<PAGE>
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

For the fiscal year ended December 31, 2000      Commission file number 33-81010

                       Aetna Insurance Company of America
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                 <C>
                     Florida                                            06-1286272
------------------------------------------------------------------------------------------------------
         (State or other jurisdiction of                             (I.R.S. Employer
          incorporation or organization)                           Identification No.)

5100 West Lemon Street, Suite 213, Tampa, Florida                         33609
------------------------------------------------------------------------------------------------------
     (Address of principal executive offices)                           (ZIP Code)
</TABLE>

(Registrant's telephone number, including area code) (860) 273-0123

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  None

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ X ].

As of March 30, 2001 there were 25,500 shares of common stock outstanding, par
value $100 per share, all of which were held by Aetna Life Insurance and Annuity
Company.

Reduced Disclosure Format

The registrant meets the conditions set forth in General Instruction
I(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced
disclosure format.
<PAGE>
                       AETNA INSURANCE COMPANY OF AMERICA
    (A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)
                           Annual Report on Form 10-K
                      For the Year Ended December 31, 2000

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                    Page
                                                    ----
<S>       <C>                                       <C>
                         PART I

Item 1.   Business**..............................    3
Item 2.   Properties**............................    7
Item 3.   Legal Proceedings.......................    7
Item 4.   Submission of Matters to a Vote of
          Security Holders*.......................    7

                        PART II

Item 5.   Market for Registrant's Common Equity
          and Related Stockholder Matters.........    7
Item 6.   Selected Financial Data*................    8
Item 7.   Management's Analysis of the Results of
          Operations**............................    8
Item 7A.  Quantitative and Qualitative Disclosure
          About Market Risk.......................   16
Item 8.   Financial Statements and Supplementary
          Data....................................   17
Item 9.   Changes in and Disagreements with
          Accountants on Accounting and Financial
          Disclosure..............................   41

                        PART III

Item 10.  Directors and Executive Officers of the
          Registrant*.............................   41
Item 11.  Executive Compensation*.................   41
Item 12.  Security Ownership of Certain Beneficial
          Owners and Management*..................   41
Item 13.  Certain Relationships and Related
          Transactions*...........................   41

                        PART IV

Item 14.  Exhibits, Financial Statement Schedules,
          and Reports on Form 8-K.................   41

          Index to Financial Statement Schedule...   44
          Signatures..............................   47
</TABLE>

  *  Item omitted pursuant to General Instruction I(2) of Form 10-K.
 **  Item prepared in accordance with General Instruction I(2) of Form 10-K.

                                       2
<PAGE>
                                     PART I

ITEM 1.  BUSINESS

Aetna Insurance Company of America (the "Company") is a stock life insurance
company organized in 1990 under the insurance laws of Connecticut. Effective
January 5, 2000, the Company's state of domicile changed from Connecticut to
Florida. The Company is a wholly owned subsidiary of Aetna Life Insurance and
Annuity Company ("ALIAC"). ALIAC is a wholly owned subsidiary of Aetna
Retirement Holdings, Inc. ("HOLDCO"), which is a wholly owned subsidiary of
Aetna Retirement Services, Inc.(ARSI). ARSI is ultimately owned by ING Groep
N.V. (ING).

On December 13, 2000, ING America Insurance Holdings, Inc., an indirect wholly
owned subsidiary of ING, acquired Aetna Inc., comprised of the Aetna Financial
Services business, of which the Company is a part, and the Aetna International
businesses for approximately $7.7 billion. The purchase price was comprised of
approximately $5.0 billion in cash and the assumption of $2.7 billion of
outstanding debt and other net liabilities. In connection with the acquisition,
Aetna Inc. was renamed Lion Connecticut Holdings Inc. ("Lion"). At the time of
the sale, Lion entered into certain transition services agreements with a former
related party, Aetna U.S. Healthcare which was renamed Aetna Inc. ("former
Aetna"). Refer to Note 1 of the Notes to Financial Statements for more
information on the acquisition.

The Company has one operating segment and all revenue reported by the Company
comes from external customers.

PRODUCTS AND SERVICES

The Company principally offers annuity contracts to individuals on a qualified
and nonqualified basis and to employer-sponsored retirement plans qualified
under Internal Revenue Code Sections 401, 403 and 408. These contracts may be
deferred or immediate ("payout annuities").

INVESTMENT OPTIONS

The Company's products provide customers with variable and/or fixed investment
options. Variable ("non-guaranteed") options provide for full assumption by the
customer of investment risks. Assets supporting non-guaranteed variable options
are held in separate accounts that invest in ALIAC mutual funds and/or
unaffiliated mutual funds. ALIAC mutual funds include funds managed by Aeltus
Investment Management, Inc. ("Aeltus"), an affiliate of the Company, and funds
managed by ALIAC and subadvised by outside investment advisors. Variable
separate account investment income and realized capital gains and losses are not
reflected in the Company's statements of income.

Fixed options can be either "fully guaranteed" or "experience rated". Fully
guaranteed options provide guarantees on investment return, maturity values, and
if applicable, benefit payments. Experience rated options require the customer
to assume investment (including realized capital gains and losses) and other
risks subject, among other things, to certain minimum guarantees. The effect of
investment performance (as long as minimum guarantees are not triggered) does
not impact the Company's results.

                                       3
<PAGE>
ITEM 1.  BUSINESS (continued)

FEES AND INVESTMENT MARGINS

Insurance charges or other fees earned by the Company vary by product and
depend, among other factors, on the funding option selected by the customer
under the product. For annuity products where assets are allocated to variable
funding options, the Company may charge the separate account asset-based
insurance and expense fees. When a customer selects an ALIAC mutual fund as a
variable funding option, the Company receives a participation fee from either
Aeltus or ALIAC. In addition, when a customer selects an unaffiliated mutual
fund as a variable funding option, the Company receives distribution fees and/or
expense reimbursements. For fixed funding options, the Company earns an
investment margin, which is based on the difference between income earned on the
investments supporting the liability and interest credited to customers. The
Company may also receive other fees or charges depending on the nature of the
products.

ASSETS UNDER MANAGEMENT

The substantial portion of fees or other charges and investment margins is based
on assets under management. Assets under management are principally affected by
net deposits (i.e. deposits, including new contracts, less surrenders),
investment growth (e.g., interest credited to customer accounts for fixed
options or market performance for variable options) and customer retention.
Assets under management, excluding net unrealized capital gains and losses
related to market value adjustments required under Financial Accounting Standard
("FAS") No. 115, were $1.1 billion, $1.3 billion and $1.1 billion at
December 31, 2000, 1999 and 1998, respectively. Assets under management are
available for contractholder withdrawal and are subject to fair value
adjustments and/or deferred surrender charges.

To encourage customer retention and recover acquisition expenses, contracts
typically impose a surrender charge on policyholder balances withdrawn within a
period of time after the contract's inception. The period of time and level of
the charge vary by product. Existing tax penalties on annuity distributions
prior to age 59 1/2 provide further disincentive to customers for premature
surrenders of account balances, but generally do not impede transfers of those
balances to products of competitors.

PRINCIPAL MARKETS AND METHOD OF DISTRIBUTION

The Company's products are offered primarily to individuals and
employer-sponsored groups in the education market. The Company's products
generally are sold through a managed network of banks and broker/dealers and
dedicated career agents.

COMPETITION

Competition arises from other insurance companies, as well as an array of
financial services companies including banks, mutual funds and other investment
managers. Principal competitive factors are reputation for investment
performance, product features, service, cost and the perceived financial
strength of the investment manager or sponsor.

Competition may affect, among other matters, both business growth and the
pricing of the Company's products and services.

                                       4
<PAGE>
ITEM 1.  BUSINESS (continued)

RESERVES

Reserves for limited pay contracts (i.e. annuities with life contingent payout)
are computed on the basis of assumed investment yield and mortality, including a
margin for adverse deviation which is assumed to provide for expenses. The
assumptions vary by plan, year of issue and policy duration. Reserves for
investment contracts (deferred annuities and immediate annuities without life
contingent payouts) are equal to cumulative deposits plus credited interest less
withdrawals and charges thereon. For the investment contracts which are
experience-rated, the reserves also reflect net realized capital gains/losses
(which the Company reflects through credited rates on an amortized basis) and
net unrealized capital gains/losses related to FAS No. 115.

Reserves, as described above, are computed amounts that, with additions from
deposits to be received and with interest on such reserves compounded annually
at assumed rates, are expected to be sufficient to meet the Company's policy
obligations at their maturities or to pay expected death or retirement benefits
or other withdrawal requests.

GENERAL ACCOUNT INVESTMENTS

Consistent with the nature of the contract obligations involved in the Company's
operations, the majority of the general account assets are invested in long-term
debt securities such as: U.S. corporate debt securities, U.S. government
securities, foreign government and corporate debt securities, residential
mortgage-backed securities, commercial and multifamily mortgage-backed
securities and other asset-backed securities. It is management's objective that
the portfolios be of high quality while achieving competitive investment yields
and returns. Investment portfolios generally match the duration of the insurance
liabilities they support. The general account of the Company has been segmented
to improve the asset/liability matching process. The duration of investments is
monitored and security purchases and sales are executed with the objective of
having adequate funds available to satisfy the Company's maturing liabilities.

Aeltus is currently the advisor of the Company's general account investments.
During the second quarter of 2001, ING Investment Management, LLC, an affiliate
of the Company, will become the advisor of the Company's general account
investments.

See Management's Analysis of the Results of Operations--General Account
Investments for further discussion of investments.

OTHER MATTERS

a. Regulation

The Company's operations are subject to comprehensive regulation throughout the
United States. The laws of the various jurisdictions establish supervisory
agencies, including the state insurance departments, with broad authority to
grant licenses to transact business and regulate many aspects of the products
and services offered by the Company, as well as solvency and reserve adequacy.
Many agencies also regulate investment activities on the basis of quality,
diversification, and other quantitative criteria. The Company's operations and
accounts are subject to examination at regular intervals by certain of these
regulators.

                                       5
<PAGE>
ITEM 1.  BUSINESS (continued)
OTHER MATTERS (continued)
Operations conducted by the Company are subject to regulation by various
insurance agencies where the Company conducts business, in particular the
Insurance Department of Connecticut, prior to January 5, 2000, and the Florida
Department of Insurance , subsequent to January 5, 2000. Among other matters,
these agencies may regulate premium rates, trade practices, agent licensing,
policy forms, and underwriting and claims practices.

The Securities and Exchange Commission ("SEC") and, to a lesser extent, the
states regulate the sales and investment management activities and operations of
the Company. Regulations of the SEC, Department of Labor and Internal Revenue
Service also impact certain of the Company's annuity and other investment and
retirement products. These products involve Separate Accounts and mutual funds
registered under the Investment Company Act of 1940.

INSURANCE HOLDING COMPANY LAWS

A number of states, including Florida and Connecticut, regulate affiliated
groups of insurers, such as the group to which the Company belongs, under
holding company statutes. These laws, among other things, place certain
restrictions on transactions between affiliates such as dividends and other
distributions that may be paid to the Company's parent corporation. For
information regarding payments of dividends by the Company, see "Liquidity &
Capital Resources" in Management's Analysis of the Results of Operations and
Note 6 of Notes to Financial Statements.

INSURANCE COMPANY GUARANTY FUND ASSESSMENTS

Under insurance guaranty fund laws existing in all states, insurers doing
business in those states can be assessed (up to prescribed limits) for certain
obligations of insolvent insurance companies to policyholders and claimants. The
after-tax charges to earnings for guaranty fund obligations were $0.1 million
for the years ended December 31, 2000 and 1999. There was no after-tax charge to
earnings for guaranty fund obligations for the year ended December 31, 1998.

For information regarding certain other potential regulatory changes relating to
the Company's businesses, see "Forward-Looking Information/Risk Factors" in
Management's Analysis of the Results of Operations.

b. Ratings

The Company's financial strength ratings at March 30, 2001 and November 8, 2000
are as follows:

<TABLE>
<CAPTION>
                                                Rating Agencies
                                -----------------------------------------------
                                                       Moody's       Standard &
                                A.M. Best  Fitch  Investors Service    Poor's
<S>                             <C>        <C>    <C>                <C>
-------------------------------------------------------------------------------
March 30, 2001 (1)              A+         AA+    Aa2                AA+
November 8, 2000                A          AA     Aa3                AA-
-------------------------------------------------------------------------------
</TABLE>

(1)  Company ratings were upgraded by each of the rating agencies shown in the
     table upon completion of ING's acquisition of Aetna Financial Services
     businesses on December 13, 2000 (refer to Note 1 of the Consolidated Notes
     to Financial Statements).

                                       6
<PAGE>
ITEM 1.  BUSINESS (continued)
OTHER MATTERS (continued)
c. Miscellaneous

The Company utilizes the employees of ING and its affiliates (primarily ALIAC)
and receives an expense allocation, at cost, based on the utilization of these
employees.

The Company uses ALIAC's computer facilities. The Company's management believes
that ALIAC's computer facilities, systems and related procedures are adequate to
meet its business needs. ALIAC's data processing systems and backup and security
policies, practices and procedures are regularly evaluated by ALIAC's management
and internal auditors and are modified as considered necessary.

The Company is not dependent upon any single customer and no single customer
accounted for 10% or more of revenue in 2000. In addition, the loss of business
from any one, or a few, independent brokers or agents would not have a material
adverse effect on the earnings of the Company.

ITEM 2.  PROPERTIES

The Company's principal executive office is located at 5100 West Lemon Street,
Suite 213, Tampa, Florida 33609 and its principal office for operations is
located at 151 Farmington Avenue, Hartford, Connecticut 06156. The Company
occupies office space that is leased by Aetna Life Insurance and Annuity Company
or other affiliates. Expenses associated with these offices are allocated on a
direct and indirect basis to the Company.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not currently involved in any material litigation.

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

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

All of the Company's outstanding shares are owned by its parent company, ALIAC.
Effective January 5, 2000, the Company changed its state of domicile from
Connecticut to Florida. All dividends paid to ALIAC by the Company must be
approved in advance by the Insurance Commissioner of the State of Florida. For
the year ended December 31, 2000, the company paid a dividend to ALIAC of $2.4
million relating to the Florida re-domestication and, for the years ended
December 31, 1999 and 1998, it did not pay any dividends to ALIAC.

At the time of the re-domestication of the Company to Florida, which occurred
during the first quarter of 2000, the par value of the Company's common stock
was changed from $2,000 per share to $100 per share to comply with Florida law.
This revaluation caused the Company's common capital

                                       7
<PAGE>
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(continued)
stock to decrease by $2.4 million and its paid-in capital to increase by the
same amount and had no net effect on total shareholder's equity.

The Company has entered into support agreements with ALIAC under which ALIAC has
agreed to cause the Company to have sufficient capital to meet a certain capital
and surplus level. The Company did not receive any capital contributions
relating to these agreements in 2000 and 1999 and received contributions
relating to these agreements of $15 million in 1998.

ITEM 6.  SELECTED FINANCIAL DATA

Omitted pursuant to General Instruction I(2)(a) of Form 10-K.

ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS

Management's analysis of the results of operations is presented in lieu of
Management's Discussion and Analysis of Financial Condition and Results of
Operations, pursuant to General Instruction I(2)(a) of Form 10-K.

RECENT DEVELOPMENTS

On December 13, 2000, ING America Insurance Holdings, Inc., an indirect wholly
owned subsidiary of ING, acquired Aetna Inc., comprised of the Aetna Financial
Services business, of which the Company is a part, and the Aetna International
businesses for approximately $7.7 billion. The purchase price was comprised of
approximately $5.0 billion in cash and the assumption of $2.7 billion of
outstanding debt and other net liabilities. In connection with the acquisition,
Aetna Inc. was renamed Lion Connecticut Holdings Inc. ("Lion"). At the time of
the sale, Lion entered into certain transition services agreements with a former
related party, Aetna U.S. Healthcare which was renamed Aetna Inc. ("former
Aetna"). Refer to Note 1 of the Notes to Financial Statements.

RESULTS OF OPERATIONS

All references to financial data for the year ended December 31, 2000 in this
section represents an aggregation of the pre-acquisition period of the eleven
months ended November 30, 2000 and the post acquisition period of the one month
ended December 31, 2000.

                                       8
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS (continued)
RESULTS OF OPERATIONS (continued)

<TABLE>
<CAPTION>
(Millions)                                                                                      2000      1999      1998
<S>                                                                                         <C>       <C>       <C>
------------------------------------------------------------------------------------------------------------------------
Charges assessed against policyholders                                                      $   17.7  $   15.5  $   11.5
Net investment income                                                                           11.2      10.9      10.4
Net realized capital losses                                                                     (0.8)     (0.3)     (0.2)
Other income                                                                                     1.5       1.5       0.6
------------------------------------------------------------------------------------------------------------------------
      Total revenue                                                                             29.6      27.6      22.3
------------------------------------------------------------------------------------------------------------------------
Current and future benefits                                                                      7.4       8.0       9.0
Operating expenses:
  Salaries and related benefits                                                                  1.3       2.4       2.5
  Other                                                                                          3.9       4.5       3.7
Amortization of deferred policy acquisition costs and valuation of business acquired             5.7       4.6       3.9
------------------------------------------------------------------------------------------------------------------------
      Total benefits and expenses                                                               18.3      19.5      19.1
------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                                                      11.3       8.1       3.2
Income taxes                                                                                     2.9       2.7       0.6
------------------------------------------------------------------------------------------------------------------------
Net income                                                                                  $    8.4  $    5.4  $    2.6
========================================================================================================================
Net realized capital losses, net of tax (included above)                                    $   (0.5) $   (0.2) $   (0.1)
========================================================================================================================
Deposits not included above:
  Annuities--fixed options                                                                  $    3.4  $    9.0  $   73.8
  Annuities--variable options                                                                   10.5      20.1     168.4
------------------------------------------------------------------------------------------------------------------------
      Total                                                                                 $   13.9  $   29.1  $  242.2
========================================================================================================================
Assets under management: (1)
  Annuities--fixed options (2)                                                              $  178.7  $  223.0  $  251.3
  Annuities--variable options (3)                                                              925.3   1,108.4     891.4
------------------------------------------------------------------------------------------------------------------------
      Total (4)                                                                             $1,104.0  $1,331.4  $1,142.7
========================================================================================================================
</TABLE>

(1)  Excludes net unrealized capital gains of $0.9 million at December 31, 2000,
     net unrealized capital losses of $4.5 million at December 31, 1999 and net
     unrealized capital gains of $4.1 million at December 31, 1998.
(2)  Includes $66.9 million, $78.7 million and $101.9 million related to the
     assets supporting a guaranteed interest option at December 31, 2000, 1999
     and 1998, respectively.
(3)  Includes $719.8 million, $870.3 million and $689.1 million at December 31,
     2000, 1999 and 1998, respectively, of assets held and managed by
     unaffiliated mutual funds.
(4)  Includes $285.2 million, $340.8 million and $359.6 million of assets
     managed by Aeltus at December 31, 2000, 1999 and 1998, respectively, and
     includes $99.0 million, $120.3 million and $94.0 million of assets managed
     by its parent, ALIAC, at December 31, 2000, 1999 and 1998, respectively.

The Company's net income increased $3.0 million and $2.8 million in 2000 and
1999, respectively. Excluding net realized capital losses, net income increased
$3.3 million and $2.9 million in 2000 and 1999, respectively. The increase in
2000 net income excluding net realized capital losses was due to an increase in
charges assessed against policyholders, lower operating expenses and a decline
in the effective tax rate. The increase in 1999 net income excluding net
realized capital losses was due to an increase in charges assessed against
policyholders partially offset by increased operating expenses.

                                       9
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS. (continued)
RESULTS OF OPERATIONS (continued)

Substantially all of the charges assessed against policyholders are derived from
assets under management. Assets under management decreased by $227.4 million in
2000 and increased by $188.7 million in 1999. The decrease in 2000 was primarily
due to a decline in the stock market during the second half of 2000. In spite of
the stock market decline, assets under management levels during 2000 remained
higher than 1999 levels throughout most of the year resulting in higher charges
assessed against policyholders for 2000. The increase in assets under management
in 1999 was primarily due to appreciation in the stock market.

Net deposits (deposits, including new contracts, less surrenders) decreased in
2000 and 1999 primarily due to decreases in deposits from new contracts. The
decreases in deposits from new contracts occurred because the Company has not
actively marketed its individual annuity products since late in 1998 (refer to
"Outlook" below).

Lower operating expenses in 2000 are a direct result of the Company's decision
to not actively market its annuity products to individuals (refer to "Outlook"
below). The decline in the effective tax rate for 2000 is primarily related to
the deduction allowed for dividends received and a favorable prior period
adjustment.

OUTLOOK

The Company's strategy is to increase assets under management and improve
profitability by continuing to focus on distribution opportunities, primarily in
Florida. Effective January 5, 2000, the Company changed its state of domicile
from Connecticut to Florida. The Company has focused its marketing efforts
principally on expanding its group annuity sales with the offering, through
dedicated agents and brokers, of contracts to public, tax exempt and private
employers sponsoring retirement plans.

Although the Company has offered annuities marketed to individuals, principally
non-qualified annuities and qualified individual retirement annuities, it is not
actively marketing these products.

GENERAL ACCOUNT INVESTMENTS

The Company's investment strategies and portfolios are intended to match the
duration of the related liabilities and provide sufficient cash flow to meet
obligations while maintaining a competitive rate of return. The duration of
these investments is monitored, and investment purchases and sales are executed
with the objective of having adequate funds available to satisfy the Company's
maturing liabilities. The risks associated with investments supporting
experience-rated products are assumed by those customers subject to, among other
things, certain minimum guarantees.

                                       10
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS. (continued)
GENERAL ACCOUNT INVESTMENTS (continued)
The Company's invested assets were comprised of the following:

<TABLE>
<CAPTION>
(Millions)                                                       December 31, 2000     December 31, 1999
<S>                                                           <C>                   <C>
--------------------------------------------------------------------------------------------------------
Debt securities, available for sale, at fair value (1)               $132.3                $128.3
Nonredeemable preferred stock                                           1.0                   0.9
Short-term investments (2)                                              2.7                    --
--------------------------------------------------------------------------------------------------------
  Total investments                                                  $136.0                $129.2
========================================================================================================
</TABLE>

(1)  Includes $5.8 million of debt securities pledged to creditors at
     December 31, 2000. Refer to "Investments" in Note 1 of the Notes to
     Financial Statements.
(2)  Includes $2.3 million of short-term investments pledged to creditors at
     December 31, 2000. Refer to "Investments" in Note 1 of the Notes to
     Financial Statements.

DEBT SECURITIES

At December 31, 2000 and December 31, 1999, the Company's carrying value of
available for sale debt securities including debt securities pledged to
creditors (herein after referred to as "total debt securities") represented 97%
and 99%, respectively, of the total general account invested assets. For the
same periods, debt securities equal to $119.1 million (90% of the total debt
securities) and $116.4 million (91% of the total debt securities), respectively,
supported experience-rated contracts. Total debt securities reflected net
unrealized capital gains of $0.8 million at December 31, 2000 and net unrealized
capital losses of $4.5 million at December 31, 1999.

It is management's objective that the portfolio of debt securities be of high
quality and be well-diversified by market sector. The debt securities 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. The average quality rating of the Company's
debt securities portfolio at December 31, 2000 and 1999 was AA- and AA,
respectively.

The percent of total debt securities investments by quality ratings is as
follows:

<TABLE>
<CAPTION>
                                           December 31, 2000     December 31, 1999
<S>                                       <C>                   <C>
------------------------------------------------------------------------------------
AAA                                                   46.8%                 39.0%
AA                                                     5.8                   8.8
A                                                     31.2                  35.3
BBB                                                   16.2                  16.9
------------------------------------------------------------------------------------
  Total                                              100.0%                100.0%
====================================================================================
</TABLE>

                                       11
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS. (continued)
GENERAL ACCOUNT INVESTMENTS (continued)
The percent of total debt securities investments by market sector is as follows:

<TABLE>
<CAPTION>
                                           December 31, 2000     December 31, 1999
<S>                                       <C>                   <C>
------------------------------------------------------------------------------------
U.S. Corporate                                        56.2%                 55.8%
Residential Mortgage-Backed                           16.9                   7.9
U.S. Treasuries/Agencies                              11.2                  16.5
Asset-Backed                                           8.1                   4.9
Commercial/Multifamily Mortgage-Backed                 6.8                   6.8
Foreign Securities--U.S. Dollar
  Denominated                                          0.8                   8.1
------------------------------------------------------------------------------------
  Total                                              100.0%                100.0%
====================================================================================
</TABLE>

RISK MANAGEMENT AND MARKET-SENSITIVE INSTRUMENTS

The Company regularly evaluates the appropriateness of investments relative to
its management approved investment guidelines and the business objective of the
portfolios. The Company manages interest rate risk by seeking to maintain a
tight duration band, while credit risk is managed by maintaining high average
quality ratings and diversified sector exposure within the debt securities
portfolio. In connection with its investment and risk management objectives, the
Company also uses financial instruments whose fair value is at least partially
determined by, among other things, levels of or changes in domestic interest
rates (short-term or long-term), duration, prepayment rates, or credit
ratings/spreads.

The risks associated with investments supporting experience-rated annuity
products are assumed by those contractholders and not by the Company (subject
to, among other things, certain minimum guarantees). Risks associated with the
investments and liabilities related to experience-rated annuity products are not
included in the sensitivity analysis presented below.

The following discussion about the Company's risk management activities includes
forward-looking statements that involve risk and uncertainties. Set forth below
are management's projections of hypothetical net losses in fair value of
shareholder's equity related to the Company's market-sensitive instruments if an
immediate increase of 100 basis points in interest rates and an immediate
decrease of 10% in prices for domestic equity securities were to occur
(sensitivity analysis). The instruments included in this analysis are not
leveraged and are held for purposes other than trading. While the Company
believes that the assumed market rate changes are reasonably possible in the
near term, actual results may differ, particularly as a result of any management
actions that would be taken to mitigate such hypothetical losses in fair value
of shareholder's equity.

INTEREST RATE RISK

Assuming an immediate increase of 100 basis points in interest rates, the net
hypothetical loss in fair value of shareholder's equity related to financial
instruments is estimated to be $ 0.1 million (after-tax) at December 31, 2000
and 1999. The Company believes that an interest rate shift of this magnitude
represents a moderately adverse scenario, and is approximately equal to the
historical annual volatility of interest rate movements for the Company's
intermediate-term available-for-sale

                                       12
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS. (continued)
GENERAL ACCOUNT INVESTMENTS (continued)
debt securities. The Company has included corresponding changes in certain
insurance liabilities in this sensitivity analysis.

The risks associated with investments supporting experience-rated annuity
products are assumed by those contractholders and not by the Company (subject
to, among other things, certain minimum guarantees). Risks associated with the
investments and liabilities related to experience-rated annuity products are not
included in the sensitivity analysis presented below.

Based on the Company's overall exposure to interest rate risk, the Company
believes that these changes in market rates would not materially affect the
near-term financial position, results of operations or cash flows of the
Company.

LIQUIDITY AND CAPITAL RESOURCES

Generally, the Company meets its operating requirements by maintaining
appropriate levels of liquidity in its investment portfolio and using overall
cash flows from deposits, income received on investments and capital
contributions. Cash provided from these sources was used primarily for operating
expenses and to fund contract withdrawals.

Debt securities have durations that were selected to approximate the durations
of the liabilities they support. The general account of the Company has been
segmented to improve the asset/liability matching process. The duration of these
investments is monitored, and investment purchases and sales are executed with
the objective of having adequate funds available to satisfy the Company's
maturing liabilities.

As the Company's investment strategy focuses on matching asset and liability
durations, and not specific cash flows, and since these duration assessments are
dependent on numerous cash flow assumptions, asset sales may, from time to time,
be required to satisfy liability obligations and/or rebalance asset portfolios.
The investment portfolios are closely monitored to assess asset and liability
matching in order to rebalance the portfolios as conditions warrant.

The Company has significant short-term liquidity supporting its business. At
December 31, 2000, cash and cash equivalents were $9.1 million.

Given the quality ratings of the Company's debt securities portfolio (see
"General Account Investments"), management expects the vast majority of the
Company's investments in debt securities to be repaid in accordance with
contractual terms. In addition, most of the debt securities in the portfolio are
highly marketable and can be sold to enhance cash flow before maturity.

Effective January 5, 2000, the Company changed its state of domicile from
Connecticut to Florida. All dividends paid by the Company to ALIAC must be
approved in advance by the Insurance Commissioner of the State of Florida. For
the year ended December 31, 2000, the Company paid a dividend to ALIAC of $2.4
million relating to the Florida re-domestication and, for the years ended
December 31, 1999 and 1998, it did not pay any dividends to ALIAC.

                                       13
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)

At the time of the re-domestication of the Company to Florida the par value of
the Company's common stock was changed from $2,000 per share to $100 per share
to comply with Florida law. This revaluation caused the Company's common capital
stock to decrease by $2.4 million and its paid-in capital to increase by the
same amount and had no net effect on total shareholder's equity.

The Company has entered into support agreements with ALIAC under which ALIAC has
agreed to cause the Company to have sufficient capital to meet a certain capital
and surplus level. The Company did not receive any capital contributions
relating to these agreements in 2000 and 1999 and received contributions
relating to these agreements of $15 million in 1998.

See "Statements of Cash Flows" for additional information.

YEAR 2000

As of March 28, 2001, ALIAC and the Company have not experienced any material
difficulties with its mission-critical IT systems, embedded systems, suppliers,
or customers due to Year 2000 issues. ALIAC has reassigned their Year 2000
personnel and transferred Year 2000 related responsibilities to their
businesses. ALIAC and the Company remain Year 2000 vigilant, and any potential
future Year 2000 issues will be addressed by IT personnel.

Year 2000 project costs are not allocated to the Company.

FORWARD-LOOKING INFORMATION/RISK FACTORS

The Private Securities Litigation Reform Act of 1995 (the "1995 Act") provides a
"safe harbor" for forward-looking statements, so long as (1) those statements
are identified as forward-looking, and (2) the statements are accompanied by
meaningful cautionary statements that identify important factors that could
cause actual results to differ materially from those discussed in the statement.
We want to take advantage of these safe harbor provisions.

Certain information contained in this Management's Analysis of the Results of
Operations is forward-looking within the meaning of the 1995 Act or Securities
and Exchange Commission rules. This information includes, but is not limited to
the information that appears under the headings: (1) "Results of
Operations--Outlook", (2) "General Account Investments--Risk Management and
Market Sensitive Instruments/Interest Rate Risk" and (3) "Year 2000." In writing
this Management's Analysis of the Results of Operations, we also used the
following words, or variations of these words and similar expressions, where we
intended to identify forward-looking statements:

<TABLE>
<S>                                                 <C>
- Expects                                           - Plans
- Projects                                          - Believes
- Anticipates                                       - Seeks
- Intends                                           - Estimates
</TABLE>

These forward-looking statements rely on a number of assumptions concerning
future events, and are subject to a number of significant uncertainties and
other factors, many of which are outside our

                                       14
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS (continued)
FORWARD-LOOKING INFORMATION/RISK FACTORS (continued)
control, that could cause actual results to differ materially from these
statements. You should not put undue reliance on these forward-looking
statements. We disclaim any intention or obligation to update or revise
forward-looking statements, whether as a result of new information, future
events or otherwise.

Set forth below are certain important risk factors that, in addition to general
economic conditions and other factors (some of which are discussed elsewhere in
this report), may affect these forward-looking statements and our businesses
generally.

CERTAIN FACTORS PARTICULAR TO THE COMPANY'S OPERATIONS

SIGNIFICANT CHANGES IN FINANCIAL MARKETS COULD AFFECT EARNINGS.  Significant
changes in financial markets could impact the level of assets under management
and administration in our businesses, and, in turn, our level of asset-based
fees in those businesses. For example, significant increases in interest rates
or decreases in equity markets would directly affect the level of assets under
management and administration and, in addition, may increase the level of
withdrawals and decrease the level of deposits by customers. Customers under
those circumstances may seek to diversify among asset managers or seek
investment alternatives that we do not offer. Significant declines in the value
of investments also may affect our ability to pass through investment losses to
certain experience rated customers, whether due to triggering minimum guarantees
or other business reasons.

DECREASES IN RATINGS COULD AFFECT ASSETS UNDER MANAGEMENT.  Decreases in the
claims-paying ratings of the Company could have the effect of decreasing new
sales and deposits and increasing withdrawals and surrenders in our businesses.
Such changes in sales and deposits, withdrawals and surrenders would adversely
affect the level of asset-based fees of our businesses. Claims-paying ratings of
the Company are periodically reviewed and subject to changes, in certain cases,
based on factors beyond our control.

EARLY WITHDRAWAL OF ASSETS COULD AFFECT EARNINGS.  We incur up-front costs, such
as commissions, when we sell our annuity and other financial services products.
We generally defer these costs and recognize them over time. As a result, the
retention of assets under these products is an important component of
profitability. We generally seek to structure our products and sales to
encourage retention of assets under management and administration or recover
costs, through surrender charges, higher credited rates to customers if we
retain their assets for longer periods, paying renewal commissions, paying
service fees or other terms. However, if customers withdraw assets earlier than

                                       15
<PAGE>
ITEM 7.  MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS (continued)
FORWARD-LOOKING INFORMATION/RISK FACTORS (continued)
we anticipated when we priced the products, it would adversely affect
profitability. We could also experience competitive pressure to lower margins.

LITIGATION CAN ADVERSELY AFFECT US.  Litigation also could adversely affect us,
both through costs of defense and adverse results or settlements. Refer to
Note 11 of Notes to Financial Statements for information regarding litigation.

ADVERSE CHANGES IN REGULATION COULD AFFECT THE OPERATIONS OF EACH OF OUR
BUSINESSES.  Each of our businesses is subject to comprehensive regulation.
These businesses could be adversely affected by:

-   Increases in minimum capital and other financial viability requirements for
    insurance operations;
-   Changes in the taxation of insurance companies; and
-   Changes in the tax treatment of annuity products as well as changes in
    capital gains tax rates. Certain of these changes, should they occur, could
    affect the attractiveness to customers of our products.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

See "General Account Investments" in Management's Analysis of the Results of
Operations.

                                       16
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                    Page
                                                    ----
<S>                                                 <C>

Independent Auditors' Report......................    18

Financial Statements:

    Statements of Income for the One Month Ended
       December 31, 2000, the Eleven Months Ended
       November 30, 2000 and the Years Ended
       December 31, 1999 and 1998.................    19

    Balance Sheets as of December 31, 2000 and
       1999.......................................    20

    Statements of Changes in Shareholder's Equity
       for the One Month Ended December 31, 2000,
       the Eleven Months Ended November 30, 2000
       and the Years Ended December 31, 1999 and
       1998.......................................    21

    Statements of Cash Flows for the One Month
       Ended December 31, 2000, the Eleven Months
       Ended November 30, 2000 and the Years Ended
       December 31, 1999 and 1998.................    22

    Notes to Financial Statements.................    23
</TABLE>

                                       17
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Shareholder and Board of Directors
Aetna Insurance Company of America:

We have audited the accompanying balance sheets of Aetna Insurance Company of
America as of December 31, 2000 ("Successor Company") and December 31, 1999
("Preacquisition Company"), and the related statements of income, changes in
shareholder's equity and cash flows for the period from December 1, 2000 to
December 31, 2000 ("Successor Company"), and for the period from January 1, 2000
to November 30, 2000 and the years ended December 31, 1999 and 1998
("Preacquisition Company"). These financial statements are the responsibility of
the Companies' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the Successor Company's financial statements referred to above
present fairly, in all material respects, the financial position of Aetna
Insurance Company of America at December 31, 2000, and the results of its
operations and its cash flows for the period from December 1, 2000 to December
31, 2000, in conformity with accounting principles generally accepted in the
United States of America. Further, in our opinion, the Preacquisition Company's
financial statements referred to above present fairly, in all material respects,
the financial position of Aetna Insurance Company of America at December 31,
1999, and the results of its operations and its cash flows for the period from
January 1, 2000 to November 30, 2000, and the years ended December 31, 1999 and
1998, in conformity with accounting principles generally accepted in the United
States of America.

As discussed in Note 1 to the financial statements, effective November 30, 2000,
ING America Insurance Holdings Inc. acquired all of the outstanding stock of
Aetna Inc., Aetna Insurance Company of America's indirect parent and sole
shareholder in a business combination accounted for as a purchase. As a result
of the acquisition, the financial information for the periods after the
acquisition is presented on a different cost basis than that for the periods
before the acquisition and, therefore, is not comparable.

                                                /s/ KPMG LLP

Hartford, Connecticut
March 27, 2001

                                       18
<PAGE>
                       AETNA INSURANCE COMPANY OF AMERICA
    (A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)

                              STATEMENTS OF INCOME
                                   (millions)

<TABLE>
<CAPTION>
                                                                                                   Preacquisition
                                                                                     -------------------------------------------
                                                                        One month    Eleven months
                                                                          ended          ended       Year ended     Year ended
                                                                      December 31,   November 30,   December 31,   December 31,
                                                                          2000           2000           1999           1998
                                                                      -------------  -------------  -------------  -------------
<S>                                                                   <C>            <C>            <C>            <C>
Revenues:
  Charges assessed against policyholders                                 $   1.2        $  16.5        $  15.5        $  11.5
  Net investment income                                                      1.0           10.2           10.9           10.4
  Net realized capital losses                                                 --           (0.8)          (0.3)          (0.2)
  Other income                                                               0.2            1.3            1.5            0.6
                                                                         -------        -------        -------        -------
      Total revenue                                                          2.4           27.2           27.6           22.3
                                                                         -------        -------        -------        -------
Benefits and expenses:
  Current and future benefits                                                0.6            6.8            8.0            9.0
  Operating expenses:
    Salaries and related benefits                                            0.2            1.1            2.4            2.5
    Other                                                                    0.3            3.6            4.5            3.7
  Amortization of deferred policy acquisition costs and value of
    business acquired                                                        0.4            5.3            4.6            3.9
                                                                         -------        -------        -------        -------
      Total benefits and expenses                                            1.5           16.8           19.5           19.1
                                                                         -------        -------        -------        -------

Income before income taxes                                                   0.9           10.4            8.1            3.2

Income taxes                                                                 0.3            2.6            2.7            0.6
                                                                         -------        -------        -------        -------

Net income                                                               $   0.6        $   7.8        $   5.4        $   2.6
                                                                         =======        =======        =======        =======
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

                                       19
<PAGE>
                       AETNA INSURANCE COMPANY OF AMERICA
    (A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)

                                 BALANCE SHEETS
                         (millions, except share data)

<TABLE>
<CAPTION>
                                                                       December 31,     December 31,
                                                                           2000             1999
                                                                      ---------------  ---------------
<S>                                                                   <C>              <C>
                               ASSETS
Investments:
  Debt securities, available for sale, at fair value
    (amortized cost: $125.8 and $132.8)                                  $  126.5         $  128.3
  Equity securities, at fair value
    Nonredeemable preferred stock (amortized cost: $1.1 and $1.0)             1.0              0.9
  Short-term investments                                                      0.4               --
Securities pledged to creditors (amortized cost $8.0)                         8.1               --
Cash and cash equivalents                                                     9.1             22.9
Short-term investments under securities loan agreement                        8.4               --
Deferred policy acquisition costs                                              --             58.8
Value of business acquired                                                   58.7               --
Accrued investment income                                                     1.7              2.0
Premiums due and other receivables                                            4.7              9.0
Goodwill                                                                     98.9               --
Other assets                                                                  1.1              0.6
Separate Accounts assets                                                  1,007.8          1,194.6
                                                                         --------         --------
        Total assets                                                     $1,326.4         $1,417.1
                                                                         ========         ========
                LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities:
  Policyholders' funds left with the Company                                110.3            138.8
  Payables under securities loan agreement                                    8.4               --
  Other liabilities                                                           3.7              6.5
  Due to parent and affiliates                                                3.8              0.5
  Income taxes:
    Current                                                                    --              0.7
    Deferred                                                                  7.8              2.6
  Separate Accounts liabilities                                           1,007.8          1,194.6
                                                                         --------         --------
        Total liabilities                                                 1,141.8          1,343.7
                                                                         --------         --------
Shareholder's equity:
  Common capital stock, par value $100 (35,000 shares
    authorized, 25,500 issued and outstanding)                                2.5              2.5
  Paid-in capital                                                           181.3             62.5
  Accumulated other comprehensive income (loss)                               0.2             (1.6)
  Retained earnings                                                           0.6             10.0
                                                                         --------         --------
        Total shareholder's equity                                          184.6             73.4
                                                                         --------         --------
          Total liabilities and shareholder's equity                     $1,326.4         $1,417.1
                                                                         ========         ========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

                                       20
<PAGE>
                       AETNA INSURANCE COMPANY OF AMERICA
    (A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)

                 STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
                                   (millions)

<TABLE>
<CAPTION>
                                                                                                   Preacquisition
                                                                                     -------------------------------------------
                                                                        One month    Eleven months
                                                                          ended          ended       Year ended     Year ended
                                                                      December 31,   November 30,   December 31,   December 31,
                                                                          2000           2000           1999           1998
                                                                      -------------  -------------  -------------  -------------
<S>                                                                   <C>            <C>            <C>            <C>
Shareholder's equity, beginning of year                                  $ 183.5        $  73.4        $  70.8        $  52.2

Comprehensive income
  Net income                                                                 0.6            7.8            5.4            2.6
  Other comprehensive income, net of tax:
      Unrealized gains (losses) on securities ($0.8 million,
      $2.0 million, ($4.3 million and $1.5 million, pretax)                  0.5            1.3           (2.8)           1.0
                                                                         -------        -------        -------        -------
Total comprehensive income                                                   1.1            9.1            2.6            3.6
                                                                         -------        -------        -------        -------

Capital contributions                                                         --             --             --           15.0

Adjustment for purchase accounting                                            --          101.0             --             --

Common stock issued                                                           --            2.4             --             --

Dividends paid to parent                                                      --           (2.4)            --             --
                                                                         -------        -------        -------        -------

Shareholder's equity, end of period                                      $ 184.6        $ 183.5        $  73.4        $  70.8
                                                                         =======        =======        =======        =======
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

                                       21
<PAGE>
                       AETNA INSURANCE COMPANY OF AMERICA
    (A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)

                            STATEMENTS OF CASH FLOWS
                                   (millions)

<TABLE>
<CAPTION>
                                                                                                  Preacquisition
                                                                                  -----------------------------------------------
                                                                    One month     Eleven months
                                                                      ended           ended        Year ended       Year ended
                                                                  December 31,    November 30,    December 31,     December 31,
                                                                      2000            2000            1999             1998
                                                                 ---------------  -------------  ---------------  ---------------
<S>                                                              <C>              <C>            <C>              <C>
Cash Flows from Operating Activities:
Net income                                                            $ 0.6          $   7.8         $  5.4           $  2.6
Adjustments to reconcile net income to net cash (used for)
  provided by operating activities:
  Net amortization of discount on debt securities                        --             (0.2)          (0.1)            (0.1)
  Net realized capital losses                                            --              0.8            0.3              0.2
  Changes in assets and liabilities:
    Decrease (increase) in accrued investment income                    0.2              0.1            0.1             (0.1)
    Decrease (increase) in deferred policy acquisition costs
      and value of business acquired                                    0.1              3.3            1.1            (14.5)
    Net change in amounts due to/from parent and affiliates             0.9              2.4           (0.4)             0.9
    Net change in other assets and liabilities                         (0.1)             1.3          (10.1)             9.2
    Increase in income taxes                                             --              2.4            4.0              2.4
                                                                      -----          -------         ------           ------
Net cash provided by operating activities                               1.7             17.9            0.3              0.6
                                                                      -----          -------         ------           ------
Cash Flows from Investing Activities:
  Proceeds from sales of:
    Debt securities available for sale                                   --            148.3           34.2             27.8
    Equity securities                                                    --               --            2.1               --
    Short-term investments                                               --              0.1             --               --
  Investment maturities and repayments of:
    Debt securites available for sale                                   0.2              6.0           17.9              3.4
  Cost of investment purchases in:
    Debt securities available for sale                                 (0.2)          (154.1)         (47.6)           (36.8)
    Short-term investments                                               --             (2.8)            --               --
                                                                      -----          -------         ------           ------
Net cash (used for) provided by investing activities                     --             (2.5)           6.6             (5.6)
                                                                      -----          -------         ------           ------
Cash Flows from Financing Activities:
  Deposits and interest credited for investment contracts               0.5              7.4           12.8             19.7
  Withdrawal of investment contracts                                   (2.5)           (39.3)         (19.0)           (14.3)
  Capital contribution                                                   --               --             --             15.0
  Proceeds from issuance of common stock                                 --              2.4             --               --
  Dividends paid to parent                                               --             (2.4)            --               --
  Other, net                                                           (0.2)             3.2            5.7            (11.4)
                                                                      -----          -------         ------           ------
Net cash (used for) provided by financing activities                   (2.2)           (28.7)          (0.5)             9.0
                                                                      -----          -------         ------           ------
Net (decrease) increase in cash and cash equivalents                   (0.5)           (13.3)           6.4              4.0
Cash and cash equivalents, beginning of period                          9.6             22.9           16.5             12.5
                                                                      -----          -------         ------           ------
Cash and cash equivalents, end of period                              $ 9.1          $   9.6         $ 22.9           $ 16.5
                                                                      =====          =======         ======           ======
Supplemental cash flow information:
Income taxes paid (received), net                                     $ 0.3          $   0.2         $ (1.3)          $ (3.3)
                                                                      =====          =======         ======           ======
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

                                       22
<PAGE>
NOTES TO FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Aetna Insurance Company of America (the "Company") is a provider of
    financial services in the United States. The Company is a wholly owned
    subsidiary of Aetna Life Insurance and Annuity Company ("ALIAC"). ALIAC is a
    wholly owned subsidiary of Aetna Retirement Holdings, Inc. ("HOLDCO").
    HOLDCO is a wholly owned subsidiary of Aetna Retirement Services, Inc.
    ("ARSI"), whose ultimate parent is ING Groep N.V. ("ING").

    The Company has one operating segment and all revenue reported by the
    Company comes from external customers.

    BASIS OF PRESENTATION

    These financial statements have been prepared in conformity with accounting
    principles generally accepted in the United States of America. Certain
    reclassifications have been made to 1999 and 1998 financial information to
    conform to the 2000 presentation.

    On December 13, 2000, ING America Insurance Holdings, Inc., an indirect
    wholly owned subsidiary of ING, acquired Aetna Inc., comprised of the Aetna
    Financial Services business, of which the Company is a part, and the Aetna
    International business, for approximately $7.7 billion. The purchase price
    was comprised of approximately $5.0 billion in cash and the assumption of
    $2.7 billion of outstanding debt and other net liabilities. In connection
    with the acquisition, Aetna Inc. was renamed Lion Connecticut Holdings Inc.
    ("Lion"). At the time of the sale, Lion entered into certain transition
    services agreements with a former related party, Aetna U.S. Healthcare which
    was renamed Aetna Inc. ("former Aetna").

    For accounting purposes, the acquisition has been accounted for as of
    November 30, 2000 using the purchase method. The application of the purchase
    method, including the recognition of goodwill, is pushed down and reflected
    on the financial statements of certain ARSI (a subsidiary of Lion)
    subsidiaries, including the Company. Further, the Balance Sheet changes
    related to accounting for this purchase were entirely non-cash in nature and
    accordingly have been excluded from the pre-acquisition Consolidated
    Statement of Cash Flows for the eleven months ended November 30, 2000.

    The purchase price was allocated to assets and liabilities based on their
    respective fair values. This revaluation resulted in a net increase to
    assets, excluding the effects of goodwill, of $3.2 million and a net
    increase to liabilities of $1.1 million. The allocation of the purchase
    price to assets and liabilities is subject to further refinement.

    The net increase to assets reflects the write off of deferred acquisition
    costs of $55.5 million, which was the balance as of November 30, 2000, and
    the establishment of value of business acquired of $58.7 million. The net
    increase to liabilities reflects an increase to deferred tax liabilities of
    $1.1 million, the November 30, 2000 balance was $6.7 million. As a result of
    the application of push down accounting, retained earnings immediately prior
    to the sale was reclassified to paid-in capital. Additionally, the Company
    established goodwill of $98.9 billion. Goodwill is being amortized over a
    period of 40 years.

                                       23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
    Unaudited pro forma consolidated net income for the period from the January
    1, 2000 to November 30, 2000 and for the year ended December 31, 1999,
    assuming that the acquisition of the Company occurred at the beginning of
    each period, would have been approximately $5.5 million and $2.9 million,
    respectively. The pro forma adjustments, which do not affect revenues,
    reflect primarily goodwill amortization.

    FUTURE APPLICATION OF ACCOUNTING STANDARDS

    ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

    In June 1998, the FASB issued FAS No. 133, Accounting for Derivative
    Instruments and Hedging Activities. In June 2000, further guidance related
    to accounting for derivative instruments and hedging activities was provided
    when the FASB issues FAS No. 138, Accounting for Certain Derivative
    Instruments and Certain Hedging Activities--an Amendment of FASB Statement
    No. 133. 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 values of those derivatives
    depends on the use of the derivative and whether it qualifies for hedge
    accounting. As amended by FAS No. 137, Accounting for Derivative Instruments
    and Hedging Activities--Deferral of the Effective Date of FASB Statement
    No. 133, this standard is effective for the Company's financial statements
    beginning January 1, 2001, with early adoption permitted. The impact to the
    Company, of the adoption of this standard, as amended, will not have a
    material effect on the Company's financial position or results of
    operations.

    NEW ACCOUNTING STANDARDS

    ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND
    EXTINGUISHMENTS OF LIABILITIES

    In September 2000, the Financial Accounting Standard Board ("FASB") issued
    Financial Accounting Standard ("FAS") No. 140, Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of Liabilities, which
    replaces FAS No. 125, Accounting for Transfers and Servicing of Financial
    Assets and Extinguishments of Liabilities. This standard revises the
    accounting for securitizations, other financial asset transfers and
    collateral associated with securities lending transactions and requires
    certain additional disclosures. FAS No. 140 is effective for transfers and
    servicing of financial assets and extinguishments of liabilities occurring
    after March 31, 2001. However, for recognition and disclosure of collateral
    and for additional disclosures related to securitization transactions, FAS
    No. 140 was effective for the Company's December 31, 2000 financial
    statements.

    With respect to the provisions effective December 31, 2000, the Company
    reclassified debt securities on loan to other institutions from "Debt
    Securities" to "Securities Pledged to Creditors" on the Company's
    Consolidated Balance Sheet. The Company does not expect the adoption of
    those provisions effective after March 31, 2001 to have a material effect on
    its financial position or results of operations.

                                       24
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
    DEPOSIT ACCOUNTING: ACCOUNTING FOR INSURANCE AND REINSURANCE CONTRACTS THAT
    DO NOT TRANSFER INSURANCE RISK

    On January 1, 2000, the Company adopted Statement of Position 98-7, Deposit
    Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not
    Transfer Insurance Risk, issued by the American Institute of Certified
    Public Accountants. This statement provides guidance on how to account for
    all insurance and reinsurance contracts that do not transfer insurance risk,
    except for long-duration life and health insurance contracts. The adoption
    of this standard had no impact on the Company's financial position or
    results of operations.

    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

    Debt and equity securities are classified as available for sale and carried
    at fair value. Securities are written down (as realized capital losses) for
    other than temporary declines in value. Included in available-for-sale
    securities are investments that support experience-rated products.

    Experience-rated products are products where the customer, not the Company,
    assumes investment (including realized capital gains and losses) and other
    risks, subject to, among other things, minimum guarantees. As long as
    minimum guarantees are not triggered, the effect of experience- rated
    products' investment performance does not impact the Company's results of
    operations.

    Realized and unrealized capital gains and losses on investments supporting
    these products are reflected in policyholder's funds left with the Company.
    Realized capital gains and losses on all other investments are reflected in
    the Company's results of operations. Unrealized capital gains and losses on
    all other investments are reflected in shareholders' equity, net of related
    income taxes. Purchases and sales of debt and equity securities are recorded
    on the trade date.

    Fair values for debt and equity securities are based on quoted market prices
    or dealer quotations. Where quoted market prices or dealer quotations are
    not available, fair values are measured utilizing quoted market prices for
    similar securities or by using discounted cash flow methods.

    Cost for mortgage-backed securities is adjusted for unamortized premiums and
    discounts, which are amortized using the interest method over the estimated
    remaining term of the securities,

                                       25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
    adjusted for anticipated prepayments. The Company does not accrue interest
    on problem debt securities when management believes the collection of
    interest is unlikely.

    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 a loaned domestic security and 105% of the market value of a
    loaned foreign security. 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.

    In September 2000, the FASB issued FAS No. 140, Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of Liabilities. In
    accordance with this new standard, general account securities on loan at
    December 31, 2000 are reflected on the balance sheet as "Securities pledged
    to creditors," which includes the following:

<TABLE>
<CAPTION>
                                                Gross       Gross
                                   Amortized  Unrealized  Unrealized  Fair
   (Millions)                        Cost       Gains       Losses    Value
   <S>                             <C>        <C>         <C>         <C>
   ------------------------------------------------------------------------
   Debt Securities                   $5.7        $0.1        $ --     $5.8
   Short-Term Investments             2.3          --          --      2.3
   ------------------------------------------------------------------------
   Total securities pledged to
     creditors                       $8.0        $0.1        $ --     $8.1
   ========================================================================
</TABLE>

    At December 31, 1999, the Company did not have any securities on loan.

    Short-term investments, consisting primarily of money market instruments and
    other debt 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.

    GOODWILL

    Goodwill, which represents the excess of cost over the fair value of net
    assets acquired, is amortized on a straight-line basis over 40 years.

    The Company regularly evaluates the recoverability of goodwill. The carrying
    value of goodwill would be reduced through a direct write-off, if, in
    management's judgement, it was probable that projected future operating
    income (before amortization of goodwill) would not be sufficient on an
    undiscounted basis to recover the carrying value. Operating earnings
    considered in such an analysis are those of the entity acquired, if
    separately identifiable, or the business segment that acquired the entity if
    the entity's earnings are not separately identifiable.

                                       26
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
    DEFERRED POLICY ACQUISITION COSTS

    Certain costs of acquiring certain insurance business are deferred. These
    costs, all of which vary with and are primarily related to the production of
    new and renewal business, consist principally of commissions, certain
    expenses of underwriting and issuing contracts, and certain agency expenses.
    For certain annuity contracts, such costs are amortized in proportion to
    estimated gross profits and adjusted to reflect actual gross profits over
    the life of the contracts (up to 20 years for annuity and pension
    contracts.)

    Periodically, modifications may be made to deferred annuity contract
    features, such as shortening the surrender charge period or waiving the
    surrender charge, changing the mortality and expense fees, etc. Unamortized
    deferred policy acquisition costs associated with these modified contracts
    are not written off, but rather, continue to be associated with the original
    block of business to which these costs were previously recorded. Such costs
    are amortized based on revised estimates of expected gross profits based
    upon the contract after the modification.

    Deferred policy acquisition costs 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.

    Refer to "Basis of Presentation" within Note 1 for related discussions
    regarding the application of the purchase method to deferred policy
    acquisition costs.

    VALUE OF BUSINESS ACQUIRED

    Value of business acquired ("VOBA") is an asset and represents the present
    value of estimated net cash flows embedded in the Company's contracts
    acquired by ING. VOBA is amortized in proportion to estimated gross profits
    and adjusted to reflect actual gross profits over the life of the contracts
    (up to 30 years for annuity contracts).

    VOBA is written off to the extent that it is determined that gross profits
    are not adequate to recover the asset. The estimated amount of VOBA to be
    amortized, net of interest, over the next five years is $8.6 million, $8.1
    million, $7.2 million, $5.8 million and $4.5 million for the years 2001,
    2002, 2003, 2004 and 2005, respectively. Actual amortization incurred during
    these years may vary as assumptions are modified to incorporate actual
    results.

    RESERVES

    Reserves for limited payment contracts (i.e. annuities with life contingent
    payout) are computed on the basis of assumed investment yield and mortality,
    including a margin for adverse deviation which is assumed to provide for
    expenses. The assumptions vary by plan, year of issue and policy duration.

    Policyholders' funds left with the Company include reserves for deferred
    annuity investment contracts and immediate annuities without life contingent
    payouts. Reserves on such contracts are equal to cumulative deposits less
    charges and withdrawals plus credited interest thereon (rates

                                       27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
    range from 3.80% to 8.00% for all years presented), net of adjustments for
    investment experience that the Company is entitled to reflect in future
    credited interest. These reserves also include unrealized gains/losses
    related to FAS No. 115. Reserves on contracts subject to experience rating
    reflect the rights of contractholders, plan participants and the Company.

    REVENUE RECOGNITION

    For certain annuity contracts, charges assessed against policyholders' funds
    for the cost of insurance, surrender charges, actuarial margin and other
    fees are recorded as revenue in charges 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.

    SEPARATE ACCOUNTS

    Separate Accounts assets and liabilities generally represent funds
    maintained to meet specific investment objectives of contractholders who
    bear the investment risk, subject, in some 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 annuity contracts
    are invested, as designated by the contractholder or participant under a
    contract (who bears the investment risk subject, in limited cases, to
    minimum guaranteed rates) in shares of mutual funds which are managed by an
    affiliate of the Company, or other selected unaffiliated mutual funds.

    Separate Accounts assets are carried at fair value. At December 31, 1999
    unrealized losses of $(0.8) million, after taxes, on assets supporting a
    guaranteed interest option are reflected in shareholder's equity. The
    amounts in 2000 were immaterial. Separate Accounts 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 3.80% to 14.00% in
    2000 and 3.70% to 12.00% in 1999.

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

    INCOME TAXES

    The Company is included in the consolidated federal income tax return of
    Lion, through December 13, 2000. Subsequent to December 13, 2000, the
    Company will file a consolidated return with its parent, ALIAC. The Company
    is taxed at regular corporate rates after adjusting income reported for
    financial statement purposes for certain items. Deferred income tax

                                       28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
    expenses/benefits result from changes during the year in cumulative
    temporary differences between the tax basis and book basis of assets and
    liabilities.

2.  INVESTMENTS

    Debt securities available-for-sale at December 31, 2000 were as follows:

<TABLE>
<CAPTION>
                                                Gross       Gross
                                   Amortized  Unrealized  Unrealized     Fair
   (Millions)                        Cost       Gains       Losses      Value
   <S>                             <C>        <C>         <C>         <C>
   -----------------------------------------------------------------------------
   U.S. government and government
     agencies and authorities      $   14.4     $  0.4      $   --    $    14.8

   U.S. corporate securities:
       Utilities                        3.8         --         0.1          3.7
       Financial                       35.4        0.4         0.3         35.5
       Transportation/capital
         goods                          7.0        0.1         0.1          7.0
       Health care/consumer
         products                       7.7        0.2         0.7          7.2
       Natural resources               14.9        0.4         0.3         15.0
       Other corporate                  6.0        0.1         0.1          6.0
   -----------------------------------------------------------------------------
     Total U.S. corporate
       securities                      74.8        1.2         1.6         74.4
   -----------------------------------------------------------------------------

   Foreign securities:
       Government                       1.0        0.1          --          1.1
   -----------------------------------------------------------------------------
     Total foreign securities           1.0        0.1          --          1.1
   -----------------------------------------------------------------------------

   Residential mortgage-backed
     securities:
       Pass-throughs                   15.6        0.2          --         15.8
       Collateralized mortgage
         obligations                    6.2        0.3          --          6.5
   -----------------------------------------------------------------------------
   Total residential
     mortgage-backed Securities        21.8        0.5          --         22.3
   -----------------------------------------------------------------------------

   Commercial/multifamily
     mortgage-backed securities         8.9        0.1         0.1          8.9

   Other asset-backed securities       10.6        0.2          --         10.8
   -----------------------------------------------------------------------------

   Total debt securities,
     including debt securities
     pledged to creditors             131.5        2.5         1.7        132.3

   Less: debt securities pledged
     to Creditors                       5.7        0.1          --          5.8
   -----------------------------------------------------------------------------

   Debt securities                 $  125.8     $  2.4      $  1.7    $   126.5
   =============================================================================
</TABLE>

                                       29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

2.  INVESTMENTS (continued)
    Debt securities available for sale at December 31, 1999 were as follows:

<TABLE>
<CAPTION>
                                                Gross       Gross
                                   Amortized  Unrealized  Unrealized    Fair
   (Millions)                        Cost       Gains       Losses     Value
   <S>                             <C>        <C>         <C>         <C>
   ---------------------------------------------------------------------------
   U.S. government and government
     agencies and authorities       $ 21.5       $ --        $0.3      $ 21.2

   U.S. corporate securities:
       Utilities                       5.7         --         0.2         5.5
       Financial                      33.3         --         0.6        32.7
       Transportation/capital
         goods                         1.6         --          --         1.6
       Health care/consumer
         products                     12.6         --         0.9        11.7
       Natural resources              14.5         --         0.7        13.8
       Other corporate                 6.7         --         0.4         6.3
   ---------------------------------------------------------------------------
     Total U.S. corporate
       securities                     74.4         --         2.8        71.6
   ---------------------------------------------------------------------------

   Foreign securities:
       Government                      1.0         --          --         1.0
       Other                           9.9        0.1         0.5         9.5
   ---------------------------------------------------------------------------
     Total foreign securities         10.9        0.1         0.5        10.5
   ---------------------------------------------------------------------------

   Residential mortgage-backed
     securities:
       Collateralized mortgage
         obligations                  10.6         --         0.5        10.1
   ---------------------------------------------------------------------------
     Total residential
       mortgage-backed securities     10.6         --         0.5        10.1
   ---------------------------------------------------------------------------

   Commercial/multifamily
     mortgage-backed securities        9.0         --         0.3         8.7

   Other asset-backed securities       6.4         --         0.2         6.2
   ---------------------------------------------------------------------------

   Debt securities                  $132.8       $0.1        $4.6      $128.3
   ===========================================================================
</TABLE>

    At December 31, 2000 and 1999 net unrealized appreciation (depreciation) of
    $0.8 million and $(4.5) million, respectively, on available-for-sale debt
    securities including debt securities pledged to creditors, herein after
    referred as "total debt securities" included $0.5 million and $(4.5)
    million, respectively, related to experience-rated contracts, which were not
    reflected in shareholder's equity but in policyholders' funds left with the
    Company.

                                       30
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

2.  INVESTMENTS (continued)

    The amortized cost and fair value of total debt securities for the year
    ended December 31, 2000 are shown below by contractual maturity. Actual
    maturities may differ from contractual maturities because securities may be
    restructured, called or prepaid.

<TABLE>
<CAPTION>
                                             Amortized   Fair
   (Millions)                                  Cost      Value
   <S>                                       <C>        <C>
   ------------------------------------------------------------
   Due to mature:
     One year or less                         $  7.5    $  7.5
     After one year through five years           1.1      41.5
     After five years through ten years          8.0      18.4
     After ten years                             3.6      22.8
     Mortgage-backed securities                  0.7      31.3
     Other asset-backed securities               0.6      10.8
   ------------------------------------------------------------
     Less: debt securities pledged to
       creditors                                 5.7       5.8
   ============================================================
     Debt securities                          $125.8    $126.5
   ============================================================
</TABLE>

    At December 31, 2000 and 1999, debt securities carried at fair value of $5.7
    million and $5.6 million, respectively, were on deposit as required by
    various state regulatory agencies.

    Investments in equity securities available for sale as of December 31, were
    as follows:

<TABLE>
<CAPTION>
   (Millions)                                 2000     1999
   <S>                                       <C>      <C>
   ----------------------------------------------------------
   Cost                                      $   1.1  $   1.0
   Gross unrealized losses                      (0.1)    (0.1)
   ----------------------------------------------------------
   Fair value                                $   1.0  $   0.9
   ==========================================================
</TABLE>

    The Company does 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 December 31, 2000.

                                       31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

3.  FINANCIAL INSTRUMENTS

    ESTIMATED FAIR VALUE

    The carrying values and estimated fair values of certain of the Company's
    financial instruments at December 31, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                    2000              1999
                              ----------------  ----------------
                              Carrying   Fair   Carrying   Fair
   (Millions)                  Value    Value    Value    Value
   <S>                        <C>       <C>     <C>       <C>     <C>
   -------------------------------------------------------------
   Liabilities:
     Investment contract
       liabilities:
       With a fixed maturity   $  1.0   $  1.1   $  1.2   $  1.3
       Without a fixed
         maturity              $109.3   $106.2   $137.6   $131.6
   -------------------------------------------------------------
</TABLE>

    Fair value estimates are made at a specific point in time, based on
    available market information and judgments about the financial instrument,
    such as estimates of timing and amount 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 instrument. In evaluating
    the 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.

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

    INVESTMENT CONTRACT LIABILITIES (INCLUDED IN POLICYHOLDERS' FUNDS LEFT WITH
    THE COMPANY):

    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 contractholder 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.

    OFF-BALANCE-SHEET AND OTHER FINANCIAL INSTRUMENTS

    The Company did not have any transactions in off-balance-sheet financial
    instruments in 2000 or 1999.

                                       32
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

4.  NET INVESTMENT INCOME

    Sources of net investment income were as follows:

<TABLE>
<CAPTION>
                                                                    Preacquisition
                                                    -----------------------------------------------
                                      One month     Eleven months
                                        ended           ended        Year ended       Year ended
                                    December 31,    November 30,    December 31,     December 31,
   (Millions)                           2000            2000            1999             1998
   <S>                             <C>              <C>            <C>              <C>
   ------------------------------------------------------------------------------------------------
   Debt securities                      $ 0.8           $ 8.3           $ 9.4            $ 9.0
   Nonredeemable preferred stock           --             0.1             0.1              0.3
   Cash equivalents                       0.1             0.9             0.7              0.7
   Short-term investments                  --             0.1              --               --
   Other                                  0.1             0.9             0.8              0.6
   ------------------------------------------------------------------------------------------------
   Gross investment income                1.0            10.3            11.0             10.6
   Less: investment expenses               --             0.1             0.1              0.2
   ------------------------------------------------------------------------------------------------
   Net investment income                $ 1.0           $10.2           $10.9            $10.4
   ================================================================================================
</TABLE>

    Net investment income includes amounts allocable to experience-rated
    contractholders of $0.7 million and $8.2 million for the one and eleven
    month periods ended December 31, 2000 and November 30, 2000, respectively,
    and $8.6 million and $8.9 million for the years ended December 31, 1999 and
    1998, respectively. Interest credited to contractholders is included in
    current and future benefits.

5.  DIVIDEND RESTRICTIONS AND SHAREHOLDER'S EQUITY

    Effective January 5, 2000 the Company changed its state of domicile from
    Connecticut to Florida. All dividends paid to ALIAC by the Company must be
    approved in advance by the Insurance Commissioner of the State of Florida.
    Prior to January 5, 2000 the Company was domiciled in the State of
    Connecticut.

    At the time of the re-domestication of the Company to Florida, which
    occurred during the first quarter of 2000, the par value of the Company's
    common stock was changed from $2,000 per share to $100 per share to comply
    with Florida law. This revaluation caused the Company's common capital stock
    to decrease by $2.4 million and its paid-in capital to increase by the same
    amount and had no net effect on total shareholder's equity.

    The Insurance Departments of the State of Florida and the State of
    Connecticut recognize as net income and capital and surplus, those amounts
    determined in conformity with statutory accounting practices prescribed or
    permitted by the respective Departments, which differ in certain respects
    from accounting principles generally accepted in the United States of
    America. Statutory net income (loss) was $5.7 million, $(0.1) million and
    $(5.2) million for the years ended December 31, 2000, 1999 and 1998,
    respectively. Statutory capital and surplus was $57.3 million and $52.5
    million as of December 31, 2000 and 1999, respectively.

                                       33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

5.  DIVIDEND RESTRICTIONS AND SHAREHOLDER'S EQUITY (continued)
    The Company has entered into support agreements with ALIAC under which ALIAC
    has agreed to cause the Company to have sufficient capital to meet a certain
    capital and surplus level. The Company received no capital contributions
    relating to these agreements in 2000 and 1999. The Company received $15.0
    million from ALIAC in 1998.

    As of December 31, 2000, 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.

    For 2001, the Company is required to implement statutory accounting changes
    ratified by the National Association of Insurance Commissioners and state
    insurance departments ("Codification"). The cumulative effect of
    Codification to the Company's statutory surplus as of January 1, 2001 is
    estimated to be an increase of $0.8 million.

6.  CAPITAL GAINS AND LOSSES ON INVESTMENT OPERATIONS

    Realized capital gains or losses are the difference between the carrying
    value and sale proceeds of specific investments sold.

    Proceeds from the sale of available-for-sale debt securities and the related
    gross gains and losses (excluding those related to experience rated
    contractholders in 2000, 1999 and 1998) were as follows:

<TABLE>
<CAPTION>
                                                                    Preacquisition
                                                    -----------------------------------------------
                                      One month     Eleven months
                                        ended           ended        Year ended       Year ended
                                    December 31,    November 30,    December 31,     December 31,
   (Millions)                           2000            2000            1999             1998
   <S>                             <C>              <C>            <C>              <C>
   ------------------------------------------------------------------------------------------------
   Proceeds on sales                   $               $148.3          $ 34.2           $ 27.8
   Gross gains                             --             0.2             0.2              0.6
   Gross losses                            --             1.0             0.5              0.8
   ------------------------------------------------------------------------------------------------
</TABLE>

    Net realized capital losses of $(1.1) million, $(1.1) million and $(0.2)
    million allocable to experience-rated contracts, were deducted from net
    realized capital losses and an offsetting amount was reflected in
    policyholders' funds left with the Company for the periods ended eleven
    months November 30, 2000, December 31, 1999 and 1998, respectively. The
    amounts for one month ended December 31, 2000 were immaterial. Net
    unamortized losses were $(1.9) million and $(1.0) million for the periods
    ended eleven months November 30, 2000 and December 31, 1999, respectively.
    Net amortized losses for the periods one month ended December 31, 2000 and
    year ended December 31, 1998 were not significant.

                                       34
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

6.  CAPITAL GAINS AND LOSSES ON INVESTMENT OPERATIONS (continued)
    Changes in shareholder's equity related to changes in accumulated other
    comprehensive income (loss) (i.e., unrealized capital gains and losses on
    securities including securities pledged to creditors), were as follows:

<TABLE>
<CAPTION>
   (Millions)                           2000   1999   1998
   <S>                                  <C>    <C>    <C>
   --------------------------------------------------------
   Debt securities                      $ 0.3  $(0.3) $ 0.1
   Equity securities                       --     --   (0.1)
   Other                                  2.5   (4.1)   1.6
   --------------------------------------------------------
       Subtotal                           2.8   (4.4)   1.6
   Increase in deferred income taxes
     (see Note 7)                         1.0   (1.6)   0.6
   --------------------------------------------------------
   Net changes in accumulated other
     comprehensive
     income (loss)                      $ 1.8  $(2.8) $ 1.0
   ========================================================
</TABLE>

    Net unrealized capital gains (losses) allocable to experienced rated
    contracts of $0.5 million and $(4.5) million at December 31, 2000 and 1999,
    respectively, are reflected on the Balance Sheets in policyholders' funds
    left with the Company and are not included in shareholder's equity.

    Shareholder's equity included the following accumulated other comprehensive
    income, which is net of amounts allocable to experience rated
    contractholders, at December 31:

<TABLE>
<CAPTION>
   (Millions)                           2000   1999   1998
   <S>                                  <C>    <C>    <C>
   --------------------------------------------------------
   Debt securities:
     Gross unrealized gains             $ 0.3  $ 0.1  $ 0.3
     Gross unrealized losses               --   (0.1)    --
   --------------------------------------------------------
                                          0.3     --    0.3
   --------------------------------------------------------
   Equity securities:
     Gross unrealized losses             (0.1)  (0.1)  (0.1)
   --------------------------------------------------------
                                         (0.1)  (0.1)  (0.1)
   --------------------------------------------------------
   Other:
     Gross unrealized gains               0.7     --    1.9
     Gross unrealized losses             (0.6)  (2.4)  (0.3)
   --------------------------------------------------------
                                          0.1   (2.4)   1.6
   --------------------------------------------------------
   Less: deferred federal income taxes
     (benefits)
     (see Note 7)                         0.1   (0.9)   0.6
   --------------------------------------------------------
   Net accumulated other comprehensive
     income (loss)                      $ 0.2  $(1.6) $ 1.2
   ========================================================
</TABLE>

                                       35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

6.  CAPITAL GAINS AND LOSSES ON INVESTMENT OPERATIONS (continued)
    Changes in accumulated other comprehensive income related to changes in
    unrealized gains (losses) (excluding those related to experience-rated
    contractholders) on securities including securities pledged to creditors
    were as follows:

<TABLE>
<CAPTION>
   (Millions)                           2000   1999   1998
   <S>                                  <C>    <C>    <C>
   --------------------------------------------------------
   Unrealized holding gains (losses)
     arising during
     the period (1)                     $ 1.2  $(2.9) $ 0.9
   Less: reclassification adjustment
     for gains
     and other items included in net
     income (2)                          (0.6)  (0.1)  (0.1)
   --------------------------------------------------------
   Net unrealized gains (losses) on
     securities                         $ 1.8  $(2.8) $ 1.0
   ========================================================
</TABLE>

(1)  Pretax unrealized holding gains (losses) arising during the period were
     $1.8 million, $(4.5) million and $1.3 million for 2000, 1999 and 1998,
     respectively.
(2)  Pretax reclassification adjustments for gains and other items included in
     net income were $(1.0) million, $(0.2) million and $(0.2) million for 2000,
     1999 and 1998, respectively.

7.  INCOME TAXES

    The Company was included in the consolidated federal income tax return of
    Lion through December 13, 2000. For tax settlements related to tax periods
    ending on or prior to December 13, 2000, the purchase agreement between ING
    America Insurance Holdings Inc. and the former Aetna provides for the
    settlement of balances owing from the Company based on an amount
    approximating the tax the Company would have incurred were it not a member
    of the consolidated group or owing to the Company for the use of its tax
    saving attributes used in the consolidated federal income tax return.

    Subsequent to December 13, 2000, as a result of the sale, the Company will
    be filing a consolidated return with ALIAC. As permitted under a tax sharing
    arrangement, the Company will be allocated an amount approximating the tax
    the member would have incurred were it not a member of the consolidated
    group, and credits the member for use of its tax saving attributes used in
    the consolidated federal income tax return.

                                       36
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

7.  INCOME TAXES (continued)

    Income taxes for the years ended December 31, consist of:

<TABLE>
<CAPTION>
                                                                    Preacquisition
                                                    -----------------------------------------------
                                      One month     Eleven months
                                        ended           ended        Year ended       Year ended
                                    December 31,    November 30,    December 31,     December 31,
   (Millions)                           2000            2000            1999             1998
   <S>                             <C>              <C>            <C>              <C>
   ------------------------------------------------------------------------------------------------
   Current taxes (benefits):
     Federal                            $(0.4)          $ 0.6           $(0.3)           $(1.7)
     State                                 --              --              --              0.1
     Net realized capital losses           --            (0.4)           (0.4)            (0.1)
   ------------------------------------------------------------------------------------------------
                                         (0.4)            0.2            (0.7)            (1.7)
   ------------------------------------------------------------------------------------------------
   Deferred taxes:
     Federal                              0.7             2.3             3.1              2.3
     Net realized capital gains            --             0.1             0.3               --
   ------------------------------------------------------------------------------------------------
                                          0.7             2.4             3.4              2.3
   ------------------------------------------------------------------------------------------------
   Total                                $ 0.3           $ 2.6           $ 2.7            $ 0.6
   ================================================================================================
</TABLE>

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

<TABLE>
<CAPTION>
                                                                    Preacquisition
                                                    -----------------------------------------------
                                      One month     Eleven months
                                        ended           ended        Year ended       Year ended
                                    December 31,    November 30,    December 31,     December 31,
   (Millions)                           2000            2000            1999             1998
   <S>                             <C>              <C>            <C>              <C>
   ------------------------------------------------------------------------------------------------
   Income before income taxes           $ 0.9           $10.4           $ 8.1            $ 3.2
   Tax rate                                35%             35%             35%              35%
   ------------------------------------------------------------------------------------------------
   Application of the tax rate            0.3             3.7             2.8              1.1
   Tax effect of:
     Excludable dividends                  --            (1.0)           (0.1)            (0.5)
     Other, net                            --            (0.1)             --               --
   ------------------------------------------------------------------------------------------------
   Income taxes                         $ 0.3           $ 2.6           $ 2.7            $ 0.6
   ================================================================================================
</TABLE>

                                       37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

7.  INCOME TAXES  (continued)
    The tax effects of temporary differences that give rise to deferred tax
    assets and deferred tax liabilities at December 31 are presented below:

<TABLE>
<CAPTION>
   (Millions)                                2000   1999
   <S>                                       <C>    <C>
   ------------------------------------------------------
   Deferred tax assets:
     Policyholders' funds left with the
       Company                               $ 9.6  $12.4
     Deferred policy acquisition costs         3.3     --
     Unrealized gains allocable to
       experience-rated contracts              0.2     --
     Net unrealized capital losses              --    2.5
     Investment losses                          --    0.4
     Guaranty fund assessments                 0.1    0.1
     Other                                      --    0.5
   ------------------------------------------------------
   Total gross assets                         13.2   15.9
   ------------------------------------------------------
   Deferred tax liabilities:
     Value of business acquired               20.6     --
     Deferred policy acquisition costs          --   16.9
     Unrealized losses allocable to
       experience-rated contracts               --    1.6
     Net unrealized capital gains              0.3     --
     Other                                     0.1     --
   ------------------------------------------------------
   Total gross liabilities                    21.0   18.5
   ------------------------------------------------------
   Net deferred tax liability                $ 7.8  $ 2.6
   ======================================================
</TABLE>

    Net unrealized capital gains and losses are presented in shareholder's
    equity net of deferred taxes.

    The Internal Revenue Service (the "Service") has completed examinations of
    the consolidated federal income tax returns of Lion through 1994.
    Discussions are being held with the Service with respect to proposed
    adjustments. Management believes there are adequate defenses against, or
    sufficient reserves to provide for, any such adjustments. The Service has
    commenced its examinations for the years 1995 through 1997.

8.  BENEFIT PLANS

    The Company utilizes the employees of ING and its affiliates, primarily
    ALIAC. The benefit plan charges allocated to the Company were $0.4 million
    and $0.2 million at December 31, 1999 and 1998, respectively. The amounts at
    December 31, 2000 were immaterial.

    During 2001, the benefit plans offered by ALIAC to its employees and agents
    will be transitioned to plans directly offered by ING. These plans are
    substantially similar to those offered by ALIAC, in conjunction with ING,
    and any differences are not expected to be material in nature.

                                       38
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)

9.  RELATED PARTY TRANSACTIONS

    Substantially all of the administrative and support functions of the Company
    have been and, for a specific transition period, will be provided by former
    Aetna and its affiliates. At the end of the transition period, such
    administrative and support functions will be provided by ING affiliates. The
    financial statements reflect allocated charges, at cost, for these functions
    based upon measures appropriate for the type and nature of function
    performed. Total charges allocated to the Company, including rent, salaries
    and other administrative expenses, were $4.3 million and $6.0 million for
    the years ended December 31, 2000 and 1999, respectively, (of which $1.5
    million and $2.0 million, respectively, were capitalized as deferred policy
    acquisition costs).

    The Company is compensated by the Separate Accounts for bearing mortality
    and expense risks and administrative expense risks pertaining to variable
    annuity contracts. Under the insurance contracts, the Separate Accounts pay
    the Company a daily fee which, on an annual basis, ranged from 1.00% to
    1.40% for 2000, and was1.25% and 1.40% for 1999 and 1998, respectively, of
    their average daily net assets. The amount of compensation and fees received
    from the Separate Accounts, included in charges assessed against
    policyholders, amounted to $14.8 million, $13.5 million and $10.3 million
    for the years ended December 31, 2000, 1999 and 1998, respectively.

    The Company received capital contributions of $15.0 million in cash from
    ALIAC in 1998. The Company received no capital contributions in 2000 and
    1999.

    Aeltus, an affiliate of the Company, acts as adviser for the general account
    assets. The Company pays Aeltus a fee which, on an annual basis, is 0.6% of
    the average daily net assets under management. The amount of such fees for
    the years ended December 31, 2000, 1999 and 1998 amounted to $0.1 million,
    $0.1 million and $0.2 million, respectively.

10. COMMITMENTS AND CONTINGENT LIABILITIES

    COMMITMENTS

    At December 31, 2000 and 1999, the Company had no commitments or contingent
    liabilities.

    LITIGATION

    The Company is not currently involved in any material litigation.

                                       39
<PAGE>
QUARTERLY DATA (UNAUDITED)

<TABLE>
<CAPTION>
2000 (Millions)                 First  Second  Third  Fourth (1)
<S>                             <C>    <C>     <C>    <C>
----------------------------------------------------------------
Total Revenue                   $7.1    $7.0   $8.1      $7.4
----------------------------------------------------------------
Income from continuing
  operations
  before income taxes           $2.4    $2.4   $3.6      $2.9
Income Taxes                     0.8     0.8    0.8       0.5
----------------------------------------------------------------
Income from continuing
  operations                    $1.6    $1.6   $2.8      $2.4
----------------------------------------------------------------
Net income                      $1.6    $1.6   $2.8      $2.4
================================================================
</TABLE>

(1)  Fourth quarter data reflects an aggregation of the pre acquisition period
     of the eleven months ended November 30, 2000 and the post acquisition
     period of the one month ended December 31, 2000.

<TABLE>
<CAPTION>
1999 (Millions)                 First  Second  Third  Fourth
<S>                             <C>    <C>     <C>    <C>
------------------------------------------------------------
Total Revenue                   $6.8    $7.3   $6.8    $6.7
------------------------------------------------------------
Income from continuing
  operations
  before income taxes           $1.9    $2.3   $1.9    $2.0
Income Taxes                     0.6     0.8    0.6     0.7
------------------------------------------------------------
Income from continuing
  operations                    $1.3    $1.5   $1.3    $1.3
------------------------------------------------------------
Net income                      $1.3    $1.5   $1.3    $1.3
============================================================
</TABLE>

                                       40
<PAGE>
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          None

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION

          Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          Omitted pursuant to General Instruction I(2) of Form 10-K.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

     1.  Financial statements. See Item 8 on Page 17
     2.  Financial statement schedules. See Index to Financial Statement
         Schedule on Page 44.
     3.  Exhibits:

         3(i)(a)  Certificate of Incorporation

                  Incorporated herein by reference to Pre-Effective Amendment
                  No. 1 to Registration Statement on Form N-4, File
                  No. 333-87131, as filed with the Securities and Exchange
                  Commission on December 15, 1999.

         3(I)(b)  Amendment to Certificate of Incorporation

                  Incorporated by reference to Post-Effective Amendment No. 2 to
                  Registration Statement on Form N-4 (File No. 333-87131), as
                  filed on December 13, 2000.

         3(ii)     By-Laws

                  Incorporated herein by reference to Pre-Effective Amendment
                  No. 1 to Registration Statement on Form N-4, File
                  No. 333-87131, as filed on December 15, 1999.

     4.   Instruments Defining the Rights of Security Holders, Including
          Indentures (Annuity Contracts)

         Incorporated herein by reference to Registration Statement on Form N-4,
         File No. 33-80750, as amended and filed on April 23, 1997.

                                       41
<PAGE>
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
          8-K (continued)
         Incorporated herein by reference to Registration Statement on Form N-4,
         File No. 33-59749, as filed on June 1, 1995.

         Incorporated herein by reference to Post-Effective Amendment No. 4 to
         Registration Statement on Form N-4, File No. 33-59749, as filed on
         April 16, 1997.

         Incorporated herein by reference to Post-Effective Amendment No. 6 to
         Registration Statement on Form N-4, File No. 33-59749, as filed on
         November 26, 1997.

         Incorporated herein by reference to Post-Effective Amendment No. 8 to
         Registration Statement on Form N-4, File No. 33-59749, as filed on
         April 17, 1998.

         Incorporated herein by reference to Registration Statement on Form S-2,
         File No. 33-63657, as filed on October 25, 1995.

         Incorporated herein by reference to Pre-Effective Amendment No. 3 to
         the Registration Statement on Form S-2, File No. 33-63657, as filed on
         January 17, 1996.

         Incorporated herein by reference to Post-Effective Amendment No. 3 to
         Registration Statement on Form S-2, File No. 33-63657, as filed on
         November 24, 1997.

     10.  Material Contracts

     10.1 Amended and Restated Asset Purchase Agreement by and among Aetna Life
          Insurance Company, Aetna Life Insurance and Annuity Company, The
          Lincoln National Life Insurance Company and Lincoln Life & Annuity
          Company of New York, dated May 21, 1998, incorporated herein by
          reference to Aetna Life Insurance and Annuity Company's Form 10-Q
          filed on August 8, 1998.

     10.2 Distribution Agreement, dated as of December 13, 2000, between Lion
          Connecticut Holdings Inc. and Aetna Inc.

     10.3 Employee Benefits Agreement, dated as of December 13, 2000, between
          Lion Connecticut Holdings Inc. and Aetna Inc.

     10.4 Tax Sharing Agreement, dated as of December 13, 2000, among Lion
          Connecticut Holdings Inc., Aetna Inc. and ING America Insurance
          Holdings, Inc.

     10.5 Transition Services Agreement, dated as of December 13, 2000, between
          Lion Connecticut Holdings Inc. and Aetna Inc.

     10.6 Lease Agreement, dated as of December 13, 2000, by and between Aetna
          Life Insurance Company and Aetna Life Insurance and Annuity Company

                                       42
<PAGE>
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
          8-K (continued)
     10.7 Real Estate Services Agreement, dated as of December 13, 2000, between
          Aetna Inc. and Aetna Life Insurance and Annuity Company

     10.8 10 State House Square Services Agreement, dated as of December 13,
          2000, between Aetna Inc. and Lion Connecticut Holdings Inc.

     24  Power of Attorney

        Filed with this Report immediately after Signature page.

    Exhibits other than these listed are omitted because they are not required
    or not applicable.

(b)  Reports on Form 8-K.

    None.

                                       43
<PAGE>
                     INDEX TO FINANCIAL STATEMENT SCHEDULE

<TABLE>
<CAPTION>
                                                    Page
                                                    ----
<S>                                                 <C>

Independent Auditors' Report......................    45

III.      Supplementary Insurance Information as
            of and for the years ended
            December 31, 2000, 1999 and 1998......    46
</TABLE>

Schedules other than those listed above are omitted because they are not
required or are not applicable.

                                       44
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Shareholder and Board of Directors
Aetna Insurance Company of America:

Under date of March 27, 2001, we reported on the balance sheets of Aetna
Insurance Company of America as of December 31, 2000 ("Successor Company") and
December 31, 1999 ("Preacquisition Company"), and the related statements of
income, changes in shareholder's equity and cash flows for the period from
December 1, 2000 to December 31, 2000 ("Successor Company"), and for the period
from January 1, 2000 to November 30, 2000 and the years ended December 31, 1999
and 1998 ("Preacquisition Company"), as included herein. In connection with our
audits of the aforementioned financial statements, we also audited the related
financial statement schedule as listed in the accompanying index. The financial
statement schedule is the responsibility of the Companies' management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

As discussed in Note 1 to the financial statements, effective November 30, 2000,
ING America Insurance Holdings Inc. acquired all of the outstanding stock of
Aetna Inc., Aetna Insurance Company of America's indirect parent and sole
shareholder in a business combination accounted for as a purchase. As a result
of the acquisition, the financial information for the periods after the
acquisition is presented on a different cost basis than that for the periods
before the acquisition and, therefore, is not comparable.

                                                                /s/ KPMG LLP

Hartford, Connecticut
March 27, 2001

                                       45
<PAGE>
                                  SCHEDULE III
                      Supplementary Insurance Information
         As of and for the years ended December 31, 2000, 1999 and 1998
                                 (in millions)
<TABLE>
<CAPTION>
                                         Policy-                                                          Amortization
                            Deferred     holders'                                                         of Deferred
                             Policy     Funds Left         Net                               Current         Policy
                           Acquisition   with the      Investment            Other          and Future    Acquisition
                              Costs      Company      Income (1)(3)      Income (2)(3)     Benefits (3)    Costs (3)
<S>                        <C>          <C>         <C>                <C>                <C>             <C>
----------------------------------------------------------------------------------------------------------------------
2000                          $  --       $110.3          $11.2              $18.4             $7.4           $5.7
----------------------------------------------------------------------------------------------------------------------
1999                          $58.8       $138.8          $10.9              $16.7             $8.0           $4.6
----------------------------------------------------------------------------------------------------------------------
1998                          $59.9       $153.2          $10.4              $11.9             $9.0           $3.9
----------------------------------------------------------------------------------------------------------------------

<CAPTION>

                               Other
                             Operating
                            Expenses (3)
<S>                        <C>
-------------------------
2000                            $5.2
-------------------------
1999                            $6.9
-------------------------
1998                            $6.2
-------------------------
</TABLE>

(1)  The allocation of net investment income is based upon the investment year
     method or specific identification of certain portfolios within specific
     segments.
(2)  Amounts include other income, realized capital losses and charges assessed
     against policyholders.
(3)  Financial data for the year ended December 31, 2000 represents an
     aggregation of the pre-acquisition period of the eleven months ended
     November 30, 2000 and the post acquisition period of the one month ended
     December 31, 2000.

                                       46
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                              AETNA INSURANCE COMPANY OF AMERICA
                                            (Registrant)

<TABLE>
<S>                                                 <C>
Date:  March 30, 2001                               By  /s/ Deborah Koltenuk
                                                       -----------------------------------------------
                                                        Deborah Koltenuk
                                                        Vice President and Corporate Controller
</TABLE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on March 30, 2001.

<TABLE>
<CAPTION>
                    SIGNATURES                                            TITLE
<S>                                                 <C>

----------------------------------------------
Wayne R. Huneke                                     Director and Chief Financial Officer
                                                      (Principal Financial Officer)

----------------------------------------------
P. Randall Lowery                                   Director

----------------------------------------------
Thomas J. McInerney                                 Director and President
                                                      (Principal Executive Officer)

----------------------------------------------
Robert C. Salipante                                 Director

----------------------------------------------
Mark A. Tullis                                      Director

/s/ Deborah Koltenuk                                Vice President and Corporate Controller
----------------------------------------------
Deborah Koltenuk
</TABLE>

* By:  /s/ Paula Cludray-Engelke
      ------------------------------------------------
      Paula Cludray-Engelke
      Attorney-in-fact

                                       47
<PAGE>
                               POWER OF ATTORNEY

We, the undersigned directors and officers of Aetna Insurance Company of
America, hereby severally constitute and appoint Paula Cludray-Engelke and
Deborah Koltenuk and each of them individually, our true and lawful attorneys,
with full power to them and each of them to sign for us, and in our names and in
the capacities indicated below, the 2000 Form 10-K and any and all amendments
thereto to be filed with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, hereby ratifying and confirming our signatures
as they may be signed by our said attorney to the Form 10-K and any and all
amendments thereto.

WITNESS our hands and common seal on this 30th day of March, 2001.

<TABLE>
<CAPTION>
                    SIGNATURE                                             TITLE
<S>                                                 <C>

/s/ Wayne R. Huneke
-------------------------------------------
Wayne R. Huneke                                     Director and Chief Financial Officer

/s/ Robert C. Salipante
-------------------------------------------
Robert C. Salipante                                 Director

/s/ P. Randall Lowery
-------------------------------------------
P. Randall Lowery                                   Director

/s/ Thomas J. McInerney
-------------------------------------------
Thomas J. McInerney                                 Director and President

/s/ Mark A. Tullis
-------------------------------------------
Mark A. Tullis                                      Director

/s/ Deborah Koltenuk
-------------------------------------------
Deborah Koltenuk                                    Vice President and Corporate Controller
</TABLE>

                                       48
<PAGE>
                  ASSISTANT CORPORATE SECRETARY'S CERTIFICATE

                       AETNA INSURANCE COMPANY OF AMERICA

I, Lena A. Rabbitt, the duly appointed Assistant Corporate Secretary of Aetna
Insurance Company of America (the "Company"), hereby certify that the attached
resolutions adopted by the Board of Directors on April 18, 1996, are currently
in full force and effect, and have not been amended, restated, or superseded.

IN WITNESS WHEREOF, I have affixed my name as Assistant Corporate Secretary and
have caused the corporate seal of said Company to be hereunto affixed this 30th
day of March, 2001.

<TABLE>
<S>                                                 <C>
                                                    By: /s/ Lena A. Rabbitt
                                                    -------------------------------------------------
(corporate seal)                                    Lena A. Rabbitt
                                                    Assistant Corporate Secretary
                                                    Aetna Insurance Company of America
</TABLE>

                                       49
<PAGE>
                       AETNA INSURANCE COMPANY OF AMERICA

                           COMPANY NAME, AUTHORITY TO
                        SIGN (DUPLICATE CORPORATE SEALS)

April 18, 1996

RESOLVED:  That the following officers:

       President
      Senior Vice President
      Vice President
      General Counsel
      Corporate Secretary
      Treasurer
      Assistant Corporate Secretary

  (1)  are hereby severally authorized to sign in the Company's name:

      (a)   insurance contracts of every type and description which the Company
            is authorized to write;
      (b)   agreements relating to the purchase, sale, or exchange of securities
            including any consents and modifications given or made under such
            agreements;
      (c)   conveyances and leases of real estate or any interest therein
            including any modifications thereof;
      (d)   assignments and releases of mortgages and other liens, claims or
            demands;
      (e)   any other written instrument which they are authorized to approve in
            the normal course of Company business; and
      (f)   any other written instrument when specifically authorized by the
            Board of Directors or the President;

      and are further severally authorized (i) to delegate all or any part of
      the foregoing authority to one or more officers, employees or agents of
      this Company, provided that each such delegation is in writing and a copy
      thereof is filed in the Office of the Corporate Secretary, or (ii) to
      designate any attorney at law representing this Company on a matter under
      their direction, to so sign this Company's name;

  (2)  are hereby severally authorized to possess the Company's duplicate seals
       and to affix the same to items (a) through (f) above;

      and are further severally authorized to designate any Company officer
      under their direction to possess and to so affix the Company's duplicate
      seals; and

      that the Senior Vice President, Investments is hereby authorized to
      designate any officer, employee or agent of this Company under his
      direction to sign the Company's name and to affix the Company's seal to
      any and all documents required in connection with any investment
      transaction in which the Company has an interest.

                                       50