<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q

(Mark One)

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

         For the quarterly period ended 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: 333-86276, 333-86278, 333-104456

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

Connecticut                                                           71-0294708
--------------------------------------------------------------------------------
(State or other jurisdiction of                (IRS employer identification no.)
incorporation or organization)

151 Farmington Avenue, Hartford, Connecticut                               06156
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip code)

Registrant's telephone number, including area code (860) 723-4646


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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes /X/   No / /

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes / /    No /X/

                      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: 55,000 shares of Common Stock
as of May 14, 2004, all of which were directly owned by Lion Connecticut
Holdings Inc.

NOTE: WHEREAS ING LIFE INSURANCE AND ANNUITY 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 LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
          (A WHOLLY-OWNED SUBSIDIARY OF LION CONNECTICUT HOLDINGS INC.)
                  FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2004

                                      INDEX

<Table>
<Caption>
                                                                                              PAGE
                                                                                              ----
<S>                                                                                           <C>
PART I.        FINANCIAL INFORMATION  (UNAUDITED)

Item 1.        Financial Statements:

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

Item 2.        Management's Narrative Analysis of the Results of
               Operations and Financial Condition                                             16

Item 4.        Controls and Procedures                                                        25

PART II.       OTHER INFORMATION

Item 1.        Legal Proceedings                                                              26

Item 6.        Exhibits and Reports on Form 8-K                                               26

Signatures                                                                                    27
</Table>

                                        2
<Page>

             ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
          (A WHOLLY-OWNED SUBSIDIARY OF LION CONNECTICUT HOLDINGS INC.)

PART I.  FINANCIAL INFORMATION (UNAUDITED)

ITEM 1.  FINANCIAL STATEMENTS

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                                   (Millions)

<Table>
<Caption>
                                                                                       THREE MONTHS ENDED MARCH 31,
                                                                                          2004             2003
                                                                                      ------------     ------------
<S>                                                                                   <C>              <C>
Revenue:
   Premiums                                                                           $       10.0     $       23.8
   Fee income                                                                                109.9             93.1
   Net investment income                                                                     237.5            244.5
   Net realized capital gains                                                                 18.5              3.5
                                                                                      ------------     ------------
Total revenue                                                                                375.9            364.9
                                                                                      ------------     ------------
Benefits, losses and expenses:
   Benefits:
     Interest credited and other benefits to policyholders                                   179.5            199.9
   Underwriting, acquisition, and insurance expenses:
     General expenses                                                                        103.0            101.7
     Commissions                                                                              33.1             28.8
     Policy acquisition costs deferred                                                       (42.0)           (39.5)
   Amortization of deferred policy acquisition costs and value of
     business acquired                                                                        37.9             56.5
                                                                                      ------------     ------------
Total benefits, losses and expenses                                                          311.5            347.4
                                                                                      ------------     ------------
Income before income taxes                                                                    64.4             17.5
Income tax expense                                                                            20.4              5.1
                                                                                      ------------     ------------
Net income                                                                            $       44.0     $       12.4
                                                                                      ============     ============
</Table>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                        3
<Page>

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                          (Millions, except share data)

<Table>
<Caption>
                                                                                          MARCH 31,      DECEMBER 31,
                                                                                            2004             2003
                                                                                        ------------     ------------
                                                                                         (Unaudited)
<S>                                                                                     <C>              <C>
ASSETS
Investments:
   Fixed maturities, available for sale, at fair value (amortized cost of
     $16,967.2 at 2004 and $16,961.7 at 2003)                                           $   17,841.2     $   17,574.3
   Equity securities, at fair value:
     Nonredeemable preferred stock (cost of $51.7 at 2004 and $34.1 at 2003)                    52.1             34.1
     Investment in affiliated mutual funds (cost of $162.5 at 2004 and $112.3 at 2003)         129.3            127.7
     Common stock (cost of $0.1 at 2004 and 2003)                                                0.0              0.1
   Mortgage loans on real estate                                                               862.2            754.5
   Policy loans                                                                                264.8            270.3
   Short-term investments                                                                       10.0              1.0
   Other investments                                                                            37.1             52.6
   Securities pledged to creditors (amortized cost of $1,151.1 at 2004 and
     $117.7 at 2003)                                                                         1,188.6            120.2
                                                                                        ------------     ------------
Total investments                                                                           20,385.1         18,934.8

Cash and cash equivalents                                                                       58.0             57.8
Short-term investments under securities loan agreement                                       1,233.2            123.9
Accrued investment income                                                                      189.4            169.6
Reinsurance recoverable                                                                      2,937.9          2,953.2
Deferred policy acquisition costs                                                              327.9            307.9
Sales inducements to contractholders                                                            21.1               --
Value of business acquired                                                                   1,394.9          1,415.4
Property, plant and equipment (net of accumulated depreciation
   of $82.1 at 2004 and $79.8 at 2003)                                                          30.0             31.7

Other assets                                                                                   162.2            123.6
Assets held in separate accounts                                                            31,572.3         33,014.7
                                                                                        ------------     ------------
Total assets                                                                            $   58,312.0     $   57,132.6
                                                                                        ============     ============
</Table>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                        4
<Page>

<Table>
<Caption>
                                                                                          MARCH 31,      DECEMBER 31,
                                                                                            2004             2003
                                                                                        ------------     ------------
                                                                                        (Unaudited)
<S>                                                                                     <C>              <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
Policy liabilities and accruals:
   Future policy benefits and claims reserves                                         $    3,346.4     $    3,379.9
   Unpaid claims and claim expenses                                                           36.7             25.4
   Other policyholders' funds                                                             17,098.2         15,871.3
                                                                                      ------------     ------------
Total policy liabilities and accruals                                                     20,481.3         19,276.6
Due from affiliates                                                                           95.7
Payables under securities loan agrement                                                    1,233.2            123.9
Borrowed money                                                                             1,512.7          1,643.2
Current income taxes                                                                         104.2             85.6
Deferred income taxes                                                                        197.3            184.7
Other liabilities                                                                            407.5            158.0
Liabilities related to separate accounts                                                  31,572.3         33,014.7
                                                                                      ------------     ------------
Total liabilities                                                                         55,604.2         54,486.7
                                                                                      ------------     ------------
Shareholder's equity
   Common stock (100,000 shares authorized, 55,000 shares issued and
     outstanding, $50.00 per share par value)                                                  2.8              2.8
   Additional paid-in capital                                                              4,646.5          4,646.5
   Accumulated other comprehensive income                                                    124.7            106.8
   Retained deficit                                                                       (2,066.2)        (2,110.2)
                                                                                      ------------     ------------
Total shareholder's equity                                                                 2,707.8          2,645.9
                                                                                      ------------     ------------
Total liabilities and shareholder's equity                                            $   58,312.0     $   57,132.6
                                                                                      ============     ============
</Table>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                        5
<Page>

      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
                                   (Unaudited)
                                   (Millions)

<Table>
<Caption>
                                                                                       THREE MONTHS ENDED MARCH 31,
                                                                                          2004             2003
                                                                                      ------------     ------------
<S>                                                                                   <C>              <C>
Shareholder's equity, beginning of period                                             $    2,645.9     $    2,262.8
Comprehensive income:
   Net income                                                                                 44.0             12.4
   Other comprehensive income net of tax: Unrealized gain
     on securities ($27.5 and $25.7, pretax year to date)                                     17.9             16.7
                                                                                      ------------     ------------
Total comprehensive income                                                                    62.0             29.1
                                                                                      ------------     ------------
Shareholder's equity, end of period                                                   $    2,707.8     $    2,291.9
                                                                                      ============     ============
</Table>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                        6
<Page>

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (Millions)

<Table>
<Caption>
                                                                                       THREE MONTHS ENDED MARCH 31,
                                                                                          2004             2003
                                                                                      ------------     ------------
<S>                                                                                   <C>              <C>
Net cash provided by operating activities                                             $       95.7     $      609.1
Cash flows from investing activities
   Proceeds from the sale, maturity or repayment of:
     Fixed maturities available for sale                                                   8,040.2          5,791.3
     Equity securities                                                                           -              0.5
     Mortgages                                                                                 3.4              6.6
     Short-term and other investments                                                         15.5              7.8
   Acquisition of investments:
     Fixed maturities available for sale                                                  (8,161.9)        (6,467.8)
     Equity securities                                                                       (17.6)               -
     Short-term and other investments                                                         (9.0)               -
     Mortgages                                                                              (111.1)           (48.5)
   Decrease in policy loans                                                                    5.5             10.2
   Sale (purchases) of property and equipment                                                  1.7             (0.1)
                                                                                      ------------     ------------
Net cash used for investing activities                                                      (233.3)          (700.0)
Cash flows from financing activities
   Deposits for investment contracts                                                         510.2            333.1
   Maturities and withdrawals from insurance and
     investment contracts                                                                   (436.4)          (185.3)
   Transfers (to) from separate accounts                                                      64.0            (37.7)
                                                                                      ------------     ------------
Net cash provided by financing activities                                                    137.8            110.1
Net increase in cash and cash equivalents                                                      0.2             19.2
Cash and cash equivalents, beginning of period                                                57.8             65.4
                                                                                      ------------     ------------
Cash and cash equivalents, end of period                                              $       58.0     $       84.6
                                                                                      ============     ============
</Table>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                        7
<Page>

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A WHOLLY-OWNED SUBSIDIARY OF LION CONNECTICUT HOLDINGS INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.       BASIS OF PRESENTATION

         ING Life Insurance and Annuity Company ("ILIAC"), and its wholly-owned
         subsidiaries (collectively, the "Company") are providers of financial
         products and services in the United States. These condensed
         consolidated financial statements include ILIAC and its wholly-owned
         subsidiaries, ING Insurance Company of America ("IICA"), ING Financial
         Advisers, LLC, and, through February 28, 2002, Aetna Investment Adviser
         Holding Company, Inc. ("IA Holdco"). ILIAC was a wholly-owned
         subsidiary of ING Retirement Holdings, Inc. ("HOLDCO"), which was a
         wholly-owned subsidiary of ING Retirement Services, Inc, ("IRSI"). IRSI
         was a wholly-owned subsidiary of Lion Connecticut Holdings, Inc,
         ("Lion"), which in turn was ultimately owned by ING Groep N.V. ("ING"),
         a financial services company based in The Netherlands. However, on
         March 30, 2003, a series of mergers occurred in the following order:
         IRSI merged into Lion, HOLDCO merged into Lion and IA Holdco merged
         into Lion. As a result, ILIAC is now a direct wholly-owned subsidiary
         of Lion.

         On February 28, 2002, ILIAC contributed 100% of the stock of IA Holdco
         and its subsidiaries to HOLDCO, (former ILIAC parent company),
         resulting in a distribution totaling $60.1 million. As a result of this
         transaction, the Investment Management Services segment is no longer
         reflected as an operating segment of the Company.

         The condensed consolidated 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 consolidated financial statements reflect all normal
         recurring adjustments , which are, in the opinion of management,
         necessary for the fair presentation of the consolidated financial
         position, results of operations and cash flows for the interim
         periods. These condensed consolidated financial statements and
         notes should be read in conjunction with the consolidated financial
         statements and related notes as presented in the Company's 2003
         Annual Report on Form 10-K. The results of operations for the
         interim periods should not be considered indicative of results to
         be expected for the full year. Certain reclassifications have been
         made to 2003 financial information to conform to the 2004
         presentation.

         The Company conducts its business through one reporting segment, U.S.
         Financial Services ("USFS"), and revenue reported by the Company is
         predominantly derived from external customers.

                                        8
<Page>

2.       RECENTLY ADOPTED ACCOUNTING STANDARDS

         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 revenues and expenses related to such arrangements be
         consolidated w/the respective revenue and expense lines in the
         Condensed Consolidated Statement of Operations. 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 account for certain
         separate account arrangements as general account arrangements and to
         defer, amortize, and recognize separately, sales inducements to
         contractholders. Requirements to establish additional liabilities for
         minimum guarantee benefits are applicable to the Company, however, the
         Company's policies on policy liabilities have historically been, and
         continue to be, in conformity with the requirements newly established.
         Requirements for recognition of additional liabilities for products
         with certain patterns of cost of insurance charges are not applicable
         to the Company.

         The adoption of SOP 03-1 did not have a significant effect on the
         Company's results of operations, and had no impact on the Company's
         net income.

         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. The Company
         has modified coinsurance treaties that are applicable to the guidance.
         The applicable contracts, however, have been determined to generate
         embedded derivatives with a fair value of zero. Therefore, the guidance
         has no impact on the Company's financial position, results of
         operations or cash flows.

                                        9
<Page>

3.       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 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.

         VOBA activity for the three month periods ended March 31, 2004 and
         2003 was as follows:

<Table>
<Caption>
         (MILLIONS)                                     2004          2003
         -----------                                 ---------     ---------
         <S>                                         <C>            <C>
         Balance at December 31, 2003                $ 1,415.4     $ 1,438.4
         Adjustment for FAS No. 115                       (4.1)         (3.8)
         Additions                                        14.8           8.3
         Interest accrued at 5% to 7%                     22.9          24.0
         Amortization                                    (54.1)        (67.9)
                                                     ---------     ---------
         Balance at March 31, 2004                   $ 1,394.9     $ 1,399.0
                                                     ==========    =========
</Table>

                                       10
<Page>

4.       INVESTMENTS

         IMPAIRMENTS

         During the three months ended March 31, 2004, the Company determined
         that thirty-six fixed maturities had other than temporary impairments.
         As a result, for the three months ended March 31, 2004, the Company
         recognized a pre-tax loss of $5.1 million to reduce the carrying value
         of the fixed maturities to their fair value at the time of impairment.
         During the three months ended March 31, 2003, the Company determined
         that fifty-eight 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 $42.1 million to reduce the carrying value
         of the fixed maturities to their fair value at the time of impairment.

         The fair value of the remaining impaired fixed maturities at March 31,
         2004 and 2003 is $64.1 million and $151.9 million, respectively.

5.       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.

                                       11
<Page>

         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 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 separate presentation in the
         Condensed Consolidated Balance Sheets (those arrangements supporting
         the guaranteed interest option), and revenues and expenses related to
         such arrangements, were reclassified to the general account on
         January 1, 2004, in accordance with the SOP requirements.

6.       ADDITIONAL INSURANCE BENEFITS AND MINIMUM GUARANTEES

         Under SOP 03-1, the Company calculates an additional liability (the
         "SOP reserve") for certain guaranteed benefits in order to recognize
         the expected value of death benefits in excess of the projected account
         balance over the accumulation period based on total expected
         assessments.

         The SOP reserve calculated is the minimum guaranteed death benefits
         ("MGDB") reserve and 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:

<Table>
<Caption>
                       AREA                                   ASSUMPTIONS/BASIS FOR ASSUMPTIONS
         -------------------------------   ------------------------------------------------------------------------
         <S>                               <C>
         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% of the 90-95 ultimate mortality table for standard,
                                           rachet, and rollup, 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
</Table>

                                       12
<Page>

         As of March 31, 2004, the separate account liability subject to SOP
         03-1 for minimum guaranteed benefits and the additional liability
         recognized related to minimum guarantees is $4,737.6 million and $0.9
         million, respectively. During the three months ended March 31, 2004,
         incurred guaranteed benefits and paid guaranteed benefits were $0.2
         million and 0.1 million, respectively. The net amount at risk (net of
         reinsurance) and the weighted average attained age of contractholders
         is $43.2 million and 67, respectively, as of March 31, 2004.

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:

<Table>
<Caption>
         (MILLIONS)
         -----------
         <S>                                                                            <C>
         Private corporate securities                                                   $     101.1
         Public corporate securities                                                    $    2604.0
         U.S. Treasury & Agency                                                                38.5
         Commercial mortgage obligations                                                      796.8
         Commercial mortgage backed securities                                               1197.2
                                                                                        -----------
         Total                                                                          $    4737.6
                                                                                        ===========
</Table>

7.       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 other
         assets on the Condensed Consolidated Balance Sheets. 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
         $0.7 million and amortized $1.4 million of sales inducements,
         respectively. The unamortized balance of capitalized sales inducements
         as of March 31, 2004 is $21.1 million.

8.       BENEFIT PLANS

         NON-QUALIFIED RETIREMENT PLANS

         As of December 31, 2001, the Company, in conjunction with ING, offers
         certain eligible employees (excluding, among others, Career Agents (as
         defined below)) the Supplemental ING Retirement Plan for Aetna
         Financial Services and Aetna International Employees ("SERP").
         Effective January 1, 2002, the Company, in conjunction with ING, offers
         certain employees (other than Career Agents) supplemental retirement
         benefits under the ING Americas Supplemental Executive Retirement Plan
         (the "Americas Supplemental Plan"). The Company, in conjunction with
         ING, sponsors the Pension Plan for Certain Producers of ING Life
         Insurance and Annuity Company (formerly the Pension Plan for Certain
         Producers of Aetna Life Insurance and Annuity Company) (the "Agents
         Non-Qualified Plan"), a non-qualified defined benefit pension plan. The
         Company also sponsors the Producers' Incentive Savings Plan ("PIP"),
         which is a non-qualified deferred compensation plan for eligible Career
         Agents and certain other individuals who meet the eligibility criteria
         specified in the PIP. The Company also sponsors the Producers' Deferred
         Compensation Plan ("DCP"), which is a non-qualified deferred
         compensation plan for eligible Career Agents and certain other
         individuals who meet the eligibility criteria specified in the DCP.
         Benefit accruals under the SERPs ceased effective as of December 31,
         2001.

         Net periodic benefit costs for the SERP and the Agents Non-Qualified
         Plan for the periods ended March 31, 2004 and 2003 were as follows:

<Table>
<Caption>
         (MILLIONS)                                                                        2004           2003
         -----------                                                                    ----------     ----------
         <S>                                                                            <C>            <C>
         Interest cost                                                                  $      1.5     $      1.7
         Net actuarial (gain) loss recognized in the year                                        -            0.2
         Unrecognized past service cost recognized in year                                     0.1            0.1
                                                                                        ----------     ----------
         Net periodic benefit cost                                                      $      1.6     $      2.0
                                                                                        ==========     ==========
</Table>

         Contributions for the SERP and Agents' Non-Qualified Plan are expected
         to be $9.4 million during 2004.

         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, including certain Career Agents.
         Generally, retired employees and eligible Career 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
         Career Agent pays for such coverage is subject to change in the future.

         Net periodic benefit costs for retired employees' and retired agents'
         post-retirement health care benefits for the periods ended March 31,
         2004 and 2003 were as follows:

<Table>
<Caption>
         (MILLIONS)                                                                        2004           2003
         ----------                                                                     ----------     ----------
         <S>                                                                            <C>            <C>
         Service cost                                                                   $      0.3     $      0.2
         Interest cost                                                                         0.4            0.4
         Net actuarial loss recognized in the year                                             0.1            0.1
         Past service cost - recognized this year                                                -           (0.1)
                                                                                        ----------     ----------
         Net periodic benefit cost                                                      $      0.8     $      0.6
                                                                                        ==========     ==========
</Table>

         Contributions for retired employees' and retired agents'
         post-retirement health care benefits are expected to be $1.6 million
         during 2004.

         CHANGES IN ASSUMPTIONS

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


<Table>
<Caption>
                                                                                           2004           2003
                                                                                        ----------     ----------
         <S>                                                                                  <C>            <C>
         Discount rate at beginning of period                                                 6.25%          6.75%
</Table>

         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.

9.       INCOME TAXES

         The effective tax rates for the three months ended March 31, 2004 and
         2003 were 31.7% and 29.1%, respectively. The increase in effective tax
         rate resulted primarily from a larger increase in pre-tax book income
         relative to the increase in the deduction allowed for dividends
         received.

10.      COMMITMENTS AND CONTINGENT LIABILITIES

         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

                                       13
<Page>

         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 the fair value of $344.0 million and
         $154.3 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.

                                       14
<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 ING Life Insurance and
         Annuity Company and its wholly-owned subsidiaries ("ILIAC", or 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 consolidated financial
         statements and other data presented herein, as well as the
         "Management's Narrative Analysis of the Results of Operations and
         Financial Condition" section contained in the Company's 2003 Annual
         Report on Form 10-K.

         NATURE OF BUSINESS

         The Company offers qualified and nonqualified annuity contracts that
         include a variety of funding and payout options for individuals and
         employer sponsored retirement plans qualified under Internal Revenue
         Code Sections 401, 403 and 457, as well as nonqualified deferred
         compensation plans. Annuity contracts may be deferred or immediate
         (payout annuities). These products also include programs offered to
         qualified plans and nonqualified deferred compensation plans that
         package administrative and record-keeping services along with a variety
         of investment options, including affiliated and nonaffiliated mutual
         funds and variable and fixed investment options. In addition, the
         Company also offers wrapper agreements entered into with retirement
         plans which contain certain benefit responsive guarantees (i.e.
         liquidity guarantees of principal and previously accrued interest for
         benefits paid under the terms of the plan) with respect to portfolios
         of plan-owned assets not invested with the Company. The Company also
         offers investment advisory services and pension plan administrative
         services.

         RECENTLY ADOPTED ACCOUNTING STANDARDS

         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 revenues and expenses related to such arrangements be consilidated
         w/the respective revenue and expense lines in the Condensed
         Consolidated Statements of Operations. In addition, the SOP requires
         additional liabilities be established for certain guaranteed death and
         other benefits and for Universal Life 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 account for certain
         separate account arrangements as general account arrangements, and to
         recognize sales inducements to

                                       15
<Page>

         contractholders. Requirements to establish additional liabilities for
         minimum guarantee benefits are applicable to the Company, however, the
         Company's policies on policy liabilities have historically been, and
         continue to be, in conformity with the requirements newly established.
         Requirements for recognition of additional liabilities for products
         with certain patterns of cost of insurance charges are not applicable
         to the Company.

         The adoption of SOP 03-1 did not have a significant effect on the
         Company's results of operations, and had no impact on the Company's
         net income.

         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. The Company
         has modified coinsurance treaties that are applicable to the guidance.
         The applicable contracts, however, have been determined to generate
         embedded derivatives with a fair value of zero. Therefore, the guidance
         has no impact on the Company's financial position, results of
         operations or cash flows.

         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. These estimates and
         assumptions are evaluated on an on-going basis based on historical
         developments, market conditions, 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. In developing these estimates
         management makes subjective and complex judgments that are inherently
         uncertain and subject to material change 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 consolidated
         financial statements.

                                       16
<Page>

         INVESTMENT IMPAIRMENT TESTING

         The Company reviews the general account investments for impairments by
         considering the length of time and the extent to which the fair value
         has been less than amortized 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 fair value. 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.

         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.

         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 the 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. 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 the 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 deferred annuity
         products is the assumed return associated with future separate 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 separate 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.

                                       17
<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.

         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 Securities and Exchange
         Commission ("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 (for
         additional information, see the Legislative Initiatives section below).
         Some may relate 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.

                                       18
<Page>

         RESULTS OF OPERATIONS

         Premiums for the period ended March 31, 2004 decreased by $13.8 million
         compared to the period ended March 31, 2003, primarily due to a
         decrease in immediate annuities with life contingencies.

         Fee income increased $22.5 million for the three months ended March 31,
         2004 compared to the three months ended March 31, 2003. A
         substantial portion of fee income is calculated based on
         variable assets under management. The increase in fee income was
         primarily due to an increase in the Company's average daily variable
         assets under management. The Company' variable assets under management
         increased due to normal net cash inflows driven by improved equity
         market returns during the several month period prior to the assets
         under management levels at each respective time period.

         Net investment income remained relatively stable during the three
         months ended March 31, 2004 compared to the same period in 2003.

         Net realized capital gains for the three month period ended
         March 31, 2004 increased by $15.0 million compared to the same
         period ended March 31, 2003. Net realized gains result from sales of
         fixed maturity investments having a fair value greater than book
         value. The increase in net realized capital gains is the result of
         significant credit related and interest related losses realized in
         early 2003.

         Interest credited and other benefits to policyholders for the period
         ended March 31, 2004 compared to the same period in 2003, decreased by
         $14.7 million. The decrease in credited interest rates resulting from a
         management decision to lower credited rates

                                       19
<Page>

         to policyholders was partially offset by an increase in average assets
         under management with fixed options.

         Underwriting, acquisition, and insurance expenses were relatively
         stable for the period ended March 31, 2004 compared to the same
         period in 2003.

         Amortization of deferred policy acquisition costs and value of business
         acquired for the three month period ended March 31, 2004, decreased
         by $18.6 million compared to the same period in 2003. Decreased
         amortization during the period was primarily due to improved market
         and fund performance, insurance in force higher than the projected
         account value, and a change in fixed annuity surrender assumptions.
         Amortization of long-duration products is recorded in proportion to
         actual and estimated future gross profits. Estimated gross profits
         are computed based on assumptions related to the underlying
         contracts, including but not limited to interest margins,
         surrenders, withdraws, expenses, and asset growth. The decrease 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.

         Net income increased by $31.6 million for the three month period
         ended March 31, 2004, compared to the same period ended March 31,
         2003. Higher net income was the result of increased fee income and
         net realized capital gains, lower interest credited to policyholders
         and amortization of deferred policy acquisition costs and value of
         business acquired, partially offset by a reduction in premiums.

         The Company's annuity deposits and assets under management are as
         follows:


<Table>
<Caption>
                                                                                           THREE MONTHS ENDED
                                                                                                MARCH 31,
         (MILLIONS) (UNAUDITED)                                                           2004             2003
                                                                                      ------------     ------------
         <S>                                                                          <C>              <C>
         Deposits:
           Annuities-fixed options                                                    $      489.8     $      425.4
           Annuities-variable options                                                      1,282.1          1,050.5
                                                                                      ------------     ------------
         Total deposits                                                               $    1,771.9     $    1,475.9
                                                                                      ============     ============
         Assets under management:
           Annuities-fixed options (1)                                                $   16,170.8     $   15,359.2
           Annuities-variable options (2)                                                 29,733.5         22,603.1
                                                                                      ------------     ------------
           Subtotal-annuities                                                             45,904.3         37,962.3
           Plan sponsored and other                                                        5,770.3          6,618.8
                                                                                      ------------     ------------
         Total-assets under management                                                    51,674.6         44,581.1
         Assets under administration (3)                                                  23,124.7         17,012.3
                                                                                      ------------     ------------
         Total assets under management
           and administration                                                         $   74,799.3     $   61,593.4
                                                                                      ============     ============
</Table>

         (1)   Excludes net unrealized capital gains of $861.1 million and
               $789.8 million at March 31, 2004 and 2003, respectively.
         (2)   Includes $13,586.8 million at March 31, 2004 and $9,112.0 million
               at March 31, 2003 related to deposits into the Company's products
               and invested in unaffiliated mutual funds.
         (3)   Represents assets for which the Company provides administrative
               services only.

         FINANCIAL CONDITION

         INVESTMENTS

         FIXED MATURITIES

         At March 31, 2004 and December 31, 2003, the Company's carrying value
         of available for sale fixed maturities including securities pledged to
         creditors (hereinafter referred to as "total fixed maturities")
         represented 93.4% and 93.5%, respectively, of the total general
         account invested assets. For the same periods, $14,104.0 million, or
         74.0% of total fixed maturities, and $13,744.9 million, or 78.4% of
         total fixed maturities, respectively, supported experience-rated
         products. Total fixed maturities reflected net unrealized capital
         gains of $861.1 million and $615.1 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,

                                       20
<Page>

         are rated by the Company on a basis believed to be similar to that used
         by the rating agencies. The average quality rating of the Company's
         fixed maturities portfolio was AA- 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:

<Table>
<Caption>
                                                                           MARCH 31,           DECEMBER 31,
                                                                             2004                  2003
                                                                      ----------------      -----------------
         <S>                                                                   <C>                   <C>
         AAA                                                                    49.2%                 51.1%
         AA                                                                      4.8                   4.3
         A                                                                      19.5                  19.1
         BBB                                                                    22.0                  21.3
         BB                                                                      3.5                   3.2
         B and below                                                             1.0                   1.0
                                                                      -----------------     -----------------
         Total                                                                 100.0%                100.0%
                                                                      =================     =================
</Table>

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

<Table>
<Caption>
                                                                           MARCH 31,           DECEMBER 31,
                                                                             2004                  2003
                                                                      -----------------     -----------------
         <S>                                                                   <C>                  <C>
         U.S. Corporate                                                         40.9%                38.9%
         Residential Mortgaged-backed                                           32.1                 33.7
         Foreign (1)                                                            11.9                 11.6
         Commercial/Multifamily Mortgage-backed                                  7.9                  7.8
         Asset-backed                                                            6.8                  6.0
         U.S. Treasuries/Agencies                                                0.4                  2.0
                                                                      -----------------     -----------------
         Total                                                                 100.0%               100.0%
                                                                      =================     =================
</Table>

         (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 time and the extent to which the
         fair value has been less than amortized 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 fair value. If it is probable that all amounts due
         according to the contractual terms of a fixed maturity investment will
         not be collected, an other than temporary impairment is considered to
         have occurred.

                                       21
<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
         deposits on contracts, product charges, investment income, maturing
         investments, and capital contributions. Primary uses of liquidity are
         payments of commissions and operating expenses, interest and premium
         credits, investment purchases, 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 a
         borrowing facility to meet short-term cash requirements. The Company
         maintains a reciprocal loan agreement with ING America Insurance
         Holdings, Inc. ("ING AIH"), a Delaware corporation and affiliate. Under
         this agreement, which became effective in June 2001 and expires in
         April 2011, the Company and ING AIH can borrow up to 3.0% of the
         Company's statutory admitted assets as of the preceding December 31
         from one another. Management believes that its 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.

         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.

                                       22
<Page>

         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
         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.

                                       23
<Page>

ITEM 4.  CONTROLS AND PROCEDURES

         a)    Within the 90-day period prior to the filing of this report, 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 design and operation 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). 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.

                                       24
<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 affiliates
         of the Company 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 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

             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.

                                       25
<Page>

                                   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 LIFE INSURANCE AND ANNUITY
                                  COMPANY
                                               (Registrant)


                                  By
----------------                      ----------------------------------------
     (Date)                           David A. Wheat
                                      Director, Senior Vice President and
                                       Chief Financial Officer

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