 46 provides a new framework for
     identifying  variable  interest  entities  (VIEs)  and  determining  when a
     company should include the assets,  liabilities,  noncontrolling  interests
     and  results  of  activities  of  a  VIE  in  its  consolidated   financial
     statements.

     In  general,  a  VIE  is  a  corporation,  partnership,   limited-liability
     corporation, trust, or any other legal structure used to conduct activities
     or hold  assets  that  either (1) has an  insufficient  amount of equity to
     carry  out  its  principal   activities  without  additional   subordinated
     financial support, (2) has a group of equity owners that are unable to make
     significant  decisions about its  activities,  or (3) has a group of equity
     owners  that do not have the  obligation  to absorb  losses or the right to
     receive returns generated by its operations.

     FIN 46  requires a VIE to be  consolidated  if a party  with an  ownership,
     contractual  or other  financial  interest in the VIE (a variable  interest
     holder)  is  obligated  to absorb a  majority  of the risk of loss from the
     VIE's  activities,  is entitled to receive a majority of the VIE's residual
     returns (if no party  absorbs a majority of the VIE's  losses),  or both. A
     variable  interest holder that  consolidates  the VIE is called the primary
     beneficiary.  Upon consolidation,  the primary  beneficiary  generally must
     initially  record all of the VIE's assets,  liabilities and  noncontrolling
     interests at fair value and subsequently  account for the VIE as if it were
     consolidated  based  on  majority  voting  interest.  FIN 46 also  requires
     disclosures about VIEs that the variable interest holder is not required to
     consolidate but in which it has a significant variable interest.


                                       11
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     At March 31, 2004,  the Company held the following  investments  that,  for
     purposes of FIN 46, were evaluated and determined  that the  investments do
     not require consolidation in the Company's financial statements:

     <TABLE>
     <S>                                            <C>                           <C>                 <C>

     (Millions)

               Asset Type                                      Purpose               Book Value (1)       Market Value
     ----------------------------------------         --------------------------    ----------------    ----------------

     Private Corporate Securities - synthetic
       leases; project financings; credit tenant
       leases                                            Investment Holdings          $    2,734.0         $   2,929.5
     Foreign Securities - US VIE subsidiaries
       of foreign companies                              Investment Holdings                 551.2               596.0

     Commercial Mortgage Obligations (CMO)               Investment Holdings               6,597.2             6,884.2

     Collateralized Debt Obligations (CDO)               Investment Holdings
                                                                and/or
                                                          Collateral Manager                  61.6                56.7

     Asset-Backed Securities (ABS)                       Investment Holdings               1,231.8             1,250.5

     Commercial Mortgage Backed Securities
       (CMBS)                                            Investment Holdings                 820.5               870.8

     (1) Represents maximum exposure to loss except for those structures for which the Company also receives asset
         management fees.
     </TABLE>


     Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that  affect the  amounts
     reported in the financial statements and accompanying notes. Actual results
     could differ from reported results using those estimates.

     Cash and Cash Equivalents

     Cash and cash equivalents  include cash on hand,  money market  instruments
     and other debt issues with a maturity of 90 days or less when purchased.

     Investments

     All of the Company's  fixed  maturity and equity  securities  are currently
     designated  as   available-for-sale.   Available-for-sale   securities  are
     reported at fair value and unrealized  gains and losses on these securities
     are included directly in shareholder's equity, after adjustment for related
     charges in deferred policy  acquisition  costs, value of business acquired,
     and deferred income taxes.

     The Company analyzes the general account  investments to determine  whether
     there has been an other than  temporary  decline  in fair  value  below the
     amortized  cost  basis in  accordance  with FAS No.  115,  "Accounting  for
     Certain  Investments in Debt and Equity Securities."  Management  considers
     the length of the time and the  extent to which the  market  value has been
     less than cost;  the financial  condition  and  near-term  prospects of the
     issuer; future economic conditions and market forecasts;  and the Company's
     intent and ability to retain the  investment  in the issuer for a period of
     time  sufficient to allow for recovery in market  value.  If it is probable


                                       12
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     that all amounts due according to the contractual  terms of a debt security
     will not be collected,  an other than temporary impairment is considered to
     have occurred.

     In addition,  the Company  invests in structured  securities  that meet the
     criteria  of  Emerging   Issues  Task  Force   ("EITF")  Issue  No.  99-20,
     "Recognition  of Interest  Income and  Impairment on Purchased and Retained
     Beneficial Interests in Securitized Financial Assets." Under Issue No. EITF
     99-20, a determination  of the required  impairment is based on credit risk
     and the  possibility  of  significant  prepayment  risk that  restricts the
     Company's ability to recover the investment. An impairment is recognized if
     the fair value of the  security is less than  amortized  cost and there has
     been an adverse change in cash flow since the remeasurement date.

     When a decline in fair value is determined to be other than temporary,  the
     individual security is written down to fair value and the loss is accounted
     for as a realized loss.

     Realized capital gains and losses on all other  investments are included in
     the Condensed Statements of Income.  Unrealized capital gains and losses on
     all other investments are reflected in shareholder's equity, net of related
     income taxes.

     Purchases and sales of fixed  maturities and equity  securities  (excluding
     private placements) are recorded on the trade date.  Purchases and sales of
     private placements and mortgage loans are recorded on the closing date.

     Fair values for fixed  maturities  are obtained  from  independent  pricing
     services or  broker/dealer  quotations.  Fair values for  privately  placed
     bonds are determined using a matrix-based  model.  The  matrix-based  model
     considers the level of risk-free interest rates, current corporate spreads,
     the  credit  quality of the  issuer  and cash flow  characteristics  of the
     security.  The fair values for equity securities are based on quoted market
     prices.  For equity  securities not actively traded,  estimated fair values
     are  based  upon  values  of issues of  comparable  yield  and  quality  or
     conversion value where applicable.

     The Company engages in securities  lending whereby certain  securities from
     its portfolio are loaned to other  institutions  for short periods of time.
     Initial  collateral,  primarily  cash, is required at a rate of 102% of the
     market value of the loaned domestic securities. The collateral is deposited
     by the  borrower  with a lending  agent,  and  retained and invested by the
     lending agent according to the Company's  guidelines to generate additional
     income.  The market value of the loaned  securities is monitored on a daily
     basis with additional  collateral  obtained or refunded as the market value
     of the loaned securities fluctuates.

     Reverse  dollar  repurchase  agreement  and  reverse  repurchase  agreement
     transactions  are accounted  for as  collateralized  borrowings,  where the
     amount borrowed is equal to the sales price of the underlying securities.

     The  investment  in mutual funds  represents  an investment in mutual funds
     managed by the Company, and is carried at fair value.


                                       13

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Mortgage  loans  on  real  estate  are  reported  at  amortized  cost  less
     impairment  writedowns.  If the value of any mortgage loan is determined to
     be impaired  (i.e.,  when it is probable that the Company will be unable to
     collect all  amounts due  according  to the  contractual  terms of the loan
     agreement),  the  carrying  value of the  mortgage  loan is  reduced to the
     present  value of  expected  cash  flows from the loan,  discounted  at the
     loan's effective  interest rate, or to the loan's  observable market price,
     or the fair value of the underlying  collateral.  The carrying value of the
     impaired loans is reduced by establishing a permanent  writedown charged to
     realized loss.

     Investments  in  real  estate  are  reported  at  historical   cost,   less
     accumulated  depreciation and impairment writedowns,  with the exception of
     land,  which  is not  depreciated.  If the  value  of any  real  estate  is
     determined to be impaired (i.e.,  when it is probable that the Company will
     be unable to recover the carrying  value of the real estate),  the carrying
     value of the real estate is reduced to the current fair value. The carrying
     value of the impaired  real estate is reduced by  establishing  a permanent
     writedown charged to realized loss.

     Policy loans are carried at unpaid  principal  balances,  net of impairment
     reserves.

     Short-term  investments,  consisting  primarily of money market instruments
     and other fixed maturity issues  purchased with an original  maturity of 91
     days to one year, are considered available for sale and are carried at fair
     value, which approximates amortized cost.

     The  Company's  use of  derivatives  is limited to  hedging  purposes.  The
     Company enters into interest rate and currency contracts,  including swaps,
     caps, floors,  options,  futures, and embedded  derivatives,  to reduce and
     manage risks associated with changes in value,  yield,  price, cash flow or
     exchange  rates of  assets  or  liabilities  held or  intended  to be held.
     Changes in the fair value of open derivative  contracts are recorded in net
     realized capital gains and losses.

     On  occasion,   the  Company  sells  call  options  written  on  underlying
     securities  that are carried at fair value.  Changes in fair value of these
     options are recorded in net realized capital gains or losses.

     Deferred Policy Acquisition Costs and Value of Business Acquired

     Deferred Policy  Acquisition  Costs ("DAC") is an asset,  which  represents
     certain costs of acquiring certain insurance  business,  which are deferred
     and  amortized.  These  costs,  all of which  vary  with and are  primarily
     related to the production of new and renewal business,  consist principally
     of commissions,  certain  underwriting and contract issuance expenses,  and
     certain agency expenses.  Value of Business  Acquired ("VOBA") is an asset,
     which  represents the present value of estimated net cash flows embedded in
     the Company's contracts, which existed at the time the Company was acquired
     by ING. DAC and VOBA are evaluated for recoverability at each balance sheet


                                       14
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     date and these assets would be reduced to the extent that gross profits are
     inadequate to recover the asset.

     The  amortization  methodology  varies  by  product  type  based  upon  two
     accounting  standards:  FAS No. 60,  "Accounting and Reporting by Insurance
     Enterprises"  ("FAS No. 60") and FAS No. 97,  "Accounting  and Reporting by
     Insurance  Enterprises  for Certain  Long-Duration  Contracts  and Realized
     Gains and Losses from the Sale of Investments" ("FAS No. 97").

     Under  FAS  No.  60,  acquisition  costs  for  traditional  life  insurance
     products,  which  primarily  include  whole  life and term  life  insurance
     contracts,  are amortized over the premium  payment period in proportion to
     the premium revenue recognition.

     Under FAS No. 97, acquisition costs for universal life and  investment-type
     products,  which  include  universal  life  policies and fixed and variable
     deferred  annuities,  are amortized over the life of the blocks of policies
     (usually 25 years) in relation to the emergence of estimated  gross profits
     from surrender charges,  investment margins, mortality and expense margins,
     asset-based fee income,  and actual realized gains (losses) on investments.
     Amortization  is  adjusted  retrospectively  when  estimates  of current or
     future gross profits to be realized from a group of products are revised.

     DAC and VOBA are  written  off to the  extent  that it is  determined  that
     future  policy  premiums  and  investment  income or gross  profits are not
     adequate to cover related expenses.

     Activity  for the periods  ended March 31, 2004 and 2003 within VOBA was as
     follows:

     (Millions)

     Balance at December 31, 2002                                   $    134.5
       Adjustment for FAS No. 115                                         (2.5)
       Interest accrued at 5%                                              1.8
       Amortization                                                       (2.6)
                                                                  --------------
     Balance at March 31, 2003                                      $    131.2
                                                                  ==============

     Balance at December 31, 2003                                   $    111.5
       Adjustment for FAS No. 115                                        (16.4)
       Interest accrued at 5%                                              1.4
       Amortization                                                       (5.7)
                                                                  --------------
     Balance at March 31, 2004                                      $     90.8
                                                                  ==============

     The  estimated  amount of VOBA to be amortized,  net of interest,  over the
     next five  years is $13.3  million,  $14.4  million,  $13.7  million,  $9.4
     million and $9.5  million for the years 2004,  2005,  2006,  2007 and 2008,
     respectively.  Actual amortization  incurred during these years may vary as
     assumptions are modified to incorporate actual results.


                                       15
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     As part of the regular analysis of DAC/VOBA, at the end of third quarter of
     2002, the Company  unlocked its long-term rate of return  assumptions.  The
     Company reset  long-term  assumptions  for the separate  account returns to
     9.0% (gross before fund management fees and mortality and expense and other
     policy  charges),  as of December 31, 2002,  reflecting a blended return of
     equity and other sub-accounts. The initial unlocking adjustment in 2002 was
     primarily  driven by the  sustained  downturn  in the  equity  markets  and
     revised expectations for future returns.

     The  Company  remained  unlocked  during 2003 and has  continued  to remain
     unlocked  during the first  quarter of 2004.  In 2003,  the  Company  reset
     long-term  assumptions  for the separate  account returns from 9.0% to 8.5%
     (gross  before fund  management  fees and  mortality  and expense and other
     policy   charges)   maintaining  a  blended  return  of  equity  and  other
     sub-accounts.  The 2003  unlocking  adjustment  from the previous  year was
     primarily  driven by improved market  performance.  During the three months
     ended March 31,  2004,  the  Company  recorded a  deceleration  of DAC/VOBA
     amortization  of $2.7 million  pretax,  $1.8 million net of $0.9 million of
     federal income tax expense.

     Separate Accounts

     Separate   Account  assets  and  liabilities   generally   represent  funds
     maintained to meet specific  investment  objectives of contractholders  who
     bear the investment risk,  subject, in limited cases, to minimum guaranteed
     rates.  Investment  income and investment gains and losses generally accrue
     directly to such  contractholders.  The assets of each  account are legally
     segregated  and are not  subject  to  claims  that  arise  out of any other
     business of the Company.

     Separate  Account assets  supporting  variable options under universal life
     and annuity  contracts are invested,  as designated by the  policyholder or
     participant  (who bears the investment  risk subject,  in limited cases, to
     minimum  guaranteed rates) under a contract in shares of mutual funds which
     are managed by the Company,  or in other selected  mutual funds not managed
     by the Company.

     Separate  Account  assets are carried at fair value.  At March 31, 2004 and
     2003, unrealized gains of $112.8 million and $153.6 million,  respectively,
     after  taxes,  on  assets  supporting  a  guaranteed  interest  option  are
     reflected in shareholder's equity.

     Separate  Account  liabilities are carried at fair value,  except for those
     relating  to the  guaranteed  interest  option.  Reserves  relating  to the
     guaranteed  interest  option  are  maintained  at fund  value  and  reflect
     interest credited at rates ranging from 2.4% to 7.5% in 2004 and 2003.


                                       16
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Separate Account assets and liabilities are carried at fair value and shown
     as  separate  captions  in  the  Consolidated  Balance  Sheets.   Deposits,
     investment income and net realized and unrealized  capital gains and losses
     of the Separate  Accounts are not reflected in the  Consolidated  Financial
     Statements (with the exception of realized and unrealized capital gains and
     losses on the  assets  supporting  the  guaranteed  interest  option).  The
     Consolidated Statements of Cash Flows do not reflect investment activity of
     the Separate Accounts.

     Assets and liabilities of separate  account  arrangements  that do not meet
     the criteria in SOP 03-1 for  presentation  in the separate  caption in the
     Condensed  Balance  Sheets,  and  revenue  and  expenses  related  to  such
     arrangements, are consolidated in the financial statements with the general
     account.

     Policy Liabilities and Accruals

     Future  policy  benefits  include  reserves for universal  life,  immediate
     annuities  with life  contingent  payouts and  traditional  life  insurance
     contracts.  Reserves for  universal  life  products are equal to cumulative
     deposits  less  withdrawals  and charges plus  credited  interest  thereon.
     Reserves for  traditional  life insurance  contracts  represent the present
     value of future  benefits to be paid to or on behalf of  policyholders  and
     related expenses less the present value of future net premiums.

     Reserves for immediate  annuities with life contingent payout contracts are
     computed on the basis of assumed investment yield, mortality, and expenses,
     including a margin for adverse deviations.  Such assumptions generally vary
     by plan, year of issue and policy  duration.  Reserve interest rates ranged
     from 3.0% to 9.3% for all periods  presented.  Investment yield is based on
     the Company's experience.

     Mortality and withdrawal  rate  assumptions  are based on relevant  Company
     experience and are periodically  reviewed  against both industry  standards
     and experience.

     Other  policyholders' fund include reserves for deferred annuity investment
     contracts and immediate annuity without life contingent  payouts.  Reserves
     on such  contracts  are  equal to  cumulative  deposits  less  charges  and
     withdrawals  plus credited  interest thereon (rates range from 2.4% to 9.0%
     for all periods  presented)  net of adjustments  for investment  experience
     that the Company is entitled to reflect in future credited interest.

     Sales Inducements

     Sales  inducements  represent  benefits  paid to  contractholders  that are
     incremental to the amounts the Company credits on similar contracts and are
     higher than the contract's  expected  ongoing  crediting  rates for periods
     after the  inducement.  As of January 1, 2004,  such  amounts are  reported
     separately on the balance sheet in accordance with SOP 03-1. Prior to 2004,
     sales  inducements  were  recorded as a component  of DAC on the  Condensed


                                       17
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Balance Sheet.  Sales  inducements  are amortized as a component of benefit
     expense using  methodology and  assumptions  consistent with those used for
     amortization of DAC.

     Revenue Recognition

     For universal life and certain annuity contracts,  charges assessed against
     policyholders'  funds  for the  cost  of  insurance,  surrender,  expenses,
     actuarial  margin and other  fees are  recorded  as revenue as charges  are
     assessed against policyholders.  Other amounts received for these contracts
     are reflected as deposits and are not recorded as revenue.  Related  policy
     benefits  are  recorded  in relation  to the  associated  premiums or gross
     profit  so that  profits  are  recognized  over the  expected  lives of the
     contracts.  When  annuity  payments  with life  contingencies  begin  under
     contracts that were initially investment contracts, the accumulated balance
     in the  account is  treated  as a single  premium  for the  purchase  of an
     annuity and reflected as an offsetting  amount in both premiums and current
     and future benefits in the Condensed Statement of Income.

     Reinsurance

     The  Company  utilizes  indemnity  reinsurance  agreements  to  reduce  its
     exposure to large  losses in all aspects of its  insurance  business.  Such
     reinsurance  permits  recovery  of a  portion  of losses  from  reinsurers,
     although  it does not  discharge  the primary  liability  of the Company as
     direct insurer of the risks reinsured.  The Company evaluates the financial
     strength of potential  reinsurers  and  continually  monitors the financial
     condition of reinsurers. Only those reinsurance recoverable balances deemed
     probable of recovery  are  reflected as assets on the  Company's  Condensed
     Balance Sheets.

     Participating Insurance

     Participating  business  approximates  10% of the  Company's  ordinary life
     insurance in force and 25% of premium income. The amount of dividends to be
     paid is determined annually by the Board of Directors. Amounts allocable to
     participating  policyholders are based on published dividend projections or
     expected  dividend scales.  Dividends of $4.1 and $5.9 were incurred during
     the three months ended March 31, 2004 and 2003, respectively.

     Income Taxes

     The  Company is taxed at regular  corporate  rates after  adjusting  income
     reported  for  financial  statement  purposes for certain  items.  Deferred
     income  tax  expenses/benefits  result  from  changes  during  the  year in
     cumulative  temporary  differences  between the tax basis and book basis of
     assets and liabilities.


                                       18

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

2.   Investments

     Fixed maturities available for sale as of March 31, 2004 were as follows:

     <TABLE>
     <S>                                             <C>             <C>             <C>             <C>

     (Millions)
                                                                         Gross           Gross
                                                       Amortized       Unrealized      Unrealized         Fair
                                                          Cost            Gains          Losses           Value
                                                     --------------- --------------- --------------- ---------------
     U.S. government and government
       agencies and authorities                        $    30.3             1.9      $       -       $    32.2
     State, municipalities and political
       subdivisions                                         31.2               -            0.8            30.4

     U.S. corporate securities:
       Public utilities                                  1,518.9           109.4            2.7         1,625.6
       Other corporate securities                        7,125.1           435.9           10.8         7,550.2
                                                     --------------- --------------- --------------- ---------------
     Total U.S. corporate securities                     8,644.0           545.3           13.5         9,175.8
                                                     --------------- --------------- --------------- ---------------

     Foreign securities:
       Government                                          415.6            27.7            2.1           441.2
       Other                                             2,073.3           127.6            8.8         2,192.1
                                                     --------------- --------------- --------------- ---------------
     Total foreign securities                            2,488.9           155.3           10.9         2,633.3
                                                     --------------- --------------- --------------- ---------------

     Mortgage-backed securities                           3,490.4           85.4           12.4         3,563.4

     Other asset-backed securities                        1,368.6           27.2           14.8         1,381.0

     Total fixed maturities, including fixed
       maturities pledged to creditors                   16,053.4          815.1           52.4        16,816.1
     Less: fixed maturities pledged to
           creditors                                        357.8           17.6            0.8           374.6
                                                     --------------- --------------- --------------- ---------------
     Fixed maturities                                  $ 15,695.6      $   797.5       $   51.6       $16,441.5
                                                     =============== =============== =============== ===============
     </TABLE>


                                       19
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Fixed  maturities  available  for  sale as of  December  31,  2003  were as
     follows:

     <TABLE>
     <S>                                             <C>             <C>             <C>             <C>
     (Millions)
                                                         Gross           Gross
                                                       Amortized       Unrealized     Unrealized         Fair
                                                          Cost            Gains          Losses          Value
                                                     --------------- --------------- --------------- ---------------
     U.S. government and government
       agencies and authorities                        $     195.5      $      2.0     $    0.1        $    197.4
     State, municipalities and political
       subdivisions                                           31.7               -          2.5              29.2

     U.S. corporate securities:
       Public utilities                                    1,341.2            84.3          8.0           1,417.5
       Other corporate securities                          7,020.6           346.7         35.8           7,331.5
                                                     --------------- --------------- --------------  --------------
     Total U.S. corporate securities                       8,361.8           431.0         43.8           8,749.0
                                                     --------------- --------------- --------------  --------------

     Foreign securities:
       Government                                            487.1            21.7          3.9             504.9
       Other                                               1,984.4            96.0         24.1           2,056.3
                                                     --------------- --------------- --------------  --------------
     Total foreign securities                              2,471.5           117.7         28.0           2,561.2
                                                     --------------- --------------- --------------  --------------
     Mortgage-backed securities                            3,247.0            66.7         21.8           3,291.9

     Other asset-backed securities                         1,273.0            17.2         21.1           1,269.1

     Total fixed maturities, including fixed
       maturities pledged to creditors                    15,580.5           634.6        117.3          16,097.8
     Less: fixed maturities pledged to
       creditors                                              22.2             0.1            -              22.3
                                                     --------------- --------------- --------------  --------------
     Fixed maturities                                  $  15,558.3      $    634.5     $  117.3        $ 16,075.5
                                                     =============== =============== ==============  ==============
     </TABLE>

     At March 31, 2004 and December 31, 2003,  net  unrealized  appreciation  is
     $762.7  million and $517.3  million,  respectively,  on  available-for-sale
     fixed maturities, including fixed maturities pledged to creditors.

     The aggregate unrealized losses and related fair values of investments with
     unrealized losses as of March 31, 2004, are shown below by duration:

     <TABLE>
     <S>                                                                        <C>                <C>

                                                                                    Unrealized            Fair
                                                                                       Loss               Value
                                                                                ------------------ ------------------
     (Millions)
     Duration category:
       Less than six months below cost                                            $      11.8        $     1,093.6
       More than six months and less than twelve months below cost                       24.2                998.0
       More than twelve months below cost                                                16.4                100.6
                                                                                ------------------ ------------------
     Fixed maturities                                                             $      52.4        $     2,192.2
                                                                                ================== ==================
</TABLE>


                                       20

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Of the  losses  more than 6 months and less than 12 months in  duration  of
     $24.2  million,  there were $17.5  million in  unrealized  losses  that are
     primarily  related to interest rate  movement or spread  widening for other
     than  credit-related  reasons.  Business  and  operating  fundamentals  are
     performing as expected.  The  remaining  losses of $6.7 million as of March
     31, 2004 included the following significant items:

          $3.5 million of unrealized  losses related to securities  reviewed for
          impairment under the guidance  prescribed by EITF 99-20. This category
          includes  U.S.  government-backed   securities,   principal  protected
          securities  and  structured  securities  which did not have an adverse
          change in cash flows for which the carrying amount was $212.9 million.

          $1.9 million of unrealized losses related to a foreign  security,  the
          issuer of which is in the Dominican  Republic,  for which the carrying
          amount was $5.2 million.

          The remaining  unrealized  losses  totaling $1.3 million  related to a
          carrying amount of $10.6 million.

     Of the losses more than 12 months in duration of $16.4 million,  there were
     $13.4  million  related to  securities  reviewed for  impairment  under the
     guidance   prescribed   by  EITF  99-20.   This   category   includes  U.S.
     government-backed securities, principal protected securities and structured
     securities which did not have an adverse change in cash flows for which the
     carrying amount was $57.2 million.

     The amortized cost and fair value of total fixed maturities as of March 31,
     2004 are shown below by contractual maturity.  Actual maturities may differ
     from contractual maturities because securities may be restructured, called,
     or prepaid.

     <TABLE>
     <S>                                                                        <C>              <C>

                                                                                    Amortized            Fair
                                                                                      Cost               Value
                                                                                ------------------ ------------------
     (Millions)
     Due to mature:
       One year or less                                                           $       754.6       $       788.8
       After one year through five years                                                3,133.9             3,339.2
       After five years through ten years                                               4,231.3             4,511.0
       After ten years                                                                  2,254.2             2,361.8
       Mortgage-backed securities                                                       4,310.8             4,434.3
       Other asset-backed securities                                                    1,368.6             1,381.0
       Less: fixed maturities pledged to creditors                                        357.8               374.6
                                                                                ------------------ ------------------
     Fixed maturities                                                             $    15,695.6       $    16,441.5
                                                                                ================== ==================
     </TABLE>

     At March 31, 2004 and December 31, 2003,  fixed maturities with fair values
     of $14.5  million  and $20.1  million,  respectively,  were on  deposit  as
     required by regulatory authorities.


                                       21

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     The Company did not have any  investments  in a single  issuer,  other than
     obligations of the U.S. government,  with a carrying value in excess of 10%
     of the Company's shareholder's equity at March 31, 2004.

     The Company  enters into reverse  dollar  repurchase  agreement and reverse
     repurchase agreement transactions to increase its return on investments and
     improve liquidity.  These transactions  involve a sale of securities and an
     agreement to repurchase  substantially  the same  securities as those sold.
     The dollar rolls and reverse  repurchase  agreements  are  accounted for as
     short-term  collateralized  financings  and the  repurchase  obligation  is
     reported on the Condensed  Balance Sheets in borrowed money. The repurchase
     obligation totaled $758.3 and $534.2 million at March 31, 2004 and December
     31, 2003, respectively.

     The primary risk associated with  short-term  collateralized  borrowings is
     that the  counterparty  will be  unable to  perform  under the terms of the
     contract.  The  Company's  exposure  is  limited  to the  excess of the net
     replacement  cost  of the  securities  over  the  value  of the  short-term
     investments, an amount that was not material at March 31, 2004. The Company
     believes  the  counterparties  to the dollar  roll and  reverse  repurchase
     agreements are financially  responsible and that the  counterparty  risk is
     immaterial.

     During the three months ended March 31, 2004, the Company  determined  that
     76 fixed  maturities had an other than temporary  impairment.  As a result,
     for the three months ended March 31, 2004, the Company recognized a pre-tax
     loss of $6.1 million to reduce the carrying  value of the fixed  maturities
     to their fair value of $53.3  million.  During the three months ended March
     31, 2003, the Company  determined that 153 fixed  maturities had other than
     temporary  impairments.  As a result,  for the three months ended March 31,
     2003, the Company  recognized a pre-tax loss of $56.6 million to reduce the
     carrying  value of the fixed  maturities  to their  combined  fair value of
     $209.4 million.


3.   Financial Instruments

     Estimated Fair Value

     The following  disclosures are made in accordance with the  requirements of
     FAS No. 107,  "Disclosures about Fair Value of Financial  Instruments." FAS
     No. 107  requires  disclosure  of fair value  information  about  financial
     instruments,  whether or not recognized in the balance sheet,  for which it
     is practicable to estimate that value.  In cases where quoted market prices
     are not available,  fair values are based on estimates  using present value
     or other valuation techniques.

     Those  techniques  are  significantly  affected  by the  assumptions  used,
     including  the discount  rate and  estimates of future cash flows.  In that
     regard,  the derived  fair value  estimates,  in many  cases,  could not be
     realized in immediate  settlement of the  instrument.  FAS No. 107 excludes
     certain  financial  instruments and all  nonfinancial  instruments from its


                                       22
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     disclosure  requirements.  Accordingly,  the  aggregate  fair value amounts
     presented do not represent the underlying value of the Company.

     The following valuation methods and assumptions were used by the Company in
     estimating the fair value of the above financial instruments:

     Fixed  maturities  securities:  The fair  values  for the  actively  traded
     marketable  bonds are determined  based upon the quoted market prices.  The
     fair values for  marketable  bonds  without an active  market are  obtained
     through  several  commercial  pricing  services which provide the estimated
     fair values.  Fair values of privately  placed bonds are determined using a
     matrix-based  pricing  model.  The model  considers  the  current  level of
     risk-free interest rates,  current corporate spreads, the credit quality of
     the issuer and cash flow characteristics of the security.  Using this data,
     the model  generates  estimated  market values which the Company  considers
     reflective of the fair value of each privately placed bond. Fair values for
     privately placed bonds are determined through consideration of factors such
     as the net worth of the  borrower,  the value of  collateral,  the  capital
     structure of the  borrower,  the presence of  guarantees  and the Company's
     evaluation of the borrower's ability to compete in their relevant market.

     Equity  securities:  Fair values of these  securities are based upon quoted
     market value.

     Mortgage  loans on real estate:  The fair values for mortgage loans on real
     estate  are  estimated  using  discounted  cash  flow  analyses  and  rates
     currently  being offered in the  marketplace for similar loans to borrowers
     with  similar  credit  ratings.  Loans  with  similar  characteristics  are
     aggregated for purposes of the calculations.

     Real  estate:  The fair  values for real estate are  estimated  using three
     methods  of  review:  a  discounted  cash  flow  analyses  utilizing  rates
     currently being offered in the marketplace,  market value/sales comparisons
     of similar products in the subject  property market,  and cost to reproduce
     the asset.  These reviews are done  periodically;  however,  a major event,
     such as signing/loss of a tenant, physical change to the property, or local
     governmental  zoning or  regulation  changes,  will  trigger  an  immediate
     valuation review.

     Cash,  short-term  investments and policy loans:  The carrying  amounts for
     these assets approximate the assets' fair values.

     Assets held in separate  accounts:  Assets  held in separate  accounts  are
     reported  at the quoted  fair values of the  individual  securities  in the
     separate accounts.

     Notes  to  affiliates:  Estimated  fair  value  of the  Company's  notes to
     affiliates  are based upon  discounted  future  cash flows using a discount
     rate approximating the current market value.


                                       23
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Investment  contract  liabilities  (included in future policy  benefits and
     claims' reserves):

     With a fixed maturity: Fair value is estimated by discounting cash flows at
     interest rates currently being offered by, or available to, the Company for
     similar contracts.

     Without a fixed maturity:  Fair value is estimated as the amount payable to
     the policyholder upon demand. However, the Company has the right under such
     contracts to delay payment of withdrawals  which may  ultimately  result in
     paying an amount different than that determined to be payable on demand.

     Liabilities  related to separate accounts:  Liabilities related to separate
     accounts  are reported at full account  value in the  Company's  historical
     balance sheet.  Estimated fair values of separate  account  liabilities are
     equal to their carrying amount.

     The carrying  values and estimated  fair values of certain of the Company's
     financial  instruments  at March 31,  2004 and  December  31,  2003 were as
     follows:

          <TABLE>
          <S>                                         <C>                  <C>        <C>                <C>
                                                                   2004                           2003
                                                       ------------------------------ ------------------------------
                                                          Carrying         Fair          Carrying         Fair
                                                            Value          Value           Value          Value
                                                       ------------------------------ ------------------------------
          (Millions)
          Assets:
            Fixed maturity, including securities
              pledged to creditors                       $   6,816.1    $  16,816.1      $  16,097.8     $ 16,097.8
            Equity securities                                   56.0           56.0            120.2          120.2
            Mortgage loans on real estate                    3,475.6        3,732.8          3,388.7        3,581.4
            Real estate                                          4.5            4.8              4.5            4.8
            Policy loans                                       173.4          173.4            177.1          177.1
            Cash and short-term investments                    178.1          178.1             65.4           65.4
            Other investments                                   83.8           83.8             56.0           56.0
            Assets held in separate accounts                19,714.9       19,714.9         18,220.1       18,220.1
          Liabilities:
            Notes to affiliates                                 35.0           56.6             35.0           57.3
           Investment contract liabilities:
             Deferred annuities                             16,852.2       16,138.8         16,020.5       15,067.9
             Supplementary contracts and
               immediate annuities                             251.8          251.8            250.9          250.9
             Liabilities related to separate accounts       19,714.9       19,714.9         18,220.1       18,220.1
</TABLE>

          Fair value  estimates are made at a specific  point in time,  based on
          available  market  information and judgments  about various  financial
          instruments,  such as  estimates  of timing and amounts of future cash
          flows.  Such  estimates  do not reflect  any premium or discount  that
          could result from offering for sale at one time the  Company's  entire
          holdings of a particular  financial  instrument,  nor do they consider
          the tax impact of the  realization of unrealized  gains or losses.  In
          many  cases,  the fair  value  estimates  cannot be  substantiated  by
          comparison to  independent  markets,  nor can the  disclosed  value be
          realized in immediate settlement of the instruments. In evaluating the


                                       24
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

          Company's  management of interest rate, price and liquidity risks, the
          fair  values  of all  assets  and  liabilities  should  be taken  into
          consideration, not only those presented above.

          Derivative Financial Instruments

          Interest Rate Caps

          Interest  rate caps are used to manage the  interest  rate risk in the
          Company's bond portfolio.  Interest rate caps are purchased  contracts
          that  provide the Company  with an annuity in an  increasing  interest
          rate  environment.  The notional amount,  carrying value and estimated
          fair value of the  Company's  open  interest rate caps as of March 31,
          2004  were  $1,036.2   million,   $1.0  thousand  and  $1.0  thousand,
          respectively.  The notional amount,  carrying value and estimated fair
          value (liabilities are denoted with parentheses) of the Company's open
          interest  rate caps as of  December  31, 2003 were  $1,036.2  million,
          $20.0 thousand and $20.0 thousand, respectively.

          Interest Rate Swaps

          Interest  rate swaps are used to manage the interest  rate risk in the
          Company's  bond  portfolio  as  well  as  the  Company's  liabilities.
          Interest rate swaps  represent  contracts that require the exchange of
          cash flows at regular interim periods, typically monthly or quarterly.
          The notional  amount,  carrying  value and estimated fair value of the
          Company's  open interest rate swaps as of March 31, 2004 were $1,294.4
          million,  $(58.1)  million  and  $(58.1)  million,  respectively.  The
          notional  amount,  carrying  value  and  estimated  fair  value of the
          Company's  open  interest  rate  swaps as of  December  31,  2003 were
          $1,266.5 million, $(91.2) million and $(91.2) million, respectively.

          Futures

          Futures  contracts  are used to hedge  against a  decrease  in certain
          indexes.  Such decrease results in increased reserve liabilities,  and
          the futures offset this  increased  expense.  The  underlying  reserve
          liabilities  are  carried  at market  value  with the  change in value
          running through the statement of income,  which is offset by the daily
          cash movement of the futures. The notional amount,  carrying value and
          estimated  fair value of the Company's  open interest rate swaps as of
          March 31,  2004,  were  $732.8  million,  $(0.6)  million  and  $(0.6)
          million,   respectively.  The  notional  amount,  carrying  value  and
          estimated  fair value of the Company's  open interest rate swaps as of
          December 31, 2003, were $491.3 million, $0.8 million and $0.8 million,
          respectively.

          Foreign Exchange Swaps

          Foreign  exchange swaps are used to reduce the risk of a change in the
          value,  yield or cash flow with  respect to invested  assets.  Foreign
          exchange  swaps  represent  contracts  that  require  the  exchange of
          foreign  currency  cash  flows for US  dollar  cash  flows at  regular
          interim periods,  typically  quarterly or semi-annually.  The notional
          amount,  carrying value and estimated fair value of the Company's open
          foreign  exchange rate swaps as of March 31, 2004 were $146.7 million,
          $(18.8)  million  and  $(18.8)  million,  respectively.  The  notional
          amount,  carrying value and estimated fair value of the Company's open


                                       25
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

          foreign  exchange  rate  swaps as of  December  31,  2003 were  $128.2
          million, $(19.4) million and $(19.4) million, respectively.

          Options

          S&P  Options  are used to hedge  against an increase in the S&P Index.
          Such  increase  results  in  increased  reserve  liabilities,  and the
          options offset this increased  expense.  The options are accounted for
          in a consistent manner with the underlying reserve  liabilities,  both
          of which are  carried at fair  value with the change in value  running
          through the statement of income.  If the options  mature in the money,
          the amount  received  is  recorded  in income to offset the  increased
          expense for the reserve  liabilities.  The notional  amount,  carrying
          value and  estimated  fair value of the  Company's  open options as of
          March 31,  2004 were  $1,491.2  million,  $103.0  million,  and $103.0
          million,   respectively.  The  notional  amount,  carrying  value  and
          estimated  fair value of the Company's open options as of December 31,
          2003 were  $1,287.8  million,  $100.9  million,  and  $100.9  million,
          respectively.

          Embedded Derivatives

          The Company also had investments in certain fixed maturity instruments
          and  retail  annuity  products  that  contain  embedded   derivatives,
          including  those whose market value is at least  partially  determined
          by,  among  other  things,  levels of or  changes in  domestic  and/or
          foreign   interest  rates  (short-  or  long-term),   exchange  rates,
          prepayment  rates,  equity  markets  or  credit  ratings/spreads.  The
          estimated  fair  value  of  the  embedded   derivatives   within  such
          securities  as of March 31,  2004 and  December  31,  2003 was  $(0.5)
          million and $(1.1) million,  respectively. The estimated fair value of
          the embedded  derivatives  within retail annuity  products as of March
          31, 2004 and December 31, 2003, was $273.3 million and $238.9 million,
          respectively.


                                       26

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

4.   Net Investment Income

     Sources of net investment income were as follows:

     <TABLE>
     <S>                                                                        <C>                <C>

                                                                                  Three months       Three months
                                                                                      ended              ended
                                                                                    March 31,          March 31,
        (Millions)                                                                    2004               2003
                                                                                ------------------ ------------------
         Fixed maturities                                                         $     231.3        $     238.0
         Equity securities                                                                0.1                  -
         Mortgage loans                                                                  53.3               50.5
         Real estate                                                                      0.1                0.5
         Policy loans                                                                     2.9                2.4
         Short-term investments and cash equivalents                                      0.2                0.7
         Other                                                                           27.8                1.6
                                                                                ------------------ ------------------
         Gross investment income                                                        315.7              293.7
         Less: investment expenses                                                       17.2               13.8
                                                                                ------------------ ------------------
         Net investment income                                                    $     298.5        $     279.9
                                                                                ================== ==================
</TABLE>


5.   Dividend Restrictions and Shareholder's Equity

     The  Company's  ability  to pay  dividends  to its Parent is subject to the
     prior  approval  of  insurance   regulatory   authorities  for  payment  of
     dividends,  which  exceed an annual  limit.  The Company did not pay common
     stock  dividends  during the period  ended March 31, 2004 or the year ended
     December 31, 2003.

     The Insurance Department of the State of Iowa (the "Department"), effective
     January 1, 2004,  recognizes  as net income and capital  and surplus  those
     amounts  determined  in  conformity  with  statutory  accounting  practices
     prescribed or permitted by the Department, which differ in certain respects
     from  accounting  principles  generally  accepted  in  the  United  States.
     Statutory  net loss was  $1.9  million  and $68.9  million,  for the three
     months ended March 31, 2004 and 2003,  respectively.  Statutory capital and
     surplus was $1,089.3  million and $969.6 million as of March 31, 2004 and
     2003, respectively.

     As of March 31, 2004, the Company does not utilize any statutory accounting
     practices,  which are not prescribed by state regulatory  authorities that,
     individually or in the aggregate,  materially  affect statutory capital and
     surplus.


                                       27
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

6.   Capial Gains and Losses

     Realized  capital gains and losses are comprised of the difference  between
     the carrying value of  investments  and proceeds from sale,  maturity,  and
     redemption,   as  well  as  losses   incurred  due  to  the  impairment  of
     investments.  Net realized  capital gains (losses) on  investments  were as
     follows:

     <TABLE>
     <S>                                                                        <C>                <C>

                                                                                  Three months       Three months
                                                                                      ended              ended
                                                                                    March 31,          March 31,
        (Millions)                                                                    2004               2003
                                                                                ------------------  ------------------
         Fixed maturities                                                         $      49.1        $      (4.9)
         Equity securities                                                                3.5                  -
         Derivatives                                                                    (52.1)              (1.8)
                                                                                ------------------  ------------------
         Pretax realized capital gains (losses)                                   $       0.5        $      (6.7)
                                                                                ==================  ==================
         After-tax realized capital gains (losses)                                $       0.3        $      (4.4)
                                                                                ==================  ==================
         </TABLE>

     Proceeds  from the sale of total fixed  maturities  and the  related  gross
     gains and losses were as follows:

     <TABLE>
     <S>                                                                        <C>                <C>

                                                                                  Three months       Three months
                                                                                      ended              ended
                                                                                    March 31,          March 31,
         (Millions)                                                                   2004               2003
                                                                                ------------------ ------------------
         Proceeds on sales                                                        $   2,971.7        $   3,912.5
         Gross gains                                                                     64.0               80.6
         Gross losses                                                                     5.9               18.6

         </TABLE>


     Changes in  shareholder's  equity related to changes in  accumulated  other
     comprehensive income were as follows:

         <TABLE>
         <S>                                                                    <C>                <C>

                                                                                  Three months       Three months
                                                                                      ended              ended
                                                                                    March 31,          March 31,
         (Millions)                                                                   2004               2003
                                                                                ------------------ ------------------
         Fixed maturities                                                         $   245.3          $     62.4
         Equity securities                                                             (2.6)                  -
         DAC/VOBA                                                                     (60.8)              (50.2)
         Derivatives                                                                    1.3                (0.6)
         Sales inducements                                                            (18.4)                  -
         Other                                                                            -                (1.1)
                                                                                ------------------ ------------------
         Subtotal                                                                     164.8                10.5
         Increase in deferred income taxes                                            (52.1)             (110.9)
                                                                                ------------------ ------------------
         Net changes in accumulated other
           comprehensive income (loss)                                            $   112.7          $   (100.4)
                                                                                ================== ==================
         </TABLE>


                                       28

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Shareholder's equity included the following accumulated other comprehensive
     income (loss):

         <TABLE>
         <S>                                                                        <C>                <C>

                                                                                    March 31,           March 31,
         (Millions)                                                                   2004                2003
                                                                                ------------------- ------------------
         Net unrealized capital gains (losses):
           Fixed maturities                                                       $       762.7        $     670.2
           Equity securities                                                                2.5               (3.4)
           DAC/VOBA                                                                      (271.3)            (439.7)
           Derivatives                                                                    (12.8)              (0.6)
           Sales inducements                                                              (18.4)                 -
           Other                                                                              -               (0.8)
                                                                                ------------------- ------------------
         Subtotal                                                                         462.7              225.7
         Less: deferred income taxes                                                      160.0              191.0
                                                                                ------------------- ------------------
         Net accumulated other comprehensive
           income                                                                 $       302.7        $      34.7
                                                                                =================== ==================
         </TABLE>

         Changes in accumulated other comprehensive income related to changes in
         unrealized gains (losses) on securities, were as follows:

         <TABLE>
         <S>                                                                        <C>                <C>

                                                                                  Three months       Three months
                                                                                      ended              ended
                                                                                    March 31,          March 31,
         (Millions)                                                                   2004               2003
         Unrealized holding gains (losses) arising                              ------------------ ------------------
           during the year (1)                                                    $    164.0         $     (100.5)
         Less: reclassification adjustment for gains
           (losses) and other items included in
           net income(2)                                                                51.3                (0.1)
                                                                                ------------------ -------------------
         Net unrealized gains (losses) on securities                              $    112.7         $    (100.4)
                                                                                ================== ===================
         </TABLE>

          (1)  Pretax  unrealized  holding  gains  (losses)  arising  during the
               period  were $106.6  million  and  $(65.3)  million for the three
               months  ended March 31, 2004 and 2003,  respectively.

          (2)  Pretax reclassification  adjustments for gains (losses) and other
               items  included  in net  income  were  $33.3  million  and $(0.1)
               million  for the three  months  ended  March  31,  2004 and 2003,
               respectively.


7.   Additional Insurance Benefits and Minimum Guarantees

     Under  SOP  03-1,  the  Company  calculates  additional  liabilities  ("SOP
     reserves") for certain guaranteed  benefits and for Universal Life products
     with  certain  patterns  of  cost of  insurance  charges.  The SOP  reserve
     recognized  for such  products is in addition to the  liability  previously
     held (the  Account  Value) and is to  recognize  the  portion  of  contract
     assessments  received  in early  years used to  compensate  the insurer for
     services provided in later years.


                                       29
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     The SOP reserve for products  with cost of insurance  charges is calculated
     as an estimate  intended to represent a calculated  reserve  using the same
     assumptions used in the determination of estimated gross profits, according
     to which,  deferred  acquisition costs are amortized.  ING USA calculates a
     benefit ratio for each block of business subject to the SOP, and calculates
     an  SOP  reserve  by  accumulating  amounts  equal  to  the  benefit  ratio
     multiplied  by the  assessments  for each  period,  reduced by excess death
     benefits  during the  period.  The SOP reserve is  accumulated  at interest
     using the  contract-credited  rate for the period.  The calculated  reserve
     includes a provision for Universal  Life contracts with patterns of Cost of
     Insurance  Charges that produce  expected gains from the insurance  benefit
     function followed by losses from that function in later years.

     The SOP  reserve for  annuities  with  minimum  guaranteed  death  benefits
     ("MGDB") is  determined  each period by  estimating  the expected  value of
     death benefits in excess of the projected  account  balance and recognizing
     the excess  ratably over the  accumulation  period based on total  expected
     assessments.  The Company regularly  evaluates estimates used to adjust the
     additional  liability  balance,  with a related charge or credit to benefit
     expense,  if actual  experience  or other  evidence  suggests  that earlier
     assumptions  should be revised.  The following  assumptions and methodology
     were used to determine the MGDB SOP reserve at March 31, 2004:

                   Area                    Assumptions/Basis for Assumptions
     ---------------------------------     -------------------------------------
     Data used                             Based on 101 investment performance
                                           scenarios stratified based on 10,000
                                           random generated scenarios
     Mean investment performance           8.5%
     Volatility                            20.0%
     Mortality                             60.0%, 60.0%, 75.0%, 75.0% of the
                                           90-95 ultimate mortality table for
                                           standard, rachet, rollup and
                                           combination rollup and rachet,
                                           respectively
     Lapse rates                           Vary by contract type and duration;
                                           range between 1.0% and 40.0%
     Discount rates                        6.5%, based on the portfolio earned
                                           rate of the general account

     The SOP reserve for annuities with guaranteed minimum accumulation benefits
     ("GMAB") and guaranteed minimum withdrawal benefits ("GMWB") are considered
     to be derivatives under Financial  Accounting  Standards Board Statement of
     Financial   Accounting   Standards  No.  133,  "Accounting  for  Derivative
     Instruments  and  Hedging  Activities",  and are  recognized  at fair value
     through earnings.

     The SOP reserve for the  guaranteed  minimum  income  benefits  ("GMIB") is
     determined each period by estimating the expected value of the annutization
     benefits  in  excess  of the  projected  account  balance  at the  date  of
     annuitization  and  recognizing  the excess  ratably over the  accumulation
     period based on total expected assessments. The Company regularly evaluates
     estimates used and adjusts the additional liability balance, with a related
     charge or credit to  benefit  expense,  if the actual  experience  or other
     evidence  suggests  that  earlier   assumptions  should  be  revised.   The
     assumptions used for calculating the additional GMIB liability at March 31,
     2004, are  consistent  with those used for the  calculating  the additional


                                       30
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     MGDB liability.  In addition, the calculation of the GMIB liability assumes
     dynamic lapses and dynamic annuitization reflecting the extent to which the
     benefit, at the time of payment, has a positive value.

     The separate account liabilities subject to SOP 03-1 for minimum guaranteed
     benefits,  and the  additional  liabilities  recognized  related to minimum
     guarantees,  by  type,  as of March  31,  2004,  and the paid and  incurred
     amounts by type for the three months ended March 31, 2004 are as follows:

     <TABLE>
     <S>                                  <C>               <C>                    <C>

                                               Minimum           Guaranteed         Guaranteed
                                             Guaranteed            Minimum            Minimum
                                                Death           Accumulation/         Income
                                               Benefit       Withdrawal Benefit       Benefit
                                                (MGDB)            (GMAB/GMWB)          (GMIB)
                                          ---------------- ----------------------  --------------
     Separate account liability
       balance                              $   20,898.6     $    1,295.6            $  5,489.8
     Additional liability balance:
       Balance at January 1, 2004           $       56.5             14.5                  13.6
       Incurred guaranteed benefits                 10.0             (6.2)                  3.7
       Paid guaranteed benefits                     (5.2)               -                     -
                                          ---------------- ----------------------  --------------
       Balance at March 31, 2004            $       61.3     $        8.3            $     17.3
                                          ================ ======================  ==============
     </TABLE>

     The net  amount  at risk  (net of  reinsurance)  and the  weighted  average
     attained age of contractholders by type of minimum guaranteed benefit,  are
     as follows as of March 31, 2004:

         <TABLE>
         <S>                                                <C>               <C>                   <C>

                                                               Minimum           Guaranteed          Guaranteed
                                                             Guaranteed           Minimum             Minimum
                                                                Death          Accumulation/           Income
                                                               Benefit       Withdrawal Benefit       Benefit
                                                               (MGDB)           (GMAB/GMWB)            (GMIB)
                                                            -------------- ----------------------- ---------------
         Net Amount at Risk (net of reinsurance)             $     462.0      $        79.9          $     223.3
         Weighted Average Attained Age                                64                 59                   59

         </TABLE>


         The aggregate fair value of assets, by major investment asset category,
         supporting separate accounts with additional insurance benefits, and
         minimum investment return guarantees as of March 31, 2004 are:

          (Millions)
          -----------
          Private corporate securities                       $      5,404.4
          Public corporate securities                               8,167.6
          Collateralized mortgage obligations                       1,248.8
          Commercial mortgage backed securities                     2,409.1
          Commercial mortgages                                      3,668.7
                                                            ---------------
          Total                                              $     20,898.6
                                                            ===============



                                       31

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

8.   Sales Inducements

     Sales  inducements  represent  benefits  paid to  contractholders  that are
     incremental to the amounts the Company credits on similar contracts and are
     higher than the contract's  expected  ongoing  crediting  rates for periods
     after the inducement.  Such amounts are reported  separately on the balance
     sheet as of January 1, 2004.  Prior to 2004, these amounts were included in
     DAC.  Sales  inducements  are  amortized as a component of benefit  expense
     using   methodology  and   assumptions   consistent  with  those  used  for
     amortization  of DAC.  During the three months  ended March 31,  2004,  the
     company   capitalized  and  amortized  $24.9  million  and  $25.2  million,
     respectively,  of sales inducements. The unamortized balance of capitalized
     sales inducements, net of unrealized gains and losses, is $467.3 million as
     of March 31, 2004.


9.   Income Taxes

     Effective  January 1, 2004, the Company files a stand-alone  federal income
     tax  return.  Prior  to that  date,  the  Company  and  each of the  Merger
     Companies,  filed federal income tax returns with their  respective  filing
     groups.

     At March 31, 2004,  the Company has net  operating  loss  carryforwards  of
     approximately  $487.0  million for federal  income tax  purposes  which are
     available to offset future taxable income. If not used, these carryforwards
     will expire between 2015 and 2017.

     Income tax expense  (benefit) from  continuing  operations  included in the
     condensed financial statements are as follows:

     <TABLE>
     <S>                                                                        <C>                 <C>

                                                                                  Three months        Three months
                                                                                      ended               ended
                                                                                     March 31,          March 31,
         (Millions)                                                                    2004                2003
                                                                                ------------------ -------------------
         Current tax (benefit):
           Federal                                                                $        -         $        (2.1)
                                                                                ------------------ -------------------
                Total current tax (benefit)                                                -                  (2.1)
                                                                                ------------------ -------------------
         Deferred tax (benefit):
           Operations and capital loss carryforwards                                     6.2                     -
           Other federal deferred tax                                                    3.8                  (5.4)
                                                                                ------------------ -------------------
                Total deferred tax (benefit)                                            10.0                  (5.4)
                                                                                ------------------ -------------------
         Total income tax expense (benefit)                                       $     10.0         $        (7.5)
                                                                                ================== ===================
     </TABLE>


                                       32
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

         Income taxes were different from the amount computed by applying the
         federal income tax rate to income from continuing operations before
         income taxes for the following reasons:

         <TABLE>
         <S>                                                                        <C>                 <C>

                                                                                  Three months        Three months
                                                                                      ended               ended
                                                                                     March 31,          March 31,
         (Millions)                                                                    2004                2003
                                                                                ------------------ -------------------
         Income before income taxes                                               $      32.6         $    (21.0)
         Tax rate                                                                          35%                35%
                                                                                ------------------- ------------------
         Income tax at federal statutory rate                                            11.4               (7.4)
         Tax effect of:
           Meals and entertainment                                                        0.1                0.1
           Dividend received deduction                                                   (1.5)              (0.2)
                                                                                ------------------- ------------------
         Income taxes                                                             $      10.0         $     (7.5)
                                                                                =================== ==================
         </TABLE>

         The tax effects of temporary differences that give rise to deferred tax
         assets and deferred tax liabilities at March 31, 2004 and December 31,
         2003 are presented below:

         <TABLE>
         <S>                                                                       <C>                 <C>

         (Millions)                                                                    2004                2003
                                                                                ------------------ -------------------
         Deferred tax assets:
           Operations and capital loss carryforwards                              $     170.4        $      168.5
           Future policy benefits                                                       461.1               470.7
           Goodwill                                                                       9.5                 9.8
           Investments                                                                   17.4                20.5
           Employee compensation and benefits                                            17.9                16.8
           Other                                                                         33.5                33.4
                                                                                ------------------- ------------------
                  Total gross assets                                                    709.8               719.7
                                                                                ------------------- ------------------
         Deferred tax liabilities:
           Unrealized gains on investments                                             (175.5)             (123.4)
           Deferred policy acquisition cost                                            (527.5)             (529.1)
           Value of purchased insurance in force                                        (38.7)              (38.3)
           Other                                                                         (0.3)               (0.3)
                                                                                ------------------- ------------------
                  Total gross liabilities                                              (742.0)             (691.1)
                                                                                ------------------- ------------------
         Net deferred income tax asset (liability)                                $     (32.2)        $      28.6
                                                                                =================== ==================
         </TABLE>

     The Internal Revenue Service has commenced  examinations for the years 2000
     and 2001. Management does not believe adverse consequences will result from
     those examinations.


                                       33

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

10.  Benefit Plans

     Defined Benefit Plan

     ING North America Insurance  Corporation ("ING North America") sponsors the
     ING  Americas  Retirement  Plan (the  "Retirement  Plan"),  effective as of
     December 31, 2001. Substantially all employees of ING North America and its
     subsidiaries and affiliates  (excluding  certain employees) are eligible to
     participate, including the Company's employees other than Company agents.

     The Retirement Plan is a  tax-qualified  defined benefit plan, the benefits
     of which are  guaranteed  (within  certain  specified  legal limits) by the
     Pension Benefit Guaranty Corporation  ("PBGC"). As of January 1, 2002, each
     participant in the Retirement Plan (except for certain specified employees)
     earns a benefit under a final average compensation  formula.  Subsequent to
     December 31, 2001, ING North America is responsible for all Retirement Plan
     liabilities.  The  costs  allocated  to  the  Company  for  its  employees'
     participation in the Retirement Plan were $2.8 million and $4.6 million for
     the three-month periods ended March 31, 2004 and 2003, respectively.

     Non-Qualified Retirement Plans

     Through  December 31, 2001, the Company,  in conjunction  with ING, offered
     certain eligible employees a Supplemental  Executive Retirement Plan and an
     Excess  Plan  (collectively,  the  "SERPs").  The SERPs  are  non-qualified
     defined  benefit  pension plans,  which means all benefits are payable from
     the general assets of the Company.  SERP benefits are not guaranteed by the
     PBGC.  Benefit accruals under the SERPs ceased effective as of December 31,
     2001.  Benefits  under  the  SERPs  are  determined  based  on an  eligible
     employees years of service and such employee's average annual  compensation
     for the highest five years during the last ten years of employment. Pre-tax
     charges of  operations  of the Company for the SERPs were $0.1  million and
     $(0.7) million for the  three-month  periods ended March 31, 2004 and 2004,
     respectively.


                                       34
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     The  following  tables  summarize  the benefit  obligations  and the funded
     status for the SERP and the Excess  Plan for the year  ended  December  31,
     2003:

     (Millions)
      Change in Benefit Obligation:
      Defined Benefit Obligation, January 1                     $      8.8
      Interest cost                                                    0.6
      Benefits paid                                                   (0.4)
      Actuarial (gain) loss on obligation                              2.0
                                                              ------------------
      Defined Benefit Obligation, December 31                   $     11.0
                                                              ==================

      Funded status:
        Funded status at December 31                            $    (11.0)
        Unrecognized past service cost                                (0.1)
        Unrecognized net loss                                         (1.8)
                                                              ------------------
      Net amount recognized                                     $    (12.9)
                                                              ==================

     At December 31, 2003, the accumulated benefit obligation was $9.3 million.

     The  weighted-average  assumptions  used in the  measurement of the benefit
     obligation for the Retirement Plan were as follows:

     <TABLE>
     <S>                                                      <C>                   <C>

                                                                     2004                  2003
                                                              ------------------    ------------------
     Discount rate at beginning of period                            6.25 %                6.75 %
     Rate of compensation increase                                   3.75                  3.75

     </TABLE>

     Net periodic benefit costs for the three-month periods ended March 31, 2004
     and 2003 were as follows:

     <TABLE>
     <S>                                                      <C>                   <C>

                                                                     2004                  2003
                                                              ------------------    ------------------
     (Millions)
     Interest cost                                              $     0.2             $     0.1
     Unrecognized past service cost recognized in period             (0.1)                (0.1)
                                                              ------------------    ------------------
         Net periodic benefit cost                              $     0.1             $      -
                                                              ==================    ==================
         </TABLE>

     Contributions for the SERPs are expected to be $0.4 million during 2004.

     Defined Contribution Plans

     ING North  America  sponsors  the ING Savings  Plan and ESOP (the  "Savings
     Plan").   Substantially   all  employees  of  ING  North  America  and  its
     subsidiaries and affiliates (excluding certain employees, including but not
     limited to Career Agents (as defined  below)) are eligible to  participate,
     including the Company's  employees other than Company  agents.  The Savings
     Plan is a tax-qualified profit sharing and stock bonus plan, which includes
     an employee stock ownership plan ("ESOP") component.  Savings Plan benefits
     are  not  guaranteed  by  the  PBGC.  The  Savings  Plan  allows   eligible


                                       35
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     participants  to defer into the  Savings  Plan a  specified  percentage  of
     eligible  compensation  on a pre-tax basis.  ING North America matches such
     pre-tax contributions,  up to a maximum of 6% of eligible compensation. All
     matching  contributions  are subject to a 4-year  graded  vesting  schedule
     (although  certain  specified  participants  are subject to a 5-year graded
     vesting  schedule).  All contributions made to the Savings Plan are subject
     to certain limits imposed by applicable law.  Pre-tax charges to operations
     of the Company for the Savings  Plan were $0.9 million and $0.8 million for
     the three-month periods ended March 31, 2004 and 2003, respectively.

     Post-Retirement Benefits

     In addition to providing pension benefits, the Company, in conjunction with
     ING,  provides certain health care and life insurance  benefits for retired
     employees and certain  agents.  Generally,  retired  employees and eligible
     agents pay a portion of the cost of these post-retirement benefits, usually
     based on their years of service with the  Company.  The amount a retiree or
     eligible agent pays for such coverage is subject to change in the future.

     The  following  tables  summarize  the benefit  obligations  and the funded
     status for retired  employees' and retired agents'  post-retirement  health
     care benefits over the three-month periods ended March 31, 2004 and 2003:

                                                                     2003
                                                              ------------------
     (Millions)
     Change in Benefit Obligation:
       Defined Benefit Obligation, January 1                    $     8.8
       Service cost                                                   0.5
       Interest cost                                                  0.6
       Benefits paid                                                 (0.6)
       Actuarial loss on obligation                                  (0.7)
                                                              ------------------
       Defined Benefit Obligation, December 31                        8.6

       Funded status:
         Funded status at December 31                                (8.6)
         Unrecognized losses                                         (0.6)
         Unrecognized past service cost                               0.4
                                                              ------------------
         Net amount recognized                                  $    (8.8)
                                                              ==================

     The medical health care trend rate was 10% for 2004,  gradually  decreasing
     to 5.0% by 2009.  Increasing the health care trend by 1% would increase the
     benefit obligation by $0.5 million as of December 31, 2003.  Decreasing the
     health care trend rate by 1% would decrease the benefit  obligation by $0.5
     million as of December 31, 2003.


                                       36
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     Net periodic benefit costs for the three-month periods ended March 31, 2004
     and 2003 were as follows:

     <TABLE>
     <S>                                                      <C>                   <C>

                                                                     2004                  2003
                                                              ------------------    ------------------
         (Millions)
         Service cost                                           $    0.2              $     0.1
         Interest cost                                               0.1                    0.2
                                                              ------------------    ------------------
         Net periodic benefit cost                              $    0.3              $     0.3
                                                              ==================    ==================

     </TABLE>

     Contributions  for retired  employees' and retired agents'  post-retirement
     health care benefits are expected to be $0.5 million during 2004.

     Effect of Recently Enacted Legislation

     On  December  8,  2003,   President  Bush  signed  into  law  the  Medicare
     Prescription  Drug  Improvement  and  Modernization  Act of  2003.  The act
     expands  Medicare,  primarily  by  including a  prescription  drug  benefit
     starting in 2006.  Employers  currently  sponsoring such  prescription drug
     programs will have a range of options to potentially  reduce program costs.
     Pursuant to guidance  from the FASB under FSP FAS 106-1,  ING has chosen to
     defer recognition of the Act in these disclosures.  Therefore, all measures
     of the accumulated post retirement  benefit obligation and the net periodic
     post retirement  benefit cost included in these  disclosures do not reflect
     the  effects of the above  named Act on the plans.  Specific  authoritative
     guidance on the accounting for the federal subsidy  possibly  payable under
     the Act is pending  and that  guidance,  when  issued,  could  require  the
     sponsor to change previously reported information.


11.  Related Party Transactions

     Operating Agreements

     The Company has certain agreements whereby it generates revenues and incurs
     expenses with affiliated entities. The agreements are as follows:

          Underwriting and distribution  agreement with Directed Services,  Inc.
          ("DSI"),  for the variable  insurance  products issued by the Company.
          DSI is  authorized to enter into  agreements  with  broker/dealers  to
          distribute    the   Company's'    variable    products   and   appoint
          representatives  of the broker/dealers as agents. For the three months
          ended March 31, 2004 and 2003,  commission  expenses  were incurred in
          the amounts of $90.8 million and $51.0 million, respectively.

          Asset management agreement with ING Investment Management LLC ("IIM"),
          in which IIM provides asset  management and accounting  services.  The
          Company records a fee, which is paid quarterly,  based on the value of
          the assets under management. For the three months ended March 31, 2004
          and 2003,  expenses  were incurred in the amounts of $16.7 million and
          $13.5 million, respectively.


                                       37

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

          Expense   sharing   agreements   with  ING  AIH  for   administrative,
          management, financial, and information technology services, which were
          approved in 2001.  For the three months ended March 31, 2004 and 2003,
          ING  USA  incurred   expenses  of  $14.3  million  and  $6.6  million,
          respectively.

          Services  agreement  with ING  Financial  Advisors,  LLC ("ING FA") to
          provide certain  administrative,  management,  professional  advisory,
          consulting  and other  services  to the Company for the benefit of its
          customers.  Charges  for  these  services  are  to  be  determined  in
          accordance  with fair and  reasonable  standards  with  neither  party
          realizing a profit nor  incurring  a loss as a result of the  services
          provided to the Company.  The Company will reimburse ING FA for direct
          and indirect costs incurred on behalf of the Company.

          Reinsurance Agreements

          ING USA entered into a  reinsurance  agreement  with  Security Life of
          Denver International,  Ltd. ("SLDI"), an affiliate,  covering variable
          annuity  minimum  guaranteed  death  benefits  and minimum  guaranteed
          living benefits of variable annuities issued after January 1, 2000. In
          March 2003, the Company amended its  reinsurance  agreement with SLDI.
          Under this amendment, the Company terminated the reinsurance agreement
          for all inforce and new business and recaptured  all inforce  business
          reinsured under the reinsurance agreement between the Company and SLDI
          retroactive to January 1, 2003 and the Company reduced its reinsurance
          recoverable  related to these liabilities by $150.1 million.  On March
          28,  2003,  SLDI  transferred  assets to the  Company in the amount of
          $185.6  million.  The  difference in amounts  transferred on March 28,
          2003 and the reduction of the  reinsurance  recoverables as of January
          1, 2003,  reflects  adjustments on the  investment of the  reinsurance
          recoverable as of January 1, 2003. It also reflects adjustments on the
          investment  income on the assets and  letter of credit  costs  between
          January  1,  2003  and  the  date  of  the  asset  transfer.  It  also
          encompasses  the net effect of a  recapture  fee paid in the amount of
          $5.0 million offset by the receipt of a $24.1 million  negative ceding
          commission. The net impact of which was deferred in policy acquisition
          costs  and is being  amortized  over the  period of  estimated  future
          profits.

          Reciprocal Loan Agreement

          On January 1, 2004,  the Company  entered into a new  reciprocal  loan
          agreement  with ING AIH,  a Delaware  corporation  and  affiliate,  to
          facilitate  the handling of unusual  and/or  unanticipated  short-term
          cash  requirements.  In accordance  with this  agreement,  the maximum
          outstanding  amount to be  borrowed or lent shall not exceed 3% of ING
          USA's total admitted  assets.  This agreement  supercedes the previous
          reciprocal  loan  agreement with ING AIH, by which the Company and ING
          AIH could borrowed up to $499 million from one another.

          Under the previous reciprocal loan agreement,  interest on any ING USA
          borrowings  was charged at the rate of ING AIH's cost of funds for the
          interest  period plus 0.15%.  Interest on any ING AIH  borrowings  was
          charged  at a rate  based  on the  prevailing  interest  rate  of U.S.
          commercial paper available for purchase with a similar duration. Under


                                       38
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

          this agreement, ING USA incurred interest expense of $2.7 thousand and
          $96.4  thousand  for the three  months  ended March 31, 2004 and 2003,
          respectively.  At March 31, 2004 and December  31,  2003,  ING USA had
          $366.4 million and $120.4 million  receivable  from ING AIH under this
          agreement included in due from affiliates.

          Notes to Affiliates

          The Company has a promissory note in the amount of $50 million payable
          to Lion  Connecticut  Holdings,  Inc. The note was issued on April 15,
          1997.  Interest  is charged at an annual  rate of 8.75%,  and the face
          amount is due on demand. The Company incurred interest expense of $1.1
          million on this note for the three  months  ended  March 31,  2004 and
          2003,  respectively.  There  are no  collateral  requirements  on this
          promissory  note.  This  note is  reported  on the  balance  sheets in
          borrowed money.

          ING USA  issued  a  30-year  surplus  note  for $35  million  with its
          affiliate, Security Life of Denver, which matures on December 7, 2029.
          Interest is charged at an annual  rate of 7.98%.  Payment of the notes
          and  related  accrued  interest  is  subordinate  to  payments  due to
          policyholders  and claimant and beneficiary  claims,  as well as debts
          owed to all other classes of debtors, other than surplus note holders,
          of ING USA. Any payment of principal  and/or  interest made is subject
          to the prior  approval of the Iowa  Insurance  Commissioner.  Interest
          expense was $0.7 million for the three months ended March 31, 2004 and
          2003, respectively.

          Tax Sharing Agreements

          The Company has entered  into a state tax sharing  agreement  with ING
          AIH and each of the  specific  subsidiaries  that are  parties  to the
          agreement.  The state tax agreement applies to situations in which ING
          AIH and all or some of the subsidiaries  join in the filing of a state
          or local franchise,  income tax or other tax return on a consolidated,
          combined or unitary basis.

          Capital Transactions

          During the three months ended March 31, 2004,  ING USA did not receive
          capital  contributions.  During the three months ended March 31, 2003,
          ING USA received capital contributions of $88.7 million.


                                       39

<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

     12.  Financing Agreements

          The Company  maintains a revolving  loan agreement with SunTrust Bank,
          Atlanta (the  "Bank").  Under this  agreement,  which expires July 30,
          2004,  the  Company  can  borrow  up to $125  million  from the  Bank.
          Interest  on any  borrowing  accrues at an annual rate equal to a rate
          quoted  by the  Bank to the  Company  for  the  borrowing.  Under  the
          agreement,  the Company incurred interest expense of $3.8 thousand and
          $28.3  thousand  for the three  months  ended March 31, 2004 and 2003,
          respectively. At March 31, 2004 and December 31, 2003, the Company did
          not have any balances payable to the Bank.

          The Company also maintains a revolving loan agreement with Bank of New
          York,  New York (the "BONY").  Under this  agreement,  the Company can
          borrow up to $100  million  from BONY.  Interest on any of the Company
          borrowing  accrues at an annual rate equal to a rate quoted by BONY to
          the  Company  for the  borrowing.  Under this  agreement,  the Company
          incurred no interest expense for the three months ended March 31, 2004
          and 2003. At March 31, 2004 and December 31, 2003, the Company did not
          have any balances payable to BONY.


     13.  Reinsurance

          At  March  31,  2004,  ING  USA  had  reinsurance   treaties  with  19
          unaffiliated   reinsurers  and  2  affiliated  reinsurers  covering  a
          significant  portion of the mortality  risks and guaranteed  death and
          living benefits under its variable  contracts.  ING USA remains liable
          to the extent its reinsurers do not meet their  obligations  under the
          reinsurance agreements.

          Reinsurance  ceded in force for life  mortality  risks  were  $1,171.1
          million and $1,209.4  million at March 31, 2004 and December 31, 2003,
          respectively. At March 31, 2004 and December 31, 2003, the Company had
          net receivables of $20.8 million and $15.4 million,  respectively  for
          reinsurance  claims,  reserve credits, or other receivables from these
          reinsurers.  At March 31, 2004 and December  31,  2003,  respectively,
          these net receivables  were comprised of the following:  $31.7 million
          and $17.1 million for claims recoverable from reinsurers; $9.0 million
          and $6.6 million payable for reinsurance  premiums;  $26.7 million and
          $20.2 million for reserve credits; and $20.2 million and $21.1 million
          for  reinsured  surrenders  and  allowances  due from an  unaffiliated
          reinsurer.   Included   in  the   accompanying   condensed   financial
          statements,  excluding the modified  coinsurance  agreements,  are net
          considerations  to reinsurers of $3.3 million and $3.1 million and net
          policy benefits  recoveries of $12.9 million and $12.7 million for the
          three months ended March 31, 2004 and 2003, respectively.

          Premiums  ceded under  reinsurance  were $3.3 million and $3.1 million
          for the three  months  ended  March 31,  2004 and 2003,  respectively.
          Reinsurance  recoveries  were $0.7  million  and $0.4  million for the
          three  months  ended March 31, 2004 and 2003,  respectively.  Premiums
          ceded and reinsurance recoveries are included in interest credited and
          other benefits to policyholders.


                                       40
<PAGE>

ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
--------------------------------------------------------------------------------

         ING USA participates in a modified coinsurance agreement with an
         unaffiliated reinsurer. The accompanying condensed financial statements
         are presented net of the effects of the treaty which increased
         (decreased) income by $(0.3) million and $(0.1) million for the three
         months ended March 31, 2004 and 2003, respectively.


     14.  Commitments and Contingent Liabilities

          Leases

          The Company  leases its home office space and certain other  equipment
          under operation leases that expire through 2017.

          For the three months  ended March 31, 2004 and 2003,  rent expense for
          leases was $1.9 million and $1.8 million, respectively. The future net
          minimum  payments  under  noncancelable  leases  for the  years  ended
          December 31, 2004 through 2008 are estimated to be $7.6 million,  $7.7
          million,  $7.7 million,  $7.5 million and $7.4 million,  respectively,
          and $42.9  million,  thereafter.  The Company pays  substantially  all
          expenses  associated with its leased and subleased office  properties.
          Expenses not paid directly by the Company are paid for by an affiliate
          and allocated back to the Company.

          Commitments

          Through  the  normal  course of  investment  operations,  the  Company
          commits to either  purchase or sell  securities,  commercial  mortgage
          loans or money market  instruments at a specified future date and at a
          specified  price or yield.  The inability of  counterparties  to honor
          these  commitments  may result in either  higher or lower  replacement
          cost.  Also,  there  is  likely  to be a  change  in the  value of the
          securities underlying the commitments.  At March 31, 2004 and December
          31, 2003, the Company had  off-balance  sheet  commitments to purchase
          investments  equal to their  fair value of $369.9  million  and $154.0
          million, respectively.

          Litigation

          The Company is a party to threatened or pending  lawsuits arising from
          the normal  conduct of business.  Due to the climate in insurance  and
          business  litigation,  suits  against  the Company  sometimes  include
          claims for substantial compensatory, consequential or punitive damages
          and other types of relief.  Moreover,  certain  claims are asserted as
          class actions,  purporting to represent a group of similarly  situated
          individuals.  While it is not possible to forecast the outcome of such
          lawsuits, in light of existing insurance,  reinsurance and established
          reserves, it is the opinion of management that the disposition of such
          lawsuits  will not have a materially  adverse  effect on the Company's
          operations or financial position.


                                       41
<PAGE>

 Item 2.  Management's  Narrative  Analysis of the Results of Operations and
          Financial Condition

          Overview

          The  following  narrative  analysis of the results of  operations  and
          financial  condition  presents a review of the Company as of March 31,
          2004 and December 31, 2003 and for the three-month periods ended March
          31, 2004 and 2003. This review should be read in conjunction  with the
          condensed financial statements and other data presented herein.

          Basis of Presentation

          On January 1, 2004, the Company  redomesticated from Delaware to Iowa.
          In addition,  on January 1, 2004 (the "merger  date"),  Equitable Life
          Insurance  Company  of Iowa  ("Equitable  Life"),  USG  Annuity & Life
          Company  ("USG") and United Life & Annuity  Insurance  Company ("ULA")
          (the "Merger  Companies"),  merged with and into Golden  American Life
          Insurance Company ("Golden  American").  Immediately after the merger,
          Golden American changed its name to ING USA Annuity and Life Insurance
          Company.  As of the merger date, the Merger  Companies ceased to exist
          and  were  merged  into  ING USA.  Lion is an  indirect,  wholly-owned
          subsidiary  of ING Groep N.V.  ("ING"),  a global  financial  services
          holding company based in The Netherlands.  ING USA is authorized to do
          business in the District of Columbia  and all states  except New York.
          ING USA is licensed as a life insurance  company under the laws of the
          State of Delaware  until  December 31, 2003 and Iowa since  January 1,
          2004.

          Prior to the merger date,  ING USA was a  wholly-owned  subsidiary  of
          Equitable  Life from  December  30, 2001  through  December  31, 2003.
          Formerly, from October 24, 1997, until December 30, 2001, Equitable of
          Iowa  Companies,  Inc. ("EIC" or "Former  Holding  Company")  directly
          owned 100% of Golden American's stock.

          Statement  of  Financial   Accounting  Standards  No.  141,  "Business
          Combinations"  ("FAS  141"),  excludes  transfers  of  net  assets  or
          exchanges of shares between  entities under common control,  and notes
          that certain provisions under Accounting  Principles Board Opinion No.
          16, "Business  Combinations"  ("APB 16"), provide a source of guidance
          for  such   transactions.   In  accordance  with  APB  16,   financial
          information of the combined entity is presented as if the entities had
          been  combined  for  the  full  year,  and all  comparative  financial
          statements   are  restated  and  presented  as  if  the  entities  had
          previously    been    combined,    in   a   manner    similar   to   a
          pooling-of-interests.

          The unaudited condensed  financial  statements have been prepared in a
          manner  similar  to a  pooling-of-interests,  in  accordance  with the
          provisions  of APB 16 in  order to  present  the  condensed  financial
          position  and  results of  operations  of the  Company  and the Merger
          Companies,  as if the  entities  had  previously  been  combined.  The
          unaudited  condensed  balance  sheets and  statements  of income  give


                                       42
<PAGE>

          effect  to the  consolidation  transaction  as if it had  occurred  on
          December 31, 2003 and January 1, 2003, respectively.

          Results of Operations

          Premiums for the three  months ended March 31, 2004  decreased by $1.8
          million  compared to the same period in 2003. This decrease in premium
          is related to the closed block of participating life business.

          Fee income and other  income for the three months ended March 31, 2004
          increased  by  $46.7  million  compared  to the same  period  in 2003,
          primarily  due to an  increase in the average  variable  assets  under
          management  by the Company.  The increase in average  variable  assets
          under  administration   reflects  continued  business  growth  in  the
          Company's variable annuity product lines.

          Net  investment  income  for the three  months  ended  March 31,  2004
          increased by $18.6 million  compared to the same period in 2003.  This
          increase in net investment  income is primarily due to increased fixed
          assets under management.

          Net realized  capital gains  (losses) for the three months ended March
          31,  2004  increased  by $7.2  million  compared to the same period in
          2003.   Net  realized   gains  result  from  sale  of  fixed  maturity
          investments  having a fair value greater than book value primarily due
          to declining interest rates.

          Interest  credited  and other  benefits to the  policyholders  for the
          three months ended March 31, 2004  decreased by $9.8 million  compared
          to the same  period  in  2003.  The  decrease  is  primarily  due to a
          decrease in guaranty  benefits reserve change offset by an increase to
          interest credited and distributions to participating policyholders.

          General  expenses  for  the  three  months  ended  March  31,  2004 is
          comparable to that for the same period in 2003.

          Commissions  for the three  months  ended March 31, 2004  increased by
          $58.9  million  compared to the same period in 2003.  This increase is
          primarily  due to  additional  commissions  on  higher  new  sales  of
          variable and fixed annuity  products during the quarter,  as well as a
          $24.1 million ceded commission adjustment in the first quarter of 2003
          related to the recapture of an affiliate reinsurance agreement.

          Policy acquisition costs deferred for the three months ended March 31,
          2004  increased by $38.6 million  compared to the same period in 2003.
          This   increase  was  primarily  due  to  the  deferral  of  increased
          commissions and selling  expense on higher annuity product sales,  the
          deferral  of  $19.1  million  net  gain  in  the  first  quarter  2003
          attributed  to the  recapture of an affiliate  reinsurance  agreement,
          partially  offset by lower premium bonus deferrals on reduced sales of
          company annuity premium credit products.


                                       43

<PAGE>

          Amortization  of  deferred  policy  acquisition  costs  and  value  of
          business acquired for the three months ended March 31, 2004, increased
          by $6.3 million  compared to the same period in 2003.  Amortization of
          long-duration  products  is  reflected  in  proportion  to actual  and
          estimated  future gross  profits.  Estimated  future gross profits are
          computed  based on underlying  assumptions  related to the  underlying
          contracts,  including but not limited to interest margins, surrenders,
          withdrawals,   expenses,   and  asset  growth.  The  increase  in  the
          amortization  of  deferred  policy  acquisition  costs  and  value  of
          insurance  acquired  reflects  the  impact of these  variables  on the
          overall book of business.

          Expense and charges  reimbursed under modified  coinsurance  ("MODCO")
          agreements  for the three months  ended March 31,  2004,  increased by
          $0.4  million  compared  to the  same  period  in 2003.  This  balance
          represents the net cash flows from the Paine Webber MODCO  agreements.
          As this MODCO  agreement  does not cover new business,  the run-off of
          the  reserve  credit and the  product  charge  reimbursement  to Paine
          Webber exceed the commission and expense allowances that accrue to the
          Company.

          Interest expense for the three months ended March 31, 2004,  increased
          by $0.4 million  compared to the same period in 2003.  The increase is
          primarily due to interest expense on dollar roll agreements.

          The  cumulative  effect of the change in accounting  principle for the
          three months ended March 31, 2004, was a loss of $2.3 million,  net of
          tax, due to the implementation of SOP 03-1.

          Net income,  excluding  change in accounting  principle,  increased by
          $36.1  million for the three months ended March 31, 2004,  as compared
          to the three months ended March 31, 2003. The increase in net earnings
          is primarily  the result of  increased  fee income,  reduced  variable
          product   benefit   guarantees   related  to  improved  equity  market
          performance  in the quarter,  partially  offset by lower fixed margins
          resulting from the depressed interest rate environment,  and increased
          amortization  of deferred  policy  acquisition  costs and value of new
          business acquired.

          Financial Condition

          Investments

          Fixed Maturities

          Total fixed  maturities  reflected  net  unrealized  capital  gains of
          $762.7  million and $517.3  million at March 31, 2004 and December 31,
          2003, respectively.

          It is management's objective that the portfolio of fixed maturities be
          of high quality and be well  diversified by market  sector.  The fixed
          maturities in the Company's  portfolio are generally rated by external
          rating agencies and, if not externally rated, are rated by the Company
          on a basis believed to be similar to that used by the rating agencies.


                                       44
<PAGE>

          The average quality rating of the Company's fixed maturities portfolio
          was A+ at March 31, 2004 and December 31, 2003.

          Fixed   maturities   rated  BBB  and   below   may  have   speculative
          characteristics,   and  changes  in  economic   conditions   or  other
          circumstances  are more  likely to lead to a weakened  capacity of the
          issuer to make  principal and interest  payments than is the case with
          higher rated fixed maturities.

          The percentage of total fixed maturities by quality rating category is
          as follows:

                                                March 31,          December 31,
                                                   2004                 2003
                                            -----------------    ---------------
          AAA                                    34.3   %             35.3   %
          AA                                      4.5                  4.7
          A                                      21.7                 21.3
          BBB                                    34.5                 33.4
          BB                                      3.9                  4.0
          B and below                             1.1                  1.3
                                            -----------------    ---------------
          Total                                 100.0   %            100.0   %
                                            =================    ===============

          The  percentage  of total  fixed  maturities  by  market  sector is as
          follows:


                                                March 31,          December 31,
                                                   2004                 2003
                                            -----------------    ---------------
          U.S. Corporate                           48.9  %             48.9  %
          Residential Mortgaged-backed             21.8                20.8
          Commercial/Multifamily
            Mortgage-backed                         5.1                 5.0
          Foreign(1)                               15.5                15.9
          U.S. Treasuries/Agencies                  0.2                 1.3
          Asset-backed                              8.5                 8.1
                                            -----------------    ---------------
          Total                                   100.0  %            100.0  %
                                            =================    ===============

          (1)  Primarily U.S. dollar denominated

          The Company  analyzes  the general  account  investments  to determine
          whether there has been an other than  temporary  decline in fair value
          below  the  amortized  cost  basis in  accordance  with  FAS No.  115,
          "Accounting  for Certain  Investments in Debt and Equity  Securities."
          Management  considers  the  length of the time and the extent to which
          the market value has been less than cost; the financial  condition and
          near term  prospects of the issuer;  future  economic  conditions  and
          market  forecasts;  and the Company's intent and ability to retain the
          investment in the issuer for a period of time  sufficient to allow for
          recovery  in market  value.  If it is  probable  that all  amounts due
          according  to the  contractual  terms of a debt  security  will not be
          collected,  an other than  temporary  impairment is considered to have
          occurred.


                                       45

<PAGE>

          In addition,  the Company  invests in structured  securities that meet
          the criteria of Emerging  Issues Task Force  ("EITF") Issue No. 99-20,
          "Recognition  of  Interest  Income and  Impairment  on  Purchased  and
          Retained Beneficial Interests in Securitized  Financial Assets." Under
          EITF Issue No. 99-20, a  determination  of the required  impairment is
          based on credit risk and the  possibility  of  significant  prepayment
          risk that restricts the Company's  ability to recover the  investment.
          An  impairment is recognized if the fair value of the security is less
          than book  value and  there  has been an  adverse  change in cash flow
          since the last remeasurement date.

          When a decline in fair value is determined to be other than temporary,
          the individual  security is written down to fair value and the loss is
          accounted for as a realized loss.

          Liquidity and Capital Resources

          Liquidity  is the ability of the Company to generate  sufficient  cash
          flows to meet the  cash  requirements  of  operating,  investing,  and
          financing activities. The Company's principal sources of liquidity are
          annuity  premiums and product  charges,  investment  income,  maturing
          investments,  proceeds from debt issuance,  and capital contributions.
          Primary uses of these funds are payments of commissions  and operating
          expenses,   interest  and  premium  credits,   investment   purchases,
          repayment of debt, as well as withdrawals and surrenders.

          The Company's  liquidity  position is managed by maintaining  adequate
          levels  of  liquid  assets,  such  as cash  or  cash  equivalents  and
          short-term  investments.   Additional  sources  of  liquidity  include
          borrowing facilities to meet short-term cash requirements. The Company
          maintains a $499  million  revolving  note  facility  with ING America
          Insurance  Holdings,  Inc.  ("ING  AIH"),  a  perpetual  $100  million
          revolving  note  facility  with  Bank of New York  and a $125  million
          revolving  note  facility with SunTrust Bank which expires on July 30,
          2004. Management believes that these sources of liquidity are adequate
          to meet the Company's short-term cash obligations.

          The  National   Association   of  Insurance   Commissioners   ("NAIC")
          risk-based  capital   requirements   require  insurance  companies  to
          calculate and report  information under a risk-based  capital formula.
          These  requirements  are  intended to allow  insurance  regulators  to
          monitor the capitalization of insurance  companies based upon the type
          and mixture of risks inherent in a Company's  operations.  The formula
          includes  components  for asset risk,  liability  risk,  interest rate
          exposure,  and other factors. The Company has complied with the NAIC's
          risk-based capital reporting  requirements.  Amounts reported indicate
          that the Company has total adjusted capital above all required capital
          levels.

          During the three months ended March 31, 2004,  ING USA did not receive
          capital  contributions.  During the three months ended March 31, 2003,
          ING USA received capital contributions of $88.7 million.


                                       46
<PAGE>

          Recently Adopted Accounting Standards

          Accounting  and  Reporting  by  Insurance   Enterprises   for  Certain
          Nontraditional Long-Duration Contracts and for Separate Accounts

          The Company adopted  Statement of Position  ("SOP") 03-1,  "Accounting
          and  Reporting by  Insurance  Enterprises  for Certain  Nontraditional
          Long-Duration  Contracts  and for  Separate  Accounts,"  on January 1,
          2004.  SOP 03-1  establishes  several new  accounting  and  disclosure
          requirements for certain  nontraditional  long-duration  contracts and
          for separate  accounts  including,  among other things,  a requirement
          that assets and liabilities of separate account  arrangements  that do
          not meet certain  criteria be accounted for as general  account assets
          and  liabilities,  and that the revenue and  expenses  related to such
          arrangements  be  consolidated  with the respective  line items in the
          Condensed  Statements  of  Income.  In  addition,   the  SOP  requires
          additional  liabilities be established  for certain  guaranteed  death
          benefits and for products  with certain  patterns of cost of insurance
          charges,  and that sales inducements  provided to  contractholders  be
          recognized on the balance sheet  separately from deferred  acquisition
          costs  and  amortized  as  a  component  of  benefits   expense  using
          methodology   and   assumptions   consistent   with   those  used  for
          amortization of deferred policy acquisition costs.

          The Company evaluated all requirements of SOP 03-1 and determined that
          it is  affected  by the SOP's  requirements  to  establish  additional
          liabilities for certain guaranteed benefits and products with patterns
          of  cost  insurance  charges  resulting  in  losses  in  later  policy
          durations from the insurance benefit function and to defer,  amortize,
          and  recognize  separately,   sales  inducements  to  contractholders.
          Requirements  for certain separate  account  arrangements  that do not
          meet  the  established  criteria  for  separate  asset  and  liability
          recognition  are  applicable  to the Company,  however,  the Company's
          policies on separate account assets and liabilities have  historically
          been, and continue to be, in conformity  with the  requirements  newly
          established.  Upon  adoption  of the SOP,  the  Company  recognized  a
          cumulative  effect  of a change  in  accounting  principle  of  $(2.3)
          million on January 1, 2004.

          Accounting for Derivative Instruments and Hedging Activities

          In June 1998, the FASB issued FAS No. 133,  "Accounting for Derivative
          Instruments and Hedging Activities," as amended and interpreted by FAS
          No. 137, "Accounting for Derivative Instruments and Hedging Activities
          - Deferral of the Effective Date of FASB  Statement  133," and FAS No.
          138,  "Accounting  for  Certain  Derivative  Instruments  and  Certain
          Hedging  Activities  - an  Amendment  of FASB 133, and certain FAS 133
          implementation issues." This standard, as amended,  requires companies
          to record all  derivatives  on the balance  sheet as either  assets or
          liabilities and measure those instruments at fair value. The manner in
          which  companies are to record gains or losses  resulting from changes
          in the fair  values  of those  derivatives  depends  on the use of the
          derivative and whether it qualifies for hedge accounting.  FAS No. 133
          was effective for the Company's financial statements beginning January
          1, 2001. Adoption of FAS No. 133 did not have a material effect on the


                                       47
<PAGE>

          Company's  financial  position  or  results  of  operations  given the
          Company's limited derivative holdings and embedded derivatives.

          The  Company  occasionally   purchases  a  financial  instrument  that
          contains  a  derivative  that  is  "embedded"  in the  instrument.  In
          addition,  the Company's  insurance products are reviewed to determine
          whether  they  contain an embedded  derivative.  The Company  assesses
          whether the economic  characteristics  of the embedded  derivative are
          clearly and closely  related to the  economic  characteristics  of the
          remaining  component of the financial  instrument or insurance product
          (i.e.,  the host contract) and whether a separate  instrument with the
          same terms as the embedded  instrument  would meet the definition of a
          derivative  instrument.  When  it  is  determined  that  the  embedded
          derivative possesses economic characteristics that are not clearly and
          closely related to the economic  characteristics  of the host contract
          and that a separate  instrument with the same terms would qualify as a
          derivative  instrument,  the embedded derivative is separated from the
          host contract and carried at fair value.  However,  in cases where the
          host  contract is measured at fair value,  with  changes in fair value
          reported  in  current  period  earnings  or the  Company  is unable to
          reliably  identify and measure the embedded  derivative for separation
          from its host contracts, the entire contract is carried on the balance
          sheet at fair value and is not designated as a hedging instrument.

          In 2003, the Derivative  Implementation  Group ("DIG") responsible for
          issuing guidance on behalf of the FASB for  implementation  of FAS No.
          133,  "Accounting for Derivative  Instruments and Hedging  Activities"
          issued Statement  Implementation Issue No. B36, "Embedded Derivatives:
          Modified   Coinsurance   Arrangements   and  Debt   Instruments   That
          Incorporate Credit Risk Exposures That Are Unrelated or Only Partially
          Related  to  the  Credit   Worthiness   of  the  Obligor  under  Those
          Instruments"   ("DIG  B36").  Under  this   interpretation,   modified
          coinsurance and coinsurance with funds withheld reinsurance agreements
          as well as other types of  receivables  and payables where interest is
          determined  by reference to a pool of fixed  maturity  assets or total
          return debt index may be  determined to contain  embedded  derivatives
          that are  required to be  bifurcated.  The Company  adopted DIG B36 on
          October  1,  2003  and has  modified  coinsurance  treaties  that  are
          applicable to the guidance.  The applicable  contracts,  however, were
          determined to generate embedded derivatives with a fair value of zero.
          Therefore,  the  guidance,  while  implemented,  does not  impact  the
          Company's financial position, results of operations, or cash flows.

          Off-Balance Sheet Arrangements

          In January  2003,  the  Financial  Accounting  Standards  Board (FASB)
          issued FASB  Interpretation  46,  "Consolidation  of Variable Interest
          Entities,  an Interpretation of ARB No.51" (FIN 46). In December 2003,
          the FASB  modified FIN 46 to make certain  technical  corrections  and
          address certain implementation issues that had arisen. FIN 46 provides
          a new framework for identifying  variable interest entities (VIEs) and
          determining  when a company  should  include the assets,  liabilities,
          noncontrolling  interests  and results of  activities  of a VIE in its
          consolidated financial statements.


                                       48
<PAGE>

          In general,  a VIE is a  corporation,  partnership,  limited-liability
          corporation,  trust,  or any other  legal  structure  used to  conduct
          activities or hold assets that either (1) has an  insufficient  amount
          of equity to carry out its  principal  activities  without  additional
          subordinated  financial support, (2) has a group of equity owners that
          are unable to make significant decisions about its activities,  or (3)
          has a group of equity owners that do not have the obligation to absorb
          losses or the right to receive returns generated by its operations.

          FIN 46 requires a VIE to be consolidated if a party with an ownership,
          contractual  or  other  financial  interest  in the  VIE  (a  variable
          interest holder) is obligated to absorb a majority of the risk of loss
          from the VIE's  activities,  is  entitled to receive a majority of the
          VIE's  residual  returns (if no party  absorbs a majority of the VIE's
          losses), or both. A variable interest holder that consolidates the VIE
          is called the primary  beneficiary.  Upon  consolidation,  the primary
          beneficiary  generally must initially  record all of the VIE's assets,
          liabilities   and   noncontrolling   interests   at  fair   value  and
          subsequently  account for the VIE as if it were consolidated  based on
          majority voting interest.  FIN 46 also requires disclosures about VIEs
          that the variable  interest  holder is not required to consolidate but
          in which it has a significant variable interest.

          At March 31, 2004,  the Company held the following  investments  that,
          for  purposes  of FIN 46,  were  evaluated  and  determined  that  the
          investments do not require  consolidation  in the Company's  financial
          statements:

          <TABLE>
          <S>                                            <C>                           <C>                 <C>

          (Millions)

                    Asset Type                                      Purpose               Book Value (1)       Market Value
          ----------------------------------------         --------------------------    ----------------    ----------------

          Private Corporate Securities - synthetic
            leases; project financings; credit tenant
            leases                                            Investment Holdings          $    2,734.0         $   2,929.5
          Foreign Securities - US VIE subsidiaries
            of foreign companies                              Investment Holdings                 551.2               596.0

          Commercial Mortgage Obligations (CMO)               Investment Holdings               6,597.2             6,884.2

          Collateralized Debt Obligations (CDO)               Investment Holdings
                                                                     and/or
                                                               Collateral Manager                  61.6                56.7

          Asset-Backed Securities (ABS)                       Investment Holdings               1,231.8             1,250.5

          Commercial Mortgage Backed Securities
            (CMBS)                                            Investment Holdings                 820.5               870.8

          (1)  Represents  maximum  exposure to loss except for those structures for which the Company also receives asset
               management fees.
          </TABLE>

          Critical Accounting Policies

          General

          The preparation of financial  statements in conformity with accounting
          principles generally accepted in the United States requires the use of
          estimates and assumptions in certain circumstances that affect amounts
          reported  in  the  accompanying  condensed  financial  statements  and
          related footnotes. These estimates and assumptions are evaluated on an
          on-going basis based on historical  developments,  market  conditions,



                                       49
<PAGE>

          industry  trends and other  information  that is reasonable  under the
          circumstances.  There can be no  assurance  that actual  results  will
          conform to estimates and  assumptions,  and that  reported  results of
          operations will not be affected in a materially  adverse manner by the
          need to make future accounting adjustments to reflect changes in these
          estimates and assumptions from time to time.

          The Company has identified the following estimates as critical in that
          they  involve  a  higher  degree  of  judgment  and are  subject  to a
          significant  degree of  variability:  investment  impairment  testing,
          amortization  of  deferred  acquisition  costs and  value of  business
          acquired  and  goodwill   impairment   testing.  In  developing  these
          estimates,  management makes subjective and complex judgments that are
          inherently  uncertain  and  subject to  material  changes as facts and
          circumstances  develop.  Although  variability  is  inherent  in these
          estimates,  management  believes the amounts  provided are appropriate
          based  upon the facts  available  upon  compilation  of the  condensed
          financial statements.

          Investment Impairment Testing

          The Company reviews the general account investments for impairments by
          analyzing  the amount and length of time  amortized  cost has exceeded
          fair value, and by making certain estimates and assumptions  regarding
          the issuing companies' business prospects,  future economic conditions
          and market  forecasts.  Based on the facts and  circumstances  of each
          case,  management  uses  judgment in deciding  whether any  calculated
          impairments  are  temporary  or  other  than   temporary.   For  those
          impairments judged to be other than temporary, the Company reduces the
          carrying  value of those  investments  to the  current  fair value and
          records impairment losses for the difference (refer to Note 2).

          Amortization  of  Deferred  Acquisition  Costs and  Value of  Business
          Acquired

          Deferred  policy  acquisition  costs  ("DAC")  and  value of  business
          acquired  ("VOBA") are  amortized  with  interest over the life of the
          contracts  (usually  25 years) in  relation  to the  present  value of
          estimated gross profits from projected  interest margins,  asset-based
          fees,  policy   administration   and  surrender  charges  less  policy
          maintenance fees and non-capitalized commissions.

          Changes  in  assumptions   can  have  a  significant   impact  on  the
          calculation of DAC/VOBA and its related amortization  patterns. Due to
          the  relative  size of  DAC/VOBA  balance and the  sensitivity  of the
          calculation  to minor changes in the  underlying  assumptions  and the
          related volatility that could result in the reported DAC/VOBA balance,
          the Company performs a quarterly  analysis of DAC/VOBA for the annuity
          business (annually for the life business).


                                       50
<PAGE>


          At each  balance  sheet  date,  actual  historical  gross  profits are
          reflected and expected  future gross  profits and related  assumptions
          are  evaluated  for  continued   reasonableness.   Any  adjustment  in
          estimated  profit  requires  that  the  amortization  rate be  revised
          retroactively   to  the   date  of   policy   or   contract   issuance
          ("unlocking"),  which could be significant.  The cumulative difference
          related  to prior  periods is  recognized  as a  component  of current
          period's  amortization,  along with  amortization  associated with the
          actual gross profits of the period. In general, increases in estimated
          returns  result in increased  expected  future  profitability  and may
          lower the rate of amortization, while increases in lapse/surrender and
          mortality  assumptions  or  decreases  in returns  reduce the expected
          future  profitability of the underlying  business and may increase the
          rate of amortization.

          One of the most significant  assumptions involved in the estimation of
          future gross profits for variable universal life and variable deferred
          annuity products is the assumed return associated with future variable
          account performance. To reflect the near-term and long-term volatility
          in the equity  markets,  this  assumption  involves a  combination  of
          near-term   expectations  and  a  long-term  assumption  about  market
          performance.  The overall return  generated by the variable account is
          dependent  on  several  factors,  including  the  relative  mix of the
          underlying  sub-accounts  among bond funds and equity funds as well as
          equity sector weightings.

          As part of the  regular  analysis  of  DAC/VOBA,  at the end of  third
          quarter of 2002,  the Company  unlocked its  long-term  rate of return
          assumptions.  The Company reset long-term assumptions for the separate
          account  returns  to 9.0%  (gross  before  fund  management  fees  and
          mortality  and expense and other policy  charges),  as of December 31,
          2002,  reflecting a blended  return of equity and other  sub-accounts.
          The initial  unlocking  adjustment in 2002 was primarily driven by the
          sustained downturn in the equity markets and revised  expectations for
          future returns.

          The Company remained  unlocked during 2003 and has continued to remain
          unlocked  during the first quarter of 2004. In 2003, the Company reset
          long-term  assumptions  for the separate  account returns from 9.0% to
          8.5% (gross before fund  management fees and mortality and expense and
          other policy charges) maintaining a blended return of equity and other
          sub-accounts. The 2003 unlocking adjustment from the previous year was
          primarily  driven by improved market  performance.  During the three
          months ended March 31, 2004, the Company  recorded a  deceleration  of
          DAC/VOBA amortization of $2.7 million pretax, $1.8 million net of $0.9
          million of federal income tax expense.


                                       51
<PAGE>


          Sales Inducements

          Sales inducements  represent benefits paid to contractholders that are
          incremental  to the amounts the Company  credits on similar  contracts
          and are higher than the contract's  expected  ongoing  crediting rates
          for periods after the inducement. Such amounts are reported separately
          on the  balance  sheet and are  amortized  as a  component  of benefit
          expense using  methodology and assumptions  consistent with those used
          for amortization of DAC.

          Contractual Obligations

          As of March 31, 2004, the Company had certain contractual  obligations
          due over a period of time as summarized in the following table:

          <TABLE>
          <S>                                <C>           <C>          <C>          <C>            <C>
                                                             Payments due by Period (in millions)
                                             -------------------------------------------------------------------
                                                           Less than                                More than
          Contractual Obligations               Total        1 Year     1-3 Years     3-5 Years      5 Years
          ---------------------------------- -------------------------------------------------------------------
          Long-Term Debt                      $  161.3     $   57.2     $   5.6       $   5.6       $    92.9
          Operating Lease Obligations             80.8          7.6        15.4          14.9            42.9
          Purchase Obligations                   369.9        369.9           -             -               -
                                             -------------------------------------------------------------------
            Total                             $  612.0     $  434.7     $  21.0       $  20.5       $   135.8
                                             --=================================================================
          </TABLE>

          The Company's long-term debt consists of notes to affiliates,  and the
          related interest  payable,  with Lion Connecticut  Holdings,  Inc. and
          Security Life of Denver Insurance Company,  respectively.  As of March
          31, 2004, the  outstanding  principal and interest rate related to the
          promissory note are $50 million and 8.75%,  respectively.  The note is
          due on  demand.  As of March  31,  2004,  the  outstanding  principal,
          interest  rate, and maturity date of the surplus note are $35 million,
          7.98%, and December 7, 2029, respectively.

          Operating lease obligations relate to the rental of office space under
          various non-cancelable  operating lease agreements that expire through
          May 2010.

          Purchase   obligations   consist  primarily  of  commitments  to  fund
          additional limited  partnerships and joint ventures and commitments to
          enter into mortgage  loan and private  placement  arrangements  during
          2004.

          Legislative Initiatives

          The Jobs and Growth Tax Relief  Reconciliation  Act of 2003, which was
          enacted in the second  quarter,  may  impact  the  Company.  The Act's
          provisions,  which reduce the tax rates on long-term capital gains and
          corporate  dividends,  impact  the  relative  competitiveness  of  the
          Company's products especially variable annuities.

          Other legislative  proposals under consideration include repealing the
          estate tax, changing the taxation of products, changing life insurance
          company   taxation  and  making  changes  to   nonqualified   deferred
          compensation arrangements.  Some of these proposals, if enacted, could


                                       52
<PAGE>

          have a material effect on life insurance, annuity and other retirement
          savings product sales.

          The impact on the tax  position of the  Company's  products  cannot be
          predicted.

          Forward-Looking Information/Risk Factors

          In  connection  with  the  "safe  harbor"  provisions  of the  Private
          Securities Litigation Reform Act of 1995, the Company cautions readers
          regarding certain forward-looking  statements contained in this report
          and in any other  statements  made by, or on behalf of,  the  Company,
          whether  or  not in  future  filings  with  the  SEC.  Forward-looking
          statements  are  statements  not based on historical  information  and
          which relate to future operations,  strategies,  financial results, or
          other   developments.   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 levels of sales and redemptions of
          the Company's products, investment spreads and yields, or the earnings
          and profitability of the Company's activities.

          Forward-looking  statements  are  necessarily  based on 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 are subject
          to change.  These  uncertainties and contingencies  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
          developments.  Some may be national in scope, such as general economic
          conditions, changes in tax law and changes in interest rates. Some may
          be  related  to the  insurance  industry  generally,  such as  pricing
          competition,   regulatory  developments  and  industry  consolidation.
          Others  may  relate  to the  Company  specifically,  such  as  credit,
          volatility and other risks  associated  with the Company's  investment
          portfolio.  Investors  are also  directed to consider  other risks and
          uncertainties  discussed  in  documents  filed by the Company with the
          SEC. The Company  disclaims any  obligation to update  forward-looking
          information.


                                       53
<PAGE>

Item 4. Controls and Procedures

     a)   The Company carried out an evaluation,  under the supervision and with
          the  participation  of its  management,  including its Chief Executive
          Officer  and Chief  Financial  Officer,  of the  effectiveness  of the
          Company's  disclosure  controls  and  procedures  (as  defined in Rule
          13a-15(e) and 15d-15(e)) of the Securities Exchange Act of 1934) as of
          the  end  of  the  period  covered  by  this  report.  Based  on  that
          evaluation,  the  Chief  Executive  Officer  and the  Chief  Financial
          Officer have concluded that the Company's current disclosure  controls
          and  procedures  are effective in ensuring  that material  information
          relating to the  Company  required to be  disclosed  in the  Company's
          periodic SEC filings is made known to them in a timely manner.

     b)   There has not been any change in the internal  controls over financial
          reporting of the Company that  occurred  during the period  covered by
          this report that has  materially  affected or is reasonably  likely to
          materially affect these internal controls.


                                       54
<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

          The Company is a party to threatened or pending  lawsuits arising from
          the normal  conduct of business.  Due to the climate in insurance  and
          business  litigation,  suits  against  the Company  sometimes  include
          claims for substantial compensatory, consequential or punitive damages
          and other types of relief.  Moreover,  certain  claims are asserted as
          class actions,  purporting to represent a group of similarly  situated
          individuals.  While it is not possible to forecast the outcome of such
          lawsuits, in light of existing insurance,  reinsurance and established
          reserves, it is the opinion of management that the disposition of such
          lawsuits  will not have a materially  adverse  effect on the Company's
          operations or financial position.

          As  with  many  financial  services  companies,  the  Company  and its
          affiliates  have  received   requests  for  information  from  various
          governmental   and   self-regulatory   agencies  in  connection   with
          investigations  related to trading in investment  company  shares.  In
          each case,  full  cooperation  and  responses  have been and are being
          provided. The Company is also reviewing its policies and procedures in
          this area.


Item 6. Exhibits and reports on Form 8-K

     (a)  Exhibits

          3.(a)(i) Bylaws, as restated February 25, 2004.

          3.(a)(ii) Articles, as restated March 4, 2004.

          10.A(a) Reciprocal Loan Agreement  dated January 1, 2004,  between
                  ING USA Annuity and Life Insurance  Company and ING America
                  Insurance Holdings,  Inc.,  dated 11/10/03;  FDF:  11/10/03;
                  DOI Approval: 12/1/03, Effective 1/1/04.

          31.1 Certificate  of David A. Wheat  pursuant  to  Section  302 of the
               Sarbanes-Oxley Act of 2002.

          31.2 Certificate  of  Keith  Gubbay  pursuant  to  Section  302 of the
               Sarbanes-Oxley Act of 2002.

          32.1 Certificate  of David A. Wheat  pursuant  to  Section  906 of the
               Sarbanes-Oxley Act of 2002.

          32.2 Certificate  of  Keith  Gubbay  pursuant  to  Section  906 of the
               Sarbanes-Oxley Act of 2002.

     (b)  Reports on Form 8-K

          None.


                                       55
<PAGE>

                                        4
                                   SIGNATURES

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.


                               ING USA ANNUITY AND LIFE INSURANCE COMPANY
                                               (Registrant)


                               By /s/ David A. Wheat
May 14, 2004                      ----------------------------------------------
------------                          David A. Wheat
  (Date)                              Director, Senior Vice President and
                                         Chief Financial Officer

                                      Duly Authorized Officer and Principal
                                      Financial Officer)


<PAGE>





                                                                Exhibit 3.(a)(i)


                                AMENDED BYLAWS OF

                   ING USA ANNUITY AND LIFE INSURANCE COMPANY

                                    ARTICLE I

                                  STOCKHOLDERS

     Section 1. PLACE OF MEETINGS.  All meetings of the  stockholders of ING USA
Annuity and Life Insurance  Company (the  "Corporation"  or "Company")  shall be
held at such place or places  within or without  the State of Iowa,  as may from
time to time be fixed by the Board of Directors  (the  "Board"),  or as shall be
specified  or fixed in the  respective  notices or  waivers  of notice  thereof,
provided that any or all  stockholders  may  participate  in any such meeting by
means of conference telephone or similar communications.

     Section 2. ANNUAL MEETING.  The annual meeting of the stockholders shall be
held at the home office of the Company on or before the  thirty-first day of May
of each year for the purpose of electing  Directors and for the  transaction  of
such other business as may be brought before the meeting.

     Section 3. SPECIAL  MEETINGS.  Special  meetings of the stockholders may be
called at any time by the President,  Secretary,  the Board of Directors  acting
upon  majority  vote,  or the  holders  of not less  than  one-tenth  of all the
outstanding  shares of the  Corporation  entitled  to vote at such  meeting.  No
business  other than that specified in the notice of meeting shall be transacted
at a special meeting of the Shareholders.

     Section  4.  NOTICE  OF  MEETING.   Written   notice  of  each  meeting  of
stockholders,  stating the place, date and hour of the meeting,  and the purpose
or purposes  thereof,  shall be mailed to each  stockholder  entitled to vote at
such  meeting  not less than ten or more than fifty days  before the date of the
meeting. Stockholders by written notice may waive notice of any meeting, and the
presence  of a  stockholder  at  any  meeting,  in  person  or by  proxy,  shall
constitute a waiver of notice of such meeting.

     Section 5.  QUORUM/VOTING.  The presence at a meeting in person or by proxy
of stockholders of the Company representing a majority or issued and outstanding
shares of the Company  shall be necessary to constitute a quorum for the purpose
of  transacting  business,  except as  otherwise  provided by law, but a smaller
number  may  adjourn  the  meeting  from  time to time  until a quorum  shall be
obtained.  Each  stockholder  shall be entitled to cast one vote in person or by
proxy  for each  share of stock of the  Company  held as of record in his or her
name on the books of the Company.

     Section  6.  PROXIES.  A  stockholder  may  vote  at  any  meeting  of  the
stockholders,  either  in  person  or  by  proxy  executed  in  writing  by  the
stockholder  or by his duly  authorized  attorney-in-fact.  All proxies shall be
filed with the Secretary of the Company  before voting and entered on the record
in the minutes of the meeting. No special form of proxy shall be necessary.


                                       1
<PAGE>


     Section 7. CONSENTS TO CORPORATE ACTION. Unless otherwise prohibited by the
applicable laws of the State of Iowa or the Company's Articles of Incorporation,
any action  required  to be taken or which may be taken at any annual or special
meeting  of  stockholders  of the  Company  may be taken  without a meeting  and
without a vote if a consent in writing, setting forth the action so taken, shall
be signed  by all of the  stockholders  entitled  to vote  with  respect  to the
subject matter thereof.  The consents of stockholders  shall be evidenced by one
or more written approvals, each which sets forth the action taken, and bears the
signature  of one or more  stockholders.  All of the  approvals  evidencing  the
consents  shall be delivered to the  Secretary of the Company to be filed in the
Company's records. The action shall be effective on the date the stockholder has
approved the consent unless the consent specifies a different effective date.


                                       2
<PAGE>

                                   ARTICLE II

                               BOARD OF DIRECTORS


     Section 1. GENERAL  POWERS.  The  business  and affairs of the  Corporation
shall be managed by its Board of  Directors.  The Board of Directors  shall have
the power to commit shares of the authorized  but unissued  capital stock of the
Corporation for acquisitions of other property of any and all kinds.  Such stock
shall be issued at valuation placed thereon by the Board of Directors, but in no
event for a consideration less than the par value of such shares.

     Section 2. NUMBER,  TENURE AND  QUALIFICATIONS.  The number of Directors of
the  Corporation  shall be not less than five (5) nor more than  twenty-one (21)
persons elected by the  shareholders  at the annual meeting of the  Corporation.
The number to be elected may be determined by a resolution of the  shareholders,
but in the  absence of such a  resolution  there  shall be elected the number of
Directors  that were  elected at the  previous  annual  meeting.  Subject to the
Restated Articles of Incorporation, each Director shall hold office for the term
of which they are elected,  and until their  successors  shall have been elected
and qualified.

     Section 3. REGULAR  MEETINGS.  A regular  meeting of the Board of Directors
shall be held without other notice than this Bylaw,  immediately  after,  and at
the same place as the annual meeting of Shareholders. The Board of Directors may
provide by resolution, the time and place, either within or without the State of
Iowa, for the holding of additional  regular  meetings without other notice than
such resolution.

     Section 4. SPECIAL MEETING.  Special meetings of the Board of Directors may
be called by or at the request of the President or the  Secretary,  and shall be
called on  written  request  of three  (3)  members  of the Board of  Directors.
Meetings of the Board shall be held at the principal  office of the  Corporation
unless a different  place,  either  within or without the State of Iowa shall be
designated by the President or Board of Directors.

     Section 5. NOTICE OF SPECIAL  MEETINGS.  Notice of each special  meeting of
the Board of Directors shall be given by written notice mailed to or served upon
each  Director  at least  twenty-four  hours  prior to such  meetings,  and such
special  meeting  shall be held at such time and place as shall be  specified in
such written notice.  Notice of a special meeting may be waived by any Director.
A special  meeting of the Board of Directors  may also be held  without  written
notice  or call at such  time and  place as  shall  be fixed by the  consent  in
writing of all of the Directors given before, at or after such meeting.

         Section 6. QUORUM. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, provided that if less than a majority of the Directors are present
at such meeting, a majority of the Directors present may adjourn the meeting
from time to time without further notice. The act of a majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.

     Members of the Board of Directors of the  Corporation  may participate in a
meeting  of  the  Board  of  Directors  by   conference   telephone  or  similar


                                       3
<PAGE>

communications  equipment  by means of which all  persons  participating  in the
meeting can hear each other,  and  participation  in a meeting  pursuant to this
provision shall constitute presence in person at such meeting.

     Section 7. VACANCIES.  Subject to the provisions of Section 3 of Article VI
of the Corporation's  Restated Articles of Incorporation,  any vacancy occurring
in the  Board of  Directors  and any  Directorship  to be filled by reason of an
increase in the number of Directors may be filled by the  affirmative  vote of a
majority  of the  Directors  then in  office,  even if less than a quorum of the
Board of  Directors.  A Director so elected  shall be elected for the  unexpired
term of his predecessor in office or the full term of such new Directorship.

     Section  8.  RESIGNATION.  Any  Director  may  resign  at  any  time.  Such
resignation shall be made in writing and shall take effect at the time specified
therein.  If no time is  specified,  it  shall  take  effect  at the time of its
receipt by the Secretary. The acceptance of a resignation shall not be necessary
to make it effective.

     Section  9.  REMOVAL.  The  entire  Board of  Directors  or any  individual
Director may be removed from office,  with or without cause,  at a Shareholders'
meeting called expressly for that purpose by the vote of a majority of those who
actually  vote. In case the entire Board or any one or more of the Directors are
so removed,  new  Directors may be elected at the same meeting for the unexpired
term of the Director or Directors  so removed.  A Director  shall not be removed
without a meeting pursuant to written consents unless such consents are obtained
from the holders of all the outstanding  shares of the  Corporation.  Failure to
elect  Directors to fill the unexpired term of the Directors so removed shall be
deemed to create a vacancy or vacancies in the Board of Directors.

     Section  10.  ACTION BY BOARD OF  DIRECTORS  WITHOUT  MEETING.  Any  action
required to be taken at a meeting of the Board of Directors by the Iowa Business
Corporation  Act,  may be taken  without a meeting of the Board of  Directors if
written  consent setting forth the action so taken shall be signed by all of the
members of the Board of Directors  and included in the minutes or filed with the
corporate  records  reflecting the action taken. Such written consent shall have
the same force and effect as a unanimous  vote of the Board of Directors and may
be stated as such in any article or document  filed with the  Secretary of State
of the State of Iowa pursuant to the provisions of the Iowa Business Corporation
Act. The  provisions of this Bylaw shall be  applicable  whether or not the Iowa
Business Corporation Act requires that such action be taken by resolution of the
Board of Directors.


                                       4
<PAGE>

                                   ARTICLE III

                             COMMITTEES OF THE BOARD

     Section 1.  COMMITTEES.  The Board shall elect from the  Directors,  by the
affirmative  vote of a majority of the whole Board,  such  committees  with such
duties as the Board may by resolution  prescribe.  Any such  committee  shall be
comprised of such persons and shall possess such authority as shall be set forth
in such  resolution;  except that no such committee  shall have the authority of
the Board in reference to amending  the Articles of  Incorporation,  approving a
plan of merger or  consolidation,  recommending  to the  stockholders  the sale,
lease, or exchange of all or substantially all of the property and assets of the
Company otherwise than in the usual course of its business,  recommending to the
stockholders  a voluntary  dissolution  of the Company or a revocation  thereof,
amending,  altering or repealing  any  resolution of the Board that by its terms
provides that it shall not be so amendable or  repealable  in such manner;  and,
unless such resolution or the Articles of Incorporation expressly so provide, no
such  committee  shall have the power or  authority  to declare a dividend or to
authorize the issuance of shares of the Company.

     Section 2. PROCEDURE.  Except as provided  otherwise in these bylaws,  each
committee  may elect its own chairman and  secretary,  who shall keep minutes of
its  proceedings,  shall fix its own rules of procedure and shall meet where and
as provided by such rules.  Unless  otherwise stated in these bylaws, a majority
of the members of a committee  shall  constitute a quorum for the transaction of
its business.

     Section 3. REPORTS TO THE BOARD.  All  completed  actions by any  committee
established  by the Board shall be reported to the Board at the next  succeeding
Board  meeting  and shall be subject to  revision  or  alteration  by the Board;
provided  that no acts or rights of third  parties shall be affected by any such
revision or alteration.


                                       5
<PAGE>

                                   ARTICLE IV

                                    OFFICERS

     Section 1. GENERAL PROVISIONS.  The corporate officers of the Company shall
consist of the following: a President; one or more Vice Presidents; a Treasurer;
a  Secretary;  and such  other  officers  as the  Board  may  from  time to time
determine. The Board of Directors may also elect or, by resolution,  delegate to
the President of the Company, the authority to appoint from time to time, one or
more business  unit  Presidents  to act as the chief  operating  officers of the
various  business units of the Company.  The delegation of such authority to the
President or any business  unit  President  shall in no way affect,  diminish or
replace the authority of the Board of Directors to elect officers. The Board may
authorize the  classification  of certain Vice Presidents as Executive,  Senior,
Second  or  Assistant,   and  may  authorize  Assistant  Treasurers,   Assistant
Secretaries and such other titles and  designations  as in its discretion  seems
proper.  Insofar as permitted  by statute,  the same person may hold two or more
offices.

     The officers  shall be elected by the Board.  Each such officer  shall hold
office until a successor is elected or appointed  and  qualified or until his or
her earlier death, resignation, removal or suspension.

     Any officer or agent or member of a committee  elected or  appointed by the
Board may be removed, either with or without cause, by the Board whenever in its
judgment  the best  interests of the Company  will be served  thereby,  but such
removal shall be without prejudice to the contract rights, if any, of the person
so  removed.  Election  or  appointment  of an  officer  or agent or member of a
committee shall not of itself create contract rights.

     Any  vacancy  occurring  in any office of the  Company may be filled by the
Board.

     Section 2. POWERS AND DUTIES OF THE  PRESIDENT.  The  President  shall have
general  charge and  management  of the  affairs,  property  and business of the
Company,  subject to the Board and the provisions of these bylaws. The President
shall be the chief executive officer, and, in the absence of the Chairman, shall
preside at meetings  of the  stockholders  and the Board.  In the absence of the
President, the Board shall appoint another of their number to preside.

     The President shall perform all duties assigned that office by these bylaws
     and such other duties as may from time to time be assigned by the Board.

     The business unit  Presidents  of the Company shall be the chief  operating
executives for and shall have supervisory  authority over the business units for
which they are appointed.  Powers and duties of the business unit  Presidents of
the Company  shall also  include,  but not be limited to, all of the  authority,
powers and duties incident to the office of a Vice President.

     Section 3. POWERS AND DUTIES OF THE VICE  PRESIDENTS.  Each Vice  President
shall  perform  such duties as may from time to time be assigned by the Board of
Directors.

     Section 4. POWERS AND DUTIES OF THE TREASURER.  The Treasurer and Assistant
Treasurers  shall have care and custody of all funds of the Company and disburse
and administer the same under  direction of the Board or the President and shall
perform such other duties as the Board or President shall assign.

     Section 5.  POWERS AND DUTIES OF THE  SECRETARY.  The  Secretary  shall act
under the direction of the Board and, with any Assistant Secretary, shall record
the proceedings of all the meetings of the  stockholders  and the Board in books
kept for that  purpose.  The  Secretary  shall be the custodian of the corporate
seal. The Secretary or Assistant Secretary shall fix the same to and countersign
papers  requiring such acts; and the Secretary and Assistant  Secretaries  shall
perform other duties as may be required by the Board.


                                       6
<PAGE>


                                    ARTICLE V

                                  CAPITAL STOCK

     All  certificates  of stock  shall be  signed  by the  President  or a Vice
President  and by the  Secretary or an Assistant  Secretary of the Company,  but
when a certificate is signed by a transfer  agent or registrar  appointed by the
Board  of  Directors,  the  signature  of any  such  corporate  officer  and the
corporate seal upon such certificate may be facsimiles, engraved or printed.


                                       7
<PAGE>

                                   ARTICLE VI

                                  MISCELLANEOUS

     Section 1. WAIVER OF NOTICE.  Notice of any  meeting  required by law or by
these bylaws may be waived in writing,  signed by the person or persons entitled
to such notice, either before or after the time of such meeting.

     Section 2. AMENDMENTS.  The Board from time to time shall have the power to
make,  alter,  amend or repeal  any and all of these  bylaws,  but any bylaws so
made,  altered,  amended,  or repealed by the Board may be amended,  altered, or
repealed by the stockholders.

     Section 3.  DIVIDENDS.  The Board may,  from time to time and in accordance
with the law,  declare  and cause to be paid  dividends  of cash,  property,  or
shares of stock or  securities  of, or owned by, the  Company,  as the Board may
deem proper.

     Section 4. FISCAL  YEAR.  The fiscal  year of the Company  shall begin with
January first and end with December thirty-first.

     Section 5. SEAL.  The seal of the Company shall bear the corporate  name of
the Company and the place of its home office.

     Section 6. INVESTMENTS.  The President,  any Vice President, the Treasurer,
the  Secretary,  and such other  officers or employees as may be  designated  by
resolution of the Board of Directors  shall have  authority to execute on behalf
of the Corporation any  instruments,  including but not limited to:  Instruments
necessary in order to purchase,  sell, assign,  transfer,  modify,  exchange, or
convert  bonds,  notes or  stocks  and to assign or  satisfy  mortgages,  and to
execute contracts,  deeds,  leases, or any and all other instruments relating in
any manner to bonds,  notes,  stocks,  real estate or  personal  property or any
evidence of indebtedness owned by the Corporation.

     Section 7. POLICY  CONTRACTS.  All policies of  insurance or contracts  for
annuities, guaranteed investment contracts ("GIC") or funding agreements and for
the disposition and for the disposition of the proceeds  thereof may be executed
on behalf of the  Corporation by any of the following  officers:  The President,
any Vice President,  the Treasurer,  the Secretary or an Assistant Secretary, an
Actuary, an Associate Actuary or an Assistant Actuary. The signature of any such
officer may be in facsimile.


                                       8

<PAGE>

     Section 8. AGENCY AND OTHER CONTRACTS.  The President,  any Vice President,
the Secretary and any other  officers or employees  designated in writing by the
Board of Directors shall have authority to execute agency  contracts and related
agreements on behalf of the Corporation,  tax returns or reports and any reports
filed with governmental agencies.

     Section 9. OTHER INSTRUMENTS.  All other contracts and written  instruments
of any kind not  previously  described  shall be signed by one of the  following
officers: The President, a Vice President, the Secretary or the Treasurer, or by
any other  officer or employee of the  Company as shall be so  empowered  by the
Board of Directors or by such other person or persons as may be designated  from
time to time by the Board of Directors.

     Section 10.  STATUTORY  AGENTS.  The President,  any Vice President and the
Secretary or an Assistant  Secretary are authorized to appoint  statutory agents
of the  Corporation  and to execute  powers of  attorney  in  evidence  thereof,
authorizing  such  statutory  agents to accept  service of process  against  the
Corporation,  to  execute  any and all  papers  to  comply  with all  applicable
requirements  of law in order to qualify the  Corporation  to do business in any
state, territory, district, country or jurisdiction and to take any other action
on behalf of the Corporation  necessary or proper to be taken in compliance with
law or with rules or  regulations  of the  supervisory  authorities  in order to
qualify the Corporation to do business.


                                   ARTICLE VII

                                 INDEMNIFICATION

     Section 1. INDEMNIFICATION.  (a) To the extent not prohibited by applicable
law, the Company  shall  indemnify  and hold harmless any person who was or is a
party,  or is  threatened  to be  made a party  to any  threatened,  pending  or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact  that he is or was a  Director,  officer,  employee  or agent of the
Company,  or who is or was  serving at the request of the Company as a Director,
officer, employee or agent of another corporation,  partnership,  joint venture,
trust or other enterprise or entity,  from and against any and all liability and
expenses  (including  attorneys'  fees),  judgments,  fines and amounts  paid in
settlement  actually  and  reasonably  incurred by him in  connection  with such
action,  suit or  proceeding  if he  acted  in good  faith  and in a  manner  he
reasonably  believed  to be in, or not  opposed  to, the best  interests  of the
Company  and,  with  respect  to  any  criminal  action  or  proceeding,  had no
reasonable  cause to believe his conduct was unlawful.  The  termination  of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea  of nolo  contendere  or its  equivalent,  shall  not of  itself  create  a
presumption  that the person  did not act in good faith and in a manner  that he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
Company, and, with respect to any criminal action or proceeding,  had reasonable
cause to believe that his conduct was unlawful.

     (b) To the extent not  prohibited  by  applicable  law,  the Company  shall
indemnify and hold  harmless any person who was or is a party,  or is threatened
to be made a party to any threatened,  pending or completed action or suit by or
in the right of the  Company to procure a judgment in its favor by reason of the
fact that he is or was a Director,  officer,  employee, or agent of the Company,
or is or was  serving  at the  request  of the  Company  as  Director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or


                                       9
<PAGE>

other enterprise or entity, from and against any expenses (including  attorneys'
fees) actually and reasonably  incurred by him in connection with the defense or
settlement  of such  action or suit if he acted in good faith and in a manner he
reasonably  believed  to be in, or not  opposed  to, the best  interests  of the
Company,  and  except  that no  indemnification  shall be made in respect of any
claim,  issue,  or matter as to which such person shall have been adjudged to be
liable  for  negligence  or  misconduct  in the  performance  of his duty to the
Company  unless,  and only to the extent  that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability,  but in view of all the  circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court shall
deem proper.

     (c) To the  extent  that a  Director,  officer,  employee,  or agent of the
Company or a person who is or was  serving  at the  request of the  Company as a
Director, officer, employee, or agent of another corporation, partnership, joint
venture,  trust,  or other  enterprise or entity,  has been  successful,  on the
merits or otherwise,  in the defense of any action,  suit or proceeding referred
to in  paragraphs  (a) or (b),  or in  defense of any  claim,  issue,  or matter
therein,  shall be indemnified  against  expenses  (including  attorneys'  fees)
actually and reasonably incurred by him in connection therewith.

     Section 2. DETERMINATION OF RIGHT TO  INDEMNIFICATION.  Any indemnification
under  paragraphs (a) and (b) of Section 1, unless ordered by a court,  shall be
made  by  the  Company  only  as  authorized  in  the  specific  case,   upon  a
determination that the indemnification of the Director,  officer,  employee,  or
agent is proper in the circumstances  because he has met the applicable standard
of conduct set forth in paragraphs (a) and (b).

     Such  determination  shall be made (1) by the Board by  majority  vote of a
quorum  consisting  of Directors  who were not parties to such action,  suit, or
proceeding,  or (2) if such a quorum is not obtainable,  or, even if obtainable,
if a quorum of disinterested  Directors so directs, by independent legal counsel
in a written opinion, or (3) by the stockholders.

     Section 3.  ADVANCES.  To the  extent not  prohibited  by  applicable  law,
expenses  incurred in defending a civil or criminal  action,  suit or proceeding
may be paid by the Company in advance of the final  disposition  of such action,
suit or  proceeding,  as  authorized  by the Board in the  specific  case,  upon
receipt of an undertaking by or on behalf of the Director,  officer, employee or
agent or person who is or was serving at the request of the Company as Director,
officer, employee, or agent of another corporation,  partnership, joint venture,
trust,  or other  enterprise  or entity,  to repay such amount,  unless it shall
ultimately be determined that he is entitled to be indemnified by the Company as
authorized in this Article of the bylaws.

     Section 4. EXCLUSIVITY.  The indemnification provided by this Article shall
not  be  deemed   exclusive  of  any  other   rights  to  which  those   seeking
indemnification  may be  entitled  under  any  agreement,  resolution,  vote  of
stockholders or disinterested Directors, or otherwise,  both as to action in his
official  capacity  and as to action in  another  capacity  while  holding  such
office,  and shall  continue  as to a person  who has  ceased to be a  Director,
officer, employee, or agent of another corporation,  partnership, joint venture,
trust,  or other  enterprise  or entity,  and shall  inure to the benefit of the
heirs, executors and administrators of such a person.

     Section 5.  INSURANCE.  The Company may purchase and maintain  insurance on
behalf of any person who is or was a Director,  officer,  employee,  or agent of


                                       10
<PAGE>

the  Company,  or who is or was  serving  at the  request  of the  Company  as a
Director, officer, employee, or agent of another corporation, partnership, joint
venture,  trust, or other enterprise or entity,  against any liability  asserted
against  him and  incurred  by him in any such  capacity,  or arising out of his
status as such, whether or not the Company would have the power to indemnify him
against such  liability  under the provisions of this Article of these bylaws or
otherwise.

     These  restated  bylaws were duly  adopted by the Board of Directors of the
Company on the 25th day of June, 2003, Article I was amended to reflect the name
change the 11th day of November 2003 and Article IV, Section 1 and 2 and Article
VI, Section 7 were amended the 25th day of February 2004.



/s/  Paula Cludray-Engelke
--------------------------------------
     Paula Cludray-Engelke, Secretary


                                       11
<PAGE>


                                                               Exhibit 3.(a)(ii)


                     AMENDMENT TO ARTICLES OF INCORPORATION
                PROVIDING FOR THE CHANGE IN PURPOSE AND POWERS OF
                   ING USA ANNUITY AND LIFE INSURANCE COMPANY


TO THE SECRETARY OF STATE
OF THE STATE OF IOWA

AND

COMMISSIONER OF INSURANCE OF THE STATE OF IOWA:

Pursuant to the provisions of Section  490.1003,  490.1007 and 508.2 of the Code
of Iowa and to  effect  the name  change  of the  undersigned  Corporation,  the
undersigned  Corporation adopts the following  amendment to its Amended Articles
of Incorporation:

I.   The name of the Corporation is ING USA Annuity and Life Insurance  Company.

II.  The  following  amendment  to  Article  III  of  the  Amended  Articles  of
     Incorporation  of ING USA  Annuity  and  Life  Insurance  Company  replaces
     Article III in its entirety.

                                   ARTICLE III
Purpose and Powers

     The kinds of business  the  Corporation  proposes to transact  shall be any
kinds,  classes,  types and forms of life,  health and  accident  insurance  and
guaranteed investment contracts ("GICs") and funding agreements,  including, but
not limited to,  annuity  contracts and  combinations  of any two (2) or more of
such kinds of classes, types or forms of such insurance, annuity contracts, GICs
and funding agreements as such insurance business is now or hereafter  permitted
and  authorized  under  the laws of the State of Iowa or any  other  state,  the
District of Columbia, nation, country, territory, possession, or principality in
which the  Corporation  is authorized  to do business;  and to reinsure any such
insurance risk or any part thereof ceded to it by other insurance companies.

III. The duly adopted  Amended  Articles of  Incorporation,  as hereby  amended,
     supersede the Article III of the Articles of  Incorporation.  The Amendment
     to the  Articles of  Incorporation  shall be effective on the date on which
     the amendment to the Amended  Articles of  Incorporation  is filed with the
     Secretary of State of Iowa.


                                       1
<PAGE>


The amendment to the Amended Articles of Incorporation was duly approved by the
shareholders.

Dated at Atlanta and Minneapolis, this 3 & 4 day of March, 2004.

                             ING USA Annuity and Life Insurance Company


                             /s/ Keith Gubbay
                             ---------------------------------------------------
                                 Keith Gubbay, President


(SEAL)                       /s/ Paula ludray-Engelke
                             ---------------------------------------------------
                                 Paula Cludray-Engelke, Secretary

                                       2
<PAGE>



STATE OF GEORGIA)
                                    ) ss:
COUNTY OF FULTON                    )

On this 3 day of March, 2004, before me, the undersigned, a Notary Public in and
for the state of Georgia,  personally  appeared  Keith Gubbay,  to me personally
known,  who, being by me duly sworn,  did say that he is the President,  of said
corporation  executing  the within  and  foregoing  instrument  to which this is
attached,  that the seal affixed thereto is the seal of said  corporation;  that
said instrument was signed and sealed on behalf of said corporation by authority
of its  Board of  Directors;  and that the said  Keith  Gubbay  as such  officer
acknowledged  the execution of said  instrument to be the voluntary act and deed
of said corporation, by it and by him voluntarily executed.


                              /s/ Dianne Glosson
                              --------------------------------------------------
                              Notary Public in and for said County and State




STATE OF MINNESOTA                  )
                                    ) ss:
COUNTY OF HENNEPIN                  )

On this 4 day of March, 2004, before me, the undersigned, a Notary Public in and
for the state of Minnesota,  personally  appeared Paula  Cludray-Engelke,  to me
personally  known,  who,  being  by me  duly  sworn,  did  say  that  she is the
Secretary,  of said corporation executing the within and foregoing instrument to
which  this is  attached,  that the  seal  affixed  thereto  is the seal of said
corporation;  that  said  instrument  was  signed  and  sealed on behalf of said
corporation  by  authority  of its Board of  Directors;  and that the said Paula
Cludray-Engelke as such officer acknowledged the execution of said instrument to
be the voluntary act and deed of said corporation,  by it and by her voluntarily
executed.



                              /s/ Loralee A. Renelt
                              --------------------------------------------------
                              Notary Public in and for said County and State



                                       3
<PAGE>


The  foregoing  amendment to the Amended  Articles of  Incorporation  of ING USA
Annuity and Life Insurance  Company have been submitted to the undersigned  each
thereof for  examination and found by us to be in accordance with the provisions
of  Chapter  490 and  Chapter  508 of the  Code of  Iowa,  as  amended,  and the
Constitution  and laws of the United States and the Constitution and the laws of
the  State  of  Iowa,  and the  same  are  hereby  approved  by the  undersigned
Commissioner of Insurance of the State of Iowa, and the undersigned Attorney
General of the State of Iowa, on the dates set opposite our respective names.




                             CERTIFICATE OF APPROVAL
                            COMMISSIONER OF INSURANCE


     Pursuant to the provisions of the Iowa Code, the  undersigned  approves the
amendment to the Amended Articles of  Incorporation  providing for the change in
purpose  and  powers of ING USA  Annuity  and Life  Insurance  Company  (adopted
February 25, 2004).


                                      THERESE M. VAUGHAN
                                      Commissioner of Insurance



3/11/04                               /s/ Jeanie Kunkle Vaudt
-------                               ------------------------------------------
  Date                                By: JEANIE KUNKLE VAUDT
                                          Assistant Attorney General


                             CERTIFICATE OF APPROVAL
                                ATTORNEY GENERAL

    Pursuant to provisions of the Iowa Code, the undersigned approves the
amendment to the Amended Articles of Incorporation providing for the change in
purpose and powers of ING USA Annuity and Life Insurance Company (adopted
February 25, 2004) and finds the amendment in conformance with the laws of the
United States and with the laws and Constitution of the State of Iowa.

                                      THOMAS J. MILLER
                                      Attorney General of Iowa

3/11/04
-------
  Date                               /s/  James N. Armstrong
                                     -------------------------------------------
                                     By:  JAMES N. ARMSTRONG
                                          Deputy Commissioner of Insurance


                                       4
<PAGE>


                                                                 Exhibit 10.A(a)


                            RECIPROCAL LOAN AGREEMENT

     This RECIPROCAL LOAN AGREEMENT (this  "Agreement"),  dated as of January 1,
2004,  between "ING USA Annuity and Life Insurance  Company,  an Iowa stock life
insurance  company ("ING USA" or "Company")  located at 909 Locust  Street,  Des
Moines,  Iowa  50309  and ING  America  Insurance  Holdings,  Inc.,  a  Delaware
corporation  ("INGAIH"  or  "Company")  located  at 1105  North  Market  Street,
Wilmington, Delaware 19809 (collectively referred to as the "Companies").

                                   WITNESSETH:

     WHEREAS,  each of the  Companies  may have,  from  time to time,  a need to
borrow funds on a revolving basis; and

     WHEREAS,  each of the  Companies may have,  from time to time,  excess cash
available to lend to the other on a revolving basis; and

     WHEREAS,  the Companies are affiliated  entities and as such are willing to
extend financing to, and borrow from each other as provided herein; and

     WHEREAS,  each of the  Companies  desires  to  enter  into  this  Agreement
providing  for,  among other things,  the making of such Loans by and among each
other;

     NOW,  THEREFORE,  for and in  consideration of the foregoing and other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the Companies agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

     Section 1.1.  Defined Terms.  For purposes of this  Agreement:

     "Agreement" shall have the meaning set forth in the preamble hereto.

     "Authorized Person" shall mean the CFO,  Treasurer,  Senior Vice President,
Assistant  Treasurer or Vice President of the Borrowing Company,  or a person so
designated.

     "Borrowing  Company"  shall mean each of the  Companies  to which a Loan is
outstanding or is to be made pursuant to a Request for Borrowing.

     "Business  Day" shall mean a day on which U.S.  financial  markets are open
for the transaction of business required for this Agreement.

     "Companies" shall have the meaning set forth in the preamble hereto.

     "Company" shall have the meaning set forth in the preamble hereto.

                                       1
<PAGE>

     "Default" shall mean any of the events specified in Section 6.1, regardless
of whether there shall have occurred any passage of time or giving of notice, or
both, that would be necessary in order to constitute such an Event of Default.

     "Event of Default" shall mean any of the events specified in Section 6.1.

     "INGAIH" shall have the meaning set forth in the preamble hereto.

     "Interest Period" shall mean the number of days or months that a particular
interest rate applies to a particular Loan advanced hereunder.

     "Lending  Company"  shall mean each of the  Companies  that has made, or is
obligated to make, in accordance  with a Request for Borrowing one or more Loans
hereunder.

     "Loans" shall mean the amounts advanced by a Lending Company to a Borrowing
Company under this Agreement.

     "Notice of Borrowing" shall have the meaning set forth in Section 2.2(b) of
this Agreement.

     "Obligations"  shall mean all payment and performance  obligations of every
kind,  nature and description of each Borrowing  Company to the Lending Company,
or either of them, under this Agreement (including any interest,  fees and other
charges  on the Loans or  otherwise),  whether  such  obligations  are direct or
indirect,  absolute or  contingent,  due or not due,  contractual  or  tortious,
liquidated  or  unliquidated,  arising by  operation  of law or  otherwise,  now
existing or hereafter arising.

     "Regional  Treasury  Office" ("RTO") shall mean the  Treasurer's  office of
INGAmerica Insurance Holdings, Inc.

     "Request for Borrowing"  shall have the meaning set forth in Section 2.2(a)
of this Agreement.

     "Revolving Loan Commitment" shall mean the maximum outstanding amount to be
funded by the Lending Company to the Borrowing Company.  The aggregate sum shall
not exceed three percent of ING USA's admitted assets as of the thirty-first day
of  December  next  preceding,  provided  that  until ING USA  files its  Annual
Statement  for the year ending  December 31, 2004,  the  aggregate sum shall not
exceed three percent of the total of Golden  American Life Insurance  Company's,
Equitable  Life  Insurance  Company of Iowa's,  United Life & Annuity  Insurance
Company's  and USG  Annuity & Life  Company's  admitted  assets,  each as of the
thirty-first day of December, 2003.

     "Termination  Date" shall mean  January 14,  2014,  or such earlier date as
payment of the Obligations shall be due (whether by acceleration or otherwise).

     Section 1.2.  Terminology.  Each definition of a document in this Article 1
shall include such document as amended,  modified,  or supplemented from time to
time, and, except where the context otherwise  requires,  definitions  imparting
the singular shall include the plural and visa versa.  Except where specifically


                                       2
<PAGE>

restricted, reference to a party shall include that party and its successors and
assigns.  All  personal  pronouns  used in this  Agreement,  whether used in the
masculine,  feminine, or neuter gender, shall include all other genders.  Titles
of articles and sections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this  Agreement,  and all references in this
Agreement to articles, sections, subsections, paragraphs, clauses, subclauses or
exhibits  shall  refer  to  the  corresponding  article,  section,   subsection,
paragraph,  clause, subclause of, or exhibit attached to, this Agreement, unless
otherwise provided.

     Section  1.3.  Accounting  Terms.  Except as otherwise  expressly  provided
herein, all accounting terms used herein shall be interpreted in accordance with
generally accepted accounting principles consistently applied.

                                    ARTICLE 2

                               TERMS OF THE LOANS

     Section 2.1. Revolving Credit.

     (a)  Subject  to and  upon  the  terms  and  conditions  set  forth in this
Agreement, each Lending Company agrees to advance to the Borrowing Company, from
time to time prior to the  Termination  Date,  Loans.  Loans  advanced under the
Revolving Loan Commitment shall be repaid in accordance with Section 2.4 and may
be reborrowed from time to time on a revolving basis.

     (b) Each Borrowing  Company's  obligation to pay to the Lending Company the
principal  of and interest on the Loans shall be evidenced by the records of the
RTO in lieu of a promissory note or notes.

     Section 2.2. Notice and Manner of Borrowing.

     (a) Whenever the Borrowing  Company desires to borrow money  hereunder,  it
shall  give the RTO prior  written  or  facsimile  request  (or  verbal  request
promptly  confirmed in writing or by facsimile) of such borrowing or reborrowing
(a "Request for  Borrowing").  Such Request for  Borrowing  shall be given by an
Authorized Person, to the RTO prior to 10:00 a.m.  (Wilmington,  Delaware time).
Any Request for Borrowing  received after 10:00 a.m. shall be deemed received on
the next Business Day.

     (b) The RTO, upon its receipt of a Request for Borrowing,  shall  determine
if the requested  funds are available and the interest rates in accordance  with
Section 2.3(a) of this Agreement (and related Interest Periods, if any) at which
the  Borrowing  Company can borrow money in a principal  amount equal to, and on
the date of,  the  proposed  borrowing  or  reborrowing  described  in each such
Request for  Borrowing,  and shall notify the Lending  Company of such  interest
rates and the related Interest Periods,  if any, and the principal amount of the
proposed  borrowing  or  reborrowing  (a "Notice  of  Borrowing")  by  telephone
(confirmed  in writing) or by  facsimile  no later than 12:00 p.m.  (Wilmington,
Delaware  time) on the Business Day of the requested  borrowing or  reborrowing.


                                       3
<PAGE>

The RTO shall promptly convey to the Borrowing Company the information contained
in the Notice of Borrowing by telephone (confirmed in writing) or by facsimile.

     (c) On the date of each borrowing,  the Lending Company will make available
the amount of such borrowing or reborrowing  in immediately  available  funds to
the Borrowing  Company by depositing such amount in the account of the Borrowing
Company by wire transfer via electronic funds transfer (EFT).

     (d) The RTO shall maintain on its books a control  account for each Company
in which shall be recorded  (i) the amount of each Loan made  hereunder  to each
such Company, (ii) the interest rate applicable with respect to each Loan, (iii)
the  amount of any  principal,  interest  or fees due or to become due from each
Borrowing  Company  with  respect to the  Loans,  and (iv) the amount of any sum
received by each Lending  Company  hereunder  in respect of any such  principal,
interest  or fees due on such  Loans.  The  entries  made in the  RTO's  control
accounts shall be prima facie evidence, in the absence of manifest error, of the
existence and amounts of Obligations therein recorded and any payments thereon.

     (e) The RTO shall  account  to each  Company  on a  quarterly  basis with a
statement of borrowings,  interest rates,  charges and payments made pursuant to
this  Agreement  with respect to the Loans and  Revolving  Loan  Commitment.  An
Authorized  Person of the Companies  shall review each quarterly  accounting for
accuracy  within thirty days of receipt  thereof from the RTO. Each such account
rendered by the RTO shall be deemed final, binding and conclusive unless the RTO
is notified by the Lending  Company or the Borrowing  Company within thirty days
after the date the account is so rendered that either the Lending Company or the
Borrowing Company disputes any item thereof.

     (f) The RTO shall be justified  in  assuming,  for purposes of carrying out
its duties and obligations under this Agreement,  including, without limitation,
its  obligation  to  maintain  accounts  and  provide  accountings  of the Loans
pursuant to Section  2.2(d) and (e) above,  that (1) Loans are  disbursed by the
Lending  Company to the Borrowing  Company in  accordance  with the terms of the
Notice of Borrowing,  (2) payments on the Loans are made to the Lending  Company
when due,  and (3) no  prepayments  of any Loans prior to the date that they are
due and payable under Section 2.4(a) have occurred,  unless the RTO is otherwise
notified  by either  Company  within  seven  Business  Days of any such  delayed
disbursement, overdue payment, or receipt of a prepayment.

     Section 2.3. Interest.

     (a) The Borrowing  Company  agrees to pay interest in respect of all unpaid
principal  amounts of the Loans from the respective dates such principal amounts
were advanced until the respective dates such principal  amounts are repaid at a
rate  per  annum  as  determined  by the RTO and  agreed  upon by the  Companies
pursuant to Section 2.2(b) of this Agreement. ING USA shall pay interest on each
Loan at a per annum  rate  which is based on the cost of funds of INGAIH for the
interest period for such Loan plus .15%.  INGAIH shall pay interest on each Loan
at a per  annum  rate  which is based on the  prevailing  interest  rate of U.S.
commercial  paper available for purchase with a similar  duration.  The interest
rate shall be determined by the RTO in accordance with its usual practices.


                                       4

<PAGE>

     (b) Overdue  principal and, to the extent not prohibited by applicable law,
overdue  interest in respect of any of the Loans and all other  overdue  amounts
owing hereunder shall bear interest from each date that such amounts are overdue
at the rate otherwise  applicable to such underlying Loans plus an additional 2%
per annum.  Interest on each Loan shall  accrue from and  including  the date of
such  Loan to,  but  excluding,  the date of any  repayment  thereof;  provided,
however, that if a Loan is repaid on the same day it is made, one day's interest
shall be paid on such Loan. Interest shall be computed on the basis of a year of
360 days for the actual number of days elapsed.

     (c) The  Companies  hereby  agree  that the only  charges  imposed or to be
imposed by the Lending Company hereunder for the use of money in connection with
the Loans is and will be the interest  required to be paid under the  provisions
of Sections  2.2(b).  In no event  shall the amount of interest  due and payable
under this  Agreement or any other  documents  executed in  connection  herewith
exceed the maximum rate of interest  allowed by applicable law and, in the event
any such  payment is made by the  Borrowing  Company or  received by the Lending
Company, such excess sum shall be credited as a payment of principal.  It is the
express intent hereof that the Borrowing Company not pay and the Lending Company
not receive,  directly or indirectly  in any manner,  interest in excess of that
which may be lawfully paid under applicable law.

     Section 2.4. Repayment of Principal and Interest.

     (a) The entire outstanding  principal balance of the Loans shall be due and
payable by no later than 5:00 p.m.  (Eastern  time) on the Business Day on which
the Loan is due,  together  with  all  remaining  accrued  and  unpaid  interest
thereon, unless an extension of no more than three additional days is authorized
by the Lending Company.

     (b) Any of the Loans may be prepaid in whole or in part at any time without
premium or  penalty.  Any such  prepayment  made on any Loan  shall be  applied,
first,  to interest  accrued  thereon  through the date  thereof and then to the
principal balance thereof.

     (c) Each payment and  prepayment  of principal of any Loan and each payment
of  interest  on any Loan shall be made to the  Lending  Company  and applied to
outstanding  Loan balances in the  following  order;  first,  toward any Loan or
Loans then due and  payable;  and,  second,  towards the Loan or Loans which are
next due and payable at the time of such prepayment.

                                    ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

     Section 3.1. Representations and Warranties. In order to induce the Lending
Company to enter into this Agreement,  the Borrowing  Company hereby  represents
and warrants as set forth below:

     (a)  Organization;   Power;   Qualification.The   Borrowing  Company  is  a
corporation duly organized, validly existing and in good standing under the laws
of the state of its  incorporation,  has the power and authority to own or lease


                                       5
<PAGE>

and operate its properties and to carry on its business as now being  conducted,
and is duly  qualified  and in  good  standing  as a  foreign  corporation,  and
authorized to do business,  in each  jurisdiction  in which the character of its
properties  or  the  nature  of  its  business  require  such  qualification  or
authorization.

     (b) Authorization;  Enforceability. The Borrowing Company has the power and
has taken all necessary  action to authorize it to execute,  deliver and perform
this  Agreement  in  accordance  with the terms  hereof  and to  consummate  the
transactions  contemplated  hereby.  This  Agreement  has been duly executed and
delivered by the Borrowing Company and is a legal,  valid and binding obligation
of the Borrowing  Company,  enforceable in accordance with its respective terms,
(i)  subject to  limitations  imposed by general  principles  of equity and (ii)
subject to applicable bankruptcy,  reorganization,  insolvency and other similar
laws affecting  creditors'  rights generally and to moratorium laws from time to
time in effect.

     (c) No Conflict. The execution,  delivery and performance of this Agreement
in  accordance  with  its  terms  and  the   consummation  of  the  transactions
contemplated  hereby  do not and  will not (i)  violate  any  applicable  law or
regulation,  (ii) conflict with,  result in a breach of, or constitute a default
under the articles or certificate of  incorporation  or by-laws of the Borrowing
Company  or under any  indenture,  agreement  or other  instrument  to which the
Borrowing  Company  is a party or by which  it or any of its  properties  may be
bound, or (iii) result in or require the creation or imposition of any lien upon
or with respect to any property now owned or hereafter acquired by the Borrowing
Company.

     (d) Compliance with Law;  Absence of Default.  The Borrowing  Company is in
compliance  with all  applicable  laws the  failure to comply  with which has or
could  reasonably  be  expected  to  have a  materially  adverse  effect  on the
business, assets,  liabilities,  financial condition or results of operations of
the  Borrowing  Company,  and no event has occurred or has failed to occur which
has not been  remedied or waived,  the  occurrence  or  non-occurrence  of which
constitutes a Default.

         Section 3.2. Survival of Representations and Warranties. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, as of the date hereof and as of the date of
each Loan.

                                    ARTICLE 4

                              AFFIRMATIVE COVENANTS

     So long as this Agreement is in effect:

     Section  4.1.  Preservation  of  Existence.The  Borrowing  Company will (a)
preserve and maintain its existence, rights, franchises, licenses and privileges
in its  jurisdiction of  incorporation  and (b) qualify and remain qualified and
authorized  to do business in each  jurisdiction  in which the  character of its
properties  or the  nature  of  its  business  requires  such  qualification  or
authorization.

     Section 4.2. Compliance with Applicable Laws and Regulations. The Borrowing
Company will comply with the requirements of all applicable laws and regulations


                                       6
<PAGE>

the failure with which to comply could have a materially  adverse  effect on the
business, assets,  liabilities,  financial condition or results of operations of
the Borrowing Company.

     Section 4.3. Visits and Inspections.

     (a) Upon reasonable advance notice from the Lending Company,  the Borrowing
Company  will permit  representatives  of the  Lending  Company to (a) visit and
inspect the properties of the Borrowing  Company during normal  business  hours,
(b) inspect and make extracts from and copies of its books and records,  and (c)
discuss  with  its  principal  officers  its  businesses,  assets,  liabilities,
financial positions and results of operations.

     (b) Each Company agrees that upon reasonable advance notice from an auditor
of either  Company or any  regulatory  official  employed by the  Department  of
Insurance  of any state in which  either  Company is engaged in  business,  each
Company will prepare and deliver to such auditor or regulatory official,  within
a reasonable  time following such request,  a written  verification of all Loans
made to and by the relevant  Company.  Upon  reasonable  advance  notice to each
Company,  the books and  records  of the RTO and each  Company  relating  to the
subject  matter of this  Agreement  shall be  available  for  inspection  by any
auditor of either  Company or any  regulatory  official  during normal  business
hours,  and the RTO and  each  Company  will  cooperate  with  said  auditor  or
regulatory  official in making any audit which requires inspection of said books
and records.

                                    ARTICLE 5

                               NEGATIVE COVENANTS

     So long as this Agreement is in effect:

     Section 5.1. Liquidation;  Merger; Sale of Assets; Change of Business.  The
Borrowing  Company shall not at any time,  without  proper notice to the Lending
Company:

     (a) Liquidate or dissolve itself (or suffer any liquidation or dissolution)
or otherwise wind up;

     (b) Merge or consolidate with any other person or entity;

     (c) Sell,  lease,  abandon  or  otherwise  dispose  of or  transfer  all or
substantially all of its assets other than in the ordinary course of business;
or

     (d) Make any  substantial  change in the type of business  conducted by the
Borrowing Company as of the date hereof without the prior written consent of the
Lending  Company if such  action  would have a  material  adverse  effect on the
business, assets,  liabilities,  financial condition or results of operations of
the Borrowing Company.

     Any corporation into which either Company may be merged,  converted or with
which either Company may be consolidated,  or any corporation resulting from any
merger,  conversion or  consolidation  to which either Company shall be a party,
shall  succeed  to all  either  Company's  rights,  obligations  and  immunities
hereunder without the execution or filing of any paper or any further act on the


                                       7
<PAGE>

part  of  any  of  the  parties   hereto,   anything   herein  to  the  contrary
notwithstanding.

                                    ARTICLE 6

                                     DEFAULT

     Section 6.1 Events of Default.  Each of the following  shall  constitute an
Event of Default:

     (a) Any representation or warranty made by the Borrowing Company under this
Agreement shall prove incorrect or misleading in any material respect when made;

     (b) The Borrowing  Company shall default in the payment of (i) any interest
payable under this Agreement within five days of when due, or (ii) any principal
payable under this Agreement within three days of when due;

     (c) The Borrowing Company shall default in the performance or observance of
any agreement or covenant  contained in this  Agreement,  and such Default shall
not be cured within a period of thirty days from the occurrence of such Default;

     (d) The  Borrowing  Company  shall  default  under any other  agreement  or
instrument  evidencing or relating to any  indebtedness  which Default shall not
have been cured within any applicable grace period set forth therein;

     (e) There shall be entered a decree or order by a court having jurisdiction
in the  premises  constituting  an order for relief in respect of the  Borrowing
Company  under  Title  11 of the  United  States  Code,  as now  constituted  or
hereafter  amended,  or any other applicable  federal or state bankruptcy law or
similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or similar official of the Borrowing Company or of any substantial
part of its properties, or ordering the winding-up or liquidation of the affairs
of the Borrowing  Company and any such decree or order shall  continue in effect
for a period of sixty consecutive days.

     (f) The Borrowing Company shall file a petition,  answer or consent seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended,  or any  other  applicable  federal  or state  bankruptcy  law or other
similar  law, or the  Borrowing  Company  shall  consent to the  institution  of
proceedings  thereunder  or to  the  filing  of  any  such  petition  or to  the
appointment  or  taking  of  possession  of a  receiver,  liquidator,  assignee,
trustee,  custodian,  sequestrator,  or other similar  official of the Borrowing
Company or of any substantial part of its properties,  or the Borrowing  Company
shall fail generally to pay its debts as such debts become due, or the Borrowing
Company shall take any corporate action in furtherance of any such action; or

     (g) This  Agreement or any  provision  hereof shall at any time and for any
reason be declared by a court of competent  jurisdiction to be null and void, or
a proceeding shall be commenced by the Borrowing  Company or any other person or
entity seeking to establish the invalidity or  unenforceability  thereof, or the


                                       8
<PAGE>

Borrowing Company shall deny that it has any liability or any obligation for the
payment of principal or interest purported to be created under this Agreement.

     Section 6.2. Remedies. If an Event of Default shall have occurred and shall
be continuing,

     (a) The  obligation of the Lending  Company to make Loans  hereunder  shall
immediately cease;

     (b) With the exception of an Event of Default  specified in Section  6.1(e)
or (f), the Lending Company,  shall declare the principal of and interest on the
Loans and all other  amounts owed under this  Agreement to be forthwith  due and
payable,  whereupon all such amounts shall  immediately  become absolute and due
and payable, without presentment, demand, protest, or notice of any kind, all of
which are hereby  expressly  waived,  anything in this Agreement to the contrary
notwithstanding,  and whereupon all such amounts  shall be  immediately  due and
payable;

     (c) Upon the occurrence and continuance of an Event of Default specified in
Section  6.1(e)  or (f),  such  principal,  interest  and  other  amounts  shall
thereupon and concurrently  therewith  become absolute and due and payable,  all
without any action by the  Lending  Company,  all of which are hereby  expressly
waived, anything in this Agreement to the contrary notwithstanding;

     (d) The Lending  Company shall have the right and option to exercise all of
the post-default rights granted to them hereunder; and

     (e) The Lending  Company  shall have the right and option to  exercise  all
rights and remedies available to them at law or in equity.

                                    ARTICLE 7

                                  MISCELLANEOUS

     Section 7.1. Notices.  Except as otherwise provided herein, all notices and
other  communications  required or permitted  under this  Agreement  shall be in
writing and, if mailed,  shall be deemed to have been received on the earlier of
the date shown on the receipt or three Business Days after the  postmarked  date
thereof  and, if sent by  facsimile,  shall be followed  forthwith by letter and
shall be  deemed  to have  been  received  on the next  Business  Day  following
dispatch and acknowledgment of receipt by the recipient's  facsimile machine. In
addition,  notices hereunder may be delivered by hand or overnight  courier,  in
which event the notice shall be deemed effective when delivered. All notices and
other  communications  under this Agreement shall be given to the parties at the
address or facsimile number listed below such party's  signature line hereto, or
such other  address or  facsimile  number as may be  specified by any party in a
writing addressed to the other parties hereto.

     Section 7.2. Waivers.  The rights and remedies of the Lending Company under
this  Agreement  shall be cumulative and not exclusive of any rights or remedies
which they would  otherwise  have. No failure or delay by the Lending Company in
exercising  any right  shall  operate  as a waiver of it.  The  Lending  Company


                                       9
<PAGE>

expressly reserves the right to require strict compliance with the terms of this
Agreement. In the event the Lending Company decides to fund a request for a Loan
at a time when the Borrowing  Company is not in strict compliance with the terms
of this  Agreement,  such decision by the Lending Company shall not be deemed to
constitute an  undertaking by the Lending  Company to fund any further  requests
for Loans or precluding the Lending Company from exercising any rights available
to it under the  Agreement  or at law or equity  with  respect to the  Borrowing
Company.  Any waiver or  indulgence  granted by the  Lending  Company  shall not
constitute a  modification  of this  Agreement,  except to the extent  expressly
provided in such waiver or indulgence,  or constitute a course of dealing by the
Lending  Company at variance with the terms of this Agreement such as to require
further notice by the Lending Company of its intent to require strict  adherence
to the terms of this Agreement in the future.  Any such actions shall not in any
way  affect  the  ability  of the  Lending  Company,  in their  respective  sole
discretion,  to exercise any of their respective  rights under this Agreement or
under any other agreement.

     Section7.3. Assignment; Successors.

     (a) The  Borrowing  Company may not assign or transfer any of its rights or
obligations hereunder without notice to the Lending Company.

     (b) The  Lending  Company  may not at any time  assign or  participate  its
interest  under this  Agreement  without  notice to the Borrowing  Company.  Any
holder of a  participation  in, and any  assignee or  transferee  of, all or any
portion of any amount owed by the  Borrowing  Company  under this  Agreement may
exercise any and all rights  provided in this  Agreement with respect to any and
all amounts owed by the Borrowing Company to such assignee, transferee or holder
as fully as if such  assignee,  transferee  or holder  had made the Loans in the
amount of the obligation in which its holds a participation or which is assigned
or transferred to it.

     (c) This Agreement  shall be binding upon, and inure to the benefit of, the
Borrowing Company, the Lending Company, and the permitted successors and assigns
of each party hereto.

     Section 7.4. Counterparts.  This Agreement may be executed in any number of
counterparts,  each of which  shall be  deemed to be an  original,  but all such
counterparts shall together constitute but one and the same instrument.

     Section  7.5.  Severability.  Any  provision  of this  Agreement  which  is
prohibited  or  unenforceable  shall  be  ineffective  to  the  extent  of  such
prohibition or unenforceability  without  invalidating the remaining  provisions
hereof in that  jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.

     Section 7.6. Entire Agreement;  Amendments.  This Agreement  represents the
entire  agreement among the parties hereto with respect to the subject matter of
this  transaction.  No amendment or  modification of the terms and provisions of
this  Agreement  shall  be  effective  unless  in  writing  and  signed  by both
Companies.

     Section 7.7. Payment on Non-Business Days.  Whenever any payment to be made
hereunder  shall be stated to be due on a non-Business  Day, such payment may be


                                       10
<PAGE>

made on the next  succeeding  Business Day, and such  extension of time shall in
such case be included in the computation of payment of interest hereunder.

     Section 7.8. Termination.  This Agreement may be terminated with respect to
any party  hereto by such party upon its giving the other  parties  thirty  days
notice of its intent to terminate.  In the event of  termination  as provided in
this paragraph,  the Lending Company's obligation to make Loans to the Borrowing
Company  shall  cease;  provided,  however,  that the  Borrowing  Company  shall
continue to be obligated to make all  repayments  of Loans and all other amounts
due and payable by it as provided under this Agreement.

     Section 7.9. Governing Law. This agreement shall be construed in accordance
with  and  governed  by the law of the  State  of Iowa,  without  regard  to the
conflict of laws rules thereof.

     IN WITNESS  WHEREOF,  the parties  hereto have executed  this  Agreement or
caused it to be executed by their duly  authorized  officers,  all as of the day
and year first above written.

                             ING USA ANNUITY AND LIFE INSURANCE
                             COMPANY

                             By: /s/ David S. Pendergrass
                                 -----------------------------------------------


                             Title: _______________________________
                                    Vice President and Treasurer

                                    Address for notices:
                                    909 Locust Street
                                    Des Moines, Iowa  50309
                                    Phone:  770/980-4837
                                    Fax:

                              ING AMERICA INSURANCE HOLDINGS, INC.

                               By:/s/ David S. Pendergrass
                                  ----------------------------------------------
                                      David S. Pendergrass

                               Title:
                                      ------------------------------
                                      Vice President and Treasurer

                                      Address for notices:
                                      1105 N. Market Street
                                      Wilmington, DE 19809
                                      Phone: 770/980-3300
                                      Fax: 770/980-4840
November 10, 2003


                                       11
<PAGE>


                                                                    Exhibit 31.1


                                  CERTIFICATION

I, David A. Wheat, certify that:

1.   I have reviewed this  quarterly  report on Form 10-Q of ING USA Annuity and
     Life Insurance Company;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date:    May 14, 2004

By       /s/ David A. Wheat
         -----------------------------------------------------------
         David A. Wheat
         Director, Senior Vice President and Chief Financial Officer
         (Duly Authorized Officer and Principal Financial Officer)


<PAGE>


                                                                    Exhibit 31.2


                                  CERTIFICATION

I, Keith Gubbay, certify that:

1.   I have reviewed this  quarterly  report on Form 10-Q of ING USA Annuity and
     Life Insurance Company;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

a)   all  significant  deficiencies  and  material  weaknesses  in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely  affect the  registrant's  ability to record,  process,
     summarize and report financial information; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees who have a significant role in the registrant's  internal control
     over financial reporting.


Date May 14, 2004

By   /s/ Keith Gubbay
     ------------------------------------------------------------
         Keith Gubbay
         Director and President
         (Duly Authorized Officer and Principal Executive Officer)


<PAGE>


                                                                    Exhibit 32.1


                                  CERTIFICATION

Pursuant to 18 U.S.C.  ss.1350,  the undersigned  officer of ING USA Annuity and
Life Insurance  Company (the "Company")  hereby certifies that, to the officer's
knowledge,  the  Company's  Quarterly  Report on Form 10-Q for the quarter ended
March 31, 2004 (the "Report")  fully complies with the  requirements  of Section
13(a) or 15(d), as applicable,  of the Securities  Exchange Act of 1934 and that
the  information  contained  in the  Report  fairly  presents,  in all  material
respects, the financial condition and results of operations of the Company.


May 14, 2004                   By /s/ David A. Wheat
------------                      ----------------------------------------------
        (Date)                        David A. Wheat
                                      Director, Senior Vice President and
                                            Chief Financial Officer



<PAGE>


                                                                    Exhibit 32.2


                                  CERTIFICATION

Pursuant to 18 U.S.C.  ss.1350,  the undersigned  officer of ING USA Annuity and
Life Insurance  Company (the "Company")  hereby certifies that, to the officer's
knowledge,  the  Company's  Quarterly  Report on Form 10-Q for the quarter ended
March 31, 2004 (the "Report")  fully complies with the  requirements  of Section
13(a) or 15(d), as applicable,  of the Securities  Exchange Act of 1934 and that
the  information  contained  in the  Report  fairly  presents,  in all  material
respects, the financial condition and results of operations of the Company.


May 14, 2004                   By /s/ Keith Gubbay
------------                      ----------------------------------------------
   (Date)                             Keith Gubbay
                                      Director and President