As filed with the Securities and Exchange Commission on March 10, 2005

Registration No. 333-67902

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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AMENDMENT NO. 5 TO

FORM S-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

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GE LIFE AND ANNUITY ASSURANCE COMPANY
(Exact name of registrant as specified in its charter)

Virginia 54-0283385 63
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(State or other jurisdiction of (I.R.S. Employer (Primary Standard Industrial
incorporation or organization) Identification Number) Classification Code)

6610 W. Broad Street
Richmond, Virginia 23230
(804) 281-6000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)

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Heather Harker
Vice President, Associate General Counsel, and Assistant Secretary
GE Life and Annuity Assurance Company
6610 W. Broad Street
Richmond, Virginia 23230
(804) 281-6910
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Approximate date of commencement of proposed sale to the public: Continuously
on and after April 29, 2005.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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CALCULATION OF REGISTRATION FEE

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Amount Proposed maximum Proposed maximum
Title of each Class of to be offering price aggregate Amount of
Securities to be Registered registered per unit* offering price registration fee**
- ---------------------------------------------------------------------------------------------------
Scheduled Purchase Payment Deferred
Variable Annuity Contracts N/A N/A $261,640,000 N/A
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* The proposed maximum aggregate offering price is estimated solely for the
purposes of determining the registration fee. The amount to be registered and
the proposed maximum offering price per unit are not applicable since these
securities are not issued in predetermined amounts or units.
**Fees for registration were paid with Amendment No. 2 to the Registration
Statement.

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The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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GE Life and Annuity Assurance Company

BUSINESS GE Life and Annuity Assurance Company (the "Company",
"we", "us", or "our" unless context otherwise requires)
is a stock life insurance company operating under a
charter granted by the Commonwealth of Virginia on March
21, 1871 as The Life Insurance Company of Virginia.
General Electric Capital Corporation ("GE Capital")
acquired us from Aon Corporation on April 1, 1996. GE
Capital subsequently contributed us to its wholly owned
subsidiary, GE Financial Assurance Holdings, Inc.,
("GEFAHI") and ultimately the majority of the outstanding
common stock to General Electric Capital Assurance
Company ("GECA" or "GE Capital Assurance"). As part of an
internal reorganization of GE Financial Assurance's
insurance subsidiaries, the Harvest Life Insurance
Company ("Harvest") merged into us on January 1, 1999. At
this time we were renamed GE Life and Annuity Assurance
Company. Harvest's former parent, Federal Home Life
Insurance Company ("Federal"), received our common stock
in exchange for its interest in Harvest.

On May 24, 2004, GEFAHI transferred substantially all of
its assets to Genworth Financial, Inc. ("Genworth"),
including all of the outstanding capital stock of GNA
Corporation ("GNA"), our indirect parent and 800 shares
of our common stock that GEFAHI had held directly. As a
result, we became an indirect, wholly-owned subsidiary of
Genworth. On May 25, 2004, Genworth's Class A common
stock began trading on The New York Stock Exchange.
Approximately 30% of Genworth's common stock is now owned
by public shareholders. GEFAHI continues to own
approximately 70% of Genworth's common stock.

On May 31, 2004, (1) Genworth contributed to GNA and GNA
in turn contributed to GECA 800 shares of our common
stock and (2) Federal paid a dividend to GECA consisting
of 2,378 shares of our common stock. As a result of the
foregoing contribution and dividend, we became a direct,
wholly-owned subsidiary of GECA while remaining an
indirect, wholly-owned subsidiary of Genworth.

We principally offer annuity contracts, guaranteed
investment contracts, funding agreements, Medicare
supplement insurance and life insurance policies. We do
business in all states, except New York, and in the
District of Columbia. Our principal offices are located
at 6610 West Broad Street, Richmond, Virginia 23230.

We are one of a number of subsidiaries of Genworth, a
company that, through its subsidiaries, provides
consumers financial security solutions by selling a wide
variety of insurance, investment and retirement products,
primarily in North America. Our product offerings are
divided along two segments of consumer needs: (1)
Retirement Income and Investments and (2) Protection. We
also have a Corporate and Other segment, which consists
primarily of net realized investment gains (losses),
interest and other financing expenses and unallocated
corporate income, expenses and income taxes.

Our financial information, including the information
contained in this report filed on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and any
amendments to the above mentioned reports, will be made
available upon request. Alternatively, reports filed with
the United States Securities and Exchange Commission
("SEC") may be viewed or obtained at the SEC Public
Reference Room in Washington, D.C., or at the SEC's
Internet site at www.sec.gov.

STRATEGY We believe that changes in demographics such as the
increased number of baby boomers entering middle and late
middle age, longer life expectancies due to healthy
lifestyles and medical advances and the reduction in
government and employer-sponsored benefit programs have
increased and will continue to increase, the demand for
innovative products and services to solve financial needs
and challenges. Our strategy is designed to take
advantage of these trends by offering a broad array of
insurance and investment products and services to meet
key consumer financial needs at each stage of life.

OPERATING SEGMENTS During 2003, we redefined our operating segments.
Management realigned the business on a product line and
market basis to intensify its focus on return on equity,
optimum deployment of capital and distribution
effectiveness. As a result of this change, our operations
are conducted under two reporting segments corresponding
to customer needs: 1) Retirement Income and Investments
and 2) Protection.

We also have a Corporate and Other segment, which
consists primarily of net realized investment gains
(losses), interest and other financing expenses and
unallocated corporate income, expenses and income taxes.

RETIREMENT INCOME We offer deferred annuities (variable and fixed) and
AND INVESTMENTS variable life insurance to a broad range of individual
SEGMENT consumers who want to accumulate tax-deferred assets for
retirement, desire a tax-efficient source of income and
seek to protect against outliving their assets. We also
offer guaranteed investment contracts ("GICs") and
funding agreements as investment products to qualified
institutional buyers.

PROTECTION SEGMENT Our Protection segment includes universal life insurance,
interest-sensitive whole life insurance and Medicare
supplement insurance. Life insurance products provide
protection against financial hardship after the death of
an insured by providing cash payment to the beneficiaries
of the policyholder. Medicare supplement insurance
provides coverage for Medicare-qualified expenses that
are not covered by Medicare because of applicable
deductibles or maximum limits.

Properties

We conduct our business from various facilities, all of
which are leased except for one building in Richmond,
Virginia, which we own.

Legal Proceedings

We face a significant risk of litigation and regulatory
investigations and actions in the ordinary course of
operating our businesses, including the risk of class
action lawsuits. Our pending legal and regulatory actions
include proceedings specific to us and others generally
applicable to business practices in the industries in
which we operate. In our insurance operations, we are or
may become subject to class actions and individual suits
alleging, among other things, issues relating to sales or
underwriting practices, payment of contingent or other
sales commissions, claims payments and procedures,
product design, disclosure, administration, additional
premium charges for premiums paid on a periodic basis,
denial or delay of benefits and breaches of fiduciary or
other duties to customers. Plaintiffs in class action and
other lawsuits against us may seek very large or
indeterminate amounts, including punitive and treble
damages, which may remain unknown for substantial periods
of time. We are also subject to various regulatory
inquiries, such as information requests, subpoenas and
books and record examinations, from state and federal
regulators and other authorities. A substantial legal
liability or a significant regulatory action against us
could have an adverse effect on our business, financial
condition and results of operations. Moreover, even if we
ultimately prevail in the litigation, regulatory action
or investigation, we could suffer significant
reputational harm, which could have an adverse effect on
our business, financial condition and results of
operations.

Recently, the insurance industry has become the focus of
increased scrutiny by regulatory and law enforcement
authorities concerning certain practices within the
insurance industry. This scrutiny includes the
commencement of investigations and other proceedings by
the New York State Attorney General and other
governmental authorities relating to allegations of
improper conduct in connection with the payment of, and
the failure to disclose, contingent commissions by
insurance companies to insurance brokers and agents, the
solicitation and provision of fictitious or inflated
quotes and the use of inducements to brokers or companies
in the sale of insurance products. We have not received a
subpoena or inquiry from the State of New York with
respect to these matters. As part of industry-wide
inquiries in this regard, we have received inquiries and
informational requests from federal and state regulatory
authorities. We are cooperating with these regulatory
authorities in connection with their inquiries.

Recent industry-wide inquiries also include those
regarding market timing and late trading in variable
annuity contracts, variable annuity sales
practices/exchanges and electronic communication document
retention practices. In this regard, we responded in late
2003 to a New York State Attorney General subpoena
regarding market timing and late trading in variable
products and mutual funds. We have not received any
further inquiries from the New York State Attorney
General regarding this matter.

Although we do not believe that the current
investigations and proceedings will have a material
adverse effect on our business, financial condition or
results of operations, we cannot assure you that this
will be the case. In addition, it is possible that
related investigations and proceedings may be commenced
in the future, and we could become subject to further
investigations and have lawsuits filed against us. In any
event, increased regulatory scrutiny and any resulting
investigations or proceedings could result in new legal
precedents and industry-wide regulations or practices
that could adversely affect our business, financial
condition and results of operation.

In our investment-related operations, we are subject to,
and may become subject to further litigation involving
commercial disputes with counterparties or others and
class action and other litigation alleging, among other
things, that we made improper or inadequate disclosures
in connection with the sale of assets and annuity and
investment products or charged excessive or impermissible
fees on these products, recommended unsuitable products
to customers or breached fiduciary or other duties to
customers. We are also subject to litigation arising out
of our general business activities such as our
contractual and employment relationships.

We were named as a defendant in a lawsuit, McBride v.
Life Insurance Co. of Virginia dba GE Life and Annuity
Assurance Co., related to the sale of universal life
insurance policies. The complaint was filed on November
1, 2000, in Georgia state court, as a class action on
behalf of all persons who purchased certain universal
life insurance policies and alleges improper practices in
connection with the sale and administration of universal
life policies. The plaintiffs sought unspecified
compensatory and punitive damages. On December 1, 2000,
we removed the case to the U.S. District Court for the
Middle District of Georgia. We have vigorously denied
liability with respect to the plaintiff's allegations.
Nevertheless, to avoid the risks and costs associated
with protracted litigation and to resolve our differences
with policyholders, we agreed in principle on October 8,
2003 to settle the case on a nationwide class basis. The
settlement provides benefits to the class, and allows us
to continue to serve our customers' needs undistracted by
disruptions caused by litigation. The court gave final
approval to the settlement on August 12, 2004. In the
third quarter of 2003, we accrued $50 million in reserves
relating to this litigation, which represents our best
estimate of bringing this matter to conclusion. The
precise amount of payments in this matter cannot be
estimated because they are dependent upon the number of
individuals who ultimately will seek relief in the claim
form process of the class settlement, the identity of
such claimants and whether they are entitled to relief
under the settlement terms and the nature of the relief
to which they are entitled. That process is currently
underway. In addition, approximately 650 class members
elected to exclude themselves from the class action
settlement. In the fourth quarter of 2004,

we reached an agreement in principle to settle the
threatened claims of policyholders who had excluded
approximately 512 policies from the class action
settlement. At that time, we accrued a reserve for the
settlement in principle. We have also been named as a
defendant in six lawsuits brought by 67 class members who
elected to exclude themselves from the class action
settlement. We cannot determine at this point whether or
how many other class members who have excluded themselves
from the class action will initiate individual actions
against us, or the effect of such suits or claims,
including the six pending lawsuits, on our financial
condition, results of operations or business reputation.

In addition, we were named as a defendant in five
lawsuits brought by individuals claiming that William
Maynard, one of our former dedicated sales specialists,
and Anthony Allen, one of our former independent
producers, converted customer monies and engaged in
various fraudulent acts. The five cases are, Monger v.
Allen, Maynard, and GE Life and Annuity Assurance Company
("GELAAC") (filed October 24, 2003), Warfel v. Allen,
Maynard, adVenture Publishing, and GELAAC (filed February
6, 2004), Hanrick v. Allen, Maynard and GELAAC (filed
March 10, 2004), Modlin v. Allen, et al. (filed June 17,
2004), and Clark v. Allen, 66 et al. (filed June 25,
2004). The Monger and Hanrick cases have been settled.
The remaining three cases are in their preliminary stages
and are pending in the state court of Cumberland County,
North Carolina. The suits allege that GELAAC failed to
properly supervise Allen and Maynard and that GELAAC is
responsible for Allen's and Maynard's conduct.
Specifically, Monger alleged conversion, negligence,
fraudulent misrepresentation, constructive fraud, unfair
and deceptive trade practices, violations of the
Investment Company Act of 1940 and negligent supervision.
Warfel alleged breach of contract, conversion, breach of
fiduciary duty, fraud, constructive fraud, negligent
misrepresentation, negligent supervision and unfair and
deceptive trade practices. Hanrick alleged conversion,
negligence, fraudulent misrepresentation, constructive
fraud, unfair and deceptive trade practices and negligent
supervision. Modlin and Clark make similar allegations.
The total amount allegedly invested by the plaintiffs in
the three unresolved actions is approximately $883,000.
The plaintiff in Warfel seeks damages of $1.4 million and
the plaintiffs in Modlin and Clark seek unspecified
compensatory damages. In addition, each plaintiff seeks
treble damages, as well as punitive damages of an
unspecified amount. Additionally, in the fourth quarter
of 2004, we reached an agreement in principle to settle
the threatened claims of a putative class of individuals
who had dealings with Allen and Maynard. At that time we
accrued a reserve for the settlement in principle. In
October 2003, Allen and Maynard were arrested and charged
with conversion in Cumberland County, North Carolina for
allegedly failing to remit $30,000 in premiums that they
received from a client to GELAAC. Allen has also been
indicted in Cumberland County, North Carolina for
converting the funds of numerous other individuals. We

cannot determine the ultimate outcome of these suits or
whether any related or similar suits or claims will be
asserted against us in the future, or the effect of such
suits or claims on our financial condition, results of
operations or reputation.

Capital Brokerage Corporation, the principal underwriter,
is not engaged in any litigation of any material nature.

Submission of Matters to a Vote of Security Holders

Information omitted in accordance with General
Instruction I (2)(c).

Market For the Registrant's Common Equity and Related Shareholder Matters

At December 31, 2004, all of our common stock, our sole
class of common equity on the date hereof, is owned by GE
Capital Assurance. Accordingly, there is no public
trading market for our common equity.

As previously discussed, our ability to pay dividends is
restricted by state insurance law.

Selected Financial Data

Information omitted in accordance with General
Instruction I (2)(a).

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

The following analysis of the consolidated financial
condition and results of our operations should be read in
conjunction with our Consolidated Financial Statements
and the notes thereto included herein.

CAUTIONARY NOTE This report contains certain "forward-looking statements"
REGARDING within the meaning of the Private Securities Litigation
FORWARD-LOOKING Reform Act of 1995. Forward-looking statements may be
STATEMENTS identified by words such as "expects," "intends,"
"anticipates," "plans," "believes," "seeks," "estimates,"
"will," or words of similar meaning and include, but are
not limited to, statements regarding the outlook for our
future business and financial performance.
Forward-looking statements are based on management's
current expectations and assumptions, which are subject
to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Actual
outcomes and results may differ materially due to global
political, economic, business, competitive, market,
regulatory and other factors, including the following:

Risks relating to our businesses, including interest rate
fluctuations, downturns and volatility in equity markets,
defaults in portfolio securities, downgrades in our
financial strength and credit ratings, unexpected changes
in mortality and morbidity rates, accelerated
amortization of deferred acquisition costs and present
value of future profits, impairment of the value of
goodwill, insufficiency of reserves, legal constraints on
dividend distributions by subsidiaries, illiquidity of
investments, competition, inability to attract or retain
independent sales intermediaries and dedicated sales
specialists, defaults by counterparties, regulatory
restrictions on our operations and changes in applicable
laws and regulations, legal or regulatory actions or
investigations, political or economic instability and the
threat of terrorism, terrorist acts, unexpected changes
in mortality, morbidity and unemployment rates,
accelerated amortization of deferred acquisition costs
and present value of future profits, goodwill
impairments, medical advances such as genetic mapping
research, unexpected changes in persistency rates,
increases in statutory reserve requirements and changes
in tax and securities laws.

We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new
information, future developments or otherwise.

OPERATING Year Ended December 31, 2004 Compared to Year Ended
RESULTS December 31, 2003

Overview. Net income in 2004 was $199.4 million, a
$179.7 million increase from 2003. The increase is
primarily due to a tax benefit increase of $140.2 million
resulting primarily from reinsurance transactions entered
into in 2004, in which we ceded to Union Fidelity Life
Insurance Company ("UFLIC"), an affiliate, substantially
all of our in-force blocks of variable annuities and
structured settlements. The reinsurance

transactions with UFLIC were completed and accounted for
at book value and will be reported on our tax returns at
fair value as determined for tax purposes, giving rise to
a net reduction in current and deferred income tax
liabilities and resulting in a net tax benefit for the
year ended December 31, 2004. Also contributing to the
increase was a $50.0 million litigation reserve in 2003
and an increase in investment income of $42.0 million in
our corporate and other segment associated with an
increase in invested assets not allocated to the
operating segments. These amounts were partially offset
by a goodwill impairment charge of $59.8 million in 2004
resulting from the reinsurance transactions with UFLIC.

Net investment income. Net investment income decreased
$117.0 million, or 21.7%, to $421.0 million in 2004 from
$538.0 million in 2003. The decrease was primarily a
result of a $2,554.9 million, or 21.7%, decline in
average invested assets. The decline in average invested
assets was due primarily to the reinsurance transactions
with UFLIC. Also contributing to the decrease in average
invested assets was a decline in outstanding
institutional stable value liabilities.

Net realized investment gains. Net realized investment
gains (losses) consist of gross realized investment gains
and gross realized investment (losses), including charges
related to impairments. Net realized investment gains
(losses) increased $1.8 million to $5.7 million in 2004
from $3.9 million in 2003. For 2004, gross realized gains
and (losses) were $10.7 million and $(5.0) million,
respectively. Realized losses for 2004 included $0.9
million of impairments that were primarily attributable
to fixed-maturity and equity securities. For 2003, gross
realized gains and (losses) were $80.2 million and
$(76.3) million, respectively. Realized losses for 2003
included $26.4 million of impairments, primarily
attributable to fixed-maturity and equity securities.

Premiums. Premiums decreased $7.2 million, or 6.9% to
$96.8 million in 2004 from $104.0 million in 2003. The
decrease was primarily due to our Medicare supplement
product. Medicare supplement premiums were down $8.3
million in 2004 driven by a reduction in due premiums
offset by growth in new business and in-force premium
rate actions.

Cost of Insurance. Cost of insurance decreased $10.9
million, or 7.1% to $142.2 million in 2004 from $153.1
million in 2003. The decrease was due primarily to a
decline of universal life policies in-force.

Variable product fees. Variable product fees decreased
$96.9 million to $9.4 million in 2004 from $106.3 million
in 2003. The decrease in variable product fees was
primarily due to the reinsurance transactions with UFLIC
in which we ceded, effective January 1, 2004, the
majority of our in-force variable annuities.

Other income. Other income decreased $10.7 million, or
30.1%, to $24.8 million in 2004 from $35.5 million in
2003. The decrease was due primarily to lower surrender
fees attributable to the reinsurance transactions with
UFLIC.

Interest credited. Interest credited represents interest
credited on behalf of policyholder and contractholder
general account balances. Interest credited decreased
$119.4 million, or 29.1%, to $291.2 million for 2004 from
$410.6 million for 2003. This decrease was primarily the
result of an $84.5 million decrease attributable to the
reinsurance transactions with UFLIC and a $33.2 million
decrease attributable to institutional stable value
products. This decrease was due to a combination of a
decrease in liabilities and reduced crediting rates on
book with the maturity of higher cost liabilities and the
addition of new business with lower crediting rates.

Benefits and other changes in policy reserves. Benefits
and other changes in policy reserves decreased $62.9
million, or 25.6%, to $182.8 million in 2004 from $245.7
million in 2003. The decrease was primarily a result of a
$46.7 million decrease attributable to the reinsurance
transactions with UFLIC and a $16.3 million reserve
strengthening in 2003 related to whole life products.

Underwriting, Acquisition and Insurance Expenses, net of
deferrals. Underwriting, acquisition and insurance
expenses, net of deferrals, decreased $85.8 million, or
57.6%, to $63.2 million in 2004 from $149.0 million in
the prior year. This decrease was primarily the result of
a $50.0 million reserve accrual in 2003 associated with a
class action lawsuit settlement agreed to in principle
and a $30.0 million decrease attributable to the
reinsurance transactions with UFLIC.

Amortization of deferred acquisition costs and
intangibles. Amortization of deferred acquisition costs
and intangibles decreased $11.6 million, or 9.8%, to
$107.3 million in 2004 from $118.9 million in 2003. The
decrease is primarily the result of a $74.0 million
decrease attributable to the reinsurance transactions
with UFLIC, which was partially offset by a $59.8 million
goodwill impairment charge, also as a result of the
reinsurance transactions with UFLIC.

Provision (benefit) for income taxes. Benefit for income
taxes increased $140.2 million to a benefit of $(143.3)
million for the year ended December 31, 2004 from a
benefit of $(3.1) million for the year ended December 31,
2003. The increase in tax benefit was primarily
attributable to the tax benefit associated with the
reinsurance transactions with UFLIC. The reinsurance
transactions with UFLIC were completed and accounted for
at book value. These transactions will be reported on our
tax returns at fair value as determined for tax purposes,
giving rise to a net reduction in current and deferred
income tax liabilities and resulting in a net tax benefit
for the year ended December 31, 2004. The tax benefit
relates primarily to the reinsurance transaction with
UFLIC.

Capital Resources and Liquidity

CONSOLIDATED BALANCE Total Investments. Total investments decreased $2,478.6
SHEET million, or 21.9%, to $8,850.6 million at December 31,
2004 from $11,329.2 million at December 31, 2003. The
decrease was primarily a result of the transfer of
invested assets associated with the reinsurance
transactions with UFLIC and lower invested assets due to
a decline in outstanding institutional stable value
liabilities, which was partially offset by an increase in
invested assets in our Corporate and Other segment. The
change in investments due to the reinsurance transactions
with UFLIC, institutional stable value liabilities and
corporate segment was $(2,728.5) million, $(354.4)
million and $635.5 million, respectively. The increase in
investments in our corporate segment was due primarily to
an increase in the securities lending program.

Investment securities comprise mainly investment grade
debt securities. Fixed maturities and equity securities
were $7,028.0 million, including gross unrealized gains
and losses of $192.6 million and $(41.2) million,
respectively at December 31, 2004 ($9,666.7 million,
including gross unrealized gains and losses of $278.7
million and $(71.1) million, respectively, as of December
31, 2003). Market value for these purposes is defined by
relevant accounting standards and should not be viewed as
a forecast of future gains or losses.

Impairment of Investment Securities. We regularly review
each investment security for impairment in accordance
with our impairment policy, which includes both
quantitative and qualitative criteria. Quantitative
criteria include length of time and amount that each
security position is in an unrealized loss position and
for fixed maturity securities, whether the issuer is in
compliance with terms and covenants of the security. Our
qualitative criteria include the financial strength and
specific prospects for the issuer as well as our intent
to hold the security until recovery. Our impairment
reviews involve our finance, risk and management teams as
well as the portfolio management and research
capabilities of GE Asset Management, Inc.("GEAM") as well
as other third party asset managers, as appropriate. Our
qualitative review attempts to identify those issuers
with a greater than 50% chance of default in the coming
twelve months. These securities are characterized as
"at-risk" of impairment. As of December 31, 2004,
securities "at risk" of impairment had aggregate
unrealized losses of approximately $10.0 million.

security-by-security basis based upon consideration of
all the evidence available to us, including the magnitude
of an unrealized loss and its duration. In any event,
this period does not exceed 18 months for common equity
securities. We measure impairment charges based on the
difference between the book value of the security and its
fair value. Fair value is based on quoted market price,
except for certain infrequently traded securities where
we estimate values using internally developed pricing
models. These models are based upon common valuation
techniques and require us to make assumptions regarding
credit quality, liquidity and other factors that affect
estimated values.

During 2004, 2003 and 2002, we recognized impairment
losses of $0.9 million, $26.4 million and $77.4 million,
respectively. We generally intend to hold securities in
unrealized loss positions until they recover. However,
from time to time, we sell securities in the normal
course of managing our portfolio to meet diversification,
credit quality, yield and liquidity requirements.

The following table presents the gross unrealized losses
and estimated fair values of our investment securities,
aggregated by investment type and length of time that
individual investment securities have been in a
continuous unrealized loss position, at December 31,

Less than 12 Months
---------------------------------------------------
2004 Amortized Fair Unrealized % Below # of
(Dollar amounts in millions) cost or cost value losses cost securities
- ---------------------------- ------------ -------- ---------- ------- ----------

Description of Securities
Fixed maturities:
U.S. government and agency $ 7.2 $ 7.2 $ -- -- 4
Non - U.S. government 2.9 2.9 -- -- 3
U.S. corporate 505.2 494.5 (10.7) 2.1% 104
Non-U.S. corporate 131.2 129.0 (2.2) 1.7% 30
Asset Backed 222.8 221.6 (1.2) 0.5% 38
Mortgage Backed 477.2 470.9 (6.3) 1.3% 76
-------- -------- ------ ---- ---
Total temporarily impaired securities $1,346.5 $1,326.1 $(20.4) 1.5% 255
======== ======== ====== ==== ===
% Underwater - Fixed maturities
(less than) 20% Underwater $1,344.7 $1,324.8 $(19.9) 1.5% 253
20-50% Underwater 1.8 1.3 (0.5) 27.8% 2
(greater than) 50% Underwater -- -- -- -- --
-------- -------- ------ ---- ---
Total fixed maturities $1,346.5 $1,326.1 $(20.4) 1.5% 255
======== ======== ====== ==== ===
Investment Grade $1,220.4 $1,203.8 $(16.6) 1.4% 223
Below Investment Grade 106.5 103.0 (3.5) 3.3% 26
Not rated 19.6 19.3 (0.3) 1.5% 6
-------- -------- ------ ---- ---
Total $1,346.5 $1,326.1 $(20.4) 1.5% 255
======== ======== ====== ==== ===

12 Months or More
-----------------------------------------------------
2004 Amortized Unrealized % Below # of
(Dollar amounts in millions) cost or cost Fair value losses cost securities
- ---------------------------- ------------ ---------- ---------- ------- ----------

Description of Securities
Fixed maturities:
U.S. corporate $285.6 $267.0 $(18.6) 6.5% 29
State and municipal 0.3 0.3 -- -- 1
Non-U.S. corporate 18.0 17.3 (0.7) 3.9% 4
Asset Backed 1.6 1.6 -- -- 1
Mortgage Backed 57.6 56.1 (1.5) 2.6% 20
------ ------ ------ ---- --
Total temporarily impaired securities $363.1 $342.3 $(20.8) 5.7% 55
====== ====== ====== ==== ==
% Underwater - Fixed maturities
(less than) 20% Underwater $338.2 $323.5 $(14.7) 4.3% 51
20-50% Underwater 24.9 18.8 (6.1) 24.5% 4
(greater than) 50% Underwater -- -- -- -- --
------ ------ ------ ---- --
Total fixed maturities $363.1 $342.3 $(20.8) 5.7% 55
====== ====== ====== ==== ==
Investment Grade $220.0 $208.2 $(11.8) 5.4% 40
Below Investment Grade 143.1 134.1 (9.0) 6.3% 15
Not rated equities -- -- -- -- --
------ ------ ------ ---- --
Total $363.1 $342.3 $(20.8) 5.7% 55
====== ====== ====== ==== ==

The investment securities at December 31, 2004 in an
unrealized loss position for less than twelve months,
account for $20.4 million or 49% of the total unrealized
losses. Of the securities in this category, there was no
security with an unrealized loss in excess of $5.0
million.

The investment securities in an unrealized loss position
for twelve months or more account for $20.8 million or
51% of the total unrealized losses. There are 35 fixed
maturity securities in three industry groups that account
for $14.0 million or 67% of the unrealized losses in this
category.

Twenty-two of these 35 securities are in the finance and
insurance sector. Within this sector, no single issuer
has unrealized losses greater than $5 million. The
unrealized losses of the securities are due to a higher
interest rate environment for the quarter ended December
31, 2004.

Six of these 35 securities are in the transportation
sector and are related to the airline industry. For those
airline securities, which we have previously impaired, we
expect to recover our carrying amount based upon
underlying aircraft collateral values.

The remaining 7 of these 35 securities are in the
consumer non-cyclical sector. There is one issuer,
comprising of one security, which represents $7 million.
No other single issuer of fixed maturities in this sector
has an unrealized loss greater than $5 million.

Separate Account Assets and Liabilities. Separate
account assets and liabilities represent funds held for
the exclusive benefit of variable annuity and variable
life contract holders. As of December 31, 2004, we held
$8,636.7 million of separate account assets. The increase
of $601.8 million, or 7.5%, from $8,034.9 million at
December 31, 2003 was related primarily to the favorable
market performance of the underlying securities, which
was partially offset by death, surrender and other
benefits outpacing new deposits.

Future Annuity and Contract Benefits. Future annuity and
contract benefits decreased $636.6 million, to $9,604.6
million at December 31, 2004 from $10,241.2 million at
December 31, 2003. The decrease is primarily attributable
to a decline in the institutional stable value product
liability, which resulted from maturities outpacing
sales. Also contributing to the decline in future annuity
and contract benefits was the recapture of previously
assumed structured settlement liabilities resulting from
the reinsurance transactions with UFLIC.

STATEMENT OF CHANGES Stockholder's interest decreased $232.0 million to
IN STOCKHOLDER'S $1,590.0 million at December 31, 2004 from $1,822.0
INTEREST million at December 31, 2003. The decrease was primarily
attributable to dividends paid in the amount of $419.1
million and a decline in net unrealized gains on invested
securities of $15.7 million, which was partially offset
by current year net income of $199.4 million.

INTEREST RATE Fluctuations in market interest rates may have a
MANAGEMENT significant effect on our sales of insurance and
investment products and our margins on these products.
Interest rates are highly sensitive to many factors,
including governmental monetary policies, domestic and
international economic and political conditions and other
factors beyond our control. In our Retirement Income and
Investments and Protection segments, low market interest
rates may reduce the spreads between the amounts we
credit to policyholders and contractholders and the yield
we earn on the investments that support these
obligations. In response to the unusually low interest
rates that have prevailed during the last several years,
we have reduced the guaranteed minimum crediting rates on
newly issued fixed annuity contracts and have reduced
crediting rates on in-force contracts where permitted to
do so. These actions have helped mitigate the adverse
impact of low interest rates on our spreads and
profitability on these products. A gradual increase in
interest rates generally would have a favorable effect on
the profitability of these products. However, rapidly
rising interest rates also could result in reduced
persistency in our spread-based retail products as
contractholders shift assets into higher yielding
investments.

We use derivative financial instruments to mitigate or
eliminate certain financial and market risks, including
those related to changes in interest rates. As a matter
of policy, we do not engage in derivative market-making,
speculative derivative trading, or other speculative
derivative activities. More detailed information
regarding these financial instruments, as well as the
strategies and policies for their use, is contained in
Notes 1 and 10 to the Consolidated Financial Statements.

We have managed our exposure to changes in interest
rates, in part, by monitoring and managing the duration
of our investment portfolio assets with the duration of
our liabilities. Established practices require that
derivative financial instruments relate to specific asset
or liability transactions or to currency exposure, if
any. Market fluctuations could negatively affect the
business. Significant changes in equity market
performance expose insurance companies to the risk of not
earning anticipated policy fees from variable products,
accelerating amortization of deferred acquisition costs,
or requiring additional liabilities for death benefits
exceeding the policyholder account balance. If the equity
markets fail to improve, we may recognize additional
amortization of deferred acquisition costs. Market
fluctuations may also increase trade volumes that could
expose insurers to gains or We are exposed to prepayment
risk in certain of our business activities, such as in
our investment portfolio and annuities activities. We use
swaptions to mitigate prepayment risk. These swaptions
are governed by the credit risk policies described below
and are transacted in either exchange-traded or
over-the-counter markets.

Counterparty credit risk is managed on an individual
counterparty basis, which means that gains and losses are
netted for each counterparty to determine the amount at
risk. When a counterparty exceeds credit exposure limits
in terms of amounts owed to us, typically as a result of
changes in market conditions, no additional transactions
are executed until the exposure with that counterparty is
reduced to an amount that is within the established
limit. All swaps are executed under master swap
agreements containing mutual credit downgrade provisions
that provide the ability to require assignment or
termination in the event either party is downgraded below
A3 or A-.

EQUITY MARKETS Equity market volatility may discourage purchases of
separate account products, such as variable annuities and
variable life, that have returns linked to the
performance of the equity markets and may cause some
existing customers to withdraw cash values or reduce
investments in those products. Equity market volatility
also affects the value of the assets in our separate
accounts, which, in turn, affects our earnings from
fee-based products. After several years of declines,
equity markets increased in 2003 and 2004, and we expect
that increases or relative stability in equity markets
could have a favorable impact on our sales of variable
products and our earnings from those

products. The potential impact of volatile equity markets
on our results has been significantly reduced as a result
of our reinsurance arrangements with UFLIC, pursuant to
which we reinsured, effective as of January 1, 2004,
substantially all of our in-force blocks of variable
annuities. We retain variable annuities sold after
January 1, 2004 for our own account, subject to
third-party reinsurance transactions in the ordinary
course of business, and therefore we bear the risk of any
adverse impact of future equity market fluctuations on
those annuities.

LIQUIDITY The principal liquidity requirements for our insurance
operations are our contractual obligations to contract
holders and annuitants. Contractual obligations include
payments of claims under outstanding insurance policies
and annuities, contract withdrawals and surrender
benefits. The primary sources for meeting these
contractual obligations are investment activities and
cash generated from operating activities. We maintain a
committed credit line with an indirect parent, GNA, of
$500 million to provide liquidity to meet normal
variation in cash requirements.

For the years ended December 31, 2004, 2003 and 2002 cash
flows from operating activities were $447.7 million,
$527.6 million and $375.3 million, respectively, and cash
flows from financing activities were $(767.1) million,
$(959.2) million and $(659.5) million, respectively.
These amounts include net cash from financing activities
relating to investment contract issuances and redemptions
of $(731.6) million, $(937.8) million and $(617.5)
million for the years ended December 31, 2004, 2003 and
2002, respectively.

As an insurance business, cash flows from operating and
financing activities, as premiums and deposits collected
from our insurance and investment products net of
redemptions and benefits paid, are invested if positive
and investments are redeemed if negative. Net cash from
investing activities was $333.4 million, $444.0 million
and $284.2 million for the year ended December 31, 2004,
2003 and 2002, respectively. The decrease in cash from
investing activities for the year ended December 31, 2004
was primarily the result of a decrease of cash used in
financing activities.

As of December 31, 2004, we had approximately $1,108.0
million of renewable floating rate funding agreements,
which are deposit-type products that generally credit
interest on deposits at a floating rate tied to an
external market index. Purchasers of renewable funding
agreements include money market funds, bank common trust
funds and other short-term investors. Some of our funding
agreements contain "put" provisions, through which the
contractholder has an option to terminate the funding
agreement for any reason after giving notice within the
contract's specified notice period, which is generally 90
days. Of the $1,108.0 million aggregate amount

outstanding as of December 31, 2004, $458.0 million had
put option features, none of which were less than 90
days. GE Capital has guaranteed certain obligations under
floating-rate funding agreements with a final maturity on
or before June 30, 2005. This guarantee covers our
obligations to contractholders and requires us to
reimburse GE Capital for any payments made to
contractholders under the guarantee. As of December 31,
2004, GE Capital's guarantee covered $858.0 million of
outstanding floating-rate funding agreements.

The nature and quality of the various types of
investments purchased by a life insurance company must
comply with the statutes and regulations imposed by the
various jurisdictions in which those entities are
incorporated. Following is a breakdown of the credit
quality of our fixed maturity portfolio at December 31,
2004.

BBB/Baa or above 91.2%
BB/Ba and below 8.6%
Not Rated 0.2%
-----
Total portfolio 100.0%
=====
-----------------------

Certain of our products contain provisions for charges
for surrender of, or withdrawals from, the policy. At
December 31, 2004 and December 31, 2003, approximately
64.8% and 67.2%, respectively, of our annuity contracts
were subject to surrender charges or contained
non-surrender provisions.

As of December 31, 2004, we had approximately $2,109.7
million of guaranteed investment contracts ("GICs").
Substantially all of these contracts allow for the
payment of benefits at contract value to ERISA plan
participants prior to contract maturity in the event of
death, disability, retirement or change in investment
election. We carefully underwrite these risks before
issuing a GIC to a plan and historically have been able
to effectively manage our exposure to these benefit
payments. Our GICs typically credit interest at a fixed
interest rate and have a fixed-maturity generally ranging
from two to six years. Contracts provide for early
termination by the contractholder but subject to an
adjustment to the contract value for changes in the level
of interest rates from the time the GIC was issued plus
an early withdrawal penalty.

Insurance companies are restricted by states as to the
aggregate amount of dividends they may pay to their
parent in any consecutive twelve-month period without
regulatory approval. Dividends in excess of the
prescribed limits or the earned surplus are deemed
extraordinary and require formal state insurance
department approval. We are able to pay $67.2 million in
dividends in 2005 without obtaining regulatory approval.

OFF-BALANCE SHEET We have used off-balance sheet securitization
TRANSACTIONS transactions to mitigate and diversify our asset risk
position and to adjust the asset class mix in our
portfolio by reinvesting securitization proceeds in
accordance with our approved investment guidelines. We
have not used securitization transactions to provide us
with additional liquidity and we do not anticipate using
securitization transactions for that purpose in the
future. The transactions involved securitizations of some
of our receivables and investments that were secured by
commercial mortgage loans, fixed maturities or other
receivables, consisting primarily of policy loans. Total
securitized assets remaining as of December 31, 2004 and
2003, were $297.9 million and $349.8 million respectively.

There were no securitization transactions in 2004 and
2003. Securitization transactions resulted in net gains,
before taxes, of approximately $5.8 million for the year
ended December 31, 2002.

We have arranged for the assets that we have transferred
in securitization transactions to be serviced by us
directly, or pursuant to arrangements with GEAM and with
General Motors Acceptance Corporation. Servicing
activities include ongoing review, credit monitoring,
reporting and collection activities.

Support. Financial support is provided under credit
support agreements, in which our direct parent, Genworth
Financial, provides limited recourse for a maximum of
$119 million of credit losses in such entities. We do not
provide any such recourse. Assets with credit support are
funded by demand notes that are further enhanced with
support provided by GE Capital.

Under FIN 46, Consolidation of Variable Interest
Entities, new consolidation criteria is applied to
certain SPE's, which are defined as "Variable Interest
Entities". Additional information about entities that
fall within the scope of FIN 46 is provided in Note 11.

Critical Accounting Policies

The accounting policies discussed in this section are
those that we consider to be particularly critical to an
understanding of our financial statements because their
application places the most significant demands on our
ability to judge the effect of inherently uncertain
matters on our financial results. For all of these
policies, we caution that future events rarely develop
exactly as forecast, and our management's best estimates
may require adjustment.

Insurance liabilities and reserves. We calculate and
maintain reserves for the estimated future payment of
claims to our policyholders and contractholders based on
actuarial assumptions and in accordance with industry
practice and U.S. GAAP. Many factors can affect these
reserves, including economic and social conditions,
inflation, healthcare costs, changes in doctrines of
legal liability and damage awards in litigation.
Therefore, the reserves we establish are necessarily
based on extensive estimates, assumptions and our
analysis of historical experience. Our results depend
significantly upon the extent to which our actual claims
experience is consistent with the assumptions we used in
determining our reserves and pricing our products. Our
reserve assumptions and estimates require significant
judgment and, therefore, are inherently uncertain. We
cannot determine with precision that the ultimate amounts
that we will pay for actual claims or the timing of those
payments will be consistent with our reserve assumptions.

Insurance reserves differ for long- and short-duration
insurance policies and annuity contracts. Measurement of
long-duration insurance reserves (such as guaranteed
renewable term life, whole life and long-term care
insurance policies) is based on approved actuarial
methods, but necessarily includes assumptions about
expenses, mortality, morbidity, lapse rates and future
yield on related investments. Short-duration contracts
are accounted for based on actuarial estimates of the
amount of loss inherent in that period's claims,
including losses incurred for which claims have not been
reported. Short-duration contract loss estimates rely on
actuarial observations of ultimate loss experience for
similar historical events.

Deferred acquisition costs. Deferred acquisition costs
("DAC") represents costs which vary with and are
primarily related to the sale and issuance of our
insurance policies and investment contracts that are
deferred and amortized over the estimated life of the
related insurance policies. These costs include
commissions in excess of ultimate renewal commissions,
solicitation and printing costs, sales material and some
support costs, such as underwriting and contract and
policy issuance expenses. DAC is subsequently amortized
to income, over the lives of the underlying contracts, in
relation to the anticipated recognition of premiums or
gross profits.

The amortization of DAC for traditional long-duration
insurance products, including guaranteed renewable term
life, is determined as a level proportion of premium
based on commonly accepted actuarial methods and
reasonable assumptions established when the contract or
policy is issued about mortality, morbidity, lapse rates,
expenses, and future yield on related investments.
Amortization for annuity contracts without significant
mortality risk and investment and universal life products
is based on estimated gross profits and is adjusted as
those estimates are revised. The DAC amortization
methodology for our variable products (variable annuities
and variable universal life insurance) includes a
long-term equity market average appreciation assumption
of 8.5%. When actual returns vary from the expected 8.5%,
we assume a reversion to this mean over a 3- to 7-year
period, subject to the imposition of ceilings and floors.
The assumed returns over this reversion period are
limited to the 85th percentile of historical market
performance.

We regularly review all of these assumptions and
periodically test DAC for recoverability. For deposit
products, if the current present value of estimated
future gross profits is less than the unamortized DAC for
a line of business, a charge to income is recorded for
additional DAC amortization. For other products, if the
benefit reserves plus anticipated future premiums and
interest earnings for a line of business are less than
the current estimate of future benefits and expenses
(including any unamortized DAC), a charge to income is
recorded for additional DAC amortization or for increased
benefit reserves.

Unfavorable experience with regard to expected expenses,
investment returns, mortality, morbidity, withdrawals or
lapses, may cause us to increase the amortization of DAC
or to record a charge to increase benefit reserves. In
recent years, the portion of estimated product margins
required to amortize DAC and has increased in most lines
of our business, with the most significant impact on
investment products, primarily as the result of lower
investment returns.

Present value of future profits. In conjunction with the
acquisition of a block of life insurance policies or
investment contracts, a portion of the purchase price is
assigned to the right to receive future gross profits
arising from existing insurance and investment contracts.
This intangible asset, called the present value of future
profits ("PVFP") represents the actuarially estimated
present value of future cash flows from the acquired
policies. PVFP is amortized, net of accreted interest, in
a manner similar to the amortization of DAC. We regularly
review our assumptions and periodically test PVFP for
recoverability in a manner similar to our treatment of
DAC.

Goodwill impairment. Goodwill resulting from
acquisitions is tested for impairment at least annually
using a fair value approach, which requires the use of
estimates and

judgment. To the extent the carrying amount of goodwill
exceeds its fair value, an impairment charge to income
would be recorded.

Valuation of investment securities. We obtain values for
actively traded securities from external pricing
services. For infrequently traded securities, we obtain
quotes from brokers or we estimate values using
internally developed pricing models. These models are
based upon common valuation techniques and require us to
make assumptions regarding credit quality, liquidity and
other factors that affect estimated values.

Impairment of investment securities. We regularly review
investment securities for impairment in accordance with
our impairment policy, which includes both quantitative
and qualitative criteria. Our quantitative criteria
include length of time and amount that each security
position is in an unrealized loss position, and for fixed
maturities, whether the issuer is in compliance with
terms and covenants of the security. Our qualitative
criteria include the financial strength and specific
prospects for the issuer as well as our intent to hold
the security until recovery. We actively perform
comprehensive market research, monitor market conditions
and segment our investments by credit risk in order to
minimize impairment risks.

Other significant accounting policies, not involving the
same level of measurement uncertainties as those
discussed above, are nevertheless important to an
understanding of the financial statements. Policies
related to revenue recognition, financial instruments and
consolidation policy require difficult judgments on
complex matters that are often subject to multiple
sources of authoritative guidance. Certain of these
matters are among topics currently under reexamination by
accounting standard setters and regulators. Although no
specific conclusion reached by these standard setters
appear likely to cause a material change in our
accounting policies, outcomes cannot be predicted with
confidence. Also see Note 1, Summary of Significant
Accounting Policies, which discusses accounting policies
that we must select when there are acceptable
alternatives.

NEW ACCOUNTING See Note 1 (t) to the Consolidated Financial Statements
STANDARDS for a discussion of recently issued accounting
pronouncements.

Quantitative and Qualitative Disclosures About Market Risk and Interest Rate
Management

Information about potential effects of market risk and
changes in interest rates on us are discussed in the
Interest Rate Management section of Item 7.

Experts

The consolidated financial statements and schedule of GE
Life and Annuity Assurance Company and subsidiary (the
Company) as of December 31, 2004 and 2003, and for each
of the years in the three-year period ended December 31,
2004, have been included herein in reliance upon the
reports of KPMG LLP, independent registered public
accounting firm, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and
auditing.

The reports of KPMG LLP dated February 12, 2005 with
respect to the consolidated financial statements and
schedule of GE Life and Annuity Assurance Company and
subsidiary refer to a change in accounting for certain
nontraditional long-duration contracts and for separate
accounts in 2004 and its method of accounting for
goodwill and other intangible assets in 2002.

GE LIFE AND ANNUITY ASSURANCE COMPANY

Consolidated Financial Statements

Year ended December 31, 2004

(With Report of Independent Registered Public Accounting Firm Thereon)

GE Life and Annuity Assurance Company
Consolidated Financial Statements

Table of Contents

Page
----

Report of Independent Registered Public Accounting Firm................................. F-1
Consolidated Statements of Income....................................................... F-2
Consolidated Balance Sheets............................................................. F-3
Consolidated Statements of Stockholder's Interest....................................... F-4
Consolidated Statements of Cash Flows................................................... F-5
Notes to Consolidated Financial Statements.............................................. F-6
Report of Independent Registered Public Accounting Firm on Financial Statement Schedules F-33
Schedule III, Supplemental Insurance Information........................................ F-34

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
GE Life and Annuity Assurance Company:

We have audited the accompanying consolidated balance sheets of GE Life and
Annuity Assurance Company and subsidiary (the Company) as of December 31, 2004
and 2003, and the related consolidated statements of income, stockholder's
interest, and cash flows for each of the years in the three-year period ended
December 31, 2004. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of GE Life and
Annuity Assurance Company and subsidiary as of December 31, 2004 and 2003, and
the results of its operations and its cash flows for each of the years in the
three-year period ended December 31, 2004, in conformity with U.S. generally
accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for certain nontraditional long-duration
contracts and for separate accounts in 2004 and its method of accounting for
goodwill and other intangible assets in 2002.

/s/ KPMG LLP

Richmond, Virginia
February 12, 2005

F-1

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Consolidated Statements of Income
(Dollar amounts in millions)

Years Ended December 31,
-------------------------
2004 2003 2002
------- ------ --------

Revenues:
Net investment income..... $ 421.0 $538.0 $ 600.2
Net realized
investment gains........ 5.7 3.9 55.3
Premiums.................. 96.8 104.0 105.3
Cost of insurance......... 142.2 153.1 125.8
Variable product fees..... 9.4 106.3 113.9
Other income.............. 24.8 35.5 44.9
------- ------ --------
Total revenues........ 699.9 940.8 1,045.4
------- ------ --------
Benefits and expenses:
Interest credited......... 291.2 410.6 462.1
Benefits and other
changes in policy
reserves................ 182.8 245.7 178.2
Underwriting,
acquisition and
insurance expenses,
net of deferrals........ 63.2 149.0 99.3
Amortization of
deferred
acquisition costs
and intangibles......... 107.3 118.9 147.1
------- ------ --------
Total benefits
and expenses........ 644.5 924.2 886.7
------- ------ --------
Income before income
taxes and cumulative
effect of change in
accounting principle....... 55.4 16.6 158.7
Provision (benefit) for
income taxes............... (143.3) (3.1) 42.9
------- ------ --------
Income before cumulative
effect of change in
accounting principle....... 198.7 19.7 115.8
Cumulative effect of
change in accounting
principle, net of tax
of $0.4 million............ 0.7 -- --
------- ------ --------
Net income................... $ 199.4 $ 19.7 $ 115.8
======= ====== ========

See Notes to Consolidated Financial Statements.

F-2

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Consolidated Balance Sheets
(Dollar amounts in millions, except share amounts)

December 31,
-------------------
2004 2003
--------- ---------

Assets
Investments:
Fixed maturities
available-for-sale,
at fair value.......... $ 7,001.2 $ 9,640.7
Equity securities
available-for-sale,
at fair value..........
Common stock........... 26.8 24.7
Preferred stock,
non-redeemable........ -- 1.3
Mortgage loans, net
of valuation
allowance of $10.4
at December 31, 2004
and 2003............... 1,207.7 1,262.3
Policy loans............ 148.4 138.5
Short-term investments.. -- 99.6
Other invested assets... 466.5 162.1
--------- ---------
Total investments...... 8,850.6 11,329.2
Cash and cash
equivalents............. 26.4 12.4
Accrued investment
income.................. 81.5 127.8
Deferred acquisition
costs................... 248.1 897.0
Goodwill.................. 57.5 117.3
Intangible assets......... 120.6 144.6
Reinsurance recoverable... 2,753.8 160.7
Deferred income tax
asset................... 5.9 --
Other assets.............. 51.5 38.7
Separate account assets... 8,636.7 8,034.9
--------- ---------
Total assets........... $20,832.6 $20,862.6
========= =========
Liabilities and
Stockholder's Interest
Liabilities:
Future annuity and
contract benefits...... $ 9,604.6 $10,241.2
Liability for policy
and contract claims.... 89.4 42.6
Other policyholder
liabilities............ 235.9 147.8
Other liabilities....... 676.0 399.4
Deferred income tax
liability.............. -- 174.7
Separate account
liabilities............ 8,636.7 8,034.9
--------- ---------
Total liabilities...... 19,242.6 19,040.6
--------- ---------
Stockholder's interest:
Net unrealized
investment gains....... 72.0 87.7
Derivatives
qualifying as hedges... 3.3 0.4
--------- ---------
Accumulated non-owner
changes in
stockholder's
interest............... 75.3 88.1
Preferred stock,
Series A ($1,000 par
value, $1,000
redemption and
liquidation value,
200,000 shares
authorized, 120,000
shares issued and
outstanding)........... 120.0 120.0
Common stock ($1,000
par value, 50,000
shares authorized,
25,651 shares issued
and outstanding)....... 25.6 25.6
Additional paid-in
capital................ 1,061.1 1,060.6
Retained earnings....... 308.0 527.7
--------- ---------
Total stockholder's
interest.............. 1,590.0 1,822.0
--------- ---------
Total liabilities
and stockholder's
interest.............. $20,832.6 $20,862.6
========= =========

See Notes to Consolidated Financial Statements.

F-3

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Consolidated Statements of Stockholder's Interest
(Dollar amounts in millions, except share amounts)

Accumulated
Preferred Stock Common Stock Additional Non-owner
-------------- ------------- Paid-In Changes In Retained
Share Amount Share Amount Capital Equity Earnings
------- ------ ------ ------ ---------- ----------- --------

Balances at January 1, 2002........................................ 120,000 $120.0 25,651 $25.6 $1,050.7 $(25.5) $ 411.4
Changes other than transactions with stockholders:
Net income...................................................... -- -- -- -- -- -- 115.8
Net unrealized gains on investment securities (a)............... -- -- -- -- -- 5.4 --
Derivatives qualifying as hedges (b)............................ -- -- -- -- -- 10.4 --

Total changes other than transactions with stockholders.....

Cash dividends declared and paid................................... -- -- -- -- -- -- (9.6)
------- ------ ------ ----- -------- ------ -------
Balances at December 31, 2002...................................... 120,000 $120.0 25,651 $25.6 $1,050.7 $ (9.7) $ 517.6
Changes other than transactions with stockholders:
Net income...................................................... -- -- -- -- -- -- 19.7
Net unrealized gains on investment securities (a)............... -- -- -- -- -- 99.7 --
Derivatives qualifying as hedges (b)............................ -- -- -- -- -- (1.9) --

Total changes other than transactions with stockholders.....

Contributed capital................................................ -- -- -- -- 9.9 -- --
Cash dividends declared and paid................................... -- -- -- -- -- -- (9.6)
------- ------ ------ ----- -------- ------ -------
Balances at December 31, 2003...................................... 120,000 $120.0 25,651 $25.6 $1,060.6 $ 88.1 $ 527.7

Changes other than transactions with stockholder:
Net income...................................................... -- -- -- -- -- -- 199.4
Net unrealized gains on investment securities (a)............... -- -- -- -- -- (15.7) --
Derivatives qualifying as hedges (b)............................ -- -- -- -- -- 2.9 --

Total changes other than transactions with stockholders.....
Contributed capital................................................ -- -- -- -- 0.5 -- --
Cash dividends declared and paid................................... -- -- -- -- -- -- (40.0)
Non-cash dividend declared and paid................................ -- -- -- -- -- -- (379.1)
------- ------ ------ ----- -------- ------ -------
Balances at December 31, 2004...................................... 120,000 $120.0 25,651 $25.6 $1,061.1 $ 75.3 $ 308.0
======= ====== ====== ===== ======== ====== =======

Total
Stockholder's
Interest
-------------

Balances at January 1, 2002........................................ $1,582.2
Changes other than transactions with stockholders:
Net income...................................................... 115.8
Net unrealized gains on investment securities (a)............... 5.4
Derivatives qualifying as hedges (b)............................ 10.4
--------
Total changes other than transactions with stockholders..... 131.6
--------
Cash dividends declared and paid................................... (9.6)
--------
Balances at December 31, 2002...................................... $1,704.2
Changes other than transactions with stockholders:
Net income...................................................... 19.7
Net unrealized gains on investment securities (a)............... 99.7
Derivatives qualifying as hedges (b)............................ (1.9)
--------
Total changes other than transactions with stockholders..... 117.5
--------
Contributed capital................................................ 9.9
Cash dividends declared and paid................................... (9.6)
--------
Balances at December 31, 2003...................................... $1,822.0
--------
Changes other than transactions with stockholder:
Net income...................................................... 199.4
Net unrealized gains on investment securities (a)............... (15.7)
Derivatives qualifying as hedges (b)............................ 2.9
--------
Total changes other than transactions with stockholders..... 186.6
Contributed capital................................................ 0.5
Cash dividends declared and paid................................... (40.0)
Non-cash dividend declared and paid................................ (379.1)
--------
Balances at December 31, 2004...................................... $1,590.0
========

- --------
(a)Presented net of deferred taxes of $8.6, $(55.9) and $(1.8) in 2004, 2003
and 2002, respectively.
(b)Presented net of deferred taxes of $(1.6), $1.0 and $(5.9) in 2004, 2003 and
2002, respectively.

See Notes to Consolidated Financial Statements.

F-4

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Consolidated Statements of Cash Flows
(Dollar amounts in millions)

Years Ended December 31,
-------------------------------
2004 2003 2002
--------- --------- ---------

Cash flows from
operating activities:
Net income................ $ 199.4 $ 19.7 $ 115.8
--------- --------- ---------
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Cumulative effect of
change in accounting
principle, net of tax.. (0.7) -- --
Change in future
policy benefits........ 341.1 407.5 413.2
Net realized
investments gains...... (5.7) (3.9) (55.3)
Amortization of
investment premiums
and discounts.......... 28.3 46.5 29.9
Acquisition costs
deferred............... (89.1) (167.7) (116.3)
Amortization of
deferred acquisition
costs and intangibles.. 107.3 118.9 147.1
Deferred income taxes... (174.0) 18.3 21.8
Change in certain
assets:
Decrease (increase)
in:
Accrued investment
income................ 26.6 32.6 48.0
Other, net............. (21.1) (39.8) 6.6
Change in certain
liabilities:
Increase (decrease)
in:
Policy and contract
claims................ 64.2 (183.9) 27.9
Other policyholder
liabilities........... 88.6 (59.6) 117.0
Other liabilities...... (117.2) 339.0 (380.4)
--------- --------- ---------
Net cash from
operating activities... 447.7 527.6 375.3
--------- --------- ---------
Cash flows from
investing activities:
Short-term investment
activity, net........... 99.6 178.4 (237.5)
Proceeds from sales and
maturities of
investment securities
and other invested
assets.................. 1,741.2 4,328.8 6,087.4
Principal collected on
mortgage and policy
loans................... 217.5 268.6 151.2
Purchases of investment
securities and other
invested assets......... (1,498.4) (3,819.5) (5,464.1)
Mortgage loan
originations and
increase in policy
loans................... (226.5) (512.3) (252.8)
--------- --------- ---------
Net cash from
investing
activities.......... 333.4 444.0 284.2
--------- --------- ---------
Cash flows from
financing activities:
Proceeds from issuance
of investment
contracts............... 1,293.0 3,107.0 3,495.1
Redemption and benefit
payments on
investment contracts.... (2,024.6) (4,044.8) (4,112.6)
Proceeds from
short-term borrowings... 251.4 346.5 388.4
Payments on short-term
borrowings.............. (246.9) (358.3) (420.8)
Cash dividends to
stockholders............ (40.0) (9.6) (9.6)
--------- --------- ---------
Net cash from
financing
activities.......... (767.1) (959.2) (659.5)
--------- --------- ---------
Net change in cash
and cash
equivalents......... 14.0 12.4 --
Cash and cash
equivalents at
beginning of year......... 12.4 -- --
--------- --------- ---------
Cash and cash
equivalents at end of
year...................... $ 26.4 $ 12.4 $ --
========= ========= =========

See Notes to Consolidated Financial Statements.

F-5

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements

Years Ended December 31, 2004, 2003 and 2002
(Dollar amounts in millions)

(1)Summary of Significant Accounting Policies

(a) Principles of Consolidation

The accompanying consolidated financial statements include the historical
operations and accounts of GE Life and Annuity Assurance Company ("GELAAC") and
its subsidiary, Assigned Settlement, Inc. All significant intercompany accounts
and transactions have been eliminated in consolidation.

GE Life and Annuity Assurance Company (the "Company", "we", "us", or "our"
unless context otherwise requires) is a stock life insurance company operating
under a charter granted by the Commonwealth of Virginia on March 21, 1871 as
The Life Insurance Company of Virginia. General Electric Capital Corporation
("GE Capital") acquired us from Aon Corporation on April 1, 1996. GE Capital
subsequently contributed us to its wholly owned subsidiary, GE Financial
Assurance Holdings, Inc., ("GEFAHI") and ultimately the majority of the
outstanding common stock to General Electric Capital Assurance Company
("GECA"). As part of an internal reorganization of GE Financial Assurance's
insurance subsidiaries, the Harvest Life Insurance Company ("Harvest") merged
into us on January 1, 1999. At this time we were renamed GE Life and Annuity
Assurance Company. Harvest's former parent, Federal Home Life Insurance Company
("Federal"), received our common stock in exchange for its interest in Harvest.

On May 24, 2004, GEFAHI transferred substantially all of its assets to
Genworth Financial, Inc. ("Genworth"), including all of the outstanding capital
stock of GNA Corporation ("GNA"), our indirect parent and 800 shares of our
common stock that GEFAHI had held directly. As a result, we became an indirect,
wholly-owned subsidiary of Genworth. On May 25, 2004, Genworth's Class A common
stock began trading on The New York Stock Exchange. Approximately 30% of
Genworth's common stock is now owned by public stockholders. GEFAHI continues
to own approximately 70% of Genworth's common stock.

On May 31, 2004, (1) Genworth contributed to GNA and GNA in turn contributed
to GECA 800 shares of our common stock and (2) Federal paid a dividend to GECA
consisting of 2,378 shares of our common stock. As a result of the foregoing
contribution and dividend, we became a direct, wholly-owned subsidiary of GECA
while remaining an indirect, wholly-owned subsidiary of Genworth.

(b) Basis of Presentation

These consolidated financial statements have been prepared on the basis of
accounting principles generally accepted in the United States of America ("U.S.
GAAP"). Preparing financial statements in conformity with U.S. GAAP requires us
to make estimates and assumptions that affect reported amounts and related
disclosures. Actual results could differ from those estimates. Certain prior
year amounts have been reclassified to conform to the current year presentation.

Our product offerings are divided along two major segments of consumer
needs: (i) Retirement Income and Investments and (ii) Protection.

Retirement Income and Investments deferred annuities (variable and fixed)
and variable life insurance products are investment vehicles and insurance
contracts intended for contractholders who want to accumulate tax-deferred
assets for retirement, desire a tax-efficient source of income and seek to
protect against outliving their assets. Our guaranteed investment contracts
("GICs") and funding agreements are investment contracts sold to qualified
institutional buyers.

Protection products are intended to provide protection against financial
hardship primarily after the death of an insured and to protect income and
assets from other adverse economic impacts of significant health care costs.
Our principal product lines under the Protection segment are universal life
insurance, interest-sensitive whole life) and Medicare supplement insurance.

F-6

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

We distribute our products through three primary channels: financial
intermediaries (banks, securities brokerage firms and independent
broker/dealers), independent producers (brokerage general agencies, affluent
market producer groups and specialized brokers) and dedicated sales specialists
(affiliated networks of both accountants and personal financial advisors).

(d) Premiums

For traditional long-duration insurance contracts, we report premiums as
earned when due.

For short-duration insurance contracts, we report premiums as revenue over
the terms of the related insurance policies on a pro-rata basis or in
proportion to expected claims.

Premiums received under annuity contracts without significant mortality risk
and premiums received on investment and universal life products are not
reported as revenues but rather as deposits and are included in liabilities for
future annuity and contract benefits.

(e) Net Investment Income and Net Realized Investment Gains and Losses

Investment income is recorded when earned. Realized investment gains and
losses are calculated on the basis of specific identification.

Investment income on mortgage-backed and asset-backed securities is
initially based upon yield, cash flow, and prepayment assumptions at the date
of purchase. Subsequent revisions in those assumptions are recorded using the
retrospective or prospective method. Under the retrospective method, used for
mortgage-backed and asset-backed securities of high credit quality (ratings
equal to or greater than AA or that are U.S. Agency backed) which cannot be
contractually prepaid, amortized cost of the security is adjusted to the amount
that would have existed had the revised assumptions been in place at the date
of purchase. The adjustments to amortized cost are recorded as a charge or
credit to net investment income. Under the prospective method, which is used
for all other mortgage-backed and asset-backed securities, future cash flows
are estimated and interest income is recognized going forward using the new
internal rate of return. As of December 31, 2004, all our mortgage-backed and
asset-backed securities that have had subsequent revisions in yield, cash flow
or prepayment assumptions were accounted for under the retrospective method.

(f) Policy Fees and Other Income

Policy fees and other income consists primarily of insurance charges
assessed on universal life contracts, fees assessed against policyholder
account values and surrender fee income. Charges to policyholder accounts for
universal life cost of insurance is recognized as revenue when due. Variable
product fees are charged to variable annuity and variable life policyholders
based upon the daily net assets of the policyholder's account values and are
recognized as revenue when charged. Policy surrender fees are recognized as
income when the policy is surrendered.

(g) Cash and Cash Equivalents

Certificates, money market funds and other time deposits with original
maturities of less than 90 days are considered cash equivalents in the
Consolidated Balance Sheets and Consolidated Statements of Cash Flows. Items
with maturities greater than 90 days but less than a year are included in
short-term investments.

(h) Investment Securities

We have designated all of our investment securities as available-for-sale
and report them in our Consolidated Balance Sheets at fair value. We obtain
values for actively traded securities from external pricing services. For
infrequently traded securities, we obtain quotes from brokers, or we estimate
values using internally developed pricing models. These models are

F-7

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

based upon common valuation techniques and require us to make assumptions
regarding credit quality, liquidity and other factors that affect estimated
values. Changes in the fair value of available-for-sale investments, net of the
effect on deferred acquisition costs ("DAC"), present value of future profits
("PVFP") and deferred income taxes, are reflected as unrealized investment
gains or losses in a separate component of accumulated nonowner changes in
stockholder's interest and accordingly, have no effect on net income.

We regularly review investment securities for impairment in accordance with
our policy, which includes both quantitative and qualitative criteria.
Quantitative criteria include length of time and amount that each security
position is in an unrealized loss position, and for fixed maturities, whether
the issuer is in compliance with terms and covenants of the security. Our
qualitative criteria include the financial strength and specific prospects for
the issuer as well as our intent to hold the security until recovery. Our
impairment reviews involve our finance, risk and asset management teams as well
as the portfolio management and research capabilities of GE Asset Management,
Inc. ("GEAM") and other third party asset managers, as appropriate. We actively
perform comprehensive market research, monitor market conditions and segment
our investments by credit risk in order to minimize impairment risks. The risks
inherent in reviewing the impairment of any investment security include the
risk that market results may differ from expectations; facts and circumstances
may change in the future and differ from estimates and assumptions; or we may
later decide to sell an investment security before it recovers in value as a
result of changed circumstances. If we change our estimate to conclude that a
decline in the value of an investment security is other than temporary, we will
reflect a charge for the impairment in the period our estimate changes.

(i) Securities Lending Activity

We engage in certain securities lending transactions, which require the
borrower to provide collateral, primarily consisting of cash and government
securities, on a daily basis, in amounts equal to or exceeding 102% of the fair
value of the applicable securities loaned. We maintain effective control over
all loaned securities and therefore, continue to report such securities as
fixed maturities in the Consolidated Balance Sheets.

Cash collateral received on securities lending transactions is reflected in
other invested assets with an offsetting liability recognized in other
liabilities for the obligation to return the collateral. Non-cash collateral,
such as a security received by us, is not reflected in our assets in the
Consolidated Balance Sheets, as we have not or repledged or sold the
collateral. The fair value of collateral held and included in other invested
assets was $406.9 million and $102.7 million at December 31, 2004 and 2003,
respectively. We had non-cash collateral of $23.8 million and $0 at December
31, 2004 and 2003, respectively.

(j) Mortgage and Policy Loans

Mortgage and policy loans are stated at their unpaid principal balance.
Mortgage loans are stated net of an allowance for estimated uncollectible
amounts. The allowance for losses is determined primarily on the basis of
management's best estimate of probable losses, including specific allowances
for known troubled loans, if any.

(k) Short-term Investments

Short-term investments are stated at amortized cost, which approximates fair
value. Equity securities (including seed money for new mutual fund portfolios)
are stated at fair value. Investments in limited partnerships are generally
accounted for under the equity method of accounting. Real estate is included in
other invested assets and is stated, generally, at cost less accumulated
depreciation. Other long-term investments are stated generally at amortized
cost.

(l) Deferred Acquisition Costs

Acquisition costs include costs which vary with and are primarily related to
the acquisition of insurance and investment contracts. Such costs are deferred
and amortized as follows:

F-8

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Long-Duration Contracts -- Acquisition costs include commissions in excess
of ultimate renewal commissions, solicitation and printing costs, sales
material and some support costs, such as underwriting and contract and policy
issuance expenses. Amortization for traditional long-duration insurance
products is determined as a level proportion of premium based on commonly
accepted actuarial methods and reasonable assumptions regarding mortality,
morbidity, lapse rates, expenses and future yield on related investments
established when the contract or policy is issued. Amortization for annuity
contracts without significant mortality risk and investment and universal life
products is based on estimated gross profits and is adjusted as those estimates
are revised.

Short-Duration Contracts -- Acquisition costs consist primarily of
commissions and premium taxes and are amortized ratably over the terms of the
underlying policies.

We regularly review all of these assumptions and periodically test DAC for
recoverability. For deposit products, if the current present value of estimated
future gross profits is less than the unamortized DAC for a line of business, a
charge to income is recorded for additional DAC amortization. For other
products, if the benefit reserve plus anticipated future premiums and interest
earnings for a line of business are less than the current estimate of future
benefits and expenses (including any unamortized DAC), a charge to income is
recorded for additional DAC amortization or for increased benefit reserves.

(m) Intangible Assets

Present Value of Future Profits -- In conjunction with the acquisition of a
block of insurance policies or investment contracts, a portion of the purchase
price is assigned to the right to receive future gross profits arising from
existing insurance and investment contracts. This intangible asset, called
PVFP, represents the actuarially estimated present value of future cash flows
from the acquired policies. PVFP is amortized, net of accreted interest, in a
manner similar to the amortization of DAC.

We regularly review all of these assumptions and periodically test PVFP for
recoverability. For deposit products, if the current present value of estimated
future gross profits is less than the unamortized PVFP for a line of business,
a charge to income is recorded for additional PVFP amortization. For other
products, if the benefit reserve plus anticipated future premiums and interest
earnings for a line of business are less than the current estimate of future
benefits and expenses (including any unamortized PVFP), a charge to income is
recorded for additional PVFP amortization or for increased benefit reserves.

Deferred Sales Inducements to Contractholders -- We defer sales inducements
to contractholders for features on variable annuities that entitle the
contractholder to an incremental amount to be credited to the account value
upon making a deposit. Our sales inducements to contractholders deferred prior
to the adoption of American Institute of Certified Public Accountants ("AICPA")
Statement of Position 03-1 ("SOP 03-1"), Accounting and Reporting by Insurance
Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate
Accounts, which we included in unamortized deferred acquisition costs, were
reinsured effective January 1, 2004.

Other Intangible Assets -- We amortize the costs of other intangibles over
their estimated useful lives unless such lives are deemed indefinite.
Amortizable intangible assets are tested for impairment at least annually based
on undiscounted cash flows, which requires the use of estimates and judgment,
and, if impaired, written down to fair value based on either discounted cash
flows or appraised values. Intangible assets with indefinite lives are tested
at least annually for impairment and written down to fair value as required.

Software -- Purchased software and certain application development costs
related to internally developed software are capitalized, above de minimus
thresholds. When the software is ready for its intended use, the amounts
capitalized are amortized over the expected useful life, not to exceed 5 years.

F-9

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

(n) Goodwill

Goodwill is not amortized but is tested for impairment at least annually
using a fair value approach, which requires the use of estimates and judgment,
at the "reporting unit" level. A reporting unit is the operating segment, or a
business one level below that operating segment (the "component" level) if
discrete financial information is prepared and regularly reviewed by management
at the component level. We recognize an impairment charge for any amount by
which the carrying amount of a reporting unit's goodwill exceeds its fair
value. We use discounted cash flows to establish fair values. When available
and as appropriate, we use comparative market multiples to corroborate
discounted cash flow results. When a business within a reporting unit is
disposed of, goodwill is allocated to the business using the relative fair
value methodology to measure the gain or loss on disposal.

(o) Reinsurance

Premium revenue, benefits, underwriting, acquisition and insurance expenses
are reported net of the amounts relating to reinsurance ceded to other
companies. Amounts due from reinsurers for incurred and estimated future claims
are reflected in the reinsurance recoverable asset. The cost of reinsurance is
accounted for over the terms of the related treaties using assumptions
consistent with those used to account for the underlying reinsured policies.

(p) Separate Accounts

The separate account assets represent funds for which the investment income
and investment gains and losses accrue directly to the variable annuity
contract holders and variable life policyholders. We assess mortality risk fees
and administration charges on the assets in the separate account. The separate
account assets are carried at fair value and are at least equal to the
liabilities that represent the policyholders' equity in those assets.

(q) Future Annuity and Contract Benefits

Future annuity and contract benefits consist of the liability for investment
contracts, insurance contracts and accident and health contracts. Investment
contract liabilities are generally equal to the policyholder's current account
value. The liability for life insurance and accident and health contracts is
calculated based upon actuarial assumptions as to mortality, morbidity,
interest, expense and withdrawals, with experience adjustments for adverse
deviation where appropriate.

(r) Liability for Policy and Contract Claims

The liability for policy and contract claims represents the amount needed to
provide for the estimated ultimate cost of settling claims relating to insured
events that have occurred on or before the end of the respective reporting
period. The estimated liability includes requirements for future payments of
(a) claims that have been reported to the insurer, (b) claims related to
insured events that have occurred but that have not been reported to the
insurer as of the date the liability is estimated, and (c) claim adjustment
expenses. Claim adjustment expenses include costs incurred in the claim
settlement process such as legal fees and costs to record, process, and adjust
claims.

Management considers the liability for policy and contract claims provided
to be satisfactory to cover the losses that have occurred. Management monitors
actual experience, and where circumstances warrant, will revise its
assumptions. The methods of determining such estimates and establishing the
reserves are reviewed continuously and any adjustments are reflected in
operations in the period in which they become known. Future developments may
result in losses and loss expenses greater or less than the liability for
policy and contract claims provided.

(s) Income Taxes

For periods prior to 2004, we filed a consolidated life insurance federal
income tax return with our parent, GECA, and its other life insurance
affiliates. We were subject to a tax-sharing agreement, as approved by state
insurance regulators,

F-10

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

which allocated taxes on a separate company basis but provided benefit for
current utilization of losses and credits. Intercompany balances were settled
at least annually.

For the period beginning January 1, 2004, and ending on the date of the
transfer of our outstanding capital stock from GEFAHI to Genworth, we will be
included in the consolidated federal income tax return of General Electric
Corporation ("GE"). During this period, we will be subject to a tax-sharing
arrangement that allocates tax on a separate company basis, but provides
benefit for current utilization of losses and credits. Intercompany balances
will be settled at least annually.

Subsequent to the transfer of our outstanding capital stock from GEFAHI to
Genworth, we will file a consolidated life insurance federal income tax return
with our parent, GECA, and its other life insurance affiliates. We will be
subject to a separate tax-sharing agreement, as approved by state insurance
regulators, which will allocate taxes on a separate company basis but will
provide benefit for current utilization of losses and credits. Intercompany
balances will be settled at least annually.

Deferred federal taxes are provided for temporary differences between the
carrying amounts of assets and liabilities and their tax bases and are stated
at the enacted tax rates expected to be in effect when taxes are actually paid
or recovered.

(t) Accounting Changes

On January 1, 2004 we adopted AICPA Statement of Position 03-1, Accounting
and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration
Contracts and for Separate Accounts. SOP 03-1 provides guidance on separate
account presentation and valuation, accounting for sales inducements to
contractholders and classification and valuation of long-duration contract
liabilities. The cumulative effect of change in accounting principle related to
adopting SOP 03-1 was a $0.7 million benefit, net of taxes, for the change in
reserves, less additional amortization of deferred acquisition costs, on
variable annuity contracts with guaranteed minimum death benefits.

As described in Note 5, on April 15, 2004 we reinsured our in-force variable
annuity contracts, excluding the GE Retirement Answer product ("GERA(TM)"), to
Union Fidelity Life Insurance Company ("UFLIC"), effective as of January 1,
2004. We have continued to sell variable annuities and are retaining that
business for our own account. This reinsurance transaction for the separate
account of the variable annuity is structured as modified coinsurance. As such,
the separate account assets remain with us, and essentially all separate
account assets and liabilities relate to variable annuity contracts. Excluding
this reinsurance block, the separate account liabilities include both variable
annuity and variable life insurance contracts. Investment income and investment
gains and losses accrue directly to, and investment risk is borne by, the
contractholder for assets allocated to the separate account option. Our
variable contracts also include fixed accounts, which are accounted for and
recognized as general account assets and liabilities. Essentially all of our
separate account guarantees are death benefits.

Our variable annuity contracts provide for a guaranteed minimum death
benefit ("GMDB"), which provides a minimum account value to be paid on the
annuitant's death. Our contractholders have the option to purchase, at an
additional charge, a GMDB rider that provides for enhanced death benefits. The
minimum death benefit that we contractually guarantee to be paid on receipt of
proof of the annuitant's death is either one of the following specified amounts
or, in some cases, the greater of one or more of these amounts: (a) current
account value, (b) return of premium, which is no less than net deposits made
to the contract reduced by any amounts withdrawn from the policy, (c) the
highest contract value on a specified anniversary date ("ratchet"), adjusted
for subsequent premiums and withdrawals, if any, or (d) premium accumulated at
a stated interest rate ("roll-up"), adjusted for any amounts withdrawn from the
policy. In addition, we offer an Earnings Protection Rider (EPR), which pays a
death benefit up to 40% of the gain in the contract. GERA, a variable deferred
annuity and two variable annuity riders, the Guaranteed Income Advantage and
Principal Protection Advantage, also provide for a GMDB. Essentially all of our
separate account guarantees are death benefits.

The total account value (excluding the block of business reinsured through
the transaction mentioned above) of our variable annuities with GMDBs,
including both separate account and fixed account assets, is approximately
$203.3 million

F-11

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

and $992.7 million at January 1 and December 31, 2004, respectively, with
related death benefit exposure (or net amount at risk) of approximately $0 and
$0.9 million at January 1 and December 31, 2004, respectively. The death
benefit exposure for the EPR was $0 and $2.5 million at January 1, and December
31, 2004, respectively.

The following table presents our variable annuity exposure, net of
reinsurance, by GMDB type at December 31, 2004:

Net
Account Amount
(Dollar amounts in millions) Value at Risk /(a)/
- ---------------------------- ------- ------------

Return of premium....... $551.5 $0.2
Ratchet................. 149.5 0.2
Roll-up................. 174.3 0.3
Ratchet and roll-up..... 117.4 0.2
------ ----
Total................... $992.7 $0.9
====== ====

- --------
(a)Net amount at risk represents the guaranteed minimum death benefit exposure,
in excess of the current account value, if all contractholders died on
December 31, 2004.

The average attained age of our variable annuity contractholders with GMDBs,
weighted by net amount at risk, is 63.4 years of age as of December 31, 2004.

The liability for our GMDBs and EPR on variable annuity contracts net of
reinsurance is $0.5 million at December 31, 2004. Benefits paid for GMDB and
EPR were $0.1 million, net of reinsurance, for the year ended December 31,
2004. Incurred GMDB and EPR, net of reinsurance, is $0.6 million for the year
ended December 31, 2004.

The GMDB and EPR liability is determined by estimating the expected value of
death benefits in excess of the projected account value (or death benefit up to
the 40% of the gain in the contract for EPR) and recognizing the excess ratably
over the accumulation period based on total expected assessments. We regularly
evaluate estimates used and adjust the additional liability balance, with a
related charge or credit to benefits and other changes in policy reserves, if
actual experience or other evidence suggests that earlier assumptions should be
revised.

The following assumptions were used to determine the variable annuity GMDB
and EPR liability at December 31, 2004: data used was 1,000 stochastically
generated investment performance scenarios; geometric mean equity growth
assumed to be 8.9% and volatility assumed to be 20% for the portion of account
value invested in equity securities; mortality assumed to be 95% of the 1983
Basic Table mortality; lapse rates, which vary by contract type and duration,
assumed to range from 1% to 25% and correspond closely to lapse rates used for
deferred acquisition cost amortization; and discount rate assumed to be 8%.

The assets supporting the separate accounts of the variable contracts are
primarily mutual fund equity securities and are reflected in our Consolidated
Balance Sheet at fair value and reported as summary total separate account
assets with an equivalent summary total reported for liabilities. Amounts
assessed against the contactholders for mortality, administrative, and other
services are included in revenues. Changes in liabilities for minimum
guarantees are included in benefits and other changes in policy reserves.

Separate account net investment income, net investment gains and losses, and
the related liability changes are offset within the same line item in the
Consolidated Statement of Income. There were no gains or losses on transfers of
assets from the general account to the separate account.

We defer sales inducements to contractholders for features on variable
annuities that entitle the contractholder to an incremental amount to be
credited to the account value upon making a deposit, and for fixed annuities
with crediting rates

F-12

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

higher than the contract's expected ongoing crediting rates for periods after
the inducement. Our sales inducements to contractholders deferred prior to the
adoption of SOP 03-1, which we included in unamortized deferred acquisition
costs, were reinsured effective January 1, 2004. At December 31, 2004 the
unamortized sales inducements to contractholders balance was $5.3 million.
Deferred sales inducements to contractholders are reported as a separate
intangible asset and amortized in benefits and other changes in policy reserves
using the same methodology and assumptions used to amortize deferred
acquisition costs. For the year ended December 31, 2004, we deferred new sales
inducements to contractholders of $5.5 million, and we amortized sales
inducements to contractholders of $0.2 million.

In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities, which we adopted on July 1, 2003. No special purpose entities
("SPEs"), or assets previously sold to qualifying SPEs ("QSPEs"), were required
to be consolidated on our books.

(2)Investment Securities

(a) General

For the years ended December 31, 2004, 2003 and 2002 the sources of our
investment income were as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------ ------ ------

Fixed maturities.......... $360.9 $467.2 $528.8
Equity securities......... 0.1 (0.1) 0.8
Mortgage loans............ 77.1 81.8 73.2
Policy loans.............. 7.5 10.8 6.3
Other investments......... (16.8) (10.4) 0.6
------ ------ ------
Gross investment income... 428.8 549.3 609.7
Investment expenses..... (7.8) (11.3) (9.5)
------ ------ ------
Net investment income..... $421.0 $538.0 $600.2
====== ====== ======

For the years ended December 31, 2004, 2003 and 2002, gross realized
investment gains and losses from the sales of investment securities
available-for-sale were as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ----- ------ -------

Gross realized investments:
Gains............................. $10.7 $ 80.2 $ 181.1
Losses, including impairments (a). (5.0) (76.3) (125.8)
----- ------ -------
Net realized investments gains....... $ 5.7 $ 3.9 $ 55.3
===== ====== =======

- --------
(a)Impairments were $(0.9) million, $(26.4) million and $(77.4) million in
2004, 2003 and 2002 respectively.

F-13

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Net unrealized gains and losses on investment securities and other invested
assets classified as available-for-sale are reduced by deferred income taxes
and adjustments to PVFP and deferred acquisition costs that would have resulted
had such gains and losses been realized. Net unrealized gains and losses on
available-for-sale investment securities and other invested assets reflected as
a separate component of stockholder's interest as of December 31, 2004, 2003
and 2002 are summarized as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------ ------ ------

Net unrealized gains (losses) on available-for-sale investment securities and other invested assets
before adjustments:
Fixed maturities................................................................................ $145.4 $204.6 $ 18.6
Equity securities............................................................................... 6.0 3.0 (9.7)
------ ------ ------
Subtotal.................................................................................... 151.4 207.6 8.9
------ ------ ------
Adjustments to the present value of future profits and Deferred acquisitions costs................. (40.7) (72.6) (29.5)
Deferred income taxes.............................................................................. (38.7) (47.3) 8.6
------ ------ ------
Net unrealized gains (losses) on available-for-sale investment securities................... $ 72.0 $ 87.7 $(12.0)
====== ====== ======

The change in the net unrealized gains (losses) on investment securities
reported in accumulated non-owner changes in equity is as follows:

2004 2003 2002
------ ------ ------
(Dollar amounts in millions)
- ----------------------------

Net unrealized gains (losses) on investment securities as of January 1......................... $ 87.7 $(12.0) $(17.4)
------ ------ ------
Unrealized gains on investment arising during the period:
Unrealized gain on investment securities.................................................... (52.5) 201.2 99.2
Adjustment to deferred acquisition costs.................................................... 19.7 (10.7) (31.8)
Adjustment to present value of future profits............................................... 12.2 (32.4) (23.1)
Provision for deferred income taxes......................................................... 8.6 (55.9) (3.0)
------ ------ ------
Unrealized gains (losses) on investment securities...................................... (12.0) 102.2 41.3
Reclassification adjustments to net realized investment gains (losses) net of deferred taxes of
$2.0, $1.4 and $19.4......................................................................... (3.7) (2.5) (35.9)
------ ------ ------
Net unrealized gains (losses) on investment securities as of December 31....................... $ 72.0 $ 87.7 $(12.0)
====== ====== ======

At December 31, 2004 and 2003, the amortized cost, gross unrealized gains
and losses and fair values of our fixed maturities and equity securities
available-for-sale were as follows:

Gross Gross
2004 Amortized Unrealized Unrealized
(Dollar amounts in millions) Cost Gains Losses Fair Value
- ---------------------------- --------- ---------- ---------- ----------

Fixed maturities:
U.S. government and agency....................... $ 51.5 $ 0.9 $ -- $ 52.4
State and municipal.............................. 0.7 -- -- 0.7
Non-U.S. government.............................. 97.9 7.5 -- 105.4
U.S. corporate................................... 3,935.8 134.1 (29.3) 4,040.6
Non-U.S. corporate............................... 782.7 23.0 (2.9) 802.8
Mortgage-backed.................................. 1,311.1 16.4 (7.8) 1,319.7
Asset-backed..................................... 676.1 4.7 (1.2) 679.6
-------- ------ ------ --------
Total fixed maturities........................ 6,855.8 186.6 (41.2) 7,001.2
Common stocks and non-redeemable preferred stocks 20.8 6.0 -- 26.8
-------- ------ ------ --------
Total available-for-sale securities.............. $6,876.6 $192.6 $(41.2) $7,028.0
======== ====== ====== ========

F-14

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Gross Gross
2003 Amortized Unrealized Unrealized
(Dollar amounts in millions) Cost Gains Losses Fair Value
- ---------------------------- --------- ---------- ---------- ----------

Fixed maturities:
U.S. government and agency....................... $ 17.5 $ 0.6 $ (0.1) $ 18.0
State and municipal.............................. 0.9 -- -- 0.9
Non-U.S. government.............................. 67.8 4.9 (0.1) 72.6
U.S. corporate................................... 5,437.3 194.9 (48.9) 5,583.3
Non-U.S. corporate............................... 874.5 27.2 (8.2) 893.5
Mortgage-backed.................................. 1,819.1 33.6 (9.5) 1,843.2
Asset-backed..................................... 1,219.0 14.5 (4.3) 1,229.2
-------- ------ ------ --------
Total fixed maturities........................ 9,436.1 275.7 (71.1) 9,640.7
Common stocks and non-redeemable preferred stocks 23.0 3.0 -- 26.0
-------- ------ ------ --------
Total available-for-sale securities.............. $9,459.1 $278.7 $(71.1) $9,666.7
======== ====== ====== ========

We regularly review each investment security for impairment in accordance
with our impairment policy, which includes both quantitative and qualitative
criteria. Quantitative measures include length of time and amount that each
security position is in an unrealized loss position and for fixed maturity
securities, whether the issuer is in compliance with terms and covenants of the
security. Our qualitative criteria include the financial strength and specific
prospects for the issuer as well as our intent to hold the security until
recovery. Our impairment reviews involve our finance, risk, and asset
management teams as well as the portfolio management and research capabilities
of GEAM and other third party asset managers, as appropriate. Our qualitative
review attempts to identify those issuers with a greater than 50% chance of
default in the coming twelve months. These securities are characterized as
"at-risk" of impairment. As of December 31, 2004, securities "at risk" of
impairment had aggregate unrealized losses of approximately $10.0 million.

For fixed maturity securities, we recognize an impairment charge to earnings
in the period in which we determine that we do not expect to either collect
principal and interest in accordance with the contractual terms of the
instruments or to recover based on underlying collateral values and considering
events such as payment default, bankruptcy or disclosure of fraud. For equity
securities, we recognize an impairment charge in the period in which we
determine that the security will not recover to book value within a reasonable
period. We determine what constitutes a reasonable period on a
security-by-security basis based upon consideration of all the evidence
available to us, including the magnitude of an unrealized loss and its
duration. In any event, this period does not exceed 18 months for common equity
securities. We measure impairment charges based on the difference between the
book value of the security and its fair value. Fair value is based on quoted
market price, except for certain infrequently traded securities where we
estimate values using internally developed pricing models. These models are
based upon common valuation techniques and require us to make assumptions
regarding credit quality, liquidity and other factors that affect estimated
values.

During 2004, 2003 and 2002, we recognized impairment losses of $0.9 million,
$26.4 million and $77.4 million, respectively. We generally intend to hold
securities in unrealized loss positions until they recover. However, from time
to time, we sell securities in the normal course of managing our portfolio to
meet diversification, credit quality, yield and liquidity requirements.

F-15

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The following table presents the gross unrealized losses and estimated fair
values of our investment securities, on a historical basis, aggregated by
investment type and length of time that individual investment securities have
been in a continuous unrealized loss position, at December 31,

Less than 12 Months
- - -----------------------------------------------------
2004 Amortized Unrealized % Below # of
(Dollar amounts in millions) cost or cost Fair value losses cost securities
- ---------------------------- ------------ ---------- ---------- ------- ----------

Description of Securities
Fixed maturities:
U.S. government and agency........ $ 7.2 $ 7.2 $ -- -- 4
Non-U.S. government............... 2.9 2.9 -- -- 3
U.S. corporate.................... 505.2 494.5 (10.7) 2.1% 104
Non-U.S. corporate................ 131.2 129.0 (2.2) 1.7% 30
Asset Backed...................... 222.8 221.6 (1.2) 0.5% 38
Mortgage Backed................... 477.2 470.9 (6.3) 1.3% 76
-------- -------- ------ ---- ---
Total temporarily impaired securities $1,346.5 $1,326.1 $(20.4) 1.5% 255
======== ======== ====== ==== ===
% Underwater -- Fixed maturities
(less than) 20% Underwater........ $1,344.7 $1,324.8 $(19.9) 1.5% 253
20-50% Underwater................. 1.8 1.3 (0.5) 27.8% 2
(greater than) 50% Underwater..... -- -- -- -- --
-------- -------- ------ ---- ---
Total fixed maturities............... $1,346.5 $1,326.1 $(20.4) 1.5% 255
======== ======== ====== ==== ===
Investment Grade..................... $1,220.4 $1,203.8 $(16.6) 1.4% 223
Below Investment Grade............... 106.5 103.0 (3.5) 3.3% 26
Not rated............................ 19.6 19.3 (0.3) 1.5% 6
-------- -------- ------ ---- ---
Total................................ $1,346.5 $1,326.1 $(20.4) 1.5% 255
======== ======== ====== ==== ===

12 Months or More
- - -------------------------------------------------
2004 Amortized Fair Unrealized % Below # of
(Dollar amounts in millions) cost or cost value losses cost securities
- ---------------------------- ------------ ------ ---------- ------- ----------

Description of Securities
Fixed maturities:
U.S. corporate.................... $285.6 $267.0 $(18.6) 6.5% 29
State and municipal............... 0.3 0.3 -- -- 1
Non-U.S. corporate................ 18.0 17.3 (0.7) 3.9% 4
Asset Backed...................... 1.6 1.6 -- -- 1
Mortgage Backed................... 57.6 56.1 (1.5) 2.6% 20
------ ------ ------ ---- --
Total temporarily impaired securities $363.1 $342.3 $(20.8) 5.7% 55
====== ====== ====== ==== ==
% Underwater -- Fixed maturities
(less than) 20% Underwater........ $338.2 $323.5 $(14.7) 4.3% 51
20-50% Underwater................. 24.9 18.8 (6.1) 24.5% 4
(greater than) 50% Underwater..... -- -- -- -- --
------ ------ ------ ---- --
Total fixed maturities............... $363.1 $342.3 $(20.8) 5.7% 55
====== ====== ====== ==== ==
Investment Grade..................... $220.0 $208.2 $(11.8) 5.4% 40
Below Investment Grade............... 143.1 134.1 (9.0) 6.3% 15
Not rated equities................... -- -- -- -- --
------ ------ ------ ---- --
Total................................ $363.1 $342.3 $(20.8) 5.7% 55
====== ====== ====== ==== ==

F-16

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Less than 12 Months
- - ---------------------------------------------------
2003 Amortized Fair Unrealized % Below # of
(Dollar amounts in millions) cost or cost value losses cost securities
- ---------------------------- ------------ -------- ---------- ------- ----------

Description of Securities
Fixed maturities:
U.S. corporate.................... $1,039.4 $1,009.2 $(30.2) 2.9% 129
U.S. government and agencies...... 7.2 7.1 (0.1) 1.4% 2
Non-U.S. government............... 14.2 14.1 (0.1) 0.7% 4
State and municipal............... 0.9 0.9 -- -- 2
Non-U.S. corporate................ 177.3 172.4 (4.9) 2.8% 41
Asset Backed...................... 224.1 220.2 (3.9) 1.7% 22
Mortgage Backed................... 560.3 550.9 (9.4) 1.7% 79
-------- -------- ------ --- ---
Total temporarily impaired securities $2,023.4 $1,974.8 $(48.6) 2.4% 279
======== ======== ====== === ===
% Underwater -- Fixed maturities
(less than) 20% Underwater........ $2,023.3 $1,974.8 $(48.5) 2.4% 277
20-50% Underwater................. -- -- -- -- --
(greater than) 50% Underwater..... 0.1 -- (0.1) 100% 2
-------- -------- ------ --- ---
Total fixed maturities............... $2,023.4 $1,974.8 $(48.6) 2.4% 279
======== ======== ====== === ===
Investment Grade..................... $1,905.1 $1,862.7 $(42.4) 2.2% 257
Below Investment Grade............... 118.3 112.1 (6.2) 5.2% 22
Not rated equities................... -- -- -- -- --
-------- -------- ------ --- ---
Total................................ $2,023.4 $1,974.8 $(48.6) 2.4% 279
======== ======== ====== === ===

12 Months or More
- - -----------------------------------------------------
2003 Amortized Unrealized % Below # of
(Dollar amounts in millions) cost or cost Fair value losses cost securities
- ---------------------------- ------------ ---------- ---------- ------- ----------

Description of Securities
Fixed maturities:
U.S. corporate.................... $268.2 $249.5 $(18.7) 7.0% 37
Non-U.S. corporate................ 46.1 42.8 (3.3) 7.2% 4
Asset Backed...................... 75.4 75.0 (0.4) 0.5% 6
Mortgage Backed................... 3.9 3.8 (0.1) 2.6% 6
------ ------ ------ ---- --
Total temporarily impaired securities $393.6 $371.1 $(22.5) 5.7% 53
====== ====== ====== ==== ==
% Underwater -- Fixed maturities
(less than) 20% Underwater........ $370.7 $353.2 $(17.5) 4.7% 47
20-50% Underwater................. 22.9 17.9 (5.0) 21.8% 6
(greater than) 50% Underwater..... -- -- -- -- --
------ ------ ------ ---- --
Total fixed maturities............... $393.6 $371.1 $(22.5) 5.7% 53
====== ====== ====== ==== ==
Investment Grade..................... $282.9 $273.0 $ (9.9) 3.5% 29
Below Investment Grade............... 110.7 98.1 (12.6) 11.4% 24
Not rated equities................... -- -- -- -- --
------ ------ ------ ---- --
Total................................ $393.6 $371.1 $(22.5) 5.7% 53
====== ====== ====== ==== ==

The investment securities at December 31, 2004 in an unrealized loss
position for less than twelve months, account for $20.4 million or 49% of the
total unrealized losses. Of the securities in this category, there was no
security with an unrealized loss in excess of $5.0 million.

F-17

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The investment securities in an unrealized loss position for twelve months
or more account for $20.8 million or 51% of the total unrealized losses. There
are 35 fixed maturity securities in three industry groups that account for
$14.0 million or 67% of the unrealized losses in this category.

Twenty-two of these 35 securities are in the finance and insurance sector.
Within this sector, no single issuer has unrealized losses greater than $5.0
million. The unrealized losses of the securities are due to a higher interest
rate environment for the quarter ended December 31, 2004.

Six of these 35 securities are in the transportation sector and are related
to the airline industry. For those airline securities, which we have previously
impaired, we expect to recover our carrying amount based upon underlying
aircraft collateral values.

The remaining 7 of these 35 securities are in the consumer non-cyclical
sector. There is one issuer, comprising of one security, which represents $7
million. No other single issuer of fixed maturities in this sector has an
unrealized loss greater than $5 million.

The scheduled maturity distribution of the fixed maturity portfolio at
December 31, 2004 follows. Expected maturities may differ from scheduled
contractual maturities because issuers of securities may have the right to call
or prepay obligations with or without call or prepayment penalties.

(Dollar amounts in millions) Amortized cost Fair value
- ---------------------------- -------------- ----------

Due in one year less.................. $ 411.5 $ 413.7
Due after one year through five years. 1,886.2 1,938.3
Due after five years through ten years 1,603.9 1,662.9
Due after ten years................... 967.0 987.0
-------- --------
Subtotals.......................... 4,868.6 5,001.9
Mortgage-backed securities............ 1,311.1 1,319.7
Asset-backed securities............... 676.1 679.6
-------- --------
Totals............................. $6,855.8 $7,001.2
======== ========

As of December 31, 2004, $828.2 million of our investments (excluding
mortgage and asset-backed securities) were subject to certain call provisions.

As required by law, we have amounts invested, with governmental authorities
and banks for the protection of policyholders, of $5.6 million and $5.7 million
as of December 31, 2004 and 2003, respectively.

As of December 31, 2004, securities issued by finance and insurance,
utilities and energy and consumer -- non cyclical industry groups represented
approximately 35%, 17% and 12% of our domestic and foreign corporate fixed
maturities portfolio, respectively. No other industry group comprises more than
10% of our investment portfolio. This portfolio is widely diversified among
various geographic regions in the U.S. and internationally, and is not
dependent on the economic stability of one particular region.

As of December 31, 2004, we did not hold any fixed maturity securities,
which individually exceeded 10% of stockholder's interest.

The Securities Valuation Office of the National Association of Insurance
Commissioners (NAIC) evaluates bond investments of U.S. insurers for regulatory
reporting purposes and assigns securities to one of six investment categories
called "NAIC designations." The NAIC designations parallel the credit ratings
of the Nationally Recognized Statistical Rating Organizations for marketable
bonds. NAIC designations 1 and 2 include bonds considered investment grade
(rated

F-18

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

"Baa3" or higher by Moody's, or rated "BBB-" or higher by S&P) by such rating
organizations. NAIC designations 3 through 6 include bonds considered below
investment grade (rated "Ba1" or lower by Moody's, or rated "BB+" or lower by
S&P).

The following table presents our fixed maturities by NAIC and/or equivalent
ratings of the Nationally Recognized Statistical Rating Organizations, as well
as the percentage, based upon estimated fair value, that each designation
comprises. Our non-U.S. fixed maturities generally are not rated by the NAIC
and are shown based upon the equivalent rating of the Nationally Recognized
Statistical Rating Organizations. Similarly, certain privately placed fixed
maturities that are not rated by the Nationally Recognized Statistical Rating
Organizations are shown based upon their NAIC designation. Certain fixed
maturities, primarily non-U.S. fixed maturities, are not rated by the NAIC or
the Nationally Recognized Statistical Rating Organizations and are so
designated.

As of December 31,
------------------------------------------------------
2004 2003
(Dollar amounts in millions) -------------------------- --------------------------
NAIC Rating Agency Equivalent Amortized Estimated % of Amortized Estimated % of
Rating Designation cost fair value total cost fair value total
- ------ ------------------------ --------- ---------- ----- --------- ---------- -----
(Dollar amounts in millions)

1 Aaa/Aa/A............... $3,982.0 $4,025.0 57.5% $5,719.0 $5,805.7 60.2%
2 Baa.................... 2,279.0 2,361.7 33.7% 2,951.8 3,059.4 31.7%
3 Ba..................... 408.2 430.9 6.2% 460.5 481.6 5.0%
4 B...................... 135.6 135.5 1.9% 161.7 158.2 1.6%
5 Caa and lower.......... 30.7 26.9 0.4% 101.5 91.8 1.0%
6 In or near default..... 7.1 7.8 0.1% 40.6 43.0 0.5%
Not rated Not rated.............. 13.2 13.4 0.2% 1.0 1.0 --
-------- -------- ----- -------- -------- -----
Total fixed maturities. $6,855.8 $7,001.2 100.0% $9,436.1 $9,640.7 100.0%
======== ======== ===== ======== ======== =====

We have limited partnership commitments outstanding of $0.4 million and $7.4
million at December 31, 2004 and December 31, 2003, respectively.

(b) Mortgage and Real Estate Portfolio

For the years ended December 31, 2004 and 2003, respectively, we originated
$28.0 million and $44.6 million of mortgages secured by real estate in
California, which represents 14% and 9% of our total originations for those
years.

We have certain investment commitments to provide fixed-rate loans. The
investment commitments, which would be collateralized by related properties of
the underlying investments and held for investment purposes, involve varying
elements of credit and market risk. We are committed to fund $6.1 million and
$0 as of December 31, 2004 and 2003, respectively, in U.S. mortgage loans,
which will be held for investment purposes.

"Impaired" loans are defined under U.S. GAAP as loans for which it is
probable that the lender will be unable to collect all amounts due according to
the original contractual terms of the loan agreement. That definition excludes,
among other things, leases or large groups of smaller-balance homogenous loans
and therefore applies principally to our commercial loans.

Under these principles, we have two types of "impaired" loans: loans
requiring allowances for losses (none as of December 31, 2004 and 2003) and
loans expected to be fully recoverable because the carrying amount has been
reduced previously through charge-offs or deferral of income recognition ($0.8
million and $1.2 million as of December 31, 2004 and 2003, respectively).
Average investment in impaired loans during December 31, 2004, 2003 and 2002
was $1.1 million, $2.8 million and $5.1 million and interest income earned on
these loans while they were considered impaired was $0, $0.1 million and $0.5
million for the years ended December 31, 2004, 2003 and 2002, respectively.

F-19

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The following table presents the activity in the allowance for losses during
the years ended December 31, 2004, 2003 and 2002:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ----- ----- -----

Balance at January 1................................ $10.4 $ 8.9 $18.2
(Benefit) provision (credited) charged to operations 1.0 1.5 (9.3)
Transfers........................................... (0.6) -- --
Amounts written off, net of recoveries.............. (0.4) -- --
----- ----- -----
Balance at December 31.............................. $10.4 $10.4 $ 8.9
===== ===== =====

During 2002, as part of our on-going analysis of exposure to losses arising
from mortgage loans, we recognized $11.6 million reduction in its allowance for
losses.

The allowance for losses on mortgage loans at December 31, 2004, 2003 and
2002 represented 0.9%, 0.8% and 0.8% of gross mortgage loans, respectively.
Non-income producing mortgage loans were $0.8 million and $0 of December 31,
2004 and 2003, respectively.

(3)Deferred Acquisition Costs

Activity impacting deferred acquisition costs for the years ended December
31, 2004, 2003 and 2002 was as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------- ------ -------

Unamortized balance at January 1.................... $ 923.8 $843.3 $ 838.2
Cost deferred....................................... 89.1 167.7 116.3
Amortization, net................................... (23.6) (87.2) (111.2)
Transfers due to reinsurance transactions with UFLIC (734.1) -- --
------- ------ -------
Unamortized balance at December 31.................. 255.2 923.8 843.3
Cumulative effect of net unrealized investment gains (7.1) (26.8) (16.1)
------- ------ -------
Balance at December 31.............................. $ 248.1 $897.0 $ 827.2
======= ====== =======

(4)Intangible Assets and Goodwill

At December 31, 2004 and 2003 the gross carrying amount and accumulated
amortization of intangibles subject to amortization were as follows:

2004 2003
- - -------------------- --------------------
Gross Gross
Carrying Accumulated Carrying Accumulated
(Dollar amounts in millions) Amount Amortization Amount Amortization
- ---------------------------- -------- ------------ -------- ------------

Present value of future profits ("PVFP")..... $123.7 $(27.6) $508.8 $(380.7)
Capitalized software......................... 31.1 (11.9) 26.2 (10.1)
Deferred sales inducements to contractholders 5.7 (0.4) -- --
All other.................................... 1.0 (1.0) 1.0 (0.6)
------ ------ ------ -------
Total........................................ $161.5 $(40.9) $536.0 $(391.4)
====== ====== ====== =======

(a) Present Value of Future Profits

The method used by us to value PVFP in connection with acquisitions of life
insurance entities is summarized as follows: (1) identify the future gross
profits attributable to certain lines of business, (2) identify the risks
inherent in realizing those gross profits and (3) discount those gross profits
at the rate of return that we must earn in order to accept the inherent risks.

F-20

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The following table presents the activity in PVFP for the years ended
December 31, 2004, 2003 and 2002:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------ ------ ------

Unamortized balance at January 1.............................................. $173.9 $202.2 $235.1
Interest accreted as 5.2%, 5.4% and 6.0% for December 31, 2004, 2003 and 2002,
respectively................................................................ 7.1 10.2 13.2
Amortization.................................................................. (27.6) (38.5) (46.1)
Amounts transferred in connection with reinsurance transactions with UFLIC.... (23.7) -- --
------ ------ ------
Unamortized balance December 31............................................... 129.7 173.9 202.2
Cumulative effect of net unrealized investment gains.......................... (33.6) (45.8) (13.4)
------ ------ ------
Balance at December 31........................................................ $ 96.1 $128.1 $188.8
====== ====== ======

The estimated percentage of the December 31, 2004 balance, before the effect
of unrealized investment gains or losses, to be amortized over each of the next
five years is as follows:

2005 11.2%
2006 9.7%
2007 8.7%
2008 7.4%
2009 6.8%

(b) Goodwill

As of December 31, 2004 goodwill was comprised of the following:

Retirement
Income &
(Dollar amounts in millions) Investments Protection Total
- ---------------------------- ----------- ---------- ------

Balance at December 31, 2002 $54.8 $52.6 $107.4
Additions................... 5.0 4.9 9.9
----- ----- ------
Balance at December 31, 2003 59.8 57.5 117.3
Impairment.................. 59.8 -- 59.8
----- ----- ------
Balance at December 31, 2004 $ -- $57.5 $ 57.5
===== ===== ======

As a result of the reinsurance transactions with UFLIC described in Note 5,
we were not able to transfer any goodwill, as the reinsurance transactions with
UFLIC did not constitute the disposition of a business. However, as the
reinsurance transactions with UFLIC represented a significant portion of our
operations, we were required to test goodwill for impairment and recognized an
impairment charge of $59.8 million in the Retirement Income and Investments
reporting unit for the year ended December 31, 2004. The fair value of that
reporting unit was estimated using the expected present value of future cash
flows.

(5)Reinsurance

On April 15, 2004, we entered into reinsurance transactions in which we
ceded to Union Fidelity Life Insurance Company, an affiliate, substantially all
of our in-force blocks of variable annuities and structured settlements. Our
in-force variable annuity contracts, excluding the GERA(TM) product that was
not reinsured, had aggregate general account reserves of $2.5 billion as of
January 1, 2004. Our in-force structured settlements reinsured had aggregate
policyholder reserves of $0.3 billion as of January 1, 2004. At December 31,
2004, the in-force blocks of variable annuities and structured settlements

F-21

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

ceded to UFLIC had aggregate policyholder reserves of $2.4 billion and $0.2
billion, respectively. The reinsurance transactions with UFLIC were completed
and accounted for at book value. We transferred investment assets to UFLIC in
exchange for the reinsurance recoverable asset from UFLIC in the amount of $2.1
billion at January 1, 2004. UFLIC also assumed any benefit or expense resulting
from third party reinsurance that we have on this block of business. We have
$7.6 billion in retained assets that are attributable to the separate account
portion of the variable annuity business and will make any payments with
respect to that separate account portion directly from these assets. The
reinsurance transactions with UFLIC will be reported on our tax returns at fair
value as determined for tax purposes, giving rise to a net reduction in current
and deferred income tax liabilities and resulting in a net tax benefit. Under
these reinsurance agreements, we continue to perform various management,
administration and support services and receive an expense allowance from UFLIC
to reimburse us for costs we incur to service the reinsured blocks. Actual
costs and expense allowance amounts will be determined by expense studies to be
conducted periodically.

Although we are not relieved of our primary obligations to the
contractholders, the reinsurance transactions with UFLIC transfer the future
financial results of the reinsured blocks to UFLIC. To secure the payment of
its obligations to us under these reinsurance agreements, UFLIC has established
trust accounts to maintain an aggregate amount of assets with a statutory book
value at least equal to the statutory general account reserves attributable to
the reinsured business less an amount required to be held in certain claims
paying accounts. A trustee will administer the trust accounts and we will be
permitted to withdraw from the trust accounts amounts due to us pursuant to the
terms of the reinsurance agreements that are not otherwise paid by UFLIC.

Concurrently with the consummation of the reinsurance transactions with
UFLIC, we paid a dividend to our stockholders consisting of cash and
securities. A portion of this dividend, together with amounts paid by certain
of our affiliates, was used by GE Financial Assurance Holdings, Inc. to make a
capital contribution to UFLIC. The aggregate value of the dividend was $409.5
million, consisting of cash in the amount of $30.4 million and securities in
the amount of $379.1 million.

We are involved in both the cession and assumption of reinsurance with other
companies. Our reinsurance consists primarily of long-duration contracts that
are entered into with financial institutions and related party reinsurance.
Although these reinsurance agreements contractually obligate the reinsurers to
reimburse us, they do not discharge us from our primary liabilities and we
remain liable to the extent that the reinsuring companies are unable to meet
their obligations.

In order to limit the amount of loss retention, certain policy risks are
reinsured with other insurance companies. The maximum of individual ordinary
life insurance normally retained by any one insured with an issue age up to and
including 75 is $1.0 million and for issue ages over 75 is $0.1 million.
Certain Medicare supplement insurance policies are reinsured on either a quota
share or excess of loss basis. We also use reinsurance for guaranteed minimum
death benefit ("GMDB") options on most of our variable annuity products. We
monitor both the financial condition of individual reinsurers and risk
concentrations arising from similar geographic regions, activities and economic
characteristics of reinsurers to lessen the risk of default by such reinsurers.
Other than with UFLIC, at December 31, 2004, we had no significant
concentrations of variable annuity net at risk reinsurance with any one
reinsurer that could have a material impact on our results of operations. At
December 31, 2004, 28.5% of our reinsured life insurance net at risk exposure
was with one company.

Net life insurance in force as of December 31 is summarized as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- --------- --------- ---------

Direct life insurance in force...... $24,723.4 $26,889.2 $28,964.5
Amounts ceded to other companies.... (4,045.2) (4,129.4) (4,575.9)
Amounts assumed from other companies 1,863.3 1,970.2 2,092.9
--------- --------- ---------
Net in force........................ $22,541.5 $24,730.0 $26,481.5
========= ========= =========
Percentage of amount assumed to net. 8.3% 8.0% 7.9%
========= ========= =========

F-22

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The effects of reinsurance on premiums earned for the years ended December
31, 2004, 2003 and 2002 were as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------ ------ ------

Direct............................. $110.8 $122.9 $117.9
Assumed............................ 2.5 2.5 4.8
Ceded.............................. (16.5) (21.4) (17.4)
------ ------ ------
Net premiums earned................ $ 96.8 $104.0 $105.3
====== ====== ======
Percentage of amount assumed to net 2.6% 2.4% 4.6%
====== ====== ======

Due to the nature of our insurance contracts, premiums earned approximate
premiums written.

Reinsurance recoveries recognized as a reduction of benefits amounted to
$1,038.7 million, $77.7 million and $87.6 million for the years ended December
31, 2004, 2003 and 2002, respectively.

(6)Future Annuity and Contract Benefits

(a) Investment Contracts

Investment contracts are broadly defined to include contracts without
significant mortality or morbidity risk. Payments received from sales of
investment contracts are recognized by providing a liability equal to the
current account value of the policyholder's contracts. Interest rates credited
to investment contracts are guaranteed for the initial policy term with renewal
rates determined as necessary by management.

(b) Insurance Contracts

Insurance contracts are broadly defined to include contracts with
significant mortality and/or morbidity risk. The liability for future benefits
of insurance contracts is the present value of such benefits less the present
value of future net premiums, based on mortality, morbidity and other
assumptions, which were appropriate at the time the policies were issued or
acquired. These assumptions are periodically evaluated for potential reserve
deficiencies. Reserves for cancelable accident and health insurance are based
upon unearned premiums, claims incurred but not reported and claims in the
process of settlement. This estimate is based on our experience and the
experience of the insurance industry, adjusted for current trends. Any changes
in the estimated liability are reflected in income as the estimates are revised.

The following chart summarizes the major assumptions underlying our recorded
liabilities for future annuity and contract benefits:

Mortality/ December 31,
Withdraw Morbidity Interest Rate ------------------
(Dollar amounts in millions) Assumption Assumption Assumption 2003 2004
- ---------------------------- ---------- ---------- ------------- -------- ---------

Investment contracts....................... N/A N/A N/A $7,419.5 $ 7,920.2
Limited payment contracts.................. None (a) 4.0% -7.6% 51.9 162.4
Traditional life insurance contracts....... Company
Experience (b) 6.0% - 7.5% 309.2 324.6
Universal life type contracts.............. N/A N/A N/A 1,769.1 1,780.2
Accident and health........................ Company
Experience (c) 4.5% - 7.0% 54.9 53.8
-------- ---------
Total future annuity and contracts benefits $9,604.6 $10,241.2
======== =========

- --------
(a)Either the United States Population Table, 1983 Group Annuitant Mortality
Table or 1983 Individual Annuity Mortality Table and Company experience.

F-23

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

(b)Principally modifications of the 1965-70 or 1975-80 Select and Ultimate
Tables and Company experience.
(c)The 1958 Commissioner's Standard Ordinary Table, 1964 modified and 1987
Commissioner's Disability Tables and Company experience.

(7)Income Taxes

The total provision (benefit) for income taxes attributable to continuing
operations for the years ended December 31, 2004, 2003 and 2002 consisted of
the following components:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------- ------ -----

Current federal income tax..... $ 34.2 $(21.4) $19.8
Deferred federal income tax.... (166.6) 18.3 20.8
------- ------ -----
Subtotal-federal income tax. (132.4) (3.1) 40.6
------- ------ -----
Current state income tax....... (3.5) -- 1.3
Deferred state income tax...... (7.4) -- 1.0
------- ------ -----
Subtotal-state income tax... (10.9) -- 2.3
------- ------ -----
Total income tax........ $(143.3) $ (3.1) $42.9
======= ====== =====

The reconciliation of the federal statutory rate to the effective income tax
rate on income from continuing operations for the years ended December 31,
2004, 2003 and 2002 is as follows:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------ ----- ----

Statutory U.S. federal income tax rate............. 35.0% 35.0% 35.0%
State income tax, net of federal income tax benefit (4.2) (0.1) 0.5
Non-deductible goodwill amortization............... 37.8 -- --
Dividends-received deduction....................... (11.9) (53.1) (9.1)
Reinsurance transactions with UFLIC................ (315.9) -- --
Other, net......................................... 0.4 (0.8) 0.6
------ ----- ----
Effective rate.................................. (258.8)% (19.0)% 27.0%
====== ===== ====

The components of the net deferred income tax asset (liability) at December
31, 2004 and 2003 are as follows:

(Dollar amounts in millions) 2004 2003
- ---------------------------- ------ -------

Assets:
Insurance reserves amounts........................ $ 65.7 $ 118.9
Investments....................................... -- 11.1
Net unrealized losses on investment securities.... -- --
Net unrealized losses on derivatives.............. -- --
Accruals.......................................... 17.5 21.9
Deferred tax losses............................... 11.0 --
Other............................................. 28.8 0.6
------ -------
Total deferred income tax asset............... 123.0 152.5
------ -------
Liabilities:
Net unrealized gains on investment securities..... 38.7 47.3
Net unrealized gains on derivatives............... 1.9 0.3
Investments....................................... 10.4 --
Present value of future profits................... 22.4 39.7
Deferred acquisition costs........................ 4.5 234.6
Other............................................. 39.2 5.3
------ -------
Total deferred income tax liability........... 117.1 327.2
------ -------
Net deferred income tax asset (liability)..... $ 5.9 $(174.7)
====== =======

F-24

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The significant changes in our deferred tax components related to insurance
reserves, deferred acquisition costs, present value of future profits and
investments are directly attributable to the reinsurance transactions with
UFLIC.

Based on our analysis, management believes it is more likely than not that
the results of future operations and implementation of tax planning strategies
will generate sufficient taxable income to enable us to realize remaining
deferred tax assets. Accordingly, no valuation allowance for deferred tax
assets is deemed necessary.

We paid federal and state taxes of $38.1 million for the year ended December
31, 2004. We paid federal and state taxes of $7.3 million for the year ended
December 31, 2003. For the year ended December 31, 2002, we received refunds of
$16.4 million.

At December 31, 2004 and 2003, the deferred income tax asset was $5.9
million and the deferred income tax liability was $174.7 million, respectively.
At December 31, 2004 and 2003, the current income tax receivable was $2.6
million and the current income tax liability was $4.8 million, respectively.

(8)Related Party Transactions

We pay investment advisory fees and other fees to affiliates. Amounts
incurred for these items aggregated $19.3 million, $60.7 million and $36.8
million for the years ended December 31, 2004, 2003 and 2002, respectively. We
charge affiliates for certain services and for the use of facilities and
equipment, which aggregated $14.3 million, $55.6 million and $58.4 million, for
the years ended December 31, 2004, 2003 and 2002, respectively.

In May 2002, we entered into an investment management agreement with GEAM
under which we paid $6.9 million in 2004 and $10.5 million in 2003 to GEAM as
compensation for the investment services.

During 2002, we sold certain assets to an affiliate at a fair value
established as if it were an arms-length, third party transaction, which
resulted in a gain of $17.6 million.

GE Capital has guaranteed certain obligations under floating-rate funding
agreements with a final maturity on or before June 30, 2005. This guarantee
covers our obligations to contractholders and requires us to reimburse GE
Capital for any payments made to contractholders under the guarantee. As of
December 31, 2004, GE Capital's guarantee covered $858.0 million of outstanding
floating-rate funding agreements.

We pay interest on outstanding amounts under a credit funding agreement with
GNA Corporation, the parent company of GECA. We have a credit line of $500
million with GNA. Interest expense under this agreement was $0.1 million, $0.1
million and $0.1 million for the years ended December 31, 2004, 2003 and 2002
respectively. We pay interest at the cost of funds of GNA Corporation, which
were 2.2%, 1.3% and 2.0%, as of December 31, 2004, 2003 and 2002, respectively.
The amounts outstanding as of December 31, 2004 and 2003 were $10.7 million and
$6.3 million, respectively and are included with other liabilities in the
Consolidated Balance Sheets.

(9)Litigation

We face a significant risk of litigation and regulatory investigations and
actions in the ordinary course of operating our businesses, including class
action lawsuits. Our pending legal and regulatory actions include proceedings
specific to us and others generally applicable to business practices in the
industries in which we operate. Plaintiffs in class action and other lawsuits
against us may seek very large or indeterminate amounts, including punitive and
treble damages, which may remain unknown for substantial periods of time. A
substantial legal liability or a significant regulatory action against us could
have an adverse effect on our financial condition and results of operations.
Moreover, even if we ultimately prevail in the litigation, regulatory action or
investigation, we could suffer significant reputational harm, which could have
an adverse effect on our business, financial condition or results of operations.

F-25

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

We were named as a defendant in a lawsuit, McBride v. Life Insurance Co. of
Virginia dba GE Life and Annuity Assurance Co., related to the sale of
universal life insurance policies. The complaint was filed on November 1, 2000,
in Georgia state court, as a class action on behalf of all persons who
purchased certain universal life insurance policies and alleges improper
practices in connection with the sale and administration of universal life
policies. The plaintiffs sought unspecified compensatory and punitive damages.
On December 1, 2000, we removed the case to the U.S. District Court for the
Middle District of Georgia. We have vigorously denied liability with respect to
the plaintiff's allegations. Nevertheless, to avoid the risks and costs
associated with protracted litigation and to resolve our differences with
policyholders, we agreed in principle on October 8, 2003 to settle the case on
a nationwide class basis. The settlement provides benefits to the class, and
allows us to continue to serve our customers' needs undistracted by disruptions
caused by litigation. The court gave final approval to the settlement on August
12, 2004. In the third quarter of 2003, we accrued $50 million in reserves
relating to this litigation, which represents our best estimate of bringing
this matter to conclusion. The precise amount of payments in this matter cannot
be estimated because they are dependent upon the number of individuals who
ultimately will seek relief in the claim form process of the class settlement,
the identity of such claimants and whether they are entitled to relief under
the settlement terms and the nature of the relief to which they are entitled.
That process is currently underway. In addition, approximately 650 class
members elected to exclude themselves from the class action settlement. In the
fourth quarter of 2004, we reached an agreement in principle to settle the
threatened claims of policyholders who had excluded approximately 512 policies
from the class action settlement. At that time, we accrued a reserve for the
settlement in principle. We have also been named as a defendant in six lawsuits
brought by 67 class members who elected to exclude themselves from the class
action settlement. We cannot determine at this point whether or how many other
class members who have excluded themselves from the class action will initiate
individual actions against us, or the effect of such suits or claims, including
the six pending lawsuits, on our financial condition, results of operations or
business reputation.

In addition, we were named as a defendant in five lawsuits brought by
individuals claiming that William Maynard, one of our former dedicated sales
specialists, and Anthony Allen, one of our former independent producers,
converted customer monies and engaged in various fraudulent acts. The five
cases are, Monger v. Allen, Maynard, and GE Life and Annuity Assurance Company
("GELAAC") (filed October 24, 2003), Warfel v. Allen, Maynard, adVenture
Publishing, and GELAAC (filed February 6, 2004), Hanrick v. Allen, Maynard and
GELAAC (filed March 10, 2004), Modlin v. Allen, et al. (filed June 17, 2004),
and Clark v. Allen, 66 et al. (filed June 25, 2004). The Monger and Hanrick
cases have been settled. The remaining three cases are in their preliminary
stages and are pending in the state court of Cumberland County, North Carolina.
The suits allege that GELAAC failed to properly supervise Allen and Maynard and
that GELAAC is responsible for Allen's and Maynard's conduct. Specifically,
Monger alleged conversion, negligence, fraudulent misrepresentation,
constructive fraud, unfair and deceptive trade practices, violations of the
Investment Company Act of 1940 and negligent supervision. Warfel alleged breach
of contract, coversion, breach of fiduciary duty, fraud, constructive fraud,
negligent misrepresentation, negligent supervision and unfair and deceptive
trade practices. Hanrick alleged conversion, negligence, fraudulent
misrepresentation, constructive fraud, unfair and deceptive trade practices and
negligent supervision. Modlin and Clark make similar allegations. The total
amount allegedly invested by the plaintiffs in the three unresolved actions is
approximately $883,000. The plaintiff in Warfel seeks damages of $1.4 million
and the plaintiffs in Modlin and Clark seek unspecified compensatory damages.
In addition, each plaintiff seeks treble damages, as well as punitive damages
of an unspecified amount. Additionally, in the fourth quarter of 2004, we
reached an agreement in principle to settle the threatened claims of a putative
class of individuals who had dealings with Allen and Maynard. At that time we
accrued a reserve for the settlement in principle. In October 2003, Allen and
Maynard were arrested and charged with conversion in Cumberland County, North
Carolina for allegedly failing to remit $30,000 in premiums that they received
from a client to GELAAC. Allen has also been indicted in Cumberland County,
North Carolina for converting the funds of numerous other individuals. We
cannot determine the ultimate outcome of these suits or any related or similar
suits or claims will be asserted against us in the future, or the effect of
such suits or claims on our financial condition, results of operations or
reputation.

(10)Fair Value of Financial Instruments

Assets and liabilities that are reflected in the Consolidated Financial
Statements at fair value are not included in the following disclosure of fair
value; such items include cash and cash equivalents, investment securities,
separate accounts and

F-26

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

derivative financial instruments. Other financial assets and
liabilities -- those not carried at fair value -- are discussed below. Apart
from certain of our borrowings and certain marketable securities, few of the
instruments discussed below are actively traded and their fair values must
often be determined using models. The fair value estimates are made at a
specific point in time, based upon available market information and judgments
about the financial instruments, including estimates of the timing and amount
of expected future cash flows and the credit standing of counterparties. Such
estimates do not reflect any premium or discount that could result from
offering for sale at one time our 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 financial instrument.

The bases on which we estimate fair values are as follows:

Mortgage loans. Based on quoted market prices, recent transactions
and/or discounted future cash flows, using rates at which similar loans
would have been made to similar borrowers.

Other financial instruments. Based on comparable market transactions,
discounted future cash flows, quoted market prices and/or estimates of the
cost to terminate or otherwise settle obligations.

Borrowings. Based on market quotes or comparables.

Investment contract benefits. Based on expected future cash flows,
discounted at currently offered discount rates for immediate annuity
contracts or cash surrender value for single premium deferred annuities.

Policy Loans. Carrying value approximates estimated fair value.

All other instruments. Based on comparable market transactions,
discounted future cash flows, quoted market prices and /or estimates of the
cost to terminate or otherwise settle obligations.

The following represents the fair value of financial assets and liabilities
at December 31,

2004 2003
----------------------------- -----------------------------
Assets (Liabilities) Assets (Liabilities)
----------------------------- -----------------------------
(Dollar amounts in Notional Carrying Estimated Notional Carrying Estimated
millions) Amount Amount Fair Value Amount Amount Fair Value
- --------- -------- --------- ---------- -------- --------- ----------

Assets:
Mortgage loans........ (a) $ 1,207.7 $ 1,252.4 (a) $ 1,262.3 $ 1,309.7
Policy Loans.......... (a) 148.4 148.4 (a) 138.5 138.5
Other financial
instruments......... (a) 23.1 23.1 (a) 0.9 0.9
Liabilities:
Borrowings and
related instruments:
Borrowings............ (a) (10.7) (10.7) (a) (6.3) (6.3)
Investment
contract
benefits............ (a) (7,419.5) (7,492.6) (a) (7,920.2) (7,969.9)
Other firm
commitments:
Ordinary course
of business
lending
commitments......... $31.5 -- -- -- -- --
Commitments to fund
limited partnerships.... $ 0.4 -- -- $7.4 -- --

- --------
(a)These financial instruments do not have notional amounts.

F-27

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

A reconciliation of current period changes for the years ended December 31,
2004 and 2003, net of applicable income taxes in the separate component of
stockholder's interest labeled "derivatives qualifying as hedges", follows:

(Dollar amounts in millions) 2004 2003
- ---------------------------- ---- -----

Net Other Comprehensive Income Balances as of January 1.. $0.4 $ 2.3
Current period decreases (increases) in fair value -- net 2.1 (0.3)
Reclassification to earnings, net........................ 0.8 (1.6)
---- -----
Balance at December 31................................... $3.3 $ 0.4
==== =====

Hedges of Future Cash Flows

There was $0 of ineffectiveness reported in the twelve months ended December
31, 2004 and 2003 in the fair values of hedge positions. There were no amounts
excluded from the measure of effectiveness in the twelve months ended
December 31, 2004 and 2003 related to the hedge of future cash flows.

The $3.3 million, net of taxes, recorded in stockholder's interest at
December 31, 2004 is expected to be reclassified to future income,
contemporaneously with and primarily offsetting changes in interest expense and
interest income on floating-rate instruments. Of this amount $0.8 million, net
of income taxes, is expected to be reclassified to earnings in the year ending
December 31, 2005. Actual amounts may vary from this amount as a result of
market conditions. The amount of $0.8 million, net of income taxes, was
reclassified to earnings in the year ended December 31, 2004. The amount of
$(1.6) million, net of income taxes, was reclassified to earnings in the year
ended December 31, 2003. No amounts were reclassified to earnings during the
year ended December 31, 2004 and 2003 in connection with forecasted
transactions that were no longer considered probable of occurring.

Derivatives Not Designated as Hedges

We use derivatives to hedge exposures when it makes economic sense to do so,
including circumstances in which the hedging relationship does not qualify for
hedge accounting as described in the following paragraph. We will also
occasionally receive derivatives in the ordinary course of business. Under SFAS
133, derivatives that do not qualify for hedge accounting are marked to market
through earnings.

For certain liabilities, we engage both OTC and exchange traded financial
derivatives to hedge the economic risk associated with changes in interest
rates, equity prices and equity implied volatility. Although these instruments
are considered to be derivatives under SFAS 133, our economic risk is similar
to, and managed on the same basis as other equity instruments we hold.

(11)Non-controlled Entities

One of the most common forms of off-balance sheet arrangements is asset
securitization. We use GE Capital sponsored and third party entities to
facilitate asset securitizations. As part of this strategy, management
considers the relative risks and returns of our alternatives and predominately
uses GE Capital sponsored entities. Management believes these transactions
could be readily executed through third party entities at insignificant
incremental cost.

The following table summarizes the current balance of assets sold to Special
Purpose Entities ("SPEs") at December 31:

(Dollar amounts in millions) 2004 2003
- ---------------------------- ------ ------

Assets secured by:
Commercial mortgage loans. $112.7 $137.1
Fixed maturities.......... 86.4 105.4
Other receivables......... 98.8 107.3
------ ------
Total assets.......... $297.9 $349.8
====== ======

F-28

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Each of the categories of assets shown in the table above represents
portfolios of assets that are highly rated. Examples of each category include:
commercial mortgage loans -- loans on diversified commercial property; fixed
maturities- domestic and foreign, corporate and government securities; other
receivables -- primarily policy loans.

We evaluate the economic, liquidity and credit risk related to the above
SPEs and believe that the likelihood is remote that any such arrangements could
have a significant adverse effect on our operations, cash flows, or financial
position. Financial support for certain SPE's is provided under credit support
agreements, in which Genworth Financial provides limited recourse for a maximum
of $119 million of credit losses in such entities. Assets with credit support
are funded by demand notes that are further enhanced with support provided by
GE Capital. We may record liabilities, for such guarantees based on our best
estimate of probable losses. To date, no SPE has incurred a loss.

Sales of securitized assets to SPEs result in a gain or loss amounting to
the net of sales proceeds, the carrying amount of net assets sold, the fair
value of servicing rights and retained interests and an allowance for losses.
There were no securitization transactions in 2004 and 2003. Sales resulted in
net gains on securitizations of approximately $5.8 million in 2002. The net
realized gains and losses are included in net realized gains within our
Consolidated Statements of Income

Retained interests and recourse obligations related to such sales that are
recognized in our consolidated financial statements are as follows:

December 31,
----------------------
2004 2003
---------- -----------
Fair Fair
(Dollar amounts in millions) Cost Value Cost Value
- ---------------------------- ---- ----- ----- -----

Retained interests -- assets $9.7 $11.5 $14.5 $15.6
Servicing assets............ -- -- -- --
Recourse liability.......... -- -- -- --
---- ----- ----- -----
Total....................... $9.7 $11.5 $14.5 $15.6
==== ===== ===== =====

Retained interest. When we securitize receivables, we determine fair value
based on discounted cash flow models that incorporate, among other things,
assumptions including credit losses, prepayment speeds and discount rates.
These assumptions are based on our experience, market trends and anticipated
performance related to the particular assets securitized. Subsequent to
recording retained interests, we review recorded values quarterly in the same
manner and using current assumptions.

Servicing assets. Following a securitization transaction, we retain the
responsibility for servicing the receivables, and as such, are entitled to
receive an ongoing fee based on the outstanding principal balances of the
receivables. There are no servicing assets nor liabilities recorded as the
benefits of servicing the assets are adequate to compensate an independent
servicer for its servicing responsibilities.

Recourse liability. As described previously, under credit support
agreements we provide recourse for credit losses in special purpose entities.
We provide for expected credit losses under these agreements and such amounts
approximate fair value.

(12)Restrictions on Dividends

Insurance companies are restricted by state regulations departments as to
the aggregate amount of dividends they may pay to their parent in any
consecutive twelve-month period without regulatory approval. Generally,
dividends may be paid out of earned surplus without approval with thirty days
prior written notice within certain limits. The limits are generally based on
the lesser of 10% of the prior year surplus or prior year net gain from
operations. Dividends in excess of the prescribed limits or our earned surplus
require formal approval from the Commonwealth of Virginia State Corporation

F-29

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Commission, Bureau of Insurance. Based on statutory results as of December 31,
2004, we are able to distribute $67.2 million in dividends in 2005 without
obtaining regulatory approval.

In addition to the dividend in connection with the reinsurance transaction
with UFLIC, we declared and paid dividends of $9.6 million for each of the
years ended December 31, 2004, 2003 and 2002.

(13)Supplementary Financial Data

We file financial statements with state insurance regulatory authorities and
the National Association of Insurance Commissioners ("NAIC") that are prepared
on an accounting basis prescribed by such authorities (statutory basis).
Statutory accounting practices differ from U.S. GAAP in several respects,
causing differences in reported net income and stockholder's interest.
Permitted statutory accounting practices encompass all accounting practices not
so prescribed but that have been specifically allowed by state insurance
authorities. We have no permitted accounting practices.

For the years ended December 31, 2004, 2003 and 2002, statutory net (loss)
income and statutory capital and surplus is summarized below:

(Dollar amounts in millions) 2004 2003 2002
- ---------------------------- ------ ------ ------

Statutory net income (loss).. $105.8 $(28.0) $(48.8)
Statutory capital and surplus $817.2 $562.4 $550.7

The NAIC has adopted Risk Based Capital ("RBC") requirements to evaluate the
adequacy of statutory capital and surplus in relation to risks associated with
(i) asset risk, (ii) insurance risk, (iii) interest rate risk and (iv) business
risks. The RBC formula is designated as an early warning tool for the states to
identify possible under-capitalized companies for the purpose of initiating
regulatory action. In the course of operations, we periodically monitor our RBC
level. At December 31, 2004 and 2003 we exceeded the minimum required RBC
levels.

(14)Operating Segment Information

During the fourth quarter 2003, we redefined our operating segments.
Management realigned the business on a product line and market basis to
intensify its focus on return on equity, optimum deployment of capital and
distribution effectiveness. As a result of this change, our operations are
conducted under two reporting segments corresponding to customer needs:
Retirement Income and Investments and Protection.

Retirement Income and Investments is comprised of products offered to
individuals who want to accumulate tax-deferred assets for retirement, desire a
tax-efficient source of income and seek to protect against outliving their
assets and to institutions seeking investment products.

Protection is comprised of products offered to consumers to provide
protection against financial hardship after the death of an insured and to
protect income and assets from the adverse economic impacts of significant
health care costs. See Note (1)(c) for further discussion of our principal
product lines within these two segments.

F-30

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

The following is a summary of industry segment activity for December 31,
2004, 2003 and 2002:

Retirement
(Dollar amounts in millions) Income and Corporate
December 31, 2004 -- Segment Data Investments Protection and Other Consolidated
- --------------------------------- ----------- ---------- --------- ------------

Net investment income................................................... $ 238.5 $ 140.3 $ 42.2 $ 421.0
Net realized investment gains........................................... -- -- 5.7 5.7
Premiums................................................................ 0.4 96.4 -- 96.8
Other revenues.......................................................... 40.0 136.4 -- 176.4
--------- -------- -------- ---------
Total revenues....................................................... 278.9 373.1 47.9 699.9
--------- -------- -------- ---------
Interest credited, benefits and other changes in policy reserves........ 202.4 271.6 -- 474.0
Underwriting, acquisition and insurance expenses, net of deferrals...... 17.1 31.1 15.0 63.2
Amortization of deferred acquisition costs and intangibles.............. 78.6 28.7 -- 107.3
--------- -------- -------- ---------
Total benefits and expenses.......................................... 298.1 331.4 15.0 644.5
--------- -------- -------- ---------
Income before income taxes and cumulative effect of change in accounting
principle............................................................. (19.2) 41.7 32.9 55.4
Provision (benefit) for income taxes................................. 8.2 14.8 (166.3) (143.3)
--------- -------- -------- ---------
Income (loss) before cumulative effect of change in accounting
principle.......................................................... (27.4) 26.9 199.2 198.7
Cumulative effect of change in accounting principle, net of tax...... 0.7 -- -- 0.7
========= ======== ======== =========
Net income (loss).................................................... $ (26.7) $ 26.9 $ 199.2 $ 199.4
========= ======== ======== =========
Total assets............................................................ $16,742.4 $2,745.7 $1,344.5 $20,832.6
========= ======== ======== =========

Retirement
(Dollar amounts in millions) Income and Corporate
December 31, 2003 -- Segment Data Investments Protection and Other Consolidated
- --------------------------------- ----------- ---------- --------- ------------

Net investment income (loss)...................................... $ 402.7 $ 152.5 $(17.2) $ 538.0
Net realized investment gains..................................... -- -- 3.9 3.9
Premiums.......................................................... (1.7) 105.7 -- 104.0
Other revenues.................................................... 150.8 143.8 0.3 294.9
--------- -------- ------ ---------
Total revenues................................................. 551.8 402.0 (13.0) 940.8
--------- -------- ------ ---------
Interest credited, benefits and other changes in policy reserves.. 362.0 294.3 -- 656.3
Underwriting, acquisition and insurance expenses, net of deferrals 46.4 55.3 47.3 149.0
Amortization of deferred acquisition costs and intangibles........ 84.9 34.0 -- 118.9
--------- -------- ------ ---------
Total benefits and expenses.................................... 493.3 383.6 47.3 924.2
--------- -------- ------ ---------
Income (loss) before income taxes.............................. 58.5 18.4 (60.3) 16.6
Provision (benefit) for income taxes........................... 14.7 6.5 (24.3) (3.1)
--------- -------- ------ ---------
Net income (loss).............................................. $ 43.8 $ 11.9 $(36.0) $ 19.7
========= ======== ====== =========
Total assets...................................................... $17,412.4 $2,758.1 $692.1 $20,862.6
========= ======== ====== =========

F-31

GE LIFE AND ANNUITY ASSURANCE COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements -- Continued

Years Ended December 31, 2004, 2003 and 2002

Retirement
(Dollar amounts in millions) Income and Corporate
December 31, 2002 -- Segment Data Investments Protection and Other Consolidated
- --------------------------------- ----------- ---------- --------- ------------

Net investment income............................................. $ 457.1 $ 160.5 $(17.4) $ 600.2
Net realized investment gains..................................... -- -- 55.3 55.3
Premiums.......................................................... 1.0 102.3 2.0 105.3
Other revenues.................................................... 157.3 123.7 3.6 284.6
--------- -------- ------ ---------
Total revenues................................................. 615.4 386.5 43.5 1,045.4
--------- -------- ------ ---------
Interest credited, benefits and other changes in policy reserves.. 392.6 247.1 0.6 640.3
Underwriting, acquisition and insurance expenses, net of deferrals 37.1 57.8 4.4 99.3
Amortization of deferred acquisition costs and intangibles........ 113.6 30.6 2.9 147.1
--------- -------- ------ ---------
Total benefits and expenses.................................... 543.3 335.5 7.9 886.7
--------- -------- ------ ---------
Income before income taxes..................................... 72.1 51.0 35.6 158.7
Provision (benefit) for income taxes........................... 26.0 18.1 (1.2) 42.9
--------- -------- ------ ---------
Net income..................................................... $ 46.1 $ 32.9 $ 36.8 $ 115.8
========= ======== ====== =========
Total assets...................................................... $17,116.4 $2,777.5 $387.1 $20,281.0
========= ======== ====== =========

(15)Quarterly Financial Data (unaudited)

Summarized quarterly financial data for the years ended December 31, 2004
and 2003 were as follows:

First Quarter Second Quarter Third Quarter Fourth Quarter
------------- ------------- ------------- -------------
(Dollar amounts in millions) 2004 2003 2004 2003 2004 2003 2004 2003
- ---------------------------- ------ ------ ------ ------ ------ ------ ------ ------

Net investment income............................. $129.1 $137.9 $ 84.4 $137.1 $100.0 $137.9 $107.5 $125.1
====== ====== ====== ====== ====== ====== ====== ======
Total revenues.................................... $232.2 $250.9 $119.0 $227.7 $174.5 $227.1 $174.2 $235.1
====== ====== ====== ====== ====== ====== ====== ======
Earnings (loss) before cumulative effect of change
in accounting principle (1)..................... $ 6.5 $ 24.9 $150.4 $ 9.7 $ 19.0 $(21.9) $ 22.8 $ 7.0
====== ====== ====== ====== ====== ====== ====== ======
Net income (loss)................................. $ 7.2 $ 24.9 $150.4 $ 9.7 $ 19.0 $(21.9) $ 22.8 $ 7.0
====== ====== ====== ====== ====== ====== ====== ======

- --------
(1)See note 1 (t) of the Consolidated Financial Statements.

F-32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
GE Life and Annuity Assurance Company:

Under the date of February 12, 2005, we reported on the consolidated balance
sheets of GE Life and Annuity Assurance Company and subsidiary (the Company) as
of December 31, 2004 and 2003, and the related consolidated statements of
income, stockholder's interest, and cash flows for each of the years in the
three-year period ended December 31, 2004, which are included herein. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial statement
schedule included herein. This financial statement schedule is the
responsibility of the Company's 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 consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Richmond, Virginia
February 12, 2005

F-33

Schedule III
GE LIFE AND ANNUITY ASSURANCE COMPANY

Supplemental Insurance Information
(Dollar amounts in millions)

Future Annuity
And Contract
Benefits &
Liability
Deferred For Policy and Other
Acquisition Contract Unearned Policyholder Premium
Segment Costs Claims Premiums Liabilities Revenue
- ------- ----------- --------------- ------------- ------------ --------

December 31, 2004:
Retirement Income and Investments. $171.0 $ 7,474.6 $ -- $210.7 $ 0.4
Protection........................ 77.1 2,219.4 24.0 1.2 96.4
Corporate and Other............... -- -- -- -- --
------ --------- ------ ------ ------
Total......................... $248.1 $ 9,694.0 $ 24.0 $211.9 $ 96.8
====== ========= ====== ====== ======
December 31, 2003:
Retirement Income and Investments. $817.0 $ 8,032.8 $ -- $120.2 $ (1.7)
Protection........................ 80.0 2,251.0 24.8 2.8 105.7
Corporate and Other............... -- -- -- -- --
------ --------- ------ ------ ------
Total......................... $897.0 $10,283.8 $ 24.8 $123.0 $104.0
====== ========= ====== ====== ======
December 31, 2002:
Retirement Income and Investments. $ 1.0
Protection........................ 102.3
Corporate and Other............... 2.0
------
Total......................... $105.3
======

Interest Underwriting, Amortization
Credited & Acquisition of Deferred
Net Benefits and and Insurance Acquisition
Investment Other Changes Expenses, net Costs and Premiums
Segment Income Policy Reserves of deferrals Intangibles Written
- ------- ----------- --------------- ------------- ------------ --------
December 31, 2004:
Retirement Income and Investments. $238.5 $ 202.4 $ 17.1 $ 78.6 $ 0.3
Protection........................ 140.3 271.6 31.1 28.7 97.1
Corporate & Other................. 42.2 -- 15.0 -- --
------ --------- ------ ------ ------
Total......................... $421.0 $ 474.0 $ 63.2 $107.3 $ 97.4
====== ========= ====== ====== ======
December 31, 2003:
Retirement Income and Investments. $402.7 $ 362.0 $ 46.4 $ 84.9 $ (1.7)
Protection........................ 152.5 294.3 55.3 34.0 105.4
Corporate & Other................. (17.2) -- 47.3 -- --
------ --------- ------ ------ ------
Total......................... $538.0 $ 656.3 $149.0 $118.9 $103.7
====== ========= ====== ====== ======
December 31, 2002:
Retirement Income and Investments. $457.1 $ 392.6 $ 37.1 $113.6 $ 1.0
Protection........................ 160.5 247.1 57.8 30.6 102.1
Corporate & Other................. (17.4) 0.6 4.4 2.9 2.0
------ --------- ------ ------ ------
Total......................... $600.2 $ 640.3 $ 99.3 $147.1 $105.1
====== ========= ====== ====== ======

F-34

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The expenses in connection with the issuance and distribution of the
contract, other than any underwriting discounts and commissions, are as follows:

Securities and Exchange Commission
Registration Fees (approximate amount
we will wire)........................ $ 25,910 (based on a total of $261,640,000
Proposed Maximum Aggregate Offering)
Printing and engraving................. $19,450
Accounting fees and expenses........... $ 7,000
Legal fees and expenses................ $ 5,000
Miscellaneous.......................... $ 2,500
--------
Total expenses (approximate)........ $59,860
========

Item 14. Indemnification of Directors and Officers.

Sections 13.1-697, 13.1-698 and 13.1-702 of the Code of Virginia, in brief,
allow a corporation to indemnify any person made party to a proceeding because
such person is or was a director, officer, employee, or agent of the
corporation, against liability incurred in the proceeding if: (1) he conducted
himself in good faith; and (2) he believed that (a) in the case of conduct in
his official capacity with the corporation, his conduct was in its best
interests; and (b) in all other cases, his conduct was at least not opposed to
the corporation's best interests and (3) in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful. The
termination of a proceeding by judgment, order, settlement or conviction is
not, of itself, determinative that the director, officer, employee, or agent of
the corporation did not meet the standard of conduct described. A corporation
may not indemnify a director, officer, employee, or agent of the corporation in
connection with a proceeding by or in the right of the corporation, in which
such person was adjudged liable to the corporation, or in connection with any
other proceeding charging improper personal benefit to such person, whether or
not involving action in his official capacity, in which such person was
adjudged liable on the basis that personal benefit was improperly received by
him. Indemnification permitted under these sections of the Code of Virginia in
connection with a proceeding by or in the right of the corporation is limited
to reasonable expenses incurred in connection with the proceeding.

General Electric Company's insurance program extends directors' and
officers' liability insurance coverage to the directors and officers of its
subsidiary companies, including GE Life and Annuity Assurance Company. In
addition, Section V of the Amended and Restated Articles of Incorporation of GE
Life and Annuity Assurance Company further provide that:

A. In this Article:

"applicant" means the person seeking indemnification pursuant to this
Article;

"expenses" includes counsel fees;

"liability" means the obligation to pay a judgment, settlement, penalty,
fine, including any excise tax assessed with respect to an employee benefit
plan, or reasonable expenses incurred with respect to a proceeding;

"party" includes an individual who was, is, or is threatened to be made a
named defendant or respondent in a proceeding; and

"proceeding" means any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal.

B. In any proceeding brought by or in the right of the Corporation or
brought by or on behalf of shareholders of the Corporation, no director or
officer of the Corporation shall be liable to the Corporation or its
shareholders for monetary damages with respect to any transaction, occurrence
or course of conduct, whether prior or subsequent to the effective date of this
Article, except for liability resulting from such person's having engaged in
willful misconduct or a knowing violation of the criminal law or any federal or
state securities law.

C. The Corporation shall indemnify (i) any person who was or is a party to
any proceeding, including a proceeding brought by a shareholder in the right of
the Corporation or brought by or on behalf of shareholders of the Corporation,
by reason of the fact that he or she is or was a director or officer of the
Corporation, or (ii) any director or officer who is or was serving at the
request of the Corporation as a director, trustee, partner or officer of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against any liability incurred by him or her in connection
with such proceeding unless he or she engaged in willful misconduct or a
knowing violation of the criminal law. A person is considered to be serving an
employee benefit plan at the Corporation's request if his or her duties to the
Corporation also impose duties on, or otherwise involve services by, him or her
to the plan or to participants in or beneficiaries of the plan. The Board of
Directors is hereby empowered, by a majority vote of a quorum of disinterested
directors, to enter into a contract to indemnify any director or officer in
respect of any proceedings arising from any act or omission, whether occurring
before or after the execution of such contract.

D. No amendment or repeal of this Article shall have any effect on the
rights provided under this Article with respect to any act or omission
occurring prior to such amendment or repeal. The Corporation shall promptly
take all such actions, and make all such determinations, as shall be necessary
or appropriate to comply with its obligation to make any indemnity under this
Article and shall promptly pay or reimburse all reasonable expenses, including
attorneys' fees, incurred by any such director, officer, employee or agent in
connection with such actions and determinations or proceedings of any kind
arising therefrom.

E. The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the applicant did not meet the standard of
conduct described in Section (B) or (C) of this Article.

F. Any indemnification under Section (C) of this Article (unless ordered by
a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the applicant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in Section (C).

The determination shall be made:

(1) By the Board of Directors by a majority vote of a quorum consisting
of directors not at the time parties to the proceeding;

(2) If a quorum cannot be obtained under subsection (1) of this Section,
by majority vote of a committee duly designated by the Board of Directors
(in which designation directors who are parties may participate), consisting
solely of two or more directors not at the time parties to the proceeding;

(3) By special legal counsel

(a) Selected by the Board of Directors or its committee in the manner
prescribed in subsection (1) or (2) of this Section; or

(b) If a quorum of the Board of Directors cannot be obtained under
subsection (1) of this Section and a committee cannot be designated
under subsection (2) of this Section, selected by majority vote of the
full Board of Directors, in which selection directors who are parties
may participate; or

(4) By the shareholders, but shares owned by or voted under the control
of directors who are at the time parties to the proceeding may not be voted
on the determination.

Any evaluation as to reasonableness of expenses shall be made in the same
manner as the determination that indemnification is appropriate, except that if
the determination is made by special legal counsel, such evaluation as to
reasonableness of expenses shall be made by those entitled under subsection (3)
of this Section (F) to select counsel.

Notwithstanding the foregoing, in the event there has been a change in the
composition of a majority of the Board of Directors after the date of the
alleged act or omission with respect to which indemnification is claimed, any
determination as to indemnification and advancement of expenses with respect to
any claim for indemnification made pursuant to this Article shall be made by
special legal counsel agreed upon by the Board of Directors and the applicant.
If the Board of Directors and the applicant are unable to agree upon such
special legal counsel the Board of Directors and the applicant each shall
select a nominee, and the nominees shall select such special legal counsel.

G. (1) The Corporation shall pay for or reimburse the reasonable expenses
incurred by any applicant who is a party to a proceeding in advance of final
disposition of the proceeding or the making of any determination under Section
(C) if the applicant furnishes the Corporation:

(a) a written statement of his or her good faith belief that he or she
has met the standard of conduct described in Section (C); and

(b) a written undertaking, executed personally or on his or her behalf,
to repay the advance if it is ultimately determined that he or she did not
meet such standard of conduct.

(2) The undertaking required by paragraph (b) of subsection (1) of this
Section shall be an unlimited general obligation of the applicant but need not
be secured and may be accepted without reference to financial ability to make
repayment.

(3) Authorizations of payments under this section shall be made by the
persons specified in Section (F).

H. The Board of Directors is hereby empowered, by majority vote of a quorum
consisting of disinterested directors, to cause the Corporation to indemnify or
contract to indemnify any person not specified in Section (B) or (C) of this
Article who was, is or may become a party to any proceeding, by reason of the
fact that he or she is or was an employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, to the same extent as if such person were
specified as one to whom indemnification is granted in Section (C). The
provisions of Sections (D) through (G) of this Article shall be applicable to
any indemnification provided hereafter pursuant to this Section (H).

I. The Corporation may purchase and maintain insurance to indemnify it
against the whole or any portion of the liability assumed by it in accordance
with this Article and may also procure insurance, in such amounts as the Board
of Directors may determine, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability asserted against or incurred by him or her in
any such capacity or arising from his or her status as such, whether or not the
Corporation would have power to indemnify him or her against such liability
under the provisions of this Article.

J. Every reference herein to directors, officers, employees or agents shall
include former directors, officers, employees and agents and their respective
heirs, executors and administrators. The indemnification hereby provided and
provided hereafter pursuant to the power hereby conferred by this Article on
the Board of Directors shall not be exclusive of any other rights to which any
person may be entitled, including any right under policies of insurance that
may be purchased and maintained by the Corporation or others, with respect to
claims, issues or matters in relation to which the Corporation would not have
the power to indemnify such person under the provisions of this Article. Such
rights shall not prevent or restrict the power of the Corporation to make or
provide for any further indemnity, or provisions for determining entitlement to
indemnity, pursuant to one or more indemnification agreements, bylaws, or other
arrangements (including, without limitation, creation of trust

funds or security interests funded by letters of credit or other means)
approved by the Board of Directors (whether or not any of the directors of the
Corporation shall be a party to or beneficiary of any such agreements, bylaws
or arrangements); provided, however, that any provision of such agreements,
bylaws or other arrangements shall not be effective if and to the extent that
it is determined to be contrary to this Article or applicable laws of the
Commonwealth of Virginia.

K. Each provision of this Article shall be severable, and an adverse
determination as to any such provision shall in no way affect the validity of
any other provision.

* * *

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
depositor pursuant to the foregoing provisions, or otherwise, the depositor has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the depositor of expenses incurred
or paid by a director, officer or controlling person of the depositor in
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the depositor will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.

Item 15. Recent Sales of Unregistered Securities.

Not applicable.

Item 16. Exhibits.

(1)(a) Underwriting Agreement. Previously filed August 20, 2001 to Form S-1 for GE Life and Annuity
Assurance Company, Registration No. 333-67902.

(1)(b) Broker-Dealer Sales Agreement. Previously filed August 20, 2001 to Form S-1 for GE Life and
Annuity Assurance Company, Registration No. 333-67902.

(2) Not applicable.

(3)(a) Certificate of Incorporation of The Life Insurance Company of Virginia. Previously filed on
May 1, 1998 with Post-Effective Amendment No. 9 to Form N-4 for GE life & Annuity Separate
Account 4, Registration No. 033-76334.

(3)(a)(i) Amended and Restated Articles of Incorporation of GE Life and Annuity Assurance Company.
Previously filed on September 1, 2000 with Post-Effective Amendment No. 1 to Form N-4 for GE
Life & Annuity Separate Account 4, Registration No. 333-31172.

(4) Contract. Previously filed on September 19, 2001 on Form S-1 for GE Life and Annuity Assurance
Company, Registration No. 333-69620.

(4)(b) SEP Endorsements, Form P5090 7/97 and Form 5094 7/98. Previously filed on May 1, 1998 with
Post-Effective Amendment No. 9 to Form N-4 for GE life & Annuity Separate Account 4,
Registration No. 033-76334.

(4)(b)(i) Individual retirement Annuity Endorsement, Form 5090 7/97. Previously filed on May 1, 1998
with Post-Effective Amendment No. 9 to Form N-4 for GE life & Annuity Separate Account 4,
Registration No. 033-76334.

(4)(b)(ii) Roth Individual Retirement Annuity Endorsement, Form P5133 1. Previously filed on
September 19, 2001 on Form S-1 for GE Life and Annuity Assurance Company, Registration No.
333-69620.

(4)(b)(iii) Section 403(b) Annuity Endorsement, Form 5145 12/00. . Previously filed on September 19, 2001
on Form S-1 for GE Life and Annuity Assurance Company, Registration No. 333-69620.

(4)(c) Application. Previously filed August 20, 2001 to Form S-1 for GE Life and Annuity Assurance
Company, Registration No. 333-67902.

(5) Opinion and Consent of Counsel. Filed herewith.

(6) Not applicable.

(7) Not applicable.

(8) Not applicable.

(9) Not applicable.

(10) Not applicable.

(11) Not applicable.

(12) Not applicable.

(13) Not applicable.

(14) Not applicable.

(15) Not applicable.

(16) Not applicable.

(17) Not applicable.

(18) Not applicable.

(19) Not applicable.

(20) Not applicable.

(21) Not applicable.

(22) Not applicable.

(23) Consent of Independent Registered Public Accounting Firm. Filed herewith.

(24) Power of Attorney. Filed herewith.

(25) Not applicable.

(26) Not applicable.

(27) Not applicable.

(99) Resolution of Board of Directors of GE Life and Annuity Assurance Company authorizing the
establishment of the Guarantee Account. Previously filed on August 20, 2001 to Form S-1 for GE Life
and Annuity Assurance Company, Registration No. 333-67902.

Item 17. Undertakings.

(A) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(B) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable: In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officers or, controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such-director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

SIGNATURES

As required by the Securities Act of 1933, the Registrant has duly caused
this Amendment No. 4 to the Registration Statement on Form S-1 to be signed on
its behalf by the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, in the County of Henrico in the Commonwealth of
Virginia, on the 10th day of March, 2005.

GE LIFE AND ANNUITY ASSURANCE COMPANY
(Registrant)

/s/ GEOFFREY S. STIFF

By: __________________________________

Geoffrey S. Stiff Senior Vice
President

As required by the Securities Act of 1933, this Post-Effective Amendment No.
4 to the Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.

Name Title Date
---- ----- ----

* Chairperson of the Board, March 10, 2005
- ----------------------------- President and Chief
Pamela S. Schutz Executive Officer

* Director, Senior Vice March 10, 2005
- ----------------------------- President and Chief Actuary
Paul A. Haley

* Director and Senior Vice March 10, 2005
- ----------------------------- President
Leon E. Roday

/S/ GEOFFREY S. STIFF Director and Senior Vice March 10, 2005
- ----------------------------- President
Geoffrey S. Stiff

* Director and Senior Vice March 10, 2005
- ----------------------------- President
Thomas M. Stinson

* Senior Vice President March 10, 2005
- ----------------------------- and General Counsel
Thomas E. Duffy

* Senior Vice President and March 10, 2005
- ----------------------------- Chief Financial Officer
J. Kevin Helmintoller

* Vice President and Controller March 10, 2005
- -----------------------------
John E. Karaffa

*By: /s/ GEOFFREY S. STIFF , pursuant to Power of Attorney March 10, 2005
---------------------- executed on October 1, 2004.
Geoffrey S. Stiff