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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>As filed with the Securities and Exchange Commission on May 20, 2008</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Registration File No. 333-[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>UNITED STATES</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>SECURITIES AND EXCHANGE COMMISSION</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Washington, D.C. 20549</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>FORM S-1</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</FONT></B><BR>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=4>ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></B></TD></TR></TABLE></P>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Exact name of registrant as specified in its charter)</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>IOWA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(State or other jurisdiction of incorporation or organization)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>6355</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Primary Standard Industrial Classification Code Number)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>41-0991508</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(I.R.S. Employer Identification Number)</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>ING</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>1475 Dunwoody Drive</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>West Chester, PA 19380-1478</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(610) 425-3400</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>John S. (Scott) Kreighbaum, Esq.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>1475 Dunwoody Drive</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>West Chester, PA 19380-1478</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(610) 425-3404</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Name, address, including zip code, and telephone number, including area code, of agent for service)</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Approximate date of commencement of proposed sale to the public:</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>As soon as practicable after the registration statement becomes effective.</FONT>&nbsp; </TD>
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     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>If any of the securities being registered on this Form are to be offered on a delayed or continuous basis</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%">&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>pursuant to Rule 415 under the Securities Act of 1933 check the following box</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[X]</FONT>&nbsp; </TD></TR>
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     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Securities Act, check the following box and list the Securities Act registration statement number of</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>the earlier effective registration statement for the same offering</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD></TR>
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     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>If this Form is post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%">&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>the following box and list the Securities Act registration statement number of the earlier effective</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%">&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>registration statement for the same offering</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD></TR>
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     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>If this Form is post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check</FONT>&nbsp; </TD>
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     <TD noWrap align=left width="7%">&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>the following box and list the Securities Act registration statement number of the earlier effective</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%">&nbsp; </TD></TR>
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     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>registration statement for the same offering</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="7%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>[ ]</FONT>&nbsp; </TD></TR></TABLE><BR>
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     <TD width=12>&nbsp;</TD>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or smaller reporting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>company. See the definitions of &#147;large accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Rule 12b-2 of the Exchange Act.</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=left width="67%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Large accelerated filer [ ]</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="30%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Accelerated filer [ ]</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left width="67%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Non-accelerated filer [X] (Do not check if a smaller reporting company)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="30%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Smaller reporting company [ ]</FONT>&nbsp; </TD></TR></TABLE><BR>
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     <TD align=center width="98%" colSpan=9><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Calculation of Registration Fee</FONT></B> </TD></TR>
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     <TD width="98%" colSpan=9>&nbsp; </TD></TR>
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     <TD noWrap align=center width="18%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Title of Each Class</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="14%">&nbsp; </TD>
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     <TD noWrap align=center width="23%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Proposed Maximum</FONT>&nbsp; </TD>
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     <TD noWrap align=center width="20%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Proposed Maximum</FONT>&nbsp; </TD>
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     <TD noWrap align=center width="18%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>of Securities to be</FONT>&nbsp; </TD>
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     <TD noWrap align=center width="14%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amount to be</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="23%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Offering Price Per</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="20%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Aggregate Offering</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="15%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amount of</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=center width="18%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Registered</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="14%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Registered</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="23%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Unit</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="20%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Price</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="15%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Registration Fee</FONT>&nbsp; </TD></TR>
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     <TD width="98%" colSpan=9>&nbsp; </TD></TR>
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     <TD noWrap align=left width="18%">&nbsp; </TD>
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     <TD noWrap align=center width="14%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>*</FONT>&nbsp; </TD>
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     <TD noWrap align=center width="23%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>*</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="20%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$1,800,000,000</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=center width="15%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$70,740</FONT>&nbsp; </TD></TR></TABLE><BR>
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     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>* The proposed maximum aggregate offering price is estimated solely for the purpose of determining the registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>fee. The amount to be registered and the proposed maximum offering price per unit are not applicable since these</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>securities are not issued in predetermined amounts or units.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Pursuant to Rule 429(b) under the Securities Act, unsold securities previously registered under Commission file </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>number 333-133156 are being carried forward to this registration statement.</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5><B>ING USA Annuity and Life Insurance Company</B></FONT><BR>
<BR>
<FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=4><B>Fixed Account II</B></FONT><BR>
<BR>
&nbsp; <B>May</B> <FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif"><B>2</B><B>0</B></FONT><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">, 2008</FONT></B></TD></TR></TABLE></P>
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     <TD width=2>&nbsp;</TD>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Fixed Account II (&#147;Fixed Account&#148;) is an optional fixed interest allocation offered during the accumulation phase of</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>your deferred combination variable and fixed annuity contract (the &#147;Contract&#148;) between you and ING USA Annuity</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and Life Insurance Company (&#147;ING USA,&#148; the &#147;Company,&#148; &#147;we&#148; or &#147;our&#148;). The Fixed Account, which is a</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>segregated asset account of ING USA, provides a means for you to invest on a tax-deferred basis and earn a</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>guaranteed interest rate for guaranteed interest periods (Fixed Interest Allocation(s)). We will credit your Fixed</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Interest Allocation(s) with a fixed rate of interest. We generally offer several Fixed Interest Allocations at any one</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>time. We reserve the right to limit the number of Fixed Interest Allocations or the availability of certain Fixed</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Interest Allocations. The number of Fixed Interest Allocations offered may vary by states, may not offer all Fixed</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Interest Allocations on all Contracts, and the rates for a given Fixed Interest Allocation may vary among contracts.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>We set the interest rates periodically. We may credit a different interest rate for each Fixed Interest Allocation. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>interest you earn in the Fixed Account as well as your principal is guaranteed by ING USA, as long as you do not</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>take your money out before the maturity date for the applicable interest period. If you take your money out from a</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Fixed Interest Allocation more than 30 days before the applicable maturity date, we will apply a market value</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>adjustment (&#147;Market Value Adjustment&#148;). A Market Value Adjustment could increase or decrease your contract</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>value and/or the amount you take out. A surrender charge may also apply to withdrawals from your contract. You</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>bear the risk that you may receive less than your principal because of the Market Value Adjustment.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>You have a right to return a contract for a refund as described in the variable annuity contract prospectus.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>The variable annuity contract prospectus describes (the Contract) offered by ING USA. The Contract is available in</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>connection with certain retirement plans that qualify for special federal income tax treatment as well as those that do</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>not qualify for such treatment. Please refer to the Contract prospectus for more information.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>This prospectus accompanies a Contract prospectus and provides information that you should know before investing</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>in the Fixed Account and should be kept for future reference. If you need more information after reading this</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>prospectus, please contact us at our Customer Service Center, P.O. Box 9271, Des Moines, Iowa 50306-9271 or call</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(800) 366-0066 or your registered representative. Either prospectus is available without charge upon request. To</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>obtain a copy of these documents, write to or call our Customer Service Center or access the SEC&#146;s website</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(http://www.sec.gov).</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>The Securities and Exchange Commission has not approved or disapproved these securities or passed upon</FONT></B> <BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>the adequacy of this prospectus. Any representation to the contrary is a criminal offense.</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>An investment in the Fixed Account is not a bank deposit and is not insured or guaranteed by any bank or by</FONT></B> <BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>the Federal Deposit Insurance Corporation or any other government agency.</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>This prospectus must be accompanied or preceded by a current prospectus for a variable Contract.</FONT></B></TD></TR></TABLE></P>
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     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Fixed Account II</FONT></TD></TR></TABLE></P>
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<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page</FONT></U>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">FEES AND EXPENSES</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">FINANCIAL STATEMENTS</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">THE FIXED INTEREST ALLOCATION</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">SPECIAL FUNDS</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">THE ANNUITY CONTRACT</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">WITHDRAWALS</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6</FONT>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">TRANSFERS AMONG YOUR INVESTMENTS</FONT>&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">CHARGES AND FEES</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">DEATH BENEFIT AND OPTIONAL RIDERS</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">OTHER CONTRACT PROVISIONS</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">OTHER INFORMATION</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">FEDERAL TAX CONSIDERATIONS</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">APPENDIX A &#150; Market Value Adjustment Examples</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A1</FONT>&nbsp;
	</TD>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">i</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FEES AND EXPENSES</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The variable Contract has insurance features and investment features, and there are charges related to each. For</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">more information about these Contract fees and expenses please refer to the Contract prospectus.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></B><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company, is an Iowa stock life insurance company, which was originally </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporated in Minnesota on January 2, 1973. ING USA is a wholly owned subsidiary of Lion Connecticut </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Holdings Inc. (&#147;Lion Connecticut&#148;), which in turn is a wholly owned subsidiary of ING Groep N.V. (&#147;ING&#148;), a </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">global financial services holding company based in The Netherlands. ING USA is authorized to sell insurance and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities in all states, except New York, and the District of Columbia. Although we are a subsidiary of ING, ING is</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">not responsible for the obligations under the Contract. The obligations under the Contract are solely the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">responsibility of ING USA.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Lion Connecticut is the holding company for Directed Services LLC, the distributor of the Contracts, and other </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">interests.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Our principal office is located at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Regulatory Matters</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As with many financial services companies, the Company and its affiliates have received informal and formal </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">requests for information from various state and federal governmental agencies and self-regulatory organizations in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">connection with inquiries and investigations of the products and practices of the financial services industry. In each </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">case, the Company and its affiliates have been and are providing full cooperation.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Insurance and Retirement Plan Products and Other Regulatory Matters. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Federal and state regulators
and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">self-regulatory agencies are conducting broad inquiries and investigations involving the insurance and retirement </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">industries. These initiatives currently focus on, among other things, compensation, revenue sharing, and other sales </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">incentives; potential conflicts of interest; potential anti-competitive activity; reinsurance; sales and marketing </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">practices (including sales to seniors); specific product types (including group annuities and indexed annuities); and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosure. It is likely that the scope of these industry investigations will further broaden before they conclude. The </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company and certain of its U.S. affiliates have received formal and informal requests in connection with such </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investigations, and are cooperating fully with each request for information. Some of these matters could result in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulatory action involving the Company. These initiatives also may result in new legislation and regulation that </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">could significantly affect the financial services industry, including businesses in which the Company is engaged. In </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">light of these and other developments, U.S. affiliates of ING, including the Company, periodically review whether </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">modifications to their business practices are appropriate.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Investment Product Regulatory Issues. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Since 2002, there has been increased governmental and
regulatory </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">activity relating to mutual funds and variable insurance products. This activity has primarily focused on </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">inappropriate trading of fund shares; directed brokerage; compensation; sales practices, suitability, and supervision; </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">arrangements with service providers; pricing; compliance and controls; adequacy of disclosure; and document </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">retention.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to responding to governmental and regulatory requests on fund trading issues, ING management, on its </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">own initiative, conducted, through special counsel and a national accounting firm, an extensive internal review of </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual fund trading in ING insurance, retirement, and mutual fund products. The goal of this review was to identify</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">any instances of inappropriate trading in those products by third parties or by ING investment professionals and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other ING personnel.</FONT></TD></TR></TABLE>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The internal review identified several isolated arrangements allowing third parties to engage in frequent trading of </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual funds within the variable insurance and mutual fund products of certain affiliates of the Company, and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">identified other circumstances where frequent trading occurred despite measures taken by ING intended to combat </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">market timing. Each of the arrangements has been terminated and disclosed to regulators, to the independent trustees</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of ING Funds (U.S.) and in Company reports previously filed with the SEC pursuant to the Securities Exchange Act </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of 1934, as amended.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Action may be taken by regulators with respect to certain ING affiliates before investigations relating to fund trading</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">are completed. The potential outcome of such action is difficult to predict but could subject certain affiliates to </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">is not currently anticipated, however, that the actual outcome of any such action will have a material adverse effect </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on ING or ING&#146;s U.S.-based operations, including the Company.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING has agreed to indemnify and hold harmless the ING Funds from all damages resulting from wrongful conduct </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">by ING or its employees or from ING&#146;s internal investigation, any investigations conducted by any governmental or </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">self-regulatory agencies, litigation or other formal proceedings, including any proceedings by the SEC.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management reported to the ING Funds Board that ING management believes that the total amount of any </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">indemnification obligations will not be material to ING or ING&#146;s U.S.-based operations, including the Company.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FINANCIAL STATEMENTS</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The audited financial statements of ING USA Annuity and Life Insurance Company are included in this prospectus.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">THE FIXED INTEREST ALLOCATION</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may allocate premium payments and transfer your Contract value to the available guaranteed interest periods of </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Fixed Account during the accumulation period as described in the prospectus for the Contract. Every time you </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">allocate money to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed interest period you </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">select. We reserve the right to limit the number of Fixed Interest Allocations or the availability of certain Fixed </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest Allocations. The number of Fixed Interest Allocations offered may vary by state, we may not offer all Fixed</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest Allocations on all Contracts, and the rates for a given Fixed Interest Allocation may vary among Contracts.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may select one or more guaranteed interest periods at any one time. We will credit your Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation with a guaranteed interest rate for the interest period you select, so long as you do not withdraw money </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from that Fixed Interest Allocation before the end of the guaranteed interest period. Each guaranteed interest period </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ends on its maturity date, which is the last day of the month in which the interest period is scheduled to expire.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">If you surrender, withdraw, transfer or annuitize your investment in a Fixed Interest Allocation more than 30 days </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">before the end of the guaranteed interest period, we will apply a Market Value Adjustment to the transaction. A </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment could increase or decrease the amount you surrender, withdraw, transfer or annuitize, </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">depending on current interest rates at the time of the transaction. You bear the risk that you may receive less than </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">your principal because of the Market Value Adjustment.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets supporting amounts allocated to the Fixed Account are available to fund the claims of all classes of our </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">customers, contract owners and other creditors. Interests under your Contract relating to the Fixed Account are </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">registered under the Securities Act of 1933, but the Fixed Account is not registered.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Selecting a Guaranteed Interest Period</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may select one or more Fixed Interest Allocations with specified guaranteed interest periods. A guaranteed </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest period is the period that a rate of interest is guaranteed to be credited to your Fixed Interest Allocation. We </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">may at any time decrease or increase the number of guaranteed interest periods offered. In addition, we may offer </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively in </FONT></TD></TR></TABLE>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">connection with our dollar cost averaging program. For more information on DCA Fixed Interest Allocations, see </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Transfers Among Your Investments &#151; Dollar Cost Averaging from Fixed Interest Allocations.&#148;</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Your Contract value in the Fixed Account is the sum of your Fixed Interest Allocations and the interest credited as </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjusted for any withdrawals, transfers or other charges we may impose, including any Market Value Adjustment.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Your Fixed Interest Allocation will be credited with the guaranteed interest rate in effect for the guaranteed interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">period you selected when we receive and accept your premium or reallocation of Contract value. We will credit </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest daily at a rate that yields the quoted guaranteed interest rate.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed Interest Rates</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Each Fixed Interest Allocation will have an interest rate that is guaranteed as long as you do not take your money out</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">until its maturity date. We do not have a specific formula for establishing the guaranteed interest rates for the different</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed interest periods. We determine guaranteed interest rates at our sole discretion. To find out the current </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed interest rate for a guaranteed interest period you are interested in, please contact our Customer Service </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Center or your registered representative. The determination may be influenced by the interest rates on fixed income </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments in which we may invest with the amounts we receive under the Contracts. We will invest these </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amounts primarily in investment-grade fixed income securities (i.e., rated by Standard &amp; Poor&#146;s rating system to be </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">suitable for prudent investors) although we are not obligated to invest according to any particular strategy, except as </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">may be required by applicable law. You will have no direct or indirect interest in these investments. We will also </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">consider other factors in determining the guaranteed interest rates, including regulatory and tax requirements, sales </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">commissions and administrative expenses borne by us, general economic trends and competitive factors. We cannot </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">predict the level of future interest rate.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We may from time to time at our discretion offer interest rate specials for new premiums that are higher than the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">current base interest rate then offered. Renewal rates for such rate specials will be based on the base interest rate </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and not on the special rates initially declared.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Transfers from a Fixed Interest Allocation</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may transfer your Contract value in a Fixed Interest Allocation to one or more new Fixed Interest Allocations </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">with new guaranteed interest periods, or to any of the subaccounts of ING USA Annuity and Life Insurance </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Separate Account B, as described in the Contract prospectus. We will transfer amounts from your Fixed </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest Allocations starting with the guaranteed interest period nearest its maturity date, until we have honored your </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">transfer request.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The minimum amount that you can transfer to or from any Fixed Interest Allocation is &#36;100. If a transfer request</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">would reduce the Contract value remaining in a Fixed Interest Allocation to less than &#36;100, we will treat such </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">transfer request as a request to transfer the entire Contract value in such Fixed Interest Allocation. Transfers from a </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Interest Allocation may be subject to a Market Value Adjustment. If you have a special Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation that was offered exclusively with our dollar cost averaging program, canceling dollar cost averaging will </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">cause a transfer of the entire Contract value in such Fixed Interest Allocation to the Liquid Assets subaccount, and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">such a transfer will be subject to a Market Value Adjustment.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On the maturity date of a guaranteed interest period, you may transfer amounts from the applicable Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation to the subaccounts and/or to new Fixed Interest Allocations with guaranteed interest periods of any </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">length we are offering at that time, if any. You may not, however, transfer amounts to any Fixed Interest Allocation </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">with a guaranteed interest period that extends beyond the annuity start date.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">At least 30 calendar days before a maturity date of any of your Fixed Interest Allocations, or earlier if required by </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">state law, we will send you a notice of the guaranteed interest periods that are available. You must notify us which </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">subaccounts or new guaranteed interest periods you have selected before the maturity date of your Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocations. If we do not receive timely instructions from you, we will transfer the Contract value in the maturing </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Interest Allocation to a new Fixed Interest Allocation with a guaranteed interest period that is the same as the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">expiring guaranteed interest period. If such guaranteed interest period is not available or would go beyond the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity start date, we will transfer your Contract value in the maturing Fixed Interest Allocation to the next shortest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed interest period which does not go beyond the annuity start date. If no such guaranteed interest period is </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available, we will transfer the Contract value to a subaccount specially designated by the Company for such purpose.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Currently we use the Liquid Assets subaccount for such purpose.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Withdrawals from a Fixed Interest Allocation</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the accumulation phase, you may withdraw a portion of your Contract value in any Fixed Interest Allocation.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may make systematic withdrawals of only the interest earned during the prior month, quarter or year, depending </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on the frequency chosen, from a Fixed Interest Allocation under our systematic withdrawal option. Systematic </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals from a Fixed Interest Allocation are not permitted if such Fixed Interest Allocation is currently </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">participating in the dollar cost averaging program. A withdrawal from a Fixed Interest Allocation may be subject to </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a Market Value Adjustment and a Contract surrender charge. Be aware that withdrawals may have federal income </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax consequences, including a 10% penalty tax, as well as state income tax consequences.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">If you tell us the Fixed Interest Allocation from which your withdrawal will be made, we will assess the withdrawal </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">against that Fixed Interest Allocation. If you do not, we will assess your withdrawal against the subaccounts in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">which you are invested, unless the withdrawal exceeds the Contract value in the subaccounts. If the withdrawal </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">exceeds the Contract value in those subaccounts, we will deduct your withdrawal from your Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocations starting with the guaranteed interest periods nearest their maturity dates until we have honored your </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">request.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Market Value Adjustment</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A Market Value Adjustment may decrease, increase or have no effect on your Contract value. We will apply a </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment (i) whenever you withdraw or transfer money from a Fixed Interest Allocation (unless </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">made within 30 days before the maturity date of the applicable guaranteed interest period, or under the systematic </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawal or dollar cost averaging program) and (ii) if on the annuity start date a guaranteed interest period for any </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Interest Allocation does not end on or within 30 days of the annuity start date.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We determine the Market Value Adjustment by multiplying the amount you withdraw, transfer or apply to an </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">income plan by the following factor:</FONT></TD></TR></TABLE>
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&nbsp;
	</TD>
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&nbsp;	</TD>
	<TD align=center width=30% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1+I</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
 &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N/365</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
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	<TD align=left width=9% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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&nbsp;
	</TD>
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&nbsp;	</TD>
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<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=43% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1+J+.0050</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Where,</FONT></TD></TR></TABLE>
</P>
<UL>
<LI>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;I&#148; is the Index Rate for a Fixed Interest Allocation on the first day of the guaranteed interest period;</FONT></LI>
<LI>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;J&#148; is the Index Rate for a new Fixed Interest Allocation with a guaranteed interest period equal to the time</FONT> <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">remaining (rounded up to the next full year) in the guaranteed interest period, except for a Fixed Interest</FONT> <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation of 6 months, where &#147;J&#148; is,
at the time of calculation, the lesser of the Index Rate for a new Fixed</FONT> <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest Allocation with (i) a 6-month guaranteed interest period, or (ii) a 1-year guaranteed interest
period;</FONT> <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and</FONT></LI>
<LI>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;N&#148; is the remaining number of days in the guaranteed interest period at the time of calculation.</FONT></LI>
</UL>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Index Rate is the average of the Ask Yields for U.S. Treasury STRIPS as quoted by a national quoting service </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for a period equal to the applicable guaranteed interest period. The average currently is based on the period starting </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the 22nd day of the calendar month two months prior to the month of the Index Rate determination and ending</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the 21st day of the calendar month immediately before the month of determination. We currently calculate the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Index Rate once each calendar month but have the right to calculate it more frequently. The Index Rate will always </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">be based on a period of at least 28 days. If the Ask Yields are no longer available, we will determine the Index Rate</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">by using a suitable and approved, if required, replacement method.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A Market Value Adjustment may be positive, negative or result in no change. In general, if interest rates are rising, </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">you bear the risk that any Market Value Adjustment will likely be negative and reduce your Contract value. On the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other hand, if interest rates are falling, it is more likely that you will receive a positive Market Value Adjustment </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that increases your Contract value. In the event of a full surrender, transfer or annuitization from a Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation, we will add or subtract any Market Value Adjustment from the amount surrendered, transferred or </FONT></TD></TR></TABLE>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuitized. In the event of a partial withdrawal, transfer or annuitization, we will add or subtract any Market Value </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adjustment from the total amount withdrawn, transferred or annuitized in order to provide the amount requested. If</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a negative Market Value Adjustment exceeds your Contract value in the Fixed Interest Allocation, we will consider </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">your request to be a full surrender, transfer or annuitization of the Fixed Interest Allocation.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Several examples which illustrate how the Market Value Adjustment works are included in Appendix A.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=3>&nbsp;</TD><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SPECIAL FUNDS</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We use the term Special Funds in the discussion of the enhanced death benefit options and the optional riders in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain Contract prospectuses. The Special Funds currently include Fixed Interest Allocations and certain variable </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">subaccounts as described in your Contract prospectus. The Company may, at any time, designate any new and/or </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">existing investment option as a Special Fund with 30 days notice with respect to new premiums added or transfers to</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">such subaccount. Designation of an investment option as a Special Fund may vary by benefit. For example, an </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment option may be designated a Special Fund for purposes of calculating a living benefit, but not a death </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefit or for calculating one death benefit and not another. Please see your Contract prospectus for more </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">information.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">THE ANNUITY CONTRACT</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Contract is described in another prospectus. This prospectus describes the Fixed Account and the operations of </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">any Fixed Interest Allocation under your Contract.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Contract Value in the Fixed Interest Allocations. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On the contract date, the Contract value in any
Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation in which you are invested is equal to the portion of the initial premium paid and designated for allocation</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the Fixed Interest Allocation. On each business day after the contract date, we calculate the amount of Contract </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value in each Fixed Interest Allocation as follows:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We take the Contract value in the Fixed Interest Allocation at the end of the preceding business day.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We credit a daily rate of interest on (1) at the guaranteed rate since the preceding business day.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We add (1) and (2).</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We subtract from (3) any transfers from that Fixed Interest Allocation.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We subtract from (4) any withdrawals, and then subtract any contract fees (including any rider charges) and premium taxes.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additional premium payments and transfers allocated to the Fixed Account will be placed in a new Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocation. The Contract value on the date of allocation will be the amount allocated.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cash Surrender Value</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value will</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">fluctuate daily based on the interest credited to Fixed Interest Allocations, any Market Value Adjustment, and any </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">surrender charge. We do not guarantee any minimum cash surrender value. On any date during the accumulation </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">phase, we calculate the cash surrender value as follows: we start with your Contract value, then we adjust for any </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract administrative fee (unless waived), and any optional benefit rider charge, and any other charges incurred </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">but not yet deducted. Several examples which illustrate how the Market Value Adjustment works are included in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Appendix A.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">WITHDRAWALS</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any time during the accumulation phase and before the death of the contract owner, except under certain qualified </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts, you may withdraw all or part of your money. Keep in mind that if you request a withdrawal for more than</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">90% of the cash surrender value, and the remaining cash surrender value after the withdrawal is less than &#36;2,500, we</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">will treat it as a request to surrender the Contract.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You need to submit to us a written request specifying the Fixed Interest Allocations or subaccounts from which </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amounts are to be withdrawn, otherwise the withdrawal will be made on a pro rata basis from all of the subaccounts </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in which you are invested. If there is not enough Contract value in the subaccounts, we will deduct the balance of </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the withdrawal from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturity dates until we have honored your request. We will apply a Market Value Adjustment to any withdrawal </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from your Fixed Interest Allocation taken more than 30 days before its maturity date. We will determine the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contract value as of the close of business on the day we receive your withdrawal request at our Customer Service </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Center. The Contract value may be more or less than the premium payments made. Please see the Contract </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">prospectus for the application of surrender charges to withdrawals.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We offer the following three withdrawal options:</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Regular Withdrawals</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After the free look period, you may make regular withdrawals. Each withdrawal must be a minimum of &#36;100. We </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">will apply a Market Value Adjustment to any regular withdrawal from a Fixed Interest Allocation that is taken more</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">than 30 days before its maturity date.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Systematic Withdrawals</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">See the Contract prospectus for general information on Systematic Withdrawals.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Systematic withdrawals from Fixed Interest Allocations are limited to interest earnings during the prior month, </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter, or year, depending on the frequency you chose. Systematic withdrawals are not subject to a Market Value </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adjustment, unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed below and the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">payments exceed interest earnings. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. A Fixed </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest Allocation may not participate in both the systematic withdrawal option and the dollar cost averaging </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">program at the same time.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fixed Dollar Systematic Withdrawal Feature. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may add the Fixed Dollar Systematic Withdrawal
</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Feature to your regular fixed dollar systematic withdrawal program. This feature allows you to receive a systematic</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawal in a fixed dollar amount regardless of any Market Value Adjustments. Systematic withdrawals from </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">with Section 72(q) and 72(t) distributions. We will assess a Market Value Adjustment on the withdrawal date if the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawal from a Fixed Interest Allocation exceeds your interest earnings on the withdrawal date. We will adjust </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the amount withdrawn to include any Market Value Adjustment so that the amount of each systematic withdrawal </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">remains fixed, unless you direct otherwise.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">IRA Withdrawals</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">See the Contract prospectus for general information on IRA Withdrawals.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">An IRA withdrawal from a Fixed Interest Allocation in excess of the amount allowed under systematic withdrawals </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">will be subject to a Market Value Adjustment.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Consult your tax adviser regarding the tax consequences associated with taking withdrawals. </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You
are </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">responsible for determining that withdrawals comply with applicable law. A withdrawal made before the taxpayer </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reaches age 59&frac12; may result in a 10% penalty tax. See &#147;Federal Tax Considerations&#148; in the Contract prospectus for </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">more details.</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">TRANSFERS AMONG YOUR INVESTMENTS</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may transfer your Contract value among the subaccounts in which you are invested and your Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocations at the end of the free look period until the annuity start date. See the Contract prospectus for general </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">information regarding transfers including transfers by third parties. We will apply a Market Value Adjustment to </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">transfers from a Fixed Interest Allocation taken more than 30 days before its maturity date, unless the transfer is </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">made under the dollar cost averaging program. Keep in mind that transfers between Special Funds and other </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment portfolios may negatively impact your death benefit or rider benefits.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">If you allocate Contract value to an investment option that has been designated as a Restricted Fund, your ability to </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">transfer Contract value to the Restricted Fund may be limited. A transfer to the Restricted Funds will not be permitted </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the extent that it would increase the Contract value in the Restricted Fund to more than the applicable limits </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">following the transfer. We do not limit transfers from Restricted Funds. If the result of multiple reallocations is to </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">lower the percentage of total Contract value in the Restricted Fund, the reallocation will be permitted even if the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">percentage of Contract value in the Restricted Fund is greater than the limit.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Transfers will be based on values at the end of the business day in which the transfer request is received at our </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Customer Service Center.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The minimum amount that you may transfer is &#36;100 or, if less, your entire Contract value held in a subaccount or a </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Interest Allocation.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Dollar Cost Averaging from Fixed Interest Allocations</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may elect to participate in our dollar cost averaging program if you have at least &#36;1,200 of Contract value in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account Interest Allocations with a guaranteed interest period of 1 year or less. The Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amount of money to investment portfolio subaccounts selected by you.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">we transfer the same dollar amount to subaccounts each month, more units of a subaccount are purchased if the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">should consider your tolerance for investing through periods of fluctuating price levels.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You elect the dollar amount you want transferred under this program. Each monthly transfer must be at least &#36;100.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may change the transfer amount once each contract year.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Transfers from a Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adjustment.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">If you do not specify the subaccounts to which the dollar amount of the source account is to be transferred, we will </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">transfer the money to the subaccounts in which you are invested on a proportional basis. The transfer date is the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">same day each month as your contract date. If, on any transfer date, your Contract value in a source account is equal</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or less than the amount you have elected to have transferred, the entire amount will be transferred and the program </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">will end. You may terminate the dollar cost averaging program at any time by sending satisfactory notice to our </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Customer Service Center at least 7 days before the next transfer date. A Fixed Interest Allocation may not </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">participate in the dollar cost averaging program and in systematic withdrawals at the same time.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">See &#147;Dollar Cost Averaging&#148; in the Contract prospectus for a discussion of transferring to a Restricted Fund.</FONT></TD></TR></TABLE>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from the dollar cost averaging program or otherwise modify, suspend or terminate this program. Of course, such</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">change will not affect any dollar cost averaging programs in operation at the time.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CHARGES AND FEES</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Contract has insurance features and investment features, and there are charges related to each. For the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance features, the Company deducts a mortality and expense risk charge, an asset-based administrative charge, </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and an annual contract administrative charge. Depending on your Contract, you may also be able to purchase </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">optional benefit riders, charges for which are deducted from your Contract value. We deduct the mortality and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">expense risk charge and the asset-based administrative charges daily directly from your Contract value in the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">subaccounts. We deduct the charge for the earnings multiplier benefit rider, if applicable, from your Fixed Interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allocations as well.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">When deducting the other contract charges and rider charges, if the value in the subaccounts is insufficient, the contract</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">charges and rider charge will be deducted from the Fixed Interest Allocations starting with the guaranteed interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">periods nearest their maturity dates until the charge has been paid and the amount deducted may be subject to a </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment. See the Contract prospectus for more information.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">DEATH BENEFIT AND OPTIONAL RIDERS</FONT></B></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Please refer to your Contract prospectus for descriptions of benefits under the Contract and the effect of your Fixed</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest Allocations on those benefits. For purposes of calculating the death benefits, certain investment portfolios </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and the Fixed Account may be designated as &#147;Special Funds.&#148; Selecting a Special Fund may limit or reduce the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">death benefit.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">OTHER CONTRACT PROVISIONS</FONT></B></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Suspension of Payments</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months.</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">OTHER INFORMATION</FONT></B></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">State Regulation</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">We are regulated by the Insurance Department of the State of Iowa. We are also subject to the insurance laws and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulations of all jurisdictions where we do business. We are required to submit annual statements of our operations, </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including financial statements, to the Insurance Departments of the various jurisdictions in which we do business to </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">determine solvency and compliance with state insurance laws and regulations.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Legal Proceedings</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is involved in threatened or pending lawsuits/arbitrations arising from the normal conduct of </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">business. Due to the climate in insurance and business litigation/arbitration, suits against the Company sometimes </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">include claims for substantial compensatory, consequential or punitive damages and other types of relief. Moreover,</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain claims are asserted as class actions, purporting to represent a group of similarly situated individuals. While it</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">materially adverse effect on the Company&#146;s operations or financial position.</FONT></TD></TR></TABLE>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT></TD></TR></TABLE>
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     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Directed Services LLC, the principal underwriter and distributor of the contract, is a party to threatened or pending</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>lawsuits/arbitration that generally arise from the normal conduct of business. Some of these suits may seek class</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>action status and sometimes include claims for substantial compensatory, consequential or punitive damages and</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>other types of relief. Directed Services LLC is not involved in any legal proceeding which, in the opinion of</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>management, is likely to have a material adverse effect on its ability to distribute the contract.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Experts</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>The financial statements of the Company appearing in the Company's Annual Report (Form 10-K) for the year</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ended December 31, 2007 (including schedules appearing therein), have been audited by Ernst &amp; Young LLP,</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>independent registered public accounting firm, as set forth in their reports thereon included therein, and are included</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and incorporated herein by reference. Such financial statements are included and incorporated herein by reference</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Further Information</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>This prospectus does not contain all of the information contained in the registration statement of which this</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>prospectus is a part. Portions of the registration statement have been omitted from this prospectus as allowed by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Securities and Exchange Commission (SEC). You may obtain the omitted information from the offices of the SEC,</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>as described below. We are required by the Securities Exchange Act of 1934 to file periodic reports and other</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>information with the SEC. You may inspect or copy information concerning the Company at the Public Reference</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Room of the SEC at:</FONT></TD></TR></TABLE></P>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Securities and Exchange Commission</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>100 F Street, NE, Room 1580</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Washington, DC 20549</FONT></TD></TR></TABLE></P>
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<TABLE>
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     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>You may also obtain copies of these materials at prescribed rates from the Public Reference Room of the above</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>office. You may obtain information on the operation of the Public Reference Room by calling the SEC at either</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>1-800-SEC-0330 or 1-202-942-8090. You may also find more information about the Company at www.ing.com.</FONT><BR>
&lt;R&gt;<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>Copies of the Company&#146;s annual report on Form 10-K for the fiscal year ended December 31, 2007, and the</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>Company&#146;s quarterly report on Form 10-Q for the period ended March 31, 2008, <FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" size=2>accompan</FONT><STRIKE>ies</STRIKE>y this prospectus. We</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2><FONT color=#000000>refer to Form 10-K for a description of the Company and its business, including financial statements. We intend to</FONT></FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2><FONT color=#000000>send contract holders annual account statements and other such legally required reports. We do not anticipate such</FONT></FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2><FONT color=#000000>reports will include periodic financial statements or information concerning the Company.</FONT></FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2><FONT color=#000000>You can find this prospectus and other information the Company files electronically with the SEC on the SEC&#146;s web</FONT></FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2><FONT color=#000000>site at www.sec.gov.</FONT></FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2><FONT color=#000000>Incorporation of Certain Documents by Reference</FONT></FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2><FONT color=#000000>We have incorporated by reference the Company&#146;s following periodic reports:</FONT></FONT></TD></TR></TABLE></P>
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     <TD vAlign=top noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></TD>
     <TD width="100%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>Annual Report on Form 10-K for the fiscal year ended December 31, 2007; and</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></TD></TR>
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     <TD colSpan=2><FONT color=#000000>&nbsp;</FONT></TD></TR>
<TR>
     <TD vAlign=top noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></TD>
     <TD width="100%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2008.</FONT></FONT></FONT></FONT></FONT></FONT></FONT></FONT></TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR></TABLE>
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<P><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" size=2>We were not required to file any other</FONT> <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reports pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act since the end of the fiscal year covered</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>by that Form 10-K.</FONT>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>We</FONT> <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>will provide a free copy of</FONT>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#808080 size=2><FONT color=#000000>these</FONT></FONT></FONT></FONT> <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>documents upon the written or oral request of anyone who has received</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>this prospectus. We will not include exhibits to those documents unless they are specifically incorporated by</FONT> <BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference into the document. Direct requests to:</FONT></P>
<P><FONT size=2>&lt;/R&gt;<BR>
</FONT></P>
</TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Fixed Account II</FONT></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>9</FONT></TD></TR></TABLE></P>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Customer Service Center</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">P.O. Box 9271</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Des Moines, Iowa 50306-9271</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1-800-366-0066</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Inquiries</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">You may contact us directly by writing or calling us at the address or phone number shown above.</FONT></TD></TR></TABLE>
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<TABLE><TR><TD width=3>&nbsp;</TD><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FEDERAL TAX CONSIDERATIONS</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">For a general description of the federal income tax considerations associated with the Contract please refer to the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contract prospectus. The &#147;Federal Tax Considerations&#148; section of the Contract prospectus does not purport to be</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">complete or to cover all tax situations. The discussion is not intended as tax advice. You should consult your </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">counsel or other competent tax advisers for more complete information. The discussion is based upon our </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">understanding of the present federal income tax laws. We do not make any representations as to the likelihood of</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">continuation of the present federal income tax laws or as to how they may be interpreted by the IRS.</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10</FONT></TD></TR></TABLE>
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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">APPENDIX A</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Market Value Adjustment Examples</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Example #1: Full Surrender </FONT></B><FONT size=2 face="SymbolMT,Times New Roman,Times,serif">&frac34;</FONT><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif"> Example of a Negative Market Value Adjustment</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assume &#36;100,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">initial Index Rate (&#147;I&#148;) of 5%; that a full surrender is requested 3 years into the guaranteed interest period; that the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Account Value on the date of surrender is &#36;115,000; that the then Index Rate for a 7-year guaranteed interest period</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;J&#148;) is 6%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been made.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=45% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Calculate the Market Value Adjustment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=37% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N = 2,555 ( 365 x 7 )</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=37% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment = &#36;115,000 </FONT><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">x</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">[(</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<U><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.05</FONT></SUP></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">) </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,555/365</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">] </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">= </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;-10,870</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=37% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0650</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Therefore, the amount paid to you on full surrender, ignoring any surrender charge, is &#36;104,130</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#36;115,000 - &#36;10,870).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Example #2: Full Surrender </FONT></B><FONT size=2 face="SymbolMT,Times New Roman,Times,serif">&frac34;</FONT><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif"> Example of a Positive Market Value Adjustment</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assume &#36;100,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">initial Index Rate (&#147;I&#148;) of 5%; that a full surrender is requested 3 years into the guaranteed interest period; that the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Account Value on the date of surrender is &#36;115,000; that the then Index Rate for a 7-year guaranteed interest period</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;J&#148;) is 4%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been made.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=46% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Calculate the Market Value Adjustment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N = 2,555 ( 365 x 7 )</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment = &#36;115,000 </FONT><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">x</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">[(</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<U><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.05</FONT></SUP></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">) </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,555/365</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">] </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">= </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;3,907</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0450</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Therefore, the amount paid to you on full surrender, ignoring any surrender charge, is &#36;118,907</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#36;115,000 + &#36;3,907).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Example #3: Withdrawal </FONT></B><FONT size=2 face="SymbolMT,Times New Roman,Times,serif">&frac34;</FONT><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif"> Example of a Negative Market Value Adjustment</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assume &#36;200,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">initial Index Rate (&#147;I&#148;) of 5%; that a withdrawal of &#36;128,000 is requested 3 years into the guaranteed interest period;</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that the Account Value on the date of withdrawal is &#36;250,000; that the then Index Rate (&#147;J&#148;) for a 7-year guaranteed </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest period is 6%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">made.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">First calculate the amount that must be withdrawn from the Fixed Interest Allocation to provide the amount </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">requested.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=2% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N = 2,555 ( 365 x 7 )</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=2% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amount that must be withdrawn =</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">[ </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;128,000 </FONT><B><SUP><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">/</FONT></SUP></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">( </FONT></B><U><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.05</FONT></SUP></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">) </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,555/365</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">] </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">= </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;141,362</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0650</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A1</FONT></TD></TR></TABLE>
</P>

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	<TD align=left width=62% nowrap colspan=5>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Then calculate the Market Value Adjustment on that amount.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=43% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3. Market Value Adjustment = &#36;141, 362 </FONT><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">x</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">[(</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<U><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.05</FONT></SUP></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">) </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,555/365</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">] </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">= </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;-13,362</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=43% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0650</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Therefore, the amount of the withdrawal paid to you, ignoring any surrender charge, is &#36;128,000, as requested.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Fixed Interest Allocation will be reduced by the amount of the withdrawal, &#36;128,000, and also reduced by the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment of &#36;13,362, for a total reduction in the Fixed Interest Allocation of &#36;141,362.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Example #4: Withdrawal </FONT></B><FONT size=2 face="SymbolMT,Times New Roman,Times,serif">&frac34;</FONT><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif"> Example of a Positive Market Value Adjustment</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assume &#36;200,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">initial Index Rate of 5%; that a withdrawal of &#36;128,000 requested 3 years into the guaranteed interest period; that the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Account Value on the date of withdrawal is &#36;250,000; that the then Index Rate (&#147;J&#148;) for a 7-year guaranteed interest </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">period is 4%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been made.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">First calculate the amount that must be withdrawn from the Fixed Interest Allocation to provide the amount </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">requested.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N = 2,555 ( 365 x 7 )</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amount that must be withdrawn =</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap colspan=3>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">[ </FONT></B><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;128,000 </FONT><B><SUP><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">/</FONT></SUP></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">( </FONT></B><U><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.05</FONT></SUP></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">) </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,555/365 </FONT></SUP><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">] </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">= </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;123,794</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0450</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=60% nowrap colspan=7>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Then calculate the Market Value Adjustment on that amount.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment = &#36;123,794 </FONT><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">x</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
 &nbsp;<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">[(</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<U><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.05</FONT></SUP></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">) </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,555/365</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
 &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-1 </FONT><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">] </FONT></B><SUP><FONT size=5 face="TimesNewRomanPSMT,Times New Roman,Times,serif">=
</FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;4,206</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0450</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Therefore, the amount of the withdrawal paid to you, ignoring any surrender charge, is &#36;128,000, as requested.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Fixed Interest Allocation will be reduced by the amount of the withdrawal, &#36;128,000, but increased by the </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market Value Adjustment of &#36;4,206, for a total reduction in the Fixed Interest Allocation of &#36;123,794.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed Account II</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A2</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>


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<A name="page_15"></A>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif" size=1>ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa.</FONT></I></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Fixed Account II</FONT></TD></TR></TABLE></P>
&lt;R&gt;
<P align=left>
<TABLE>
<TR>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>0</FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>5</FONT>
<!-- 4--><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>/20</FONT>
<!-- 28--><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>/2008</FONT></TD></TR></TABLE></P>
&lt;/R&gt;
<HR align=center width="100%" noShade SIZE=2>


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<A name="page_1"></A>

<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">UNITED STATES SECURITIES AND EXCHANGE COMMISSION</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">WASHINGTON, D.C. 20549</FONT></U></B><BR>
<BR>
<B><FONT size=6 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FORM 10-K</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">For the fiscal year ended </FONT></B><B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31, 2007</FONT></U></B><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Commission File Number: </FONT></B><B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">333-133154, 333-133076, 333-133156, 333-133153, 333-133155,
333-133152</FONT></U></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Exact name of registrant as specified in its charter)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=57% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Iowa</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">41-0991508</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=57% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(State or other jurisdiction of incorporation or organization)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(IRS Employer Identification No.)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=57% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1475 Dunwoody Drive</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">19380-1478</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=57% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">West Chester, Pennsylvania</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Zip Code)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=57% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Address of principal executive offices)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(610) 425-3400</FONT></U></B><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Registrant's telephone number, including area code)</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Former name, former address and former fiscal year, if changed since last report</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Securities registered pursuant to Section 12(b) of the Act: </FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Title: 4.50% Secured Medium Term Notes due 2010 of ING USA Global Funding Trust I</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Name of exchange on which registered: New York Stock Exchange</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=81% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Securities registered pursuant to Section 12(g) of the Act: None</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=81% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
<FONT size=2 face="Wingdings-Regular,WingDings"> </FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
<FONT size=2 face="Wingdings 2,WingDings">&#163;</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=81% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap colspan=3>
<FONT size=2 face="Wingdings 2,WingDings">&#163; </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="Wingdings-Regular,WingDings"> </FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">days.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Yes</FONT><FONT size=2 face="Wingdings-Regular,WingDings"> </FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No</FONT><FONT size=2 face="Wingdings 2,WingDings">&#163;</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (&#167; 229.405 of this chapter) is not contained herein, and will not be</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contained, to the best of registrant&#146;s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amendment to this Form 10-K. Yes</FONT><FONT face="Wingdings-Regular,WingDings">  </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No</FONT><FONT size=2 face="Wingdings 2,WingDings">&#163;</FONT><BR>
<BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">definitions of &#147;large accelerated filer&#148;, &#147;accelerated filer&#148;, and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange Act. (Check
one):</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=15% nowrap>
 &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Large accelerated filer</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
<FONT size=2 face="Wingdings 2,WingDings">&#163; </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accelerated filer</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap colspan=3>
<FONT size=2 face="Wingdings 2,WingDings">&#163; </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Non-accelerated filer </FONT><FONT size=2 face="Wingdings-Regular,WingDings"> </FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Smaller reporting company</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
<FONT size=2 face="Wingdings 2,WingDings">&#163;</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Do not check if a smaller</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=21% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reporting company)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=60% nowrap colspan=5>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Yes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<FONT size=2 face="Wingdings 2,WingDings">&#163; </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
<FONT size=2 face="Wingdings-Regular,WingDings"> </FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=66% nowrap colspan=7>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State the aggregate market value of the voting and non-voting common equity held by non-affiliates: N/A</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">APPLICABLE ONLY TO CORPORATE ISSUERS:</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 250,000 shares of Common Stock, &#36;10 par</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value, as of March 25, 2008, are authorized, issued, and outstanding, all of which were directly owned by Lion Connecticut Holdings Inc.</FONT><BR>
<BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NOTE: WHEREAS ING USA ANNUITY AND LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b)</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">OF FORM 10-K, THIS FORM IS BEING FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION I(2).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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	<TD align=center width=75% nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
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&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=75% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=75% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Annual Report on Form 10-K</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=75% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">For the Year Ended December 31, 2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
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<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">TABLE OF CONTENTS</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
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</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
&nbsp;
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	<TD width=2%>
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	<TD align=center width=9% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PAGE</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART I</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Business**</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1A.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Risk Factors</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">15</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1B.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unresolved Staff Comments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">23</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Properties</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">**</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">23</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 3.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Legal Proceedings</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 4.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Submission of Matters to a Vote of Security Holders</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
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	<TD align=left width=11% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART II</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 5.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market for Registrant&#146;s Common Equity, Related Stockholder Matters</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">25</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Issuer Purchases of Equity Securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 6.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Selected Financial Data</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">***</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 7.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management&#146;s Narrative Analysis of the Results of Operations and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">27</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Condition</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">**</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 7A.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Quantitative and Qualitative Disclosures About Market Risk</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">67</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 8.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Statements and Supplementary Data</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">72</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 9.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in and Disagreements With Accountants on Accounting and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Disclosure</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">131</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 9A.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Controls and Procedures</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">131</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 9B.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other Information</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">132</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART III</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 10.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Directors, Executive Officers, and Corporate Governance</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">133</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 11.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Compensation</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">133</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 12.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Ownership of Certain Beneficial Owners and Management</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Related Stockholder Matters*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">133</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 13.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain Relationships, Related Transactions, and Director Independence</FONT><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">133</FONT>&nbsp;
	</TD>
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&nbsp;
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 14</FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">.</FONT>&nbsp;
	</TD>
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&nbsp;	</TD>
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 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Principal Accounting Fees and Services</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">134</FONT>&nbsp;
	</TD>
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<TR>
	<TD colspan=5>
&nbsp;
	</TD>
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	<TD align=left width=11% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART IV</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 15.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibits, Financial Statement Schedules</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">136</FONT>&nbsp;
	</TD>
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<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Index to Financial Statement Schedules</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">137</FONT>&nbsp;
	</TD>
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	<TD align=left width=11% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Signatures</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">141</FONT>&nbsp;
	</TD>
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	<TD align=left width=11% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=75% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibits Index</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">142</FONT>&nbsp;
	</TD>
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<TABLE border=0 cellspacing=0 cellpadding=0>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item omitted pursuant to General Instruction I(2) of Form 10-K, except as to Part III, Item 10 with respect to compliance with Sections 406 and 407 of the Sarbanes-Oxley Act of
2002.</FONT>	</TD>
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<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">**</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item prepared in accordance with General Instruction I(2) of Form 10-K.</FONT>	</TD>
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<TR><TD colspan=2>&nbsp;</TD></TR><TR>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">***</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Although item may be omitted pursuant to General Instruction I(2) of Form 10-K, the Company has provided certain disclosure under this item.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART I</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 1. Business</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Organization of Business</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company (&#147;ING USA&#148; or the &#147;Company,&#148; as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate) is a stock life insurance company domiciled in the State of Iowa and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides financial products and services in the United States. ING USA is authorized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to conduct its insurance business in all states, except New York, and in the District of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Columbia.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;Lion&#148; or &#147;Parent&#148;), which is an indirect, wholly-owned subsidiary of ING Groep</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">N.V. (&#147;ING&#148;).  ING is a global financial services holding company based in The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Netherlands, with American Depository Shares listed on the New York Stock</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange under the symbol &#147;ING&#148;.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Description of Business</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING&#146;s U.S.-based operations offer a broad range of life insurance, annuity, mutual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fund, employee benefit, defined contribution, guaranteed investment, and funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement contracts.  For the year ended December 31, 2007, ING&#146;s U.S.-based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations were ranked eighth in sales of variable annuities according to data</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">published by Morningstar, Inc. and twelfth in sales of fixed annuities, excluding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">structured settlements, according to data published by LIMRA International Inc.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;LIMRA&#148;).  The Company serves as one of the primary vehicles through which</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING&#146;s U.S.-based operations write variable and fixed annuity business. According to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">LIMRA&#146;s fourth quarter 2007 sales report on Stable Value and Funding Agreement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products, ING&#146;s U.S.-based operations were ranked second in market share for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">funding agreement contracts, and seventh for traditional general account guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment contracts, in terms of total assets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company offers various insurance products, including immediate and deferred</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable and fixed annuities.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s annuity products are distributed by</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">national wirehouses, regional securities firms, independent broker-dealers, banks, life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance companies with captive agency sales forces, independent insurance agents,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">independent marketing organizations, and affiliated broker-dealers. The Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primary annuity customers are individual consumers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also offers guaranteed investment contracts and funding agreements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(collectively referred to as &#147;GICs&#148;), sold primarily to institutional investors and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporate benefit plans. These products are marketed by home office personnel or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">through specialty insurance brokers.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">See &#147;Reserves&#148; for a discussion of the Company&#146;s reserves by product type.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has one operating segment, which offers the products described below.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Products and Services</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Products offered by the Company include immediate and deferred variable and fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities, designed to address customer needs for tax-advantaged savings, retirement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">needs, and wealth-protection concerns, and GICs.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Variable Annuities</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The variable annuities offered by the Company are savings</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">vehicles in which contractowner deposits are recorded and primarily maintained in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">separate accounts established by the Company and registered with the Securities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange Commission (&#147;SEC&#148;) as a unit investment trust. Unlike fixed annuities,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable annuity contractowners bear the risk of investment gains and losses</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with the selected investment allocation.  The Company, however, offers</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain guaranteed death and living benefits (described below) under which it bears</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specific risks associated with these products.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets and liabilities generally represent funds maintained to meet</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specific investment objectives of contractowners. In general, investment income and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment gains and losses accrue directly to the separate accounts. The assets of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">each account are legally segregated and are not subject to claims that arise out of any</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other business of the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets supporting variable options under variable annuity contracts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are invested, as designated by the contractowner or participant under a contract, in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">shares of mutual funds managed by affiliates of the Company or in other selected</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual funds not managed by affiliates of the Company. Variable annuity deposits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are allocated to various subaccounts established within the separate account.  Each</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">subaccount represents a different investment option into which the contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">may allocate deposits. The account value of a variable annuity contract is equal to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">aggregate value of the subaccounts selected by the contractowner, including the value</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">allocated to any fixed account, less fees and expenses.  The Company offers</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment options for its variable annuities covering a wide range of investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">styles, including large, mid, and small cap equity funds, as well as fixed income</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">alternatives.  Many of the variable annuity contracts issued by the Company are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">combination contracts, offering both variable and fixed options under which some or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">all of the deposits may be allocated by the contractowner to a fixed account.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s major source of income from variable annuities is the base contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortality, expense, and guaranteed death and living benefit rider fees charged to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner, less the costs of administering the product and providing for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed death and living benefits.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s variable annuities offer one or more of the following guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">death and living benefits:</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Minimum Death Benefits </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;GMDBs&#148;):</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Standard - Guarantees that, upon death, the death benefit will be no less than the premiums paid by the contractowner, adjusted for any contract withdrawals.</FONT>	</TD>
</TR>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Ratchet - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Standard or (2) the maximum contract anniversary (or quarterly) value of the variable
annuity, adjusted for contract withdrawals.</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rollup (7.0% or 5.5% Solution) - Guarantees that, upon death, the death benefit will be no less than the aggregate premiums paid by the contractowner accruing interest at 7.0% or 5.5% per
annum, adjusted for contract withdrawals, which may be subject to a maximum cap on the rolled up amount. (The Company has discontinued this option for new sales.)</FONT>	</TD>
</TR>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combo (Max 7) - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For contracts issued prior to January 1, 2000, most contracts with enhanced death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefit guarantees were reinsured to third party reinsurers to mitigate the risk</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">produced by such guaranteed death benefits. For contracts issued after December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999, the Company instituted an equity hedging program in lieu of reinsurance. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity hedging program is based on the Company entering into derivative positions to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">offset exposures to guaranteed minimum death benefits due to adverse changes in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity markets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, the guaranteed value of these death benefits in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">excess of account values was estimated to be &#36;2.7 billion and &#36;2.2 billion,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, before reinsurance. The increase was primarily driven by the decrease</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in account values due to unfavorable equity market performance in the second half of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the guaranteed value of minimum guaranteed death benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in excess of account values, net of reinsurance, was estimated to be &#36;1.8 billion, of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which &#36;537.6 was projected to be covered by the Company&#146;s equity hedging</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">program. At December 31, 2006, the guaranteed value of minimum guaranteed death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits in excess of account values, net of reinsurance, was estimated to be &#36;1.3</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion, of which &#36;381.7 was projected to be covered by the Company&#146;s equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hedging program.  As of December 31, 2007 and 2006, the Company recorded a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability of &#36;209.4 and &#36;139.7, respectively, net of reinsurance, representing the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated net present value of the Company&#146;s future obligation for guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">minimum death benefits in excess of account values. The liability increased mainly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to the accumulation of fees used to fund the reserve during 2007 and higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future project benefits in excess of account values.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Living Benefits</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Income Benefit (&#147;GMIB&#148;) - Guarantees a minimum income payout, exercisable each contract anniversary on or after a specified date, in most cases the 10th rider
anniversary.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Withdrawal Benefit (&#147;GMWB&#148;) - Guarantees annual withdrawals for life of a percentage of premiums received during the growth phase (before taking withdrawals and
after age 60). The percentage may vary by age at first withdrawal, depending on the base annuity contract. For certain versions, before withdrawals begin there are annual step-up (for 10 years) and quarterly ratchet features that may increase the
amount used to calculate the annual withdrawal amount. Other versions have a quarterly ratchet feature only.</FONT>	</TD>
</TR>
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<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A joint life-time withdrawal benefit option is available to include coverage for spouses. Most versions of the withdrawal benefit have reset and/or step up features that may increase the
guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0 % of eligible premiums may be made until eligible premiums previously paid by the contractowner are
returned, regardless of account value performance. Asset allocation requirements apply at all times where withdrawals are guaranteed for life.</FONT>	</TD>
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	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Accumulation Benefit (&#147;GMAB&#148;) - Guarantees that the account value will be at least 100% of the eligible premiums paid by the contractowner after 10 years, net of
any contract withdrawals (GMAB 10). In the past, the Company offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contractowners after 20 years (GMAB 20).</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">All living benefits are covered by the Company&#146;s equity hedging program.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, the guaranteed value of these living benefits in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">excess of account values was &#36;506.5 and &#36;227.4, respectively.  The increase was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily driven by the decrease in account values due to unfavorable equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance in the second half of 2007.  As of December 31, 2007 and 2006, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company recorded a liability of &#36;149.3 and &#36;76.1, respectively, representing the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated net present value of its future obligation for living benefits in excess of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">account values. The liability increased mainly due to accumulation of fees used to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fund the reserve and higher future projected benefits in excess of account values</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">during 2007.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity Hedging Program</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: In order to hedge equity risk associated with GMDBs and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed living benefits, the Company enters into futures positions on various</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">public market equity indices chosen to closely replicate contractowner variable fund</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">returns. The Company uses market consistent valuation techniques to establish its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative positions and to rebalance the derivative positions in response to market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fluctuations. One aspect of the hedging program is designed to offset changes related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to equity experience in the liability and to pay excess claims not covered by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner account value. The Company also administers a hedging program that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mitigates both equity risk and equity volatility risk associated with its Principal Guard</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMWB product issued in 2005 and beyond. This hedge strategy primarily involves</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">entering into put options.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other risks posed by market conditions, such as interest rate risk and the majority of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s equity volatility risk, and risks posed by contractowner experience,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such as surrender and mortality experience deviations, are not explicitly mitigated by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this program. In addition, certain funds, where there is no replicating market index</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and where hedging is not appropriate, are excluded from the program.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For those risks addressed by the equity hedging program, the Company is exposed to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the risk that the market indices will not adequately replicate actual contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable fund growth. Any differences between actual results and the market indices</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result in income volatility.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fixed Annuities</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The fixed annuities offered by the Company are general account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products and include single premium immediate, multi-year guaranteed, annual reset,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and fixed indexed (&#147;FIA&#148;) annuities.  Under fixed annuity contracts, the principal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amount is guaranteed, and, for a specified time period, the Company credits interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the contractowner accounts at a fixed interest rate, or, for an FIA, the greater of a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fixed interest rate or a return based upon performance of the Standard &amp; Poor&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;S&amp;P&#148;) 500 index and participation rates set by the Company.  For accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purposes, the equity return component of an FIA is considered an embedded</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative. See further discussion under &#147;Reserves&#148; below. The Company bears the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment risk on fixed annuities, because, while the Company credits contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounts with a stated interest rate, the Company cannot be certain the investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">income earned on the general account assets will exceed that rate.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">S&amp;P 500 call options are purchased and written to hedge equity risk associated with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIA contracts. During the fourth quarter of 2007, the Company began using futures</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts to hedge certain FIA contracts.  The FIA hedging program is limited to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">currently accruing liabilities resulting from participation rates that have already been</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">set, and measured using capital market valuation techniques. Future equity returns,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which may be reflected in FIA credited rates beyond the current policy term, are not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hedged.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s major source of income from fixed annuities is the spread between</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the investment income earned on the underlying general account assets and the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest rate credited to contractowner accounts.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Investments Contracts and Funding Agreements</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The Company is also a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provider of GICs issued to the stable value market and other institutional customers.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company may issue GICs to one or more special purpose vehicles, including the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Global Funding Trusts, which concurrently sell notes to institutional or retail</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investors in order to fund the purchase of GICs. The Company profits from the sale of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GICs by earning income in excess of the amount credited to the customer accounts, less</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the cost of administering the product. The Company bears the investment risk because,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">while the Company credits customer accounts with an interest rate based on a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">predetermined index, plus a spread or a fixed rate, the Company cannot be certain the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment income earned on the general account investments, less expenses will</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exceed that rate.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other Insurance Products</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Historically, the Company provided interest-sensitive,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">traditional life insurance, and health insurance products. All health insurance has been</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ceded to other insurers and new policies are no longer written. The Company ceased</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the issuance of life insurance policies in 2001, and all life insurance business is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">currently in run-off.  A certain portion of the assets held in the general account are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dedicated to funding this block of business.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Strategy, Method of Distribution, and Principal Markets</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company believes longer life expectancies, an aging population, and growing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">concern over the stability and availability of the Social Security system have made</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">retirement planning a priority for many Americans. The target market for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s annuity products is primarily individuals, while the target market for GICs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is primarily institutional investors and corporate benefit plans.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The principal distribution channels of the Company&#146;s variable and fixed annuities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">include national wirehouses, regional securities firms, independent broker-dealers,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">banks, life insurance companies with captive agency sales forces, independent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance agents, independent marketing organizations, and affiliated broker-dealers.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GICs are distributed primarily through direct sales by home office personnel or through</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specialty insurance brokers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company markets its variable annuities primarily on the underlying guarantee</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">features, positioning the product line as a risk management tool for clients and advisors.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indexed annuities are marketed primarily based on underlying guarantee features</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">coupled with consumer-friendly product designs offering the potential for equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market upside. The Company also offers fixed annuities offering a guaranteed interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rate or annuity payment suitable for clients seeking a stable return.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also utilizes sales inducements as part of its distribution strategy for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities. Sales inducements represent benefits paid to contractowners for a specified</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">period, which are incremental to the amounts the Company credits on similar contracts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and are higher than the contract&#146;s expected ongoing crediting rates for periods after the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">inducement.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is not dependent upon any single customer, and no single customer</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounted for 10</FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">.</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">0% or more of the
Company&#146;s revenue in 2007.  The only</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distributor that produced 5.0% or more of 2007 annuity sales was the ING Advisors</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Network (a group of broker-dealers affiliated with the Company), which produced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately 14.2% of annuity sales.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Assets Under Management</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A substantial portion of the Company&#146;s fees, or other charges and margins, are based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on general and separate account assets under management (&#147;AUM&#148;).  General</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">account AUM represents assets in which the Company bears the investment risk,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">while separate account AUM represents assets in which the contractowners bear the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment risk. AUM is principally affected by net deposits (i.e., annuity premiums</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and GIC deposits, less surrenders), investment performance (i.e., interest credited to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner accounts for fixed options or market performance for variable options),</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and contractowner retention. The general and separate account AUM was as follows</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=45% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
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	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Variable annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 45,525.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 38,801.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,167.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,084.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">GICs</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,976.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,353.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other insurance products</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,300.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,316.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 70,970.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 59,555.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
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<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=40% nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Competition</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The competitive annuity market remains intense and is dominated by a number of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">large, highly-rated insurance companies. Increasing competition within the retirement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">savings business from traditional insurance carriers, as well as banks and mutual fund</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">companies, offers consumers many choices. The Company&#146;s annuity products compete</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the annuity market principally on the basis of investment performance, product</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">design, brand recognition, financial strength ratings, distribution capabilities, levels of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">charges and credited rates, reputation, and customer service.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company competes in the GIC market primarily on the basis of its capital markets,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">product structuring, and risk management expertise, as well as its brand recognition and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial strength ratings. Other competitors in this market include other life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">companies, as well as banks and other financial institutions.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Reserves</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company establishes and carries actuarially-determined reserves that are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">calculated to meet its future obligations. Generally, reserves are calculated using</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortality and withdrawal rate assumptions based on relevant Company experience</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and are periodically reviewed against both industry standards and experience.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in, or deviations from, the assumptions used can significantly affect the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s reserve levels and related future operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits and claims reserves include reserves for deferred annuities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate annuities with and without life contingent payouts, universal and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">traditional life insurance contracts, and GICs. </FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">9</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for deferred annuity investment contracts and immediate annuities without</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">life contingent payouts are equal to cumulative deposits, less charges and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals, plus credited interest thereon.  Deferred annuity crediting rates and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserve interest rates varied by product up to 10.0% for 2007, 7.8% for 2006, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.0% for 2005.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for individual immediate annuities with life contingent payout benefits are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">computed on the basis of assumed interest discount rate, mortality, and expenses,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including a margin for adverse deviations. Such assumptions generally vary by</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity plan type, year of issue, and policy duration.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For 2007, 2006, and 2005,</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate annuity reserve interest discount rates varied up to 8.0% .</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for FIAs are computed in accordance with the Financial Accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Standards Board Statement of Financial Accounting Standards (&#147;FAS&#148;) No. 97,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Accounting and Reporting by Insurance Enterprises for Certain Long-Duration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contracts and for Realized Gains and Losses from the Sale of Investments&#148; (&#147;FAS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 97&#148;) and FAS No. 133, &#147;Accounting for Derivative Instruments and Hedging</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Activities&#148; (&#147;FAS No. 133&#148;). Accordingly, the aggregate initial liability is equal to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the deposit received, plus a bonus, if applicable, and is split into a host component</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and an embedded derivative component. Thereafter, the host liability accumulates at a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">set interest rate, and the embedded derivative liability is recognized at fair value, with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the change in fair value recorded in the Statements of Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for universal life products are equal to cumulative deposits, less withdrawals</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and charges, plus credited interest thereon. Reserves for traditional life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts represent the present value of future benefits to be paid to or on behalf of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners and related expenses, less the present value of future net premiums.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under Statement of Position (&#147;SOP&#148;) 03-1, &#147;Accounting and Reporting by Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Enterprises for Certain Nontraditional Long-Duration Contracts for Separate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accounts&#148; (&#147;SOP 03-1&#148;), the Company calculates additional liabilities (&#147;SOP 03-1</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves&#148;) for certain guaranteed benefits and for universal life products with certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">patterns of cost of insurance charges and certain other fees. The SOP 03-1 reserve for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such products recognizes the portion of contract assessments received in early years</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">used to compensate the insurer for services provided in later years.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company calculates a benefit ratio for each block of business subject to SOP 03-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1, and calculates an SOP 03-1 reserve by accumulating amounts equal to the benefit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratio multiplied by the assessments for each period, reduced by excess death benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">during the period. The SOP 03-1 reserve is accumulated at interest rates using the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract-credited rate for the period. The calculated reserve includes a provision for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">universal life contracts with patterns of cost of insurance charges that produce</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expected gains from the insurance benefit function followed by losses from that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">function in later years.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMABs and GMWBs without life contingent payouts are considered to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivatives under FAS No. 133. The additional reserves for these guarantees are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized at fair value through the Statements of Operations.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for GICs are calculated using the amount deposited with the Company, less</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals, plus interest accrued to the ending valuation date. Interest on these</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts is accrued by a predetermined index, plus a spread or a fixed rate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">established at the issue date of the contract.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007 and 2006, the Company&#146;s life and annuity insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves (general and separate account) and deposit-type funds were comprised of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">each type of the following products:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Reserves</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of Total</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Reserves</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Variable annuity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 49,789.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">65.6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 43,353.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.1%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed annuity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15,385.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15,287.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23.7%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">GICs</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9,415.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12.4%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,603.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.1%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other insurance products</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,349.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.8%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,379.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.1%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 75,939.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 64,624.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Reinsurance Arrangements</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company utilizes indemnity reinsurance agreements to reduce its exposure to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">large losses from its annuity and life insurance businesses.  Reinsurance permits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recovery of a portion of losses from reinsurers, although it does not discharge the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s primary liability as the direct insurer of the risks. Reinsurance treaties are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">structured as yearly renewable term, coinsurance, or modified coinsurance.  All</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">treaties for variable annuity and life products are closed for new business, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable annuity guarantees, and the life business in force under those treaties is in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">run-off. Thus, the Company is currently not selecting new reinsurers. If in a position</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to select a reinsurer, the Company would primarily base its selection on the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">strength of the reinsurer.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company currently has a significant concentration of ceded reinsurance with its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate, Security Life of Denver Insurance Company (&#147;Security Life&#148;).  At</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, the Company has reinsurance primarily related to GICs, fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities, and universal life policies with Security Life. See &#147;Liquidity and Capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Resources - Facultative Reinsurance Agreement&#148; in Management&#146;s Narrative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Analysis of the Results of Operations and Financial Condition for further discussion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Company&#146;s reinsurance of GICs to Security Life.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">One of the main risks reinsured by the Company is the GMDBs on its variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity policies issued prior to January 1, 2000.  For contracts issued after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 1999, the Company hedges its exposure due to these products. Other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reinsurance contracts coinsure life, accident and health, and annuity businesses. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company continually monitors and evaluates the financial strength and credit ratings</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of its reinsurers. Only those reinsurance recoverable balances deemed probable of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recovery are reflected as assets on the Company&#146;s Balance Sheets.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">11</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment Overview and Strategy</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s investment strategy focuses on diversification by asset class.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company seeks to achieve economic diversification, while reducing overall credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk and liquidity risks. In addition, the Company seeks to mitigate the impact of cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">flow variability from embedded options within certain investment products, such as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prepayment options and interest rate options embedded in collateralized mortgage</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligations and call options embedded in corporate bonds.  The investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management function is centralized under ING Investment Management LLC, an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate of the Company, pursuant to an investment advisory agreement.  Separate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolios are established for groups of products with similar liability characteristics</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">within the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s general account invests primarily in fixed maturity investments,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including publicly issued bonds (including government bonds), privately placed notes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and bonds, mortgage-backed securities, and asset-backed securities.  The primary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment strategy is to optimize the risk-adjusted return through superior asset</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">selection predicated on a developed relative value approach, credit research and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">monitoring, superior management of interest rate risk, and active exploration into new</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment product opportunities. Investments are purchased when market returns,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjusted for risk and expenses, are sufficient to profitably support growth of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability block of business. In addition, assets and liabilities are analyzed and reported</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for internal management purposes on an option-adjusted basis. The level of required</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital of given transactions is a primary factor in determining relative value among</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">different investment and liability alternatives, within the scope of each product type&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">objective. An active review of existing holdings identifies specific assets that could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be effectively traded in order to enhance the risk-adjusted returns of the portfolio,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">while minimizing adverse tax and accounting impacts.  The Company strives to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maintain a portfolio weighted average asset quality rating of A, based on S&amp;P ratings</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">classifications.  The weighted average excludes mortgage loans, but includes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgage-backed securities, which are reported with bonds.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company uses derivatives for hedging purposes to reduce the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and market risk. In addition, the Company uses credit default swaps to reduce the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit loss exposure with respect to certain assets that the Company owns, or to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assume credit exposure on certain assets that the Company does not own.  These</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit default swaps are similar in credit risk to bonds of the named issuer, and allow</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company to gain access to a broader, more diversified pool of credit risks. See</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Liquidity and Capital Resources - Derivatives&#148; in Management&#146;s Narrative Analysis</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Results of Operations and Financial Condition for further discussion of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s use of derivatives.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Ratings</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On August 23, 2005, S&amp;P reaffirmed its AA (Very Strong) counterparty credit and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial strength rating of ING&#146;s primary U.S. insurance operating companies (&#147;ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S.&#148;), including the Company. S&amp;P also, on that date, affirmed the stable outlook</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on the core insurance operating companies. On February 9, 2005, S&amp;P assigned its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A-1+ short-term counterparty credit rating to the Company.  S&amp;P noted that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratings are based on the Company&#146;s status as a core member of ING U.S. There has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">been no change in S&amp;P&#146;s rating of ING U.S., including the Company, since that date.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On July 25, 2007, Moody&#146;s Investor&#146;s Service, Inc. (&#147;Moody&#146;s&#148;) affirmed the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial strength rating of ING U.S., including the Company, of Aa3 (Excellent)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with a stable outlook. The rating is based on the strong implicit support and financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">strength of the parent company, ING.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On, May 11, 2007, A.M. Best Company, Inc. (&#147;A.M. Best&#148;) reaffirmed the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">strength rating of A+ (Superior) of ING U.S., including the Company, with a stable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">outlook. A.M. Best also affirmed and assigned issuer credit ratings of aa- to the same</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">entities. Concurrently, A.M. Best affirmed the debt ratings of aa- on the two funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement backed securities programs sponsored by ING USA and the notes issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">thereunder.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Regulation</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s operations are subject to comprehensive regulation throughout the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">United States. The laws of the various jurisdictions establish supervisory agencies,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including the state insurance departments, with broad authority to grant licenses to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transact business and regulate many aspects of the products and services offered by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company, as well as solvency and reserve adequacy.  Many agencies also</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulate the investment activities of insurance companies on the basis of quality,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">diversification, and other quantitative criteria.  The Company&#146;s operations and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounts are subject to examination at regular intervals by certain of these regulators.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA is subject to the insurance laws of the state in which it is organized and of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the other jurisdictions in which it transacts business.  The primary regulator of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s insurance operations is the Division of Insurance for the State of Iowa.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Among other matters, these agencies may regulate trade practices, agent licensing,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">policy forms, underwriting and claims practices, minimum interest rate to be credited</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to fixed annuity contractowner accounts, and the maximum interest rates that can be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">charged on policy loans.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The SEC, the Financial Industry Regulatory Authority (&#147;FINRA&#148;), the self-regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">organization which succeeded to the regulatory functions of the National Association</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Securities Dealers and the New York Stock Exchange, and, to a lesser extent, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">states, regulate sales and investment management activities and operations of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company.  Generally, the Company&#146;s variable annuity products and certain of its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fixed annuities are registered as securities with the SEC.  Regulations of the SEC,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Department of Labor, and Internal Revenue Service also impact certain of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s annuity, life insurance, and other investment products. These products</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">may involve separate accounts and mutual funds registered under the Investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Act of 1940.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Insurance Holding Company Laws</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A number of states regulate affiliated groups that include insurers such as the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company under holding company statutes.  These laws, among other things, place</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain restrictions on investments in, or transactions with, affiliates and may require</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pre-approval of the payment of certain dividends by the Company to its parent.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Insurance Company Guaranty Fund Assessments</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance companies are assessed the costs of funding the insolvencies of other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance companies by the various state guaranty associations, generally based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the amount of premiums companies collect in that state.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company accrues the cost of future guaranty fund assessments based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimates of insurance company insolvencies provided by the National Organization</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Life and Health Insurance Guaranty Associations and the amount of premiums</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">written in each state. The Company has estimated this liability to be &#36;11.6 and &#36;12.7</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as of December 31, 2007 and 2006, respectively. The Company has also recorded an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">asset of &#36;4.6 and &#36;5.3 as of December 31, 2007 and 2006, respectively, for future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credits to premium taxes for assessments already paid.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For information regarding certain other potential regulatory changes relating to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s businesses, see Item 1A. Risk Factors.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Employees and Other Shared Services</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company had 1,318 employees as of December 31, 2007, primarily focused on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">managing new business processing, product distribution, marketing, customer service,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and product management for the Company and certain of its affiliates, as well as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">providing product development, actuarial, and finance services to the Company and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain of its affiliates. The Company also utilizes services provided by ING North</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">America Insurance Corporation and other affiliates.  These services include</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">underwriting, risk management, human resources, investment management,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">information technology, legal and compliance services, as well as other new business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">processing, product distribution, marketing, customer service, product management,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">actuarial, and finance related services. The affiliated companies are reimbursed for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s use of various services and facilities under a variety of intercompany</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 1A. Risk Factors</FONT></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to the normal risks of business, the Company is subject to significant risks</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and uncertainties, including those which are described below.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity market volatility could negatively impact profitability and financial</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">condition</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The decline of the United States and international equity markets over an extended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">period of time may reduce the profitability and negatively affect the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condition of the Company due to the following:</FONT></TD></TR></TABLE>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales of new contracts and profitability of in force variable annuity products that provide returns based on equities or equity indices may decrease, which results in a decrease in fees and
profits earned on the accounts. The amount of fees the Company earns on variable annuity products is based on such account values.</FONT>	</TD>
</TR>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s exposure under certain guarantees related to the equity markets may increase due to equity markets decline. As a result, the Company may need to increase reserves through
a charge to earnings while at the same time receiving lower fees from such products.</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company tries to minimize its exposure to guaranteed benefits by using reinsurance and other risk management strategies, including a hedging program.</FONT>	</TD>
</TR>
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<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For guaranteed minimum death benefits, the Company uses a combination of reinsurance and a hedging program to mitigate the risk; for guaranteed living benefits (GMIBs, GMWBs, GMABs) the
Company uses a hedging program. If the Company is not successful in minimizing these risks, the Company&#146;s future profitability may be negatively impacted. The factors that could cause the Company to be unsuccessful in minimizing these risks
would include, though not be limited to, the risk that reinsurers or derivative counterparties would be unable or unwilling to meet their contractual obligations; the risk that our other risk management strategies would not be effective; and the
risk that unfavorable market changes would produce losses beyond what is covered by our risk management strategies.</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">If the Company&#146;s expectations of future performance and profits decrease, it may be required to accelerate the amortization of deferred policy acquisition costs, decreasing
profits.</FONT>	</TD>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Changes in interest rates could have a negative impact on profitability and</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">financial condition</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in interest rates may be caused by either changes in the underlying risk free</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates or changes in the credit spreads required for various levels of risk within the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market. Changes in interest rates may negatively affect the Company&#146;s attempts to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maintain profitable margins between the amounts earned on its general account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments and the amounts paid under its annuity and insurance contracts.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As interest rates rise, fixed annuity contract surrenders and withdrawals may increase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as contractowners seek higher returns.  To raise the cash necessary to fund such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">surrenders and withdrawals, the Company may need to sell assets at capital losses.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">An increase in contract surrenders and withdrawals may also require the Company to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accelerate amortization of deferred policy acquisition costs relating to such contracts,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">further reducing profits.  In addition, rising interest rates increase unrealized losses</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for fixed maturities and certain derivatives where the Company assumes credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure. Significant or sustained increases in interest rates may result in increased</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other-than-temporary impairments. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As interest rates decline, borrowers may prepay or redeem mortgages and bonds with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">embedded call options that are owned as investments by the Company.  This may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">force the Company to reinvest the proceeds at lower interest rates. In addition, many</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Company&#146;s annuity products contain minimum interest rate guarantees that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">limit the Company&#146;s ability to lower interest rates credited to contractowners in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">response to lower investment returns. A decrease in the difference between earned</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment income and the interest credited to contractowners further reduces profits.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">This decrease in profits may also require the Company to accelerate amortization of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deferred policy acquisition costs.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The Company&#146;s investment portfolio is subject to risks that may reduce the</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">value of invested assets and adversely affect sales, profitability, and investment</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">returns credited to contractowners</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s investment portfolio is subject to several risks, including the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">following:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">An increase in defaults or delinquency in investment portfolios, including derivative contracts;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Greater difficulty selling privately placed and certain asset-backed fixed maturity securities and commercial mortgage loans at attractive prices and in a timely manner, as all are less
liquid than publicly traded fixed maturity securities;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Borrower prepayment or redemption, prior to maturity, of mortgages that back mortgage-backed securities and bonds with embedded call options could force the Company to reinvest proceeds at
lower interest rates;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">An increase in environmental liability exposure from the Company&#146;s commercial mortgage loan portfolio; and</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Losses in the commercial mortgage loan portfolio as a result of economic downturns or natural disasters.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Changes in underwriting and actual experience could materially affect profitability</FONT></I>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company prices its products based on long-term assumptions regarding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment returns, mortality, morbidity, persistency, and operating costs.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management establishes target returns for each product based upon these factors and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the average amount of regulatory and rating agency capital that the Company must</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hold to support in-force contracts. The Company monitors and manages pricing and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales mix to achieve target returns. Profitability from a new business emerges over a</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">16</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">period of years, depending on the nature and life of the product, and is subject to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variability, either positive or negative, as actual results may differ from pricing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assumptions.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s profitability depends on the following:</FONT></TD></TR></TABLE>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adequacy of investment margins;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management of market and credit risks associated with investments;</FONT>	</TD>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Ability to maintain premiums and contract charges at a level adequate to cover mortality and morbidity benefits and contract administration expenses;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adequacy of contract charges on variable contracts to cover the cost of product features;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Persistency of policies to ensure recovery of acquisition expenses; and</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management of operating costs and expenses within anticipated pricing allowances.</FONT>	</TD>
</TR>
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<TD>&nbsp;</TD>	<TD width=100%>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Changes in reserve estimates may reduce profitability</FONT></I>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company establishes reserves based upon estimates of how much the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will pay for future benefits and claims. The Company calculates reserves based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">many assumptions and estimates including future investment yields, mortality,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">morbidity, policy terminations, and expenses. The assumptions and estimates used in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">connection with the reserve estimation process are inherently uncertain.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company periodically reviews the adequacy of reserves.  The Company cannot,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">however, determine with precision the amounts that the Company will pay for, or the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">timing of payment of, actual benefits and claims or whether the assets supporting the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">policy liabilities will grow to the level assumed prior to payment of benefits or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">claims. If actual experience differs significantly from assumptions or estimates,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves may not be adequate.  As a result, the Company would incur a charge to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">earnings in the quarter in which the reserves are increased.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">A downgrade in the Company&#146;s ratings may negatively affect profitability and</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">financial condition</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Ratings are an important factor in establishing the competitive position of insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">companies. A downgrade, or the potential for a downgrade, of any of the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratings may lead to lower margins and fee income as follows:</FONT></TD></TR></TABLE>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase in contract surrenders and withdrawals;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Termination of relationships with broker-dealers, banks, agents, wholesalers, and other distributors of products and services; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reduction of new annuity contract and guaranteed investment contract and funding agreement sales.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company cannot predict what actions rating organizations may take, or what</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">actions it may be required to take in response to the actions of rating organizations,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which could adversely affect the Company. Rating organizations assign ratings based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upon several factors, including the following:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">17</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statutory capital;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Risk of investment portfolio;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Economic trends affecting the financial services industry;</FONT>	</TD>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in models and formulas used by rating organizations to assess the financial strength of a rated company;</FONT>	</TD>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Enterprise risk management; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other circumstances outside the rated company&#146;s control.</FONT>	</TD>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The continued availability of capital may affect the ability to grow</FONT></I>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has, from time to time, required capital to increase its reserves</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with growth from product sales. Although the Company believes it has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sufficient capital to fund its immediate growth and capital needs, the amount of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital required and available can vary due to a variety of circumstances that may not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be predictable, foreseeable, or within its control. A lack of sufficient capital could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hinder the Company&#146;s ability to grow.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The Company&#146;s results of operations and financial condition may be adversely</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">affected by general economic and business conditions or adverse capital market</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">conditions that are less favorable than anticipated</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Factors such as consumer spending, business investment, government spending, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">volatility and strength of capital markets and inflation affect the business and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">economic environment and, ultimately, the amount and profitability of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s business. For example, in an economic downturn characterized by high</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unemployment, lower family income, lower corporate earnings, lower business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment and lower consumer spending, the demand for financial and insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products could be adversely affected.  Additionally, slow growth and recessionary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">periods are often associated with declining asset prices, lower interest rates, credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rating agency downgrades and increasing default losses.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adverse capital market conditions, such as that recently experienced with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decrease in the value and liquidity of asset-backed securities supported by subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgages, as well as other investments, could also impact the cost of and ability of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company to issue debt, including commercial paper borrowings. While the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company has various sources of liquidity available, adverse market conditions could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impact the cost and availability of these borrowing sources.  This capital market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">environment has reduced the liquidity of institutional investors, which has limited</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">their ability to purchase guaranteed investment contracts and funding agreements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(collectively, &#147;GICs&#148;). These market conditions may constrain the Company&#146;s ability</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to issue GICs in the near term.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">A loss of key product distribution relationships could materially affect sales</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company distributes certain products under agreements with other members of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the financial services industry that are not affiliated with the Company. Termination</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of one or more of these agreements due to, for example, a change in control of one of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the distributors, could reduce sales.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">18</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Competition could negatively affect the ability to maintain or increase</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">profitability</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The insurance industry is intensely competitive. The Company competes based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">factors including the following:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Name recognition and reputation;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Service;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investment performance;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Product features;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Price;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Perceived financial strength; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Claims paying and credit ratings.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s competitors include insurers, broker-dealers, financial advisors, asset</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">managers, and other financial institutions, which may, for example, have greater</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market share, offer a broader range of products, or have higher claims-paying or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit ratings than the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In recent years, there has been substantial consolidation among companies in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial services industry resulting in increased competition from large, well-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capitalized financial services firms.</FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">  </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Many
of these firms also have been able to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increase their distribution systems through mergers or contractual arrangements.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Furthermore, larger competitors may lower operating costs and have an ability to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">absorb greater risk, while maintaining financial strength ratings, allowing them to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">price products more competitively.</FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">  </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">While
the Company cannot predict the future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">level of consolidation, the Company expects consolidation to continue and perhaps</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accelerate in the future, increasing competitive pressure.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Changes in federal income tax law or interpretations of existing tax law could</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">affect profitability and financial condition by making some products less</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">attractive to contractowners and increasing tax costs of contractowners or the</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Company</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annuity products that the Company sells currently benefit from one or more forms of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax favored status under current federal tax law. The Economic Growth and Tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2003 contain provisions that will, over time, significantly lower individual tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates. This decrease will reduce the benefits of deferral on the build-up of value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities.</FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">  </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Many of these provisions expire
in 2008 and 2010.</FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">  </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Bush</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Administration, however, has proposed that many of the rate reductions and tax-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">favored savings initiatives be made permanent.</FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">  </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Although the Company cannot</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">predict the overall effect on product sales, some of these tax law changes could hinder</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales and result in the increased surrender of annuity contracts.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">19</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additionally, the Company is subject to federal corporation income tax, and benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">from certain federal tax provisions, including but not limited to, dividends received</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deductions, various tax credits, and insurance reserve deductions. There is risk that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes to federal tax law or in Internal Revenue Service (&#147;IRS&#148;) interpretation of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">existing tax law may be enacted or adopted, and could result in materially higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporate taxes than would be incurred under existing tax law or interpretation and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adversely impact profitability.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Litigation may adversely affect profitability and financial condition</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is, and may be in the future, subject to legal actions in the ordinary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">course of insurance, investment management, and other business operations. These</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">legal actions may include proceedings relating to aspects of businesses and operations</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that are specific to the Company, and proceedings that are typical of the businesses in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which the Company operates. Some of these proceedings may be brought on behalf</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of a class. Plaintiffs may seek large or indeterminate amounts of damage, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensatory, liquidated, treble, and/or punitive damages.  Given the large or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">indeterminate amounts sometimes sought, and the inherent unpredictability of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">litigation, it is possible that an adverse outcome could, from time to time, have an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adverse effect on the Company&#146;s reputation, results of operations, or cash flows, in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">particular quarterly or annual periods.</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Changes in regulation in the United States and recent regulatory investigations</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">may reduce profitability</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s insurance and securities business is subject to comprehensive state</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and federal regulation and supervision throughout the United States.  The primary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purpose of state regulation is to protect contractowners, and not necessarily to protect</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">creditors and investors.  State insurance and securities regulators, state attorneys</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">general, the National Association of Insurance Commissioners, the SEC, the FINRA,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Department of Labor and the IRS continually reexamine existing laws and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulations and may impose changes in the future.  Changes in legislation and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">administrative policies, or new interpretations of existing laws, in areas such as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employee benefit plan regulation, financial services regulation, and federal taxation,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">could lessen the competitive advantages of certain of the Company&#146;s products, result</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the surrender of existing contracts and policies, increase costs, reduce new product</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales, or result in higher taxes affecting the Company, thus reducing the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">profitability.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Since 2002, the insurance industry has become the focus of increased regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scrutiny as various state and federal governmental agencies and self-regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">organizations conduct inquiries and investigations into the products and practices of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the financial services industries. These initiatives currently focus on areas such as:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inappropriate trading of fund shares;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Revenue sharing and directed brokerage;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales and marketing practices (including sales to seniors);</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Suitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Arrangements with service providers;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pricing;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD width=174>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">20</FONT></TD></TR></TABLE>
</P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Product cost and fees;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Compensation and sales incentives;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Potential conflicts of interest;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Potential anti-competitive activity;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Specific product types, including group annuities and indexed annuities; and</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adequacy of disclosure.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">It is likely that the scope of these industry investigations will become broader before</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">they conclude.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In some cases, this regulatory scrutiny has led to new proposed legislation and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulation that could significantly affect the financial services industry, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">businesses in which the Company is engaged, or has resulted in regulatory penalties,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and litigation. At this time, the Company does not believe that any of this regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scrutiny will have a material adverse affect on it. The Company cannot, however,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guarantee that new laws, regulations, and other regulatory action aimed at the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">business practices under scrutiny would not adversely affect its business.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adoption of new laws and regulations, enforcement actions, or litigation, whether or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">not involving the Company, could influence the manner in which the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distributes its products, result in negative coverage of the industry by the media,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cause significant harm to the Company&#146;s reputation, and adversely impact</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">profitability.</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The Company&#146;s products are subject to extensive regulation and failure to meet</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">any of the complex product requirements may reduce profitability</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s insurance and annuity products are subject to a complex and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">extensive array of state and federal tax, securities and insurance laws, and regulations,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which are administered and enforced by a number of different governmental and self-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulatory authorities, including state insurance regulators, state securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">administrators, the SEC, the FINRA, and the IRS. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For example, U.S. federal income tax law imposes requirements relating to insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and annuity product design, administration, and investments that are conditions for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">beneficial tax treatment of such products under the Internal Revenue Code. Failure to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">administer certain contract features (for example, contractual annuity start dates in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">nonqualified annuities) could affect such beneficial tax treatment. Additionally, state</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and federal securities and insurance laws impose requirements relating to insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and annuity product design, offering and distribution, and administration. Failure to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">meet any of these complex tax, securities, or insurance requirements could subject the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company to administrative penalties imposed by a particular governmental or self-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulatory authority, unanticipated costs associated with remedying such failure or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other claims, harm to the Company's reputation, interruption of the Company's</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations, or adversely impact profitability.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">21</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD width=27>&nbsp;</TD><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">A failure of the Company&#146;s operating systems or a compromise of security with</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">respect to operating systems or portable electronic devices could adversely</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">affect the Company&#146;s results of operations and financial condition</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is highly dependent on automated systems to record and process</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company and contractowner transactions. The Company may experience a failure of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">its operating systems or a compromise of security due to technical system flaws,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">clerical or record-keeping errors, or tampering or manipulation of those systems by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employees or unauthorized third parties.  Information security risks also exist with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respect to the use of portable electronic devices, such as laptops, which are</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">particularly vulnerable to loss and theft.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company may also be subject to</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">disruptions of its operating systems arising from events that are wholly or partially</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">beyond its control (for example, natural disasters, acts of terrorism, epidemics,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">computer viruses, and electrical/telecommunications outages). All of these risks are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">also applicable where the Company relies on outside vendors to provide services to it</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and its contractowners. Operating system failures or disruptions or the compromise</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of security with respect to operating systems or portable electronic devices could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">subject the Company to regulatory sanctions, or other claims, harm the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reputation, interrupt the Company&#146;s operations, and adversely affect the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">business, results of operations, or financial condition.</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Reinsurance subjects the Company to the credit risk of reinsurers and may not</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">be adequate to protect against losses arising from ceded reinsurance</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The collectibility of reinsurance recoverables is subject to uncertainty arising from a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">number of factors, including whether the insured losses meet the qualifying</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">conditions of the reinsurance contract and whether reinsurers, or their affiliates, have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the financial capacity and willingness to make payments under the terms of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reinsurance treaty or contract. The Company&#146;s inability to collect a material recovery</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">from a reinsurer could have a material adverse effect on profitability and financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condition.</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The occurrence of natural or man-made disasters may adversely affect the</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Company&#146;s results of operations and financial condition</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is exposed to various risks arising from natural disasters, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hurricanes, floods, earthquakes, tornadoes, and pandemic disease, caused by a virus</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such as H5N1 (the &#147;Avian flu&#148; virus), as well as man-made disasters, including acts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of terrorism and military actions, which may adversely affect assets under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management, results of operations and financial condition, as follows:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Losses in the Company&#146;s investment portfolio due to significant volatility in global financial markets or the failure of counterparties to perform.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in the rate of mortality lapses and surrenders of existing policies/contracts, as well as sales of new policies/contracts.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reduced collectibility of reinsurance.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Disruption of the Company&#146;s normal business operations due to catastrophic property damage, loss of life, or disruption of public and private infrastructure, including communications
and financial services.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">22</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">While the Company has a business continuation and crisis management plan, there</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">can be no assurance that the Company&#146;s plan and insurance coverages would be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">effective in mitigating any negative effects on operations or profitability in the event</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of a disaster. </FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The occurrence of unidentified or unanticipated risks could negatively affect the</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Company&#146;s business or result in losses</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has developed risk management policies and procedures and expects to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">continue to do so in the future. Nonetheless, the Company's policies and procedures</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to identify, monitor, and manage risks may not be fully effective.  Many of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company's methods of managing risk and exposures are based upon observed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">historical market behavior or statistics based on historical models. As a result, these</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">methods may not predict future exposures, which could be significantly greater than</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">historical measures indicate.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other risk management methods depend on the</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">evaluation of information regarding markets, clients, catastrophe occurrence, or other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">matters, that is publicly available or otherwise accessible to the Company.  This</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">information may not always be accurate, complete, up-to-date, or properly evaluated.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management of operational, legal, and regulatory risks requires, among other things,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">policies and procedures to record and verify large numbers of transactions and events.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">These policies and procedures may not be fully effective.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 1B. Unresolved Staff Comments</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">None.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 2.</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Properties</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s principal office is located at 1475 Dunwoody Drive, West Chester,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pennsylvania, 19380-1478. The Company&#146;s annuity operations and customer service</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">center are located at 909 Locust Street, Des Moines, Iowa 50309, and the guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment contract business activities are located at 1290 Broadway, Denver,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Colorado 80203-2122.  All Company office space is leased or subleased by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company or its other affiliates.  The Company pays substantially all expenses</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with its leased and subleased office properties.  Affiliates within ING&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. operations provide the Company with various management, finance, investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management, and other administrative services, from facilities located at 5780 Powers</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Ferry Road, N.W., Atlanta, Georgia 30327-4390, and One Orange Way, Windsor,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Connecticut 06095-4774.  The affiliated companies are reimbursed for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s use of these services and facilities under a variety of intercompany</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">23</FONT></TD></TR></TABLE>
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<A name="page_24"></A>

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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 3.</FONT></B></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Legal Proceedings</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is involved in threatened or pending lawsuits/arbitrations arising from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the normal conduct of business.  Due to the climate in insurance and business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">litigation/arbitrations, suits against the Company sometimes include claims for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">substantial compensatory, consequential, or punitive damages, and other types of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">relief. Moreover, certain claims are asserted as class actions, purporting to represent</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a group of similarly situated individuals.</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">While it is not possible to forecast the</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">established reserves, it is the opinion of management that the disposition of such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lawsuits/arbitrations will not have a materially adverse effect on the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations or financial position.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 4. Submission of Matters to a Vote of Security Holders</FONT></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Omitted pursuant to General Instruction I(2)(c) of Form 10-K.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT></TD></TR></TABLE>
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<A name="page_25"></A>

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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART II</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=11% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 5.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Market for Registrant&#146;s Common Equity, Related Stockholder Matters and</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Issuer Purchases of Equity Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There is no public trading market for the common stock of ING USA Annuity and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life Insurance Company (&#147;ING USA&#148; or the &#147;Company&#148;, as appropriate). All of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s outstanding common stock is owned by its parent, Lion Connecticut</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Holdings Inc. (&#147;Lion&#148; or &#147;Parent&#148;), a Connecticut holding and management company.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">All of the outstanding common stock of Lion is owned by ING America Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Holdings, Inc., whose ultimate parent is ING Groep N.V.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s ability to pay dividends to its parent is subject to the prior approval</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Iowa Division of Insurance for payment of any dividend, which, when</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">combined with other dividends paid within the preceding twelve months, exceeds the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">greater of (1) ten percent (10.0%) of the Company&#146;s statutory surplus at the prior year</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">end or (2) the Company&#146;s prior year statutory net gain from operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007 and 2005, the Company did not pay any dividends or return of capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distributions to Lion. During 2006, the Company paid &#36;170.0 in a return of capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distribution to Lion.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007, the Company received &#36;150.0 in capital contributions from Lion.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2006, the Company did not receive any capital contributions from its Parent.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2005, the Company received capital contributions of &#36;100.0 from Lion to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">support sales activities. On February 21, 2008, the Company received a &#36;1.1 billion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital contribution from Lion.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">25</FONT></TD></TR></TABLE>
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<A name="page_26"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
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	<TD align=left width=8% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 6.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Selected Financial Data</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=54% nowrap colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=72% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=72% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">3-YEAR SUMMARY OF SELECTED FINANCIAL DATA</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">OPERATING RESULTS</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,346.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,156.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,102.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fee income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,198.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">939.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">745.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(391.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(90.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,173.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,025.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,867.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest credited and other benefits to</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,312.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,169.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,085.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization of deferred policy acquisition</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">costs and value of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">408.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">293.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">318.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">129.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">212.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">189.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">FINANCIAL POSITION</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27,881.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,586.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,454.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets held in separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37,928.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30,262.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total assets</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81,276.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">69,677.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59,371.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits and claims reserves</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">31,461.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26,696.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24,225.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liabilities related to separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37,928.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30,262.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total shareholder's equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,119.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,989.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,949.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ASSETS UNDER MANAGEMENT</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Variable annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 45,525.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 38,801.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 31,220.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,167.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,084.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15,632.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and funding agreements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,976.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,353.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,074.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other insurance products</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,300.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,316.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,346.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total assets under management</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 70,970.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 59,555.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 50,272.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT></TD></TR></TABLE>
</P>

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<A name="page_27"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 7. Management&#146;s Narrative Analysis of the Results of Operations and Financial</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Condition</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Overview</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following narrative analysis presents a review of the results of operations of ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">USA Annuity and Life Insurance Company (&#147;ING USA&#148; or the &#147;Company&#148;, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate) for each of the three years ended December 31, 2007, 2006, and 2005,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and financial condition as of December 31, 2007 and 2006. This item should be read</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in its entirety and in conjunction with the selected financial data, financial statements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and related notes, and other supplemental data, which can be found under Part II,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 6. and Item 8. contained herein.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Forward-Looking Information/Risk Factors</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In connection with the &#147;safe harbor&#148; provisions of the Private Securities Litigation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reform Act of 1995, the Company cautions readers regarding certain forward-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">looking statements contained in this report and in any other statements made by, or on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">behalf of, the Company, whether or not in future filings with the Securities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange Commission (&#147;SEC&#148;). Forward-looking statements are statements not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on historical information and which relate to future operations, strategies,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial results, or other developments. Statements using verbs such as &#147;expect,&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;anticipate,&#148; &#147;believe,&#148; or words of similar import, generally involve forward-looking</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements. Without limiting the foregoing, forward-looking statements include</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements that represent the Company&#146;s beliefs concerning future levels of sales and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">redemptions of the Company&#146;s products, investment spreads and yields, or the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">earnings and profitability of the Company&#146;s activities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Forward-looking statements are necessarily based on estimates and assumptions that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are inherently subject to significant business, economic, and competitive uncertainties</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and contingencies, many of which are beyond the Company&#146;s control and many of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which are subject to change. These uncertainties and contingencies could cause actual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">results to differ materially from those expressed in any forward-looking statements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">made by, or on behalf of, the Company. Whether or not actual results differ</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">materially from forward-looking statements may depend on numerous foreseeable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and unforeseeable developments, including, but not limited to the following:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity market volatility could negatively impact profitability and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in interest rates could have a negative impact on profitability and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s investment portfolio is subject to risks that may reduce the value of invested assets and adversely affect sales, profitability, and investment returns credited to
contractowners;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in underwriting and actual experience could materially affect profitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">27</FONT></TD></TR></TABLE>
</P>

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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in reserve estimates may reduce profitability;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A downgrade in the Company&#146;s ratings may negatively affect profitability and financial condition;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The continued availability of capital may affect the ability to grow;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s results of operations and financial condition may be adversely affected by general economic and business conditions or adverse capital market conditions that are less
favorable than anticipated;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(9)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A loss of key product distribution relationships could materially affect sales;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(10)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Competition could negatively affect the ability to maintain or increase profitability;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(11)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in federal income tax law or interpretations of existing tax law could affect profitability and financial condition by making some products less attractive to contractowners and
increasing tax costs of contractowners or the Company;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(12)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Litigation may adversely affect profitability and financial condition;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(13)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in regulation in the United States and recent regulatory investigations may reduce profitability;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(14)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(15)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A failure of the Company&#146;s operating systems or a compromise of security with respect to operating systems or portable electronic devices could adversely affect the Company&#146;s
results of operations and financial condition;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(16)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance subjects the Company to the credit risk of reinsurers and may not be adequate to protect against losses arising from ceded reinsurance;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(17)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The occurrence of natural or man-made disasters may adversely affect the Company&#146;s results of operations and financial condition; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(18)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The occurrence of unidentified or unanticipated risks could negatively affect the Company&#146;s business or result in losses.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investors are also directed to consider the risks and uncertainties discussed in Items</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1A., 7., and 7A. contained herein, as well as in other documents filed by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company with the SEC. Except as may be required by the federal securities laws, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company disclaims any obligation to update forward-looking information.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Basis of Presentation</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a stock life insurance company domiciled in the State of Iowa and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides financial products and services in the United States. ING USA is authorized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to conduct its insurance business in all states, except New York, and in the District of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Columbia.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;Lion&#148; or &#147;Parent&#148;), which is an indirect, wholly-owned subsidiary of ING Groep</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">N.V. (&#147;ING&#148;).  ING is a global financial services holding company based in The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Netherlands, with American Depository Shares listed on the New York Stock</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange under the symbol &#147;ING&#148;.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has one operating segment.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Critical Accounting Policies</FONT></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">General</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The preparation of financial statements in conformity with accounting principles</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generally accepted in the United States requires the use of estimates and assumptions</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in certain circumstances that affect amounts reported in the accompanying financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements and related footnotes. These estimates and assumptions are evaluated on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">an on-going basis based on historical developments, market conditions, industry</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">trends, and other information that is reasonable under the circumstances. There can</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be no assurance that actual results will conform to estimates and assumptions, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that reported results of operations will not be materially adversely affected by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">need to make future accounting adjustments to reflect changes in these estimates and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assumptions from time to time.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has identified the following estimates as critical in that they involve a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">higher degree of judgment and are subject to a significant degree of variability:</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves, valuation of investments and other-than-temporary impairments, valuation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of derivative instruments, and amortization of deferred policy acquisition costs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;DAC&#148;) and value of business acquired (&#147;VOBA&#148;). In developing these estimates,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management makes subjective and complex judgments that are inherently uncertain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and subject to material changes as facts and circumstances develop.  Although</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variability is inherent in these estimates, management believes the amounts provided</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are appropriate based upon the facts available upon compilation of the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Reserves</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company establishes and carries actuarially-determined reserves that are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">calculated to meet its future obligations. Generally, reserves are calculated using</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortality and withdrawal rate assumptions based on relevant Company experience</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and are periodically reviewed against both industry standards and experience.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in, or deviations from, the assumptions used can significantly affect the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s reserve levels and related future operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits and claims reserves include reserves for deferred annuities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate annuities with and without life contingent payouts, universal and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">traditional life insurance contracts, and guaranteed investment contracts and funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements, collectively referred to as GICs. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for deferred annuity investment contracts and immediate annuities without</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">life contingent payouts are equal to cumulative deposits, less charges and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals, plus credited interest thereon.  Deferred annuity crediting rates and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserve interest rates varied by product up to 10.0% for 2007, 7.8% for 2006, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.0% for 2005.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for individual immediate annuities with life contingent payout benefits are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">computed on the basis of assumed interest discount rate, mortality, and expenses,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including a margin for adverse deviations. Such assumptions generally vary by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity plan type, year of issue, and policy duration. For 2007, 2006, and 2005,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate annuity reserve interest discount rates varied up to 8.0% .</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for fixed indexed annuities (&#147;FIAs&#148;) are computed in accordance with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Accounting Standards Board (&#147;FASB&#148;) Statement of Financial Accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Standards (&#147;FAS&#148;) No. 97, &#147;Accounting and Reporting by Insurance Enterprises for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investments&#148; (&#147;FAS No. 97&#148;), and FAS No. 133, &#147;Accounting for Derivative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Instruments and Hedging Activities&#148; (&#147;FAS No. 133&#148;). Accordingly, the aggregate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">initial liability is equal to the deposit received, plus a bonus, if applicable, and is split</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">into a host component and an embedded derivative component. Thereafter, the host</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability accumulates at a set interest rate, and the embedded derivative liability is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized at fair value, with the change in fair value recorded in the Statements of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for universal life products are equal to cumulative deposits, less withdrawals</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and charges, plus credited interest thereon. Reserves for traditional life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts represent the present value of future benefits to be paid to or on behalf of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners and related expenses, less the present value of future net premiums.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under Statement of Position (&#147;SOP&#148;) 03-1, &#147;Accounting and Reporting by Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Enterprises for Certain Nontraditional Long-Duration Contracts for Separate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accounts&#148; (&#147;SOP 03-1&#148;), the Company calculates additional liabilities (&#147;SOP 03-1</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves&#148;) for certain guaranteed benefits and for universal life products with certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">patterns of cost of insurance charges and certain other fees. The SOP 03-1 reserve</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized for such products is in addition to the liability previously held and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognizes the portion of contract assessments received in early years used to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensate the insurer for services provided in later years.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company calculates a benefit ratio for each block of business subject to SOP 03-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1, and calculates an SOP 03-1 reserve by accumulating amounts equal to the benefit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratio multiplied by the assessments for each period, reduced by excess death benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">during the period. The SOP 03-1 reserve is accumulated at interest rates using the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract-credited rate for the period. The calculated reserve includes a provision for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">universal life contracts with patterns of cost of insurance charges that produce</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expected gains from the insurance benefit function followed by losses from that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">function in later years.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Accumulation Benefits (&#147;GMABs&#148;) and Guaranteed Minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Withdrawal Benefits (&#147;GMWBs&#148;) without life contingent payouts are considered to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be derivatives under FAS No. 133. The additional reserves for these guarantees are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized at fair value through the Statements of Operations.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for GICs are calculated using the amount deposited with the Company, less</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals, plus interest accrued to the ending valuation date. Interest on these</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts is accrued by a predetermined index, plus a spread or a fixed rate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">established at the issue date of the contract.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Valuation of Investments and Other-Than-Temporary Impairments</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">All of the Company&#146;s fixed maturities and equity securities are currently designated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as available-for-sale.  Available-for-sale securities are reported at fair value and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized capital gains (losses) on these securities are recorded directly in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Shareholder&#146;s equity, after adjustment for related changes in DAC, VOBA, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deferred income taxes.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair values for fixed maturities are largely determined by one of two pricing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">methods: published price quotations or valuation techniques with market inputs.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security pricing is applied using a hierarchy or &#147;waterfall&#148; approach, whereby prices</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are first sought from published price quotations, including pricing services or broker-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dealer quotations.  Published price quotations may be unavailable or deemed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unreliable due to a limited market for securities that are rarely traded or are traded</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">only in privately negotiated transactions.  As such, fair values for the remaining</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities, consisting primarily of privately placed bonds, are then determined using</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk-free interest rates, current corporate spreads, the credit quality of the issuer and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flow characteristics of the security.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair values for actively traded equity securities are based on quoted market prices.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For equity securities not actively traded, estimated fair values are based upon values</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of issues of comparable yield and quality or conversion value, where applicable.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair values for short-term investments are based on quoted market prices.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">See &#147;Valuation of Derivative Instruments&#148; for a discussion of the techniques used to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determine fair values of derivatives.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair value of a financial instrument is the amount at which the instrument could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be exchanged in a current transaction between knowledgeable, unrelated willing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">parties.  As such, the estimated fair value of a financial instrument may differ</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">significantly from the amount that could be realized if the security was sold</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediately.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s accounting policy requires that a decline in the value of an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment below its amortized cost basis be assessed to determine if the decline is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other-than-temporary. If so, the investment is deemed to be other-than-temporarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impaired, and a charge is recorded in Net realized capital gains (losses) equal to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">difference between fair value and the amortized cost basis of the investment. The fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of the other-than-temporarily impaired investment becomes its new cost basis.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The evaluation of other-than-temporary impairments included in the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">general account is a quantitative and qualitative process, which is subject to risks and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">uncertainties, and is intended to determine whether declines in the fair value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments should be recognized in current period earnings.  The risks and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">uncertainties include the length of time and extent to which the fair value has been</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">less than amortized cost, the issuer&#146;s financial condition and near-term prospects,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future economic conditions and market forecasts, and the Company&#146;s intent and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ability to retain the investment for a period of time sufficient to allow for recovery in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fair value.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition, the Company invests in structured securities that meet the criteria of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Emerging Issues Task Force (&#147;EITF&#148;) Issue No. 99-20, &#147;Recognition of Interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income and Impairment on Purchased and Retained Beneficial Interests in Securitized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Assets&#148; (&#147;EITF 99-20&#148;). Under EITF 99-20, a further determination of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">required impairment is based on the analysis discussed in the preceding paragraph, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">well as credit risk and the possibility of significant prepayment risk that restricts the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s ability to recover the investment. An impairment is recognized if the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of the security is less than amortized cost and there has been an adverse change</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in cash flow since the last remeasurement date.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Valuation of Derivative Instruments</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivative instruments are reported at fair value primarily using the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative accounting system.  The system uses key financial data, such as yield</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">curves, exchange rates, Standard and Poor&#146;s (&#147;S&amp;P&#148;) 500 Index prices, and London</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inter Bank Offered Rates (&#147;LIBOR&#148;), which are obtained from third party sources</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and uploaded into the system. For those derivatives that are unable to be valued by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the accounting system, the Company typically utilizes values established by third</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">party brokers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Embedded derivative instruments within investments are reported at fair value based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upon internally established valuations that are consistent with external valuation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">models or market quotations. GMWBs without life contingent payouts and GMABs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">represent embedded derivative liabilities in annuity contracts that are required to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded separately from the host annuity contracts. The option component of an FIA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">also represents an embedded derivative. These embedded derivatives are carried at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fair value based on actuarial assumptions related to projected cash flows, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits and related contract charges, over the lives of the contracts, incorporating</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expectations concerning contractowner behavior.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Amortization of Deferred Policy Acquisition Costs and Value of Business Acquired</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC represents policy acquisition costs that have been capitalized and are subject to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization.  Such costs consist principally of certain commissions, underwriting,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract issuance, and certain agency expenses, related to the production of new and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">renewal business.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">VOBA represents the outstanding value of in force business capitalized in purchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting when the Company was acquired and is subject to amortization.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value is based on the present value of estimated profits embedded in the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 97 applies to universal life and investment-type products, such as fixed and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable deferred annuities. Under FAS No. 97, DAC and VOBA are amortized, with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest, over the life of the related contracts in relation to the present value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated future gross profits from investment, mortality, and expense margins, plus</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">surrender charges. DAC related to GICs, however, are amortized on a straight-line</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">basis over the life of the contract</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contractowners may periodically exchange one contract for another, or make</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">modifications to an existing contract. These transactions are identified as internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">replacements and are accounted for in accordance with Statement of Position 05-1,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with Modifications or Exchanges of Insurance Contracts&#148; (&#147;SOP 05-1&#148;).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Internal replacements that are determined to result in substantially unchanged</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts are accounted for as continuations of the replaced contracts.  Any costs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with the issuance of the new contracts are considered maintenance costs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and expensed as incurred. Unamortized DAC and VOBA related to the replaced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts continue to be deferred and amortized in connection with the new contracts,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as follows:</FONT></TD></TR></TABLE>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For deferred annuities, the estimated future gross profits of the new contracts are treated as revisions to the estimated future gross profits of the replaced contracts in the determination
of amortization.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of January 1, 2007, internal replacements that are determined to result in contracts that are substantially changed are accounted for as extinguishments of the replaced contracts, and any
unamortized DAC and VOBA related to the replaced contracts are written off to Amortization of deferred policy acquisition costs and value of business acquired in the Statements of Operations.</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in assumptions can have a significant impact on DAC and VOBA balances</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and amortization rates.  Several assumptions are considered significant in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimation of future gross profits associated with variable universal life and variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deferred annuity products. One of the most significant assumptions involved in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimation of future gross profits is the assumed return associated with the variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">account performance.  The overall return on the variable account is dependent on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">multiple factors, including the relative mix of the underlying sub-accounts among</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bond funds and equity funds, as well as equity sector weightings. Other significant</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assumptions include surrender and lapse rates, estimated interest spread, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated mortality.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to the relative size and sensitivity to minor changes in underlying assumptions of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC and VOBA balances, the Company performs quarterly and annual analyses of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC and VOBA for the annuity and life businesses, respectively.  The DAC and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">VOBA balances are also evaluated for recoverability.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">33</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At each evaluation date, actual historical gross profits are reflected, and estimated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future gross profits and related assumptions are evaluated for continued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reasonableness.  Any adjustment in estimated future gross profits requires that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization rate be revised (&#147;unlocking&#148;) retroactively to the date of the policy or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract issuance.  The cumulative unlocking adjustment is recognized as a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">component of current period amortization.  In general, sustained increases in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment, mortality, and expense margins, and thus estimated future profits, lower</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the rate of amortization. However, sustained decreases in investment, mortality, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expense margins, and thus estimated future gross profits, increase the rate of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For interest rate and equity sensitivity and related effects on DAC and VOBA, see</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 7A. Quantitative and Qualitative Disclosures About Market Risk.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Results of Operations</FONT></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Overview</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Products offered by the Company include immediate and deferred variable and fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities, designed to address individual customer needs for tax-advantaged savings,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">retirement needs, and wealth-protection concerns, and GICs, sold primarily to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">institutional investors and corporate benefit plans.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company derives its revenue mainly from (a) fee income generated on variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets under management (&#147;AUM&#148;), (b) investment income earned on fixed AUM,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and (c) certain other management fees. Fee income is primarily generated from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">separate account assets supporting variable options under variable annuity contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments, as designated by contractowners. Investment income from fixed AUM</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is mainly generated from annuity products with fixed investment options. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s expenses primarily consist of (a) interest credited and other benefits to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners, (b) amortization of DAC and VOBA, (c) expenses related to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">selling and servicing of the various products offered by the Company, and (d) other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">general business expenses.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Economic Analysis</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The current economic environment presents challenges and opportunities for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company and the insurance industry.  The Company&#146;s sales and financial results</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">continue to be affected by economic trends.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity market performance affects the Company, as fee revenue from variable AUM</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is generally affected by equity market performance.  In addition, variable product</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">demand often mirrors consumer demand for equity market investments. The increase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in sales and investment performance in the variable product lines during 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">favorably impacted variable AUM in 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The changing market interest rate environment during 2007, in combination with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">slow economic growth resulted in a substantial increase in unrealized losses in 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as compared to the same period for 2006. </FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">While the interest rate environment during 2007 has resulted in an increase in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized losses as compared to 2006, overall increases in market yields have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">allowed for improved asset returns, and, therefore, improved margins on fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products during 2007.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Year ended December 31, 2007 compared to year ended December 31, 2006</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s results of operations for the year ended December 31, 2007, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes therein, reflected positive product experience as a result of increased AUM,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily driven by higher sales of GICs and variable annuity products during 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and a higher block of business in force. This positive product experience, however,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">was more than offset by higher realized capital losses, interest credited and other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits to contractowners, and amortization of DAC and VOBA.</FONT></TD></TR></TABLE>
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<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=36% nowrap colspan=3>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Years Ended December 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&#36; Increase</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% Increase</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Decrease)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Decrease)</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
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<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Revenues:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,346.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,156.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 190.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.4%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fee income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,198.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">939.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">259.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.7%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
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 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.4)%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(391.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(90.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(300.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,173.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,025.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">148.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefits and expenses:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest credited and other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,312.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,169.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">142.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12.2%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">269.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">228.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.2%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization of deferred policy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">acquisition costs and value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">408.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">293.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">115.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.3%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(13.9)%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,046.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,749.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">297.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income before income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">127.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">276.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(149.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(53.9)%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax (benefit) expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(66.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(102.5)%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 129.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 212.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (83.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(39.2)%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective tax rate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.3)%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM - Not meaningful.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Revenues</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue for the year ended December 31, 2007, increased mainly due to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increases in Fee income and Net investment income, partially offset by increases in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The increase in </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fee income</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> for the year
ended December 31, 2007, reflects an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increase in average variable AUM, primarily driven by higher sales of variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities and a higher block of business in force.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">35</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_36"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net investment income</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> for the year ended December 31, 2007, increased as the result</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of an increase in assets supporting fixed AUM and surplus, which reflects a larger</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">block of GICs, and fixed indexed annuities in force.  In addition, the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">experienced higher yields in 2007.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net realized capital losses</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased for the year ended December 31, 2007, primarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to higher losses on derivatives and fixed maturities. The changes in derivatives</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were primarily driven by interest rate swaps and call options, partially offset by lower</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses on futures as a result of lower equity market performance. The losses on fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities for the year ended December 31, 2007, were due to other-than-temporary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impairments driven by the slow economic environment and widening of credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">spreads in 2007.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Benefits and Expenses</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses for the year ended December 31, 2007, increased mainly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to higher Interest credited and other benefits to contractowners, Amortization of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC and VOBA, and Operating expenses.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest credited and other benefits</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> to contractowners increased for the year ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, primarily driven by (a) the increase in reserves on variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities, driven by unfavorable equity market performance in 2007 compared to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006, and (b) the increase in interest credited on GICs, mainly attributable to higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">average fixed AUM.  The increases were partially offset by a lower increase in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves on fixed annuities due to unfavorable equity market performance in 2007.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Operating expenses</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased for the year ended December 31, 2007, primarily due to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">higher non-deferred asset-based commissions and marketing expenses, as well as the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">continued growth of the business.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Amortization of DAC and VOBA</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased
for the year ended December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, primarily due to refinements of the DAC model during the fourth quarter of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, partially offset by favorable mutual fund and mortality and persistency</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unlocking.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income Taxes</FONT></I><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income tax (benefit) expense</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> decreased for the year ended December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily due to lower Income before taxes relative to the deduction allowed for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dividends received.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=174>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">36</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Year ended December 31, 2006 compared to year ended December 31, 2005</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s results of operations for the year ended December 31, 2006, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes therein, reflected positive product experience due to favorable equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance and increased AUM driven by the rise in sales of annuity products. This</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">positive product experience, however, was partially offset by higher realized capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses, due to increased interest rates, as well as higher operating expenses.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=48% nowrap colspan=3>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Years Ended December 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=27% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&#36; Increase</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% Increase</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
 &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=27% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Decrease)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Decrease)</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Revenues:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,156.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,102.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 54.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.9%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fee income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">939.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">745.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">193.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6.0)%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(90.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(87.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,025.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,867.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">158.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.5%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefits and expenses:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest credited and other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,169.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,085.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">83.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.7%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">228.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">192.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.4%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization of deferred policy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">acquisition costs and value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">293.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">318.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(25.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8.1)%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.4%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">70.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
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	<TD>
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	<TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,749.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,643.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">105.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.4%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income before income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">276.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">224.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">52.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23.4%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">34.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">88.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 212.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 189.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.7%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective tax rate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM - Not meaningful.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Revenues</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue for the year ended December 31, 2006, increased mainly due to higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fee income and Net investment income. The increase was partially offset, however,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by higher Net realized capital losses. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The increase in </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fee income </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reflects a larger
block of business in force, driven by an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increase in net investment returns and new sales exceeding withdrawals and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">surrenders. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The increase in </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net investment income </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is the
result of an increase in assets supporting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">average fixed AUM, due to strong sales of fixed indexed annuities.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">37</FONT></TD></TR></TABLE>
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<A name="page_38"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The increase in </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net realized capital losses </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the year ended December 31, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reflects higher losses on investments in fixed maturities, primarily driven by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increasing interest rate environment in 2006. </FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Benefits and Expenses</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses for the year ended December 31, 2006, increased mainly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to higher Interest credited and other benefits to contractowners and Operating</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expenses, partially offset by the decrease in Amortization of DAC and VOBA.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest credited and other benefits to contractowners </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased due to (a) the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increase in reserves on fixed indexed annuities, driven by higher AUM and improved</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity market performance, and (b) the increase in interest credited on GICs, based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on higher interest rates and AUM in 2006. These increases were partially offset by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lower increase of guaranteed benefits reserves on variable annuities, mainly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">attributable to the favorable equity market performance in 2006. </FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Operating expenses </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased for the year ended December 31, 2006 as a result of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">larger non-capitalized asset-based commissions and marketing expenses.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Amortization of DAC and VOBA </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decreased
primarily due to higher expected</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gross profits, which reflect revisions in prospective assumptions based on positive</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">persistency experience and favorable equity market performance. The unlocking of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assumptions resulted in deceleration of amortization of &#36;62.4.  This decrease was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">partially offset, however, by an increase in amortization driven by higher actual gross</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">profits experienced in 2006.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other expenses </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased for the year ended December 31, 2006 due to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization of deferred negative ceding commission related to the coinsurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement with Security Life, which became effective in the second quarter of 2005.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income Taxes</FONT></I><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income tax expense </FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased for the year ended December 31, 2006, primarily due to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Internal Revenue Service (&#147;IRS&#148;) audit settlement in the third quarter of 2005,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which related to the Company's tax returns for the years 2000 and 2001. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provision for the year ended December 31, 2005, reflected non-recurring favorable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjustments, due to a reduction in the tax liability that was no longer deemed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">necessary based on the results of the IRS examination, monitoring the activities of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">IRS with respect to certain issues with other taxpayers, and the merits of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company's positions.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=174>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">38</FONT></TD></TR></TABLE>
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<A name="page_39"></A>

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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Financial Condition</FONT></B><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Investments</FONT></I></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment Strategy</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s investment strategy focuses on diversification by asset class.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company seeks to achieve economic diversification, while reducing overall credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk and liquidity risks. In addition, the Company seeks to mitigate the impact of cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">flow variability from embedded options within certain investment products, such as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prepayment options and interest rate options embedded in collateralized mortgage</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligations and call options embedded in corporate bonds.  The investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management function is centralized under ING Investment Management LLC, an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate, pursuant to an investment advisory agreement.  Separate portfolios are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">established for groups of products with similar liability characteristics within the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s general account invests primarily in fixed maturity investments,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including publicly issued bonds (including government bonds), privately placed notes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and bonds, mortgage-backed securities, and asset-backed securities.  The primary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment strategy is to optimize the risk-adjusted return through superior asset</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">selection predicated on a developed relative value approach, credit research and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">monitoring, superior management of interest rate risk, and active exploration into new</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment product opportunities.  Investments are purchased when market returns,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjusted for risk and expenses, are sufficient to profitably support growth of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability block of business. In addition, assets and liabilities are analyzed and reported</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for internal management purposes on an option-adjusted basis. The level of required</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital of given transactions is a primary factor in determining relative value among</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">different investment and liability alternatives, within the scope of each product type&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">objective. An active review of existing holdings identifies specific assets that could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be effectively traded in order to enhance the risk-adjusted returns of the portfolio,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">while minimizing adverse tax and accounting impacts.  The Company strives to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maintain a portfolio weighted average asset quality rating of A, based on S&amp;P ratings</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">classifications.  The weighted average excludes mortgage loans, but includes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgage-backed securities, which are reported with bonds.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company uses derivatives for hedging purposes to reduce the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and market risk. In addition, the Company uses credit default swaps to reduce the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit loss exposure with respect to certain assets that the Company owns, or to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assume credit exposure on certain assets that the Company does not own.  These</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit default swaps are similar in credit risk to bonds of the named issuer, and allow</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company to gain access to a broader, more diversified pool of credit risks. See</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Liquidity and Capital Resources &#150; Derivatives&#148; for further discussion of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s use of derivatives.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">39</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Portfolio Composition</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table presents the investment portfolio at December 31, 2007 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=21% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=21% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
 &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">%</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
 &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">%</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=21% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.7%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,918.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">79.3%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.8%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">188.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,701.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,687.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">848.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">642.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.9%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27,881.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,586.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT></U>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table identifies the fair value of fixed maturities and equity securities,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale, as well as short-term investments and derivatives by pricing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sources as of December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Valuation</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Valuation</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Techniques</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Techniques</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Published</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">with</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">without</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Price</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Market</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Market</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=35% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Quotations</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Inputs</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Inputs</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 18,402.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 4,373.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">188.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">188.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments (primarily derivatives)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">366.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">366.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liabilities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other liabilities (primarily derivatives)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">273.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">273.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 14,519.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,399.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,918.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments (primarily derivatives)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">472.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">472.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liabilities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other liabilities (primarily derivatives)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.7</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">40</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_41"></A>

<P align="left">
<TABLE><TR><TD width=2>&nbsp;</TD><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fixed Maturities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale, were as follows as of December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gains</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 18.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State, municipalities, and political subdivisions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">49.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">47.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate securities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Public utilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,417.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,426.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,742.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,756.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total U.S. corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,160.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">103.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">80.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,183.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign securities</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Government</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">525.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">14.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">533.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,280.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,261.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total foreign securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,805.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">55.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,794.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,988.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">53.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">85.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,955.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,842.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,843.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">108.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,898.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">257.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">380.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,776.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">953.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">942.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=39% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,945.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 251.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 363.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,833.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=2>&nbsp;</TD><TD nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollar denominated.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">41</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_42"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale, were as follows as of December 31, 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gains</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=38% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 276.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 275.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">220.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">219.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State, municipalities, and political subdivisions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate securities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Public utilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,324.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,327.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,138.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">49.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,139.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total U.S. corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,463.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">71.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,467.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign securities</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Government</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">486.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">498.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,843.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">46.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,829.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total foreign securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,330.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">48.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,327.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,841.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">62.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,823.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,928.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,923.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,843.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,838.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,947.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">186.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">215.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,918.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">875.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">864.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,071.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 183.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 201.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,054.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollar denominated.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">It is management&#146;s objective that the portfolio of fixed maturities be of high quality</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and be well diversified by market sector.  The fixed maturities in the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolio are generally rated by external rating agencies and, if not externally rated,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are rated by the Company on a basis believed to be similar to that used by the rating</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agencies. The average quality rating of the Company's fixed maturities portfolio was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">AA- at December 31, 2007 and 2006, respectively.  Ratings are calculated using a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rating hierarchy that considers S&amp;P, Moody&#146;s Investor&#146;s Service, Inc., and internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratings.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">42</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_43"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities by quality rating category, including securities pledged to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">creditors, were as follows at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=31% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=31% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">AAA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 10,023.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 7,243.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.4%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">AA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,743.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.7%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,245.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.9%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,112.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,631.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.3%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BBB</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,945.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,124.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.6%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BB</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">676.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">575.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.2%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">B and below</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">275.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">98.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,918.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">95.8% and 96.2% of the fixed maturities were invested in securities rated BBB and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">above (Investment Grade) at December 31, 2007 and 2006, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities rated BB and below (Below Investment Grade) may have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">speculative characteristics, and changes in economic conditions or other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">circumstances are more likely to lead to a weakened capacity of the issuer to make</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">principal and interest payments than is the case with higher rated fixed maturities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged to creditors, by market sector</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were as follows at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 275.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.6%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">219.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate, states, and municipalities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,230.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,510.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.3%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,794.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.7%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,327.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.6%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,955.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,823.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.3%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,843.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,923.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.7%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,838.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,918.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">43</FONT></TD></TR></TABLE>
</P>

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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The amortized cost and fair value of fixed maturities as of December 31, 2007, are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">shown below by contractual maturity. Actual maturities may differ from contractual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities as securities may be restructured, called, or prepaid.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to mature:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">One year or less</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 550.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 551.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After one year through five years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,800.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,856.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After five years through ten years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,797.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,776.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After ten years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,971.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,830.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,799.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">953.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">942.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, excluding securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,945.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,833.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company did not have any investments in a single issuer, other than obligations</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the U.S. government and government agencies, with a carrying value in excess of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.0% of the Company&#146;s shareholder&#146;s equity at December 31, 2007 or 2006.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, fixed maturities with fair values of &#36;11.2 and &#36;10.7,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, were on deposit as required by regulatory authorities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company invests in various categories of collateralized mortgage obligations</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;CMOs&#148;) that are subject to different degrees of risk from changes in interest rates</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and, for CMOs that are not agency-backed, defaults. The principal risks inherent in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holding CMOs are prepayment and extension risks related to dramatic decreases and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increases in interest rates resulting in the prepayment of principal from the underlying</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgages, either earlier or later than originally anticipated. At December 31, 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2006, approximately 7.5% and 6.7%, respectively, of the Company&#146;s CMO</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holdings were invested in those types of CMOs which are subject to more</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prepayment and extension risk than traditional CMOs, such as interest-only or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">principal-only strips.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a member of the Federal Home Loan Bank of Des Moines (&#147;FHLB&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and is required to maintain a collateral deposit that backs funding agreements issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the FHLB.  At December 31, 2007 and 2006, the Company had &#36;2,898.7 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;226.7, respectively, in non-putable funding agreements, including accrued interest,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued to the FHLB.  The level of funding agreements issued to the FHLB as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 increased significantly from the amount issued as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2006. During the second half of 2007, the Company took advantage of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the credit market dislocation to purchase highly rated assets and issue FHLB funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements.  At December 31, 2007 and 2006, assets with a carrying value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately &#36;3,270.1 and &#36;703.0, respectively, collateralized the funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements issued to the FHLB. Assets pledged to the FHLB are included in Fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities, available-for-sale, in the Balance Sheets.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">44</FONT></TD></TR></TABLE>
</P>

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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Subprime Mortgage Exposure</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Credit markets have recently become more turbulent amid concerns about subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgages and collateralized debt obligations (&#147;CDOs&#148;). This in turn has resulted in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a general widening of credit spreads, reduced price transparency, reduced liquidity,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased rating agency downgrades and increased volatility across certain markets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">To date, this market disruption has had a limited impact on the Company, which does</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">not originate or purchase subprime or Alt-A whole-loan mortgages.  Subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lending is the origination of loans to customers with weaker credit profiles.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company defines Alt-A Loans to include residential mortgage loans to customers</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">who have strong credit profiles but lack some element(s), such as documentation to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">substantiate income.  Commencing in the fourth quarter of 2007, the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expanded its definition of Alt-A loans to include residential mortgage loans to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">borrowers that would otherwise be classified as prime but whose loan structure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides repayment options to the borrower that increase the risk of default. Further,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">during the fourth quarter, the industry coalesced around classifying any residential</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgage backed securities (&#147;RMBS&#148;) not clearly identifiable as prime or subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">into the Alt-A category and the Company is following that lead.  The following</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">summarizes the Company&#146;s exposure to subprime and Alt-A mortgages as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007, the fair value and gross unrealized losses related to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s exposure to subprime mortgages was &#36;879.3 and &#36;86.4, respectively,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">representing 3.2% of total investments. 89.5% of these securities were rated &#147;AAA&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">or &#147;AA&#148;. This exposure was primarily in the form of asset-backed securities (&#147;ABS&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">structures, collateralized by subprime residential mortgages (&#147;ABS Home Equity&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and one CDO position backed by ABS Home Equity.  Of the total subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">residential mortgage backed securities portfolio, 28.0% were issued in 2007, 11.5% in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006, and 60.5% in 2005 and prior. The ABS CDO had no unrealized loss and fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of &#36;0.8 at December 31, 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s exposure to Alt-A mortgages was concentrated in RMBS, and the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fair value and gross unrealized losses aggregated to &#36;1.9 billion and &#36;69.9,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, representing 6.8% of total investments at December 31, 2007. 99.9% of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">these securities were AAA-rated.  The Alt-A mortgage backed securities portfolio</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">included 36.2% issued in 2007, 24.0% in 2006, and 39.8% in 2005 and prior.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total RMBS (including CMO and ABS structures) was &#36;4.9 billion with 17.8%</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">consisting of subprime residential mortgage backed securities and 38.0% consisting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Alt-A mortgage backed securities. The RMBS portfolio is of high credit quality</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with 99.9% of the portfolio rated AAA. Further, 1.0% of the RMBS portfolio was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued by the Government National Mortgage Association (&#147;GNMA&#148; or &#147;Ginnie</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mae&#148;), the Federal National Mortgage Association (&#147;FNMA&#148; or &#147;Fannie Mae&#148;), or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Federal Home Loan Mortgage Corporation (&#147;FHLMC&#148; or &#147;Freddie Mac&#148;), which</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are government agencies or instrumentalities that guarantee the credit quality of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">underlying mortgage pools.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">45</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Commercial Mortgage-backed and Other Asset-backed Securities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">While the delinquency rates on commercial mortgages have been stable in recent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years, commercial real estate rents and property values have recently become more</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">volatile. In addition, there are growing concerns with consumer loans as a result of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the current economic environment, which includes lower family income and higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unemployment rates.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the fair value of the Company&#146;s Commercial mortgage-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">backed securities (&#147;CMBS&#148;) totaled &#36;3.8 billion, and Other ABS, excluding subprime</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure, totaled &#36;984.1.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">CMBS investments represent pools of commercial</FONT></TD></TR></TABLE>
</P>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgages that are broadly diversified across property types and geographical areas.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Other ABS is also broadly diversified both by type and issuer with credit card</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receivables, collateralized loan obligations and automobile receivables comprising</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.3%, 29.7% and 14.3%, respectively, of total Other ABS, excluding subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following tables summarize the Company&#146;s exposure to CMBS and Other ABS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holdings by credit quality and vintage year as of December 31, 2007:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=97% colspan=7>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CMBS</FONT></U></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=38% nowrap colspan=3>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of Total CMBS</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Vintage</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">AAA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">95.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.4%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">AA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.2%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005 and prior</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">47.4%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BBB</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BB and below</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=97% colspan=7>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other ABS</FONT></U></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=38% nowrap colspan=3>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of Total Other ABS</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Vintage</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">AAA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.5%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">AA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.8%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">A</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005 and prior</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">57.7%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BBB</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">BB and below</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=42% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=4>&nbsp;</TD><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Mortgage Loans on Real Estate</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate, primarily commercial mortgage loans, totaled &#36;3,701.7</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;3,687.6 at December 31, 2007 and 2006, respectively. These loans are reported</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at amortized cost, less impairment write-downs. If the value of any mortgage loan is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determined to be impaired (i.e., when it is probable that the Company will be unable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to collect on all amounts due according to the contractual terms of the loan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement), the carrying value of the mortgage loan is reduced to either the present</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of expected cash flows from the loan, discounted at the loan&#146;s effective interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rate, or fair value of the collateral. If the loan is in foreclosure, the carrying value is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reduced to the fair value of the underlying collateral, net of estimated costs to obtain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and sell.  The carrying value of the impaired loans is reduced by establishing a</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">46</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">permanent write-down charged to Net realized capital gains (losses).  At</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 and 2006, the Company had no allowance for mortgage loan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit losses.  The properties collateralizing mortgage loans are geographically</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dispersed throughout the United States, with the largest concentration of 24.5% and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.9% of properties in California at December 31, 2007 and 2006, respectively.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Unrealized Capital Losses </FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, including securities pledged to creditors, comprise 81.7% and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">79.3% of the Company&#146;s total investment portfolio at December 31, 2007 and 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively.  Unrealized capital losses related to fixed maturities are analyzed in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">detail in the following tables.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital losses in fixed maturities, including securities pledged to creditors,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for Investment Grade (&#147;IG&#148;) and Below Investment Grade (&#147;BIG&#148;) securities by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">duration were as follows at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of IG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of IG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of IG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of IG</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">IG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and BIG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">BIG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and BIG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">IG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and BIG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">BIG</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and BIG</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less than six months</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">below amortized cost</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 106.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 25.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.8%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.9%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">More than six months</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and less than twelve</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">months below</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortized cost</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">171.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">45.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">More than twelve months</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">below amortized cost</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">174.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=2% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.8%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 359.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">94.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">98.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 4.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.9%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized losses in fixed maturities at December 31, 2007 and 2006, were primarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related to interest rate movement or changes in credit spreads to mortgage and other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">asset-backed securities.  Mortgage and other asset-backed securities include U.S.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">government-backed securities, principal protected securities, and structured securities,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which did not have an adverse change in cash flows. The following table summarizes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the unrealized capital losses by duration and reason, along with the fair value of fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities, including securities pledged to creditors, in unrealized capital loss</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">positions at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months and</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">less than Twelve</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Months Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate or spread widening</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 37.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 49.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 62.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 149.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage and other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">73.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">230.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 111.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 184.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 85.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 380.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,322.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,248.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,300.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11,871.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">47</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_48"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less than</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months and</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">less than Twelve</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Months Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate or spread widening</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 12.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 103.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 122.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage and other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">14.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">72.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">92.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 176.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 215.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,095.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 905.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6,026.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 10,028.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=7>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital losses in fixed maturities, including securities pledged to creditors,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by market sector and duration were as follows at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and less than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate, state, and municipalities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">34.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">82.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">51.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">85.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">78.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">108.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 111.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 184.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 85.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 380.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate, state, and municipalities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">58.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">48.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">62.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 176.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 215.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=7>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Of the unrealized losses aged more than twelve months, the average market value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the related fixed maturities was 97.1% of the average book value as of December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.  In addition, this category includes 753 securities, which have an average</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quality rating of A+.  No other-than-temporary impairment loss was considered</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">necessary for these fixed maturities as of December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">48</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD width=4>&nbsp;</TD><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other-Than-Temporary Impairments</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company analyzes the general account investments to determine whether there</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">has been an other-than-temporary decline in fair value below amortized cost basis.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management considers the length of time and the extent to which the fair value has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">been less than amortized cost, the issuer&#146;s financial condition and near-term</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prospects, future economic conditions and market forecasts, interest rate changes, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s intent to retain the investment for a period of time sufficient to allow</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for recovery in fair value.  If it is probable that all amounts due according to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractual terms of an investment will not be collected, an other-than-temporary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impairment is considered to have occurred.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition, the Company invests in asset-backed securities.  Determination of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">required impairment is based on the analysis discussed in the preceding paragraph, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">well as credit risk and the possibility of significant prepayment risk that restricts the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s ability to recover the investment. An impairment is recognized if the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of the security is less than book value and there has been an adverse change in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flow since the last remeasurement date.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">When a decline in fair value is determined to be other-than-temporary, the individual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">security is written down to fair value, and the loss is recorded in Net realized capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains (losses).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table identifies the Company&#146;s other-than-temporary impairments by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">type for the years ended December 31, 2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap colspan=3>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">173</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">25.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">74</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">68</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">91</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 153.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">364</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 33.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">149</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">104</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=4>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The above schedule includes &#36;31.0, &#36;11.5, and &#36;18.7 in other-than-temporary write-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">downs for the years ended December 31, 2007, 2006, and 2005, respectively, related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the analysis of credit risk and the possibility of significant prepayment risk. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">remaining &#36;122.3, &#36;22.3, and &#36;3.1 in write-downs for the years ended December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, 2006, and 2005, respectively, are related to investments that the Company does</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">not have the intent to retain for a period of time sufficient to allow for recovery in fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value. The following table summarizes these write-downs by type for the years ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">49</FONT></TD></TR></TABLE>
</P>

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<A name="page_50"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">70.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">161</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">68</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">84</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<U><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT></U>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 122.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">319</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">83</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* Less than &#36;0.1.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company may sell securities during the period in which fair value has declined</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">below amortized cost for fixed maturities or cost for equity securities.  In certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situations new factors, including changes in the business environment, can change the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s previous intent to continue holding a security.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net Realized Capital Gains (Losses)</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital gains (losses) are comprised of the difference between the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortized cost of investments and proceeds from sale, and redemption, as well as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses incurred due to the other-than-temporary impairment of investments and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes in fair value of derivatives.  The cost of the investments on disposal is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determined based on specific identification of securities. Net realized capital gains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on investments were as follows for the years ended December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006, and 2005. </FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (100.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (43.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 45.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(291.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(48.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(48.3)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (391.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (90.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (2.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After-tax net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (254.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (58.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (1.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses increased for the year ended December 31, 2007, primarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to higher losses on derivatives, along with higher losses on fixed maturities. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes in derivatives were primarily driven by interest rate swaps and call options,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">partially offset by lower losses on futures as a result of lower equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance. The losses on fixed maturities for the year ended December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were due to other-than-temporary impairments driven by the slow economic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">environment and widening of credit spreads in 2007.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Liquidity and Capital Resources</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liquidity is the ability of the Company to generate sufficient cash flows to meet the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash requirements of operating, investing, and financing activities.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">50</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_51"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Sources and Uses of Liquidity</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s principal sources of liquidity are annuity product charges, GIC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deposits, investment income, proceeds from the maturing and sale of investments,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">proceeds from debt issuance, and capital contributions. Primary uses of these funds</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are payments of commissions and operating expenses, interest and premium credits,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">payments under guaranteed death and living benefits, investment purchases,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repayment of debt, and contract maturities, withdrawals, and surrenders.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s liquidity position is managed by maintaining adequate levels of</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liquid</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets,</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such as</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash,</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equivalents,</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and short-term</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Asset/liability management is integrated into many aspects of the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations, including investment decisions, product development, and determination</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of crediting rates.  As part of the risk management process, different economic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scenarios are modeled, including cash flow testing required for insurance regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purposes, to determine that existing assets are adequate to meet projected liability</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flows. Key variables in the modeling process include interest rates, anticipated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner behavior, and variable separate account performance. Contractowners</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bear the investment risk related to variable annuity products, subject to the minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed death and living benefits included in these contracts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fixed account liabilities are supported by a general account portfolio, principally</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">composed of fixed rate investments with matching duration characteristics that can</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generate predictable, steady rates of return. The portfolio management strategy for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the fixed account considers the assets available-for-sale.  This strategy enables the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company to respond to changes in market interest rates, prepayment risk, relative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">values of asset sectors and individual securities and loans, credit quality outlook, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other relevant factors. The objective of portfolio management is to maximize returns,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">taking into account interest rate and credit risk, as well as other risks.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s asset/liability management discipline includes strategies to minimize</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure to loss as interest rates and economic and market conditions change.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Liquidity and Capital Resources</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additional sources of liquidity include borrowing facilities to meet short-term cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">requirements that arise in the ordinary course of business. The Company maintains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the following agreements:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A reciprocal loan agreement with ING America Insurance Holdings, Inc. (&#147;ING AIH&#148;), an affiliate, whereby either party can borrow from the other up to 3.0% of the Company&#146;s
statutory admitted assets as of the prior December 31. As of December 31, 2007 and 2006, the Company had no amounts due to or due from ING AIH under the reciprocal loan agreement.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A &#36;100.0 uncommitted, perpetual revolving note facility with the Bank of New York. At December 31, 2007 and 2006, the Company had no amounts outstanding under the revolving note
facility.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A &#36;75.0 uncommitted line-of-credit agreement with PNC Bank. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to ING AIH and its affiliates
of &#36;75.0. As of December 31, 2007 and 2006, the Company had no amounts outstanding under the line-of-credit agreement.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A &#36;100.0 uncommitted line-of-credit agreement with Svenska Handelsbanken AB (Publ.), effective June 2, 2006. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings
outstanding at anytime to ING AIH and its affiliates of &#36;100.0. As of December 31, 2007 and 2006, the Company had no amounts outstanding under the line-of-credit agreement.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management believes that these sources of liquidity are adequate to meet the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s short-term cash obligations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a member of the Federal Home Loan Bank of Des Moines (&#147;FHLB&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and is required to maintain a collateral deposit that backs funding agreements issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the FHLB. As of December 31, 2007 and 2006, the Company had &#36;2,898.7 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;226.7, respectively, in non-putable funding agreements, including accrued interest,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued to FHLB.  The level of funding agreements issued to the FHLB as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 increased significantly from the amount issued as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2006. During the second half of 2007, the Company took advantage of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the credit market dislocation to purchase highly rated assets and issue FHLB funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements.  As of December 31, 2007 and 2006, assets with a carrying value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately &#36;3,270.1 and &#36;703.0, respectively, collateralized the funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements issued to the FHLB. Assets pledged to the FHLB are included in Fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities, available-for-sale, on the Balance Sheets.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Funding Agreement</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On August 10, 2007, the Company issued an extendable funding agreement to its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">parent, Lion, upon receipt of a single deposit in the amount of &#36;500.0. To fund the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase of the funding agreement, Lion issued a promissory note to its indirect</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">parent company, ING Verzekeringen N.V. ("ING V"), which has been guaranteed by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Lion&#146;s immediate parent, ING AIH.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the funding agreement, the Company will pay Lion interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarterly at the credited interest rate until maturity, and on the maturity date, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company will pay Lion the single deposit and any accrued and unpaid interest. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credited interest rate shall be the three-month London Interbank Offered Rate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;LIBOR&#148;), plus 0.05%, and shall be reset quarterly. The maturity date of the funding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement shall be August 10, 2009, or such later date to which the maturity date may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be extended; provided, however, that the maturity date may not be extended beyond</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">August 10, 2012.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Capital Contributions and Distributions</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007, the Company received &#36;150.0 in capital contributions from Lion. During</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006, the Company did not receive any capital contributions from its Parent. During</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005, the Company received capital contributions of &#36;100.0 from its Parent to support</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales activities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007 and 2005, the Company did not pay any dividends or return of capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distributions on its common stock to Lion. During 2006, the Company paid &#36;170.0 in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a return of capital distribution to its Parent.  On February 21, 2008, the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">received a &#36;1.1 billion capital contribution from Lion.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Cash Collateral</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the Company&#146;s Over-The-Counter Derivative International Swaps</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Derivatives Association, Inc. Agreements (&#147;ISDA Agreements&#148;), the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">may receive from, or deliver to, counterparties, collateral to assure that all terms of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the ISDA Agreements will be met with regard to the Credit Support Annex (&#147;CSA&#148;).</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The terms of the CSA call for the Company to pay interest on any cash received equal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the Federal Funds rate. As of December 31, 2007, the Company held &#36;11.5 of cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateral, which was included in Collateral held, including payables under securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">loan agreement and was reinvested in Short-term investments under securities loan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement on the Balance Sheets. The Company held no cash collateral under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ISDA Agreements as of December 31, 2006.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Facultative Reinsurance Agreement</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a party to a Facultative Coinsurance Agreement with its affiliate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life of Denver Insurance Company (&#147;Security Life&#148;) effective August 20,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999.  Under the terms of this agreement, the Company facultatively cedes to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life, from time to time, certain GICs on a 100% coinsurance basis.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of GIC reserves ceded by the Company under this agreement was &#36;2.3 billion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;2.2 billion at December 31, 2007 and 2006, respectively. The Company utilizes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this reinsurance facility primarily for diversification and asset-liability management</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purposes in connection with this business, which is facilitated by the fact that Security</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life is also a major GIC issuer. Senior management of the Company has established</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a current maximum of &#36;4.0 billion for GIC reserves ceded under this agreement.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Separate Accounts</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets and liabilities generally represent funds maintained to meet</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specific investment objectives of contractowners who bear the investment risk,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">subject, in limited cases, to certain minimum guarantees.  Investment income and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment gains and losses generally accrue directly to such contractowners.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets of each account are legally segregated and are not subject to claims that arise</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">out of any other business of the Company or its affiliates.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets supporting variable options under variable annuity contracts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are invested, as designated by the contractowner or participant (who bears the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment risk subject, in limited cases, to minimum guaranteed rates) under a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract, in shares of mutual funds that are managed by affiliates of the Company, or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in other selected mutual funds not managed by affiliates of the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Variable annuity deposits are allocated to various subaccounts established within the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">separate account.  Each subaccount represents a different investment option into</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which the contractowner may allocate premiums.  The account value of a variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity contract is equal to the aggregate value of the subaccounts selected by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner (including the value allocated to any fixed account), less fees and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expenses. The Company offers investment options for its variable annuity contracts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">covering a wide range of investment styles, including large, mid, and small cap equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">funds, as well as fixed income alternatives. Therefore, unlike fixed annuities, under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable annuity contracts, contractowners bear the risk of investment gains and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses associated with the selected investment allocation.  The Company, however,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">offers certain guaranteed death and living benefits (described below) under which it</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bears specific risks associated with these benefits.  Many of the variable annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts issued by the Company are combination contracts offering both variable and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fixed options under which some or all of the deposits may be allocated by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner to a fixed account available under the contract.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s major source of income from variable annuities is the base contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortality fees, expense fees, and guaranteed death and living benefit rider fees</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">charged to the contractowner, less the cost of administering the product, as well as the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cost of providing for the guaranteed death and living benefits.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Minimum Guarantees</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Variable annuity contracts containing minimum guaranteed death and living benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expose the Company to equity risk. A decrease in the equity markets may cause a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decrease in the account values, thereby increasing the possibility that the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">may be required to pay amounts to contractowners due to guaranteed death and living</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits. An increase in the value of the equity markets may increase account values</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for these contracts, thereby decreasing the Company&#146;s risk associated with guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">death and living benefits.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s variable annuities offer one or more of the following guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">death and living benefits:</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Minimum Death Benefits (&#147;GMDBs&#148;)</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: </FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Standard - Guarantees that, upon death, the death benefit will be no less than the premiums paid by the contractowner, adjusted for any contract withdrawals.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Ratchet - Guarantees that, upon the death of the annuitant, the death benefit will be no less than the greater of (1) Standard or (2) the maximum contract anniversary (or quarterly) value of
the variable annuity, adjusted for contract withdrawals.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rollup (7.0% or 5.5% Solution) - Guarantees that, upon death, the death benefit will be no less than the aggregate premiums paid by the contractowner accruing interest at 7.0% or 5.5% per
annum, adjusted for contract withdrawals, which may be subject to a maximum cap on the rolled up amount. (The Company has discontinued this option for new sales.)</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combo (Max 7) - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For contracts issued prior to January 1, 2000, most contracts with enhanced death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefit guarantees were reinsured to third party reinsurers to mitigate the risk</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">produced by such guaranteed death benefits. For contracts issued after December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999, the Company instituted an equity hedging program in lieu of reinsurance. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity hedging program is based on the Company entering into derivative positions to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">offset exposures to guaranteed minimum death benefits due to adverse changes in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity markets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, the guaranteed value of these death benefits in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">excess of account values was estimated to be &#36;2.7 billion and &#36;2.2 billion,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, before reinsurance. The increase was primarily driven by the decrease</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in account values due to unfavorable equity market performance in the second half of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the guaranteed value of minimum guaranteed death benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in excess of account values, net of reinsurance, was estimated to be &#36;1.8 billion, of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which &#36;537.6 was projected to be covered by the Company&#146;s equity hedging</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">program. At December 31, 2006, the guaranteed value of minimum guaranteed death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits in excess of account values, net of reinsurance, was estimated to be &#36;1.3</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion, of which &#36;381.7 was projected to be covered by the Company&#146;s equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hedging program.  As of December 31, 2007 and 2006, the Company recorded a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability of &#36;209.4 and &#36;139.7, respectively, net of reinsurance, representing the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated net present value of the Company&#146;s future obligation for guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">minimum death benefits in excess of account values. The liability increased mainly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to the accumulation of fees used to fund the reserve during 2007 and higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future projected benefits in excess of account values.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Living Benefits</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: </FONT></TD></TR></TABLE>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Income Benefit - Guarantees a minimum income payout, exercisable each contract anniversary on or after a specified date, in most cases the 10th rider anniversary. This
type of living benefit is the predominant selection in the Company&#146;s sales of variable annuities.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Withdrawal Benefit (&#147;GMWB&#148;) - Guarantees annual withdrawals for life of a percentage of premiums received during the growth phase (before taking withdrawals and
after age 60). The percentage may vary by age at first withdrawal, depending on the base annuity contract. For certain versions, before withdrawals begin there are annual step-up (for 10 years) and quarterly ratchet features that may increase the
amount used to calculate the annual withdrawal amount. Other versions have a quarterly ratchet feature only.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A joint life-time withdrawal benefit option is available to include coverage for spouses. Most versions of the withdrawal benefit have reset and/or step up</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">features that may increase the guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0 % of eligible
premiums may be made until eligible premiums previously paid by the contractowner are returned, regardless of account value performance. Asset allocation requirements apply at all times where withdrawals are guaranteed for life.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Accumulation Benefit - Guarantees that the account value will be at least 100% of the eligible premiums paid by the contractowner after 10 years, net of any contract
withdrawals (GMAB 10). In the past, the Company offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contractowners after 20 years (GMAB 20).</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">All living benefits are covered by the Company&#146;s equity hedging program. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, the guaranteed value of these living benefits in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">excess of account values was &#36;506.5 and &#36;227.4, respectively.  The increase was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily driven by the decrease in account values due to unfavorable equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance in the second half of 2007.  As of December 31, 2007 and 2006, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company recorded a liability of &#36;149.3 and &#36;76.1, respectively, representing the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated net present value of its future obligation for living benefits in excess of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">account values. The liability increased mainly due to the accumulation of fees used</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to fund the reserve during 2007, as well as higher future projected benefits in excess</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of account values.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity Hedging Program</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: In order to hedge equity risk associated with GMDBs and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed living benefits, the Company enters into futures positions on various</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">public market equity indices chosen to closely replicate contractowner variable fund</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">returns. The Company uses market consistent valuation techniques to establish its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative position and to rebalance the derivative positions in response to market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fluctuations. One aspect of the hedging program is designed to offset changes related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to equity experience in the liability and to pay excess claims not covered by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner account value. The Company also administers a hedging program that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mitigates both equity risk and equity volatility risk associated with its Principal Guard</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMWB product issued in 2005 and beyond. This hedge strategy primarily involves</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">entering into put options.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other risks posed by market conditions, such as interest rate risk and the majority of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s equity volatility risk, and risks posed by contractowner experience,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such as surrender and mortality experience deviations, are not explicitly mitigated by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this program. In addition, certain funds, where there is no replicating market index</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and where hedging is not appropriate, are excluded from the program.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For those risks addressed by the equity hedging program, the Company is exposed to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the risk that the market indices will not adequately replicate actual contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable fund growth. Any differences between actual results and the market indices</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result in income volatility.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">56</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fixed Indexed Annuities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The crediting mechanism for FIAs exposes the Company to changes in the equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market (&#147;S&amp;P 500&#148;).  Under these contracts, the Company credits interest to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner accounts at the greater of a fixed interest rate or a rate based upon</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance of a specified equity index. The Company bears the investment risk as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company credits contractowner accounts with a stated interest rate, but cannot be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain that the investment income earned on the general account assets will exceed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that rate.  For accounting purposes, the equity return component of the FIA is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">considered an embedded derivative. See Critical Accounting Policies &#147;Reserves&#148; for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">further discussion.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">S&amp;P 500 call options are purchased and written to hedge equity risk associated with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the FIA contracts.  During the fourth quarter of 2007, the Company began using</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">futures contracts to hedge certain FIA contracts. The FIA hedging program is limited</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to currently accruing liabilities resulting from participation rates, that have already</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">been set, and measured using capital market valuation techniques.  Future equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">returns, which may be reflected in FIA credited rates beyond the current policy term,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are not hedged.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Derivatives</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s use of derivatives is limited mainly to hedging purposes to reduce the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s exposure to cash flow variability of assets and liabilities, interest rate risk,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit risk, and market risk. Generally, derivatives are not accounted for using hedge</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting treatment under FAS No. 133, as the Company has not historically sought</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hedge accounting treatment.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company enters into interest rate, equity market, credit default, total return, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">currency contracts, including swaps, caps, floors, and options, to reduce and manage</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risks associated with changes in value, yield, price, cash flow, or exchange rates of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets or liabilities held or intended to be held, or to assume or reduce credit exposure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with a referenced asset, index, or pool. The Company also utilizes options</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and futures on equity indices to reduce and manage risks associated with its annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products. Open derivative contracts are reported as either Other investments or Other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities, as appropriate, on the Balance Sheets. Changes in the fair value of such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivatives are recorded in Net realized capital gains (losses) in the Statements of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also has investments in certain fixed maturity instruments, and has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued certain retail annuity products, that contain embedded derivatives whose</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market value is at least partially determined by, among other things, levels of or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes in domestic and/or foreign interest rates (short- or long-term), exchange</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates, prepayment rates, equity markets, or credit ratings/spreads.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Embedded derivatives within fixed maturity instruments are included in Fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities, available-for-sale, on the Balance Sheets, and changes in fair value are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded in Net realized capital gains (losses) in the Statements of Operations.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">57</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Embedded derivatives within retail annuity products are included in Future policy</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits and claims reserves on the Balance Sheets, and changes in the fair value are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded in Interest credited and other benefits to contractowners in the Statements of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Deposits and Reinsurance Recoverable</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company utilizes reinsurance agreements to reduce its exposure to large losses in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">most aspects of its insurance business.  Such reinsurance permits recovery of a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portion of losses from reinsurers, although it does not discharge the primary liability</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Company as direct insurer of the risks reinsured. The Company evaluates the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial strength of potential reinsurers and continually monitors the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condition of reinsurers.  Only those reinsurance recoverable balances deemed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">probable of recovery are reflected as assets on the Company&#146;s Balance Sheets.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Off-Balance Sheet Arrangements and Aggregate Contractual Obligations</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Through the normal course of investment operations, the Company commits to either</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase or sell securities, commercial mortgage loans, or money market instruments,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at a specified future date and at a specified price or yield.  The inability of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">counterparties to honor these commitments may result in either a higher or lower</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">replacement cost. Also, there is likely to be a change in the value of the securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">underlying the commitments.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the Company had off-balance sheet commitments to purchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments equal to their fair value of &#36;616.3, &#36;156.5 of which was with related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">parties. At December 31, 2006, the Company had off-balance sheet commitments to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase investments equal to their fair value of &#36;537.9, &#36;143.2 of which was with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related parties. During 2007 and 2006, &#36;33.1 and &#36;32.4, respectively, was funded to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related parties under these commitments.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has entered into various credit default swaps to assume credit exposure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to certain assets that the Company does not own.  Credit default swaps involve a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transfer of credit risk from one party to another in exchange for periodic payments.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In the event of a default on the underlying credit exposure, the Company will either</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receive an additional payment (purchased credit protection) or will be required to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">make an additional payment (sold credit protection) equal to the notional value of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">swap contract. At December 31, 2007, the fair value of credit default swaps of &#36;8.5</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;30.6 was included in Other investments and Other liabilities, respectively, on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Balance Sheets. At December 31, 2006, the fair value of credit default swaps of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;0.6 and &#36;0.7 was included in Other investments and Other liabilities, respectively,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on the Balance Sheets.  As of December 2007, the maximum potential future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure to the Company on the sale of credit protection under credit default swaps</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">was &#36;235.4.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">58</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company owns a 3-year credit-linked note arrangement, whereby the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agrees to reimburse the guaranteed party upon payment default of the referenced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation. Upon such default, the Company will reimburse the guaranteed party for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the loss under the reference obligation, and the Company receives that reference</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation in settlement. The Company can then seek recovery of any losses under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the agreement by sale or collection of the received reference obligation.  As of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, the maximum potential future exposure to the Company under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the guarantee was &#36;32.5.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007, the Company had certain contractual obligations due over</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a period of time as summarized in the following table.</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=41% nowrap colspan=5>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Payments Due by Period</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=5>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
</TR>
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	<TD align=left width=27% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Contractual Obligations</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1 Year</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1-3 Years</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
 &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">3-5 Years</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">5 Years</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
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<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Long-term debt</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,181.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 28.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 56.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 56.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,040.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating lease obligations</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Purchase obligations</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">616.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">616.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for insurance obligations</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">117,729.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10,544.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19,616.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21,548.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66,020.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension obligations</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 119,608.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11,198.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19,692.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,620.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 67,096.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Long-term debt, including interest, consists of the following:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A surplus note in the principal amount of &#36;35.0, and the related interest payable with its affiliate, Security Life. As of December 31, 2007, the outstanding principal, interest rate,
and maturity date, of the surplus note were &#36;35.0, 7.98%, and December 7, 2029, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Surplus notes in the aggregate principal amount of &#36;400.0 and the related interest payable, with its affiliates, ING Life Insurance and Annuity Company, ReliaStar Life Insurance Company,
and Security Life of Denver International, Limited. As of December 31, 2007, the aggregate amount of outstanding principal, interest rate, and maturity date, of these surplus notes were &#36;435.0, 6.26%, and December 29, 2034,
respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating lease obligations relate to the rental of office space under various non-cancelable operating lease agreements, the longest term of which expires in 2017.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Purchase obligations consist primarily of outstanding commitments under limited partnerships that may occur any time within the term of the partnership.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The exact timing of funding these commitments, however, cannot be estimated. Therefore, the total amount of the commitments is included in the category &#147;Less than 1
Year.&#148;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for insurance obligations consist of amounts required to meet the Company&#146;s future obligations under its variable annuity, fixed annuity, GIC, and other insurance
products.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">59</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension obligations consist of actuarially-determined pension obligations, contribution matching obligations, and other supplemental retirement and insurance obligations, under various
benefit plans.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Repurchase Agreements</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company engages in dollar repurchase agreements (&#147;dollar rolls&#148;) and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repurchase agreements to increase its return on investments and improve liquidity.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">These transactions involve a sale of securities and an agreement to repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">substantially the same securities as those sold. Company policies require a minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of 95% of the fair value of securities pledged under dollar rolls and repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement transactions to be maintained as collateral.  Cash collateral received is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">invested in fixed maturities, and the offsetting collateral liability is included in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Borrowed money on the Balance Sheets.  At December 31, 2007 and 2006, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">carrying value of the securities pledged in dollar rolls and repurchase agreement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transactions was &#36;745.5 and &#36;765.7, respectively. The carrying value of the securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pledged in dollar rolls and repurchase agreement transactions is included in Securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pledged on the Balance Sheets. The repurchase obligation related to dollar rolls and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repurchase agreements totaled &#36;711.9 and &#36;769.6 at December 31, 2007 and 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively.  The repurchase obligation related to dollar rolls and repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements is included in Borrowed money on the Balance Sheets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also enters into reverse repurchase agreements.  These transactions</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">involve a purchase of securities and an agreement to sell substantially the same</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities as those purchased. Company policies require a minimum of 102% of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fair value of securities pledged under reverse repurchase agreements to be pledged as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateral. At December 31, 2007, the Company did not have any securities pledged</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">under reverse repurchase agreements. At December 31, 2006, the carrying value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the securities in reverse repurchase agreements was &#36;16.4.  Reverse repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements are included in Cash and cash equivalents on the Balance Sheets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The primary risk associated with short-term collateralized borrowings is that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">counterparty will be unable to perform under the terms of the contract.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s exposure is limited to the excess of the net replacement cost of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities over the value of the short-term investments, an amount that was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immaterial at December 31, 2007. The Company believes the counterparties to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dollar roll, repurchase, and reverse repurchase agreements are financially responsible</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and that the counterparty risk is minimal.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Securities Lending</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company engages in securities lending whereby certain securities from its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolio are loaned to other institutions for short periods of time. Initial collateral,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily cash, is required at a rate of 102% of the market value of the loaned</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">domestic securities. The collateral is deposited by the borrower with a lending agent,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and retained and invested by the lending agent according to the Company&#146;s guidelines</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to generate additional income. The market value of the loaned securities is monitored</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on a daily basis with additional collateral obtained or refunded as the market value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the loaned securities fluctuates.</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">60</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Risk-Based Capital</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The National Association of Insurance Commissioners (&#147;NAIC&#148;) risk-based capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">requirements require insurance companies to calculate and report information under a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk-based capital formula. These requirements are intended to allow insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulators to monitor the capitalization of insurance companies based upon the type</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and mixture of risks inherent in a company&#146;s operations. The formula includes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">components for asset risk, liability risk, interest rate exposure, and other factors. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company has complied with the NAIC&#146;s risk-based capital reporting requirements.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amounts reported indicate that, as of December 31, 2007, the Company has total</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjusted capital above all required capital levels.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income Taxes</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On September 25, 2007, the Internal Revenue Service (&#147;IRS&#148;) issued Revenue Ruling</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007-61, which announced its intention to issue regulations with respect to certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">computational aspects of the dividend received deduction (&#147;DRD&#148;) on separate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">account assets held in connection with variable annuity and life insurance contracts.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 issued in August 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that purported to change accepted industry and IRS interpretations of the statutes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">governing these computational questions. Any regulations that the IRS ultimately</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">proposes for issuance in this area will be subject to public notice and comment, at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which time insurance companies and other members of the public will have the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">opportunity to raise legal and practical questions about the content, scope and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">application of such regulations. As a result, the ultimate timing, substance, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">effective date of any such regulations are unknown, but they could result in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">elimination of some or all of the separate account DRD tax benefit that the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receives. Management believes that such regulations will apply prospectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax obligations include the allowance on uncertain tax benefits related to IRS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax audits and state tax exams that have not been completed. The current liability of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;2.6 may be paid in less than one year, upon completion of such audits and exams.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The timing of the payment of the remaining allowance of &#36;66.8 cannot be reliably</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Recently Adopted Accounting Standards</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(See the Organization and Significant Accounting Policies footnote to the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements for further information.)</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Accounting for Uncertainty in Income Taxes</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In June 2006, the Financial Accounting Standards Board (&#147;FASB&#148;) issued FASB</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interpretation No. 48, &#147;Accounting for Uncertainty in Income Taxes&#148; (&#147;FIN 48&#148;),</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which creates a single model to address the accounting for the uncertainty in income</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax positions recognized in a company&#146;s financial statements. FIN 48 prescribes a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognition threshold and measurement criteria that must be satisfied to recognize a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial statement benefit of tax positions taken, or expected to be taken, on an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">income tax return.  Additionally, FIN 48 provides guidance on derecognition,</FONT></TD></TR></TABLE>
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<TABLE><TR><TD width=174>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">61</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">classification, interest and penalties, accounting in interim periods, disclosure, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transition.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIN 48 was adopted by the Company on January 1, 2007.  As a result of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">implementing FIN 48, the Company recognized a cumulative effect of change in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting principle of &#36;1.7 as a reduction to January 1, 2007 Retained earnings</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(deficit).</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">With Modifications or Exchanges of Insurance Contracts</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2005, the American Institute of Certified Public Accountants</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;AICPA&#148;) issued SOP 05-1, &#147;Accounting by Insurance Enterprises for Deferred</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Acquisition Costs in Connection with Modifications or Exchanges of Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contracts&#148; (&#147;SOP 05-1&#148;), which states that when an internal replacement transaction</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">results in a substantially changed contract, the unamortized deferred acquisition costs,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unearned revenue liabilities, and deferred sales inducement assets, related to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">replaced contract should not be deferred in connection with the new contract.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contract modifications that meet various conditions defined by SOP 05-1 and result</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in a new contract that is substantially unchanged from the replaced contract, however,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">should be accounted for as a continuation of the replaced contract.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1 defines an internal replacement as a modification in product benefits,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">features, rights, or coverage, that occurs by the exchange of a contract for a new</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract, by amendment, endorsement, or rider, to a contract, or by the election of a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">feature or coverage within a contract.  SOP 05-1 applies to internal replacements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">made primarily to contracts defined by FAS No. 60, &#147;Accounting and Reporting by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Enterprises&#148; (&#147;FAS No. 60&#148;), as short-duration and long-duration insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts, and by FAS No. 97 as investment contracts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">internal replacements occurring on or after that date.  As a result of implementing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1, the Company recognized a cumulative effect of change in accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">principle of &#36;4.8, before tax, or &#36;3.1, net of &#36;1.7 of income taxes, as a reduction to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2007 Retained earnings (deficit).  In addition, the Company revised its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting policy on the amortization of DAC and VOBA to include internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">replacements.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2006, the FASB issued Statement of Financial Accounting Standards</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;FAS&#148;) No. 158, &#147;Employers' Accounting for Defined Benefit Pension and Other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Postretirement Plans - An Amendment of FASB Statements No. 87, 88, 106, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">132R&#148; (&#147;FAS No. 158&#148;). FAS No. 158 requires an employer to:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Recognize in the statement of financial position, an asset for a plan&#146;s overfunded status or a liability for a plan&#146;s underfunded status;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Measure a plan&#146;s assets and obligations that determine its funded status as of the end of the fiscal year; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur, reporting such changes in comprehensive income.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On December 31, 2006, the Company adopted the recognition and disclosure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provisions of FAS No. 158. The effect of adopting FAS No. 158 on the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial condition at December 31, 2006 is included in the accompanying financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements. FAS No. 158 did not have a significant effect on the Company&#146;s financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condition at December 31, 2006.  The provisions regarding the change in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measurement date of postretirement benefit plans were not applicable, as the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company already used a measurement date of December 31 for its pension plans.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The incremental effects of adopting the provisions of FAS No. 158 on the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance Sheets at December 31, 2006 was &#36;(1.6) .</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">New Accounting Pronouncements</FONT></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Business Combinations</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In December 2007, the FASB issued FAS No. 141 (revised 2007), &#147;Business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combinations&#148; (&#147;FAS No. 141R&#148;), which replaces FAS No. 141, &#147;Business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combinations,&#148; as issued in 2001. FAS No. 141R requires most identifiable assets,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities, noncontrolling interest, and goodwill acquired in a business combination to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be recorded at full fair value as of the acquisition date, even for acquisitions achieved</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in stages. In addition, the statement requires:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Acquisition-related costs to be recognized separately and generally expensed;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Non-obligatory restructuring costs to be recognized separately when the liability is incurred;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contractual contingencies acquired to be recorded at acquisition-date fair values;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a
gain; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The nature and financial effects of the business combination to be disclosed.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 141R also amends or eliminates various other authoritative literature.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The provisions of FAS No. 141R are effective for fiscal years beginning on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 15, 2008 for all business combinations occurring on or after that date. As</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such, this standard will impact any Company acquisitions that occur on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2009.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The Fair Value Option for Financial Assets and Financial Liabilities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In February 2007, the FASB issued FAS No. 159, &#147;The Fair Value Option for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Assets and Financial Liabilities&#148; (&#147;FAS No. 159&#148;), which allows a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">company to make an irrevocable election, on specific election dates, to measure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">eligible items at fair value with unrealized gains and losses recognized in earnings at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">each subsequent reporting date. The election to measure an item at fair value may be</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determined on an instrument by instrument basis, with certain exceptions. If the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value option is elected, any upfront costs and fees related to the item will be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized in earnings as incurred. Items eligible for the fair value option include:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain recognized financial assets and liabilities;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rights and obligations under certain insurance contracts that are not financial instruments;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain commitments.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 159 is generally effective for fiscal years beginning after November 15,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.  As of the effective date, the fair value option may be elected for certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">eligible items that exist on that date. The effect of the first remeasurement to fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value shall be reported as a cumulative effect adjustment to the opening balance of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Retained earnings (deficit). The Company will not be electing the fair value option</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for any eligible assets or liabilities in existence on January 1, 2008.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fair Value Measurements</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2006, the FASB issued FAS No. 157, &#147;Fair Value Measurements&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;FAS No. 157&#148;). FAS No. 157 provides guidance for using fair value to measure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets and liabilities whenever other standards require (or permit) assets or liabilities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to be measured at fair value. FAS No. 157 does not expand the use of fair value to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">any new circumstances.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under FAS No. 157, the FASB clarifies the principle that fair value should be based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on the assumptions market participants would use when pricing the asset or liability.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In support of this principle, FAS No. 157 establishes a fair value hierarchy that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prioritizes the information used to develop such assumptions. The fair value hierarchy</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gives the highest priority to quoted prices in active markets and the lowest priority to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unobservable data.  FAS No. 157 also requires separate disclosure of fair value</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measurements by level within the hierarchy and expanded disclosure of the effect on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">earnings for items measured using unobservable data.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The provisions of FAS No. 157 are effective for financial statements issued for fiscal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years beginning after November 15, 2007.  The Company is in the process of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determining the impact of adoption of FAS No. 157.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Legislative Initiatives</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Legislative proposals, which have been or are being considered by Congress, include</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repealing/modifying the estate tax, reducing the taxation on annuity benefits,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changing the tax treatment of insurance products relative to other financial products,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and changing life insurance company taxation. Some of these proposals, if enacted,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">could have a material adverse effect on life insurance, annuity, and other retirement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">savings product sales, while others could have a material beneficial effect. There</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are no indications at the present time, however, that Congress will enact tax changes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that will adversely affect the Company&#146;s products in 2008. The SEC has a regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">initiative underway to improve fee disclosure in financial products and legislative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">proposals on financial product fee disclosure may also be considered by Congress as</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">it undertakes a review of fee disclosures in the defined contribution plan arena.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">However, the timing and content of legislative or regulatory action to change fee</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosure requirements are uncertain at this time. The IRS and the Treasury have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">published final regulations, effective in 2009, that update and consolidate the rules</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">applicable to 403(b) tax deferred annuity arrangements. The final regulations impose</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">broad written plan document and operational compliance requirements on all 403(b)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">plan sponsors and contain new restrictions on annuity exchanges, which have the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">potential to adversely impact the Company&#146;s 403(b) annuity business.  For a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">description of Revenue Ruling 2007-61 issued by the IRS in September of 2007, see</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the &#147;Liquidity and Capital Resources, Income Taxes&#148; section of &#147;Management&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Narrative Analysis of the Results of Operations and Financial Condition&#148; above.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other Regulatory Matters</FONT></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Regulatory Matters</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As with many financial services companies, the Company and its affiliates have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">received informal and formal requests for information from various state and federal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">governmental agencies and self-regulatory organizations in connection with inquiries</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and investigations of the products and practices of the financial services industry. In</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">each case, the Company and its affiliates have been and are providing full</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cooperation.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Insurance and Retirement Plan Products and Other Regulatory Matters</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Federal and state regulators, and self-regulatory agencies are conducting broad</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">inquiries and investigations involving the insurance and retirement industries. These</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">initiatives currently focus on, among other things, compensation, revenue sharing,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and other sales incentives; potential conflicts of interest; potential anti-competitive</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">activity; reinsurance; sales and marketing practices (including sales to seniors);</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specific product types (including group annuities and indexed annuities); and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosure.  It is likely that the scope of these industry investigations will further</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">broaden before they conclude. The Company and certain of its U.S. affiliates have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">received formal and informal requests in connection with such investigations, and are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cooperating fully with each request for information.  Some of these matters could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result in regulatory action involving the Company. These initiatives also may result</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in new legislation and regulation that could significantly affect the financial services</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">industry, including businesses in which the Company is engaged. In light of these</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and other developments, U.S. affiliates of ING, including the Company, periodically</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">review whether modifications to their business practices are appropriate.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment Product Regulatory Issues</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Since 2002, there has been increased governmental and regulatory activity relating to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual funds and variable insurance products. This activity has primarily focused on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">inappropriate trading of fund shares; directed brokerage; compensation; sales</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">practices, suitability, and supervision; arrangements with service providers; pricing;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compliance and controls; adequacy of disclosure; and document retention.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to responding to governmental and regulatory requests on fund trading</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issues, ING management, on its own initiative, conducted, through special counsel</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and a national accounting firm, an extensive internal review of mutual fund trading in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING insurance, retirement, and mutual fund products. The goal of this review was to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">identify any instances of inappropriate trading in those products by third parties or by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING investment professionals and other ING personnel.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The internal review identified several isolated arrangements allowing third parties to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">engage in frequent trading of mutual funds within the variable insurance and mutual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fund products of ING, and identified other circumstances where frequent trading</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">occurred despite measures taken by ING intended to combat market timing. Each of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the arrangements has been terminated and disclosed to regulators, to the independent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">trustees of ING Funds (U.S.), and in Company reports previously filed with the SEC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pursuant to the Securities Exchange Act of 1934, as amended.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Action may be taken by regulators with respect to the Company or certain affiliates</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">before investigations relating to fund trading are completed. The potential outcome</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of such action is difficult to predict but could subject the Company or certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliates to adverse consequences, including, but not limited to, settlement payments,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">penalties, and other financial liability. It is not currently anticipated, however, that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the actual outcome of any such action will have a material adverse effect on ING or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING&#146;s U.S.-based operations, including the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING has agreed to indemnify and hold harmless the ING Funds from all damages</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">resulting from wrongful conduct by ING or its employees or from ING&#146;s internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investigation, any investigations conducted by any governmental or self-regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agencies, litigation or other formal proceedings, including any proceedings by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SEC. Management reported to the ING Funds Board that ING management believes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that the total amount of any indemnification obligations will not be material to ING or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING&#146;s U.S.-based operations, including the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For further discussion of the risks to the Company as a result of recent regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">inquiries and possible changes in U.S. regulation, see Part I, Item 1A. Risk Factors.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 7A. Quantitative and Qualitative Disclosures About Market Risk</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Asset/liability management is integrated into many aspects of the Company&#146;s</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations, including investment decisions, product development, and determination</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of crediting rates. As part of the risk management process, different economic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scenarios are modeled, including cash flow testing required for insurance regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purposes, to determine that existing assets are adequate to meet projected liability</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flows. Key variables in the modeling process include interest rates, anticipated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner behavior, and variable separate account performance. Contractowners</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bear the investment risk related to variable annuity products, subject to the minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed death and living benefits included in these contracts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fixed account liabilities are supported by a general account portfolio principally</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">composed of fixed rate investments with matching duration characteristics that can</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generate predictable, steady rates of return. The portfolio management strategy for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fixed account considers the assets available-for-sale. This enables the Company to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respond to changes in market interest rates, prepayment risk, relative values of asset</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sectors and individual securities and loans, credit quality outlook, and other relevant</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">factors. The objective of portfolio management is to maximize returns, taking into</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">account interest rate and credit risk, as well as other risks. The Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">asset/liability management discipline includes strategies to minimize exposure to loss</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as interest rates and economic and market conditions change.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On the basis of these analyses, management believes there is currently no material</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">solvency risk to the Company.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest Rate Risk</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company defines interest rate risk as the risk of an economic loss due to adverse</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes in interest rates.  This risk arises from the Company&#146;s primary activity of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investing fixed annuity premiums and guaranteed investment contract deposits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">received in interest-sensitive assets and carrying these funds as interest-sensitive</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities.  The Company manages the interest rate risk in its general account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments relative to the interest rate risk in its liabilities.  The current product</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolio also includes products where interest rate risks are entirely or partially</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">passed on to the contractowner, thereby reducing the Company&#146;s exposure to interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rate movements. Changes in interest rates can impact present and future earnings, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">levels of new sales, surrenders, or withdrawals. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following schedule demonstrates the potential changes in the 2007 earnings from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">an instantaneous, parallel increase/decrease in interest rates of 1% on December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.  These changes to income could relate to future investment income, interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">paid to contractowners, market-value adjustments, amortization of DAC and VOBA,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales levels, or any other net income item that would be affected by interest rate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes. The effect of interest rate changes is different by product. In addition, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company has estimated the impact to December 31, 2007 Shareholder&#146;s equity from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the same instantaneous change in interest rates. The effect on Shareholder&#146;s equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">includes the impact of interest rate fluctuations on income, unrealized capital gains</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on available-for-sale securities, and DAC and VOBA adjustments for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized capital gains (losses) on available-for-sale securities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate sensitivity and effect on Net income and Shareholder&#146;s equity:</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=41% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=41% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Shareholder's</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=41% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on Net</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Equity as of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=41% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income for</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=41% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase of 1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (9.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (23.7)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Decrease of 1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(14.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.9</FONT>&nbsp;
	</TD>
</TR>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The above analysis includes the following changes in DAC and VOBA related to an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instantaneous, parallel increase/decrease in interest rates.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate sensitivity and effect on DAC and VOBA:</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortization of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">DAC and VOBA</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">DAC and VOBA</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assets as of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">for</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase of 1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 94.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 25.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Decrease of 1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(16.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(111.6)</FONT>&nbsp;
	</TD>
</TR>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity Market Risk</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s operations are significantly influenced by changes in the equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">markets. The Company&#146;s profitability depends largely on the amount of assets under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management (&#147;AUM&#148;), which is primarily driven by the level of sales, equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appreciation and depreciation, and the persistency of the in force block of business.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Prolonged and precipitous declines in the equity markets can have a significant</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impact on the Company&#146;s operations.  As a result, sales of variable products may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decline and surrender activity may increase, as contractowner sentiment towards the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity market turns negative. Lower AUM will have a negative impact on the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s financial results, primarily due to lower fee income on variable annuities.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Furthermore, the Company may experience a reduction in profit margins if a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">significant portion of the assets held in the variable annuity separate account move to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the general account and the Company is unable to earn an acceptable investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">margin, particularly in light of the low interest rate environment and the presence of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractually guaranteed interest credited rates.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">68</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition, prolonged declines in the equity market may also decrease the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s expectations of future gross profits, which are utilized to determine the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amount of DAC and VOBA to be amortized in a given financial statement period. A</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">significant decrease in the Company&#146;s estimated gross profits would require the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company to accelerate the amount of amortization of DAC and VOBA in a given</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">period, potentially causing a material adverse deviation in the period&#146;s Net income. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following schedule demonstrates the potential changes in the 2007 earnings</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">resulting from an instantaneous increase/decrease in equity markets of 10% on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007. These changes to income could relate to future fee income,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized or realized capital gains (losses), amortization of DAC and VOBA, sales</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">levels, or any other net income item that would be affected by a substantial change to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity markets. In addition, the Company has estimated the impact to Shareholder&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity as of December 31, 2007 from the same instantaneous change in equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">markets.  The effect on Shareholder&#146;s equity include the impact of equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fluctuations on income, unrealized gains or losses on available-for-sale securities, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC and VOBA adjustments for unrealized capital gains (losses) on available-for-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sale securities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity sensitivity and effect on Net income and Shareholder&#146;s equity</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Shareholder's</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on Net</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Equity as of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income for</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 56.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 56.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Decrease of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(49.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(49.5)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=4>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The above analysis includes the following changes in DAC and VOBA related to an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instantaneous increase/decrease in equity markets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity sensitivity and effect on DAC and VOBA:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortization of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">DAC and VOBA</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">DAC and VOBA</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assets as of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">for</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (137.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 137.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Decrease of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">116.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(116.6)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">69</FONT></TD></TR></TABLE>
</P>

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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Hedging of Minimum Guarantees</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company sells variable annuities that offer various guaranteed death and living</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits, including guaranteed minimum death benefits (&#147;GMDBs&#148;), guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">minimum income benefits (&#147;GMIBs&#148;), guaranteed minimum withdrawals benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;GMWBs&#148;), and guaranteed minimum accumulation benefits (&#147;GMABs&#148;). See Part</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">II, Item 7., discussion of Minimum Guarantees under Liquidity and Capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Resources. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The liabilities associated with GMDBs, GMIBs, and GMWBs with life contingent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">payouts, are recorded in accordance with Statement of Position (&#147;SOP&#148;) 03-1,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Accounting and Reporting by Insurance Enterprises for Certain Nontraditional</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Long-Duration Contracts for Separate Accounts&#148; (&#147;SOP 03-1&#148;). The liabilities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with GMABs and GMWBs without life contingent payouts represent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">embedded derivative liabilities within variable annuities, which are required to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reported separately from the host variable annuity contract. These guarantees are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">carried at fair value in accordance with Statement of Financial Accounting Standards</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;FAS&#148;) No. 133, &#147;Accounting for Derivative Instruments and Hedging Activities&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;FAS No. 133&#148;), and are reported in Future policy benefits and claims reserves in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance Sheets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Both the liabilities recorded in accordance with SOP 03-1, and the liabilities carried at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fair value in accordance with FAS No. 133, are calculated based on actuarial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assumptions related to projected cash flows, including benefits and related contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">charges, over the lives of the contracts, incorporating expectations concerning</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner behavior. These liability assumptions, such as lapses, partial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals, and mortality, are based on Company experience and are, where</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate, consistent with those used for DAC and VOBA.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Declines in the equity market may increase the Company&#146;s net exposure to the death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and living benefit guarantees offered under these contracts. Such declines would</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cause a decrease in account values, and increase the possibility that the Company may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be required to pay amounts related to these guarantees.  The following schedule</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">demonstrates the potential change in the 2007 reserve liabilities for minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guarantees resulting from an instantaneous increase/decrease in equity markets of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10% on December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=32% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on Reserves</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">GMDBs</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">GMIBs</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">GMABs</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">GMWBs</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=32% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (36.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(33.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7.2)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">56.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">45.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Decrease of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In order to hedge equity risk associated with guaranteed death and living benefits, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company enters into futures positions on various public market indices chosen to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">closely replicate contractowner variable fund returns.  The Company uses market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">consistent valuation techniques to establish its derivative positions and to rebalance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the derivative positions in response to market fluctuation. One aspect of the hedging</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">70</FONT></TD></TR></TABLE>
</P>

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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">program is designed to offset changes related to equity experience in the liability and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to pay excess claims not covered by the contractowner account value. The Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">also administers a hedging program that mitigates both equity risk and equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">volatility risk associated with its Principal Guard GMWB product issued in 2005 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">beyond. This hedge strategy primarily involves entering into put options.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other risks posed by market conditions, such as interest rate risk and the majority of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s equity volatility risk, and risks posed by contractowner experience,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such as surrender and mortality experience deviations, are not explicitly mitigated by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this program. In addition, certain funds where there is no replicating market index</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and where hedging is not appropriate are excluded from the program.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For those risks addressed by the equity hedging program, the Company is exposed to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the risk that the market indices will not adequately replicate actual contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable fund growth. Any differences between actual results and the market indices</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result in income volatility.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Hedging of Indexed Annuity Guarantees</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The crediting mechanism for fixed indexed annuities (&#147;FIA&#148;) exposes the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to changes in the equity market (&#147;S&amp;P 500&#148;). The Company mitigates this exposure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by purchasing over-the-counter S&amp;P 500 call options from broker-dealer derivative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">counterparties who generally have a minimum credit rating of Aa3 from Moody&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investor&#146;s Service, Inc., and AA- from Standard &amp; Poor&#146;s. For each broker-dealer</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">counterparty, the Company&#146;s derivative exposure to that counterparty is aggregated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with any fixed income exposure to the same counterparty, and is maintained within</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">applicable state requirements and National Association of Insurance Commissioners</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance regulatory guidelines.  The FIA hedging program is limited to currently</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accruing liabilities resulting from participation rates that have been determined using</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital market valuation techniques. Future equity returns, which may be reflected in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIA credited rates beyond the current policy term, are not hedged.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following schedule demonstrates the potential change in the 2007 FIA reserve</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities resulting from instantaneous increase/decrease in equity markets of 10% on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=48% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=49% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Effect on</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=48% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=49% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Reserves</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=48% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Increase of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=49% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 166.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=48% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Decrease of 10%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=49% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(113.8)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">71</FONT></TD></TR></TABLE>
</P>

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<A name="page_72"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 8.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Financial Statements and Supplementary Data</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=78% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Index to Financial Statements</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Page</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Report of Independent Registered Public Accounting Firm</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">73</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Statements:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statements of Operations for the years ended</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">74</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance Sheets as of December 31, 2007 and 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">75</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statements of Changes in Shareholder's Equity for the years ended</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">77</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statements of Cash Flows for the years ended</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">78</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
 &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">80</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<A name="page_73"></A>

<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT size=4 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Report of Independent Registered Public Accounting Firm</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Board of Directors</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">We have audited the accompanying balance sheets of ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company as of December 31, 2007 and 2006, and the related statements of operations, changes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in shareholder&#146;s equity, and cash flows for each of the three years in the period ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.  These financial statements are the responsibility of the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management. Our responsibility is to express an opinion on these financial statements based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">our audits.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">We conducted our audits in accordance with the standards of the Public Company Accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Oversight Board (United States). Those standards require that we plan and perform the audit to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obtain reasonable assurance about whether the financial statements are free of material</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">misstatement. We were not engaged to perform an audit of the Company&#146;s internal control over</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial reporting. Our audits include consideration of internal control over financial reporting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as a basis for designing audit procedures that are appropriate in the circumstances, but not for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purpose of expressing an opinion on the effectiveness of the Company&#146;s internal control over</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial reporting.  Accordingly, we express no such opinion.  An audit also includes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">examining, on a test basis, evidence supporting the amounts and disclosures in the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements, assessing the accounting principles used and significant estimates made by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management, and evaluating the overall financial statement presentation. We believe that our</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">audits provide a reasonable basis for our opinion.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In our opinion, the financial statements referred to above present fairly, in all material respects,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the financial position of ING USA Annuity and Life Insurance Company as of December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007 and 2006, and the results of its operations and its cash flows for each of the three years in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the period ended December 31, 2007, in conformity with U.S. generally accepted accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">principles.</FONT></TD></TR></TABLE>
</P>
<P align="right">
<TABLE><TR><TD align="right" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Ernst &amp; Young LLP</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Atlanta, Georgia</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></TD></TR></TABLE>
</P>

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<A name="page_74"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=right width=81% nowrap colspan=7>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=88% nowrap colspan=9>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion
Connecticut Holdings Inc.)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=31% nowrap colspan=3>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Statements of Operations</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=32% nowrap colspan=5>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year Ended December 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Revenue:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,346.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,156.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,102.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fee income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,198.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">939.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">745.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(391.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(90.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,173.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,025.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,867.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefits and expenses:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap colspan=3>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest credited and other benefits to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,312.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,169.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,085.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">269.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">228.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">192.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap colspan=3>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization of deferred policy acquisition</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">costs and value of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">408.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">293.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">318.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,046.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,749.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,643.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income before income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">127.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">276.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">224.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax (benefit) expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">34.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 129.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 212.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 189.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">74</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_75"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Balance Sheets</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions, except share data)</FONT>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">As of December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assets</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investments:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale, at fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(amortized cost of &#36;21,945.0 at 2007 and &#36;17,071.8 at 2006)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,833.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,054.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale, at fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(cost of &#36;216.6 at 2007 and &#36;39.1 at 2006)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">188.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,701.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,687.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships/corporations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">454.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">149.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">394.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">493.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(amortized cost of &#36;953.3 at 2007 and &#36;875.5 at 2006)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">942.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">864.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27,881.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,586.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">204.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">608.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments under securities loan agreement</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">128.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">102.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accrued investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">216.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">183.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Receivable for securities sold</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deposits and reinsurance recoverable from affiliate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,616.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,759.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred policy acquisition costs</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,908.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,669.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Value of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">128.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">110.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">645.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">630.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due from affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Current income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other assets</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets held in separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37,928.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total assets</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 81,276.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 69,677.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">75</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_76"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=right width=80% nowrap colspan=3>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=86% nowrap colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=61% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Balance Sheets</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions, except share data)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">As of December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Liabilities and Shareholder's Equity</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits and claims reserves</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 31,461.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 26,696.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Payables for securities purchased</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">48.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Collateral held, including payables under securities loan agreement</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">140.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">102.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Borrowed money</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">715.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">769.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">95.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">46.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Current income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">184.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">262.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">606.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">399.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liabilities related to separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37,928.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total liabilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">78,157.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66,688.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Shareholder's equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Common stock (250,000 shares authorized, issued</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and outstanding; &#36;10 per share value)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additional paid-in capital</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,132.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,978.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated other comprehensive loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(160.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(12.1)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Retained earnings (deficit)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(855.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(979.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total shareholder's equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,119.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,989.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=61% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total liabilities and shareholder's equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 81,276.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 69,677.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">76</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_77"></A>

<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Statements of Changes in Shareholder&#146;s Equity</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=24% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accumulated</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Additional</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=24% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Other</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Retained</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Common</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Paid-In</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=24% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Comprehensive</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Earnings</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Shareholder's</FONT></B>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Stock</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income (Loss)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Deficit)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Equity</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2004</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 4,041.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 112.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (1,381.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,774.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Comprehensive income:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">189.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">189.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other comprehensive loss, net of tax:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in net unrealized capital gains (losses)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on securities (&#36;(185.2) pretax)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(118.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(118.4)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Minimum pension liability (&#36;(1.1) pretax)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total comprehensive income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">72.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contribution of capital</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Employee share-based payments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,143.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,191.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,949.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Comprehensive income:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">212.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">212.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other comprehensive loss, net of tax:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in net unrealized capital gains (losses)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on securities (&#36;(10.7) pretax)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7.3)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension liability (&#36;0.6 pretax)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total comprehensive income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">206.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cumulative effect of change of accounting</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">principle (&#36;(2.4) pretax)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.6)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Capital distribution paid</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(170.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(170.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Employee share-based payments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,978.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(12.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(979.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,989.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cumulative effect of change of accounting principles</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at January 1, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,978.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(12.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(984.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,984.3</FONT>&nbsp;
	</TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Comprehensive loss:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">129.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">129.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
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	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other comprehensive loss, net of tax:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in net unrealized capital gains (losses)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on securities (&#36;(158.7) pretax), including</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">valuation allowance of &#36;(46.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(149.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(149.7)</FONT>&nbsp;
	</TD>
</TR>
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<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension liability (&#36;3.4 pretax)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.1)</FONT>&nbsp;
	</TD>
</TR>
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<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total comprehensive loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(19.6)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Capital contribution</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">150.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">150.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
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<HR noshade size=2>
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	</TD>
	<TD>
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	<TD>
	</TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Employee share-based payments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
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<HR noshade size=1>
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<HR noshade size=1>
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	<TD>
	</TD>
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<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 4,132.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (160.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (855.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,119.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">77</FONT></TD></TR></TABLE>
</P>

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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=89% nowrap colspan=7>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=89% nowrap colspan=7>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion
Connecticut Holdings Inc.)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=72% nowrap colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Statements of Cash Flows</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=56% nowrap colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=31% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year Ended December 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
 &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cash Flows from Operating Activities:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=23% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 129.0 &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">212.2 &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">189.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Adjustments to reconcile net income to</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">net cash provided by operating activities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Capitalization of deferred policy acquisition costs</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and sales inducements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(864.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(831.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(715.3)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization of deferred policy acquisition costs,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of business acquired, and sales inducements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">528.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">367.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">387.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net accretion/decretion of discount/premium</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">52.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">57.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">93.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits, claims reserves, and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest credited</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,368.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,179.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,078.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Provision for deferred income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(69.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">131.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">192.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">391.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">90.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accrued investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(33.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance recoverable (excluding GICs)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">117.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(52.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(31.1)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other receivables and asset accruals</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(13.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.6)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to/from affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">56.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(18.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other payables and accruals</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">42.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Employee share-based payments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash provided by operating activities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,728.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,126.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,245.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cash Flows from Investing Activities:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Proceeds from the sale, maturity, or redemption of:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10,631.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10,496.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16,027.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">776.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">523.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">739.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Acquisition of:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(15,767.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(11,446.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(17,518.1)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(193.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(25.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(14.1)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(790.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(444.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(658.0)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(198.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(139.9)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(305.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(69.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(23.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(53.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(79.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(49.1)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(21.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash used in investing activities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5,650.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,223.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,636.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">78</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_79"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=83% nowrap colspan=7>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=83% nowrap colspan=7>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion
Connecticut Holdings Inc.)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=66% nowrap colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Statements of Cash Flows</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=32% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year Ended December 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cash Flows from Financing Activities:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deposits received for investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 10,458.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,788.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,225.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Maturities and withdrawals from investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7,062.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4,497.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5,039.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance recoverable on investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">25.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(638.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(120.5)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">45.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term loan to affiliate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">139.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term borrowings</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(54.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(36.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">92.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Capital distribution to Parent</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(170.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Capital contribution from Parent</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">150.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash provided by financing activities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,517.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">490.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">397.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net (decrease) increase in cash and cash equivalents</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(404.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">393.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents, beginning of year</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">608.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">215.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">209.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents, end of year</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 204.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 608.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 215.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Supplemental cash flow information:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income taxes paid (received), net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (30.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (174.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest paid</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 67.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 66.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 52.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1. Organization and Significant Accounting Policies</FONT></B></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Basis of Presentation</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company (&#147;ING USA&#148; or the &#147;Company,&#148; as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate) is a stock life insurance company domiciled in the State of Iowa and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides financial products and services in the United States. ING USA is authorized to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">conduct its insurance business in all states, except New York, and in the District of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Columbia.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;Lion&#148; or &#147;Parent&#148;), which is an indirect, wholly-owned subsidiary of ING Groep N.V.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;ING&#148;). ING is a global financial services holding company based in The Netherlands,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with American Depository Shares listed on the New York Stock Exchange under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">symbol &#147;ING&#148;.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Description of Business</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company offers various insurance products, including immediate and deferred</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable and fixed annuities. The Company&#146;s annuity products are distributed by national</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">wirehouses, regional securities firms, independent broker-dealers, banks, life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">companies with captive agency sales forces, independent insurance agents, independent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">marketing organizations, and affiliated broker-dealers. The Company&#146;s primary annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">customers are individual consumers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also offers guaranteed investment contracts and funding agreements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(collectively referred to as &#147;GICs&#148;), sold primarily to institutional investors and corporate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefit plans.  These products are marketed by home office personnel or through</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specialty insurance brokers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company previously provided interest-sensitive, traditional life insurance, and health</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance. The Company no longer issues these products. The life insurance business is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in run-off, and the Company has ceded to other insurers all health insurance.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has one operating segment.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Recently Adopted Accounting Standards</FONT></I></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Accounting for Uncertainty in Income Taxes</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In June 2006, the Financial Accounting Standards Board (&#147;FASB&#148;) issued FASB</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interpretation No. 48, &#147;Accounting for Uncertainty in Income Taxes&#148; (&#147;FIN 48&#148;), which</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">creates a single model to address the accounting for the uncertainty in income tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">positions recognized in a company&#146;s financial statements.  FIN 48 prescribes a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognition threshold and measurement criteria that must be satisfied to recognize a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial statement benefit of tax positions taken, or expected to be taken, on an income</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax return.  Additionally, FIN 48 provides guidance on derecognition, classification,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest and penalties, accounting in interim periods, disclosure, and transition.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIN 48 was adopted by the Company on January 1, 2007. As a result of implementing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIN 48, the Company recognized a cumulative effect of change in accounting principle of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;1.7 as a reduction to January 1, 2007 Retained earnings (deficit).</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Modifications or Exchanges of Insurance Contracts</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2005, the American Institute of Certified Public Accountants (&#147;AICPA&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued Statement of Position (&#147;SOP&#148;) 05-1, &#147;Accounting by Insurance Enterprises for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contracts&#148; (&#147;SOP 05-1&#148;), which states that when an internal replacement transaction</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">results in a substantially changed contract, the unamortized deferred acquisition costs,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unearned revenue liabilities, and deferred sales inducement assets, related to the replaced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract should not be deferred in connection with the new contract.  Contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">modifications that meet various conditions defined by SOP 05-1 and result in a new</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract that is substantially unchanged from the replaced contract, however, should be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounted for as a continuation of the replaced contract.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1 defines an internal replacement as a modification in product benefits, features,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rights, or coverage, that occurs by the exchange of a contract for a new contract, by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amendment, endorsement, or rider, to a contract, or by the election of a feature or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">coverage within a contract. SOP 05-1 applies to internal replacements made primarily to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts defined by Statement of Financial Accounting Standards (&#147;FAS&#148;) No. 60,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Accounting and Reporting by Insurance Enterprises&#148; (&#147;FAS No. 60&#148;), as short-duration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and long-duration insurance contracts, and by FAS No. 97, &#147;Accounting and Reporting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Losses from the Sale of Investments&#148; (&#147;FAS No. 97&#148;), as investment contracts.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">replacements occurring on or after that date. As a result of implementing SOP 05-1, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company recognized a cumulative effect of change in accounting principle of &#36;4.8,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">before tax, or &#36;3.1, net of &#36;1.7 of income taxes, as a reduction to January 1, 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Retained earnings (deficit). In addition, the Company revised its accounting policy on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the amortization of deferred policy acquisition costs (&#147;DAC&#148;) and value of business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">acquired (&#147;VOBA&#148;) to include internal replacements.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2006, FASB issued No. 158, &#147;Employers' Accounting for Defined Benefit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension and Other Postretirement Plans - An Amendment of FASB Statements No. 87,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">88, 106, and 132R&#148; (&#147;FAS No. 158&#148;). FAS No. 158 requires an employer to:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Recognize in the statement of financial position, an asset for a plan&#146;s overfunded status or a liability for a plan&#146;s underfunded status;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Measure a plan&#146;s assets and obligations that determine its funded status as of the end of the fiscal year; and</FONT>	</TD>
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	<TD nowrap valign=top>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur, reporting such changes in comprehensive income.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On December 31, 2006, the Company adopted the recognition and disclosure provisions</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of FAS No. 158.  The effect of adopting FAS No. 158 on the Company&#146;s financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condition at December 31, 2006 is included in the accompanying financial statements.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 158 did not have a significant effect on the Company&#146;s financial condition at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2006. The provisions regarding the change in the measurement date of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">postretirement benefit plans are not applicable, as the Company already uses a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measurement date of December 31 for its pension plans.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The incremental effects of adopting the provisions of FAS No. 158 on the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance Sheets at December 31, 2006 was &#36;(1.6) .</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Accounting for Certain Hybrid Financial Instruments</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In February 2006, the FASB issued FAS No. 155, &#147;Accounting for Certain Hybrid</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Instruments - an amendment of FASB Statements No. 133 and 140&#148; (&#147;FAS No.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">155&#148;), which permits the application of fair value accounting to certain hybrid financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instruments in their entirety if they contain embedded derivatives that would otherwise</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">require bifurcation under FAS No. 133, &#147;Accounting for Derivative Instruments and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Hedging Activities&#148; (&#147;FAS No. 133&#148;). Under this approach, changes in fair value would</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be recognized currently in earnings. In addition, FAS No. 155 does the following:</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Clarifies which interest-only strips and principal-only strips are not subject to derivative accounting under FAS No. 133;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Requires that interests in securitized financial assets be analyzed to identify interests that are freestanding derivatives or that are hybrid instruments that contain embedded derivatives
requiring bifurcation;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Allows a qualifying special-purpose entity to hold derivative financial instruments that pertain to beneficial interests, other than another derivative financial instrument.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 155 was adopted by the Company on January 1, 2007, and is effective for all</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instruments acquired, issued, or subject to a remeasurement event, occurring on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that date. The adoption of FAS No. 155 did not have a material effect on the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial position, results of operations, or cash flows.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">New Accounting Pronouncements</FONT></I></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Business Combinations</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In December 2007, the FASB issued FAS No. 141 (revised 2007), &#147;Business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combinations&#148; (&#147;FAS No. 141R&#148;), which replaces FAS No. 141, &#147;Business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combinations,&#148; as issued in 2001.  FAS No. 141R requires most identifiable assets,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities, noncontrolling interest, and goodwill, acquired in a business combination to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded at full fair value as of the acquisition date, even for acquisitions achieved in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">stages. In addition, the statement requires:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Acquisition-related costs to be recognized separately and generally expensed;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Non-obligatory restructuring costs to be recognized separately when the liability is incurred;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contractual contingencies acquired to be recorded at acquisition-date fair values;</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a
gain; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The nature and financial effects of the business combination to be disclosed.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 141R also amends or eliminates various other authoritative literature.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The provisions of FAS No. 141R are effective for fiscal years beginning on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 15, 2008 for all business combinations occurring on or after that date.  As</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such, this standard will impact any Company acquisitions that occur on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2009.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The Fair Value Option for Financial Assets and Financial Liabilities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In February 2007, the FASB issued FAS No. 159, &#147;The Fair Value Option for Financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets and Financial Liabilities&#148; (&#147;FAS No. 159&#148;), which allows a company to make an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">irrevocable election, on specific election dates, to measure eligible items at fair value.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The election to measure an item at fair value may be determined on an instrument by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instrument basis, with certain exceptions. If the fair value option is elected, unrealized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains and losses will be recognized in earnings at each subsequent reporting date, and any</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upfront costs and fees related to the item will be recognized in earnings as incurred.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Items eligible for the fair value option include:</FONT></TD></TR></TABLE>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain recognized financial assets and liabilities;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rights and obligations under certain insurance contracts that are not financial instruments;</FONT>	</TD>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain commitments.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 159 is effective for fiscal years beginning after November 15, 2007. As of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">effective date, the fair value option may be elected for eligible items that exist on that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">date. The effect of the first remeasurement to fair value shall be reported as a cumulative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">effect adjustment to the opening balance of Retained earnings (deficit). The Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will not be electing the fair value option for any eligible assets or liabilities in existence</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on January 1, 2008.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fair Value Measurements</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2006, the FASB issued FAS No. 157, &#147;Fair Value Measurements&#148; (&#147;FAS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 157&#148;). FAS No. 157 provides guidance for using fair value to measure assets and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities whenever other standards require (or permit) assets or liabilities to be measured</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at fair value.  FAS No. 157 does not expand the use of fair value in any new</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">circumstances.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under FAS No. 157, the FASB clarifies the principle that fair value should be based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the assumptions market participants would use when pricing the asset or liability. In</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">support of this principle, FAS No. 157 establishes a fair value hierarchy that prioritizes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the information used to develop such assumptions. The fair value hierarchy gives the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">highest priority to quoted prices in active markets and the lowest priority to unobservable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">data. FAS No. 157 also requires separate disclosure of fair value measurements by level</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">within the hierarchy and expanded disclosure of the effect on earnings for items</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measured using unobservable data.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The provisions of FAS No. 157 are effective for financial statements issued for fiscal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years beginning after November 15, 2007. The Company is in the process of determining</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the impact of adoption of FAS No. 157.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Use of Estimates</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The preparation of financial statements in conformity with accounting principles</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generally accepted in the United States (&#147;US GAAP&#148;) requires management to make</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimates and assumptions that affect the amounts reported in the financial statements and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accompanying notes.  Actual results could differ from reported results using those</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimates.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Reclassifications</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain reclassifications have been made to prior year financial information to conform to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the current year classifications.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Cash and Cash Equivalents</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents include cash on hand, money market instruments, and other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">debt issues with a maturity of 90 days or less when purchased.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Investments</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">All of the Company&#146;s fixed maturities and equity securities are currently designated as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale. Available-for-sale securities are reported at fair value and unrealized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital gains (losses) on these securities are recorded directly in Shareholder&#146;s equity,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">after adjustment for related changes in DAC, VOBA, and deferred income taxes.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other-Than-Temporary-Impairments</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company analyzes the general account investments to determine whether there has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">been an other-than-temporary decline in fair value below the amortized cost basis.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management considers the length of the time and the extent to which the fair value has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">been less than amortized cost, the issuer&#146;s financial condition and near-term prospects,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future economic conditions and market forecasts, and the Company&#146;s intent and ability to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">retain the investment for a period of time sufficient to allow for recovery in fair value. If</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">it is probable that all amounts due according to the contractual terms of a debt security</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will not be collected, an other-than-temporary impairment is considered to have occurred.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition, the Company invests in structured securities that meet the criteria of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Emerging Issues Task Force (&#147;EITF&#148;) Issue No. 99-20, &#147;Recognition of Interest Income</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets&#148; (&#147;EITF 99-20&#148;).  Under EITF 99-20, a further determination of the required</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impairment is based on credit risk and the possibility of significant prepayment risk that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">restricts the Company&#146;s ability to recover the investment. An impairment is recognized if</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the fair value of the security is less than amortized cost and there has been an adverse</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">change in cash flow since the remeasurement date.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">When a decline in fair value is determined to be other-than-temporary, the individual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">security is written down to fair value, and the loss is recorded in Net realized capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains (losses).</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Purchases and Sales</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Purchases and sales of fixed maturities and equity securities, excluding private</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">placements, are recorded on the trade date. Purchases and sales of private placements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and mortgage loans are recorded on the closing date.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Valuation</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair values for fixed maturities are largely determined by one of two pricing methods:</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">published price quotations or valuation techniques with market inputs. Security pricing is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">applied using a hierarchy or &#147;waterfall&#148; approach, whereby prices are first sought from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">published price quotations, including pricing services or broker-dealer quotations.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Published price quotations may be unavailable or deemed unreliable due to a limited</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market for securities that are rarely traded or are traded only in privately negotiated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transactions.  As such, fair values for the remaining securities, consisting primarily of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">privately placed bonds, are then determined using risk-free interest rates, current</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporate spreads, the credit quality of the issuer and cash flow characteristics of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">security. The fair values for actively traded equity securities are based on quoted market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prices.  For equity securities not actively traded, estimated fair values are based upon</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">values of issues of comparable yield and quality or conversion value, where applicable.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate are reported at amortized cost, less impairment write-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">downs. If the value of any mortgage loan is determined to be impaired (i.e., when it is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">probable that the Company will be unable to collect all amounts due according to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractual terms of the loan agreement), the carrying value of the mortgage loan is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reduced to either the present value of expected cash flows from the loan, discounted at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the loan&#146;s effective interest rate, or fair value of the collateral.  If the loan is in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of estimated costs to obtain and sell. The carrying value of the impaired loans is reduced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by establishing a permanent write-down recorded in Net realized capital gains (losses).</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, the Company had no allowance for mortgage loan</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit losses. The properties collateralizing mortgage loans are geographically dispersed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">throughout the United States, with the largest concentration of 24.5% and 19.9% of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">properties in California at December 31, 2007 and 2006, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans are carried at unpaid principal balances.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments, consisting primarily of money market instruments and other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fixed maturity issues purchased with an original maturity of 91 days to one year, are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">considered available-for-sale and are carried at fair value.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivative instruments are reported at fair value primarily using the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative accounting system. The system uses key financial data, such as yield curves,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exchange rates, Standard &amp; Poor&#146;s (&#147;S&amp;P&#148;) 500 Index prices, and London Inter Bank</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Offered Rates (&#147;LIBOR&#148;), which are obtained from third party sources and uploaded into</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the system. For those derivatives that are unable to be valued by the accounting system,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company utilizes values established by third party brokers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Embedded derivative instruments within investments are reported at fair value based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upon internally established valuations that are consistent with external valuation models</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">or market quotations. Guaranteed minimum withdrawals benefits (&#147;GMWBs&#148;) without</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">life contingent payouts and guaranteed minimum accumulation benefits (&#147;GMABs&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">represent an embedded derivative liability in the variable annuity contract that is required</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to be reported separately from the host variable annuity contract. The option component</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of a fixed indexed annuity (&#147;FIA&#148;) also represents an embedded derivative.  These</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">embedded derivatives are carried at fair value based on actuarial assumptions related to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">projected cash flows, including benefits and related contract charges, over the lives of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts, incorporating expectations concerning contractowner behavior.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Repurchase Agreements</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company engages in dollar repurchase agreements (&#147;dollar rolls&#148;) and repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements to increase the return on investments and improve liquidity.  These</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transactions involve a sale of securities and an agreement to repurchase substantially the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">same securities as those sold. Company policies require a minimum of 95% of the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of securities pledged under dollar rolls and repurchase agreement transactions to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maintained as collateral. Cash collateral received is invested in fixed maturities, and the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">carrying value of the securities pledged in dollar rolls and repurchase agreement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transactions is included in Securities pledged on the Balance Sheets.  The repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation related to dollar rolls and repurchase agreements is included in Borrowed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">money on the Balance Sheets.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also enters into reverse repurchase agreements. These transactions involve</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a purchase of securities and an agreement to sell substantially the same securities as those</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchased. Company policies require a minimum of 102% of the fair value of securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pledged under reverse repurchase agreements to be pledged as collateral.  Reverse</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repurchase agreements are included in Cash and cash equivalents on the Balance Sheets.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Securities Lending</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company engages in securities lending whereby certain securities from its portfolio</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are loaned to other institutions for short periods of time. Initial collateral, primarily cash,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is required at a rate of 102% of the market value of the loaned domestic securities. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateral is deposited by the borrower with a lending agent, and retained and invested by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the lending agent according to the Company&#146;s guidelines to generate additional income.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The market value of the loaned securities is monitored on a daily basis with additional</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateral obtained or refunded as the market value of the loaned securities fluctuates.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Derivatives</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s use of derivatives is limited mainly to hedging purposes to reduce the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s exposure to cash flow variability of assets and liabilities, interest rate risk,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit risk, and market risk.  Generally, derivatives are not accounted for using hedge</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting treatment under FAS No. 133, as the Company has not historically sought</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">hedge accounting treatment.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company enters into interest rate, equity market, credit default, total return, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">currency contracts, including swaps, caps, floors, and options, to reduce and manage risks</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">associated with changes in value, yield, price, cash flow, or exchange rates of assets or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities held or intended to be held, or to assume or reduce credit exposure associated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with a referenced asset, index, or pool. The Company also utilizes options and futures on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity indices to reduce and manage risks associated with its annuity products.  Open</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative contracts are reported as either Other investments or Other liabilities, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate, on the Balance Sheets.  Changes in the fair value of such derivatives are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded in Net realized capital gains (losses) in the Statements of Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also has investments in certain fixed maturity instruments, and has issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain retail annuity products, that contain embedded derivatives whose market value is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at least partially determined by, among other things, levels of or changes in domestic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity markets, or credit ratings/spreads.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Embedded derivatives within fixed maturity instruments are included in Fixed maturities,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale, on the Balance Sheets, and changes in fair value are recorded in Net</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">realized capital gains (losses) in the Statements of Operations.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Embedded derivatives within retail annuity products are included in Future policy</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits and claims reserves on the Balance Sheets, and changes in the fair value are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded in Interest credited and other benefits to contractowners in the Statements of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Deferred Policy Acquisition Costs and Value of Business Acquired</FONT></I></B><BR>
<BR>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">General</FONT></U><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC represents policy acquisition costs that have been capitalized and are subject to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization.  Such costs consist principally of certain commissions, underwriting,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract issuance, and agency expenses, related to the production of new and renewal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">business.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">VOBA represents the outstanding value of in force business capitalized in purchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting when the Company was acquired and is subject to amortization. The value is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on the present value of estimated profits embedded in the Company&#146;s contracts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 97 applies to universal life and investment-type products, such as fixed and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable deferred annuities. Under FAS No. 97, DAC and VOBA are amortized, with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest, over the life of the related contracts in relation to the present value of estimated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future gross profits from investment, mortality, and expense margins, plus surrender</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">charges. DAC related to GICs, however, is amortized on a straight-line basis over the life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the contract.</FONT><BR>
<BR>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Internal Replacements</FONT></U><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contractowners may periodically exchange one contract for another, or make</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">modifications to an existing contract. Beginning January 1, 2007, these transactions are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">identified as internal replacements and are accounted for in accordance with SOP 05-1.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Internal replacements that are determined to result in substantially unchanged contracts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are accounted for as continuations of the replaced contracts. Any costs associated with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the issuance of the new contracts are considered maintenance costs and expensed as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incurred. Unamortized DAC and VOBA related to the replaced contracts continue to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deferred and amortized in connection with the new contracts. For deferred annuities, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated future gross profits of the new contracts are treated as revisions to the estimated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future gross profits of the replaced contracts in the determination of amortization.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Internal replacements that are determined to result in contracts that are substantially</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changed are accounted for as extinguishments of the replaced contracts, and any</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unamortized DAC and VOBA related to the replaced contracts are written off to Net</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization of deferred policy acquisition costs and value of business acquired in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statements of Operations.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As a result of implementing SOP 05-1, the Company recognized a cumulative effect of </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">change in accounting principle of &#36;4.8, before tax, or &#36;3.1, net of &#36;1.7 of income taxes, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a reduction to January 1, 2007 Retained earnings (deficit).</FONT><BR>
<BR>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unlocking</FONT></U><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in assumptions can have a significant impact on DAC and VOBA balances and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization rates. Several assumptions are considered significant in the estimation of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future gross profits associated with variable universal life and variable deferred annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products. One of the most significant assumptions involved in the estimation of future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gross profits is the assumed return associated with the variable account performance. To</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reflect the volatility in the equity markets, this assumption involves a combination of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">near-term expectations and long-term assumptions regarding market performance. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">overall return on the variable account is dependent on multiple factors, including the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">relative mix of the underlying sub-accounts among bond funds and equity funds, as well</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as equity sector weightings. Other significant assumptions include surrender and lapse</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates, estimated interest spread, and estimated mortality.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to the relative size and sensitivity to minor changes in underlying assumptions of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC and VOBA balances, the Company performs quarterly and annual analyses of DAC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and VOBA for the annuity and life businesses, respectively.  The DAC and VOBA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">balances are evaluated for recoverability.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At each evaluation date, actual historical gross profits are reflected, and estimated future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gross profits and related assumptions are evaluated for continued reasonableness. Any</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjustment in estimated profit requires that the amortization rate be revised</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;unlocking&#148;), retroactively to the date of the policy or contract issuance.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cumulative unlocking adjustment is recognized as a component of current period</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization.  In general, sustained increases in investment, mortality, and expense</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">margins, and thus estimated future profits, lower the rate of amortization.  Sustained</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decreases in investment, mortality, and expense margins, and thus estimated future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">profits, however, increase the rate of amortization.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Reserves</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits and claims reserves include reserves for deferred annuities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate annuities with and without life contingent payouts, universal and traditional</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">life insurance contracts, and GICs. Generally, reserves are calculated using mortality and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawal rate assumptions based on relevant Company experience and are periodically</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reviewed against both industry standards and experience.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for deferred annuity investment contracts and immediate annuities without life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contingent payouts are equal to cumulative deposits, less charges and withdrawals, plus</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credited interest thereon.  Deferred annuity crediting rates and reserve interest rates</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">varied by product up to 10.0% for 2007, 7.8% for 2006, and 8.0% for 2005.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for individual immediate annuities with life contingent payout benefits are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">computed on the basis of assumed interest discount rate, mortality, and expenses,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including a margin for adverse deviations. Such assumptions generally vary by annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">plan type, year of issue, and policy duration.  For 2007, 2006, and 2005, immediate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity reserve interest discount rates varied up to 8.0% .</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for FIAs are computed in accordance with FAS No. 97 and FAS No. 133.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accordingly, the aggregate initial liability is equal to the deposit received, plus a bonus,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">if applicable, and is split into a host component and an embedded derivative component.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Thereafter, the host liability accumulates at a set interest rate, and the embedded</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative liability is recognized at fair value, with the change in fair value recorded in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Statements of Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for universal life products are equal to cumulative deposits, less withdrawals</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and charges, plus credited interest thereon. Reserves for traditional life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts represent the present value of future benefits to be paid to or on behalf of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners and related expenses, less the present value of future net premiums.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under Statement of Position 03-1, &#147;Accounting and Reporting by Insurance Enterprises</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for Certain Nontraditional Long-Duration Contracts for Separate Accounts&#148; (&#147;SOP 03-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1&#148;), the Company calculates additional liabilities (&#147;SOP 03-1 reserves&#148;) for certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed benefits and for universal life products with certain patterns of cost of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance charges and certain other fees. The SOP 03-1 reserve recognized for such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products is in addition to the liability previously held and recognizes the portion of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract assessments received in early years used to compensate the insurer for services</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provided in later years.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company calculates a benefit ratio for each block of business subject to SOP 03-1,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and calculates an SOP 03-1 reserve by accumulating amounts equal to the benefit ratio</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">multiplied by the assessments for each period, reduced by excess death benefits during</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the period. The SOP 03-1 reserve is accumulated at interest rates using the contract-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credited rate for the period. The calculated reserve includes a provision for universal life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts with patterns of cost of insurance charges that produce expected gains from the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance benefit function followed by losses from that function in later years.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMABs and GMWBs without life contingent payouts are considered to be derivatives</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">under FAS No. 133. The additional reserves for these guarantees are recognized at fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value through the Statements of Operations.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserves for GICs are calculated using the amount deposited with the Company, less</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawals, plus interest accrued to the ending valuation date. Interest on these contracts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is accrued by a predetermined index, plus a spread or a fixed rate, established at the issue</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">date of the contract.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Sales Inducements</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements represent benefits paid to contractowners for a specified period that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are incremental to the amounts the Company credits on similar contracts and are higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">than the contract&#146;s expected ongoing crediting rates for periods after the inducement.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements are amortized as a component of Interest credited and other benefits to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners using methodologies and assumptions consistent with those used for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization of DAC.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Revenue Recognition</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For universal life and most annuity contracts, charges assessed against contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">funds for the cost of insurance, surrender, expenses, and other fees are recorded as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">revenue as charges are assessed. Other amounts received for these contracts are reflected</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as deposits and are not recorded as premium or revenue. Related policy benefits are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recorded in relation to the associated premiums or gross profit so that profits are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized over the expected lives of the contracts. When annuity payments with life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contingencies begin under contracts that were initially investment contracts, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accumulated balance in the account is treated as a single premium for the purchase of an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity and reflected as an offsetting amount in both Premiums and Interest credited and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other benefits to contractowners in the Statements of Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums on the Statements of Operations primarily represent amounts received under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">traditional life insurance policies.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For GICs, deposits made to the Company are not recorded as revenue in the Statements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Operations, but are recorded directly to Future policy benefits and claims reserves on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Balance Sheets.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Separate Accounts</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets and liabilities generally represent funds maintained to meet</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specific investment objectives of contractowners who bear the investment risk, subject, in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">limited cases, to certain minimum guarantees. Investment income and investment gains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and losses generally accrue directly to such contractowners. The assets of each account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are legally segregated and are not subject to claims that arise out of any other business of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company or its affiliates.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets supporting variable options under variable annuity contracts are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">invested, as designated by the contractowner or participant (who bears the investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk subject, in limited cases, to minimum guaranteed rates) under a contract, in shares of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual funds that are managed by the Company or its affiliates, or in other selected</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual funds not managed by the Company or its affiliates.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account assets and liabilities are carried at fair value and shown as separate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">captions in the Balance Sheets.  Deposits, investment income, and net realized and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized capital gains (losses) of the separate accounts, however, are not reflected in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Statements of Operations (with the exception of realized and unrealized capital gains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on the assets supporting the guaranteed interest option). The Statements of Cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Flows do not reflect investment activity of the separate accounts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets and liabilities of separate account arrangements that do not meet the criteria in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 03-1 for separate presentation in the Balance Sheets (primarily guaranteed interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">options), and revenue and expenses related to such arrangements, are consolidated in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial statements with the general account.  At December 31, 2007 and 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized capital gains (losses) of &#36;21.1 and &#36;(4.1), respectively, after taxes, on assets</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">supporting a guaranteed interest option are reflected in Shareholder&#146;s equity.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Reinsurance</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company utilizes reinsurance agreements to reduce its exposure to large losses in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">most aspects of its insurance business. Such reinsurance permits recovery of a portion of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses from reinsurers, although it does not discharge the primary liability of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company as the direct insurer of the risks reinsured.  The Company evaluates the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial strength of potential reinsurers and continually monitors the financial condition</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of reinsurers. Only those reinsurance recoverable balances deemed probable of recovery</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are reflected as assets on the Company&#146;s Balance Sheets.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Participating Insurance</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Participating business approximates 8.5% of the Company&#146;s ordinary life insurance in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">force and 27.1% of life insurance premium income. The amount of dividends to be paid</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is determined annually by the Board of Directors.  Amounts allocable to participating</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners are based on published dividend projections or expected dividend scales.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Dividends to participating policyholders of &#36;14.8, &#36;15.4, and &#36;15.8, were incurred during</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the years ended December 31, 2007, 2006, and 2005, respectively.</FONT></TD></TR></TABLE>
</P>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">93</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Income Taxes </FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is taxed at regular corporate rates after adjusting income reported for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial statement purposes for certain items. Deferred income tax expenses (benefits)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result from changes during the year in cumulative temporary differences between the tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">basis and book basis of assets and liabilities.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2. Investments</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Fixed Maturities and Equity Securities</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities and equity securities, available-for-sale, were as follows as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gains</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 18.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State, municipalities, and political subdivisions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">49.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">47.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate securities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Public utilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,417.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,426.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,742.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,756.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total U.S. corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,160.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">103.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">80.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,183.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign securities</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Government</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">525.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">14.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">533.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,280.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,261.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total foreign securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,805.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">55.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,794.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,988.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">53.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">85.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,955.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,842.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,843.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">108.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,898.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">257.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">380.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,776.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">953.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">942.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21,945.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">251.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">363.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21,833.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">216.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,161.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 254.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 371.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,044.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollar denominated.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">94</FONT></TD></TR></TABLE>
</P>

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<A name="page_95"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities and equity securities, available-for-sale, were as follows as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gains</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 276.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 275.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">220.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">219.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State, municipalities, and political subdivisions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate securities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Public utilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,324.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,327.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,138.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">49.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,139.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total U.S. corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,463.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">71.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,467.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign securities</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Government</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">486.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">498.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,843.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">46.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,829.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total foreign securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,330.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">48.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,327.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,841.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">62.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,823.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,928.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,923.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,843.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,838.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,947.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">186.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">215.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,918.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">875.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">864.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,071.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">183.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">201.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17,054.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,110.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 185.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 201.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,095.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollar denominated.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, net unrealized loss was &#36;127.8 and &#36;27.4, respectively,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on total fixed maturities, including securities pledged to creditors, and equity securities.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">95</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The amortized cost and fair value of fixed maturities as of December 31, 2007, are shown</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">below by contractual maturity. Actual maturities may differ from contractual maturities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as securities may be restructured, called, or prepaid.</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
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&nbsp;
	</TD>
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&nbsp;	</TD>
	<TD align=center width=27% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
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	<TD align=left width=50% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=27% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to mature:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
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 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">One year or less</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 550.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 551.3</FONT>&nbsp;
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	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After one year through five years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,800.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,856.5</FONT>&nbsp;
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 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After five years through ten years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,797.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,776.3</FONT>&nbsp;
	</TD>
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	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After ten years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,971.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.7</FONT>&nbsp;
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 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,830.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,799.3</FONT>&nbsp;
	</TD>
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	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">953.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">942.6</FONT>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, excluding securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,945.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,833.4</FONT>&nbsp;
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company did not have any investments in a single issuer, other than obligations of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the U.S. government and government agencies, with a carrying value in excess of 10.0%</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Company&#146;s Shareholder&#146;s equity at December 31, 2007 or 2006.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, fixed maturities with fair values of &#36;11.2 and &#36;10.7,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, were on deposit as required by regulatory authorities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company invests in various categories of collateralized mortgage obligations</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;CMOs&#148;) that are subject to different degrees of risk from changes in interest rates and,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for CMOs that are not agency-backed, defaults. The principal risks inherent in holding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">CMOs are prepayment and extension risks related to dramatic decreases and increases in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest rates resulting in the prepayment of principal from the underlying mortgages,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">either earlier or later than originally anticipated.  At December 31, 2007 and 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately 7.5% and 6.7%, respectively, of the Company&#146;s CMO holdings were</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">invested in those types of CMOs which are subject to more prepayment and extension</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk than traditional CMOs, such as interest-only or principal-only strips.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a member of the Federal Home Loan Bank of Des Moines (&#147;FHLB&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and is required to maintain a collateral deposit that backs funding agreements issued to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the FHLB.  At December 31, 2007 and 2006, the Company had &#36;2,898.7 and &#36;226.7,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, in non-putable funding agreements, including accrued interest, issued to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FHLB. The level of funding agreements issued to the FHLB as of December 31, 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased significantly from the amount issued as of December 31, 2006.  During the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">second half of 2007, the Company took advantage of the credit market dislocation to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase highly rated assets and issue FHLB funding agreements. At December 31, 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2006, assets with a carrying value of approximately &#36;3,270.1 and &#36;703.0,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, collateralized the funding agreements to the FHLB. Assets pledged to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FHLB are included in Fixed maturities, available-for-sale, in the Balance Sheets.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">96</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Repurchase Agreements</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company engages in dollar repurchase agreements (&#147;dollar rolls&#148;) and repurchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements.  At December 31, 2007 and 2006, the carrying value of the securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pledged in dollar rolls and repurchase agreement transactions was &#36;745.5 and &#36;765.7,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively. The repurchase obligation related to dollar rolls and repurchase agreements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">totaled &#36;711.9 and &#36;769.6 at December 31, 2007 and 2006, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also enters into reverse repurchase agreements. At December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company did not have any securities in reverse repurchase agreements.  At</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2006, the carrying value of the securities in reverse repurchase agreements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">was &#36;16.4.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The primary risk associated with short-term collateralized borrowings is that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">counterparty will be unable to perform under the terms of the contract. The Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure is limited to the excess of the net replacement cost of the securities over the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of the short-term investments, an amount that was immaterial at December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007 and 2006. The Company believes the counterparties to the dollar rolls, repurchase,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and reverse repurchase agreements are financially responsible and that the counterparty</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk is minimal.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Unrealized Capital Losses</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital losses in fixed maturities at December 31, 2007 and 2006, were</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily related to interest rate movement or changes in credit spreads to mortgage and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other asset-backed securities.  Mortgage and other asset-backed securities include U.S.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">government-backed securities, principal protected securities, and structured securities,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which did not have an adverse change in cash flows. The following table summarizes the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized capital losses by duration and reason, along with the fair value of fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturities, including securities pledged to creditors, in unrealized capital loss positions at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
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&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months and</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">less than Twelve</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Months Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
</TR>
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	<TD align=left width=29% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate or spread widening</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 37.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 49.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 62.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 149.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage and other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">73.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">230.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 111.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 184.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 85.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 380.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,322.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,248.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,300.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11,871.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate or spread widening</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 12.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 103.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 122.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage and other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">14.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">72.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">92.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 176.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 215.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,095.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 905.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6,026.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 10,028.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Of the unrealized capital losses aged more than twelve months, the average market value</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the related fixed maturities is 97.1% of the average book value.  In addition, this</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">category includes 753 securities, which have an average quality rating of A+. No other-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">than-temporary impairment loss was considered necessary for these fixed maturities as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Other-Than-Temporary Impairments</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table identifies the Company&#146;s other-than-temporary impairments by type</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the years ended December 31, 2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=3% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=6% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=3% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">173</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">25.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">74</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">68</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">91</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 153.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">364</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 33.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">149</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">104</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less than &#36;0.1.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The above schedule includes &#36;31.0, &#36;11.5, and &#36;18.7 in other-than-temporary write-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">downs for the years ended December 31, 2007, 2006, and 2005, respectively, related to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the analysis of credit risk and the possibility of significant prepayment risk.  The</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">98</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_99"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">remaining &#36;122.3, &#36;22.3, and &#36;3.1 in write-downs for the years ended December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, 2006, and 2005, respectively, are related to investments that the Company does not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">have the intent to retain for a period of time sufficient to allow for recovery in fair value.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table summarizes these write-downs by type for the years ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">70.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">161</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">68</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">84</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 122.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">319</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">83</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The remaining fair value of fixed maturities with other-than-temporary impairments at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005 was &#36;2,353.8, &#36;437.4, and &#36;275.1, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company may sell securities during the period in which fair value has declined</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">below amortized cost for fixed maturities or cost for equity securities.  In certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situations new factors, including changes in the business environment, can change the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s previous intent to continue holding a security.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Net Investment Income</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sources of Net investment income were as follows for the years ended December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,176.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,009.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 936.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">233.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">225.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">238.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments and cash equivalents</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
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	<TD>
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	<TD>
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	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Gross investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,463.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,265.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,199.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: investment expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">116.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">109.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">97.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
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	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,346.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,156.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,102.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
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	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007 and 2006, the Company had &#36;60.3 and &#36;30.5, respectively, of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">non-income producing investments in fixed maturities.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">99</FONT></TD></TR></TABLE>
</P>

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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Net Realized Capital Gains (Losses)</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital gains (losses) are comprised of the difference between the amortized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cost of investments and proceeds from sale, and redemption, as well as losses incurred</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to the other-than-temporary impairment of investments and changes in fair value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivatives.  The cost of the investment on disposal is determined based on specific</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">identification of securities using the first-in, first-out method. Net realized capital gains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on investments were as follows for the years ended December 31, 2007, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
</TR>
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	<TD>
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	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (100.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (43.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 45.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(291.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(48.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(48.3)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=5% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.2)</FONT>&nbsp;
	</TD>
</TR>
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<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (391.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (90.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (2.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After-tax net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (254.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (58.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (1.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
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	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
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<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses increased for the year ended December 31, 2007, primarily due</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to higher losses on derivatives, along with higher losses on fixed maturities. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes in derivatives were primarily driven by interest rate swaps and call options,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">partially offset by improvements in futures as a result of lower equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance. The losses on fixed maturities for the year ended December 31, 2007, were</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to other-than-temporary impairments driven by the slow economic environment and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">widening of credit spreads in 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Proceeds from the sale of fixed maturities and equity securities, available-for-sale, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the related gross gains and losses were as follows for the years ended December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Proceeds on sales</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,859.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,543.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 9,317.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Gross gains</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">97.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=27% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Gross losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">57.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">78.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">75.2</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">100</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">3. Financial Instruments</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Estimated Fair Value</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following disclosures are made in accordance with the requirements of FAS No. 107,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Disclosures about Fair Value of Financial Instruments&#148; (&#147;FAS No. 107&#148;). FAS No. 107</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">requires disclosure of fair value information about financial instruments, whether or not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized in the balance sheet, for which it is practicable to estimate that value. In cases</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">where quoted market prices are not available, fair values are based on estimates using</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">present value or other valuation techniques. Those techniques are significantly affected</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by the assumptions used, including the discount rate and estimates of future cash flows.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In that regard, the derived fair value estimates, in many cases, could not be realized in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate settlement of the instrument.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 107 excludes certain financial instruments, including insurance contracts, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fair value amounts presented do not represent the underlying value of the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following valuation methods and assumptions were used by the Company in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimating the fair value of the following financial instruments:</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The fair values for the actively traded marketable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bonds are determined based upon the quoted market prices or dealer quotes.  The fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">values for marketable bonds without an active market are obtained through several</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">commercial pricing services which provide the estimated fair values.  Fair values of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">privately placed bonds are determined using a matrix-based pricing model. The model</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">considers the current level of risk-free interest rates, current corporate spreads, the credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quality of the issuer, and cash flow characteristics of the security. Also considered are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">factors such as the net worth of the borrower, the value of collateral, the capital structure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the borrower, the presence of guarantees, and the Company&#146;s evaluation of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">borrower's ability to compete in their relevant market.  Using this data, the model</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generates estimated market values which the Company considers reflective of the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of each privately placed bond.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Fair values of these securities are based upon quoted</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market price. For equity securities not actively traded, estimated fair values are based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upon values of issues of comparable yield and quality or conversion price, where</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">applicable.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The fair values for mortgage loans on real estate are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated using discounted cash flow analyses and rates currently being offered in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">marketplace for similar loans to borrowers with similar credit ratings. Loans with similar</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">characteristics are aggregated for purposes of the calculations.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">101</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Cash and cash equivalents, Short-term investments under securities loan agreement, and</FONT></I><BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Policy loans</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The carrying amounts for these assets approximate the assets&#146; fair values.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Assets held in separate accounts</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Assets held in separate accounts are reported at the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quoted fair values of the individual securities in the separate accounts.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment contract liabilities (included in Future policy benefits and claims reserves)</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">With a fixed maturity</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Fair value is estimated by discounting cash flows at interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates currently being offered by, or available to, the Company for similar contracts.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Without a fixed maturity</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Fair value is estimated as the amount payable to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner upon demand.  However, the Company has the right under such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts to delay payment of withdrawals, which may ultimately result in paying an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amount different than that determined to be payable on demand.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Notes to affiliates</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Estimated fair value of the Company&#146;s notes to affiliates is based upon</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">discounted future cash flows using a discount rate approximating the current market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other financial instruments reported as assets and liabilities</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The carrying amounts for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">these financial instruments (primarily derivatives and limited partnerships) approximate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the fair value of the assets and liabilities. Derivatives are carried at fair value, which is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determined using the Company&#146;s derivative accounting system in conjunction with key</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial data from third party sources or through values established by third party</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">brokers, on the Balance Sheets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The carrying values and estimated fair values of certain of the Company&#146;s financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instruments were as follows at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">102</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
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	<TD>
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	</TD>
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	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Carrying</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,918.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 17,918.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,701.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,739.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,687.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,657.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash, cash equivalents,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
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<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">under securities loan agreement</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">332.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">332.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">711.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">711.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,036.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,045.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">777.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">782.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
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	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets held in separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37,928.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37,928.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liabilities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
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<HR noshade size=2>
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	</TD>
	<TD>
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	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investment contract liabilities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19,733.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18,150.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19,732.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18,108.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
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	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and funding agreements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9,415.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9,498.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,603.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,591.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Supplementary contracts and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">immediate annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">900.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">900.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">931.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">931.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">273.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">273.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">420.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">459.2</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value estimates are made at a specific point in time, based on available market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">information and judgments about various financial instruments, such as estimates of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">timing and amounts of future cash flows. Such estimates do not reflect any premium or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">discount that could result from offering for sale at one time the Company&#146;s entire</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holdings of a particular financial instrument, nor do they consider the tax impact of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">realization of unrealized capital gains (losses). In many cases, the fair value estimates</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cannot be substantiated by comparison to independent markets, nor can the disclosed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value be realized in immediate settlement of the instruments.  In evaluating the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s management of interest rate, price, and liquidity risks, the fair values of all</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets and liabilities should be taken into consideration, not only those presented above.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">103</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_104"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Derivative Financial Instruments</FONT></I></B></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notional Amount</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest Rate Caps</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate caps are used to manage the interest</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">rate risk in the Company&#146;s fixed maturity portfolio.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate caps are purchased contracts that</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">provide the Company with an annuity in an</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">increasing interest rate environment.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 50.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1 &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest Rate Swaps</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=44% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate swaps are used to manage the interest</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">rate risk in the Company&#146;s fixed maturity portfolio,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">as well as the Company&#146;s liabilities. Interest rate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">swaps represent contracts that require the exchange</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of cash flows at regular interim periods, typically</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">monthly or quarterly.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,533.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,856.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(138.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Foreign Exchange Swaps</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=49% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign exchange swaps are used to reduce the risk</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of a change in the value, yield, or cash flow with</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">respect to invested assets. Foreign exchange</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">swaps represent contracts that require the</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">exchange of foreign currency cash flows for</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. dollar cash flows at regular interim periods,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">typically quarterly or semi-annually.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">288.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">244.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(44.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(28.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Credit Default Swaps</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=49% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Credit default swaps are used to reduce the credit loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure with respect to certain assets that the</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company owns, or to assume credit exposure on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain assets that the Company does not own.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Payments are made to or received from the</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">counterparty at specified intervals and amounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the purchase or sale of credit protection. In the</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">event of a default on the underlying credit exposure,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company will either receive an additional</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">payment (purchased credit protection) or will be</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">required to make an additional payment (sold credit</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">protection) equal to the notional value of the swap</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=44% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">488.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">260.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(22.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.1)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">104</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_105"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notional Amount</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap colspan=5>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=5>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
 &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Total Return Swaps</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=47% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total return swaps are used to assume credit exposure</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to a referenced index or asset pool. The difference</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">between different floating-rate interest amounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">calculated by reference to an agreed upon notional</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">principal amount is exchanged with other parties</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">at specified intervals.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 65.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Swaptions</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=42% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Swaptions are used to manage interest rate risk in</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s collateralized mortgage obligations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolio. Swaptions are contracts that give the</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company the option to enter into an interest rate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">swap at a specific future date.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">302.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">665.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">**</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Futures</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=47% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Futures contracts are used to hedge against a decrease</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in certain equity indices. Such decrease may result</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in a decrease in variable annuity account values,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">which would increase the possibility of the Company</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">incurring an expense for guaranteed benefits in</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">excess of account values. The futures income would</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">serve to offset this increased expense. Futures</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts are also used to hedge against an increase</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in certain equity indices. Such increase may result</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in increased payments to contract holders of fixed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">indexed annuity contracts, and the futures income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">offset this increased expense. The underlying</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserve liabilities are valued under either</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 03-01, or FAS No. 133 (see discussion under</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Reserves&#148; section) and the change in reserve</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=47% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability is recorded in Interest credited and other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits to contractowners. The gain or loss on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">futures is recorded in Net realized capital gains</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses).</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,584.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,265.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.8</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">105</FONT></TD></TR></TABLE>
</P>

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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=24% nowrap colspan=3>
 &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notional Amount</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=22% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
 &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Options</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Call options are used to hedge against an increase</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the various equity indices. Such increase may</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">result in increased payments to contract holders</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of fixed indexed annuity contracts, and the options</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">offset this increased expense. Put options are used</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to hedge the liability associated with embedded</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivatives in certain variable annuity contracts.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Both the options and the embedded derivative</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserve are carried at fair value. The change in value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the options are recorded in Net realized capital</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains (losses); the change in value of the embedded</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative is recorded in Interest credited and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other benefits to contractowners.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,666.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,341.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">303.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">387.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Embedded Derivatives</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=49% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also has investments in certain fixed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturity instruments, and has issued certain retail</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuity products, that contain embedded derivatives</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">whose market value is at least partially determined by,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">among other things, levels of or changes in domestic</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and/or foreign interest rates (short- or long-term),</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">exchange rates, prepayment rates, equity rates, or</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit ratings/spreads.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=49% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Within securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N/A*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N/A*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">33.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=49% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Within retail annuity products</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N/A*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">N/A*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">960.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">820.2</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* N/A - not applicable.</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">**Less than &#36;0.1.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest Rate Swaps</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate swaps included two interest rate swaps with Security Life of Denver</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company (&#147;Security Life&#148;), an affiliate, each with notional amounts of &#36;100.0</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and fair values of &#36;(1.6) and &#36;(0.1), respectively, as of the date of termination at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">August 31, 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">See Related Party Transactions footnote for further information.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Credit Default Swaps</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007, the maximum potential future exposure to the Company on the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sale of credit protection under credit default swaps was &#36;235.4.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">106</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">4. Deferred Policy Acquisition Costs and Value of Business Acquired</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Activity within DAC was as follows for the years ended December 31, 2007, 2006, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at January 1, 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,704.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferrals of commissions and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">614.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(400.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 5% to 6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">105.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(294.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital gains (losses) on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">232.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,255.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferrals of commissions and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">681.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(421.7)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 5% to 6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">138.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(283.6)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital gains (losses) on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,669.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferrals of commissions and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">729.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(592.0)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 5% to 6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(429.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital gains (losses) on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(56.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Implementation of SOP 05-1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,908.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The estimated amount of DAC to be amortized, net of interest, is &#36;478.9, &#36;444.2, &#36;414.2,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;360.4, and &#36;311.3, for the years 2008, 2009, 2010, 2011, and 2012, respectively. Actual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization incurred during these years may vary as assumptions are modified to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporate actual results.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">107</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Activity within VOBA was as follows for the years ended December 31, 2007, 2006, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at January 1, 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 112.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(30.8)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 4% to 5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(24.2)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital gains (losses) on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">34.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">122.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(15.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 4% to 5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(9.4)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital gains (losses) on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.6)</FONT>&nbsp;
	</TD>
</TR>
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	<TD>
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	<TD>
	</TD>
	<TD>
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	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">110.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 4% to 6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.9</FONT>&nbsp;
	</TD>
</TR>
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	<TD>
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	<TD>
	</TD>
	<TD>
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	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital gains (losses) on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3.1)</FONT>&nbsp;
	</TD>
</TR>
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	<TD>
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	<TD>
	</TD>
	<TD>
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	<TD align=left width=72% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 128.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The estimated amount of VOBA to be amortized, net of interest, is &#36;13.4, &#36;13.1, &#36;11.9,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;10.6, and &#36;9.7, for the years 2008, 2009, 2010, 2011, and 2012, respectively. Actual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization incurred during these years may vary as assumptions are modified to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporate actual results.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Analysis of DAC and VOBA - Annuity Products</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The increase in Amortization of DAC and VOBA in 2007 compared to 2006 is due in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">part to a &#36;67.0 change in estimate recorded during the fourth quarter of 2007.  This</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">change resulted from refinements of the DAC model, partially offset by favorable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unlocking of mutual fund and mortality and persistency unlocking.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The decrease in Amortization of DAC and VOBA in 2006 compared to 2005 is due to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">higher expected gross profits, which reflect revisions in prospective assumptions based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on positive persistency experience and favorable equity market performance.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decrease was partially offset, however, by an increase in amortization driven by higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">actual gross profits experience in 2006.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">108</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company revised and unlocked certain assumptions for its fixed and variable annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products during 2007, 2006, and 2005. Unlocking adjustments and their acceleration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(deceleration) impact on Amortization of DAC and VOBA were as follows for the years</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended December 31, 2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Impact of separate account growth and contractowner</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">withdrawal behavior favorable to assumptions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (42.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (13.3)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unlock of contractowner withdrawal behavior</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">assumptions for certain fixed deferred annuities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unlock of future rate of spread income assumptions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on some fixed annuity liabilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unlock on long-term separate account growth assumption</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unlock of mortality and persistency assumptions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(12.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(19.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.2)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Impact of DAC model refinements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">67.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unlock of mutual fund revenue sharing assumptions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=5% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(31.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unlocking effect on Amortization of DAC and VOBA</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 24.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (62.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 7.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
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<TR>
	<TD colspan=11>
&nbsp;
	</TD>
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<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">5.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap colspan=3>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Dividend Restrictions and Shareholder&#146;s Equity</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s ability to pay dividends to its parent is subject to the prior approval of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Insurance Division of the State of Iowa (the &#147;Division&#148;) for payment of any dividend,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which, when combined with other dividends paid within the preceding twelve months,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exceeds the greater of (1) ten percent (10.0%) of the Company&#146;s statutory surplus at the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prior year end or (2) the Company&#146;s prior year statutory net gain from operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007 and 2005, the Company did not pay any dividends or return of capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distributions to Lion.  During 2006, the Company paid &#36;170.0 in a return of capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">distribution to its Parent.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007, the Company received &#36;150.0 in capital contributions from Lion. During</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006, the Company did not receive any capital contributions from its Parent.  During</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005, the Company received capital contributions of &#36;100.0 from its Parent to support</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales activities.  On February 21, 2008, the Company received a &#36;1.1 billion capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contribution from Lion.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">109</FONT></TD></TR></TABLE>
</P>

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<P align="left">
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Division recognizes as net income and capital and surplus those amounts determined</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in conformity with statutory accounting practices prescribed or permitted by the Division,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which differ in certain respects from accounting principles generally accepted in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">United States. Statutory net income (loss) was &#36;(40.1), &#36;(1.6), and &#36;6.9, for the years</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended December 31, 2007, 2006, and 2005, respectively. Statutory capital and surplus</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">was &#36;2,552.6 and &#36;1,660.7 as of December 31, 2007 and 2006, respectively.  As</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specifically required by statutory accounting practices, statutory surplus as of December</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">31, 2007 includes the impact of the &#36;1.1 billion capital contribution.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007, the Company did not utilize any statutory accounting practices</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">that are not prescribed by state regulatory authorities that, individually or in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">aggregate, materially affected statutory capital and surplus.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">6. Additional Insurance Benefits and Minimum Guarantees</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under SOP 03-1, the Company calculates SOP 03-1 reserves for certain guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits and for universal life products with certain patterns of cost of insurance charges</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and certain other fees.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following assumptions and methodology were used to determine the GMDB SOP</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">03-1 reserve at December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=30% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Area</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=67% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assumptions/Basis for Assumptions</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Data used</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on 100 investment performance scenarios stratified based on</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10,000 random generated scenarios</FONT>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mean investment performance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.125%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Volatility</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.0%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortality</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999 and prior issues &#150; 80.0%, 80.0%, 90.0%, 90.0%, grading to 100%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from age 80 to 120, of the 90-95 ultimate mortality table for standard,</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratchet, rollup, and combination rollup and ratchet, respectively.</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2000 and later issues &#150; 60.0%, 60.0%, 75.0%, 75.0%, grading to 100%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from age 80 to 120, of the 90-95 ultimate mortality table for standard,</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ratchet, rollup, and combination rollup and ratchet, respectively.</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Lapse rates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Vary by contract type and duration; range between 1.0% and 40.0%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Discount rates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.5%, based on the portfolio earned rate of the general account</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The assumptions used for calculating the additional GMIB and Guaranteed Minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Withdrawal for Life Benefit (LifePay and LifePay Plus) liabilities at December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are consistent with those used for the calculating the additional GMDB liability.  In</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">addition, the calculation of the GMIB liability assumes dynamic surrenders and dynamic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuitization reflecting the extent to which the benefit, at the time of payment, has a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">positive value.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">110</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The separate account liabilities subject to SOP 03-1 for minimum guaranteed benefits,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and the additional liabilities recognized related to minimum guarantees, by type, as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 and 2006, and the paid and incurred amounts by type for the years</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended December 31, 2007 and 2006, were as follows:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Withdrawal</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Death</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accumulation/</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">For Life</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefit</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Withdrawal Benefit</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefit</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefit</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(GMDB)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(GMAB/GMWB)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(GMIB)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(LP/LPP)</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account liability</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">at December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 44,477.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,556.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 20,066.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,900.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate account liability</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">at December 31, 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 37,928.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,759.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 18,036.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,846.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additional liability balance:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at January 1, 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 112.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 9.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 60.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Incurred guaranteed benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(18.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Paid guaranteed benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(16.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2006</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">139.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">83.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Incurred guaranteed benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">88.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">48.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Paid guaranteed benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(19.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 209.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 132.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The net amount at risk, net of reinsurance, and the weighted average attained age of</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners by type</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">minimum</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed benefit,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were as</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">follows as of</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 and 2006.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap colspan=3>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Guaranteed</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Minimum</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Death</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accumulation/</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefit</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Withdrawal Benefit</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefit</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">GMWB-For-Life</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(GMDB)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(GMAB/GMWB)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(GMIB)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(LP/LPP)</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amount at risk, net of reinsurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,796.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 109.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 391.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Weighted average attained age</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">63</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<B><U><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amount at risk, net of reinsurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,252.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 200.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=25% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Weighted average attained age</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">62</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">64</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">58</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The aggregate fair value of equity securities, including mutual funds, supporting separate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounts with additional insurance benefits and minimum investment return guarantees as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of December 31, 2007 and 2006 was &#36;44.5 billion and &#36;37.9 billion, respectively.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">111</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">7.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Sales Inducements</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the year ended December 31, 2007, the Company capitalized and amortized &#36;135.4 and &#36;120.2, respectively, of sales inducements. During the year ended December 31, 2006, the
Company capitalized and amortized &#36;150.0 and &#36;74.1, respectively, of sales inducements. The unamortized balance of capitalized sales inducements, net of unrealized capital gains (losses) on available-for-sale securities, was &#36;645.4 and
&#36;630.7 as of December 31, 2007 and 2006, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">8.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income Taxes</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective January 1, 2005, the Company files a consolidated federal income tax return with ING America Insurance Holdings, Inc. (&#147;ING AIH&#148;), an affiliate, and certain other
subsidiaries of ING AIH that are eligible corporations qualified to file consolidated federal income tax returns as part of the ING AIH affiliated group. Effective January 1, 2005, the Company is a party to a federal tax allocation agreement with
ING AIH and its subsidiaries that are part of the group, whereby ING AIH charges its subsidiaries for federal taxes each subsidiary would have incurred were it not a member of the consolidated group and credits each subsidiary for losses at the
statutory federal tax rate.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax expense (benefit) consisted of the following for the years ended December 31, 2007, 2006, and 2005.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Current tax expense (benefit):</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Federal</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 26.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (67.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (156.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total current tax expense (benefit)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(67.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(156.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred tax (benefit) expense:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations and capital loss carryforwards</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">151.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other federal deferred tax</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(28.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(19.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">147.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total deferred tax (benefit) expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(28.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">132.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">190.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=42% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total income tax (benefit) expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (1.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 64.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 34.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">112</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income taxes were different from the amount computed by applying the federal income</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax rate to income before income taxes for the following reasons for the years ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income before income taxes</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Tax rate</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax at federal statutory rate</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Tax effect of:</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Meals and entertainment</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Dividend received deduction</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">IRS audit settlements</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax (benefit) expense</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 127.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 276.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 224.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">96.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">78.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(49.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(42.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(20.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(24.4)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (1.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 64.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=30% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 34.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Temporary Differences</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The tax effects of temporary differences that give rise to Deferred tax assets and Deferred</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax liabilities at December 31, 2007 and 2006, are presented below.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred tax assets:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=24% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations and capital loss carryforwards</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 14.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">731.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">734.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Goodwill</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">103.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Employee compensation and benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">45.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized losses on investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">68.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total gross assets before valuation allowance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,027.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">792.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: valuation allowance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(46.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total gross assets, net of valuation allowance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">980.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">792.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred tax liabilities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=24% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred policy acquisition cost</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,120.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,018.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Value of purchased insurance in force</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(42.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(34.4)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total gross liabilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,165.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,055.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=55% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net deferred income tax liability</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (184.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (262.5)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital gains (losses) are presented as a component of Other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">comprehensive income (loss) in Shareholder&#146;s equity, net of deferred taxes.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">113</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_114"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Valuation allowances are provided when it is considered unlikely that deferred tax assets</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will be realized.  As of December 31, 2007, the Company had a &#36;46.9 valuation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">allowance related to unrealized capital losses on investments, which is included in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated other comprehensive income (loss).  The Company had no valuation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">allowance as of December 31, 2006.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Tax Sharing Agreement</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company had a payable to ING AIH of &#36;40.7 and a receivable from ING AIH of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;4.6 at December 31, 2007 and 2006, respectively, for federal income taxes under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">intercompany tax sharing agreement.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">See Related Party Transactions footnote for more information.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Unrecognized Tax Benefits</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As a result of implementing FIN 48, the Company recognized a cumulative effect of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">change in accounting principle of &#36;1.7 as a reduction to January 1, 2007 Retained</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">earnings (deficit). In addition, the Company had &#36;61.5 of unrecognized tax benefits as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2007, of which &#36;41.4 would affect the Company&#146;s effective tax rate if</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recognized.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A reconciliation of the change in the unrecognized income tax benefits for the years is as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">follows:</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at January 1, 2007</FONT>&nbsp;
	</TD>
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 61.5</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additions for tax positions related to the current year</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.9</FONT>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additions (reduction) for tax positions related to prior years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.0)</FONT>&nbsp;
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&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at December 31, 2007</FONT>&nbsp;
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&nbsp;	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 66.4</FONT>&nbsp;
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company had &#36;43.2 of unrecognized tax benefits as of December 31, 2007 that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">would affect the Company&#146;s effective tax rate if recognized.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Interest and Penalties</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company recognizes accrued interest and penalties related to unrecognized tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits in Current income taxes and Income tax expense on the Balance Sheets and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statements of Operations, respectively. The Company had accrued interest of &#36;4.7 as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Regulatory Matters</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is under audit by the Internal Revenue Service (&#147;IRS&#148;) for tax years 2002</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">through 2005.  It is anticipated that the IRS audit of tax years 2002 and 2003 will be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">finalized within the next twelve months.  The settlement is not expected to have a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">material impact on the Company&#146;s financial position. The timing of the settlement and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">any potential future payment of the remaining allowance related to the IRS audit of tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years 2004 and 2005 cannot be reliably estimated.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On September 25, 2007, the IRS issued Revenue Ruling 2007-61, which announced its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">intention to issue regulations with respect to certain computational aspects of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dividend received deduction (&#147;DRD&#148;) on separate account assets held in connection with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable annuity and life insurance contracts.  Revenue Ruling 2007-61 suspended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Revenue Ruling 2007-54 issued in August 2007 that purported to change accepted</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">industry and IRS interpretation of the statutes governing these computational questions.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any regulations that the IRS ultimately proposes for issuance in this area will be subject</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to public notice and comment, at which time insurance companies and other members of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the public will have the opportunity to raise legal and practical questions about the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">content, scope and application of such regulations.  As a result, the ultimate timing,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">substance, and effective date of any such regulations are unknown, but they could result</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the elimination of some or all of the separate account DRD tax benefit that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company receives.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under prior law, life insurance companies were allowed to defer from taxation a portion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of income.  Prior to 2006, deferred income of &#36;14.4 was accumulated in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policyholder&#146;s Surplus Account and would only become taxable under certain conditions,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which management believed to be remote. In 2004, Congress passed the American Jobs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Creation Act of 2004, allowing certain tax-free distributions from the Policyholders&#146;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Surplus Account during 2005 and 2006. During 2006, the Company made a return of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital distribution of &#36;170.0, which eliminated the &#36;14.4 balance in the Policyholders&#146;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Surplus Account and, therefore, any potential tax on the accumulated balance.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">9. Benefit Plans</FONT></B></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Defined Benefit Plan</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING North America Insurance Corporation (&#147;ING North America&#148;) sponsors the ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Americas Retirement Plan (the &#147;Retirement Plan&#148;), effective as of December 31, 2001.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Substantially all employees of ING North America and its affiliates (excluding certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employees) are eligible to participate, including the Company&#146;s employees.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Retirement Plan is a tax-qualified defined benefit plan, the benefits of which are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed (within certain specified legal limits) by the Pension Benefit Guaranty</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Corporation (&#147;PBGC&#148;). As of January 1, 2002, each participant in the Retirement Plan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(except for certain specified employees) earns a benefit under a final average</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensation formula.  Subsequent to December 31, 2001, ING North America is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">responsible for all Retirement Plan liabilities. The costs allocated to the Company for its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employees&#146; participation in the Retirement Plan were &#36;13.0, &#36;17.1, and &#36;15.9, for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years ended 2007, 2006, and 2005, respectively, and are included in Operating expenses</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the Statements of Operations.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Defined Contribution Plan</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING North America sponsors the ING Savings Plan and ESOP (the &#147;Savings Plan&#148;).</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Substantially all employees of ING North America and its affiliates (excluding certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employees) are eligible to participate, including the Company&#146;s employees other than</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company agents. The Savings Plan is a tax-qualified profit sharing and stock bonus plan,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which includes an employee stock ownership plan (&#147;ESOP&#148;) component. Savings Plan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits are not guaranteed by the PBGC. The Savings Plan allows eligible participants</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to defer into the Savings Plan a specified percentage of eligible compensation on a pre-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax basis. ING North America matches such pre-tax contributions, up to a maximum of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.0% of eligible compensation.  Matching contributions are subject to a 4-year graded</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">vesting schedule, although certain specified participants are subject to a 5-year graded</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">vesting schedule. All contributions made to the Savings Plan are subject to certain limits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">imposed by applicable law.  Pre-tax charges to operations of the Company for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Savings Plan were &#36;4.9, &#36;4.6, and &#36;4.2, for the years ended December 31, 2007, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2005, respectively, and are included in Operating expenses in the Statements of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operations.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Stock Option and Share Plans</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING sponsors the ING Group Long Term Equity Ownership Plan (&#147;leo&#148;), which provides</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employees of the Company who are selected by the ING Board of Directors to be granted</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">options and/or performance shares. The terms applicable to an award under leo are set</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">out in an award agreement which is signed by the participant when he or she accepts the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">award.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Options granted under leo are nonqualified options on ING shares in the form of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Depository Receipts (&#147;ADRs&#148;). Leo options have a ten (10) year term and vest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">three years from the grant date. Options awarded under leo may vest earlier in the event</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the participant&#146;s death, permanent disability or retirement. Retirement for purposes of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">leo means a participant terminates service after attaining age 55 and completing 5 years</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of service. Early vesting in all or a portion of a grant of options may also occur in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">event the participant is terminated due to redundancy or business divestiture. Unvested</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">options are generally subject to forfeiture when a participant voluntarily terminates</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employment or is terminated for cause (as defined in leo).  Upon vesting, participants</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generally have up to seven years in which to exercise their vested options.  A shorter</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exercise period applies in the event of termination due to redundancy, business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">divestiture, voluntary termination or termination for cause. An option gives the recipient</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the right to purchase an ING share in the form of ADRs at a price equal to the fair market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of one ING share on the date of grant. On exercise, participant&#146;s have three options</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(i) retain the shares and remit a check for applicable taxes due on exercise, (ii) request the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">administrator to remit a cash payment for the value of the options being exercised, less</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">applicable taxes, or (iii) retain some of the shares and have the administrator liquidate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sufficient shares to satisfy the participant&#146;s tax obligation. The share price is in Euros and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">converted to U.S. dollars, as determined by ING.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Awards of performance shares may also be made under leo. Performance shares are a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contingent grant of ING stock and on vesting, the participant has the right to receive a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash amount equal to the closing price per ING share on the Euronext Amsterdam Stock</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Market on the vesting date times the number of vested Plan shares. Performance shares</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generally vest three years from the date of grant, with the amount payable based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING&#146;s share price on the vesting date.  Payments made to participants on vesting are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on the performance targets established in connection with leo and payments can</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">range from 0% to 200% of target.  Performance is based on ING&#146;s total shareholder</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">return relative to a peer group as determined at the end of the vesting period. To vest, a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">participant must be actively employed on the vesting date, although vesting will continue</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to occur in the event of the participant&#146;s death, disability or retirement. If a participant is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">terminated due to redundancy or business divestiture, vesting will occur but in only a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portion of the award.  Unvested shares are generally subject to forfeiture when an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">employee voluntarily terminates employment or is terminated for cause (as defined in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">leo). Upon vesting, participants have three options (i) retain the shares and remit a check</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for applicable taxes due on exercise, (ii) request the administrator to remit a cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">payment for the value of the shares, less applicable taxes, or (iii) retain some of the shares</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and have the administrator liquidate sufficient shares to satisfy the participant&#146;s tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation.  The amount is converted from Euros to U.S. dollars based on the daily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">average exchange rate between the Euro and the U.S. dollar, as determined by ING.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company recognized compensation expense for the leo options and performance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">shares of &#36;4.7, &#36;7.4, and &#36;4.0 for the years ended December 31, 2007, 2006, and 2005</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For leo, the Company recognized tax benefits of &#36;2.5 in 2007 and minimal tax benefits in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2006 and 2005.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Other Benefit Plans</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to providing retirement plan benefits, the Company, in conjunction with ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">North America, provides certain supplemental retirement benefits to eligible employees</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and health care and life insurance benefits to retired employees and other eligible</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dependents. The supplemental retirement plan includes a non-qualified defined benefit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pension plan and a non-qualified defined contribution plan, which means all benefits are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">payable from the general assets of the Company. The post-retirement health care plan is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contributory, with retiree contribution levels adjusted annually. The life insurance plan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides a flat amount of noncontributory coverage and optional contributory coverage.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The benefits charges allocated to the Company related to all of these plans for the years</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended December 31, 2007, 2006, and 2005, were &#36;0.6, &#36;1.3, and &#36;1.1, respectively.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">10.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Related Party Transactions</FONT></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Operating Agreements</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has certain agreements whereby it generates revenues and incurs expenses with affiliated entities. The agreements are as follows:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Underwriting and distribution agreement with Directed Services LLC (&#147;DSL&#148;) (successor by merger to Directed Services, Inc.), an affiliated broker-dealer, whereby DSL serves as the
principal underwriter for variable insurance products issued by the Company. DSL is authorized to enter into agreements with broker-dealers to distribute the Company&#146;s variable products and appoint representatives of the broker- dealers as
agents. For the years ended December 31, 2007, 2006, and 2005, commissions were incurred in the amounts of &#36;553.8, &#36;418.0, and &#36;371.5, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Asset management agreement with ING Investment Management LLC (&#147;IIM&#148;), an affiliate, in which IIM provides asset management, administration, and accounting services for ING
USA&#146;s general account. The Company records a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2007, 2006, and 2005, expenses were incurred in the amounts of &#36;78.0, &#36;69.5,
and &#36;71.8, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Service agreement with DSL, in which the Company provides managerial and supervisory services to DSL and earns a fee that is calculated as a percentage of average assets in the
Company&#146;s variable separate accounts deposited in ING</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investors Trust. On August 9, 2007, the Company and DSL entered into an amendment to the service agreement effective July 31, 2007, which modifies the method for calculating the compensation
owed to the Company for its provision of managerial and supervisory services to DSL. As a result of this amendment, DSL pays the Company the total net revenue associated with the Company&#146;s deposits in ING Investors Trust. For the years ended
December 31, 2007, 2006, and 2005, revenue for these services was &#36;109.0, &#36;62.0, and &#36;43.0, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Services agreements with ING North America, dated September 1, 2000 and January 1, 2001, respectively, for administrative, management, financial, information technology, and finance and
treasury services. For the years ended December 31, 2007, 2006, and 2005, expenses were incurred in the amounts of &#36;96.6, &#36;95.4, and &#36;82.5, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Services agreement between the Company and its U.S. insurance company affiliates dated January 1, 2001, amended effective January 1, 2002 and December 31, 2007, for administrative,
management, professional, advisory, consulting, and other services. For the years ended December 31, 2007, 2006, and 2005, expenses related to the agreements were incurred in the amount of &#36;19.0, &#36;6.1, and &#36;5.7,
respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Administrative Services Agreement between the Company, ReliaStar Life Insurance Company of New York (&#147;RLNY&#148;), an affiliate, and other U.S. insurance company affiliates dated March
1, 2003, amended effective August 1, 2004, in which the Company and affiliates provide services to RLNY. For the years ended December 31, 2007, 2006, and 2005, revenue related to the agreement was &#36;6.3, &#36;5.8, and &#36;2.5,
respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING Advisors Network, a group of broker-dealers affiliated with the Company, distributes the Company&#146;s annuity products. For the years ended December 31, 2007, 2006, and 2005, ING
Advisors Network sold new contracts of &#36;1,429.3, &#36;1,255.4, and &#36;1,082.0, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management and service contracts and all cost sharing arrangements with other affiliated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">companies are allocated in accordance with the Company&#146;s expense and cost allocation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">methods.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Reinsurance Agreements</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective May 1, 2005, ING USA entered into a coinsurance agreement with its affiliate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life. Under the terms of the agreement, Security Life assumed and accepted the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">responsibility for paying, when due, 100% of the liabilities arising under the multi-year</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed fixed annuity contracts issued by ING USA between January 1, 2001 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2003. In addition, ING USA assigned to Security Life all future premiums</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">received by ING USA attributable to the ceded contracts.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the agreement, ING USA ceded &#36;2.5 billion in account balances and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transferred a ceding commission and &#36;2.7 billion in assets to Security Life, resulting in a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">realized capital gain of &#36;47.9 to the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The coinsurance agreement is accounted for using the deposit method.  As such, &#36;2.7</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion of Deposit receivable from affiliate was established on the Balance Sheets. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receivable will be adjusted over the life of the agreement based on cash settlements and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the experience of the contracts, as well as for amortization of the ceding commission.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company incurred amortization expense of the negative ceding commission of &#36;21.2</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;23.5 for the years ended December 31, 2007 and 2006, respectively, which is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">included in Other expenses in the Statements of Operations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition, the Company entered into a 100% coinsurance agreement with Security Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dated January 1, 2000, covering certain universal life policies which had been issued and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in force as of, as well as any such policies issued after, the effective date of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement.  As of December 31, 2007 and 2006, the value of reserves ceded by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company under this agreement was &#36;16.6 and &#36;16.0, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a party to a Facultative Coinsurance Agreement with its affiliate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life, effective August 20, 1999.  Under the terms of this agreement, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company facultatively cedes to Security Life, from time to time, certain GICs on a 100%</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">coinsurance basis.  The value of GIC reserves ceded by the Company under this</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement was &#36;2.3 billion and &#36;2.2 billion at December 31, 2007 and 2006, respectively.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Financing Agreements</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company maintains a reciprocal loan agreement with ING AIH, an affiliate, to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">facilitate the handling of unanticipated short-term cash requirements that arise in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ordinary course of business. Under this agreement, which became effective in January</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2004 and expires on January 14, 2014, either party can borrow from the other up to 3.0%</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the Company's statutory admitted assets as of the preceding December 31. Interest on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">any ING USA borrowing is charged at the rate of ING AIH&#146;s cost of funds for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest period, plus 0.15% .  Interest on any ING AIH borrowing is charged at a rate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on the prevailing interest rate of U.S. commercial paper available for purchase with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a similar duration.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under this agreement, the Company incurred interest expense of &#36;3.5, &#36;1.5, and &#36;0.9, for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the years ended December 31, 2007, 2006, and 2005, respectively. The Company earned</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest income of &#36;6.7, &#36;4.9, and &#36;4.3, for the years ended December 31, 2007, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2005, respectively. Interest expense and income are included in Interest expense and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income, respectively, on the Statements of Operations. At December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007 and 2006, the Company had no amounts outstanding with ING AIH under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reciprocal loan agreement.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Notes with Affiliates</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company issued a 30-year surplus note in the principal amount of &#36;35.0 on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 8, 1999, to its affiliate, Security Life, which matures on December 7, 2029.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest is charged at an annual rate of 7.98% . Payment of the note and related accrued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest is subordinate to payments due to contractowners and claimant and beneficiary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">claims, as well as debts owed to all other classes of debtors, other than surplus note</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holders, of ING USA. Any payment of principal and/or interest made is subject to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prior approval of the Iowa Insurance Commissioner. Interest expense was &#36;2.8, for each</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the years ended December 31, 2007, 2006, and 2005, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On December 29, 2004, the Company issued surplus notes in the aggregate principal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amount of &#36;400.0 (the &#147;Notes&#148;), scheduled to mature on December 29, 2034, to its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliates, ING Life Insurance and Annuity Company, ReliaStar Life Insurance Company,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Security Life of Denver International, Limited, in an offering that was exempt from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the registration requirements of the Securities Act of 1933. The Notes bear interest at a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rate of 6.26% per year. Any payment of principal and/or interest is subject to the prior</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">approval of the Iowa Insurance Commissioner.  Interest is scheduled to be paid semi-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annually in arrears on June 29 and December 29 of each year, commencing on June 29,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005. Interest expense was &#36;25.4 for each of the years ended December 31, 2007, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2005, respectively.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Funding Agreement</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On August 10, 2007, the Company issued an extendable funding agreement to its parent,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Lion, upon receipt of a single deposit in the amount of &#36;500.0. To fund the purchase of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the funding agreement, Lion issued a promissory note to its indirect parent company,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING Verzekeringen N.V. ("ING V"), which has been guaranteed by Lion&#146;s immediate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">parent, ING AIH.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the funding agreement, the Company will pay Lion interest quarterly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at the credited interest rate until maturity, and on the maturity date, the Company will pay</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Lion the single deposit and any accrued and unpaid interest. The credited interest rate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">shall be the three-month LIBOR, plus 0.05%, and shall be reset quarterly. The maturity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">date of the funding agreement shall be August 10, 2009, or such later date to which the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturity date may be extended; provided, however, that the maturity date may not be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">extended beyond August 10, 2012.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Proprietary Alpha Fund</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On September 4, 2007, ING USA invested &#36;125.0 into the ING Proprietary Alpha Fund,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">LLC (&#147;PAF&#148;). PAF is a newly-formed multi-strategy investment fund established as a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. domiciled limited liability company managed by ING Alternative Asset</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management LLC (&#147;IAAM&#148;).  PAF&#146;s initial capital of &#36;300.0 was provided by ING</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">USA&#146;s affiliated insurance and non-insurance companies.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The investment strategies</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">within PAF include both long and short exposures to various investments and utilize</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">various fixed income, equity and derivative financial instruments.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Tax Sharing Agreements</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective January 1, 2005, the Company is a party to a federal tax allocation agreement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with ING AIH and its subsidiaries that are part of the ING AIH consolidated group.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the federal tax allocation agreement, ING AIH charges its subsidiaries for federal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">taxes each subsidiary would have incurred were it not a member of the consolidated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">group and credits each subsidiary for losses at the statutory federal tax rate.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has entered into a state tax sharing agreement with ING AIH and each of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the specific subsidiaries that are parties to the agreement. The state tax agreement applies</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to situations in which ING AIH and all or some of the subsidiaries join in the filing of a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">state or local franchise, income tax, or other tax return on a consolidated, combined, or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unitary basis.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Derivatives</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On August 31, 2007, ING USA terminated two interest rate swaps with Security Life to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reduce the Company&#146;s exposure to cash flow variability of assets and liabilities. Under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the terms of the agreement, the Company paid the quarterly quoted 3-month LIBOR rate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and received a fixed rate of 4.8% and 4.9% for swaps that mature on December 30, 2010</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2015, respectively. The notional amount of each swap was &#36;100.0. The fair values</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the swaps were &#36;(1.6) and &#36;(0.1) for the December 30, 2010 and 2015 swaps,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, at the date of termination.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007 and 2006, the Company had call options with a notional</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amount of &#36;167.8 and &#36;935.4 respectively, and market value of &#36;42.6 and &#36;78.6,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, with ING Bank, an affiliate. Each of these contracts was entered into as a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result of a competitive bid, which included unaffiliated counterparties.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Purchase of Investments</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On September 27, 2007, the Company purchased at fair value financial assets with a fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of &#36;435.0 from Security Life, an affiliate.  The investments, which primarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">consisted of AAA rated collateralized mortgage obligations were purchased by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company with the intent to use them as part of the FHLB funding agreement program.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">These assets are included in fixed maturities on the Balance Sheets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On August 21, 2007, ING USA purchased at fair value U.S. commercial mortgage loans</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with a fair value of &#36;17.9 from ING Bank of Canada, an affiliate.</FONT></TD></TR></TABLE>
</P>
<P align="left">
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">11. Financing Agreements</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company maintains a &#36;100.0 uncommitted, perpetual revolving note facility with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Bank of New York ("BONY"). Interest on any of the Company borrowing accrues at an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annual rate equal to a rate quoted by BONY to the Company for the borrowing. Under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this agreement, the Company incurred minimal interest expense for the years ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005. At December 31, 2007 and 2006, the Company had</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">no amounts outstanding under the revolving note facility.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also maintains a &#36;75.0 uncommitted line-of-credit agreement with PNC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Bank (&#147;PNC&#148;), effective December 19, 2005. Borrowings are guaranteed by ING AIH,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with maximum aggregate borrowings outstanding at anytime to ING AIH and its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliates of &#36;75.0. Interest on any of the Company borrowing accrues at an annual rate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equal to the rate quoted by PNC to the Company for the borrowing.  Under this</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement, the Company incurred minimal interest expense for the year ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 and 2006. At December 31, 2007 and 2006, the Company had no</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amounts outstanding under the line-of-credit agreement.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company maintains a &#36;100.0 uncommitted line-of-credit agreement with Svenska</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Handelsbanken AB (Publ.) (&#147;Svenska&#148;), effective June 2, 2006. Borrowings are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING AIH and its affiliates of &#36;100.0. Interest on any of the Company&#146;s borrowing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accrues at an annual rate equal to the rate quoted by Svenska to the Company for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">borrowing. Under this agreement, the Company incurred minimal interest expense for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">year ended December 31, 2007. At December 31, 2007, the Company had no amounts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">outstanding under the line-of-credit agreement.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Also see Financing Agreements in the Related Party Transactions footnote.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">123</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">12. Reinsurance</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the Company had reinsurance treaties with 16 unaffiliated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reinsurers covering a portion of the mortality risks and guaranteed death and living</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits under its annuity contracts. The Company also has reinsurance treaties with one</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate, Security Life, related to GICs, fixed annuities, and universal life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">policies.  The Company remains liable to the extent its reinsurers do not meet their</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligations under the reinsurance agreements.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance ceded in force for life mortality risks were &#36;689.1 and &#36;755.3 at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007 and 2006, respectively.  Net receivables were comprised of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">following at December 31, 2007 and 2006.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Claims recoverable from reinsurers</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 7.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Payable for reinsurance premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.3)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsured amounts due to reinsurers</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(36.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(29.9)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reserve credits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance ceded</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,452.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,265.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deposits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,153.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,478.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">33.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
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	<TD>
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<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 4,616.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 4,759.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
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<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums and Interest credited and other benefits to contractowners were reduced by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">following amounts for reinsurance ceded for the years ended December 31, 2007, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2005.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deposits ceded under reinsurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,309.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,144.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 722.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums ceded under reinsurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=40% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance recoveries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,723.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">657.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">703.4</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Also see Reinsurance Agreements in the Related Party Transactions footnote.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">13. Commitments and Contingent Liabilities</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Leases</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company leases its office space and certain equipment under operating leases, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">longest term of which expires in 2017.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">124</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For the years ended December 31, 2007, 2006, and 2005, rent expense for leases was</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;7.9, &#36;8.3, and &#36;8.0, respectively.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The future net minimum payments under</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">noncancelable leases for the years ended December 31, 2008 through 2012 are estimated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to be &#36;8.6, &#36;8.6, &#36;7.0, &#36;5.7, and &#36;5.5, respectively, and &#36;24.2, thereafter. The Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pays substantially all expenses associated with its leased and subleased office properties.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Expenses not paid directly by the Company are paid for by an affiliate and allocated back</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the Company.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Commitments</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Through the normal course of investment operations, the Company commits to either</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purchase or sell securities, commercial mortgage loans, or money market instruments, at</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a specified future date and at a specified price or yield. The inability of counterparties to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">honor these commitments may result in either a higher or lower replacement cost. Also,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">there is likely to be a change in the value of the securities underlying the commitments. </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the Company had off-balance sheet commitments to purchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments equal to their fair value of &#36;616.3, &#36;156.5 of which was with related parties.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2006, the Company had off-balance sheet commitments to purchase</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments equal to their fair value of &#36;537.9, &#36;143.2 of which was with related parties.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During 2007 and 2006, &#36;33.1 and &#36;32.4, respectively, was funded to related parties under</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">these commitments.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Financial Guarantees</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company owns a 3-year credit-linked note arrangement, whereby the Company will</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reimburse the guaranteed party upon payment default of the referenced obligation. Upon</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such default, the Company will reimburse the guaranteed party for the loss under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reference obligation, and the Company receives that reference obligation in settlement.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company can seek recovery of any losses under the agreements by sale or collection</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the received reference obligation. As of December 31, 2007, the maximum potential</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">future exposure to the Company under the guarantee was &#36;32.5.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Cash Collateral</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the Company&#146;s Over-The-Counter Derivative International Swaps and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives Association, Inc. Agreements (&#147;ISDA Agreements&#148;), the Company may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receive from, or deliver to, counterparties, collateral to assure that all terms of the ISDA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreements will be met with regard to the Credit Support Annex (&#147;CSA&#148;). The terms of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the CSA call for the Company to pay interest on any cash received equal to the Federal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Funds rate. As of December 31, 2007, the Company held &#36;11.5 of cash collateral, which</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">was included in Collateral held, including payables under securities loan agreement and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">was reinvested in Short-term investments under securities loan agreement on the</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Condensed Balance Sheets.  The Company held no cash collateral under the ISDA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreements as of December 31, 2006.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Litigation</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is involved in threatened or pending lawsuits/arbitrations arising from the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">normal conduct of business.  Due to the climate in insurance and business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">litigation/arbitrations, suits against the Company sometimes include claims for substantial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensatory, consequential, or punitive damages, and other types of relief. Moreover,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain claims are asserted as class actions, purporting to represent a group of similarly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situated individuals.  While it is not possible to forecast the outcome of such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lawsuits/arbitrations, in light of existing insurance, reinsurance, and established reserves,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">it is the opinion of management that the disposition of such lawsuits/arbitrations will not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">have a materially adverse effect on the Company&#146;s operations or financial position.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Other Regulatory Matters</FONT></I></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Regulatory Matters</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As with many financial services companies, the Company and its affiliates have received</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">informal and formal requests for information from various state and federal governmental</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agencies and self-regulatory organizations in connection with inquiries and investigations</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the products and practices of the financial services industry.  In each case, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company and its affiliates have been and are providing full cooperation.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Insurance and Retirement Plan Products and Other Regulatory Matters</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Federal and state regulators, and self-regulatory agencies are conducting broad inquiries</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and investigations involving the insurance and retirement industries.  These initiatives</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">currently focus on, among other things, compensation, revenue sharing, and other sales</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incentives; potential conflicts of interest; potential anti-competitive activity; reinsurance;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales and marketing practices (including sales to seniors); specific product types</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(including group annuities and indexed annuities); and disclosure.  It is likely that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scope of these industry investigations will further broaden before they conclude.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company and certain of its U.S. affiliates have received formal and informal requests in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">connection with such investigations, and are cooperating fully with each request for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">information.  Some of these matters could result in regulatory action involving the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company. These initiatives also may result in new legislation and regulation that could</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">significantly affect the financial services industry, including businesses in which the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company is engaged. In light of these and other developments, U.S. affiliates of ING,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">including the Company, periodically review whether modifications to their business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">practices are appropriate.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<P align="left">
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment Product Regulatory Issues</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Since 2002, there has been increased governmental and regulatory activity relating to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mutual funds and variable insurance products.  This activity has primarily focused on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">inappropriate trading of fund shares; directed brokerage; compensation; sales practices,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">suitability, and supervision; arrangements with service providers; pricing; compliance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and controls; adequacy of disclosure; and document retention.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to responding to governmental and regulatory requests on fund trading issues,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING management, on its own initiative, conducted, through special counsel and a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">national accounting firm, an extensive internal review of mutual fund trading in ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance, retirement, and mutual fund products. The goal of this review was to identify</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">any instances of inappropriate trading in those products by third parties or by ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investment professionals and other ING personnel.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The internal review identified several isolated arrangements allowing third parties to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">engage in frequent trading of mutual funds within the variable insurance and mutual fund</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">products of ING, and identified other circumstances where frequent trading occurred</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">despite measures taken by ING intended to combat market timing. Each of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">arrangements has been terminated and disclosed to regulators, to the independent trustees</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of ING Funds (U.S.) and in Company reports previously filed with the Securities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange Commission (&#147;SEC&#148;) pursuant to the Securities Exchange Act of 1934, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amended.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Action may be taken by regulators with respect to the Company or certain affiliates</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">before investigations relating to fund trading are completed. The potential outcome of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such action is difficult to predict but could subject the Company or certain affiliates to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adverse consequences, including, but not limited to, settlement payments, penalties, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other financial liability. It is not currently anticipated, however, that the actual outcome</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of any such action will have a material adverse effect on ING or ING&#146;s U.S.-based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations, including the Company.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING has agreed to indemnify and hold harmless the ING Funds from all damages</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">resulting from wrongful conduct by ING or its employees or from ING&#146;s internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investigation, any investigations conducted by any governmental or self-regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agencies, litigation or other formal proceedings, including any proceedings by the SEC.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management reported to the ING Funds Board that ING management believes that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">total amount of any indemnification obligations will not be material to ING or ING&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S.-based operations, including the Company.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">14.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=65% nowrap colspan=3>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accumulated Other Comprehensive Income (Loss)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=82% nowrap colspan=5>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Shareholder&#146;s equity included the following components of Accumulated</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=82% nowrap colspan=5>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">comprehensive income (loss) as of December 31, 2007, 2006, and 2005.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=24% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
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	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
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	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital (losses) gains:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=24% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (122.3) &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(28.9) &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6.9)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
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<HR noshade size=2>
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	<TD>
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</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC/VOBA adjustment on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=24% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
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<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(36.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements adjustment on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=24% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=39% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
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</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital (losses) gains , before tax</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=right width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
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<TR valign="bottom">
	<TD align=right width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(170.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(11.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=25% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.2)</FONT>&nbsp;
	</TD>
</TR>
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</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred income tax asset (liability)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred tax asset valuation allowance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(46.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
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<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital (losses) gains</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(157.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.8)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension liability, net of tax</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
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	<TD>
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	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated other comprehensive (loss) income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (160.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (12.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (4.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
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<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=98% nowrap colspan=7>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in Accumulated other comprehensive income (loss), net of DAC, VOBA, and</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=98% nowrap colspan=7>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax (excluding the tax valuation allowance), related to changes in unrealized capital gains</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=98% nowrap colspan=7>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on securities, including securities pledged, were as follows for the years ended</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (93.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (22.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (458.3)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC/VOBA adjustment on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(58.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">266.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements adjustment on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital (losses) gains, before tax</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(158.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(10.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(185.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred income tax asset (liability)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">55.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=46% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net change in unrealized capital (losses) gains</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (102.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (7.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (118.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">128</FONT></TD></TR></TABLE>
</P>

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<A name="page_129"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Financial Statements</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital holding (losses) gains</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">arising during the year</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: reclassification adjustment for (losses) gains</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and other items included in Net income</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT></SUP><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net change in unrealized capital (losses)</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains on securities</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=31% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (210.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (49.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (69.2)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(107.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(42.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=31% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">49.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (102.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (7.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (118.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pretax unrealized capital holding gains (losses) arising during the year were &#36;(324.9), &#36;(72.6), and &#36;(108.3), for the years ended December 31, 2007, 2006, and 2005,
respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pretax reclassification adjustments for gains (losses) and other items included in Net income were &#36;(166.2), &#36;(61.9), and &#36;76.9, for the years ended December 31, 2007,
2006, and 2005, respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">129</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_130"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=42% nowrap colspan=3>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">QUARTERLY DATA (UNAUDITED)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=53% nowrap colspan=5>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">First</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Second</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Third</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fourth</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 512.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 632.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 534.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 494.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income (loss) before income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">96.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">138.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(144.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax expense (benefit)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(11.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(58.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income (loss)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 69.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 97.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 48.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (86.0)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">First</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Second</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Third</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fourth</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 425.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 502.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 535.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 562.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income before income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">54.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">54.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">75.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">92.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 40.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 41.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 73.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 56.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">130</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=10% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 9.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=87% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Changes in and Disagreements With Accountants on Accounting and Financial</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=87% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Disclosure</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=87% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">None.</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=10% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 9A.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=87% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Controls and Procedures</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=87% nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Evaluation of Disclosure Controls and Procedures</FONT></I>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company carried out an evaluation, under the supervision and with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">participation of its management, including its Chief Executive Officer and Chief</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Officer, of the effectiveness of the design and operation of the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Securities Exchange Act of 1934, as amended (&#147;Exchange Act&#148;)) as of the end of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">period covered by this report. Based on that evaluation, the Chief Executive Officer</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and the Chief Financial Officer have concluded that the Company&#146;s current disclosure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">controls and procedures are effective in ensuring that material information relating to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company required to be disclosed in the Company&#146;s periodic SEC filings is made</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">known to them in a timely manner.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Management&#146;s Annual Report on Internal Control Over Financial Reporting</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management of the Company is responsible for establishing and maintaining</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">adequate internal control over financial reporting (as defined in Rules 13a-15(f) and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">15d-15(f) under the Exchange Act) for the Company.  The Company&#146;s internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">control over financial reporting is designed to provide reasonable assurance regarding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the reliability of financial reporting and the preparation of the financial statements of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company in accordance with U.S. generally accepted accounting principles. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s internal control over financial reporting includes those policies and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">procedures that:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and
that receipts and expenditures are being made only in accordance with authorizations of the Company&#146;s management and directors; and</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial
statements.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Because of its inherent limitations, internal control over financial reporting may not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prevent or detect misstatements. Also, projections of any evaluation of effectiveness</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to future periods are subject to the risk that controls may become inadequate because</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of changes in conditions, or that the degree of compliance with the policies or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">procedures may deteriorate.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">131</FONT></TD></TR></TABLE>
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<P align="left">
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management has assessed the effectiveness of the Company&#146;s internal control over</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial reporting as of December 31, 2007. In making its assessment, management</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">has used the criteria set forth in &#147;Internal Control &#150; Integrated Framework&#148; issued by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Committee of Sponsoring Organizations of the Treadway Commission.  Based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upon its assessment, management has concluded that the Company&#146;s internal control</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">over financial reporting was effective as of December 31, 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">This annual report does not include an attestation report of the Company&#146;s registered</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">public accounting firm regarding internal control over financial reporting.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management&#146;s report was not subject to attestation by the Company&#146;s registered</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">public accounting firm pursuant to temporary rules of the Securities and Exchange</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commission that permit the Company to provide only management&#146;s report in this</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annual report.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Changes in Internal Control Over Financial Reporting</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There has not been any change in the internal controls over financial reporting of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company that occurred during the period covered by this report that has materially</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affected or is reasonably likely to materially affect these internal controls.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 9B. Other Information</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">None.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">132</FONT></TD></TR></TABLE>
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<P align="left">
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART III</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 10. Directors, Executive Officers, and Corporate Governance</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Omitted pursuant to General Instruction I(2) of Form 10-K, except with respect to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compliance with Sections 406 and 407 of the Sarbanes-Oxley Act of 2002.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Code of Ethics for Financial Professionals</FONT></U>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has approved and adopted a Code of Ethics for Financial Professionals (which was filed as Exhibit 14 to the Company&#146;s Form 10-K, as filed with the Securities and Exchange
Commission on March 29, 2004, File No. 033-87270), pursuant to the requirements of Section 406 of the Sarbanes- Oxley Act of 2002. Any waiver of the Code of Ethics will be disclosed by the Company by way of a Form 8-K filing.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designation of Board Financial Expert</FONT></U>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has designated David A. Wheat, Director, Executive Vice President and Chief Financial Officer of the Company, as its Board Financial Expert, pursuant to the requirements of
Section 407 of the Sarbanes-Oxley Act of 2002. Because the Company is not subject to the requirements of Exchange Act Rule 10A-3, it does not have any outside directors sitting on its board.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 11. Executive Compensation</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Omitted pursuant to General Instruction I(2) of Form 10-K.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 12. Security Ownership of Certain Beneficial Owners and Management and Related</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Stockholder Matters</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Omitted pursuant to General Instruction I(2) of Form 10-K.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 13. Certain Relationships, Related Transactions, and Director Independence</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Omitted pursuant to General Instruction I(2) of Form 10-K.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">133</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 14. Principal Accounting Fees and Services</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In 2007 and 2006, Ernst &amp; Young LLP (&#147;Ernst &amp; Young&#148;) served as the principal</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">external auditing firm for ING, including ING USA.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING subsidiaries, including</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA, are allocated Ernst &amp; Young fees attributable to services rendered by Ernst</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&amp; Young to each subsidiary. Ernst &amp; Young fees allocated to the Company for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years ended December 31, 2007 and 2006 are detailed below, along with a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">description of the services rendered by Ernst &amp; Young to the Company.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=29% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Audit fees</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=34% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap colspan=5>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Audit-related fees</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Tax fees</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">All other fees</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
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	</TD>
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	<TD>
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	</TD>
	<TD>
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	</TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
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	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=34% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap colspan=5>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=5>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=34% nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Audit Fees</FONT></I>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fees for audit services include fees associated with professional services rendered by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the auditors for the audit of the annual financial statements of the Company and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">review of the Company&#146;s interim financial statements. </FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Audit-related Fees</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Audit-related fees were allocated to ING USA for assurance and related services that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are reasonably related to the performance of the audit or review of the financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements and are not reported under the audit fee item above.  These services</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">consisted primarily of the audit of SEC product filings.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Tax Fees</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There were minimal tax fees allocated to ING USA in 2007 and 2006.  Tax fees</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">allocated to ING USA were primarily for tax compliance and accounting for income</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">taxes.  These services consisted of tax compliance, including the review of tax</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosures and proper completion of tax forms, assistance with questions regarding</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax audits, and tax planning and advisory services relating to common forms of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">domestic taxation (i.e., income tax and capital tax).</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">All Other Fees</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There were minimal fees allocated to ING USA in 2007 and 2006 under the category</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;all other fees.&#148;  Other fees allocated to ING USA under this category typically</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">include fees paid for products and services other than the audit fees, audit-related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fees, and tax fees described above, and consist primarily of non-recurring support and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">advisory services.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">134</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Pre-approval Policies and Procedures</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA has adopted the pre-approval policies and procedures of ING. Audit, audit-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related, and non-audit, services provided to the Company by ING&#146;s independent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">auditors are pre-approved by ING&#146;s audit committee. Pursuant to ING&#146;s pre-approval</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">policies and procedures, the ING audit committee is required to pre-approve all</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">services provided by ING&#146;s independent auditors to ING and its affiliates, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company. The ING pre-approval policies and procedures distinguish five types</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of services: (1) audit services, (2) audit-related services, (3) tax services, (4) other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">services that are not audit, audit-related, tax, or prohibited services, and (5) prohibited</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">services (as described in the Sarbanes-Oxley Act).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The ING pre-approval procedures consist of a general pre-approval procedure and a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specific pre-approval procedure.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">General Pre-approval Procedure</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING&#146;s audit committee pre-approves audit, audit-related, tax, and other, services to be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provided by ING&#146;s external audit firms on an annual basis. The audit committee also</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sets the maximum annual amount for such pre-approved services.  Throughout the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">year, ING&#146;s audit committee receives from ING&#146;s external audit firms an overview of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">all services provided, including related fees and supported by sufficiently detailed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">information.  ING&#146;s audit committee evaluates this overview periodically on a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">retrospective basis during the year.  Additionally, ING&#146;s external audit firms and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Corporate Audit Services monitor the amounts paid versus the pre-approved amounts</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">throughout the year.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Specific Pre-approval Procedure</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition to the general pre-approval procedure, each proposed independent auditor</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">engagement that is expected to generate fees in excess of the pre-approved amounts,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">must be approved by the audit committee after recommendation of local management</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on a case-by-case basis.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In 2007 and 2006, 100% of each of the audit related services, tax services, and all</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other services were pre-approved by ING&#146;s audit committee.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=171>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">135</FONT></TD></TR></TABLE>
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<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART IV</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 15. Exhibits, Financial Statement Schedules</FONT></B></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following documents are filed as part of this report:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial statements. See Item 8. on page 72.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial statement schedules. See Index to Financial Statement Schedules on page 137.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibits. See Exhibit Index on page 142.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="left">
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">136</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=98% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Index to Financial Statement Schedules</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Page</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=84% nowrap colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Report of Independent Registered Public Accounting Firm</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">138</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">I.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Summary of Investments - Other than Investments in Affiliates as of</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">139</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">IV.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance Information as of and for the years ended</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=78% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 2006, and 2005</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">140</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Schedules other than those listed above are omitted because they are not required or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">not applicable.</FONT></TD></TR></TABLE>
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<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT size=4 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Report of Independent Registered Public Accounting Firm</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Board of Directors</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">We have audited the financial statements of ING USA Annuity and Life Insurance Company as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of December 31, 2007 and 2006, and for each of the three years in the period ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, and have issued our report thereon dated March 25, 2008. Our audits also</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">included the financial statement schedules listed in Item 15. These schedules are the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">responsibility of the Company&#146;s management. Our responsibility is to express an opinion based</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on our audits.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In our opinion, the financial statement schedules referred to above, when considered in relation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the basic financial statements taken as a whole, present fairly, in all material respects, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">information set forth therein. </FONT></TD></TR></TABLE>
</P>
<P align="right">
<TABLE><TR><TD align="right" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Ernst &amp; Young LLP</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Atlanta, Georgia</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=80% nowrap colspan=7>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=80% nowrap colspan=7>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Schedule I</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=80% nowrap colspan=7>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Summary of Investments &#150; Other than Investments in Affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=64% nowrap colspan=5>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of December 31, 2007</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amount</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Shown on</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Type of Investments</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value*</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Balance Sheets</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 18.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State, municipalities, and political subdivisions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">49.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">47.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">47.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Public utilities securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,417.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,426.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,426.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other U.S. corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,742.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,756.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,756.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign securities </FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,805.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,794.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,794.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,988.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,955.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,955.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,842.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,843.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,843.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,947.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=52% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, available-for-sale, including</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities pledged to creditors</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,898.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 216.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 211.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,701.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,739.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,701.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,030.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,045.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,036.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=24% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 28,003.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27,927.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27,881.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=38% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* See Notes 2 and 3 of Notes to Financial Statements.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The term "foreign" includes foreign governments, foreign political subdivisions, foreign public utilities, and all other bonds of foreign issuers. Substantially all of the Company's
foreign securities are denominated in U.S. dollars.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">139</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_140"></A>

<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Schedule IV </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance Information </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of and for the years ended December 31, 2007, 2006, and 2005</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Percentage of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Ceded</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assumed</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Net</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assumed to Net</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year ended December 31, 2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life insurance in force</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 8,351.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 689.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 7,662.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.0%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life insurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accident and health insurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year ended December 31, 2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life insurance in force</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6,596.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 755.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; - &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,841.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.0%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life insurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accident and health insurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 23.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; - &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year ended December 31, 2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life insurance in force</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 7,012.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 822.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; - &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,190.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.0%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life insurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accident and health insurance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 24.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; - &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">140</FONT></TD></TR></TABLE>
</P>

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<A name="page_141"></A>

<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SIGNATURES</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">duly authorized.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=65% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></U>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=65% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Registrant)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Vice President and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Duly Authorized Officer and Principal Financial Officer)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">below by the following persons on behalf of the registrant and in the capacities indicated on or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">before March 25, 2008.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=37% nowrap>
 &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Signatures</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Title</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director, Executive Vice President and</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Bridget M. Healy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Bridget M. Healy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Robert G. Leary</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Robert G. Leary</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Thomas J. McInerney</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director and Chairman</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Thomas J. McInerney</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Kathleen A. Murphy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Kathleen A. Murphy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Catherine H. Smith</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Director</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Catherine H. Smith</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Harry N. Stout</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">President</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Harry N. Stout</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Steven T. Pierson</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Senior Vice President and</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Steven T. Pierson</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=51% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Accounting Officer</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">141</FONT></TD></TR></TABLE>
</P>

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<A name="page_142"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Form 10-K for Fiscal Year Ended December 31, 2007</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit Index</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit Number</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Description of Exhibit</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreement and Plan of Merger dated June 25, 2003, by and between USG</FONT>&nbsp;
	</TD>
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	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annuity &amp; Life Company, United Life &amp; Annuity Insurance Company,</FONT>&nbsp;
	</TD>
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	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equitable Life Insurance Company of Iowa and Golden American Life</FONT>&nbsp;
	</TD>
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	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company, incorporated by reference in Exhibit 99-8 in the</FONT>&nbsp;
	</TD>
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	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s Form 8K filed with the SEC on January 2, 2004 (File No. 333-</FONT>&nbsp;
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&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">87270).</FONT>&nbsp;
	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.1 Restated Articles of Incorporation Providing for the Redomestication of Golden</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company dated July 2 and 3, 2003, effective January</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1, 2004, incorporated by reference to Company&#146;s 10-K, as filed with the SEC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on March 29, 2004 (File No. 033-87270).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.2 Amendment to Articles of Incorporation Providing for the Name Change of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Golden American Life Insurance Company dated November 20, 2003, effective</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2004, incorporated by reference to the Company&#146;s 10-K, as filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on March 29, 2004 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.3 Amendment to Articles of Incorporation Providing for the Change in Purpose</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Powers of ING USA Annuity and Life Insurance Company dated March 3</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 4, 2004, effective March 11, 2004, incorporated by reference to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s 10-Q, as filed with the SEC on May 17, 2004 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.4 Amended and Restated By-Laws of ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company effective January 1, 2005, incorporated by reference to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s Form 10-Q, as filed with the SEC on May 13, 2005 (File No. 033-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.1 Single Premium Deferred Modified Guaranteed Annuity Contract, Single</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premium Deferred modified Guaranteed Annuity Master Contract, and Single</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premium Deferred Modified Guaranteed Annuity Certificate - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Pre-Effective Amendment No. 1 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form S-1 for Golden American Life Insurance Company as filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on February 8, 2002 (File No. 333-67660).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.2 Single Premium Deferred Modified Guaranteed Annuity Master Contract and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Single Premium Deferred Modified guaranteed Annuity Certificate &#150;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Incorporated by reference to Post-Effective Amendment No. 1 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form S-1 for Golden American Life Insurance Company, as filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on September 13, 2000 (File No. 333-40596).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3 Individual Retirement Annuity Rider; Roth Individual Retirement Annuity</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rider; Simple Retirement Account Rider; and 403(b) Rider - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Post-Effective Amendment No. 34 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Golden American Life Insurance Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate Account B, as filed with the SEC on April 15, 2003 (File No. 033-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">23351).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.4 403(b) Rider - Incorporated herein by reference to Initial Registration Statement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on Form S-2 for Golden American Life Insurance Company, as filed with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SEC on April 15, 2003 (File No. 333-104547).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.5 Single Premium Deferred Equity Indexed Modified Guaranteed Annuity</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contract; Single Premium Deferred Modified Guaranteed Annuity Group</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Master Contract; and Single Premium Deferred Equity Indexed Modified</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Annuity Certificate, - Incorporated herein by reference to Pre-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective Amendment No. 1 to Registration Statement on Form S-2, as filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on August 13, 2004 (File No. 333-116137).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.6 Interest in Fixed Account I under Variable Annuity Contracts - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to: Post-Effective Amendment No. 12 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Golden American Life Insurance Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate Account B, as filed with the Securities and Exchange Commission on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">April 23, 1999 (File Nos. 033-59261, 811-5626); Incorporated by reference to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Post-Effective Amendment No. 3 to Registration Statement on Form N-4 for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Golden American life Insurance Company, as filed with the SEC on April 23,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999 (File Nos. 333-28769, 811-5626); and Incorporated by reference to Pre-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective Amendment No. 1 to Registration statement on Form N-4 for Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company Separate Account B, as filed with the SEC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on June 24, 2000 (File Nos. 333-33914, 811-5626). </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.7 Interests in Fixed Account II under Variable Annuity Contracts - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Post-Effective Amendment No. 7 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Separate Account B of Golden American Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company as filed with the SEC on October 2, 2000 (File No. 333-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">28679, 811-5626), Incorporated herein by reference to Post-Effective</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment No. 2 to Registration Statement on Form N-4 for Separate Account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">B of Golden American Life Insurance Company as filed with the SEC on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">October 2, 2000 (File No. 333-30180, 811-5626), Incorporated herein by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reference to Post-Effective Amendment No. 5 to Registration Statement on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Form N-4 for Separate Account B of Golden American Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company as filed with the SEC on April 23, 1999 (File No. 333-28755, 811-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">5626), Incorporated herein by reference to Post-Effective Amendment No. 1 to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Registration Statement on Form N-4 for Separate Account B of Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company as filed with the SEC on April 23, 1999</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(File No. 333-66757, 811-5626), Incorporated herein by reference to Pre-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective Amendment No. 1 to Registration Statement on Form N-4 for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate Account B of Golden American Life Insurance Company as filed with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the SEC on October 26, 2001 (File No. 333-63692, 811-5626), Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Pre-Effective Amendment No. 1 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Separate Account B of Golden American Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company as filed with the SEC on December 11, 2001 (File No.333-</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">70600, 811-5626), Incorporated by reference to Post-Effective Amendment No.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1 to Registration Statement on Form N-4 for Golden American Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Separate Account B, as filed with the SEC on April 16, 2003 (File</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 333-90516, 811-5626) and Incorporated by reference to Pre-Effective</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment No. 1 to Registration Statement on Form N-4 for Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company Separate Account B, as filed with the SEC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on July 3, 2003 (File No. 333-101487, 811-5626).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.8 Interest in the Guaranteed Account under Variable Annuity Contracts -</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Incorporated herein by reference to Pre-Effective Amendment No. 1 to</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Registration Statement on Form S-2 for Golden American Life Insurance</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company, as filed with the SEC on June 29, 2001 (File No. 333-57212).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.1 Service Agreement, dated as of January 1, 1994, as amended March 7, 1995,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">between Golden American and Directed Services, Inc., incorporated by</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reference from Exhibit 10(b) to a Registration Statement on Form S-1 filed with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the SEC on April 29, 1998 (File No. 333-51353).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.2 Asset Management Agreement, dated January 20, 1998, between Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American and ING Investment Management LLC, incorporated by reference</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">from Exhibit 10(f) to Golden American&#146;s Form 10-Q filed with the SEC on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">August 14, 1998 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.3 Reciprocal Loan Agreement dated January 1, 2004, between ING USA Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Life Insurance Company and ING America Insurance Holdings, Inc.,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporated by reference from Exhibit 10.A(a) to ING USA Annuity and Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company&#146;s Form 10-Q filed with the SEC on or about May 17, 2004</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(File No. 333-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.4 Surplus Note, dated December 8, 1999, between Golden American and First</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Columbine Life Insurance Company, incorporated by reference from Exhibit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10(g) to Amendment No. 7 to a Registration Statement for Golden American on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Form S-1 filed with the SEC on or about January 27, 2000 (File No. 333-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">28765).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.5 Services Agreement between Golden American and the affiliated companies</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">listed in Exhibit B to that Agreement, dated as of January 1, 2001, as amended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">effective January 1, 2002, incorporated by reference from Exhibit 10.A (k) to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company&#146;s Form 10-K filed with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SEC on March 29, 2004 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.6 Services Agreement between Golden American and ING North America</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Corporation effective January 1, 2001, incorporated by reference</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">from Exhibit 10.A (g) to ING USA Annuity and Life Insurance Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Form 10-K filed with the SEC on March 29, 2004 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.7 Form of Shared Services Center Services Agreement by and among ING North</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">America Insurance Corporation (&#147;Service Provider&#148;) and Ameribest Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company, a Georgia corporation; Equitable Life Insurance Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Iowa, an Iowa corporation; USG Annuity &amp; Life Company, an Oklahoma</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporation; Golden American, a Delaware corporation; First Columbine Life</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company, a Colorado corporation; Life Insurance Company of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Georgia, a Georgia corporation; Southland Life Insurance Company, a Texas</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporation; Security Life of Denver Insurance Company, a Colorado</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporation; Midwestern United Life Insurance Company, an Indiana</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporation; and United Life &amp; Annuity Insurance Company, a Texas</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">corporation, incorporated by reference from Exhibit 10(r) to Pre-Effective</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment No. 1 to a Registration Statement on Form S-1 filed by Registrant</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on or about December 11, 2001 (File No. 333-70602).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.8 Tax Sharing Agreement between Golden American, ING America Insurance</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Holdings, Inc. and affiliated companies, effective January 1, 2001, incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by reference from Exhibit 10.A (j) to ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s Form 10-K filed with the SEC on March 29, 2004 (File No. 033-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">87270).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.9 Administrative Services Agreement between Golden American, ReliaStar Life</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company of New York and affiliated companies listed on Exhibit A</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the Agreement, effective March 1, 2003, incorporated by reference from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit 10.A (m) to ING USA Annuity and Life Insurance Company&#146;s Form</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10-K filed with the SEC on March 29, 2004 (File No. 033-87270).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.10 First Amendment to the Administrative Services Agreement between ING USA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annuity and Life Insurance Company and its affiliates, effective as of August</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1, 2004, incorporated by reference from Exhibit 10.(i) to ING USA Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Life Insurance Company&#146;s Form 10-K filed with the SEC on March 18,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2005 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.11 Amendments to Asset Management Agreement between Golden American and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING Investment Management LLC, effective January 1, 2003, incorporated by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reference from Exhibit 10.A (l) to ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s Form 10-K filed with the SEC on March 29, 2004 (File No. 033-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.12 Third Amendment to the Asset Management Agreement, between Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American and ING Investment Management LLC, effective August 18, 2003,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporated by reference from Exhibit 10.A (n) to ING USA Annuity and Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company&#146;s Form 10-K filed with the SEC on March 29, 2004 (File</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.13 Lease Agreement, dated as of April 16, 1998, by and between Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American and Dunwoody Associates, incorporated by reference from Exhibit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.A (o) to ING USA Annuity and Life Insurance Company&#146;s Form 10-K filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on March 29, 2004 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.14 First Amendment to Lease Agreement, dated November 4, 1998, between</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Golden American and Dunwoody Associates, incorporated by reference from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit 10.A (p) to ING USA Annuity and Life Insurance Company&#146;s Form 10-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">K filed with the SEC on March 29, 2004 (File No. 033-87270).</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">145</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.15 Second Amendment to Lease Agreement, dated June 1, 2000, between Golden</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=95>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American and Dunwoody Associates, incorporated by reference from Exhibit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.A (q) to ING USA Annuity and Life Insurance Company&#146;s Form 10-K filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on March 29, 2004 (File No. 033-87270).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.16 Services Agreement with ING Financial Advisers, LLC (&#147;INGFA&#148;), entered</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=95>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">into June 1, 2002 by Equitable Life Insurance Company of Iowa, as subsumed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by ING USA pursuant to the January 1, 2004 merger, incorporated by reference</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">from Exhibit 10.(p) to ING USA Annuity and Life Insurance Company&#146;s Form</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10-K filed with the SEC on March 18, 2005 (File No. 033-87270).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.17 Surplus Note for &#36;50,000,000 aggregate principal amount, dated December 29,</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=95>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2004, issued by ING USA Annuity and Life Insurance Company to its affiliate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life of Denver International Limited, incorporated by reference from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit 10.(q) to ING USA Annuity and Life Insurance Company&#146;s Form 10-K</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">filed with the SEC on March 18, 2005 (File No. 033-87270).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.18 Surplus Note for &#36;175,000,000 aggregate principal amount, dated December</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">29, 2004, issued by ING USA Annuity and Life Insurance Company to its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate, ING Life Insurance and Annuity Company, incorporated by reference</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">from Exhibit 10.(r) to ING USA Annuity and Life Insurance Company&#146;s Form</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10-K filed with the SEC on March 18, 2005 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.19 Surplus Note for &#36;175,000,000 aggregate principal amount, dated December</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">29, 2004, issued by ING USA Annuity and Life Insurance Company to its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate, ReliaStar Life Insurance Company, incorporated by reference from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit 10.(s) to ING USA Annuity and Life Insurance Company&#146;s Form 10-K</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">filed with the SEC on March 18, 2005 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.20 Lease Agreement dated August 31, 1995, between The Graham Group, Inc. and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equitable Life Insurance Company of Iowa, as subsumed by ING USA Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Life Insurance Company pursuant to the January 1, 2004 merger,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporated by reference from Exhibit 10.(t) to ING USA Annuity and Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company&#146;s Form 10-K filed with the SEC on March 18, 2005 (File</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.21 Joinder Number 2005-1 to Tax Sharing Agreement, dated January 20, 2006,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">between ING USA Annuity and Life Insurance Company and ING America</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Holdings Inc., incorporated by reference from Exhibit 10. to ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">USA Annuity and Life Insurance Company&#146;s Form 10-Q filed with the SEC on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 12, 2006 (File No. 001-32625).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.22 Coinsurance Agreement, effective May 1, 2005, between ING USA Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Life Insurance Company and Security Life of Denver Insurance Company,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporated by reference from Exhibit 10. to ING USA Annuity and Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company&#146;s Form 10-Q filed with the SEC on May 13, 2005 (File No.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">033-87270).</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">146</FONT></TD></TR></TABLE>
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<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.23</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.24 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.25 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.26 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">10.27</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">14</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.1 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.2 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.1 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.2 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+ </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Filed herewith.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment Number 2006-1, dated as of September 11, 2006, to the Services</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreement between ING USA Annuity and Life Insurance Company and ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">North America Insurance Company, incorporated by reference from Exhibit 10.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to ING USA Annuity and Life Insurance Company&#146;s Form 10-Q filed with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SEC on November 14, 2006 (File No. 001-32625).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Second Amendment, effective as of July 31, 2007, to Services Agreement,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">between Golden American Life Insurance Company (nka ING USA Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Life Insurance Company) &amp; Directed Services Inc. (nka Directed Services</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">LLC).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment Number 2007-1 to Reciprocal Loan Agreement, dated as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, between ING USA and ING America Insurance Holdings,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inc.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment Number 2007-1 to Services Agreement, dated as of December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007, between ING USA and the affiliated companies listed on Exhibit B to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreement.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Guaranteed Funding Agreement, effective August 10, 2007, issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by ING USA Annuity and Life Insurance Company to Lion Connecticut</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Holdings, Inc., incorporated by reference from Exhibit 10.2 to ING USA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annuity and Life Insurance Company&#146;s Form 10-Q filed with the SEC on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">November 13, 2007 (File No. 001-32625).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Computation of Ratio of Earnings to Fixed Charges, filed herewith.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING Code of Ethics for Financial Professionals, incorporated by reference from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit 14 to ING USA Annuity and Life Insurance Company&#146;s Form 10-K</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">filed with the SEC on March 29, 2004 (File No. 033-87270).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of David A. Wheat pursuant to Section 302 of the Sarbanes-Oxley</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2002.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of Harry N. Stout pursuant to Section 302 of the Sarbanes-Oxley Act</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of 2002.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of David A. Wheat pursuant to Section 906 of the Sarbanes-Oxley</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2002.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of Harry N. Stout pursuant to Section 906 of the Sarbanes-Oxley Act</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of 2002.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">147</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 12</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=15>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=15>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2006</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2005</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2004</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2003</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Earnings:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income before income taxes and cumulative</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">effect of changes in accounting principles</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 127.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 276.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 224.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 173.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 56.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fixed Charges:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest factor on rental expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest credited to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,067.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">980.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">946.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">903.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">896.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net (undistributed) distributed income from</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity investees</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(11.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total fixed charges (2 + 3 + 4 + 5)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1,093.3</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1,015.9</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">982.5</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">911.9</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">923.9</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total fixed charges excluding interest</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
 &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">credited to contractowners (6 - 4)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">26.3</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">35.1</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">36.0</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">8.3</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">27.2</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Earnings and fixed charges (1 + 6)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1,220.7</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1,292.5</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1,206.6</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1,085.5</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">980.4</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Earnings and fixed charges, excluding</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
 &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">interest credited to contractowners (1 + 7)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">153.7</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">311.7</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">260.1</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">181.9</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">83.7</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Ratios:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">10. Earnings and fixed charges, to total fixed charges (8 / 6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
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<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11. Earnings and fixed charges, excluding interest credited to</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=1% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowners to total fixed charges (9 / 7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">12. Deficiency of earnings to fixed charges (6 - 8)*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=74% nowrap colspan=9>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*Represents additional earnings that would be necessary to result in a one to one ratio of earnings to fixed charges.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=15>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap colspan=3>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NM - Not meaningful.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>

<HR noshade align="center" width="100%" size=2>



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<A name="page_149"></A>

<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 31.1</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I, David A. Wheat, certify that:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I have reviewed this annual report on Form 10-K of ING USA Annuity and Life Insurance Company;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">c)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">d)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial information; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial
reporting.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></U>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Vice President and Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=86% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Duly Authorized Officer and Principal Financial Officer)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

<HR noshade align="center" width="100%" size=2>



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<A name="page_150"></A>

<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 31.2</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I, Harry N. Stout, certify that:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I have reviewed this annual report on Form 10-K of ING USA Annuity and Life Insurance Company;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">c)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">d)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial information; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial
reporting.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></U>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Harry N. Stout</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Harry N. Stout</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">President</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Duly Authorized Officer and Principal Officer)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 32.1</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to 18 U.S.C. &#167;1350, the undersigned officer of ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company (the &#147;Company&#148;) hereby certifies that, to the officer&#146;s knowledge, the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annual Report on Form 10-K for the year ended December 31, 2007 (the &#147;Report&#148;) fully</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 1934 and that the information contained in the Report fairly presents, in all material</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respects, the financial condition and results of operations of the Company.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Vice President and</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 32.2</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to 18 U.S.C. &#167;1350, the undersigned officer of ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company (the &#147;Company&#148;) hereby certifies that, to the officer&#146;s knowledge, the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annual Report on Form 10-K for the year ended December 31, 2007 (the &#147;Report&#148;) fully</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 1934 and that the information contained in the Report fairly presents, in all material</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respects, the financial condition and results of operations of the Company. </FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 25, 2008</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Harry N. Stout</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Harry N. Stout</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=35% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=34% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">President</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<P align="center">
<IMG src="form10q_ingusa-033108x1x1.jpg" border=0>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">UNITED STATES SECURITIES AND EXCHANGE COMMISSION</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">WASHINGTON, D.C. 20549</FONT></B><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">_______________________</FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FORM 10-Q</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Mark One)</FONT></B></TD></TR></TABLE>
</P>
<UL>
<LI>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF</FONT></B> <B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1934</FONT></B><BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">For the quarterly period ended </FONT></B><B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">March 31, 2008</FONT></U></B></UL>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">OR</FONT></B></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#168;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">For the transition period from <BR>___________________<BR> to <BR>____________________</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Commission File Number: </FONT></B><B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">333-133154, 333-133076, 333-133156, 333-133153, 333-133155,
333-133152</FONT></U></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND LIFE INSURANCE COMPANY</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Exact name of registrant as specified in its charter)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=51% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Iowa</FONT></U></B>&nbsp;
	</TD>
	<TD align=center width=48% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">41-0991508</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=51% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(State or other jurisdiction of incorporation or organization)</FONT>&nbsp;
	</TD>
	<TD align=center width=48% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(IRS Employer Identification No.)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=2>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=51% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1475 Dunwoody Drive</FONT></B>&nbsp;
	</TD>
	<TD align=center width=48% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">19380-1478</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=51% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">West Chester, Pennsylvania</FONT></U></B>&nbsp;
	</TD>
	<TD align=center width=48% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Zip Code)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=51% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Address of principal executive offices)</FONT>&nbsp;
	</TD>
	<TD align=left width=48% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=2>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
	<TD align=center width=48% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(610) 425-3400</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% nowrap colspan=2>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Registrant's telephone number, including area code)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=2>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% nowrap colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(</FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Former name, former address and former fiscal year, if changed since last report)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="top">
	<TD width=3%>&nbsp;
	</TD>
	<TD width=96% colspan=3><P><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes </FONT><FONT size=1 face="Wingdings-Regular,WingDings">
 </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No </FONT><FONT size=1 face="Wingdings-Regular,WingDings">&#168;</FONT></P>

	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=89% nowrap colspan=9>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">See the</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=89% nowrap colspan=9>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">definitions of &#147;large accelerated filer&#148;, &#147;accelerated filer&#148;, and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange Act. (Check
one):</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
 &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Large accelerated filer</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
<FONT size=1 face="Wingdings 2,WingDings">&#163; </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accelerated filer</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=22% nowrap>
<FONT size=1 face="Wingdings 2,WingDings">&#163; </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Non-accelerated filer</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<FONT size=1 face="Wingdings-Regular,WingDings"> </FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Smaller reporting company</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
<FONT size=1 face="Wingdings 2,WingDings">&#163;</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=31% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Do not check if a smaller</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=22% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reporting company)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes </FONT><FONT size=1 face="Wingdings-Regular,WingDings">&#168;
</FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">No</FONT><FONT size=1 face="Wingdings-Regular,WingDings"> </FONT></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">APPLICABLE ONLY TO CORPORATE ISSUERS:</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 250,000 shares of Common Stock, &#36;10 par</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value, as of May 12, 2008, are authorized, issued, and outstanding, all of which were directly owned by Lion Connecticut Holdings Inc.</FONT><BR>
<BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">NOTE: WHEREAS ING USA ANNUITY AND LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">H(1)(a) AND (b) OF FORM 10-Q, THIS FORM IS BEING FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL</FONT><BR>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">INSTRUCTION H(2).</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT></TD></TR></TABLE>
</P>

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<A name="page_2"></A>


<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Form 10-Q for the period ended March 31, 2008</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">INDEX</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART I.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FINANCIAL INFORMATION (UNAUDITED)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PAGE</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Statements:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Condensed Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Condensed Balance Sheets</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Condensed Statements of Changes in Shareholder's Equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Condensed Statements of Cash Flows</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 2.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management&#146;s Narrative Analysis of the Results of Operations and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Condition</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 4.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Controls and Procedures</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">48</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART II.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">OTHER INFORMATION</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Legal Proceedings</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">49</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 1A.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Risk Factors</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">49</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 6.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
 &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">49</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Signature</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">50</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=14% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibit Index</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=72% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=9% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">51</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>


<HR noshade align="center" width="100%" size=2>



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<A name="page_3"></A>

<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART I. FINANCIAL INFORMATION (UNAUDITED)</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 1. Financial Statements</FONT></B><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Condensed Statements of Operations</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Unaudited)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=45% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Revenues:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=28% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 373.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 301.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fee income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">322.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">267.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premiums</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(271.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(61.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">429.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">512.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Benefits and expenses:</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=28% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest credited and other benefits</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=28% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=51% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">266.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">246.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">71.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">58.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization of deferred policy acquisition</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=28% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">costs and value of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">191.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">96.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.2</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">543.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">415.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Loss) income before income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(113.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">96.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Income tax (benefit) expense</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(51.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=51% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net (loss) income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=28% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (61.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 69.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=98% colspan=5>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Condensed Balance Sheets</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=5>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions, except share data)</FONT>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">As of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">As of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">March 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Unaudited)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Assets</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investments:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale, at fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(amortized cost of &#36;21,840.7 at 2008 and &#36;21,945.0 at 2007)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,105.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,833.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale, at fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(cost of &#36;235.5 at 2008 and &#36;216.6 at 2007)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">224.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">188.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,849.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,701.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">154.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships/corporations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">472.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">454.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">268.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">394.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Securities pledged (amortized cost of &#36;1,009.8 at 2008 and &#36;953.3 at 2007)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">991.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">942.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27,227.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27,881.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,412.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">204.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments under securities loan agreement,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including collateral delivered</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">201.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">128.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accrued investment income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">242.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">216.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Receivable for securities sold</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deposits and reinsurance recoverable from affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,610.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,616.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred policy acquisition costs</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,044.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,908.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Value of business acquired</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">149.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">128.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements to contractowners</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">666.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">645.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due from affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">76.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred income tax asset</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other assets</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">42.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets held in separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">42,774.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=62% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total assets</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 80,515.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 81,276.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT></TD></TR></TABLE>
</P>

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<A name="page_5"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Condensed Balance Sheets</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=5>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions, except share data)</FONT>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">As of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">As of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">March 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">December 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(Unaudited)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Liabilities and Shareholder's Equity</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future policy benefits and claims reserves</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 31,657.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 31,461.6</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Payable for securities purchased</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Collateral held, including payables under securities loan agreement</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">136.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">140.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Borrowed money</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">660.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">715.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Notes to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">435.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to affiliates</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">132.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">95.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Current income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">61.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">40.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred income taxes</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">184.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other liabilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">803.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">606.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liabilities related to separate accounts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">42,774.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44,477.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total liabilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">76,682.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">78,157.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Shareholder's equity:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Common stock (250,000 shares authorized, issued,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and outstanding; &#36;10 per share value)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additional paid-in capital</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,233.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,132.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated other comprehensive loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(485.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(160.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Retained earnings (deficit)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(917.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(855.5)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total shareholder's equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,833.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,119.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=63% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total liabilities and shareholder's equity</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 80,515.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 81,276.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT></TD></TR></TABLE>
</P>

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<IMG src="form10q_ingusa-033108x6x1.jpg" border=0>
<BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">6</FONT></TD></TR></TABLE>
</P>

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<A name="page_7"></A>

<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Condensed Statements of Cash Flows</FONT></B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Unaudited)</FONT>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=98% colspan=7>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(In millions)</FONT>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=40% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash provided by operating activities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 354.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 371.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash Flows from Investing Activities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Proceeds from the sale, maturity, or redemption of:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,916.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,072.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">97.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">185.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Acquisition of:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,937.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3,683.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(20.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(28.0)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(245.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(147.7)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">108.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(22.3)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(26.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(15.8)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">91.4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Collateral delivered</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(77.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other, net</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash used in investing activities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(154.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(537.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash Flows from Financing Activities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deposits received for investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,880.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,332.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Maturities and withdrawals from investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,956.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1,385.5)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance recoverable on investment contracts</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(56.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term loans to affiliate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(45.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=56% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term borrowings</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(54.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(86.7)</FONT>&nbsp;
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 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Capital contribution from Parent</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,100.0</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash provided by (used in) financing activities</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,008.3</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(241.2)</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net increase (decrease) in cash and cash equivalents</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,208.1</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(407.6)</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents, beginning of period</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">204.4</FONT>&nbsp;
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&nbsp;	</TD>
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&nbsp;
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	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">608.6</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Cash and cash equivalents, end of period</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,412.5</FONT>&nbsp;
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&nbsp;	</TD>
	<TD align=right width=18% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 201.0</FONT>&nbsp;
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<I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">The accompanying notes are an integral part of these financial statements.</FONT></I></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">1. Organization and Significant Accounting Policies</FONT></B></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Basis of Presentation</FONT></I></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company (&#147;ING USA&#148; or the &#147;Company,&#148; as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate) is a stock life insurance company domiciled in the State of Iowa and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides financial products and services in the United States. ING USA is authorized to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">conduct its insurance business in all states, except New York, and the District of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Columbia.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;Lion&#148; or &#147;Parent&#148;), which is an indirect, wholly-owned subsidiary of ING Groep N.V.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;ING&#148;). ING is a global financial services holding company based in The Netherlands,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with American Depository Shares listed on the New York Stock Exchange under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">symbol &#147;ING&#148;.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The condensed financial statements and notes as of March 31, 2008, and for the three</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">months ended March 31, 2008 and 2007, have been prepared in accordance with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounting principles generally accepted in the United States (&#147;US GAAP&#148;) and are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unaudited.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The condensed financial statements reflect all adjustments (consisting only of normal,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recurring accruals) which are, in the opinion of management, necessary for the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">presentation of the financial position, results of operations, and cash flows, for the interim</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">periods. These condensed financial statements and notes should be read in conjunction</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the financial statements and related notes as presented in the Company&#146;s 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annual Report on Form 10-K. The results of operations for the interim periods may not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be considered indicative of results to be expected for the full year.</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Description of Business</FONT></I></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company offers various insurance products, including immediate and deferred</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable and fixed annuities. The Company&#146;s annuity products are distributed by national</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">wirehouses, regional securities firms, independent broker-dealers, banks, life insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">companies with captive agency sales forces, independent insurance agents, independent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">marketing organizations, and an affiliated broker-dealer network.  The Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primary annuity customers are individual consumers.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also offers guaranteed investment contracts and funding agreements</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(collectively referred to as &#147;GICs&#148;), sold primarily to institutional investors and corporate</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefit plans.  These products are marketed by home office personnel or through</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">specialty insurance brokers.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Use of Estimates</FONT></I></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The preparation of financial statements in conformity with US GAAP requires</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management to make estimates and assumptions that affect the amounts reported in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condensed financial statements and accompanying notes. Actual results could differ from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reported results using those estimates.</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Reclassifications</FONT></I></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain reclassifications have been made to prior year financial information to conform to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the current year classifications.</FONT></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Significant Accounting Policies</FONT></I></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For a description of significant accounting policies, see the Organization and Significant</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accounting Policies footnote to the Financial Statements included in the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007 Annual Report on Form 10-K.  There have been no material changes to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s significant accounting policies since the filing of the Company&#146;s 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annual Report on Form 10-K, except as noted in the Recently Adopted Accounting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Standards footnote.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2. Recently Adopted Accounting Standards</FONT></B></TD></TR></TABLE>
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<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Fair Value Measurements</FONT></I></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2006, the Financial Accounting Standards Board (&#147;FASB&#148;) issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement of Financial Accounting Standards (&#147;FAS&#148;) No. 157, &#147;Fair Value</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Measurements&#148; (&#147;FAS No. 157&#148;). FAS No. 157 provides guidance for using fair value to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measure assets and liabilities whenever other standards require (or permit) assets or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities to be measured at fair value.  FAS No. 157 does not expand the use of fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value to any new circumstances.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under FAS No. 157, the FASB clarifies the principle that fair value should be based on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the assumptions market participants would use when pricing the asset or liability. In</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">support of this principle, FAS No. 157 establishes a fair value hierarchy that prioritizes</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the information used to develop such assumptions. The fair value hierarchy gives the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">highest priority to quoted prices in active markets and the lowest priority to unobservable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">data. FAS No. 157 also requires separate disclosure of fair value measurements by level</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">within the hierarchy and expanded disclosure of the effect on earnings for items</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measured using unobservable data.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS 157 was adopted by the Company on January 1, 2008. As a result of implementing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS 157, the Company recognized &#36;69.6, before tax, as an increase to Net income on the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">date of adoption related to the fair value measurements of investment contract guarantees.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The impact of implementation was included in Interest credited and other benefits to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractholders on the Condensed Statements of Operations. The Company recognized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">no other adjustments to its financial statements related to the adoption of FAS 157, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">new disclosures are included in the Financial Instruments footnote.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">The Fair Value Option for Financial Assets and Financial Liabilities</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In February 2007, the FASB issued FAS No. 159, &#147;The Fair Value Option for Financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Assets and Financial Liabilities&#148; (&#147;FAS No. 159&#148;), which allows a company to make an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">irrevocable election, on specific election dates, to measure eligible items at fair value</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with unrealized gains and losses recognized in earnings at each subsequent reporting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">date. The election to measure an item at fair value may be determined on an instrument</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by instrument basis, with certain exceptions.  If the fair value option is elected, any</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">upfront costs and fees related to the item will be recognized in earnings as incurred.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Items eligible for the fair value option include:</FONT></TD></TR></TABLE>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain recognized financial assets and liabilities;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rights and obligations under certain insurance contracts that are not financial instruments;</FONT>	</TD>
</TR>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and</FONT>	</TD>
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	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certain commitments.</FONT>	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 159 was adopted by the Company on January 1, 2008. In implementing FAS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 159, the Company however, elected not to take the fair value option for any eligible</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets or liabilities in existence on January 1, 2008.</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Offsetting of Amounts Related to Certain Contracts</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On April 30, 2007, the FASB issued a Staff Position on FASB Interpretation No. 39,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Offsetting of Amounts Related to Certain Contracts&#148; (&#147;FSP FIN 39-1&#148;), which permits a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reporting entity to offset fair value amounts recognized for the right to reclaim or the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation to return cash collateral against fair value amounts recognized for derivative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">instruments under master netting arrangements. FSP FIN 39-1 had no effect on the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial condition, results of operations, or cash flows upon adoption by the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on January 1, 2008, as it is the Company&#146;s accounting policy to not offset such fair value</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amounts.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Accounting for Uncertainty in Income Taxes</FONT></I></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In June 2006, the FASB issued FASB Interpretation No. 48, &#147;Accounting for Uncertainty</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in Income Taxes&#148; (&#147;FIN 48&#148;), which creates a single model to address the accounting for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the uncertainty in income tax positions recognized in a company&#146;s financial statements.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIN 48 prescribes a recognition threshold and measurement criteria that must be satisfied</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to recognize a financial statement benefit of tax positions taken, or expected to be taken,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on an income tax return.  Additionally, FIN 48 provides guidance on derecognition,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">classification, interest and penalties, accounting in interim periods, disclosure, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transition.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIN 48 was adopted by the Company on January 1, 2007. As a result of implementing</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FIN 48, the Company recognized a cumulative effect of change in accounting principle of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;1.7 as a reduction to January 1, 2007 Retained earnings (deficit).</FONT><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection</FONT></I></B><BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">With Modifications or Exchanges of Insurance Contracts</FONT></I></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In September 2005, the American Institute of Certified Public Accountants (&#147;AICPA&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued Statement of Position (&#147;SOP&#148;) 05-1, &#147;Accounting by Insurance Enterprises for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contracts&#148; (&#147;SOP 05-1&#148;), which states that when an internal replacement transaction</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">results in a substantially changed contract, the unamortized deferred acquisition costs,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unearned revenue liabilities, and deferred sales inducement assets, related to the replaced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract should not be deferred in connection with the new contract.  Contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">modifications that meet various conditions defined by SOP 05-1 and result in a new</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contract that is substantially unchanged from the replaced contract, however, should be</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accounted for as a continuation of the replaced contract.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1 defines an internal replacement as a modification in product benefits, features,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rights, or coverage, that occurs by the exchange of a contract for a new contract, by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amendment, endorsement, or rider, to a contract, or by the election of a feature or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">coverage within a contract. SOP 05-1 applies to internal replacements made primarily to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts defined by FAS No. 60, &#147;Accounting and Reporting by Insurance Enterprises&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;FAS No. 60&#148;), as short-duration and long-duration insurance contracts, and by FAS No.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">97, &#147;Accounting and Reporting by Insurance Enterprises for Certain Long-Duration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contracts and for Realized Gains and Losses from the Sale of Investments&#148; (&#147;FAS No.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">97&#148;), as investment contracts.</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for internal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">replacements occurring on or after that date. As a result of implementing SOP 05-1, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company recognized a cumulative effect of change in accounting principle of &#36;4.8,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">before tax, or &#36;3.1, net of &#36;1.7 of income taxes, as a reduction to January 1, 2007</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Retained earnings (deficit). In addition, the Company revised its accounting policy on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the amortization of deferred policy acquisition costs (&#147;DAC&#148;) and value of business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">acquired (&#147;VOBA&#148;) to include internal replacements.</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=0 cellpadding=0>
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	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">3.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">New Accounting Pronouncements</FONT></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Disclosures about Derivative Instruments and Hedging Activities</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In March 2008, the FASB issued FAS No. 161, &#147;Disclosures about Derivative Instruments and Hedging Activities&#148; (&#147;FAS No. 161&#148;), which requires enhanced disclosures about
objectives and strategies for using derivatives, fair value amounts of and gains and losses on derivative instruments, and credit-risk-related contingent features in derivative agreements, including:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">How and why derivative instruments are used;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">How derivative instruments and related hedged items are accounted for under FAS No. 133,&#147;Accounting for Derivative Instruments and Hedging Activities&#148; (&#147;FAS</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 133&#148;), and its related interpretations; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">How derivative instruments and related hedged items affect an entity&#146;s financial statements.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The provisions of FAS No. 161 are effective for financial statements issued for fiscal years and interim periods after November 15, 2008, with early application encouraged. The Company is in
the process of determining the impact of adoption of FAS No. 161 for its derivative instruments. The Company&#146;s derivatives, however, are generally not accounted for using hedge accounting treatment under FAS No. 133, as the Company has not
historically sought hedge accounting treatment.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Business Combinations</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In December 2007, the FASB issued FAS No. 141 (revised 2007), &#147;Business Combinations&#148; (&#147;FAS No. 141R&#148;), which replaces FAS No. 141, &#147;Business Combinations,&#148; as
issued in 2001. FAS No. 141R requires most identifiable assets, liabilities, noncontrolling interest, and goodwill, acquired in a business combination to be recorded at full fair value as of the acquisition date, even for acquisitions achieved in
stages. In addition, the statement requires:</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">12</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Acquisition-related costs to be recognized separately and generally expensed;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Non-obligatory restructuring costs to be recognized separately when the liability is incurred;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contractual contingencies acquired to be recorded at acquisition-date fair values;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a
gain; and</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The nature and financial effects of the business combination to be disclosed.</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 141R also amends or eliminates various other authoritative literature.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The provisions of FAS No. 141R are effective for fiscal years beginning on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 15, 2008 for all business combinations occurring on or after that date.  As</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such, this standard will impact any Company acquisitions that occur on or after</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2009.</FONT></TD></TR></TABLE>
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	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">4.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Financial Instruments</FONT></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Fair Value Measurements</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FAS No. 157 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances
disclosure requirements for fair value measurements.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Fair Value Hierarchy</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial assets and liabilities recorded at fair value on the Condensed Balance Sheets are categorized as follows:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Level 1 - Unadjusted quoted prices for identical assets or liabilities in an active market.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Level 2 - Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">13</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Level 2 inputs include the following:</FONT></TD></TR></TABLE>
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	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Quoted prices for similar assets or liabilities in active markets;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Quoted prices for identical or similar assets or liabilities in non-active markets;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">c)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inputs other than quoted market prices that are observable; and</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">d)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inputs that are derived principally from or corroborated by observable market data through correlation or other means.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Level 3 - Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These valuations, whether derived internally or
obtained from a third party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table presents the Company&#146;s hierarchy for its assets and liabilities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">measured at fair value on a recurring basis as of March 31, 2008.</FONT></TD></TR></TABLE>
</P>
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<IMG src="form10q_ingusa-033108x14x1.jpg" border=0>
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<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Level 3 assets and liabilities accounted for 1.3% of total assets and liabilities measured at fair value on a recurring basis. Excluding separate accounts assets for which the
policyholder bears the risk, the Level 3 assets and liabilities in relation to total assets and liabilities measured at fair value on a recurring basis totaled 3.7%.</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">14</FONT></TD></TR></TABLE>
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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following valuation methods and assumptions were used by the Company in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimating the fair value of the following financial instruments:</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The fair values for the actively traded marketable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bonds are determined based upon the quoted market prices or dealer quotes.  The fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">values for marketable bonds without an active market are obtained through several</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">commercial pricing services, which provide the estimated fair values.  Fair values of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">privately placed bonds are determined using a matrix-based pricing model. The model</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">considers the current level of risk-free interest rates, current corporate spreads, the credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quality of the issuer, and cash flow characteristics of the security. Also considered are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">factors such as the net worth of the borrower, the value of collateral, the capital structure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the borrower, the presence of guarantees, and the Company&#146;s evaluation of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">borrower&#146;s ability to compete in their relevant market.  Using this data, the model</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generates estimated market values which the Company considers reflective of the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of each privately placed bond.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Fair values of these securities are based upon quoted</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market price.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Cash and cash equivalents and Short-term investments under securities loan agreement</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The carrying amounts for cash reflect the assets&#146; fair values.  The fair values for cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equivalents and short-term investments are determined based on quoted market prices.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Assets held in separate accounts</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: Assets held in separate accounts are reported at the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quoted fair values of the underlying investments in the separate accounts.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other financial instruments reported as assets and liabilities</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The carrying amounts for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">these financial instruments (primarily derivatives) reflect the fair value of the assets and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liabilities. Derivatives are carried at fair value (on the Condensed Balance Sheets), which</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is determined using the Company&#146;s derivative accounting system in conjunction with key</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial data from third party sources or through values established by third party</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">brokers.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment contract guarantees</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: The Company records liabilities, which can be either</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">positive or negative, for annuity contracts containing guaranteed riders for GMABs and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMWBs without life contingencies in accordance with FAS No. 133. The guarantee is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">treated as an embedded derivative and is required to be reported separately from the host</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable annuity contract. The fair value of the obligation is calculated based on actuarial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and capital market assumptions related to the projected cash flows, including benefits and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related contract charges, over the anticipated life of the related contracts. The cash flow</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimates are produced by using stochastic techniques under a variety of market return</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scenarios and other best estimate assumptions.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">15</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company also records for its FIA contracts an embedded derivative liability for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest payments to contractholders above the minimum guaranteed interest rate, in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accordance with FAS No. 133. The guarantee is treated as an embedded derivative and is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">required to be reported separately from the host contract. The fair value of the obligation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is calculated based on actuarial and capital market assumptions related to the projected</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flows, including benefits and related contract charges, over the anticipated life of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related contracts. The cash flow estimates are produced by best estimate assumptions.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table summarizes the changes in fair value of the Company&#146;s Level 3</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets and liabilities as of March 31, 2008.</FONT></TD></TR></TABLE>
</P>
<P align="center">
<IMG src="form10q_ingusa-033108x16x1.jpg" border=0>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The amounts in this line are included in Accumulated other comprehensive income (loss) on the Condensed Balance Sheets.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations and contains unrealized gains (losses) on Level 3 derivatives held at March
31, 2008. All gains and losses on Level 3 assets are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately by security.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">These amounts are included in Interest credited and other benefits to contractowners on the Condensed Statements of Operations. All gains and losses on Level 3 liabilities are
classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">16</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">5. Investments</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Other-Than-Temporary Impairments</FONT></I></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table identifies the Company&#146;s other-than-temporary impairments by type</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the three months ended March 31, 2008 and 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=34% nowrap colspan=5>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=4% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=4% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 110.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">105</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 8.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollars denominated.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The above schedule includes &#36;50.8 and &#36;0.2 in other-than-temporary write-downs for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">three months ended March 31, 2008 and 2007, respectively, related to the analysis of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credit risk, the possibility of significant prepayment risk, and severity and duration of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized losses.  The remaining write-downs are related to investments that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company does not have the intent to retain for a period of time sufficient to allow for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recovery in fair value. The following table summarizes these write-downs by type for the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">three months ended March 31, 2008 and 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=36% nowrap colspan=3>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">- &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">- </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 59.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">65 &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollars denominated.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">17</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_18"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The remaining fair value of fixed maturities with other-than-temporary impairments as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2008 and 2007 was &#36;2,473.3 and &#36;798.1, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company may sell securities during the period in which fair value has declined</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">below amortized cost for fixed maturities or cost for equity securities.  In certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situations new factors, including changes in the business environment, can change the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s previous intent to continue holding a security.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">6. Deferred Policy Acquisition Costs and Value of Business Acquired</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Activity within DAC was as follows for the three months ended March 31, 2008 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.</FONT><BR>
<BR>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008 2007</FONT></B></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at January 1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,908.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,669.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferrals of commissions and expenses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">214.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">139.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amortization</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(237.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(134.3)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest accrued at 5% to 6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">43.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">38.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net amortization included in the Condensed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statements of Operations</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(194.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(96.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Change in unrealized capital (gains) losses on</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">116.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(36.9)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Implementation of SOP 05-1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4.8)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Balance at March 31</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,044.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,671.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Activity within VOBA was as follows for the three months ended March 31, 2008 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.</FONT></TD></TR></TABLE>
</P>
<P align="center">
<IMG src="form10q_ingusa-033108x18x1.jpg" border=0>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">18</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the first quarter of 2008, the Company revised and unlocked the assumptions</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related to mutual fund revenue and to the gross profit projections for separate account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">returns for its annuity products, resulting in a &#36;70.8 increase in amortization of DAC and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">VOBA.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the first quarter of 2007, the Company revised and unlocked the mutual fund</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">revenue assumption for its annuity products, resulting in a &#36;20.1 reduction in Net</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortization of DAC and VOBA for the three months ended March 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">7.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital Contributions and Distributions</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the three months ended March 31, 2008, the Company received a &#36;1.1 billion capital contribution from its Parent. During the three months ended March 31, 2007, the Company did not
receive any capital contributions from its Parent.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the three months ended March 31, 2008 and 2007, the Company did not pay any dividends or return of capital distributions to its Parent.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">8.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Income Taxes</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s effective tax rates for the three months ended March 31, 2008 and 2007 were (45.4)% and 27.8%, respectively. The effective rates differ from the expected rate primarily
due to the benefit from the dividends received deduction. The decrease in the effective rate from March 31, 2007 to 2008 is primarily due to pre-tax loss and an increase in the deduction allowed for dividends received.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Temporary Differences</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At March 31, 2008 and December 31, 2007, the Company had a valuation allowance of &#36;46.9 related to unrealized capital losses on investments, which is included in Accumulated other
comprehensive income (loss).</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Unrecognized Tax Benefits</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In the first quarter of 2008, the Internal Revenue Service (&#147;IRS&#148;) finalized the audit of tax year 2003. The 2003 settlement did not have a material impact on the Company&#146;s
financial position. The IRS is currently examining tax years 2002, 2004, 2005 and 2006. In addition, the Company and the IRS have agreed to enter the Compliance Assurance Program (&#147;CAP&#148;) for tax year 2008.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">19</FONT></TD></TR></TABLE>
</P>

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<P align="left">
<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">9.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Financing Agreements</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Reciprocal Loan Agreement</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company maintains a reciprocal loan agreement with ING America Insurance Holdings, Inc. (&#147;ING AIH&#148;), an affiliate, to facilitate the handling of unanticipated short- term cash
requirements that arise in the ordinary course of business. Under this agreement, which became effective in January 2004 and expires on January 14, 2014, either party can borrow from the other up to 3.0% of the Company's statutory admitted assets as
of the preceding December 31. Interest on any ING USA borrowing is charged at the rate of ING AIH&#146;s cost of funds for the interest period, plus 0.15%. Interest on any ING AIH borrowing is charged at a rate based on the prevailing interest rate
of U.S. commercial paper available for purchase with a similar duration.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under this agreement, the Company incurred &#36;0.3 interest expense for the three months ended March 31, 2008 and minimal interest expense for the three months ended March 31, 2007. The
Company earned interest income of &#36;0.6 and &#36;2.6 for the three months ended March 31, 2008 and 2007, respectively. Interest expense and income are included in Interest expense and Net investment income, respectively, on the Condensed
Statements of Operations. As of March 31, 2008 and December 31, 2007, the Company had no amounts due to or due from ING AIH under the reciprocal loan agreement.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For information on the Company&#146;s additional financing agreements, see the Financing Agreements footnote to the Financial Statements included in the Company&#146;s 2007 Annual Report on
Form 10-K.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">10.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Commitments and Contingent Liabilities</FONT></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Commitments</FONT></I></B>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Through the normal course of investment operations, the Company commits to either purchase or sell securities, commercial mortgage loans, or money market instruments, at a specified future
date and at a specified price or yield. The inability of counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a change in the value of the securities underlying the
commitments.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At March 31, 2008, the Company had off-balance sheet commitments to purchase investments equal to their fair value of &#36;672.8, &#36;258.9 of which was with related parties. At December
31, 2007, the Company had off-balance sheet commitments to purchase investments equal to their fair value of &#36;616.3, &#36;156.5 of which was with related parties. During the three months ended March 31, 2008, &#36;67.2 was funded to related
parties under these commitments.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">20</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Financial Guarantees</FONT></I></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company owns a 3-year credit-linked note arrangement, whereby the Company will</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reimburse the guaranteed party upon payment default of the referenced obligation. Upon</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such default, the Company will reimburse the guaranteed party for the loss under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reference obligation, and the Company receives that reference obligation in settlement.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company can seek recovery of any losses under the agreements by sale or collection</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the received reference obligation. As of March 31, 2008, the maximum liability of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company under the guarantee was &#36;32.5.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Cash Collateral</FONT></I></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the Company&#146;s Over-The-Counter Derivative International Swaps and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives Association, Inc. Agreements (&#147;ISDA Agreements&#148;), the Company may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receive from, or deliver to, counterparties, collateral to assure that all terms of the ISDA</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreements will be met with regard to the Credit Support Annex (&#147;CSA&#148;). The terms of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the CSA call for the Company to pay interest on any cash received equal to the Federal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Funds rate.  As of March 31, 2008, the Company delivered &#36;65.8 of cash collateral,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which was included in Short-term investments under securities loan agreement, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateral delivered, on the Condensed Balance Sheets. As of December 31, 2007, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company held &#36;11.5 of cash collateral, which was included in Collateral held, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">payables under securities loan agreement on the Balance Sheets and was reinvested in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">short-term investments.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Litigation</FONT></I></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is involved in threatened or pending lawsuits/arbitrations arising from the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">normal conduct of business.  Due to the climate in insurance and business</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">litigation/arbitrations, suits against the Company sometimes include claims for substantial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">compensatory, consequential, or punitive damages, and other types of relief. Moreover,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">certain claims are asserted as class actions, purporting to represent a group of similarly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situated individuals.  While it is not possible to forecast the outcome of such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lawsuits/arbitrations, in light of existing insurance, reinsurance, and established reserves,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">it is the opinion of management that the disposition of such lawsuits/arbitrations will not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">have a materially adverse effect on the Company&#146;s operations or financial position.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">21</FONT></TD></TR></TABLE>
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<TABLE><TR><TD width=5>&nbsp;</TD><TD nowrap>
<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Regulatory Matters</FONT></I></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=36>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As with many financial services companies, the Company and its affiliates have received</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">informal and formal requests for information from various state and federal governmental</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agencies and self-regulatory organizations in connection with inquiries and investigations</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the products and practices of the financial services industry.  In each case, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company and its affiliates have been and are providing full cooperation. For information</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on the focus of such regulatory inquiries and the actions undertaken by ING in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">connection therewith, see the Other Regulatory Matters section of the Commitments and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contingent Liabilities footnote to the Financial Statements included in the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007 Annual Report on Form 10-K.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">11.</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Accumulated Other Comprehensive Income (Loss)</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=91% nowrap colspan=7>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Shareholder&#146;s equity included the following components of Accumulated other</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=61% nowrap colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">comprehensive income (loss) as of March 31, 2008 and 2007.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital gains (losses):</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (754.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 43.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(10.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC/VOBA adjustment on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">96.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(19.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sales inducements adjustment on available-for-sale securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5.8)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5.4)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital (losses) gains, before tax</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(669.5)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred income tax asset (liability)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">234.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7.3)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Deferred tax liability valuation allowance</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(46.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital (losses) gains</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(482.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pension liability, net of tax</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5.1)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=53% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated other comprehensive (loss) income</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (485.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 8.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">22</FONT></TD></TR></TABLE>
</P>

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<A name="page_23"></A>

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<B><FONT size=4 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Notes to Condensed Financial Statements (Unaudited)</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=30>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in Accumulated other comprehensive income (loss), net of DAC, VOBA, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">tax (excluding the tax valuation allowance), related to changes in unrealized capital gains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on securities, including securities pledged, were as follows for the three months</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended March 31, 2008 and 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=54% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net unrealized capital holding gains (losses) arising</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=21% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">during the period</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (374.7)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: reclassification adjustment for gains (losses) and</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=21% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other items included in Net income</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(50.4)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=54% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net change in unrealized capital gains (losses) on securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=21% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (324.3)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap colspan=3>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 20.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pretax net unrealized capital holding gains (losses) arising during the period were &#36;(576.5) and &#36;18.2 for the three months ended March 31, 2008 and 2007,
respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pretax reclassification adjustments for gains (losses) and other items included in Net income were &#36;(77.6) and &#36;(13.6) for the three months ended March 31, 2008 and 2007,
respectively.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">23</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 2. Management&#146;s Narrative Analysis of the Results of Operations and Financial</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Condition</FONT></B><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Dollar amounts in millions, unless otherwise stated)</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Overview</FONT></B></TD></TR></TABLE>
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<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following narrative analysis presents a review of the results of operations of ING</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">USA Annuity and Life Insurance Company (&#147;ING USA&#148; or the &#147;Company&#148;, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">appropriate) for each of the three months ended March 31, 2008 and 2007, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial condition as of March 31, 2008 and December 31, 2007. This item should</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">be read in its entirety and in conjunction with the condensed financial statements and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">related notes, which can be found under Part I, Item 1. contained herein, as well as the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Management&#146;s Narrative Analysis of the Results of Operations and Financial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Condition&#148; section contained in the Company&#146;s 2007 Annual Report on Form 10-K.</FONT></TD></TR></TABLE>
</P>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Forward-Looking Information/Risk Factors</FONT></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In connection with the &#147;safe harbor&#148; provisions of the Private Securities Litigation</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reform Act of 1995, the Company cautions readers regarding certain forward-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">looking statements contained in this report and in any other statements made by, or on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">behalf of, the Company, whether or not in future filings with the Securities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange Commission (&#147;SEC&#148;). Forward-looking statements are statements not</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on historical information and which relate to future operations, strategies,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">financial results, or other developments. Statements using verbs such as &#147;expect,&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;anticipate,&#148; &#147;believe,&#148; or words of similar import, generally involve forward-looking</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements.  Without limiting the foregoing, forward-looking statements include</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements that represent the Company&#146;s beliefs concerning future levels of sales and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">redemptions of the Company&#146;s products, investment spreads and yields, or the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">earnings and profitability of the Company&#146;s activities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Forward-looking statements are necessarily based on estimates and assumptions that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are inherently subject to significant business, economic, and competitive uncertainties</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and contingencies, many of which are beyond the Company&#146;s control and many of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which are subject to change.  These uncertainties and contingencies could cause</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">actual results to differ materially from those expressed in any forward-looking</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">statements made by, or on behalf of, the Company. Whether or not actual results</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">differ materially from forward-looking statements may depend on numerous</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">foreseeable and unforeseeable developments, including, but not limited to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">following:</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity market volatility could negatively impact profitability and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in interest rates could have a negative impact on profitability and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT></TD></TR></TABLE>
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	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s investment portfolio is subject to risks that may reduce the value of invested assets and adversely affect sales, profitability, and investment returns credited to
contractowners;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in underwriting and actual experience could materially affect profitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in reserve estimates may reduce profitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A downgrade in the Company&#146;s ratings may negatively affect profitability and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(7)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The continued availability of capital may affect the ability to grow;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(8)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s results of operations and financial condition may be adversely affected by general economic and business conditions or adverse capital market conditions that are less
favorable than anticipated;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(9)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A loss of key product distribution relationships could materially affect sales;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(10)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Competition could negatively affect the ability to maintain or increase profitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(11)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in federal income tax law or interpretations of existing tax law could affect profitability and financial condition by making some products less attractive to contractowners and
increasing tax costs of contractowners or the Company;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(12)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Litigation may adversely affect profitability and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(13)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Changes in regulation in the United States and recent regulatory investigations may reduce profitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(14)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(15)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A failure of the Company&#146;s operating systems or a compromise of security with respect to operating systems or portable electronic devices could adversely affect the Company&#146;s
results of operations and financial condition;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(16)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Reinsurance subjects the Company to the credit risk of reinsurers and may not be adequate to protect against losses arising from ceded reinsurance;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(17)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The occurrence of natural or man-made disasters may adversely affect the Company&#146;s results of operations and financial condition; and</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(18)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The occurrence of unidentified or unanticipated risks could negatively affect the Company&#146;s business or result in losses.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Investors are also directed to consider the risks and uncertainties discussed in this</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Item 2. and in Item 1A. of Part II contained herein, as well as in other documents filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by the Company with the SEC. Except as may be required by the federal securities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">laws, the Company disclaims any obligation to update forward-looking information.</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Basis of Presentation</FONT></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a stock life insurance company domiciled in the State of Iowa and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides financial products and services in the United States. ING USA is authorized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to conduct its insurance business in all states, except New York, and in the District of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Columbia.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">25</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(&#147;Lion&#148; or &#147;Parent&#148;), which is an indirect, wholly-owned subsidiary of ING Groep</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">N.V. (&#147;ING&#148;).  ING is a global financial services holding company based in The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Netherlands, with American Depository Shares listed on the New York Stock</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exchange under the symbol &#147;ING&#148;.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company has one operating segment.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Critical Accounting Policies</FONT></B></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There have been no material changes to the Company&#146;s critical accounting policies</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">since the filing of the Company&#146;s 2007 Annual Report on Form 10-K.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Results of Operations</FONT></B></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Overview</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Products offered by the Company include immediate and deferred variable and fixed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities, designed to address individual customer needs for tax-advantaged savings,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">retirement needs, and wealth-protection concerns, and guaranteed investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts and funding agreements (collectively referred to as &#147;GICs&#148;), sold primarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to institutional investors and corporate benefit plans.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company derives its revenue mainly from (a) fee income generated on variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets under management (&#147;AUM&#148;), (b) investment income earned on fixed AUM,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and (c) certain other management fees. Fee income is primarily generated from</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">separate account assets supporting variable options under variable annuity contract</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">investments, as designated by contractowners. Investment income from fixed AUM</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is mainly generated from annuity products with fixed investment options and GICs.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s expenses primarily consist of (a) interest credited and other benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to contractowners, (b) amortization of deferred policy acquisition costs (&#147;DAC&#148;) and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of business acquired (&#147;VOBA&#148;), (c) expenses related to the selling and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">servicing of the various products offered by the Company, and (d) other general</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">business expenses.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Economic Analysis</FONT></I></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The current economic environment presents challenges for the Company and the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance industry.  The Company&#146;s financial results continue to be affected by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">economic trends.</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity market performance affects the Company, as fee revenue from variable AUM</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">is generally impacted by equity market performance as well as other factors. While</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the decline in equity market performance presented challenges for the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable products, the increase in sales during 2007 and the first quarter of 2008</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">favorably impacted variable AUM in 2008, as compared to the first quarter of 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The changing market interest rate environment during the first quarter of 2008, in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">combination with the slow economic growth resulted in a substantial increase in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unrealized and realized losses in 2008, as compared to the same period for 2007.</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Results of Operations</FONT></I></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s results of operations for the three months ended March 31, 2008, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes therein, reflected higher realized capital losses and increased amortization of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">DAC and VOBA driven by unfavorable market conditions, as well as, higher interest</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">credited and other benefits to contractowners and operating expenses. These losses,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">however, were partially offset by the impact of the adoption of FAS 157 and by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">positive product experience as a result of increased AUM, primarily driven by higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales of variable annuity products during 2007 and the first quarter of 2008 and a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">higher block of business in force.</FONT></TD></TR></TABLE>
</P>
<IMG src="form10q_ingusa-033108x27x1.jpg" border=0>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">27</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Revenues</FONT></I></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total revenue for the three months ended March 31, 2008, decreased primarily due to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increases in Net realized capital losses, partially offset by increases in Net investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">income and Fee income.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net investment income</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> for the three months ended March 31, 2008, increased as the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result of higher average assets supporting fixed AUM and surplus, which reflects a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">larger block of GICs, and fixed indexed annuities in force.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The increase in </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fee income</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> for the three
months ended March 31, 2008, reflected an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increase in average variable AUM, primarily driven by higher sales of variable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">annuities in 2007 and the first quarter of 2008.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net realized capital losses</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased for the three months ended March 31, 2008,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily due to higher losses on derivatives and fixed maturities. The losses on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivatives were related to interest rate swaps and driven by the decline of LIBOR</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates. The losses on fixed maturities for the three months ended March 31, 2008, were</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to other-than-temporary impairments driven by the slow economic environment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and widening of credit spreads in the first quarter of 2008.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Benefits and Expenses</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total benefits and expenses for the three months ended March 31, 2008, increased</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily due to higher Net amortization of DAC and VOBA, Interest credited and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other benefits to contractowners and Operating expenses.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The </FONT><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net amortization of DAC and VOBA</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">
increased for the three months ended</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2008, reflecting lower estimated future gross profits driven by the decline</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in equity market performance.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Interest credited and other benefits to contractowners</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased for the three months</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended March 31, 2008, primarily driven by the rise in interest credited on GICs</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mainly attributable to higher average fixed AUM, as well as an increase in reserves</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for variable annuity guarantees, primarily due to the decline in equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance and due to a change in the discount rate on reserves. These increases</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were partially offset by the impact of the adoption of FAS 157 and by a decrease in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves on fixed indexed annuities due to unfavorable equity market performance in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the first quarter of 2008.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Operating expenses</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased for the three months ended March 31, 2008, primarily</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to higher non-deferred asset-based commissions and marketing expenses, as well</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as the continued growth of the business.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">28</FONT></TD></TR></TABLE>
</P>

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<A name="page_29"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income Taxes</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Income tax (benefit) expense</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> decreased for the three months ended March 31, 2008,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily due to lower Income before taxes relative to the deduction allowed for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">dividends received.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Financial Condition</FONT></B><BR>
<BR>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Investments</FONT></I></B><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investment Strategy</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s investment strategy focuses on diversification by asset class.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company seeks to achieve economic diversification, while reducing overall credit</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">risk and liquidity risks. In addition, the Company seeks to mitigate the impact of cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">flow variability from embedded options within certain investment products, such as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prepayment options and interest rate options embedded in collateralized mortgage</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligations and call options embedded in corporate bonds.  The investment</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">management function is centralized under ING Investment Management LLC, an</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">affiliate, pursuant to an investment advisory agreement.  Separate portfolios are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">established for groups of products with similar liability characteristics within the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Fair Value Measurements</FONT></I></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fair values of Level 3 assets and liabilities are determined using prices or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">valuation techniques that require inputs that are both unobservable and significant to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the overall fair value measurement. These valuations, whether derived internally or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obtained from a third party, use critical assumptions that are not widely available to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimate market participant expectations in valuing the asset or liability. In light of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the methodologies employed to obtain the fair values of financial assets and liabilities</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">classified as Level 3, additional information is presented below with particular</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">attention addressed to changes in derivatives, fixed indexed annuities (&#147;FIA&#148;), and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed minimum withdrawal and accumulation benefits (&#147;GMWB&#148; and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;GMAB&#148;) due to their impacts on current Net income.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">29</FONT></TD></TR></TABLE>
</P>

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<A name="page_30"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table summarizes the changes in fair value of the Company&#146;s Level 3</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets and liabilities as of March 31, 2008.</FONT></TD></TR></TABLE>
</P>
<IMG src="form10q_ingusa-033108x30x1.jpg" border=0>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The amounts in this line are included in Accumulated other comprehensive income (loss) on the Condensed Balance Sheets.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations and contains unrealized gains (losses) on Level 3 derivatives held at March
31, 2008. All gains and losses on Level 3 assets are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately by security.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(4)</FONT></SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">These amounts are included in Interest credited and other benefits to contractowners on the Condensed Statements of Operations. All gains and losses on Level 3 liabilities are
classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The decline in the fair values of FIAs was partially offset by a decline in the value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Level 3 derivatives that hedge the FIA exposure and an increase in the reserves for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMWB/GMABs.  The gains on the FIA embedded derivatives and the partially</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">offsetting losses on GMWBs and GMABs were primarily driven by unfavorable</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity market performance and changes in interest rates during the first quarter of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2008.  In addition, derivatives experienced losses related to unfavorable equity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">market performance, resulting in a decline in the fair values of these assets.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">30</FONT></TD></TR></TABLE>
</P>

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<A name="page_31"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Portfolio Composition</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table presents the investment portfolio at March 31, 2008 and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Carrying Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Carrying Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale,</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=23% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=9% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=20% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,096.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">81.7%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">224.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.8%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">211.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.8%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Short-term investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">162.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">188.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.7%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,849.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">14.1%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,701.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.3%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Policy loans</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">154.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.6%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">741.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.7%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">848.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total investments</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=23% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27,227.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=9% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=20% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 27,881.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Fixed Maturities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale, were as follows as of March 31, 2008.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gross</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Gains</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Losses</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=1 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 42.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 44.9</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">89.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">92.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">State, municipalities, and political subdivisions</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">46.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">45.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate securities:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Public utilities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,442.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">30.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">13.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,460.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,892.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">104.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">142.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6,855.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total U.S. corporate securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,335.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">135.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">155.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,316.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign securities</FONT><SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Government</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">522.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">529.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,258.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">51.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">104.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,205.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total foreign securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,780.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">68.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">114.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,734.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,897.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">74.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">376.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,595.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,833.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">194.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,644.7</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,825.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">207.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,622.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,850.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">295.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,049.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22,096.0</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
 &nbsp; &nbsp;<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,009.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">9.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">991.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,840.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 285.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=13% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,021.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,105.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=39% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollar denominated.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">31</FONT></TD></TR></TABLE>
</P>

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<A name="page_32"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale, were as follows as of December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<IMG src="form10q_ingusa-033108x32x1.jpg" border=0>
<BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">It is management&#146;s objective that the portfolio of fixed maturities be of high quality</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and be well diversified by market sector.  The fixed maturities in the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">portfolio are generally rated by external rating agencies and, if not externally rated,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are rated by the Company on a basis believed to be similar to that used by the rating</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agencies. The average quality rating of the Company's fixed maturities portfolio was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">AA- at March 31, 2008 and December 31, 2007, respectively. Ratings are calculated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">using a rating hierarchy that considers S&amp;P, Moody&#146;s Investor&#146;s Service, Inc., and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">internal ratings.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_33"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities by quality rating category, including securities pledged to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">creditors, were as follows at March 31, 2008 and December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<IMG src="form10q_ingusa-033108x33x1.jpg" border=0>
<BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">95.9% and 95.8% of the fixed maturities were invested in securities rated BBB and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">above (Investment Grade) at March 31, 2008 and December 31, 2007, respectively.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities rated BB and below (Below Investment Grade) may have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">speculative characteristics, and changes in economic conditions or other</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">circumstances are more likely to lead to a weakened capacity of the issuer to make</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">principal and interest payments than is the case with higher rated fixed maturities.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total fixed maturities, including securities pledged to creditors, by market sector</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were as follows at March 31, 2008 and December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=15% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">% of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=8% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=15% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=7% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 44.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 19.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">92.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">86.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate, state, and municipalities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,361.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">37.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,230.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.0%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,734.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.9%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,794.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.7%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,595.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">20.8%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4,955.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.8%</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,644.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.5%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,843.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.9%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,622.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7.3%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,844.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.1%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=41% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,096.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=8% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 22,776.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=7% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">100.0%</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">33</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The amortized cost and fair value of fixed maturities, excluding securities pledged, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of March 31, 2008, are shown below by contractual maturity. Actual maturities may</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">differ from contractual maturities as securities may be restructured, called, or prepaid.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Fair</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=26% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Value</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Due to mature:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=26% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
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	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">One year or less</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 570.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 572.8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After one year through five years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,903.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5,980.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After five years through ten years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,619.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3,580.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After ten years</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,201.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2,098.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
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	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,730.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8,240.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=50% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,825.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,622.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
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	<TD align=left width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less: securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1,009.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">991.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
	<TD>
	</TD>
	<TD>
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	<TD align=left width=50% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, excluding securities pledged</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=26% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,840.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 21,105.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
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	<TD>
	</TD>
	<TD>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Subprime Mortgage Exposure</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Since the third quarter of 2007, credit markets have become more turbulent amid</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">concerns about subprime mortgages and collateralized debt obligations (&#147;CDOs&#148;).</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">This in turn has resulted in a general widening of credit spreads, reduced price</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">transparency, reduced liquidity, increased rating agency downgrades and increased</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">volatility across certain markets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">To date, this market disruption has had a limited impact on the Company, which does</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">not originate or purchase subprime or Alt-A whole-loan mortgages.  Subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lending is the origination of loans to customers with weaker credit profiles.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company defines Alt-A Loans to include residential mortgage loans to customers</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">who have strong credit profiles but lack some element(s), such as documentation to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">substantiate income.  Commencing in the fourth quarter of 2007, the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expanded its definition of Alt-A loans to include residential mortgage loans to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">borrowers that would otherwise be classified as prime but whose loan structure</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">provides repayment options to the borrower that increase the risk of default. Further,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">during the fourth quarter, the industry coalesced around classifying any residential</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgage backed securities (&#147;RMBS&#148;) not clearly identifiable as prime or subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">into the Alt-A category and the Company is following that lead.  The following</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">summarizes the Company&#146;s exposure to subprime and Alt-A mortgages as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2008 and December 31, 2007.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, the fair value and gross unrealized losses related to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s exposure to subprime mortgages was &#36;760.7 and &#36;155.8, respectively,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">representing 2.8% of total investments. 89.5% of these securities were rated &#147;AAA&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">or &#147;AA&#148;. As of December 31, 2007, the fair value and gross unrealized losses related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the Company&#146;s exposure to subprime mortgages was &#36;879.3 and &#36;86.4,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, representing 3.2% of total investments. This exposure was primarily in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the form of asset-backed securities (&#147;ABS&#148;) structures, collateralized by subprime</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">residential mortgages (&#147;ABS Home Equity&#148;) and one CDO position backed by ABS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Home Equity. Of the total subprime residential mortgage backed securities portfolio</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">34</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">as of March 31, 2008, 38.3% were issued in 2007, 10.8% in 2006, and 50.9% in 2005</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and prior. Of the total subprime residential mortgage backed securities portfolio as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, 28.0% were issued in 2007, 11.5% in 2006, and 60.5% in 2005</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and prior. The ABS CDO had no unrealized loss and fair value of &#36;0.2 at March 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2008. At December 31, 2007, the ABS CDO has no unrealized loss and fair value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;0.8.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, the Company&#146;s exposure to Alt-A mortgages was concentrated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in RMBS, and the fair value and gross unrealized losses aggregated to &#36;1.5 billion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;322.9, respectively, representing 5.6% of total investments at March 31, 2008.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">99.9% of these securities were AAA-rated.  As of December 31, 2007, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s exposure to Alt-A mortgages was concentrated in RMBS, and the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value and gross unrealized losses aggregated to &#36;1.9 billion and &#36;69.9, respectively,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">representing 6.8% of total investments. 99.9% of these securities were AAA-rated.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, the Alt-A mortgage backed securities portfolio included</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.9% issued in 2007, 22.3% in 2006, and 44.8% in 2005 and prior.  As of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, the Alt-A mortgage backed securities portfolio included 36.2%</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued in 2007, 24.0% in 2006, and 39.8% in 2005 and prior.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, total RMBS (including CMO and ABS structures) was &#36;4.6</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion with 16.6% consisting of subprime residential mortgage backed securities and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">33.0% consisting of Alt-A mortgage backed securities. As of December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">total RMBS (including CMO and ABS structures) was &#36;4.9 billion with 17.8%</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">consisting of subprime residential mortgage backed securities and 38.0% consisting</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Alt-A mortgage backed securities. The RMBS portfolio is of high credit quality</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with 100.0% of the portfolio rated AAA and 99.9% of the portfolio rated AAA as of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2008 and December 31, 2007, respectively. Further, as of March 31, 2008</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and December 31, 2007, 6.7% and 1.0%, respectively, of the RMBS portfolio was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issued by the Government National Mortgage Association (&#147;GNMA&#148; or &#147;Ginnie</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mae&#148;), the Federal National Mortgage Association (&#147;FNMA&#148; or &#147;Fannie Mae&#148;), or</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Federal Home Loan Mortgage Corporation (&#147;FHLMC&#148; or &#147;Freddie Mac&#148;), which</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are government agencies or instrumentalities that guarantee the credit quality of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">underlying mortgage pools.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Commercial Mortgage-backed and Other Asset-backed Securities</FONT></I><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">While the delinquency rates on commercial mortgages have been stable in recent</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">years, commercial real estate rents and property values have recently become more</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">volatile. In addition, there are growing concerns with consumer loans as a result of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the current economic environment, which includes lower family income and higher</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">unemployment rates.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, and December 31, 2007, the fair value of the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed securities (&#147;CMBS&#148;) totaled &#36;3.6 billion and &#36;3.8</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion, respectively, and Other ABS, excluding subprime exposure, totaled &#36;860.5</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;984.1, respectively.  CMBS investments represent pools of commercial</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgages that are broadly diversified across property types and geographical areas.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, the Other ABS was also broadly diversified both by type and</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">35</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">issuer with credit card receivables, collateralized loan obligations and automobile</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">receivables comprising 40.6%, 31.0% and 13.4%, respectively, of total Other ABS,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">excluding subprime exposure. As of December 31, 2007, the Other ABS was broadly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">diversified both by type and issuer with credit card receivables, collateralized loan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligations and automobile receivables comprising 41.3%, 29.7% and 14.3%,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, of total Other ABS, excluding subprime exposure.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following tables summarize the Company&#146;s exposure to CMBS and Other ABS</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">holdings by credit quality and vintage year as of March 31, 2008:</FONT></TD></TR></TABLE>
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<IMG src="form10q_ingusa-033108x36x1.jpg" border=0>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Mortgage Loans on Real Estate</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage loans on real estate, primarily commercial mortgage loans, totaled &#36;3,849.5</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;3,701.7 at March 31, 2008 and December 31, 2007, respectively. These loans</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are reported at amortized cost, less impairment write-downs.  If the value of any</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mortgage loan is determined to be impaired (i.e., when it is probable that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company will be unable to collect on all amounts due according to the contractual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">terms of the loan agreement), the carrying value of the mortgage loan is reduced to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">either the present value of expected cash flows from the loan, discounted at the loan&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">effective interest rate, or fair value of the collateral. If the loan is in foreclosure, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">carrying value is reduced to the fair value of the underlying collateral, net of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated costs to obtain and sell. At March 31, 2008 and December 31, 2007, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company had no allowance for mortgage loan credit losses.  The properties</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateralizing mortgage loans are geographically dispersed throughout the United</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">States, with the largest concentration of 24.4% and 24.5% of properties in California</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">at March 31, 2008 and December 31, 2007, respectively.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">36</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



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<A name="page_37"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Unrealized Capital Losses</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital losses in fixed maturities, including securities pledged to creditors,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for Investment Grade (&#147;IG&#148;) and Below Investment Grade (&#147;BIG&#148;) securities by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">duration were as follows at March 31, 2008 and December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<IMG src="form10q_ingusa-033108x37x1.jpg" border=0>
<BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized losses in fixed maturities at March 31, 2008 and December 31, 2007, were</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily related to interest rate movement or changes in credit spreads to mortgage</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and other asset-backed securities. Mortgage and other asset-backed securities include</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government-backed securities, principal protected securities, and structured</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities, which did not have an adverse change in cash flows. The following table</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">summarizes the unrealized capital losses by duration and reason, along with the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of fixed maturities, including securities pledged to creditors, in unrealized</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital loss positions at March 31, 2008 and December 31, 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and Less Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate or spread widening</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 113.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 66.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 91.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 271.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage and other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">234.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">418.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">125.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">778.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 347.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 485.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 217.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,049.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 6,779.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,153.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 2,513.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 12,445.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=11% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Interest rate or spread widening</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 37.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 49.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 62.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 149.7</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Mortgage and other asset-backed securities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">73.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">134.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">22.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">230.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 111.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 184.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 85.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 380.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fair value</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 5,322.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,248.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 3,300.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 11,871.0</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">37</FONT></TD></TR></TABLE>
</P>

<HR noshade align="center" width="100%" size=2>



<!--$$/page=-->
<A name="page_38"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Unrealized capital losses in fixed maturities, including securities pledged to creditors,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by market sector and duration were as follows at March 31, 2008 and December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and Less Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Loss</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate, state, and municipalities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">70.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">38.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">47.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">156.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">41.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">44.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">114.1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">136.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">216.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">376.1</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">69.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">59.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">194.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">143.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">207.6</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 347.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 485.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 217.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 1,049.5</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Less Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">More Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Six Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">and Less Than</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Total</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Twelve Months</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Unrealized</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Below</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Capital</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Amortized Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Cost</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Loss</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. government agencies and authorities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 0.3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate, state, and municipalities</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">34.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">82.9</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">21.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">17.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">66.5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">51.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">29.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">85.8</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commercial mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">36.4</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">18.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">78.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">11.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">108.3</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total unrealized capital loss</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 111.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 184.0</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 85.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 380.2</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Of the unrealized losses aged more than twelve months, the average market value of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the related fixed maturities was 91.7% of the average book value as of March 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2008.  In addition, this category includes 690 securities, which have an average</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">quality rating of AA-.  No other-than-temporary impairment loss was considered</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">necessary for these fixed maturities as of March 31, 2008.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Other-Than-Temporary Impairments</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company analyzes the general account investments to determine whether there</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">has been an other-than-temporary decline in fair value below amortized cost basis.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management considers the length of time and the extent to which the fair value has</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">been less than amortized cost, the issuer&#146;s financial condition and near-term</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">prospects, future economic conditions and market forecasts, interest rate changes, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s intent to retain the investment for a period of time sufficient to allow</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for recovery in fair value.  If it is probable that all amounts due according to the</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">38</FONT></TD></TR></TABLE>
</P>

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<A name="page_39"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractual terms of an investment will not be collected, an other-than-temporary</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">impairment is considered to have occurred.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">In addition, the Company invests in asset-backed securities.  Determination of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">required impairment is based on the analysis discussed in the preceding paragraph, as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">well as credit risk and the possibility of significant prepayment risk that restricts the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s ability to recover the investment. An impairment is recognized if the fair</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of the security is less than book value and there has been an adverse change in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flow since the last remeasurement date.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">When a decline in fair value is determined to be other-than-temporary, the individual</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">security is written down to fair value, and the loss is recorded in Net realized capital</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains (losses).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The following table identifies the Company&#146;s other-than-temporary impairments by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">type for the three months ended March 31, 2008 and 2007.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=33% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; - </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26.9</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">50</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1)</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">15.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other asset-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">27.6</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Limited partnerships</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 110.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">105</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 8.7</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Primarily U.S. dollar denominated.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=14% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=19% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The above schedule includes &#36;50.8 and &#36;0.2 in other-than-temporary write-downs for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the three months ended March 31, 2008 and 2007, respectively, related to the analysis</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of credit risk, the possibility of significant prepayment risk, and severity and duration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of unrealized losses. The remaining write-downs are related to investments that the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company does not have the intent to retain for a period of time sufficient to allow for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">recovery in fair value. The following table summarizes these write-downs by type for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the three months ended March 31, 2008 and 2007.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">39</FONT></TD></TR></TABLE>
</P>

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<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=35% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=37% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD colspan=3>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
	<TD>
	</TD>
	<TD>
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	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">No. of</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Impairment</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. Treasuries</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; -</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">- &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">- </FONT><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. corporate</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">19.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">26</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Foreign</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">39.8</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Residential mortgage-backed</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Total</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=18% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; 59.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=17% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">65 &#36;</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">8.5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=10% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">35</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=29% nowrap>
<SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">* </FONT></SUP><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Less than &#36;0.1.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=16% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=10% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company may sell securities during the period in which fair value has declined</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">below amortized cost for fixed maturities or cost for equity securities.  In certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situations new factors, including changes in the business environment, can change the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s previous intent to continue holding a security.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net Realized Capital Gains (Losses)</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital gains (losses) are comprised of the difference between the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">amortized cost of investments and proceeds from sale, and redemption, as well as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">losses incurred due to the other-than-temporary impairment of investments and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changes in fair value of derivatives.  The cost of the investments on disposal is</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">determined based on specific identification of securities. Net realized capital gains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(losses) on investments were as follows for the three months ended March 31, 2008</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 2007. </FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=52% nowrap colspan=3>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Three Months Ended March 31,</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2008</FONT></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">2007</FONT></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fixed maturities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (47.9)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (8.0)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equity securities, available-for-sale</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">0.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">-</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Derivatives</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(223.0)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(52.2)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(0.6)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1.7)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (271.1)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (61.9)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">After-tax net realized capital losses</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=31% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (176.2)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=19% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36; (40.2)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=2>
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Net realized capital losses</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif"> increased for the three months ended March 31, 2008,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">primarily due to higher losses on derivatives and fixed maturities. The losses on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivatives are related to interest rate swaps and driven by the decline of LIBOR</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">rates.  The losses on fixed maturities for the three months ended March 31, 2008,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">were due to other-than-temporary impairments driven by the slow economic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">environment and widening of credit spreads in the first quarter of 2008.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">40</FONT></TD></TR></TABLE>
</P>

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<A name="page_41"></A>

<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Liquidity and Capital Resources</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Liquidity is the ability of the Company to generate sufficient cash flows to meet the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash requirements of operating, investing, and financing activities.</FONT></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Sources and Uses of Liquidity</FONT></I></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s principal sources of liquidity are annuity product charges, GIC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">deposits, investment income, proceeds from the maturing and sale of investments,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">proceeds from debt issuance, and capital contributions. Primary uses of these funds</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">are payments of commissions and operating expenses, interest and premium credits,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">payments under guaranteed death and living benefits, investment purchases,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repayment of debt, and contract maturities, withdrawals, and surrenders.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s liquidity position is managed by maintaining adequate levels of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liquid assets, such as cash, cash equivalents, and short-term investments.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Asset/liability management is integrated into many aspects of the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations, including investment decisions, product development, and determination</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">of crediting rates.  As part of the risk management process, different economic</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">scenarios are modeled, including cash flow testing required for insurance regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">purposes, to determine that existing assets are adequate to meet projected liability</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash flows. Key variables in the modeling process include interest rates, anticipated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner behavior, and variable separate account performance. Contractowners</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">bear the investment risk related to variable annuity products, subject to the minimum</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed death and living benefits included in these contracts.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The fixed account liabilities are supported by a general account portfolio, principally</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">composed of fixed rate investments with matching duration characteristics that can</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">generate predictable, steady rates of return. The portfolio management strategy for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the fixed account considers the assets available-for-sale.  This strategy enables the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company to respond to changes in market interest rates, prepayment risk, relative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">values of asset sectors and individual securities and loans, credit quality outlook, and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">other relevant factors. The objective of portfolio management is to maximize returns,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">taking into account interest rate and credit risk, as well as other risks.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s asset/liability management discipline includes strategies to minimize</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">exposure to loss as interest rates and economic and market conditions change.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Liquidity and Capital Resources</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Additional sources of liquidity include borrowing facilities to meet short-term cash</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">requirements that arise in the ordinary course of business. The Company maintains</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the following agreements:</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A reciprocal loan agreement with ING America Insurance Holdings, Inc. (&#147;ING AIH&#148;), an affiliate, whereby either party can borrow from the other up to 3.0% of the Company&#146;s
statutory admitted assets as of the prior December 31. As of March 31, 2008 and December 31, 2007, the Company had no amounts due to or due from ING AIH under the reciprocal loan agreement.</FONT>	</TD>
</TR>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A &#36;100.0 uncommitted, perpetual revolving note facility with the Bank of New York. As of March 31, 2008 and December 31, 2007, the Company had no amounts outstanding under the revolving
note facility.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A &#36;75.0 uncommitted line-of-credit agreement with PNC Bank. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to ING AIH and its affiliates
of &#36;75.0. As of March 31, 2008 and December 31, 2007, the Company had no amounts outstanding under the line- of-credit agreement.</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A &#36;100.0 uncommitted line-of-credit agreement with Svenska Handelsbanken AB (Publ.), effective June 2, 2006. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings
outstanding at anytime to ING AIH and its affiliates of &#36;100.0. As of March 31, 2008 and December 31, 2007, the Company had no amounts outstanding under the line-of-credit agreement.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Management believes that these sources of liquidity are adequate to meet the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s short-term cash obligations.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a member of the Federal Home Loan Bank of Des Moines (&#147;FHLB&#148;)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and is required to maintain a collateral deposit that backs funding agreements issued</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the FHLB.  As of March 31, 2008 and December 31, 2007, the Company had</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;3,043.9 and &#36;2,898.7, respectively, in non-putable funding agreements, including</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">accrued interest, issued to FHLB. As of March 31, 2008 and December 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">assets with a carrying value of approximately &#36;3,207.3 and &#36;3,270.1, respectively,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">collateralized the funding agreements issued to the FHLB.  Assets pledged to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">FHLB are included in Fixed maturities, available-for-sale, on the Condensed Balance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sheets.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Capital Contributions and Distributions</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For the three months ended March 31, 2008, the Company received a &#36;1.1 billion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital contribution from its Parent. During the three months ended March 31, 2007,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company did not receive any capital contributions from its Parent.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">During the three months ended March 31, 2008 and 2007, the Company did not pay</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">any dividends or return of capital distributions to its Parent.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">42</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Financial Guarantees</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company owns a 3-year credit-linked note arrangement, whereby the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will reimburse the guaranteed party upon payment default of the referenced</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation. Upon such default, the Company will reimburse the guaranteed party for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the loss under the reference obligation, and the Company receives that reference</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation in settlement.  The Company can seek recovery of any losses under the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreements by sale or collection of the received reference obligation.  As of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2008, the maximum liability of the Company under the guarantee was</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#36;32.5.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Cash Collateral</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Under the terms of the Company&#146;s Over-The-Counter Derivative International Swaps</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Derivatives Association, Inc. Agreements (&#147;ISDA Agreements&#148;), the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">may receive from, or deliver to, counterparties, collateral to assure that all terms of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the ISDA Agreements will be met with regard to the Credit Support Annex (&#147;CSA&#148;).</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The terms of the CSA call for the Company to pay interest on any cash received equal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to the Federal Funds rate. As of March 31, 2008, the Company delivered &#36;65.8 of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cash collateral, which was included in Short-term investments under securities loan</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">agreement, including collateral delivered, on the Condensed Balance Sheets. As of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">December 31, 2007, the Company held &#36;11.5 of cash collateral, which was included</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in Collateral held, including payables under securities loan agreement on the Balance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Sheets and was reinvested in short-term investments.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Facultative Reinsurance Agreement</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company is a party to a Facultative Coinsurance Agreement with its affiliate,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life of Denver Insurance Company (&#147;Security Life&#148;) effective August 20,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999.  Under the terms of this agreement, the Company facultatively cedes to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Security Life, from time to time, certain GICs on a 100% coinsurance basis.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of GIC reserves ceded by the Company under this agreement was &#36;2.4 billion</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;2.3 billion at March 31, 2008 and December 31, 2007, respectively.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company utilizes this reinsurance facility primarily for diversification and asset-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability management purposes in connection with this business, which is facilitated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">by the fact that Security Life is also a major GIC issuer. Senior management of the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company has established a current maximum of &#36;4.0 billion for GIC reserves ceded</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">under this agreement.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Minimum Guarantees</FONT></I></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Variable annuity contracts containing minimum guaranteed death and living benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">expose the Company to equity risk. A decrease in the equity markets may cause a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">decrease in the account values, thereby increasing the possibility that the Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">may be required to pay amounts to contractowners due to guaranteed death and living</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits. An increase in the value of the equity markets may increase account values</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">for these contracts, thereby decreasing the Company&#146;s risk associated with guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">death and living benefits.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company&#146;s variable annuities offer one or more of the following guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">death and living benefits:</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Minimum Death Benefits (&#147;GMDBs&#148;)</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: </FONT></TD></TR></TABLE>
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	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Standard - Guarantees that, upon death, the death benefit will be no less than the premiums paid by the contractowner, adjusted for any contract withdrawals.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Ratchet - Guarantees that, upon the death of the annuitant, the death benefit will be no less than the greater of (1) Standard or (2) the maximum contract anniversary (or quarterly) value of
the variable annuity, adjusted for contract withdrawals.</FONT>	</TD>
</TR>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rollup (7.0% or 5.5% Solution) - Guarantees that, upon death, the death benefit will be no less than the aggregate premiums paid by the contractowner accruing interest at 7.0% or 5.5% per
annum, adjusted for contract withdrawals, which may be subject to a maximum cap on the rolled up amount. (The Company has discontinued this option for new sales.)</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Combo (Max 7) - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.</FONT>	</TD>
</TR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For contracts issued prior to January 1, 2000, most contracts with enhanced death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefit guarantees were reinsured to third party reinsurers to mitigate the risk</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">produced by such guaranteed death benefits. For contracts issued after December 31,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999, the Company instituted an equity hedging program in lieu of reinsurance. The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity hedging program is based on the Company entering into derivative positions to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">offset exposures to guaranteed minimum death benefits due to adverse changes in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">equity markets.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008 and December 31, 2007, the guaranteed value of these death</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits in excess of account values was estimated to be &#36;5.0 billion and &#36;2.7 billion,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respectively, before reinsurance. The increase was primarily driven by the decrease</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the account values of contractowners due to unfavorable equity market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">performance in the first quarter of 2008.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008, the guaranteed value of minimum guaranteed death benefits in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">excess of account values, net of reinsurance, was estimated to be &#36;3.9 billion, of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which &#36;1.6 was projected to be covered by the Company&#146;s equity hedging program.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">At December 31, 2007, the guaranteed value of minimum guaranteed death benefits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">in excess of account values, net of reinsurance, was estimated to be &#36;1.8 billion, of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">which &#36;537.6 was projected to be covered by the Company&#146;s equity hedging</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">program. As of March 31, 2008 and December 31, 2007, the Company recorded a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">liability of &#36;283.5 and &#36;209.4, respectively, net of reinsurance, representing the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimated net present value of the Company&#146;s future obligation for guaranteed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">minimum death benefits in excess of account values. The liability increased mainly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to the accumulation of fees used to fund the reserve in the first quarter of 2008,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">higher future projected benefits in excess of account values, and a change in the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">discount rate on reserves.</FONT></TD></TR></TABLE>
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<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Guaranteed Living Benefits</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">:</FONT></TD></TR></TABLE>
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<TABLE border=0 cellspacing=0 cellpadding=0>
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	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Income Benefit - Guarantees a minimum income payout, exercisable each contract anniversary on or after a specified date, in most cases the 10th rider anniversary. This
type of living benefit is the predominant selection in the Company&#146;s sales of variable annuities.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Withdrawal Benefit (&#147;GMWB&#148;) - Guarantees annual withdrawals for life of a percentage of premiums received during the growth phase (before taking withdrawals and
after age 60). The percentage may vary by age at first withdrawal, depending on the base annuity contract. For certain versions, before withdrawals begin there are annual step-up (for 10 years) and quarterly ratchet features that may increase the
amount used to calculate the annual withdrawal amount. Other versions have a quarterly ratchet feature only.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">A joint life-time withdrawal benefit option is available to include coverage for spouses. Most versions of the withdrawal benefit have reset and/or step up features that may increase the
guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0% of eligible premiums may be made until eligible premiums previously paid by the contractowner are
returned, regardless of account value performance. Asset allocation requirements apply at all times where withdrawals are guaranteed for life.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
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<FONT face="Wingdings-Regular,WingDings">&#167;</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Minimum Accumulation Benefit - Guarantees that the account value will be at least 100% of the eligible premiums paid by the contractowner after 10 years, net of any contract
withdrawals (GMAB 10). In the past, the Company offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contractowners after 20 years (GMAB 20).</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">All living benefits are covered by the Company&#146;s equity hedging program.</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">45</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2008 and December 31, 2007, the guaranteed value of these living</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">benefits in excess of account values was &#36;2,068.8 and &#36;506.5, respectively.  The</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">increase was primarily driven by the decrease in account values of contractowners</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">due to unfavorable equity market performance in the first quarter of 2008.  As of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2008 and December 31, 2007, the Company recorded a liability of &#36;257.8</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#36;149.3, respectively, representing the estimated net present value of its future</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">obligation for living benefits in excess of account values.  The liability increased</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mainly due to the accumulation of fees used to fund the reserve in the first quarter of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2008, as well as higher future projected benefits in excess of account values, and a</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">change in the discount rate on reserves.</FONT><BR>
<BR>
<I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Equity Hedging Program</FONT></I><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">: In order to hedge equity risk associated with GMDBs and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">guaranteed living benefits, the Company enters into futures positions on various</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">public market equity indices chosen to closely replicate contractowner variable fund</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">returns. The Company uses market consistent valuation techniques to establish its</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">derivative position and to rebalance the derivative positions in response to market</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">fluctuations. One aspect of the hedging program is designed to offset changes related</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">to equity experience in the liability and to pay excess claims not covered by the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">contractowner account value. The Company also administers a hedging program that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">mitigates both equity risk and equity volatility risk associated with its Principal Guard</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">GMWB product issued in 2005 and beyond. This hedge strategy primarily involves</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">entering into put options.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Other risks posed by market conditions, such as interest rate risk and the majority of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the Company&#146;s equity volatility risk, and risks posed by contractowner experience,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">such as surrender and mortality experience deviations, are not explicitly mitigated by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">this program. In addition, certain funds, where there is no replicating market index</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and where hedging is not appropriate, are excluded from the program.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">For those risks addressed by the equity hedging program, the Company is exposed to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the risk that the market indices will not adequately replicate actual contractowner</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">variable fund growth. Any differences between actual results and the market indices</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">result in income volatility.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Recently Adopted Accounting Standards</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(See the Recently Adopted and New Accounting Standards footnotes to the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">condensed financial statements.)</FONT></TD></TR></TABLE>
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<TABLE><TR><TD width=174>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">46</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Legislative and Regulatory Initiatives</FONT></B></TD></TR></TABLE>
</P>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Legislative proposals, which have been or are being considered by Congress, include</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">repealing/modifying the estate tax, reducing the taxation on annuity benefits,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">changing the tax treatment of insurance products relative to other financial products,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and changing life insurance company taxation. Some of these proposals, if enacted,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">could have a material adverse effect on life insurance, annuity, and other retirement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">savings product sales, while others could have a material beneficial effect. There are</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">no indications at the present time, however, that Congress will enact tax changes that</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">will adversely affect the Company&#146;s products in 2008. The SEC has a regulatory</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">initiative underway to improve fee disclosure in financial products and legislative</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">proposals on financial product fee disclosure may also be considered by Congress as</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">it undertakes a review of fee disclosures in the defined contribution plan arena.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">However, the timing and content of legislative or regulatory action to change fee</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosure requirements are uncertain at this time. The IRS and the Treasury have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">published final regulations, effective in 2009, that update and consolidate the rules</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">applicable to 403(b) tax deferred annuity arrangements. The final regulations impose</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">broad written plan document and operational compliance requirements on all 403(b)</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">plan sponsors and contain new restrictions on annuity exchanges, which have the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">potential to adversely impact the Company&#146;s 403(b) annuity business.</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">47</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 4. Controls and Procedures</FONT></B></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company&#146;s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company&#146;s current disclosure controls and procedures are effective in ensuring that material information relating to the Company required to be
disclosed in the Company&#146;s periodic SEC filings is made known to them in a timely manner.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There has not been any change in the internal controls over financial reporting of the Company that occurred during the period covered by this report that has materially affected or is
reasonably likely to materially affect these internal controls.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">48</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PART II. OTHER INFORMATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 1.</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Legal Proceedings</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company ("the Company") is involved in</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">threatened or pending lawsuits/arbitrations arising from the normal conduct of</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">business.  Due to the climate in insurance and business litigation/arbitrations, suits</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">against the Company sometimes include claims for substantial compensatory,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">consequential, or punitive damages, and other types of relief.  Moreover, certain</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">claims are asserted as class actions, purporting to represent a group of similarly</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">situated individuals.  While it is not possible to forecast the outcome of such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lawsuits/arbitrations, in light of existing insurance, reinsurance, and established</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reserves, it is the opinion of management that the disposition of such</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">lawsuits/arbitrations will not have a materially adverse effect on the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">operations or financial position.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">As with many financial services companies, the Company and its affiliates have</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">received informal and formal requests for information from various state and federal</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">governmental agencies and self-regulatory organizations in connection with inquiries</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and investigations of the products and practices of the financial services industry. In</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">each case, the Company and its affiliates have been and are providing full</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">cooperation. For information on the focus of such regulatory inquiries and the actions</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">undertaken by ING in connection therewith, see the &#147;Other Regulatory Matters&#148;</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">section of &#147;Management&#146;s Narrative Analysis of the Results of Operations and</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Financial Condition&#148; included in the Company&#146;s 2007 Annual Report on Form 10-K</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">filed on March 28, 2008 (SEC File No. 001-32625).</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 1A. Risk Factors</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD width=54>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">There are no material changes from the risk factors set forth under Part I, Item 1A.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Risk Factors&#148; in the Company&#146;s Annual Report on Form 10-K for the fiscal year</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ended December 31, 2007.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 6.</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibits</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">See Exhibit Index on pages 51-53 hereof.</FONT></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">49</FONT></TD></TR></TABLE>
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<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">.</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SIGNATURE</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">duly authorized.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=30% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 12, 2008</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company</FONT></U>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=30% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=67% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Registrant)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Vice President and</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Duly Authorized Officer and Principal Financial Officer)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">50</FONT></TD></TR></TABLE>
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&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=79% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit Index</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit Number</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<B><U><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Description of Exhibit</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Agreement and Plan of Merger dated June 25, 2003, by and between USG</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annuity &amp; Life Company, United Life &amp; Annuity Insurance Company,</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Equitable Life Insurance Company of Iowa and Golden American Life</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company, incorporated by reference in Exhibit 99-8 in the</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s Form 8K filed with the SEC on January 2, 2004 (File No. 333-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">87270).</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Restated Articles of Incorporation Providing for the Redomestication of Golden</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company dated July 2 and 3, 2003, effective January</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1, 2004, incorporated by reference to Company&#146;s 10-K, as filed with the SEC</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on March 29, 2004 (File No. 033-87270).</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment to Articles of Incorporation Providing for the Name Change of</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Golden American Life Insurance Company dated November 20, 2003, effective</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">January 1, 2004, incorporated by reference to the Company&#146;s 10-K, as filed</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on March 29, 2004 (File No. 033-87270).</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.3</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment to Articles of Incorporation Providing for the Change in Purpose</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and Powers of ING USA Annuity and Life Insurance Company dated March 3</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">and 4, 2004, effective March 11, 2004, incorporated by reference to the</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s 10-Q, as filed with the SEC on May 17, 2004 (File No. 033-87270).</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.4</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amended and Restated By-Laws of ING USA Annuity and Life Insurance</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company effective January 1, 2005, incorporated by reference to the</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company&#146;s Form 10-Q, as filed with the SEC on May 13, 2005 (File No. 033-</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">87270).</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.1</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Single Premium Deferred Modified Guaranteed Annuity Contract, Single</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premium Deferred modified Guaranteed Annuity Master Contract, and Single</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Premium Deferred Modified Guaranteed Annuity Certificate - Incorporated</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Pre-Effective Amendment No. 1 to Registration</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form S-1 for Golden American Life Insurance Company as filed</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on February 8, 2002 (File No. 333-67660).</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.2</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Single Premium Deferred Modified Guaranteed Annuity Master Contract and</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Single Premium Deferred Modified guaranteed Annuity Certificate &#150;</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Incorporated by reference to Post-Effective Amendment No. 1 to Registration</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=18% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=79% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form S-1 for Golden American Life Insurance Company, as filed</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=99% colspan=3>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on September 13, 2000 (File No. 333-40596).</FONT>
	</TD>
</TR>
</TABLE><BR>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">51</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.3 Individual Retirement Annuity Rider; Roth Individual Retirement Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rider; Simple Retirement Account Rider; and 403(b) Rider - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Post-Effective Amendment No. 34 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Golden American Life Insurance Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate Account B, as filed with the SEC on April 15, 2003 (File No. 033-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">23351).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.4 403(b) Rider - Incorporated herein by reference to Initial Registration Statement</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on Form S-2 for Golden American Life Insurance Company, as filed with the</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SEC on April 15, 2003 (File No. 333-104547).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.5 Single Premium Deferred Equity Indexed Modified Guaranteed Annuity</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Contract; Single Premium Deferred Modified Guaranteed Annuity Group</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Master Contract; and Single Premium Deferred Equity Indexed Modified</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Guaranteed Annuity Certificate, - Incorporated herein by reference to Pre-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective Amendment No. 1 to Registration Statement on Form S-2, as filed</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">with the SEC on August 13, 2004 (File No. 333-116137).</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.6 Interest in Fixed Account I under Variable Annuity Contracts - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to: Post-Effective Amendment No. 12 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Golden American Life Insurance Company</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate Account B, as filed with the Securities and Exchange Commission on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">April 23, 1999 (File Nos. 033-59261, 811-5626); Incorporated by reference to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Post-Effective Amendment No. 3 to Registration Statement on Form N-4 for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Golden American life Insurance Company, as filed with the SEC on April 23,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1999 (File Nos. 333-28769, 811-5626); and Incorporated by reference to Pre-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective Amendment No. 1 to Registration statement on Form N-4 for Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company Separate Account B, as filed with the SEC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on June 24, 2000 (File Nos. 333-33914, 811-5626). </FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.7 Interests in Fixed Account II under Variable Annuity Contracts - Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Post-Effective Amendment No. 7 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Separate Account B of Golden American Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company as filed with the SEC on October 2, 2000 (File No. 333-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">28679, 811-5626), Incorporated herein by reference to Post-Effective</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment No. 2 to Registration Statement on Form N-4 for Separate Account</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">B of Golden American Life Insurance Company as filed with the SEC on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">October 2, 2000 (File No. 333-30180, 811-5626), Incorporated herein by</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">reference to Post-Effective Amendment No. 5 to Registration Statement on</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Form N-4 for Separate Account B of Golden American Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company as filed with the SEC on April 23, 1999 (File No. 333-28755, 811-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">5626), Incorporated herein by reference to Post-Effective Amendment No. 1 to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Registration Statement on Form N-4 for Separate Account B of Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company as filed with the SEC on April 23, 1999</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(File No. 333-66757, 811-5626), Incorporated herein by reference to Pre-</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">52</FONT></TD></TR></TABLE>
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<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Effective Amendment No. 1 to Registration Statement on Form N-4 for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Separate Account B of Golden American Life Insurance Company as filed with</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the SEC on October 26, 2001 (File No. 333-63692, 811-5626), Incorporated</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">herein by reference to Pre-Effective Amendment No. 1 to Registration</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form N-4 for Separate Account B of Golden American Life</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insurance Company as filed with the SEC on December 11, 2001 (File No.333-</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">70600, 811-5626), Incorporated by reference to Post-Effective Amendment No.</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">1 to Registration Statement on Form N-4 for Golden American Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company Separate Account B, as filed with the SEC on April 16, 2003 (File</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">No. 333-90516, 811-5626) and Incorporated by reference to Pre-Effective</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Amendment No. 1 to Registration Statement on Form N-4 for Golden</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">American Life Insurance Company Separate Account B, as filed with the SEC</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">on July 3, 2003 (File No. 333-101487, 811-5626).</FONT></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.8 Interest in the Guaranteed Account under Variable Annuity Contracts -</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Incorporated herein by reference to Pre-Effective Amendment No. 1 to</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Registration Statement on Form S-2 for Golden American Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company, as filed with the SEC on June 29, 2001 (File No. 333-57212).</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">12.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+ </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Computation of Ratio of Earnings to Fixed Charges, filed herewith.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.1</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+ </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of David A. Wheat pursuant to Section 302 of the Sarbanes-Oxley</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="left">
<TABLE><TR><TD width=95>&nbsp;</TD><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2002.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">31.2</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of Valerie G. Brown pursuant to Section 302 of the Sarbanes-Oxley</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2002.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.1</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of David A. Wheat pursuant to Section 906 of the Sarbanes-Oxley</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2002.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">32.2</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+</FONT></SUP>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Certificate of Valerie G. Brown pursuant to Section 906 of the Sarbanes-Oxley</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 2002.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=17% nowrap>
<SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">+ </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Filed herewith.</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=80% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>
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<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">53</FONT></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 31.1</FONT></B></TD></TR></TABLE>
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<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
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<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I, David A. Wheat, certify that:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I have reviewed this quarterly report on Form 10-Q of ING USA Annuity and Life Insurance Company;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">c)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">d)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial information; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial
reporting.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="top">
	<TD width=13%><P><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date:</FONT></P>
<P><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT></P>

	</TD>
	<TD width=86% colspan=1><P><U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 12, 2008</FONT></U></P>
<P><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat David A. Wheat</FONT></P>

	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD align=left width=86% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Vice President and Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=13% nowrap>
&nbsp;
	</TD>
	<TD align=left width=86% nowrap>
<FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Duly Authorized Officer and Principal Financial Officer)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 31.2</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I, Valerie G. Brown, certify that:</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">I have reviewed this quarterly report on Form 10-Q of ING USA Annuity and Life Insurance Company;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">c)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">d)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5.</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">a)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial information; and</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">b)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial
reporting.</FONT>	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="top">
	<TD width=19%><P><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date:</FONT></P>
<P><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT></P>

	</TD>
	<TD width=80% colspan=1><P><U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 12, 2008</FONT></U></P>
<P><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Valerie G. Brown Valerie G. Brown President</FONT></P>
<P><FONT size=1 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Duly Authorized Officer and Principal Officer)</FONT></P>

	</TD>
</TR>
</TABLE><BR>

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<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 32.1</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to 18 U.S.C. &#167;1350, the undersigned officer of ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company (the &#147;Company&#148;) hereby certifies that, to the officer&#146;s knowledge, the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (the &#147;Report&#148;) fully</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 1934 and that the information contained in the Report fairly presents, in all material</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respects, the financial condition and results of operations of the Company.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=30% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 12, 2008</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=30% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Executive Vice President and</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=30% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=27% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=37% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<P align="right">
<TABLE><TR><TD align="right" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Exhibit 32.2</FONT></B></TD></TR></TABLE>
</P>
<P align="center">
<TABLE><TR><TD align="center" nowrap>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CERTIFICATION</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to 18 U.S.C. &#167;1350, the undersigned officer of ING USA Annuity and Life Insurance</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Company (the &#147;Company&#148;) hereby certifies that, to the officer&#146;s knowledge, the Company&#146;s</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (the &#147;Report&#148;) fully</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Act of 1934 and that the information contained in the Report fairly presents, in all material</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">respects, the financial condition and results of operations of the Company. </FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=center width=32% nowrap>
<U><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 12, 2008</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=33% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">By: /s/</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=30% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Valerie G. Brown</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
	</TD>
	<TD>
<HR noshade size=1>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center width=32% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=33% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=30% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Valerie G. Brown</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=32% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=33% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=30% nowrap>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">President</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<A name="page_1"></A>
<P align=center>
<TABLE>
<TR>
     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>PART II</FONT></B><BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>INFORMATION NOT REQUIRED IN PROSPECTUS</FONT></B></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION</FONT></B></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Not Applicable</FONT></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS</FONT></B><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ING USA Annuity and Life Insurance Company (ING USA) shall indemnify (including therein the prepayment of </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>expenses) any person who is or was a director, officer or employee, or who is or was serving at the request of ING </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>USA as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise for</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>incurred by him with respect to any threatened, pending or completed action, suit or proceedings against him by </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reason of the fact that he is or was such a director, officer or employee to the extent and in the manner permitted by </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>law.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ING USA may also, to the extent permitted by law, indemnify any other person who is or was serving ING USA in </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>any capacity. The Board of Directors shall have the power and authority to determine who may be indemnified </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>under this paragraph and to what extent (not to exceed the extent provided in the above paragraph) any such person </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>may be indemnified.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>A corporation may procure indemnification insurance on behalf of an individual who is or was a director of the </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>corporation. ING America Insurance Holdings, Inc. maintains a Professional Liability umbrella insurance policy </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>issued by an international insurer. The policy covers ING America Insurance Holdings, Inc. and any company in </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>which ING America Insurance Holdings, Inc. has a controlling interest of 50% or more. This would encompass the </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>principal underwriter as well as the depositor. Additionally, the parent company of ING America Insurance </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Holdings, Inc., ING Groep N.V., maintains an excess umbrella cover with limits in excess of $125,000,000. The </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>policy provides for the following types of coverage: errors and omissions/professional liability, directors and </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>officers, employment practices, fiduciary and fidelity.</FONT><BR>
<BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>directors, officers and controlling persons of the Registrant, as provided above or otherwise, the Registrant has been </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>advised that in the opinion of the SEC such indemnification by the Depositor is against public policy, as expressed </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>in the Securities Act of 1933, and therefore may be unenforceable. In the event that a claim of such indemnification </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(except insofar as it provides for the payment by the Depositor of expenses incurred or paid by a director, officer or </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>controlling person in the successful defense of any action, suit or proceeding) is asserted against the Depositor by </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>such director, officer or controlling person and the SEC is still of the same opinion, the Depositor or Registrant will,</FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>appropriate jurisdiction the question of whether such indemnification by the Depositor is against public policy as </FONT><BR>
<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>expressed by the Securities Act of 1933 and will be governed by the final adjudication of such issue.</FONT><BR>
<BR>
<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES</FONT></B></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Not Applicable</FONT></TD></TR></TABLE></P>
<P align=left>
<TABLE>
<TR>
     <TD noWrap><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</FONT></B></TD></TR></TABLE></P>
<TABLE cellSpacing=1 cellPadding=0 border=0>
<TR vAlign=bottom>
     <TD noWrap align=left width="3%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(a)</FONT>&nbsp; </TD>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD noWrap align=left width="90%">&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="3%">&nbsp; </TD>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>3(a)</FONT>&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment to Articles of Incorporation Providing for the Name Change of Golden American Life</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="3%">&nbsp; </TD>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Insurance Company, dated (11/21/03), incorporated herein by reference to Post-Effective</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="3%">&nbsp; </TD>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment No. 1 to a Registration Statement on Form S-1 for ING USA Annuity and Life</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="3%">&nbsp; </TD>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Insurance Company filed with the Securities and Exchange Commission on April 9, 2007 (File</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="3%">&nbsp; </TD>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD noWrap align=left width="90%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Nos. 333-133076).</FONT>&nbsp; </TD></TR></TABLE>
<P>&nbsp;</P>

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<TABLE cellSpacing=1 cellPadding=0 border=0>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>3(b)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment to Articles of Incorporation Providing for the Change in Purpose and Powers of ING</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>USA Annuity and Life Insurance Company, dated (03/04/04), incorporated herein by reference to</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Post-Effective Amendment No. 1 to a Registration Statement on Form S-1 for ING USA Annuity</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and Life Insurance Company filed with the Securities and Exchange Commission on April 9, 2007</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(File Nos. 333-133076).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>3(c)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amended and Restated By-Laws of ING USA Annuity and Life Insurance Company, dated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(12/15/04), incorporated herein by reference to Post-Effective Amendment No. 1 to a Registration</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Statement on Form S-1 for ING USA Annuity and Life Insurance Company filed with the</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Securities and Exchange Commission on April 9, 2007 (File Nos. 333-133076).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>3(d)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Resolution of Board of Directors for Powers of Attorney, dated (04/23/99), incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post Effective Amendment No. 5 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 23, 1999 (File Nos. 333-28679, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>3(e)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Articles of Merger and Agreement and Plan of Merger of USGALC, ULAIC, ELICI into GALIC</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and renamed ING USA Annuity and Life Insurance Company, effective date (01/01/04), dated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(06/25/03), incorporated herein by reference to Post-Effective Amendment No. 25 to a Registration</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>filed with the Securities and Exchange Commission on February 13, 2004 (File Nos. 333-28679,</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(a)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 23, 1999 (File Nos. 333-28769, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(b)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Group Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 23, 1999 (File Nos. 333-28769, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(c)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Variable Annuity Contract, incorporated herein by reference to Post-Effective</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment No. 3 to a Registration Statement on Form N-4 for Golden American Life Insurance</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Company Separate Account B filed with the Securities and Exchange Commission on April 23,</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>1999 (File Nos. 333-28769, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(d)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Deferred Combination Variable and Fixed Annuity Certificate, incorporated herein by reference to</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden American</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Life Insurance Company Separate Account B filed with the Securities and Exchange Commission</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>on April 23, 1999 (File Nos. 333-28769, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(e)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on February 26, 2001 (File Nos. 333-30180, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(f)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Individual Deferred Combination Variable and Fixed Annuity Contract,</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>incorporated herein by reference to Post-Effective Amendment No. 2 to a Registration Statement</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Securities and Exchange Commission on February 26, 2001 (File Nos. 333-30180, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(g)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Individual Deferred Variable Annuity Contract, incorporated herein by reference</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4 for Golden American</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Life Insurance Company Separate Account B filed with the Securities and Exchange Commission</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>on February 26, 2001 (File Nos. 333-30180, 811-05626).</FONT>&nbsp; </TD></TR></TABLE><BR>

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<TABLE cellSpacing=1 cellPadding=0 border=0>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(h)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on February 26, 2001 (File Nos. 333-30180, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(i)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 5 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company for Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 23, 1999 (File Nos. 333-28755, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(j)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Group Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 5 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company for Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 23, 1999 (File Nos. 333-28755, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(k)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Variable Annuity Contract, incorporated herein by reference to Post-Effective</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment No. 5 to a Registration Statement on Form N-4 for Golden American Life Insurance</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Company for Separate Account B filed with the Securities and Exchange Commission on April 23,</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>1999 (File Nos. 333-28755, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(l)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 1 to a Registration Statement on N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company for Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on or about April 23, 1999 (File Nos. 333-66757, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(m)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Group Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 1 to a Registration Statement on N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company for Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on or about April 23, 1999 (File Nos. 333-66757, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(n)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Variable Annuity Contract, incorporated herein by reference to Post-Effective</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment No. 1 to a Registration Statement on N-4 for Golden American Life Insurance</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Company for Separate Account B filed with the Securities and Exchange Commission on or about</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>April 23, 1999 (File Nos. 333-66757, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(o)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on October 26, 2001 (File Nos. 333-63692, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(p)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Contract, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on October 26, 2001 (File Nos. 333-63692, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(q)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on October 26, 2001 (File Nos. 333-63692, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(r)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="5%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="92%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on December 11, 2001 (File Nos. 333-70600, 811-05626).</FONT>&nbsp; </TD></TR></TABLE><BR>

<!--$$/page=-->
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<TABLE cellSpacing=1 cellPadding=0 border=0>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(s)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Contract, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on December 11, 2001 (File Nos. 333-70600, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(t)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on December 11, 2001 (File Nos. 333-70600, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(u)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Group Deferred Combination Variable and Fixed Annuity Master Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 16, 2003 (File Nos. 333-90516, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(v)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Post-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on April 16, 2003 (File Nos. 333-90516, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(w)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Deferred Combination Variable and Fixed Annuity Certificate, incorporated herein by reference to</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Post-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden American</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Life Insurance Company Separate Account B filed with the Securities and Exchange Commission</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>on April 16, 2003 (File Nos. 333-90516, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(x)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>American Life Insurance Company Separate Account B filed with the Securities and Exchange</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Commission on July 3, 2003 (File Nos. 333-101481, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(y)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Contract, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on July 3, 2003 (File Nos. 333-101481, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(z)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for Golden American Life Insurance Company Separate Account B filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on July 3, 2003 (File Nos. 333-101481, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4(aa)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Company Address and Name Change Endorsement, incorporated herein by reference to Post-</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Effective Amendment No. 25 to a Registration Statement on Form N-4 for ING USA Annuity and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Life Insurance Company Separate Account B filed with the Securities and Exchange Commission</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>on February 13, 2004 (File Nos. 333-28679, 811-05626).</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>5</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Opinion of Counsel, attached.</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>10</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Material contracts are listed under exhibit 10 in the Company's Form 10-K for the fiscal year ended</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>December 31, 2007 (File Nos. 333-133076, 333-133156, 333-133154, 333-133155, 333-133153,</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>333-133152), as filed with the Commission on March 28, 2008. Each of the Exhibits so listed is</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>incorporated by reference as indicated in the Form 10-K.</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>21</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Subsidiaries of the Registrant, incorporated herein by reference to Item 26 in Post-Effective</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Amendment No. 10 to Registration Statement on Form N-4 for Variable Annuity Account C of</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ING Life Insurance and Annuity Company (File No. 333-105479), as filed with the Securities and</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%">&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Exchange Commission on April 11, 2008.</FONT>&nbsp; </TD></TR>
<TR>
     <TD width="99%" colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="6%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>23(a)</FONT>&nbsp; </TD>
     <TD width="2%">&nbsp; </TD>
     <TD noWrap align=left width="91%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Consent of Independent Registered Public Accounting Firm, attached.</FONT>&nbsp; </TD></TR></TABLE><BR>


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&nbsp;
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&nbsp;	</TD>
	<TD align=left width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23(b)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Consent of Counsel, incorporated in Item 5 of this Part II, together with the Opinion of Counsel.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">24</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Powers of Attorney, see below.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Exhibits other than those listed above are omitted because they are not required or are not</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">applicable.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=3% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(b)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company Form 10-K for the fiscal year ended December</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">31, 2007 is incorporated in Part I within the Prospectus.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">ING USA Annuity and Life Insurance Company Form 10-Q for the fiscal quarter ended March 31,</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=3% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=6% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2008 is incorporated in Part I within the Prospectus.</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ITEM 17. UNDERTAKINGS</FONT></B></TD></TR></TABLE>
</P>
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<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(a) Rule 415 offerings. The undersigned registrant hereby undertakes as follows, pursuant to Reg. 229.512. Item </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of Regulation S-K:</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(1) To file, during any period in which offers or sales of the registered securities are being made, a post-effective </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amendment to this registration statement:</FONT></TD></TR></TABLE>
</P>
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	<TD align=left width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(i)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(ii)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">To reflect in the prospectus any facts or events arising after the effective date of the registration statement</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">fundamental change in the information set forth in the registration statement; and</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(iii)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">To include any material information with respect to the plan of distribution not previously</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">disclosed in the registration statement or any material changes to such information in the registration</FONT>&nbsp;
	</TD>
</TR>
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	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=93% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">statement.</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</FONT><BR>
<BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(3) To remove from registration by means of a post-effective amendment any of the securities being registered</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">which remain unsold at the termination of the offering.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
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	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(ii) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering,</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other than registration statements relaying on Rule 430B or other than prospectuses filed in
reliance on</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Rule 430A, shall be deemed to be part of and included in the registration statement as of the date
it is</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">first used after effectiveness. Provided, however, that no statement made in a registration
statement or</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">prospectus that is part of the registration statement or made in a document incorporated or
deemed</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">incorporated by reference into the registration statement or prospectus that is part of the
registration</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">statement will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">modify any statement that was made in the registration statement or prospectus that was part of
the</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">registration statement or made in any such document immediately prior to such date of first
use.</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the initial distribution of the securities:</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities are offered or sold to such purchaser by means of any of the following communications, the undersigned</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=99% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(i)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(ii)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(iii)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf
of the undersigned registrant; and</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(iv)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
	<TD nowrap valign=top>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(h)</FONT>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Request for Acceleration of Effective Date:</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Act 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, officer 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 Act and will be governed by the final adjudication of such issue.</FONT>	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>

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<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SIGNATURES</FONT></B></TD></TR></TABLE>
</P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of West</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chester, Commonwealth of Pennsylvania, on this 20th day of May, 2008.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ING USA ANNUITY AND</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">LIFE INSURANCE COMPANY</FONT></B>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Registrant)</FONT>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By:</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Valerie G. Brown</FONT></U>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Valerie G. Brown</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=85% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">President (Principal Executive Officer)</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the capacities and on the dates indicated. Each person whose signature appears below hereby constitutes and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">appoints John S. (Scott) Kreighbaum, Julie E. Rockmore and Michael Pignatella and each of them individually, such</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">person&#146;s true and lawful attorneys and agents with full power of substitution and resubstitution for him or her and in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">his or her name, place and stead, in any and all capacities, to sign for such person and in such person&#146;s name and </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">capacity indicated below, any signatures as it may be signed by said attorneys to any and all amendments (pre-</FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">effective and post-effective amendments). This Registration Statement has been signed by the following persons in </FONT><BR>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the capacities indicated on May 20, 2008.</FONT></TD></TR></TABLE>
</P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SIGNATURE</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">TITLE</FONT></U></B>&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
 &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">President</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Valerie G. Brown</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
 &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Principal Executive Officer)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Valerie G. Brown</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Steven T. Pierson</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
 &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Accounting Officer</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Steven T. Pierson</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">DIRECTORS</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ David A. Wheat</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
 &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chief Financial Officer</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">David A. Wheat</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Bridget M. Healy</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Bridget M. Healy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Robert G. Leary</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Robert G. Leary</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Thomas J. McInerney</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
 &nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Chairman</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Thomas J. McInerney</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Kathleen A. Murphy</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Kathleen A. Murphy</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<U><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">/s/ Catherine H. Smith</FONT></U>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=45% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Catherine H. Smith</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=52% nowrap>
&nbsp;
	</TD>
</TR>
</TABLE><BR>

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&nbsp;	</TD>
	<TD align=left width=68% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">EXHIBIT INDEX</FONT></U></B>&nbsp;
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	<TD align=left width=12% nowrap>
&nbsp;
	</TD>
</TR>
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	<TD align=left width=15% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">ITEM</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=68% nowrap>
<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">EXHIBIT</FONT></U></B>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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<B><U><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PAGE #</FONT></U></B>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=68% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Opinion of Counsel</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">EX-5</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=15% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23(a)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=68% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Consent of Independent Registered Public Accounting Firm</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">EX-23.A</FONT>&nbsp;
	</TD>
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">23(b)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=left width=68% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Consent of Counsel</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=center width=12% nowrap>
<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*</FONT>&nbsp;
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<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*Included in Exhibit 5 above</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
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[{"type": "S-1", "sequence": "1", "filename": "final.htm", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 2289800}]
{"company-data": {"conformed-name": "ING USA ANNUITY & LIFE INSURANCE CO", "cik": "0000836658", "assigned-sic": "6311", "irs-number": "410991508", "state-of-incorporation": "IA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-151031", "film-number": "08847957"}, "business-address": {"street1": "1475 DUNWOODY DRIVE", "street2": "SUITE 400", "city": "WEST CHESTER", "state": "PA", "zip": "19380-2700", "phone": "610-425-3400"}, "mail-address": {"street1": "1475 DUNWOODY DRIVE", "street2": "SUITE 400", "city": "WEST CHESTER", "state": "PA", "zip": "19380-2700"}, "former-company": [{"former-conformed-name": "GOLDEN AMERICAN LIFE INSURANCE CO /NY/", "date-changed": "19930506"}, {"former-conformed-name": "MB VARIABLE LIFE INSURANCE CO", "date-changed": "19600201"}, {"former-conformed-name": "GOLDEN AMERICAN LIFE INSURANCE CO", "date-changed": "19600201"}]}
Fixed Acct II -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing
As filed with the Securities and Exchange Commission on May 20, 2008
Registration File No. 333-[                   ]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ING USA ANNUITY AND LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
IOWA
(State or other jurisdiction of incorporation or organization)
6355
(Primary Standard Industrial Classification Code Number)
41-0991508
(I.R.S. Employer Identification Number)
ING
1475 Dunwoody Drive
West Chester, PA 19380-1478
(610) 425-3400
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
John S. (Scott) Kreighbaum, Esq.
ING
1475 Dunwoody Drive
West Chester, PA 19380-1478
(610) 425-3404
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the registration statement becomes effective.
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
the earlier effective registration statement for the same offering
[ ]
If this Form is 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 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
[ ]
Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [X] (Do not check if a smaller reporting company)
Smaller reporting company [ ]
Calculation of Registration Fee
Title of Each Class
Proposed Maximum
Proposed Maximum
of Securities to be
Amount to be
Offering Price Per
Aggregate Offering
Amount of
Registered
Registered
Unit
Price
Registration Fee
*
*
$1,800,000,000
$70,740
* The proposed maximum aggregate offering price is estimated solely for the purpose 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.
Pursuant to Rule 429(b) under the Securities Act, unsold securities previously registered under Commission file
number 333-133156 are being carried forward to this registration statement.
<R>
ING USA Annuity and Life Insurance Company
Fixed Account II
May
2
0
, 2008
</R>
Fixed Account II ("Fixed Account") is an optional fixed interest allocation offered during the accumulation phase of
your deferred combination variable and fixed annuity contract (the "Contract") between you and ING USA Annuity
and Life Insurance Company ("ING USA," the "Company," "we" or "our"). The Fixed Account, which is a
segregated asset account of ING USA, provides a means for you to invest on a tax-deferred basis and earn a
guaranteed interest rate for guaranteed interest periods (Fixed Interest Allocation(s)). We will credit your Fixed
Interest Allocation(s) with a fixed rate of interest. We generally offer several Fixed Interest Allocations at any one
time. We reserve the right to limit the number of Fixed Interest Allocations or the availability of certain Fixed
Interest Allocations. The number of Fixed Interest Allocations offered may vary by states, may not offer all Fixed
Interest Allocations on all Contracts, and the rates for a given Fixed Interest Allocation may vary among contracts.
We set the interest rates periodically. We may credit a different interest rate for each Fixed Interest Allocation. The
interest you earn in the Fixed Account as well as your principal is guaranteed by ING USA, as long as you do not
take your money out before the maturity date for the applicable interest period. If you take your money out from a
Fixed Interest Allocation more than 30 days before the applicable maturity date, we will apply a market value
adjustment ("Market Value Adjustment"). A Market Value Adjustment could increase or decrease your contract
value and/or the amount you take out. A surrender charge may also apply to withdrawals from your contract. You
bear the risk that you may receive less than your principal because of the Market Value Adjustment.
You have a right to return a contract for a refund as described in the variable annuity contract prospectus.
The variable annuity contract prospectus describes (the Contract) offered by ING USA. The Contract is available in
connection with certain retirement plans that qualify for special federal income tax treatment as well as those that do
not qualify for such treatment. Please refer to the Contract prospectus for more information.
This prospectus accompanies a Contract prospectus and provides information that you should know before investing
in the Fixed Account and should be kept for future reference. If you need more information after reading this
prospectus, please contact us at our Customer Service Center, P.O. Box 9271, Des Moines, Iowa 50306-9271 or call
(800) 366-0066 or your registered representative. Either prospectus is available without charge upon request. To
obtain a copy of these documents, write to or call our Customer Service Center or access the SEC's website
(http://www.sec.gov).
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon
the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
An investment in the Fixed Account is not a bank deposit and is not insured or guaranteed by any bank or by
the Federal Deposit Insurance Corporation or any other government agency.
This prospectus must be accompanied or preceded by a current prospectus for a variable Contract.
Fixed Account II
TABLE OF CONTENTS
Page
FEES AND EXPENSES
1
ING USA ANNUITY AND LIFE INSURANCE COMPANY
1
FINANCIAL STATEMENTS
2
THE FIXED INTEREST ALLOCATION
2
SPECIAL FUNDS
5
THE ANNUITY CONTRACT
5
WITHDRAWALS
6
TRANSFERS AMONG YOUR INVESTMENTS
7
CHARGES AND FEES
8
DEATH BENEFIT AND OPTIONAL RIDERS
8
OTHER CONTRACT PROVISIONS
8
OTHER INFORMATION
8
FEDERAL TAX CONSIDERATIONS
10
APPENDIX A – Market Value Adjustment Examples
A1
Fixed Account II
i
FEES AND EXPENSES
The variable Contract has insurance features and investment features, and there are charges related to each. For
more information about these Contract fees and expenses please refer to the Contract prospectus.
ING USA ANNUITY AND LIFE INSURANCE COMPANY
ING USA Annuity and Life Insurance Company, is an Iowa stock life insurance company, which was originally
incorporated in Minnesota on January 2, 1973. ING USA is a wholly owned subsidiary of Lion Connecticut
Holdings Inc. ("Lion Connecticut"), which in turn is a wholly owned subsidiary of ING Groep N.V. ("ING"), a
global financial services holding company based in The Netherlands. ING USA is authorized to sell insurance and
annuities in all states, except New York, and the District of Columbia. Although we are a subsidiary of ING, ING is
not responsible for the obligations under the Contract. The obligations under the Contract are solely the
responsibility of ING USA.
Lion Connecticut is the holding company for Directed Services LLC, the distributor of the Contracts, and other
interests.
Our principal office is located at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380.
Regulatory Matters
As with many financial services companies, the Company and its affiliates have received informal and formal
requests for information from various state and federal governmental agencies and self-regulatory organizations in
connection with inquiries and investigations of the products and practices of the financial services industry. In each
case, the Company and its affiliates have been and are providing full cooperation.
Insurance and Retirement Plan Products and Other Regulatory Matters.
Federal and state regulators
and
self-regulatory agencies are conducting broad inquiries and investigations involving the insurance and retirement
industries. These initiatives currently focus on, among other things, compensation, revenue sharing, and other sales
incentives; potential conflicts of interest; potential anti-competitive activity; reinsurance; sales and marketing
practices (including sales to seniors); specific product types (including group annuities and indexed annuities); and
disclosure. It is likely that the scope of these industry investigations will further broaden before they conclude. The
Company and certain of its U.S. affiliates have received formal and informal requests in connection with such
investigations, and are cooperating fully with each request for information. Some of these matters could result in
regulatory action involving the Company. These initiatives also may result in new legislation and regulation that
could significantly affect the financial services industry, including businesses in which the Company is engaged. In
light of these and other developments, U.S. affiliates of ING, including the Company, periodically review whether
modifications to their business practices are appropriate.
Investment Product Regulatory Issues.
Since 2002, there has been increased governmental and
regulatory
activity relating to mutual funds and variable insurance products. This activity has primarily focused on
inappropriate trading of fund shares; directed brokerage; compensation; sales practices, suitability, and supervision;
arrangements with service providers; pricing; compliance and controls; adequacy of disclosure; and document
retention.
In addition to responding to governmental and regulatory requests on fund trading issues, ING management, on its
own initiative, conducted, through special counsel and a national accounting firm, an extensive internal review of
mutual fund trading in ING insurance, retirement, and mutual fund products. The goal of this review was to identify
any instances of inappropriate trading in those products by third parties or by ING investment professionals and
other ING personnel.
Fixed Account II
1
The internal review identified several isolated arrangements allowing third parties to engage in frequent trading of
mutual funds within the variable insurance and mutual fund products of certain affiliates of the Company, and
identified other circumstances where frequent trading occurred despite measures taken by ING intended to combat
market timing. Each of the arrangements has been terminated and disclosed to regulators, to the independent trustees
of ING Funds (U.S.) and in Company reports previously filed with the SEC pursuant to the Securities Exchange Act
of 1934, as amended.
Action may be taken by regulators with respect to certain ING affiliates before investigations relating to fund trading
are completed. The potential outcome of such action is difficult to predict but could subject certain affiliates to
adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It
is not currently anticipated, however, that the actual outcome of any such action will have a material adverse effect
on ING or ING's U.S.-based operations, including the Company.
ING has agreed to indemnify and hold harmless the ING Funds from all damages resulting from wrongful conduct
by ING or its employees or from ING's internal investigation, any investigations conducted by any governmental or
self-regulatory agencies, litigation or other formal proceedings, including any proceedings by the SEC.
Management reported to the ING Funds Board that ING management believes that the total amount of any
indemnification obligations will not be material to ING or ING's U.S.-based operations, including the Company.
FINANCIAL STATEMENTS
The audited financial statements of ING USA Annuity and Life Insurance Company are included in this prospectus.
THE FIXED INTEREST ALLOCATION
You may allocate premium payments and transfer your Contract value to the available guaranteed interest periods of
the Fixed Account during the accumulation period as described in the prospectus for the Contract. Every time you
allocate money to the Fixed Account, we set up a Fixed Interest Allocation for the guaranteed interest period you
select. We reserve the right to limit the number of Fixed Interest Allocations or the availability of certain Fixed
Interest Allocations. The number of Fixed Interest Allocations offered may vary by state, we may not offer all Fixed
Interest Allocations on all Contracts, and the rates for a given Fixed Interest Allocation may vary among Contracts.
You may select one or more guaranteed interest periods at any one time. We will credit your Fixed Interest
Allocation with a guaranteed interest rate for the interest period you select, so long as you do not withdraw money
from that Fixed Interest Allocation before the end of the guaranteed interest period. Each guaranteed interest period
ends on its maturity date, which is the last day of the month in which the interest period is scheduled to expire.
If you surrender, withdraw, transfer or annuitize your investment in a Fixed Interest Allocation more than 30 days
before the end of the guaranteed interest period, we will apply a Market Value Adjustment to the transaction. A
Market Value Adjustment could increase or decrease the amount you surrender, withdraw, transfer or annuitize,
depending on current interest rates at the time of the transaction. You bear the risk that you may receive less than
your principal because of the Market Value Adjustment.
Assets supporting amounts allocated to the Fixed Account are available to fund the claims of all classes of our
customers, contract owners and other creditors. Interests under your Contract relating to the Fixed Account are
registered under the Securities Act of 1933, but the Fixed Account is not registered.
Selecting a Guaranteed Interest Period
You may select one or more Fixed Interest Allocations with specified guaranteed interest periods. A guaranteed
interest period is the period that a rate of interest is guaranteed to be credited to your Fixed Interest Allocation. We
may at any time decrease or increase the number of guaranteed interest periods offered. In addition, we may offer
DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed Interest Allocations available exclusively in
Fixed Account II
2
connection with our dollar cost averaging program. For more information on DCA Fixed Interest Allocations, see
"Transfers Among Your Investments — Dollar Cost Averaging from Fixed Interest Allocations."
Your Contract value in the Fixed Account is the sum of your Fixed Interest Allocations and the interest credited as
adjusted for any withdrawals, transfers or other charges we may impose, including any Market Value Adjustment.
Your Fixed Interest Allocation will be credited with the guaranteed interest rate in effect for the guaranteed interest
period you selected when we receive and accept your premium or reallocation of Contract value. We will credit
interest daily at a rate that yields the quoted guaranteed interest rate.
Guaranteed Interest Rates
Each Fixed Interest Allocation will have an interest rate that is guaranteed as long as you do not take your money out
until its maturity date. We do not have a specific formula for establishing the guaranteed interest rates for the different
guaranteed interest periods. We determine guaranteed interest rates at our sole discretion. To find out the current
guaranteed interest rate for a guaranteed interest period you are interested in, please contact our Customer Service
Center or your registered representative. The determination may be influenced by the interest rates on fixed income
investments in which we may invest with the amounts we receive under the Contracts. We will invest these
amounts primarily in investment-grade fixed income securities (i.e., rated by Standard & Poor's rating system to be
suitable for prudent investors) although we are not obligated to invest according to any particular strategy, except as
may be required by applicable law. You will have no direct or indirect interest in these investments. We will also
consider other factors in determining the guaranteed interest rates, including regulatory and tax requirements, sales
commissions and administrative expenses borne by us, general economic trends and competitive factors. We cannot
predict the level of future interest rate.
We may from time to time at our discretion offer interest rate specials for new premiums that are higher than the
current base interest rate then offered. Renewal rates for such rate specials will be based on the base interest rate
and not on the special rates initially declared.
Transfers from a Fixed Interest Allocation
You may transfer your Contract value in a Fixed Interest Allocation to one or more new Fixed Interest Allocations
with new guaranteed interest periods, or to any of the subaccounts of ING USA Annuity and Life Insurance
Company Separate Account B, as described in the Contract prospectus. We will transfer amounts from your Fixed
Interest Allocations starting with the guaranteed interest period nearest its maturity date, until we have honored your
transfer request.
The minimum amount that you can transfer to or from any Fixed Interest Allocation is $100. If a transfer request
would reduce the Contract value remaining in a Fixed Interest Allocation to less than $100, we will treat such
transfer request as a request to transfer the entire Contract value in such Fixed Interest Allocation. Transfers from a
Fixed Interest Allocation may be subject to a Market Value Adjustment. If you have a special Fixed Interest
Allocation that was offered exclusively with our dollar cost averaging program, canceling dollar cost averaging will
cause a transfer of the entire Contract value in such Fixed Interest Allocation to the Liquid Assets subaccount, and
such a transfer will be subject to a Market Value Adjustment.
On the maturity date of a guaranteed interest period, you may transfer amounts from the applicable Fixed Interest
Allocation to the subaccounts and/or to new Fixed Interest Allocations with guaranteed interest periods of any
length we are offering at that time, if any. You may not, however, transfer amounts to any Fixed Interest Allocation
with a guaranteed interest period that extends beyond the annuity start date.
At least 30 calendar days before a maturity date of any of your Fixed Interest Allocations, or earlier if required by
state law, we will send you a notice of the guaranteed interest periods that are available. You must notify us which
subaccounts or new guaranteed interest periods you have selected before the maturity date of your Fixed Interest
Allocations. If we do not receive timely instructions from you, we will transfer the Contract value in the maturing
Fixed Interest Allocation to a new Fixed Interest Allocation with a guaranteed interest period that is the same as the
expiring guaranteed interest period. If such guaranteed interest period is not available or would go beyond the
annuity start date, we will transfer your Contract value in the maturing Fixed Interest Allocation to the next shortest
guaranteed interest period which does not go beyond the annuity start date. If no such guaranteed interest period is
available, we will transfer the Contract value to a subaccount specially designated by the Company for such purpose.
Fixed Account II
3
Currently we use the Liquid Assets subaccount for such purpose.
Withdrawals from a Fixed Interest Allocation
During the accumulation phase, you may withdraw a portion of your Contract value in any Fixed Interest Allocation.
You may make systematic withdrawals of only the interest earned during the prior month, quarter or year, depending
on the frequency chosen, from a Fixed Interest Allocation under our systematic withdrawal option. Systematic
withdrawals from a Fixed Interest Allocation are not permitted if such Fixed Interest Allocation is currently
participating in the dollar cost averaging program. A withdrawal from a Fixed Interest Allocation may be subject to
a Market Value Adjustment and a Contract surrender charge. Be aware that withdrawals may have federal income
tax consequences, including a 10% penalty tax, as well as state income tax consequences.
If you tell us the Fixed Interest Allocation from which your withdrawal will be made, we will assess the withdrawal
against that Fixed Interest Allocation. If you do not, we will assess your withdrawal against the subaccounts in
which you are invested, unless the withdrawal exceeds the Contract value in the subaccounts. If the withdrawal
exceeds the Contract value in those subaccounts, we will deduct your withdrawal from your Fixed Interest
Allocations starting with the guaranteed interest periods nearest their maturity dates until we have honored your
request.
Market Value Adjustment
A Market Value Adjustment may decrease, increase or have no effect on your Contract value. We will apply a
Market Value Adjustment (i) whenever you withdraw or transfer money from a Fixed Interest Allocation (unless
made within 30 days before the maturity date of the applicable guaranteed interest period, or under the systematic
withdrawal or dollar cost averaging program) and (ii) if on the annuity start date a guaranteed interest period for any
Fixed Interest Allocation does not end on or within 30 days of the annuity start date.
We determine the Market Value Adjustment by multiplying the amount you withdraw, transfer or apply to an
income plan by the following factor:
1+I
.
N/365
(
)
-1
1+J+.0050
Where,
"I" is the Index Rate for a Fixed Interest Allocation on the first day of the guaranteed interest period;
"J" is the Index Rate for a new Fixed Interest Allocation with a guaranteed interest period equal to the time
remaining (rounded up to the next full year) in the guaranteed interest period, except for a Fixed Interest
Allocation of 6 months, where "J" is,
at the time of calculation, the lesser of the Index Rate for a new Fixed
Interest Allocation with (i) a 6-month guaranteed interest period, or (ii) a 1-year guaranteed interest
period;
and
"N" is the remaining number of days in the guaranteed interest period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury STRIPS as quoted by a national quoting service
for a period equal to the applicable guaranteed interest period. The average currently is based on the period starting
from the 22nd day of the calendar month two months prior to the month of the Index Rate determination and ending
the 21st day of the calendar month immediately before the month of determination. We currently calculate the
Index Rate once each calendar month but have the right to calculate it more frequently. The Index Rate will always
be based on a period of at least 28 days. If the Ask Yields are no longer available, we will determine the Index Rate
by using a suitable and approved, if required, replacement method.
A Market Value Adjustment may be positive, negative or result in no change. In general, if interest rates are rising,
you bear the risk that any Market Value Adjustment will likely be negative and reduce your Contract value. On the
other hand, if interest rates are falling, it is more likely that you will receive a positive Market Value Adjustment
that increases your Contract value. In the event of a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from the amount surrendered, transferred or
Fixed Account II
4
annuitized. In the event of a partial withdrawal, transfer or annuitization, we will add or subtract any Market Value
Adjustment from the total amount withdrawn, transferred or annuitized in order to provide the amount requested. If
a negative Market Value Adjustment exceeds your Contract value in the Fixed Interest Allocation, we will consider
your request to be a full surrender, transfer or annuitization of the Fixed Interest Allocation.
Several examples which illustrate how the Market Value Adjustment works are included in Appendix A.
SPECIAL FUNDS
We use the term Special Funds in the discussion of the enhanced death benefit options and the optional riders in
certain Contract prospectuses. The Special Funds currently include Fixed Interest Allocations and certain variable
subaccounts as described in your Contract prospectus. The Company may, at any time, designate any new and/or
existing investment option as a Special Fund with 30 days notice with respect to new premiums added or transfers to
such subaccount. Designation of an investment option as a Special Fund may vary by benefit. For example, an
investment option may be designated a Special Fund for purposes of calculating a living benefit, but not a death
benefit or for calculating one death benefit and not another. Please see your Contract prospectus for more
information.
THE ANNUITY CONTRACT
The Contract is described in another prospectus. This prospectus describes the Fixed Account and the operations of
any Fixed Interest Allocation under your Contract.
Contract Value in the Fixed Interest Allocations.
On the contract date, the Contract value in any
Fixed Interest
Allocation in which you are invested is equal to the portion of the initial premium paid and designated for allocation
to the Fixed Interest Allocation. On each business day after the contract date, we calculate the amount of Contract
value in each Fixed Interest Allocation as follows:
1)
We take the Contract value in the Fixed Interest Allocation at the end of the preceding business day.
2)
We credit a daily rate of interest on (1) at the guaranteed rate since the preceding business day.
3)
We add (1) and (2).
4)
We subtract from (3) any transfers from that Fixed Interest Allocation.
5)
We subtract from (4) any withdrawals, and then subtract any contract fees (including any rider charges) and premium taxes.
Additional premium payments and transfers allocated to the Fixed Account will be placed in a new Fixed Interest
Allocation. The Contract value on the date of allocation will be the amount allocated.
Cash Surrender Value
The cash surrender value is the amount you receive when you surrender the Contract. The cash surrender value will
fluctuate daily based on the interest credited to Fixed Interest Allocations, any Market Value Adjustment, and any
surrender charge. We do not guarantee any minimum cash surrender value. On any date during the accumulation
phase, we calculate the cash surrender value as follows: we start with your Contract value, then we adjust for any
Market Value Adjustment, and then we deduct any surrender charge, any charge for premium taxes, the annual
contract administrative fee (unless waived), and any optional benefit rider charge, and any other charges incurred
but not yet deducted. Several examples which illustrate how the Market Value Adjustment works are included in
Appendix A.
Fixed Account II
5
WITHDRAWALS
Any time during the accumulation phase and before the death of the contract owner, except under certain qualified
contracts, you may withdraw all or part of your money. Keep in mind that if you request a withdrawal for more than
90% of the cash surrender value, and the remaining cash surrender value after the withdrawal is less than $2,500, we
will treat it as a request to surrender the Contract.
You need to submit to us a written request specifying the Fixed Interest Allocations or subaccounts from which
amounts are to be withdrawn, otherwise the withdrawal will be made on a pro rata basis from all of the subaccounts
in which you are invested. If there is not enough Contract value in the subaccounts, we will deduct the balance of
the withdrawal from your Fixed Interest Allocations starting with the guaranteed interest periods nearest their
maturity dates until we have honored your request. We will apply a Market Value Adjustment to any withdrawal
from your Fixed Interest Allocation taken more than 30 days before its maturity date. We will determine the
Contract value as of the close of business on the day we receive your withdrawal request at our Customer Service
Center. The Contract value may be more or less than the premium payments made. Please see the Contract
prospectus for the application of surrender charges to withdrawals.
We offer the following three withdrawal options:
Regular Withdrawals
After the free look period, you may make regular withdrawals. Each withdrawal must be a minimum of $100. We
will apply a Market Value Adjustment to any regular withdrawal from a Fixed Interest Allocation that is taken more
than 30 days before its maturity date.
Systematic Withdrawals
See the Contract prospectus for general information on Systematic Withdrawals.
Systematic withdrawals from Fixed Interest Allocations are limited to interest earnings during the prior month,
quarter, or year, depending on the frequency you chose. Systematic withdrawals are not subject to a Market Value
Adjustment, unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed below and the
payments exceed interest earnings. Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar
Systematic Withdrawal Feature are available only in connection with Section 72(q) and 72(t) distributions. A Fixed
Interest Allocation may not participate in both the systematic withdrawal option and the dollar cost averaging
program at the same time.
Fixed Dollar Systematic Withdrawal Feature.
You may add the Fixed Dollar Systematic Withdrawal
Feature to your regular fixed dollar systematic withdrawal program. This feature allows you to receive a systematic
withdrawal in a fixed dollar amount regardless of any Market Value Adjustments. Systematic withdrawals from
Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature are available only in connection
with Section 72(q) and 72(t) distributions. We will assess a Market Value Adjustment on the withdrawal date if the
withdrawal from a Fixed Interest Allocation exceeds your interest earnings on the withdrawal date. We will adjust
the amount withdrawn to include any Market Value Adjustment so that the amount of each systematic withdrawal
remains fixed, unless you direct otherwise.
IRA Withdrawals
See the Contract prospectus for general information on IRA Withdrawals.
An IRA withdrawal from a Fixed Interest Allocation in excess of the amount allowed under systematic withdrawals
will be subject to a Market Value Adjustment.
Consult your tax adviser regarding the tax consequences associated with taking withdrawals.
You
are
responsible for determining that withdrawals comply with applicable law. A withdrawal made before the taxpayer
reaches age 59½ may result in a 10% penalty tax. See "Federal Tax Considerations" in the Contract prospectus for
more details.
Fixed Account II
6
TRANSFERS AMONG YOUR INVESTMENTS
You may transfer your Contract value among the subaccounts in which you are invested and your Fixed Interest
Allocations at the end of the free look period until the annuity start date. See the Contract prospectus for general
information regarding transfers including transfers by third parties. We will apply a Market Value Adjustment to
transfers from a Fixed Interest Allocation taken more than 30 days before its maturity date, unless the transfer is
made under the dollar cost averaging program. Keep in mind that transfers between Special Funds and other
investment portfolios may negatively impact your death benefit or rider benefits.
If you allocate Contract value to an investment option that has been designated as a Restricted Fund, your ability to
transfer Contract value to the Restricted Fund may be limited. A transfer to the Restricted Funds will not be permitted
to the extent that it would increase the Contract value in the Restricted Fund to more than the applicable limits
following the transfer. We do not limit transfers from Restricted Funds. If the result of multiple reallocations is to
lower the percentage of total Contract value in the Restricted Fund, the reallocation will be permitted even if the
percentage of Contract value in the Restricted Fund is greater than the limit.
Transfers will be based on values at the end of the business day in which the transfer request is received at our
Customer Service Center.
The minimum amount that you may transfer is $100 or, if less, your entire Contract value held in a subaccount or a
Fixed Interest Allocation.
Dollar Cost Averaging from Fixed Interest Allocations
You may elect to participate in our dollar cost averaging program if you have at least $1,200 of Contract value in
Fixed Account Interest Allocations with a guaranteed interest period of 1 year or less. The Fixed Interest
Allocations serve as the source accounts from which we will, on a monthly basis, automatically transfer a set dollar
amount of money to investment portfolio subaccounts selected by you.
The dollar cost averaging program is designed to lessen the impact of market fluctuation on your investment. Since
we transfer the same dollar amount to subaccounts each month, more units of a subaccount are purchased if the
value of its unit is low and fewer units are purchased if the value of its unit is high. Therefore, a lower than average
value per unit may be achieved over the long term. However, we cannot guarantee this. When you elect the dollar
cost averaging program, you are continuously investing in securities regardless of fluctuating price levels. You
should consider your tolerance for investing through periods of fluctuating price levels.
You elect the dollar amount you want transferred under this program. Each monthly transfer must be at least $100.
You may change the transfer amount once each contract year.
Transfers from a Fixed Interest Allocation under the dollar cost averaging program are not subject to a Market Value
Adjustment.
If you do not specify the subaccounts to which the dollar amount of the source account is to be transferred, we will
transfer the money to the subaccounts in which you are invested on a proportional basis. The transfer date is the
same day each month as your contract date. If, on any transfer date, your Contract value in a source account is equal
or less than the amount you have elected to have transferred, the entire amount will be transferred and the program
will end. You may terminate the dollar cost averaging program at any time by sending satisfactory notice to our
Customer Service Center at least 7 days before the next transfer date. A Fixed Interest Allocation may not
participate in the dollar cost averaging program and in systematic withdrawals at the same time.
See "Dollar Cost Averaging" in the Contract prospectus for a discussion of transferring to a Restricted Fund.
Fixed Account II
7
We may in the future offer additional subaccounts or withdraw any subaccount or Fixed Interest Allocation to or
from the dollar cost averaging program or otherwise modify, suspend or terminate this program. Of course, such
change will not affect any dollar cost averaging programs in operation at the time.
CHARGES AND FEES
The Contract has insurance features and investment features, and there are charges related to each. For the
insurance features, the Company deducts a mortality and expense risk charge, an asset-based administrative charge,
and an annual contract administrative charge. Depending on your Contract, you may also be able to purchase
optional benefit riders, charges for which are deducted from your Contract value. We deduct the mortality and
expense risk charge and the asset-based administrative charges daily directly from your Contract value in the
subaccounts. We deduct the charge for the earnings multiplier benefit rider, if applicable, from your Fixed Interest
Allocations as well.
When deducting the other contract charges and rider charges, if the value in the subaccounts is insufficient, the contract
charges and rider charge will be deducted from the Fixed Interest Allocations starting with the guaranteed interest
periods nearest their maturity dates until the charge has been paid and the amount deducted may be subject to a
Market Value Adjustment. See the Contract prospectus for more information.
DEATH BENEFIT AND OPTIONAL RIDERS
Please refer to your Contract prospectus for descriptions of benefits under the Contract and the effect of your Fixed
Interest Allocations on those benefits. For purposes of calculating the death benefits, certain investment portfolios
and the Fixed Account may be designated as "Special Funds." Selecting a Special Fund may limit or reduce the
death benefit.
OTHER CONTRACT PROVISIONS
Suspension of Payments
We have the right to delay payment of amounts from a Fixed Interest Allocation for up to 6 months.
OTHER INFORMATION
State Regulation
We are regulated by the Insurance Department of the State of Iowa. We are also subject to the insurance laws and
regulations of all jurisdictions where we do business. We are required to submit annual statements of our operations,
including financial statements, to the Insurance Departments of the various jurisdictions in which we do business to
determine solvency and compliance with state insurance laws and regulations.
Legal Proceedings
The Company is involved in threatened or pending lawsuits/arbitrations arising from the normal conduct of
business. Due to the climate in insurance and business litigation/arbitration, suits against the Company sometimes
include claims for substantial compensatory, consequential or punitive damages and other types of relief. Moreover,
certain claims are asserted as class actions, purporting to represent a group of similarly situated individuals. While it
is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance and
established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a
materially adverse effect on the Company's operations or financial position.
Fixed Account II
8
Directed Services LLC, the principal underwriter and distributor of the contract, is a party to threatened or pending
lawsuits/arbitration that generally arise from the normal conduct of business. Some of these suits may seek class
action status and sometimes include claims for substantial compensatory, consequential or punitive damages and
other types of relief. Directed Services LLC is not involved in any legal proceeding which, in the opinion of
management, is likely to have a material adverse effect on its ability to distribute the contract.
Experts
The financial statements of the Company appearing in the Company's Annual Report (Form 10-K) for the year
ended December 31, 2007 (including schedules appearing therein), have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their reports thereon included therein, and are included
and incorporated herein by reference. Such financial statements are included and incorporated herein by reference
in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
Further Information
This prospectus does not contain all of the information contained in the registration statement of which this
prospectus is a part. Portions of the registration statement have been omitted from this prospectus as allowed by the
Securities and Exchange Commission (SEC). You may obtain the omitted information from the offices of the SEC,
as described below. We are required by the Securities Exchange Act of 1934 to file periodic reports and other
information with the SEC. You may inspect or copy information concerning the Company at the Public Reference
Room of the SEC at:
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, DC 20549
You may also obtain copies of these materials at prescribed rates from the Public Reference Room of the above
office. You may obtain information on the operation of the Public Reference Room by calling the SEC at either
1-800-SEC-0330 or 1-202-942-8090. You may also find more information about the Company at www.ing.com.
<R>
Copies of the Company's annual report on Form 10-K for the fiscal year ended December 31, 2007, and the
Company's quarterly report on Form 10-Q for the period ended March 31, 2008,
accompan
ies
y this prospectus. We
refer to Form 10-K for a description of the Company and its business, including financial statements. We intend to
send contract holders annual account statements and other such legally required reports. We do not anticipate such
reports will include periodic financial statements or information concerning the Company.
You can find this prospectus and other information the Company files electronically with the SEC on the SEC's web
site at www.sec.gov.
Incorporation of Certain Documents by Reference
We have incorporated by reference the Company's following periodic reports:
1)
Annual Report on Form 10-K for the fiscal year ended December 31, 2007; and
2)
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2008.
We were not required to file any other
reports pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act since the end of the fiscal year covered
by that Form 10-K.
We
will provide a free copy of
these
documents upon the written or oral request of anyone who has received
this prospectus. We will not include exhibits to those documents unless they are specifically incorporated by
reference into the document. Direct requests to:
</R>
Fixed Account II
9
ING
Customer Service Center
P.O. Box 9271
Des Moines, Iowa 50306-9271
1-800-366-0066
Inquiries
You may contact us directly by writing or calling us at the address or phone number shown above.
FEDERAL TAX CONSIDERATIONS
For a general description of the federal income tax considerations associated with the Contract please refer to the
Contract prospectus. The "Federal Tax Considerations" section of the Contract prospectus does not purport to be
complete or to cover all tax situations. The discussion is not intended as tax advice. You should consult your
counsel or other competent tax advisers for more complete information. The discussion is based upon our
understanding of the present federal income tax laws. We do not make any representations as to the likelihood of
continuation of the present federal income tax laws or as to how they may be interpreted by the IRS.
Fixed Account II
10
APPENDIX A
Market Value Adjustment Examples
Example #1: Full Surrender
¾
Example of a Negative Market Value Adjustment
Assume $100,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an
initial Index Rate ("I") of 5%; that a full surrender is requested 3 years into the guaranteed interest period; that the
Account Value on the date of surrender is $115,000; that the then Index Rate for a 7-year guaranteed interest period
("J") is 6%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been made.
Calculate the Market Value Adjustment
1.
N = 2,555 ( 365 x 7 )
2.
Market Value Adjustment = $115,000
x
[(
1.05
)
2,555/365
-1
]
=
$-10,870
1.0650
Therefore, the amount paid to you on full surrender, ignoring any surrender charge, is $104,130
($115,000 - $10,870).
Example #2: Full Surrender
¾
Example of a Positive Market Value Adjustment
Assume $100,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an
initial Index Rate ("I") of 5%; that a full surrender is requested 3 years into the guaranteed interest period; that the
Account Value on the date of surrender is $115,000; that the then Index Rate for a 7-year guaranteed interest period
("J") is 4%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been made.
Calculate the Market Value Adjustment
1.
N = 2,555 ( 365 x 7 )
2.
Market Value Adjustment = $115,000
x
[(
1.05
)
2,555/365
-1
]
=
$3,907
1.0450
Therefore, the amount paid to you on full surrender, ignoring any surrender charge, is $118,907
($115,000 + $3,907).
Example #3: Withdrawal
¾
Example of a Negative Market Value Adjustment
Assume $200,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an
initial Index Rate ("I") of 5%; that a withdrawal of $128,000 is requested 3 years into the guaranteed interest period;
that the Account Value on the date of withdrawal is $250,000; that the then Index Rate ("J") for a 7-year guaranteed
interest period is 6%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been
made.
First calculate the amount that must be withdrawn from the Fixed Interest Allocation to provide the amount
requested.
1.
N = 2,555 ( 365 x 7 )
2.
Amount that must be withdrawn =
[
$128,000
/
(
1.05
)
2,555/365
]
=
$141,362
1.0650
Fixed Account II
A1
Then calculate the Market Value Adjustment on that amount.
3. Market Value Adjustment = $141, 362
x
[(
1.05
)
2,555/365
-1
]
=
$-13,362
1.0650
Therefore, the amount of the withdrawal paid to you, ignoring any surrender charge, is $128,000, as requested.
The Fixed Interest Allocation will be reduced by the amount of the withdrawal, $128,000, and also reduced by the
Market Value Adjustment of $13,362, for a total reduction in the Fixed Interest Allocation of $141,362.
Example #4: Withdrawal
¾
Example of a Positive Market Value Adjustment
Assume $200,000 was allocated to a Fixed Interest Allocation with a guaranteed interest period of 10 years, an
initial Index Rate of 5%; that a withdrawal of $128,000 requested 3 years into the guaranteed interest period; that the
Account Value on the date of withdrawal is $250,000; that the then Index Rate ("J") for a 7-year guaranteed interest
period is 4%; and that no prior transfers or withdrawals affecting this Fixed Interest Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed Interest Allocation to provide the amount
requested.
1.
N = 2,555 ( 365 x 7 )
2.
Amount that must be withdrawn =
[
$128,000
/
(
1.05
)
2,555/365
]
=
$123,794
1.0450
Then calculate the Market Value Adjustment on that amount.
3.
Market Value Adjustment = $123,794
x
[(
1.05
)
2,555/365
-1
]
=
$4,206
1.0450
Therefore, the amount of the withdrawal paid to you, ignoring any surrender charge, is $128,000, as requested.
The Fixed Interest Allocation will be reduced by the amount of the withdrawal, $128,000, but increased by the
Market Value Adjustment of $4,206, for a total reduction in the Fixed Interest Allocation of $123,794.
Fixed Account II
A2
ING USA Annuity and Life Insurance Company
ING USA Annuity and Life Insurance Company is a stock company domiciled in Iowa.
Fixed Account II
<R>
0
5
/20
/2008
</R>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2007
Commission File Number:
333-133154, 333-133076, 333-133156, 333-133153, 333-133155,
333-133152
ING USA ANNUITY AND LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Iowa
41-0991508
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
1475 Dunwoody Drive
19380-1478
West Chester, Pennsylvania
(Zip Code)
(Address of principal executive offices)
(610) 425-3400
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
Title: 4.50% Secured Medium Term Notes due 2010 of ING USA Global Funding Trust I
Name of exchange on which registered: New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
£
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
£
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90
days.
Yes
No
£
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any
amendment to this Form 10-K. Yes
No
£
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer
£
Accelerated filer
£
Non-accelerated filer
Smaller reporting company
£
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
£
No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates: N/A
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 250,000 shares of Common Stock, $10 par
value, as of March 25, 2008, are authorized, issued, and outstanding, all of which were directly owned by Lion Connecticut Holdings Inc.
NOTE: WHEREAS ING USA ANNUITY AND LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b)
OF FORM 10-K, THIS FORM IS BEING FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION I(2).
1
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Annual Report on Form 10-K
For the Year Ended December 31, 2007
TABLE OF CONTENTS
PAGE
PART I
Item 1.
Business**
3
Item 1A.
Risk Factors
15
Item 1B.
Unresolved Staff Comments
23
Item 2.
Properties
**
23
Item 3.
Legal Proceedings
24
Item 4.
Submission of Matters to a Vote of Security Holders
*
24
PART II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters
25
and Issuer Purchases of Equity Securities
Item 6.
Selected Financial Data
***
26
Item 7.
Management's Narrative Analysis of the Results of Operations and
27
Financial Condition
**
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
67
Item 8.
Financial Statements and Supplementary Data
72
Item 9.
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
131
Item 9A.
Controls and Procedures
131
Item 9B.
Other Information
132
PART III
Item 10.
Directors, Executive Officers, and Corporate Governance
*
133
Item 11.
Executive Compensation
*
133
Item 12.
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters*
133
Item 13.
Certain Relationships, Related Transactions, and Director Independence
*
133
Item 14
.
Principal Accounting Fees and Services
134
PART IV
Item 15.
Exhibits, Financial Statement Schedules
136
Index to Financial Statement Schedules
137
Signatures
141
Exhibits Index
142
*
Item omitted pursuant to General Instruction I(2) of Form 10-K, except as to Part III, Item 10 with respect to compliance with Sections 406 and 407 of the Sarbanes-Oxley Act of
2002.
**
Item prepared in accordance with General Instruction I(2) of Form 10-K.
***
Although item may be omitted pursuant to General Instruction I(2) of Form 10-K, the Company has provided certain disclosure under this item.
2
PART I
Item 1. Business
(Dollar amounts in millions, unless otherwise stated)
Organization of Business
ING USA Annuity and Life Insurance Company ("ING USA" or the "Company," as
appropriate) is a stock life insurance company domiciled in the State of Iowa and
provides financial products and services in the United States. ING USA is authorized
to conduct its insurance business in all states, except New York, and in the District of
Columbia.
ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.
("Lion" or "Parent"), which is an indirect, wholly-owned subsidiary of ING Groep
N.V. ("ING").  ING is a global financial services holding company based in The
Netherlands, with American Depository Shares listed on the New York Stock
Exchange under the symbol "ING".
Description of Business
ING's U.S.-based operations offer a broad range of life insurance, annuity, mutual
fund, employee benefit, defined contribution, guaranteed investment, and funding
agreement contracts.  For the year ended December 31, 2007, ING's U.S.-based
operations were ranked eighth in sales of variable annuities according to data
published by Morningstar, Inc. and twelfth in sales of fixed annuities, excluding
structured settlements, according to data published by LIMRA International Inc.
("LIMRA").  The Company serves as one of the primary vehicles through which
ING's U.S.-based operations write variable and fixed annuity business. According to
LIMRA's fourth quarter 2007 sales report on Stable Value and Funding Agreement
products, ING's U.S.-based operations were ranked second in market share for
funding agreement contracts, and seventh for traditional general account guaranteed
investment contracts, in terms of total assets.
The Company offers various insurance products, including immediate and deferred
variable and fixed annuities.
The Company's annuity products are distributed by
national wirehouses, regional securities firms, independent broker-dealers, banks, life
insurance companies with captive agency sales forces, independent insurance agents,
independent marketing organizations, and affiliated broker-dealers. The Company's
primary annuity customers are individual consumers.
The Company also offers guaranteed investment contracts and funding agreements
(collectively referred to as "GICs"), sold primarily to institutional investors and
corporate benefit plans. These products are marketed by home office personnel or
through specialty insurance brokers.
3
See "Reserves" for a discussion of the Company's reserves by product type.
The Company has one operating segment, which offers the products described below.
Products and Services
Products offered by the Company include immediate and deferred variable and fixed
annuities, designed to address customer needs for tax-advantaged savings, retirement
needs, and wealth-protection concerns, and GICs.
Variable Annuities
: The variable annuities offered by the Company are savings
vehicles in which contractowner deposits are recorded and primarily maintained in
separate accounts established by the Company and registered with the Securities and
Exchange Commission ("SEC") as a unit investment trust. Unlike fixed annuities,
variable annuity contractowners bear the risk of investment gains and losses
associated with the selected investment allocation.  The Company, however, offers
certain guaranteed death and living benefits (described below) under which it bears
specific risks associated with these products.
Separate account assets and liabilities generally represent funds maintained to meet
specific investment objectives of contractowners. In general, investment income and
investment gains and losses accrue directly to the separate accounts. The assets of
each account are legally segregated and are not subject to claims that arise out of any
other business of the Company.
Separate account assets supporting variable options under variable annuity contracts
are invested, as designated by the contractowner or participant under a contract, in
shares of mutual funds managed by affiliates of the Company or in other selected
mutual funds not managed by affiliates of the Company. Variable annuity deposits
are allocated to various subaccounts established within the separate account.  Each
subaccount represents a different investment option into which the contractowner
may allocate deposits. The account value of a variable annuity contract is equal to the
aggregate value of the subaccounts selected by the contractowner, including the value
allocated to any fixed account, less fees and expenses.  The Company offers
investment options for its variable annuities covering a wide range of investment
styles, including large, mid, and small cap equity funds, as well as fixed income
alternatives.  Many of the variable annuity contracts issued by the Company are
combination contracts, offering both variable and fixed options under which some or
all of the deposits may be allocated by the contractowner to a fixed account.
The Company's major source of income from variable annuities is the base contract
mortality, expense, and guaranteed death and living benefit rider fees charged to the
contractowner, less the costs of administering the product and providing for the
guaranteed death and living benefits.
4
The Company's variable annuities offer one or more of the following guaranteed
death and living benefits:
Guaranteed Minimum Death Benefits
("GMDBs"):
§
Standard - Guarantees that, upon death, the death benefit will be no less than the premiums paid by the contractowner, adjusted for any contract withdrawals.
§
Ratchet - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Standard or (2) the maximum contract anniversary (or quarterly) value of the variable
annuity, adjusted for contract withdrawals.
§
Rollup (7.0% or 5.5% Solution) - Guarantees that, upon death, the death benefit will be no less than the aggregate premiums paid by the contractowner accruing interest at 7.0% or 5.5% per
annum, adjusted for contract withdrawals, which may be subject to a maximum cap on the rolled up amount. (The Company has discontinued this option for new sales.)
§
Combo (Max 7) - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.
For contracts issued prior to January 1, 2000, most contracts with enhanced death
benefit guarantees were reinsured to third party reinsurers to mitigate the risk
produced by such guaranteed death benefits. For contracts issued after December 31,
1999, the Company instituted an equity hedging program in lieu of reinsurance. The
equity hedging program is based on the Company entering into derivative positions to
offset exposures to guaranteed minimum death benefits due to adverse changes in the
equity markets.
At December 31, 2007 and 2006, the guaranteed value of these death benefits in
excess of account values was estimated to be $2.7 billion and $2.2 billion,
respectively, before reinsurance. The increase was primarily driven by the decrease
in account values due to unfavorable equity market performance in the second half of
2007.
At December 31, 2007, the guaranteed value of minimum guaranteed death benefits
in excess of account values, net of reinsurance, was estimated to be $1.8 billion, of
which $537.6 was projected to be covered by the Company's equity hedging
program. At December 31, 2006, the guaranteed value of minimum guaranteed death
benefits in excess of account values, net of reinsurance, was estimated to be $1.3
billion, of which $381.7 was projected to be covered by the Company's equity
hedging program.  As of December 31, 2007 and 2006, the Company recorded a
liability of $209.4 and $139.7, respectively, net of reinsurance, representing the
estimated net present value of the Company's future obligation for guaranteed
minimum death benefits in excess of account values. The liability increased mainly
due to the accumulation of fees used to fund the reserve during 2007 and higher
future project benefits in excess of account values.
5
Guaranteed Living Benefits
:
§
Guaranteed Minimum Income Benefit ("GMIB") - Guarantees a minimum income payout, exercisable each contract anniversary on or after a specified date, in most cases the 10th rider
anniversary.
§
Guaranteed Minimum Withdrawal Benefit ("GMWB") - Guarantees annual withdrawals for life of a percentage of premiums received during the growth phase (before taking withdrawals and
after age 60). The percentage may vary by age at first withdrawal, depending on the base annuity contract. For certain versions, before withdrawals begin there are annual step-up (for 10 years) and quarterly ratchet features that may increase the
amount used to calculate the annual withdrawal amount. Other versions have a quarterly ratchet feature only.
A joint life-time withdrawal benefit option is available to include coverage for spouses. Most versions of the withdrawal benefit have reset and/or step up features that may increase the
guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0 % of eligible premiums may be made until eligible premiums previously paid by the contractowner are
returned, regardless of account value performance. Asset allocation requirements apply at all times where withdrawals are guaranteed for life.
§
Guaranteed Minimum Accumulation Benefit ("GMAB") - Guarantees that the account value will be at least 100% of the eligible premiums paid by the contractowner after 10 years, net of
any contract withdrawals (GMAB 10). In the past, the Company offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contractowners after 20 years (GMAB 20).
All living benefits are covered by the Company's equity hedging program.
At December 31, 2007 and 2006, the guaranteed value of these living benefits in
excess of account values was $506.5 and $227.4, respectively.  The increase was
primarily driven by the decrease in account values due to unfavorable equity market
performance in the second half of 2007.  As of December 31, 2007 and 2006, the
Company recorded a liability of $149.3 and $76.1, respectively, representing the
estimated net present value of its future obligation for living benefits in excess of
account values. The liability increased mainly due to accumulation of fees used to
fund the reserve and higher future projected benefits in excess of account values
during 2007.
Equity Hedging Program
: In order to hedge equity risk associated with GMDBs and
guaranteed living benefits, the Company enters into futures positions on various
public market equity indices chosen to closely replicate contractowner variable fund
returns. The Company uses market consistent valuation techniques to establish its
derivative positions and to rebalance the derivative positions in response to market
fluctuations. One aspect of the hedging program is designed to offset changes related
to equity experience in the liability and to pay excess claims not covered by the
contractowner account value. The Company also administers a hedging program that
mitigates both equity risk and equity volatility risk associated with its Principal Guard
GMWB product issued in 2005 and beyond. This hedge strategy primarily involves
entering into put options.
6
Other risks posed by market conditions, such as interest rate risk and the majority of
the Company's equity volatility risk, and risks posed by contractowner experience,
such as surrender and mortality experience deviations, are not explicitly mitigated by
this program. In addition, certain funds, where there is no replicating market index
and where hedging is not appropriate, are excluded from the program.
For those risks addressed by the equity hedging program, the Company is exposed to
the risk that the market indices will not adequately replicate actual contractowner
variable fund growth. Any differences between actual results and the market indices
result in income volatility.
Fixed Annuities
: The fixed annuities offered by the Company are general account
products and include single premium immediate, multi-year guaranteed, annual reset,
and fixed indexed ("FIA") annuities.  Under fixed annuity contracts, the principal
amount is guaranteed, and, for a specified time period, the Company credits interest
to the contractowner accounts at a fixed interest rate, or, for an FIA, the greater of a
fixed interest rate or a return based upon performance of the Standard & Poor's
("S&P") 500 index and participation rates set by the Company.  For accounting
purposes, the equity return component of an FIA is considered an embedded
derivative. See further discussion under "Reserves" below. The Company bears the
investment risk on fixed annuities, because, while the Company credits contractowner
accounts with a stated interest rate, the Company cannot be certain the investment
income earned on the general account assets will exceed that rate.
S&P 500 call options are purchased and written to hedge equity risk associated with
FIA contracts. During the fourth quarter of 2007, the Company began using futures
contracts to hedge certain FIA contracts.  The FIA hedging program is limited to
currently accruing liabilities resulting from participation rates that have already been
set, and measured using capital market valuation techniques. Future equity returns,
which may be reflected in FIA credited rates beyond the current policy term, are not
hedged.
The Company's major source of income from fixed annuities is the spread between
the investment income earned on the underlying general account assets and the
interest rate credited to contractowner accounts.
Guaranteed Investments Contracts and Funding Agreements
: The Company is also a
provider of GICs issued to the stable value market and other institutional customers.
The Company may issue GICs to one or more special purpose vehicles, including the
ING USA Global Funding Trusts, which concurrently sell notes to institutional or retail
investors in order to fund the purchase of GICs. The Company profits from the sale of
GICs by earning income in excess of the amount credited to the customer accounts, less
the cost of administering the product. The Company bears the investment risk because,
while the Company credits customer accounts with an interest rate based on a
predetermined index, plus a spread or a fixed rate, the Company cannot be certain the
investment income earned on the general account investments, less expenses will
exceed that rate.
7
Other Insurance Products
: Historically, the Company provided interest-sensitive,
traditional life insurance, and health insurance products. All health insurance has been
ceded to other insurers and new policies are no longer written. The Company ceased
the issuance of life insurance policies in 2001, and all life insurance business is
currently in run-off.  A certain portion of the assets held in the general account are
dedicated to funding this block of business.
Strategy, Method of Distribution, and Principal Markets
The Company believes longer life expectancies, an aging population, and growing
concern over the stability and availability of the Social Security system have made
retirement planning a priority for many Americans. The target market for the
Company's annuity products is primarily individuals, while the target market for GICs
is primarily institutional investors and corporate benefit plans.
The principal distribution channels of the Company's variable and fixed annuities
include national wirehouses, regional securities firms, independent broker-dealers,
banks, life insurance companies with captive agency sales forces, independent
insurance agents, independent marketing organizations, and affiliated broker-dealers.
GICs are distributed primarily through direct sales by home office personnel or through
specialty insurance brokers.
The Company markets its variable annuities primarily on the underlying guarantee
features, positioning the product line as a risk management tool for clients and advisors.
Indexed annuities are marketed primarily based on underlying guarantee features
coupled with consumer-friendly product designs offering the potential for equity
market upside. The Company also offers fixed annuities offering a guaranteed interest
rate or annuity payment suitable for clients seeking a stable return.
The Company also utilizes sales inducements as part of its distribution strategy for
annuities. Sales inducements represent benefits paid to contractowners for a specified
period, which are incremental to the amounts the Company credits on similar contracts
and are higher than the contract's expected ongoing crediting rates for periods after the
inducement.
The Company is not dependent upon any single customer, and no single customer
accounted for 10
.
0% or more of the
Company's revenue in 2007.  The only
distributor that produced 5.0% or more of 2007 annuity sales was the ING Advisors
Network (a group of broker-dealers affiliated with the Company), which produced
approximately 14.2% of annuity sales.
8
Assets Under Management
A substantial portion of the Company's fees, or other charges and margins, are based
on general and separate account assets under management ("AUM").  General
account AUM represents assets in which the Company bears the investment risk,
while separate account AUM represents assets in which the contractowners bear the
investment risk. AUM is principally affected by net deposits (i.e., annuity premiums
and GIC deposits, less surrenders), investment performance (i.e., interest credited to
contractowner accounts for fixed options or market performance for variable options),
and contractowner retention. The general and separate account AUM was as follows
at December 31, 2007 and 2006.
December 31,
2007
2006
Variable annuities
$ 45,525.9
$ 38,801.6
Fixed annuities
17,167.4
17,084.1
GICs
6,976.1
2,353.9
Other insurance products
1,300.9
1,316.0
Total
$ 70,970.3
$ 59,555.6
Competition
The competitive annuity market remains intense and is dominated by a number of
large, highly-rated insurance companies. Increasing competition within the retirement
savings business from traditional insurance carriers, as well as banks and mutual fund
companies, offers consumers many choices. The Company's annuity products compete
in the annuity market principally on the basis of investment performance, product
design, brand recognition, financial strength ratings, distribution capabilities, levels of
charges and credited rates, reputation, and customer service.
The Company competes in the GIC market primarily on the basis of its capital markets,
product structuring, and risk management expertise, as well as its brand recognition and
financial strength ratings. Other competitors in this market include other life insurance
companies, as well as banks and other financial institutions.
Reserves
The Company establishes and carries actuarially-determined reserves that are
calculated to meet its future obligations. Generally, reserves are calculated using
mortality and withdrawal rate assumptions based on relevant Company experience
and are periodically reviewed against both industry standards and experience.
Changes in, or deviations from, the assumptions used can significantly affect the
Company's reserve levels and related future operations.
Future policy benefits and claims reserves include reserves for deferred annuities and
immediate annuities with and without life contingent payouts, universal and
traditional life insurance contracts, and GICs.
9
Reserves for deferred annuity investment contracts and immediate annuities without
life contingent payouts are equal to cumulative deposits, less charges and
withdrawals, plus credited interest thereon.  Deferred annuity crediting rates and
reserve interest rates varied by product up to 10.0% for 2007, 7.8% for 2006, and
8.0% for 2005.
Reserves for individual immediate annuities with life contingent payout benefits are
computed on the basis of assumed interest discount rate, mortality, and expenses,
including a margin for adverse deviations. Such assumptions generally vary by
annuity plan type, year of issue, and policy duration.
For 2007, 2006, and 2005,
immediate annuity reserve interest discount rates varied up to 8.0% .
Reserves for FIAs are computed in accordance with the Financial Accounting
Standards Board Statement of Financial Accounting Standards ("FAS") No. 97,
"Accounting and Reporting by Insurance Enterprises for Certain Long-Duration
Contracts and for Realized Gains and Losses from the Sale of Investments" ("FAS
No. 97") and FAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("FAS No. 133"). Accordingly, the aggregate initial liability is equal to
the deposit received, plus a bonus, if applicable, and is split into a host component
and an embedded derivative component. Thereafter, the host liability accumulates at a
set interest rate, and the embedded derivative liability is recognized at fair value, with
the change in fair value recorded in the Statements of Operations.
Reserves for universal life products are equal to cumulative deposits, less withdrawals
and charges, plus credited interest thereon. Reserves for traditional life insurance
contracts represent the present value of future benefits to be paid to or on behalf of
contractowners and related expenses, less the present value of future net premiums.
Under Statement of Position ("SOP") 03-1, "Accounting and Reporting by Insurance
Enterprises for Certain Nontraditional Long-Duration Contracts for Separate
Accounts" ("SOP 03-1"), the Company calculates additional liabilities ("SOP 03-1
reserves") for certain guaranteed benefits and for universal life products with certain
patterns of cost of insurance charges and certain other fees. The SOP 03-1 reserve for
such products recognizes the portion of contract assessments received in early years
used to compensate the insurer for services provided in later years.
The Company calculates a benefit ratio for each block of business subject to SOP 03-
1, and calculates an SOP 03-1 reserve by accumulating amounts equal to the benefit
ratio multiplied by the assessments for each period, reduced by excess death benefits
during the period. The SOP 03-1 reserve is accumulated at interest rates using the
contract-credited rate for the period. The calculated reserve includes a provision for
universal life contracts with patterns of cost of insurance charges that produce
expected gains from the insurance benefit function followed by losses from that
function in later years.
GMABs and GMWBs without life contingent payouts are considered to be
derivatives under FAS No. 133. The additional reserves for these guarantees are
recognized at fair value through the Statements of Operations.
10
Reserves for GICs are calculated using the amount deposited with the Company, less
withdrawals, plus interest accrued to the ending valuation date. Interest on these
contracts is accrued by a predetermined index, plus a spread or a fixed rate,
established at the issue date of the contract.
As of December 31, 2007 and 2006, the Company's life and annuity insurance
reserves (general and separate account) and deposit-type funds were comprised of
each type of the following products:
2007
2006
Reserves
% of Total
Reserves
% of Total
Variable annuity
$ 49,789.0
65.6%
$ 43,353.9
67.1%
Fixed annuity
15,385.6
20.2%
15,287.5
23.7%
GICs
9,415.1
12.4%
4,603.8
7.1%
Other insurance products
1,349.7
1.8%
1,379.5
2.1%
Total
$ 75,939.4
100.0%
$ 64,624.7
100.0%
Reinsurance Arrangements
The Company utilizes indemnity reinsurance agreements to reduce its exposure to
large losses from its annuity and life insurance businesses.  Reinsurance permits
recovery of a portion of losses from reinsurers, although it does not discharge the
Company's primary liability as the direct insurer of the risks. Reinsurance treaties are
structured as yearly renewable term, coinsurance, or modified coinsurance.  All
treaties for variable annuity and life products are closed for new business, including
variable annuity guarantees, and the life business in force under those treaties is in
run-off. Thus, the Company is currently not selecting new reinsurers. If in a position
to select a reinsurer, the Company would primarily base its selection on the financial
strength of the reinsurer.
The Company currently has a significant concentration of ceded reinsurance with its
affiliate, Security Life of Denver Insurance Company ("Security Life").  At
December 31, 2007, the Company has reinsurance primarily related to GICs, fixed
annuities, and universal life policies with Security Life. See "Liquidity and Capital
Resources - Facultative Reinsurance Agreement" in Management's Narrative
Analysis of the Results of Operations and Financial Condition for further discussion
of the Company's reinsurance of GICs to Security Life.
One of the main risks reinsured by the Company is the GMDBs on its variable
annuity policies issued prior to January 1, 2000.  For contracts issued after
December 31, 1999, the Company hedges its exposure due to these products. Other
reinsurance contracts coinsure life, accident and health, and annuity businesses. The
Company continually monitors and evaluates the financial strength and credit ratings
of its reinsurers. Only those reinsurance recoverable balances deemed probable of
recovery are reflected as assets on the Company's Balance Sheets.
11
Investment Overview and Strategy
The Company's investment strategy focuses on diversification by asset class.  The
Company seeks to achieve economic diversification, while reducing overall credit
risk and liquidity risks. In addition, the Company seeks to mitigate the impact of cash
flow variability from embedded options within certain investment products, such as
prepayment options and interest rate options embedded in collateralized mortgage
obligations and call options embedded in corporate bonds.  The investment
management function is centralized under ING Investment Management LLC, an
affiliate of the Company, pursuant to an investment advisory agreement.  Separate
portfolios are established for groups of products with similar liability characteristics
within the Company.
The Company's general account invests primarily in fixed maturity investments,
including publicly issued bonds (including government bonds), privately placed notes
and bonds, mortgage-backed securities, and asset-backed securities.  The primary
investment strategy is to optimize the risk-adjusted return through superior asset
selection predicated on a developed relative value approach, credit research and
monitoring, superior management of interest rate risk, and active exploration into new
investment product opportunities. Investments are purchased when market returns,
adjusted for risk and expenses, are sufficient to profitably support growth of the
liability block of business. In addition, assets and liabilities are analyzed and reported
for internal management purposes on an option-adjusted basis. The level of required
capital of given transactions is a primary factor in determining relative value among
different investment and liability alternatives, within the scope of each product type's
objective. An active review of existing holdings identifies specific assets that could
be effectively traded in order to enhance the risk-adjusted returns of the portfolio,
while minimizing adverse tax and accounting impacts.  The Company strives to
maintain a portfolio weighted average asset quality rating of A, based on S&P ratings
classifications.  The weighted average excludes mortgage loans, but includes
mortgage-backed securities, which are reported with bonds.
The Company uses derivatives for hedging purposes to reduce the Company's
exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk,
and market risk. In addition, the Company uses credit default swaps to reduce the
credit loss exposure with respect to certain assets that the Company owns, or to
assume credit exposure on certain assets that the Company does not own.  These
credit default swaps are similar in credit risk to bonds of the named issuer, and allow
the Company to gain access to a broader, more diversified pool of credit risks. See
"Liquidity and Capital Resources - Derivatives" in Management's Narrative Analysis
of the Results of Operations and Financial Condition for further discussion of the
Company's use of derivatives.
12
Ratings
On August 23, 2005, S&P reaffirmed its AA (Very Strong) counterparty credit and
financial strength rating of ING's primary U.S. insurance operating companies ("ING
U.S."), including the Company. S&P also, on that date, affirmed the stable outlook
on the core insurance operating companies. On February 9, 2005, S&P assigned its
A-1+ short-term counterparty credit rating to the Company.  S&P noted that the
ratings are based on the Company's status as a core member of ING U.S. There has
been no change in S&P's rating of ING U.S., including the Company, since that date.
On July 25, 2007, Moody's Investor's Service, Inc. ("Moody's") affirmed the
financial strength rating of ING U.S., including the Company, of Aa3 (Excellent)
with a stable outlook. The rating is based on the strong implicit support and financial
strength of the parent company, ING.
On, May 11, 2007, A.M. Best Company, Inc. ("A.M. Best") reaffirmed the financial
strength rating of A+ (Superior) of ING U.S., including the Company, with a stable
outlook. A.M. Best also affirmed and assigned issuer credit ratings of aa- to the same
entities. Concurrently, A.M. Best affirmed the debt ratings of aa- on the two funding
agreement backed securities programs sponsored by ING USA and the notes issued
thereunder.
Regulation
The Company's operations are subject to comprehensive regulation throughout the
United States. The laws of the various jurisdictions establish supervisory agencies,
including the state insurance departments, with broad authority to grant licenses to
transact business and regulate many aspects of the products and services offered by
the Company, as well as solvency and reserve adequacy.  Many agencies also
regulate the investment activities of insurance companies on the basis of quality,
diversification, and other quantitative criteria.  The Company's operations and
accounts are subject to examination at regular intervals by certain of these regulators.
ING USA is subject to the insurance laws of the state in which it is organized and of
the other jurisdictions in which it transacts business.  The primary regulator of the
Company's insurance operations is the Division of Insurance for the State of Iowa.
Among other matters, these agencies may regulate trade practices, agent licensing,
policy forms, underwriting and claims practices, minimum interest rate to be credited
to fixed annuity contractowner accounts, and the maximum interest rates that can be
charged on policy loans.
The SEC, the Financial Industry Regulatory Authority ("FINRA"), the self-regulatory
organization which succeeded to the regulatory functions of the National Association
of Securities Dealers and the New York Stock Exchange, and, to a lesser extent, the
states, regulate sales and investment management activities and operations of the
Company.  Generally, the Company's variable annuity products and certain of its
fixed annuities are registered as securities with the SEC.  Regulations of the SEC,
Department of Labor, and Internal Revenue Service also impact certain of the
Company's annuity, life insurance, and other investment products. These products
13
may involve separate accounts and mutual funds registered under the Investment
Company Act of 1940.
Insurance Holding Company Laws
A number of states regulate affiliated groups that include insurers such as the
Company under holding company statutes.  These laws, among other things, place
certain restrictions on investments in, or transactions with, affiliates and may require
pre-approval of the payment of certain dividends by the Company to its parent.
Insurance Company Guaranty Fund Assessments
Insurance companies are assessed the costs of funding the insolvencies of other
insurance companies by the various state guaranty associations, generally based on
the amount of premiums companies collect in that state.
The Company accrues the cost of future guaranty fund assessments based on
estimates of insurance company insolvencies provided by the National Organization
of Life and Health Insurance Guaranty Associations and the amount of premiums
written in each state. The Company has estimated this liability to be $11.6 and $12.7
as of December 31, 2007 and 2006, respectively. The Company has also recorded an
asset of $4.6 and $5.3 as of December 31, 2007 and 2006, respectively, for future
credits to premium taxes for assessments already paid.
For information regarding certain other potential regulatory changes relating to the
Company's businesses, see Item 1A. Risk Factors.
Employees and Other Shared Services
The Company had 1,318 employees as of December 31, 2007, primarily focused on
managing new business processing, product distribution, marketing, customer service,
and product management for the Company and certain of its affiliates, as well as
providing product development, actuarial, and finance services to the Company and
certain of its affiliates. The Company also utilizes services provided by ING North
America Insurance Corporation and other affiliates.  These services include
underwriting, risk management, human resources, investment management,
information technology, legal and compliance services, as well as other new business
processing, product distribution, marketing, customer service, product management,
actuarial, and finance related services. The affiliated companies are reimbursed for
the Company's use of various services and facilities under a variety of intercompany
agreements.
14
Item 1A. Risk Factors
In addition to the normal risks of business, the Company is subject to significant risks
and uncertainties, including those which are described below.
Equity market volatility could negatively impact profitability and financial
condition
The decline of the United States and international equity markets over an extended
period of time may reduce the profitability and negatively affect the financial
condition of the Company due to the following:
§
Sales of new contracts and profitability of in force variable annuity products that provide returns based on equities or equity indices may decrease, which results in a decrease in fees and
profits earned on the accounts. The amount of fees the Company earns on variable annuity products is based on such account values.
§
The Company's exposure under certain guarantees related to the equity markets may increase due to equity markets decline. As a result, the Company may need to increase reserves through
a charge to earnings while at the same time receiving lower fees from such products.
§
The Company tries to minimize its exposure to guaranteed benefits by using reinsurance and other risk management strategies, including a hedging program.
For guaranteed minimum death benefits, the Company uses a combination of reinsurance and a hedging program to mitigate the risk; for guaranteed living benefits (GMIBs, GMWBs, GMABs) the
Company uses a hedging program. If the Company is not successful in minimizing these risks, the Company's future profitability may be negatively impacted. The factors that could cause the Company to be unsuccessful in minimizing these risks
would include, though not be limited to, the risk that reinsurers or derivative counterparties would be unable or unwilling to meet their contractual obligations; the risk that our other risk management strategies would not be effective; and the
risk that unfavorable market changes would produce losses beyond what is covered by our risk management strategies.
§
If the Company's expectations of future performance and profits decrease, it may be required to accelerate the amortization of deferred policy acquisition costs, decreasing
profits.
Changes in interest rates could have a negative impact on profitability and
financial condition
Changes in interest rates may be caused by either changes in the underlying risk free
rates or changes in the credit spreads required for various levels of risk within the
market. Changes in interest rates may negatively affect the Company's attempts to
maintain profitable margins between the amounts earned on its general account
investments and the amounts paid under its annuity and insurance contracts.
15
As interest rates rise, fixed annuity contract surrenders and withdrawals may increase
as contractowners seek higher returns.  To raise the cash necessary to fund such
surrenders and withdrawals, the Company may need to sell assets at capital losses.
An increase in contract surrenders and withdrawals may also require the Company to
accelerate amortization of deferred policy acquisition costs relating to such contracts,
further reducing profits.  In addition, rising interest rates increase unrealized losses
for fixed maturities and certain derivatives where the Company assumes credit
exposure. Significant or sustained increases in interest rates may result in increased
other-than-temporary impairments.
As interest rates decline, borrowers may prepay or redeem mortgages and bonds with
embedded call options that are owned as investments by the Company.  This may
force the Company to reinvest the proceeds at lower interest rates. In addition, many
of the Company's annuity products contain minimum interest rate guarantees that
limit the Company's ability to lower interest rates credited to contractowners in
response to lower investment returns. A decrease in the difference between earned
investment income and the interest credited to contractowners further reduces profits.
This decrease in profits may also require the Company to accelerate amortization of
deferred policy acquisition costs.
The Company's investment portfolio is subject to risks that may reduce the
value of invested assets and adversely affect sales, profitability, and investment
returns credited to contractowners
The Company's investment portfolio is subject to several risks, including the
following:
§
An increase in defaults or delinquency in investment portfolios, including derivative contracts;
§
Greater difficulty selling privately placed and certain asset-backed fixed maturity securities and commercial mortgage loans at attractive prices and in a timely manner, as all are less
liquid than publicly traded fixed maturity securities;
§
Borrower prepayment or redemption, prior to maturity, of mortgages that back mortgage-backed securities and bonds with embedded call options could force the Company to reinvest proceeds at
lower interest rates;
§
An increase in environmental liability exposure from the Company's commercial mortgage loan portfolio; and
§
Losses in the commercial mortgage loan portfolio as a result of economic downturns or natural disasters.
Changes in underwriting and actual experience could materially affect profitability
The Company prices its products based on long-term assumptions regarding
investment returns, mortality, morbidity, persistency, and operating costs.
Management establishes target returns for each product based upon these factors and
the average amount of regulatory and rating agency capital that the Company must
hold to support in-force contracts. The Company monitors and manages pricing and
sales mix to achieve target returns. Profitability from a new business emerges over a
16
period of years, depending on the nature and life of the product, and is subject to
variability, either positive or negative, as actual results may differ from pricing
assumptions.
The Company's profitability depends on the following:
§
Adequacy of investment margins;
§
Management of market and credit risks associated with investments;
§
Ability to maintain premiums and contract charges at a level adequate to cover mortality and morbidity benefits and contract administration expenses;
§
Adequacy of contract charges on variable contracts to cover the cost of product features;
§
Persistency of policies to ensure recovery of acquisition expenses; and
§
Management of operating costs and expenses within anticipated pricing allowances.
Changes in reserve estimates may reduce profitability
The Company establishes reserves based upon estimates of how much the Company
will pay for future benefits and claims. The Company calculates reserves based on
many assumptions and estimates including future investment yields, mortality,
morbidity, policy terminations, and expenses. The assumptions and estimates used in
connection with the reserve estimation process are inherently uncertain.  The
Company periodically reviews the adequacy of reserves.  The Company cannot,
however, determine with precision the amounts that the Company will pay for, or the
timing of payment of, actual benefits and claims or whether the assets supporting the
policy liabilities will grow to the level assumed prior to payment of benefits or
claims. If actual experience differs significantly from assumptions or estimates,
reserves may not be adequate.  As a result, the Company would incur a charge to
earnings in the quarter in which the reserves are increased.
A downgrade in the Company's ratings may negatively affect profitability and
financial condition
Ratings are an important factor in establishing the competitive position of insurance
companies. A downgrade, or the potential for a downgrade, of any of the Company's
ratings may lead to lower margins and fee income as follows:
§
Increase in contract surrenders and withdrawals;
§
Termination of relationships with broker-dealers, banks, agents, wholesalers, and other distributors of products and services; and
§
Reduction of new annuity contract and guaranteed investment contract and funding agreement sales.
The Company cannot predict what actions rating organizations may take, or what
actions it may be required to take in response to the actions of rating organizations,
which could adversely affect the Company. Rating organizations assign ratings based
upon several factors, including the following:
17
§
Statutory capital;
§
Risk of investment portfolio;
§
Economic trends affecting the financial services industry;
§
Changes in models and formulas used by rating organizations to assess the financial strength of a rated company;
§
Enterprise risk management; and
§
Other circumstances outside the rated company's control.
The continued availability of capital may affect the ability to grow
The Company has, from time to time, required capital to increase its reserves
associated with growth from product sales. Although the Company believes it has
sufficient capital to fund its immediate growth and capital needs, the amount of
capital required and available can vary due to a variety of circumstances that may not
be predictable, foreseeable, or within its control. A lack of sufficient capital could
hinder the Company's ability to grow.
The Company's results of operations and financial condition may be adversely
affected by general economic and business conditions or adverse capital market
conditions that are less favorable than anticipated
Factors such as consumer spending, business investment, government spending, the
volatility and strength of capital markets and inflation affect the business and
economic environment and, ultimately, the amount and profitability of the
Company's business. For example, in an economic downturn characterized by high
unemployment, lower family income, lower corporate earnings, lower business
investment and lower consumer spending, the demand for financial and insurance
products could be adversely affected.  Additionally, slow growth and recessionary
periods are often associated with declining asset prices, lower interest rates, credit
rating agency downgrades and increasing default losses.
Adverse capital market conditions, such as that recently experienced with the
decrease in the value and liquidity of asset-backed securities supported by subprime
mortgages, as well as other investments, could also impact the cost of and ability of
the Company to issue debt, including commercial paper borrowings. While the
Company has various sources of liquidity available, adverse market conditions could
impact the cost and availability of these borrowing sources.  This capital market
environment has reduced the liquidity of institutional investors, which has limited
their ability to purchase guaranteed investment contracts and funding agreements
(collectively, "GICs"). These market conditions may constrain the Company's ability
to issue GICs in the near term.
A loss of key product distribution relationships could materially affect sales
The Company distributes certain products under agreements with other members of
the financial services industry that are not affiliated with the Company. Termination
of one or more of these agreements due to, for example, a change in control of one of
the distributors, could reduce sales.
18
Competition could negatively affect the ability to maintain or increase
profitability
The insurance industry is intensely competitive. The Company competes based on
factors including the following:
§
Name recognition and reputation;
§
Service;
§
Investment performance;
§
Product features;
§
Price;
§
Perceived financial strength; and
§
Claims paying and credit ratings.
The Company's competitors include insurers, broker-dealers, financial advisors, asset
managers, and other financial institutions, which may, for example, have greater
market share, offer a broader range of products, or have higher claims-paying or
credit ratings than the Company.
In recent years, there has been substantial consolidation among companies in the
financial services industry resulting in increased competition from large, well-
capitalized financial services firms.
Many
of these firms also have been able to
increase their distribution systems through mergers or contractual arrangements.
Furthermore, larger competitors may lower operating costs and have an ability to
absorb greater risk, while maintaining financial strength ratings, allowing them to
price products more competitively.
While
the Company cannot predict the future
level of consolidation, the Company expects consolidation to continue and perhaps
accelerate in the future, increasing competitive pressure.
Changes in federal income tax law or interpretations of existing tax law could
affect profitability and financial condition by making some products less
attractive to contractowners and increasing tax costs of contractowners or the
Company
Annuity products that the Company sells currently benefit from one or more forms of
tax favored status under current federal tax law. The Economic Growth and Tax
Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation
Act of 2003 contain provisions that will, over time, significantly lower individual tax
rates. This decrease will reduce the benefits of deferral on the build-up of value of
annuities.
Many of these provisions expire
in 2008 and 2010.
The Bush
Administration, however, has proposed that many of the rate reductions and tax-
favored savings initiatives be made permanent.
Although the Company cannot
predict the overall effect on product sales, some of these tax law changes could hinder
sales and result in the increased surrender of annuity contracts.
19
Additionally, the Company is subject to federal corporation income tax, and benefits
from certain federal tax provisions, including but not limited to, dividends received
deductions, various tax credits, and insurance reserve deductions. There is risk that
changes to federal tax law or in Internal Revenue Service ("IRS") interpretation of
existing tax law may be enacted or adopted, and could result in materially higher
corporate taxes than would be incurred under existing tax law or interpretation and
adversely impact profitability.
Litigation may adversely affect profitability and financial condition
The Company is, and may be in the future, subject to legal actions in the ordinary
course of insurance, investment management, and other business operations. These
legal actions may include proceedings relating to aspects of businesses and operations
that are specific to the Company, and proceedings that are typical of the businesses in
which the Company operates. Some of these proceedings may be brought on behalf
of a class. Plaintiffs may seek large or indeterminate amounts of damage, including
compensatory, liquidated, treble, and/or punitive damages.  Given the large or
indeterminate amounts sometimes sought, and the inherent unpredictability of
litigation, it is possible that an adverse outcome could, from time to time, have an
adverse effect on the Company's reputation, results of operations, or cash flows, in
particular quarterly or annual periods.
Changes in regulation in the United States and recent regulatory investigations
may reduce profitability
The Company's insurance and securities business is subject to comprehensive state
and federal regulation and supervision throughout the United States.  The primary
purpose of state regulation is to protect contractowners, and not necessarily to protect
creditors and investors.  State insurance and securities regulators, state attorneys
general, the National Association of Insurance Commissioners, the SEC, the FINRA,
the Department of Labor and the IRS continually reexamine existing laws and
regulations and may impose changes in the future.  Changes in legislation and
administrative policies, or new interpretations of existing laws, in areas such as
employee benefit plan regulation, financial services regulation, and federal taxation,
could lessen the competitive advantages of certain of the Company's products, result
in the surrender of existing contracts and policies, increase costs, reduce new product
sales, or result in higher taxes affecting the Company, thus reducing the Company's
profitability.
Since 2002, the insurance industry has become the focus of increased regulatory
scrutiny as various state and federal governmental agencies and self-regulatory
organizations conduct inquiries and investigations into the products and practices of
the financial services industries. These initiatives currently focus on areas such as:
§
Inappropriate trading of fund shares;
§
Revenue sharing and directed brokerage;
§
Sales and marketing practices (including sales to seniors);
§
Suitability;
§
Arrangements with service providers;
§
Pricing;
20
§
Product cost and fees;
§
Compensation and sales incentives;
§
Potential conflicts of interest;
§
Potential anti-competitive activity;
§
Reinsurance;
§
Specific product types, including group annuities and indexed annuities; and
§
Adequacy of disclosure.
It is likely that the scope of these industry investigations will become broader before
they conclude.
In some cases, this regulatory scrutiny has led to new proposed legislation and
regulation that could significantly affect the financial services industry, including
businesses in which the Company is engaged, or has resulted in regulatory penalties,
and litigation. At this time, the Company does not believe that any of this regulatory
scrutiny will have a material adverse affect on it. The Company cannot, however,
guarantee that new laws, regulations, and other regulatory action aimed at the
business practices under scrutiny would not adversely affect its business.  The
adoption of new laws and regulations, enforcement actions, or litigation, whether or
not involving the Company, could influence the manner in which the Company
distributes its products, result in negative coverage of the industry by the media,
cause significant harm to the Company's reputation, and adversely impact
profitability.
The Company's products are subject to extensive regulation and failure to meet
any of the complex product requirements may reduce profitability
The Company's insurance and annuity products are subject to a complex and
extensive array of state and federal tax, securities and insurance laws, and regulations,
which are administered and enforced by a number of different governmental and self-
regulatory authorities, including state insurance regulators, state securities
administrators, the SEC, the FINRA, and the IRS.
For example, U.S. federal income tax law imposes requirements relating to insurance
and annuity product design, administration, and investments that are conditions for
beneficial tax treatment of such products under the Internal Revenue Code. Failure to
administer certain contract features (for example, contractual annuity start dates in
nonqualified annuities) could affect such beneficial tax treatment. Additionally, state
and federal securities and insurance laws impose requirements relating to insurance
and annuity product design, offering and distribution, and administration. Failure to
meet any of these complex tax, securities, or insurance requirements could subject the
Company to administrative penalties imposed by a particular governmental or self-
regulatory authority, unanticipated costs associated with remedying such failure or
other claims, harm to the Company's reputation, interruption of the Company's
operations, or adversely impact profitability.
21
A failure of the Company's operating systems or a compromise of security with
respect to operating systems or portable electronic devices could adversely
affect the Company's results of operations and financial condition
The Company is highly dependent on automated systems to record and process
Company and contractowner transactions. The Company may experience a failure of
its operating systems or a compromise of security due to technical system flaws,
clerical or record-keeping errors, or tampering or manipulation of those systems by
employees or unauthorized third parties.  Information security risks also exist with
respect to the use of portable electronic devices, such as laptops, which are
particularly vulnerable to loss and theft.
The Company may also be subject to
disruptions of its operating systems arising from events that are wholly or partially
beyond its control (for example, natural disasters, acts of terrorism, epidemics,
computer viruses, and electrical/telecommunications outages). All of these risks are
also applicable where the Company relies on outside vendors to provide services to it
and its contractowners. Operating system failures or disruptions or the compromise
of security with respect to operating systems or portable electronic devices could
subject the Company to regulatory sanctions, or other claims, harm the Company's
reputation, interrupt the Company's operations, and adversely affect the Company's
business, results of operations, or financial condition.
Reinsurance subjects the Company to the credit risk of reinsurers and may not
be adequate to protect against losses arising from ceded reinsurance
The collectibility of reinsurance recoverables is subject to uncertainty arising from a
number of factors, including whether the insured losses meet the qualifying
conditions of the reinsurance contract and whether reinsurers, or their affiliates, have
the financial capacity and willingness to make payments under the terms of the
reinsurance treaty or contract. The Company's inability to collect a material recovery
from a reinsurer could have a material adverse effect on profitability and financial
condition.
The occurrence of natural or man-made disasters may adversely affect the
Company's results of operations and financial condition
The Company is exposed to various risks arising from natural disasters, including
hurricanes, floods, earthquakes, tornadoes, and pandemic disease, caused by a virus
such as H5N1 (the "Avian flu" virus), as well as man-made disasters, including acts
of terrorism and military actions, which may adversely affect assets under
management, results of operations and financial condition, as follows:
§
Losses in the Company's investment portfolio due to significant volatility in global financial markets or the failure of counterparties to perform.
§
Changes in the rate of mortality lapses and surrenders of existing policies/contracts, as well as sales of new policies/contracts.
§
Reduced collectibility of reinsurance.
§
Disruption of the Company's normal business operations due to catastrophic property damage, loss of life, or disruption of public and private infrastructure, including communications
and financial services.
22
While the Company has a business continuation and crisis management plan, there
can be no assurance that the Company's plan and insurance coverages would be
effective in mitigating any negative effects on operations or profitability in the event
of a disaster.
The occurrence of unidentified or unanticipated risks could negatively affect the
Company's business or result in losses
The Company has developed risk management policies and procedures and expects to
continue to do so in the future. Nonetheless, the Company's policies and procedures
to identify, monitor, and manage risks may not be fully effective.  Many of the
Company's methods of managing risk and exposures are based upon observed
historical market behavior or statistics based on historical models. As a result, these
methods may not predict future exposures, which could be significantly greater than
historical measures indicate.
Other risk management methods depend on the
evaluation of information regarding markets, clients, catastrophe occurrence, or other
matters, that is publicly available or otherwise accessible to the Company.  This
information may not always be accurate, complete, up-to-date, or properly evaluated.
Management of operational, legal, and regulatory risks requires, among other things,
policies and procedures to record and verify large numbers of transactions and events.
These policies and procedures may not be fully effective.
Item 1B. Unresolved Staff Comments
None.
Item 2.
Properties
The Company's principal office is located at 1475 Dunwoody Drive, West Chester,
Pennsylvania, 19380-1478. The Company's annuity operations and customer service
center are located at 909 Locust Street, Des Moines, Iowa 50309, and the guaranteed
investment contract business activities are located at 1290 Broadway, Denver,
Colorado 80203-2122.  All Company office space is leased or subleased by the
Company or its other affiliates.  The Company pays substantially all expenses
associated with its leased and subleased office properties.  Affiliates within ING's
U.S. operations provide the Company with various management, finance, investment
management, and other administrative services, from facilities located at 5780 Powers
Ferry Road, N.W., Atlanta, Georgia 30327-4390, and One Orange Way, Windsor,
Connecticut 06095-4774.  The affiliated companies are reimbursed for the
Company's use of these services and facilities under a variety of intercompany
agreements.
23
Item 3.
Legal Proceedings
The Company is involved in threatened or pending lawsuits/arbitrations arising from
the normal conduct of business.  Due to the climate in insurance and business
litigation/arbitrations, suits against the Company sometimes include claims for
substantial compensatory, consequential, or punitive damages, and other types of
relief. Moreover, certain claims are asserted as class actions, purporting to represent
a group of similarly situated individuals.
While it is not possible to forecast the
outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance, and
established reserves, it is the opinion of management that the disposition of such
lawsuits/arbitrations will not have a materially adverse effect on the Company's
operations or financial position.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted pursuant to General Instruction I(2)(c) of Form 10-K.
24
PART II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
(Dollar amounts in millions, unless otherwise stated)
There is no public trading market for the common stock of ING USA Annuity and
Life Insurance Company ("ING USA" or the "Company", as appropriate). All of the
Company's outstanding common stock is owned by its parent, Lion Connecticut
Holdings Inc. ("Lion" or "Parent"), a Connecticut holding and management company.
All of the outstanding common stock of Lion is owned by ING America Insurance
Holdings, Inc., whose ultimate parent is ING Groep N.V.
The Company's ability to pay dividends to its parent is subject to the prior approval
of the Iowa Division of Insurance for payment of any dividend, which, when
combined with other dividends paid within the preceding twelve months, exceeds the
greater of (1) ten percent (10.0%) of the Company's statutory surplus at the prior year
end or (2) the Company's prior year statutory net gain from operations.
During 2007 and 2005, the Company did not pay any dividends or return of capital
distributions to Lion. During 2006, the Company paid $170.0 in a return of capital
distribution to Lion.
During 2007, the Company received $150.0 in capital contributions from Lion.
During 2006, the Company did not receive any capital contributions from its Parent.
During 2005, the Company received capital contributions of $100.0 from Lion to
support sales activities. On February 21, 2008, the Company received a $1.1 billion
capital contribution from Lion.
25
Item 6.
Selected Financial Data
(Dollar amounts in millions, unless otherwise stated)
ING USA ANNUITY AND LIFE INSURANCE COMPANY
3-YEAR SUMMARY OF SELECTED FINANCIAL DATA
2007
2006
2005
OPERATING RESULTS
Net investment income
$ 1,346.4
$ 1,156.4
$ 1,102.2
Fee income
1,198.9
939.2
745.6
Premiums
19.6
20.5
21.8
Net realized capital losses
(391.2)
(90.4)
(2.9)
Total revenue
2,173.8
2,025.7
1,867.4
Interest credited and other benefits to
contractowners
1,312.0
1,169.7
1,085.8
Amortization of deferred policy acquisition
costs and value of business acquired
408.1
293.0
318.9
Net income
129.0
212.2
189.9
FINANCIAL POSITION
Total investments
$ 27,881.2
$ 22,586.3
$ 21,454.6
Assets held in separate accounts
44,477.8
37,928.3
30,262.8
Total assets
81,276.2
69,677.6
59,371.7
Future policy benefits and claims reserves
31,461.6
26,696.4
24,225.3
Notes to affiliates
435.0
435.0
435.0
Liabilities related to separate accounts
44,477.8
37,928.3
30,262.8
Total shareholder's equity
3,119.0
2,989.1
2,949.0
ASSETS UNDER MANAGEMENT
Variable annuities
$ 45,525.9
$ 38,801.6
$ 31,220.2
Fixed annuities
17,167.4
17,084.1
15,632.1
Guaranteed investment contracts
and funding agreements
6,976.1
2,353.9
2,074.0
Other insurance products
1,300.9
1,316.0
1,346.2
Total assets under management
$ 70,970.3
$ 59,555.6
$ 50,272.5
26
Item 7. Management's Narrative Analysis of the Results of Operations and Financial
Condition
(Dollar amounts in millions, unless otherwise stated)
Overview
The following narrative analysis presents a review of the results of operations of ING
USA Annuity and Life Insurance Company ("ING USA" or the "Company", as
appropriate) for each of the three years ended December 31, 2007, 2006, and 2005,
and financial condition as of December 31, 2007 and 2006. This item should be read
in its entirety and in conjunction with the selected financial data, financial statements
and related notes, and other supplemental data, which can be found under Part II,
Item 6. and Item 8. contained herein.
Forward-Looking Information/Risk Factors
In connection with the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the Company cautions readers regarding certain forward-
looking statements contained in this report and in any other statements made by, or on
behalf of, the Company, whether or not in future filings with the Securities and
Exchange Commission ("SEC"). Forward-looking statements are statements not
based on historical information and which relate to future operations, strategies,
financial results, or other developments. Statements using verbs such as "expect,"
"anticipate," "believe," or words of similar import, generally involve forward-looking
statements. Without limiting the foregoing, forward-looking statements include
statements that represent the Company's beliefs concerning future levels of sales and
redemptions of the Company's products, investment spreads and yields, or the
earnings and profitability of the Company's activities.
Forward-looking statements are necessarily based on estimates and assumptions that
are inherently subject to significant business, economic, and competitive uncertainties
and contingencies, many of which are beyond the Company's control and many of
which are subject to change. These uncertainties and contingencies could cause actual
results to differ materially from those expressed in any forward-looking statements
made by, or on behalf of, the Company. Whether or not actual results differ
materially from forward-looking statements may depend on numerous foreseeable
and unforeseeable developments, including, but not limited to the following:
(1)
Equity market volatility could negatively impact profitability and financial condition;
(2)
Changes in interest rates could have a negative impact on profitability and financial condition;
(3)
The Company's investment portfolio is subject to risks that may reduce the value of invested assets and adversely affect sales, profitability, and investment returns credited to
contractowners;
(4)
Changes in underwriting and actual experience could materially affect profitability;
27
(5)
Changes in reserve estimates may reduce profitability;
(6)
A downgrade in the Company's ratings may negatively affect profitability and financial condition;
(7)
The continued availability of capital may affect the ability to grow;
(8)
The Company's results of operations and financial condition may be adversely affected by general economic and business conditions or adverse capital market conditions that are less
favorable than anticipated;
(9)
A loss of key product distribution relationships could materially affect sales;
(10)
Competition could negatively affect the ability to maintain or increase profitability;
(11)
Changes in federal income tax law or interpretations of existing tax law could affect profitability and financial condition by making some products less attractive to contractowners and
increasing tax costs of contractowners or the Company;
(12)
Litigation may adversely affect profitability and financial condition;
(13)
Changes in regulation in the United States and recent regulatory investigations may reduce profitability;
(14)
The Company's products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability;
(15)
A failure of the Company's operating systems or a compromise of security with respect to operating systems or portable electronic devices could adversely affect the Company's
results of operations and financial condition;
(16)
Reinsurance subjects the Company to the credit risk of reinsurers and may not be adequate to protect against losses arising from ceded reinsurance;
(17)
The occurrence of natural or man-made disasters may adversely affect the Company's results of operations and financial condition; and
(18)
The occurrence of unidentified or unanticipated risks could negatively affect the Company's business or result in losses.
Investors are also directed to consider the risks and uncertainties discussed in Items
1A., 7., and 7A. contained herein, as well as in other documents filed by the
Company with the SEC. Except as may be required by the federal securities laws, the
Company disclaims any obligation to update forward-looking information.
Basis of Presentation
The Company is a stock life insurance company domiciled in the State of Iowa and
provides financial products and services in the United States. ING USA is authorized
to conduct its insurance business in all states, except New York, and in the District of
Columbia.
ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.
("Lion" or "Parent"), which is an indirect, wholly-owned subsidiary of ING Groep
N.V. ("ING").  ING is a global financial services holding company based in The
Netherlands, with American Depository Shares listed on the New York Stock
Exchange under the symbol "ING".
The Company has one operating segment.
28
Critical Accounting Policies
General
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the use of estimates and assumptions
in certain circumstances that affect amounts reported in the accompanying financial
statements and related footnotes. These estimates and assumptions are evaluated on
an on-going basis based on historical developments, market conditions, industry
trends, and other information that is reasonable under the circumstances. There can
be no assurance that actual results will conform to estimates and assumptions, and
that reported results of operations will not be materially adversely affected by the
need to make future accounting adjustments to reflect changes in these estimates and
assumptions from time to time.
The Company has identified the following estimates as critical in that they involve a
higher degree of judgment and are subject to a significant degree of variability:
reserves, valuation of investments and other-than-temporary impairments, valuation
of derivative instruments, and amortization of deferred policy acquisition costs
("DAC") and value of business acquired ("VOBA"). In developing these estimates,
management makes subjective and complex judgments that are inherently uncertain
and subject to material changes as facts and circumstances develop.  Although
variability is inherent in these estimates, management believes the amounts provided
are appropriate based upon the facts available upon compilation of the financial
statements.
Reserves
The Company establishes and carries actuarially-determined reserves that are
calculated to meet its future obligations. Generally, reserves are calculated using
mortality and withdrawal rate assumptions based on relevant Company experience
and are periodically reviewed against both industry standards and experience.
Changes in, or deviations from, the assumptions used can significantly affect the
Company's reserve levels and related future operations.
Future policy benefits and claims reserves include reserves for deferred annuities and
immediate annuities with and without life contingent payouts, universal and
traditional life insurance contracts, and guaranteed investment contracts and funding
agreements, collectively referred to as GICs.
Reserves for deferred annuity investment contracts and immediate annuities without
life contingent payouts are equal to cumulative deposits, less charges and
withdrawals, plus credited interest thereon.  Deferred annuity crediting rates and
reserve interest rates varied by product up to 10.0% for 2007, 7.8% for 2006, and
8.0% for 2005.
29
Reserves for individual immediate annuities with life contingent payout benefits are
computed on the basis of assumed interest discount rate, mortality, and expenses,
including a margin for adverse deviations. Such assumptions generally vary by
annuity plan type, year of issue, and policy duration. For 2007, 2006, and 2005,
immediate annuity reserve interest discount rates varied up to 8.0% .
Reserves for fixed indexed annuities ("FIAs") are computed in accordance with the
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("FAS") No. 97, "Accounting and Reporting by Insurance Enterprises for
Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of
Investments" ("FAS No. 97"), and FAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS No. 133"). Accordingly, the aggregate
initial liability is equal to the deposit received, plus a bonus, if applicable, and is split
into a host component and an embedded derivative component. Thereafter, the host
liability accumulates at a set interest rate, and the embedded derivative liability is
recognized at fair value, with the change in fair value recorded in the Statements of
Operations.
Reserves for universal life products are equal to cumulative deposits, less withdrawals
and charges, plus credited interest thereon. Reserves for traditional life insurance
contracts represent the present value of future benefits to be paid to or on behalf of
contractowners and related expenses, less the present value of future net premiums.
Under Statement of Position ("SOP") 03-1, "Accounting and Reporting by Insurance
Enterprises for Certain Nontraditional Long-Duration Contracts for Separate
Accounts" ("SOP 03-1"), the Company calculates additional liabilities ("SOP 03-1
reserves") for certain guaranteed benefits and for universal life products with certain
patterns of cost of insurance charges and certain other fees. The SOP 03-1 reserve
recognized for such products is in addition to the liability previously held and
recognizes the portion of contract assessments received in early years used to
compensate the insurer for services provided in later years.
The Company calculates a benefit ratio for each block of business subject to SOP 03-
1, and calculates an SOP 03-1 reserve by accumulating amounts equal to the benefit
ratio multiplied by the assessments for each period, reduced by excess death benefits
during the period. The SOP 03-1 reserve is accumulated at interest rates using the
contract-credited rate for the period. The calculated reserve includes a provision for
universal life contracts with patterns of cost of insurance charges that produce
expected gains from the insurance benefit function followed by losses from that
function in later years.
Guaranteed Minimum Accumulation Benefits ("GMABs") and Guaranteed Minimum
Withdrawal Benefits ("GMWBs") without life contingent payouts are considered to
be derivatives under FAS No. 133. The additional reserves for these guarantees are
recognized at fair value through the Statements of Operations.
30
Reserves for GICs are calculated using the amount deposited with the Company, less
withdrawals, plus interest accrued to the ending valuation date. Interest on these
contracts is accrued by a predetermined index, plus a spread or a fixed rate,
established at the issue date of the contract.
Valuation of Investments and Other-Than-Temporary Impairments
All of the Company's fixed maturities and equity securities are currently designated
as available-for-sale.  Available-for-sale securities are reported at fair value and
unrealized capital gains (losses) on these securities are recorded directly in
Shareholder's equity, after adjustment for related changes in DAC, VOBA, and
deferred income taxes.
The fair values for fixed maturities are largely determined by one of two pricing
methods: published price quotations or valuation techniques with market inputs.
Security pricing is applied using a hierarchy or "waterfall" approach, whereby prices
are first sought from published price quotations, including pricing services or broker-
dealer quotations.  Published price quotations may be unavailable or deemed
unreliable due to a limited market for securities that are rarely traded or are traded
only in privately negotiated transactions.  As such, fair values for the remaining
securities, consisting primarily of privately placed bonds, are then determined using
risk-free interest rates, current corporate spreads, the credit quality of the issuer and
cash flow characteristics of the security.
The fair values for actively traded equity securities are based on quoted market prices.
For equity securities not actively traded, estimated fair values are based upon values
of issues of comparable yield and quality or conversion value, where applicable.
The fair values for short-term investments are based on quoted market prices.
See "Valuation of Derivative Instruments" for a discussion of the techniques used to
determine fair values of derivatives.
The fair value of a financial instrument is the amount at which the instrument could
be exchanged in a current transaction between knowledgeable, unrelated willing
parties.  As such, the estimated fair value of a financial instrument may differ
significantly from the amount that could be realized if the security was sold
immediately.
The Company's accounting policy requires that a decline in the value of an
investment below its amortized cost basis be assessed to determine if the decline is
other-than-temporary. If so, the investment is deemed to be other-than-temporarily
impaired, and a charge is recorded in Net realized capital gains (losses) equal to the
difference between fair value and the amortized cost basis of the investment. The fair
value of the other-than-temporarily impaired investment becomes its new cost basis.
31
The evaluation of other-than-temporary impairments included in the Company's
general account is a quantitative and qualitative process, which is subject to risks and
uncertainties, and is intended to determine whether declines in the fair value of
investments should be recognized in current period earnings.  The risks and
uncertainties include the length of time and extent to which the fair value has been
less than amortized cost, the issuer's financial condition and near-term prospects,
future economic conditions and market forecasts, and the Company's intent and
ability to retain the investment for a period of time sufficient to allow for recovery in
fair value.
In addition, the Company invests in structured securities that meet the criteria of
Emerging Issues Task Force ("EITF") Issue No. 99-20, "Recognition of Interest
Income and Impairment on Purchased and Retained Beneficial Interests in Securitized
Financial Assets" ("EITF 99-20"). Under EITF 99-20, a further determination of the
required impairment is based on the analysis discussed in the preceding paragraph, as
well as credit risk and the possibility of significant prepayment risk that restricts the
Company's ability to recover the investment. An impairment is recognized if the fair
value of the security is less than amortized cost and there has been an adverse change
in cash flow since the last remeasurement date.
Valuation of Derivative Instruments
Derivative instruments are reported at fair value primarily using the Company's
derivative accounting system.  The system uses key financial data, such as yield
curves, exchange rates, Standard and Poor's ("S&P") 500 Index prices, and London
Inter Bank Offered Rates ("LIBOR"), which are obtained from third party sources
and uploaded into the system. For those derivatives that are unable to be valued by
the accounting system, the Company typically utilizes values established by third
party brokers.
Embedded derivative instruments within investments are reported at fair value based
upon internally established valuations that are consistent with external valuation
models or market quotations. GMWBs without life contingent payouts and GMABs
represent embedded derivative liabilities in annuity contracts that are required to be
recorded separately from the host annuity contracts. The option component of an FIA
also represents an embedded derivative. These embedded derivatives are carried at
fair value based on actuarial assumptions related to projected cash flows, including
benefits and related contract charges, over the lives of the contracts, incorporating
expectations concerning contractowner behavior.
Amortization of Deferred Policy Acquisition Costs and Value of Business Acquired
DAC represents policy acquisition costs that have been capitalized and are subject to
amortization.  Such costs consist principally of certain commissions, underwriting,
contract issuance, and certain agency expenses, related to the production of new and
renewal business.
32
VOBA represents the outstanding value of in force business capitalized in purchase
accounting when the Company was acquired and is subject to amortization.  The
value is based on the present value of estimated profits embedded in the Company's
contracts.
FAS No. 97 applies to universal life and investment-type products, such as fixed and
variable deferred annuities. Under FAS No. 97, DAC and VOBA are amortized, with
interest, over the life of the related contracts in relation to the present value of
estimated future gross profits from investment, mortality, and expense margins, plus
surrender charges. DAC related to GICs, however, are amortized on a straight-line
basis over the life of the contract
Contractowners may periodically exchange one contract for another, or make
modifications to an existing contract. These transactions are identified as internal
replacements and are accounted for in accordance with Statement of Position 05-1,
"Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection
with Modifications or Exchanges of Insurance Contracts" ("SOP 05-1").
Internal replacements that are determined to result in substantially unchanged
contracts are accounted for as continuations of the replaced contracts.  Any costs
associated with the issuance of the new contracts are considered maintenance costs
and expensed as incurred. Unamortized DAC and VOBA related to the replaced
contracts continue to be deferred and amortized in connection with the new contracts,
as follows:
§
For deferred annuities, the estimated future gross profits of the new contracts are treated as revisions to the estimated future gross profits of the replaced contracts in the determination
of amortization.
§
As of January 1, 2007, internal replacements that are determined to result in contracts that are substantially changed are accounted for as extinguishments of the replaced contracts, and any
unamortized DAC and VOBA related to the replaced contracts are written off to Amortization of deferred policy acquisition costs and value of business acquired in the Statements of Operations.
Changes in assumptions can have a significant impact on DAC and VOBA balances
and amortization rates.  Several assumptions are considered significant in the
estimation of future gross profits associated with variable universal life and variable
deferred annuity products. One of the most significant assumptions involved in the
estimation of future gross profits is the assumed return associated with the variable
account performance.  The overall return on the variable account is dependent on
multiple factors, including the relative mix of the underlying sub-accounts among
bond funds and equity funds, as well as equity sector weightings. Other significant
assumptions include surrender and lapse rates, estimated interest spread, and
estimated mortality.
Due to the relative size and sensitivity to minor changes in underlying assumptions of
DAC and VOBA balances, the Company performs quarterly and annual analyses of
DAC and VOBA for the annuity and life businesses, respectively.  The DAC and
VOBA balances are also evaluated for recoverability.
33
At each evaluation date, actual historical gross profits are reflected, and estimated
future gross profits and related assumptions are evaluated for continued
reasonableness.  Any adjustment in estimated future gross profits requires that the
amortization rate be revised ("unlocking") retroactively to the date of the policy or
contract issuance.  The cumulative unlocking adjustment is recognized as a
component of current period amortization.  In general, sustained increases in
investment, mortality, and expense margins, and thus estimated future profits, lower
the rate of amortization. However, sustained decreases in investment, mortality, and
expense margins, and thus estimated future gross profits, increase the rate of
amortization.
For interest rate and equity sensitivity and related effects on DAC and VOBA, see
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Results of Operations
Overview
Products offered by the Company include immediate and deferred variable and fixed
annuities, designed to address individual customer needs for tax-advantaged savings,
retirement needs, and wealth-protection concerns, and GICs, sold primarily to
institutional investors and corporate benefit plans.
The Company derives its revenue mainly from (a) fee income generated on variable
assets under management ("AUM"), (b) investment income earned on fixed AUM,
and (c) certain other management fees. Fee income is primarily generated from
separate account assets supporting variable options under variable annuity contract
investments, as designated by contractowners. Investment income from fixed AUM
is mainly generated from annuity products with fixed investment options. The
Company's expenses primarily consist of (a) interest credited and other benefits to
contractowners, (b) amortization of DAC and VOBA, (c) expenses related to the
selling and servicing of the various products offered by the Company, and (d) other
general business expenses.
Economic Analysis
The current economic environment presents challenges and opportunities for the
Company and the insurance industry.  The Company's sales and financial results
continue to be affected by economic trends.
Equity market performance affects the Company, as fee revenue from variable AUM
is generally affected by equity market performance.  In addition, variable product
demand often mirrors consumer demand for equity market investments. The increase
in sales and investment performance in the variable product lines during 2007
favorably impacted variable AUM in 2007.
The changing market interest rate environment during 2007, in combination with the
slow economic growth resulted in a substantial increase in unrealized losses in 2007,
as compared to the same period for 2006.
34
While the interest rate environment during 2007 has resulted in an increase in
unrealized losses as compared to 2006, overall increases in market yields have
allowed for improved asset returns, and, therefore, improved margins on fixed
products during 2007.
Year ended December 31, 2007 compared to year ended December 31, 2006
The Company's results of operations for the year ended December 31, 2007, and
changes therein, reflected positive product experience as a result of increased AUM,
primarily driven by higher sales of GICs and variable annuity products during 2007,
and a higher block of business in force. This positive product experience, however,
was more than offset by higher realized capital losses, interest credited and other
benefits to contractowners, and amortization of DAC and VOBA.
Years Ended December 31,
$ Increase
% Increase
2007
2006
(Decrease)
(Decrease)
Revenues:
Net investment income
$ 1,346.4
$ 1,156.4
$ 190.0
16.4%
Fee income
1,198.9
939.2
259.7
27.7%
Premiums
19.6
20.5
(0.9)
(4.4)%
Net realized capital losses
(391.2)
(90.4)
(300.8)
NM
Other income
0.1
-
0.1
NM
Total revenue
2,173.8
2,025.7
148.1
7.3%
Benefits and expenses:
Interest credited and other
benefits to contractowners
1,312.0
1,169.7
142.3
12.2%
Operating expenses
269.6
228.0
41.6
18.2%
Amortization of deferred policy
acquisition costs and value
of business acquired
408.1
293.0
115.1
39.3%
Interest expense
32.5
30.3
2.2
7.3%
Other expense
24.2
28.1
(3.9)
(13.9)%
Total benefits and expenses
2,046.4
1,749.1
297.3
17.0%
Income before income taxes
127.4
276.6
(149.2)
(53.9)%
Income tax (benefit) expense
(1.6)
64.4
(66.0)
(102.5)%
Net income
$ 129.0
$ 212.2
$ (83.2)
(39.2)%
Effective tax rate
(1.3)%
23.3%
NM - Not meaningful.
Revenues
Total revenue for the year ended December 31, 2007, increased mainly due to
increases in Fee income and Net investment income, partially offset by increases in
Net realized capital losses.
The increase in
Fee income
for the year
ended December 31, 2007, reflects an
increase in average variable AUM, primarily driven by higher sales of variable
annuities and a higher block of business in force.
35
Net investment income
for the year ended December 31, 2007, increased as the result
of an increase in assets supporting fixed AUM and surplus, which reflects a larger
block of GICs, and fixed indexed annuities in force.  In addition, the Company
experienced higher yields in 2007.
Net realized capital losses
increased for the year ended December 31, 2007, primarily
due to higher losses on derivatives and fixed maturities. The changes in derivatives
were primarily driven by interest rate swaps and call options, partially offset by lower
losses on futures as a result of lower equity market performance. The losses on fixed
maturities for the year ended December 31, 2007, were due to other-than-temporary
impairments driven by the slow economic environment and widening of credit
spreads in 2007.
Benefits and Expenses
Total benefits and expenses for the year ended December 31, 2007, increased mainly
due to higher Interest credited and other benefits to contractowners, Amortization of
DAC and VOBA, and Operating expenses.
Interest credited and other benefits
to contractowners increased for the year ended
December 31, 2007, primarily driven by (a) the increase in reserves on variable
annuities, driven by unfavorable equity market performance in 2007 compared to
2006, and (b) the increase in interest credited on GICs, mainly attributable to higher
average fixed AUM.  The increases were partially offset by a lower increase in
reserves on fixed annuities due to unfavorable equity market performance in 2007.
Operating expenses
increased for the year ended December 31, 2007, primarily due to
higher non-deferred asset-based commissions and marketing expenses, as well as the
continued growth of the business.
The
Amortization of DAC and VOBA
increased
for the year ended December 31,
2007, primarily due to refinements of the DAC model during the fourth quarter of
2007, partially offset by favorable mutual fund and mortality and persistency
unlocking.
Income Taxes
Income tax (benefit) expense
decreased for the year ended December 31, 2007,
primarily due to lower Income before taxes relative to the deduction allowed for
dividends received.
36
Year ended December 31, 2006 compared to year ended December 31, 2005
The Company's results of operations for the year ended December 31, 2006, and
changes therein, reflected positive product experience due to favorable equity market
performance and increased AUM driven by the rise in sales of annuity products. This
positive product experience, however, was partially offset by higher realized capital
losses, due to increased interest rates, as well as higher operating expenses.
Years Ended December 31,
$ Increase
% Increase
2006
2005
(Decrease)
(Decrease)
Revenues:
Net investment income
$ 1,156.4
$ 1,102.2
$ 54.2
4.9%
Fee income
939.2
745.6
193.6
26.0%
Premiums
20.5
21.8
(1.3)
(6.0)%
Net realized capital losses
(90.4)
(2.9)
(87.5)
NM
Other income
-
0.7
(0.7)
NM
Total revenue
2,025.7
1,867.4
158.3
8.5%
Benefits and expenses:
Interest credited and other
benefits to contractowners
1,169.7
1,085.8
83.9
7.7%
Operating expenses
228.0
192.5
35.5
18.4%
Amortization of deferred policy
acquisition costs and value
of business acquired
293.0
318.9
(25.9)
(8.1)%
Interest expense
30.3
29.6
0.7
2.4%
Other expense
28.1
16.5
11.6
70.3%
Total benefits and expenses
1,749.1
1,643.3
105.8
6.4%
Income before income taxes
276.6
224.1
52.5
23.4%
Income tax expense
64.4
34.2
30.2
88.3%
Net income
$ 212.2
$ 189.9
$ 22.3
11.7%
Effective tax rate
23.3%
15.3%
NM - Not meaningful.
Revenues
Total revenue for the year ended December 31, 2006, increased mainly due to higher
Fee income and Net investment income. The increase was partially offset, however,
by higher Net realized capital losses.
The increase in
Fee income
reflects a larger
block of business in force, driven by an
increase in net investment returns and new sales exceeding withdrawals and
surrenders.
The increase in
Net investment income
is the
result of an increase in assets supporting
average fixed AUM, due to strong sales of fixed indexed annuities.
37
The increase in
Net realized capital losses
for the year ended December 31, 2006,
reflects higher losses on investments in fixed maturities, primarily driven by the
increasing interest rate environment in 2006.
Benefits and Expenses
Total benefits and expenses for the year ended December 31, 2006, increased mainly
due to higher Interest credited and other benefits to contractowners and Operating
expenses, partially offset by the decrease in Amortization of DAC and VOBA.
Interest credited and other benefits to contractowners
increased due to (a) the
increase in reserves on fixed indexed annuities, driven by higher AUM and improved
equity market performance, and (b) the increase in interest credited on GICs, based
on higher interest rates and AUM in 2006. These increases were partially offset by
lower increase of guaranteed benefits reserves on variable annuities, mainly
attributable to the favorable equity market performance in 2006.
Operating expenses
increased for the year ended December 31, 2006 as a result of
larger non-capitalized asset-based commissions and marketing expenses.
The
Amortization of DAC and VOBA
decreased
primarily due to higher expected
gross profits, which reflect revisions in prospective assumptions based on positive
persistency experience and favorable equity market performance. The unlocking of
assumptions resulted in deceleration of amortization of $62.4.  This decrease was
partially offset, however, by an increase in amortization driven by higher actual gross
profits experienced in 2006.
Other expenses
increased for the year ended December 31, 2006 due to the
amortization of deferred negative ceding commission related to the coinsurance
agreement with Security Life, which became effective in the second quarter of 2005.
Income Taxes
Income tax expense
increased for the year ended December 31, 2006, primarily due to
the Internal Revenue Service ("IRS") audit settlement in the third quarter of 2005,
which related to the Company's tax returns for the years 2000 and 2001. The
provision for the year ended December 31, 2005, reflected non-recurring favorable
adjustments, due to a reduction in the tax liability that was no longer deemed
necessary based on the results of the IRS examination, monitoring the activities of the
IRS with respect to certain issues with other taxpayers, and the merits of the
Company's positions.
38
Financial Condition
Investments
Investment Strategy
The Company's investment strategy focuses on diversification by asset class.  The
Company seeks to achieve economic diversification, while reducing overall credit
risk and liquidity risks. In addition, the Company seeks to mitigate the impact of cash
flow variability from embedded options within certain investment products, such as
prepayment options and interest rate options embedded in collateralized mortgage
obligations and call options embedded in corporate bonds.  The investment
management function is centralized under ING Investment Management LLC, an
affiliate, pursuant to an investment advisory agreement.  Separate portfolios are
established for groups of products with similar liability characteristics within the
Company.
The Company's general account invests primarily in fixed maturity investments,
including publicly issued bonds (including government bonds), privately placed notes
and bonds, mortgage-backed securities, and asset-backed securities.  The primary
investment strategy is to optimize the risk-adjusted return through superior asset
selection predicated on a developed relative value approach, credit research and
monitoring, superior management of interest rate risk, and active exploration into new
investment product opportunities.  Investments are purchased when market returns,
adjusted for risk and expenses, are sufficient to profitably support growth of the
liability block of business. In addition, assets and liabilities are analyzed and reported
for internal management purposes on an option-adjusted basis. The level of required
capital of given transactions is a primary factor in determining relative value among
different investment and liability alternatives, within the scope of each product type's
objective. An active review of existing holdings identifies specific assets that could
be effectively traded in order to enhance the risk-adjusted returns of the portfolio,
while minimizing adverse tax and accounting impacts.  The Company strives to
maintain a portfolio weighted average asset quality rating of A, based on S&P ratings
classifications.  The weighted average excludes mortgage loans, but includes
mortgage-backed securities, which are reported with bonds.
The Company uses derivatives for hedging purposes to reduce the Company's
exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk,
and market risk. In addition, the Company uses credit default swaps to reduce the
credit loss exposure with respect to certain assets that the Company owns, or to
assume credit exposure on certain assets that the Company does not own.  These
credit default swaps are similar in credit risk to bonds of the named issuer, and allow
the Company to gain access to a broader, more diversified pool of credit risks. See
"Liquidity and Capital Resources – Derivatives" for further discussion of the
Company's use of derivatives.
39
Portfolio Composition
The following table presents the investment portfolio at December 31, 2007 and
2006.
2007
2006
Carrying
Carrying
Value
%
Value
%
Fixed maturities, available-for-sale,
including securities pledged
$ 22,776.0
81.7%
$ 17,918.4
79.3%
Equity securities, available-for-sale
211.1
0.8%
40.6
0.2%
Short-term investments
188.0
0.7%
134.3
0.6%
Mortgage loans on real estate
3,701.7
13.3%
3,687.6
16.3%
Policy loans
155.8
0.5%
162.5
0.7%
Other investments
848.6
3.0%
642.9
2.9%
Total investments
$ 27,881.2
100.0%
$ 22,586.3
100.0%
The following table identifies the fair value of fixed maturities and equity securities,
available-for-sale, as well as short-term investments and derivatives by pricing
sources as of December 31, 2007 and 2006.
Valuation
Valuation
Techniques
Techniques
Published
with
without
Price
Market
Market
2007
Quotations
Inputs
Inputs
Total
Assets:
Fixed maturities, available-for-sale,
including securities pledged
$ 18,402.6
$ 4,373.4
$ -
$ 22,776.0
Equity securities, available-for-sale
211.1
-
-
211.1
Short-term investments
188.0
-
-
188.0
Other investments (primarily derivatives)
-
366.6
-
366.6
Liabilities:
Other liabilities (primarily derivatives)
-
273.8
-
273.8
2006
Assets:
Fixed maturities, available-for-sale,
including securities pledged
$ 14,519.3
$ 3,399.1
$ -
$ 17,918.4
Equity securities, available-for-sale
40.6
-
-
40.6
Short-term investments
134.3
-
-
134.3
Other investments (primarily derivatives)
-
472.0
0.5
472.5
Liabilities:
Other liabilities (primarily derivatives)
-
64.2
0.5
64.7
40
Fixed Maturities
Fixed maturities, available-for-sale, were as follows as of December 31, 2007.
Gross
Gross
Unrealized
Unrealized
Amortized
Capital
Capital
Fair
Cost
Gains
Losses
Value
Fixed maturities:
U.S. Treasuries
$ 18.4
$ 1.0
$ -
$ 19.4
U.S. government agencies and authorities
86.1
1.0
0.3
86.8
State, municipalities, and political subdivisions
49.7
-
2.5
47.2
U.S. corporate securities:
Public utilities
1,417.5
22.8
13.4
1,426.9
Other corporate securities
6,742.7
81.1
67.0
6,756.8
Total U.S. corporate securities
8,160.2
103.9
80.4
8,183.7
Foreign securities
(1)
:
Government
525.2
14.9
7.1
533.0
Other
3,280.6
40.5
59.4
3,261.7
Total foreign securities
3,805.8
55.4
66.5
3,794.7
Residential mortgage-backed securities
4,988.4
53.3
85.8
4,955.9
Commercial mortgage-backed securities
3,842.2
37.6
36.4
3,843.4
Other asset-backed securities
1,947.5
5.7
108.3
1,844.9
Total fixed maturities, including securities pledged
22,898.3
257.9
380.2
22,776.0
Less: securities pledged
953.3
6.1
16.8
942.6
Total fixed maturities
$ 21,945.0
$ 251.8
$ 363.4
$ 21,833.4
(1)
Primarily U.S. dollar denominated.
41
Fixed maturities, available-for-sale, were as follows as of December 31, 2006.
Gross
Gross
Unrealized
Unrealized
Amortized
Capital
Capital
Fair
Cost
Gains
Losses
Value
Fixed maturities:
U.S. Treasuries
$ 276.9
$ 0.2
$ 1.4
$ 275.7
U.S. government agencies and authorities
220.9
0.6
2.2
219.3
State, municipalities, and political subdivisions
43.0
0.5
0.4
43.1
U.S. corporate securities:
Public utilities
1,324.5
21.1
17.8
1,327.8
Other corporate securities
5,138.6
50.3
49.7
5,139.2
Total U.S. corporate securities
6,463.1
71.4
67.5
6,467.0
Foreign securities
(1)
:
Government
486.1
16.2
4.3
498.0
Other
2,843.9
32.3
46.6
2,829.6
Total foreign securities
3,330.0
48.5
50.9
3,327.6
Residential mortgage-backed securities
3,841.4
44.8
62.8
3,823.4
Commercial mortgage-backed securities
1,928.6
15.1
20.2
1,923.5
Other asset-backed securities
1,843.4
5.2
9.8
1,838.8
Total fixed maturities, including securities pledged
17,947.3
186.3
215.2
17,918.4
Less: securities pledged
875.5
2.4
13.9
864.0
Total fixed maturities
$ 17,071.8
$ 183.9
$ 201.3
$ 17,054.4
(1)
Primarily U.S. dollar denominated.
It is management's objective that the portfolio of fixed maturities be of high quality
and be well diversified by market sector.  The fixed maturities in the Company's
portfolio are generally rated by external rating agencies and, if not externally rated,
are rated by the Company on a basis believed to be similar to that used by the rating
agencies. The average quality rating of the Company's fixed maturities portfolio was
AA- at December 31, 2007 and 2006, respectively.  Ratings are calculated using a
rating hierarchy that considers S&P, Moody's Investor's Service, Inc., and internal
ratings.
42
Total fixed maturities by quality rating category, including securities pledged to
creditors, were as follows at December 31, 2007 and 2006.
2007
2006
Fair
% of
Fair
% of
Value
Total
Value
Total
AAA
$ 10,023.0
43.9%
$ 7,243.8
40.4%
AA
1,743.6
7.7%
1,245.7
6.9%
A
4,112.4
18.1%
3,631.0
20.3%
BBB
5,945.3
26.1%
5,124.0
28.6%
BB
676.0
3.0%
575.1
3.2%
B and below
275.7
1.2%
98.8
0.6%
Total
$ 22,776.0
100.0%
$ 17,918.4
100.0%
95.8% and 96.2% of the fixed maturities were invested in securities rated BBB and
above (Investment Grade) at December 31, 2007 and 2006, respectively.
Fixed maturities rated BB and below (Below Investment Grade) may have
speculative characteristics, and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the issuer to make
principal and interest payments than is the case with higher rated fixed maturities.
Total fixed maturities, including securities pledged to creditors, by market sector
were as follows at December 31, 2007 and 2006.
2007
2006
Fair
% of
Fair
% of
Value
Total
Value
Total
U.S. Treasuries
$ 19.4
0.1%
$ 275.7
1.6%
U.S. government agencies and authorities
86.8
0.4%
219.3
1.2%
U.S. corporate, states, and municipalities
8,230.9
36.0%
6,510.1
36.3%
Foreign
3,794.7
16.7%
3,327.6
18.6%
Residential mortgage-backed
4,955.9
21.8%
3,823.4
21.3%
Commercial mortgage-backed
3,843.4
16.9%
1,923.5
10.7%
Other asset-backed
1,844.9
8.1%
1,838.8
10.3%
Total
$ 22,776.0
100.0%
$ 17,918.4
100.0%
43
The amortized cost and fair value of fixed maturities as of December 31, 2007, are
shown below by contractual maturity. Actual maturities may differ from contractual
maturities as securities may be restructured, called, or prepaid.
Amortized
Fair
Cost
Value
Due to mature:
One year or less
$ 550.8
$ 551.3
After one year through five years
5,800.7
5,856.5
After five years through ten years
3,797.6
3,776.3
After ten years
1,971.1
1,947.7
Mortgage-backed securities
8,830.6
8,799.3
Other asset-backed securities
1,947.5
1,844.9
Less: securities pledged
953.3
942.6
Fixed maturities, excluding securities pledged
$ 21,945.0
$ 21,833.4
The Company did not have any investments in a single issuer, other than obligations
of the U.S. government and government agencies, with a carrying value in excess of
10.0% of the Company's shareholder's equity at December 31, 2007 or 2006.
At December 31, 2007 and 2006, fixed maturities with fair values of $11.2 and $10.7,
respectively, were on deposit as required by regulatory authorities.
The Company invests in various categories of collateralized mortgage obligations
("CMOs") that are subject to different degrees of risk from changes in interest rates
and, for CMOs that are not agency-backed, defaults. The principal risks inherent in
holding CMOs are prepayment and extension risks related to dramatic decreases and
increases in interest rates resulting in the prepayment of principal from the underlying
mortgages, either earlier or later than originally anticipated. At December 31, 2007
and 2006, approximately 7.5% and 6.7%, respectively, of the Company's CMO
holdings were invested in those types of CMOs which are subject to more
prepayment and extension risk than traditional CMOs, such as interest-only or
principal-only strips.
The Company is a member of the Federal Home Loan Bank of Des Moines ("FHLB")
and is required to maintain a collateral deposit that backs funding agreements issued
to the FHLB.  At December 31, 2007 and 2006, the Company had $2,898.7 and
$226.7, respectively, in non-putable funding agreements, including accrued interest,
issued to the FHLB.  The level of funding agreements issued to the FHLB as of
December 31, 2007 increased significantly from the amount issued as of
December 31, 2006. During the second half of 2007, the Company took advantage of
the credit market dislocation to purchase highly rated assets and issue FHLB funding
agreements.  At December 31, 2007 and 2006, assets with a carrying value of
approximately $3,270.1 and $703.0, respectively, collateralized the funding
agreements issued to the FHLB. Assets pledged to the FHLB are included in Fixed
maturities, available-for-sale, in the Balance Sheets.
44
Subprime Mortgage Exposure
Credit markets have recently become more turbulent amid concerns about subprime
mortgages and collateralized debt obligations ("CDOs"). This in turn has resulted in
a general widening of credit spreads, reduced price transparency, reduced liquidity,
increased rating agency downgrades and increased volatility across certain markets.
To date, this market disruption has had a limited impact on the Company, which does
not originate or purchase subprime or Alt-A whole-loan mortgages.  Subprime
lending is the origination of loans to customers with weaker credit profiles.  The
Company defines Alt-A Loans to include residential mortgage loans to customers
who have strong credit profiles but lack some element(s), such as documentation to
substantiate income.  Commencing in the fourth quarter of 2007, the Company
expanded its definition of Alt-A loans to include residential mortgage loans to
borrowers that would otherwise be classified as prime but whose loan structure
provides repayment options to the borrower that increase the risk of default. Further,
during the fourth quarter, the industry coalesced around classifying any residential
mortgage backed securities ("RMBS") not clearly identifiable as prime or subprime
into the Alt-A category and the Company is following that lead.  The following
summarizes the Company's exposure to subprime and Alt-A mortgages as of
December 31, 2007.
As of December 31, 2007, the fair value and gross unrealized losses related to the
Company's exposure to subprime mortgages was $879.3 and $86.4, respectively,
representing 3.2% of total investments. 89.5% of these securities were rated "AAA"
or "AA". This exposure was primarily in the form of asset-backed securities ("ABS")
structures, collateralized by subprime residential mortgages ("ABS Home Equity")
and one CDO position backed by ABS Home Equity.  Of the total subprime
residential mortgage backed securities portfolio, 28.0% were issued in 2007, 11.5% in
2006, and 60.5% in 2005 and prior. The ABS CDO had no unrealized loss and fair
value of $0.8 at December 31, 2007.
The Company's exposure to Alt-A mortgages was concentrated in RMBS, and the
fair value and gross unrealized losses aggregated to $1.9 billion and $69.9,
respectively, representing 6.8% of total investments at December 31, 2007. 99.9% of
these securities were AAA-rated.  The Alt-A mortgage backed securities portfolio
included 36.2% issued in 2007, 24.0% in 2006, and 39.8% in 2005 and prior.
Total RMBS (including CMO and ABS structures) was $4.9 billion with 17.8%
consisting of subprime residential mortgage backed securities and 38.0% consisting
of Alt-A mortgage backed securities. The RMBS portfolio is of high credit quality
with 99.9% of the portfolio rated AAA. Further, 1.0% of the RMBS portfolio was
issued by the Government National Mortgage Association ("GNMA" or "Ginnie
Mae"), the Federal National Mortgage Association ("FNMA" or "Fannie Mae"), or
the Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac"), which
are government agencies or instrumentalities that guarantee the credit quality of the
underlying mortgage pools.
45
Commercial Mortgage-backed and Other Asset-backed Securities
While the delinquency rates on commercial mortgages have been stable in recent
years, commercial real estate rents and property values have recently become more
volatile. In addition, there are growing concerns with consumer loans as a result of
the current economic environment, which includes lower family income and higher
unemployment rates.
At December 31, 2007, the fair value of the Company's Commercial mortgage-
backed securities ("CMBS") totaled $3.8 billion, and Other ABS, excluding subprime
exposure, totaled $984.1.
CMBS investments represent pools of commercial
mortgages that are broadly diversified across property types and geographical areas.
The Other ABS is also broadly diversified both by type and issuer with credit card
receivables, collateralized loan obligations and automobile receivables comprising
41.3%, 29.7% and 14.3%, respectively, of total Other ABS, excluding subprime
exposure.
The following tables summarize the Company's exposure to CMBS and Other ABS
holdings by credit quality and vintage year as of December 31, 2007:
CMBS
% of Total CMBS
Vintage
AAA
95.1%
2007
39.4%
AA
2.5%
2006
13.2%
A
1.2%
2005 and prior
47.4%
BBB
1.0%
BB and below
0.2%
Other ABS
% of Total Other ABS
Vintage
AAA
59.3%
2007
30.5%
AA
5.9%
2006
11.8%
A
10.1%
2005 and prior
57.7%
BBB
24.5%
BB and below
0.2%
Mortgage Loans on Real Estate
Mortgage loans on real estate, primarily commercial mortgage loans, totaled $3,701.7
and $3,687.6 at December 31, 2007 and 2006, respectively. These loans are reported
at amortized cost, less impairment write-downs. If the value of any mortgage loan is
determined to be impaired (i.e., when it is probable that the Company will be unable
to collect on all amounts due according to the contractual terms of the loan
agreement), the carrying value of the mortgage loan is reduced to either the present
value of expected cash flows from the loan, discounted at the loan's effective interest
rate, or fair value of the collateral. If the loan is in foreclosure, the carrying value is
reduced to the fair value of the underlying collateral, net of estimated costs to obtain
and sell.  The carrying value of the impaired loans is reduced by establishing a
46
permanent write-down charged to Net realized capital gains (losses).  At
December 31, 2007 and 2006, the Company had no allowance for mortgage loan
credit losses.  The properties collateralizing mortgage loans are geographically
dispersed throughout the United States, with the largest concentration of 24.5% and
19.9% of properties in California at December 31, 2007 and 2006, respectively.
Unrealized Capital Losses
Fixed maturities, including securities pledged to creditors, comprise 81.7% and
79.3% of the Company's total investment portfolio at December 31, 2007 and 2006,
respectively.  Unrealized capital losses related to fixed maturities are analyzed in
detail in the following tables.
Unrealized capital losses in fixed maturities, including securities pledged to creditors,
for Investment Grade ("IG") and Below Investment Grade ("BIG") securities by
duration were as follows at December 31, 2007 and 2006.
2007
2006
% of IG
% of IG
% of IG
% of IG
IG
and BIG
BIG
and BIG
IG
and BIG
BIG
and BIG
Less than six months
below amortized cost
$ 106.1
27.9%
$ 5.0
1.3%
$ 25.5
11.8%
$ 1.9
0.9%
More than six months
and less than twelve
months below
amortized cost
171.3
45.1%
12.7
3.3%
11.3
5.3%
0.5
0.2%
More than twelve months
below amortized cost
81.6
21.5%
3.5
0.9%
174.3
81.0%
1.7
0.8%
Total unrealized capital losses
$ 359.0
94.5%
$ 21.2
5.5%
$ 211.1
98.1%
$ 4.1
1.9%
Unrealized losses in fixed maturities at December 31, 2007 and 2006, were primarily
related to interest rate movement or changes in credit spreads to mortgage and other
asset-backed securities.  Mortgage and other asset-backed securities include U.S.
government-backed securities, principal protected securities, and structured securities,
which did not have an adverse change in cash flows. The following table summarizes
the unrealized capital losses by duration and reason, along with the fair value of fixed
maturities, including securities pledged to creditors, in unrealized capital loss
positions at December 31, 2007 and 2006.
Less than
More than
Six Months
Six Months and
More than
Total
Below
less than Twelve
Twelve Months
Unrealized
Amortized
Months Below
Below
Capital
2007
Cost
Amortized Cost
Amortized Cost
Losses
Interest rate or spread widening
$ 37.8
$ 49.2
$ 62.7
$ 149.7
Mortgage and other asset-backed
securities
73.3
134.8
22.4
230.5
Total unrealized capital losses
$ 111.1
$ 184.0
$ 85.1
$ 380.2
Fair value
$ 5,322.0
$ 3,248.4
$ 3,300.6
$ 11,871.0
47
Less than
More than
Six Months
Six Months and
More than
Total
Below
less than Twelve
Twelve Months
Unrealized
Amortized
Months Below
Below
Capital
2006
Cost
Amortized Cost
Amortized Cost
Losses
Interest rate or spread widening
$ 12.8
$ 6.2
$ 103.4
$ 122.4
Mortgage and other asset-backed
securities
14.6
5.6
72.6
92.8
Total unrealized capital losses
$ 27.4
$ 11.8
$ 176.0
$ 215.2
Fair value
$ 3,095.9
$ 905.9
$ 6,026.5
$ 10,028.3
Unrealized capital losses in fixed maturities, including securities pledged to creditors,
by market sector and duration were as follows at December 31, 2007 and 2006.
More than
Less than
Six Months
More than
Six Months
and less than
Twelve Months
Total
Below
Twelve Months
Below
Unrealized
Amortized
Below
Amortized
Capital
2007
Cost
Amortized Cost
Cost
Losses
U.S. government agencies and authorities
$ -
$ -
$ 0.3
$ 0.3
U.S. corporate, state, and municipalities
16.6
31.4
34.9
82.9
Foreign
21.2
17.8
27.5
66.5
Residential mortgage-backed
51.1
29.3
5.4
85.8
Commercial mortgage-backed
3.8
27.0
5.6
36.4
Other asset-backed
18.4
78.5
11.4
108.3
Total unrealized capital losses
$ 111.1
$ 184.0
$ 85.1
$ 380.2
2006
U.S. Treasuries
$ 1.4
$ -
$ -
$ 1.4
U.S. government agencies and authorities
0.3
-
1.9
2.2
U.S. corporate, state, and municipalities
7.8
1.8
58.3
67.9
Foreign
3.3
4.4
43.2
50.9
Residential mortgage-backed
11.5
2.9
48.4
62.8
Commercial mortgage-backed
2.0
1.4
16.8
20.2
Other asset-backed
1.1
1.3
7.4
9.8
Total unrealized capital losses
$ 27.4
$ 11.8
$ 176.0
$ 215.2
Of the unrealized losses aged more than twelve months, the average market value of
the related fixed maturities was 97.1% of the average book value as of December 31,
2007.  In addition, this category includes 753 securities, which have an average
quality rating of A+.  No other-than-temporary impairment loss was considered
necessary for these fixed maturities as of December 31, 2007.
48
Other-Than-Temporary Impairments
The Company analyzes the general account investments to determine whether there
has been an other-than-temporary decline in fair value below amortized cost basis.
Management considers the length of time and the extent to which the fair value has
been less than amortized cost, the issuer's financial condition and near-term
prospects, future economic conditions and market forecasts, interest rate changes, and
the Company's intent to retain the investment for a period of time sufficient to allow
for recovery in fair value.  If it is probable that all amounts due according to the
contractual terms of an investment will not be collected, an other-than-temporary
impairment is considered to have occurred.
In addition, the Company invests in asset-backed securities.  Determination of the
required impairment is based on the analysis discussed in the preceding paragraph, as
well as credit risk and the possibility of significant prepayment risk that restricts the
Company's ability to recover the investment. An impairment is recognized if the fair
value of the security is less than book value and there has been an adverse change in
cash flow since the last remeasurement date.
When a decline in fair value is determined to be other-than-temporary, the individual
security is written down to fair value, and the loss is recorded in Net realized capital
gains (losses).
The following table identifies the Company's other-than-temporary impairments by
type for the years ended December 31, 2007, 2006, and 2005.
2007
2006
2005
No. of
No. of
No. of
Impairment
Securities
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
*
1
$ 0.1
1
$ 0.1
1
U.S. Corporate
81.0
173
15.8
63
3.0
12
Foreign
25.7
74
3.5
13
0.1
1
Residential mortgage-backed
3.0
24
12.7
68
16.4
86
Commercial mortgage-backed
-
-
-
-
1.2
1
Other asset-backed
43.3
91
1.2
2
0.5
2
Limited partnerships
0.3
1
0.5
2
0.5
1
Total
$ 153.3
364
$ 33.8
149
$ 21.8
104
* Less than $0.1.
The above schedule includes $31.0, $11.5, and $18.7 in other-than-temporary write-
downs for the years ended December 31, 2007, 2006, and 2005, respectively, related
to the analysis of credit risk and the possibility of significant prepayment risk. The
remaining $122.3, $22.3, and $3.1 in write-downs for the years ended December 31,
2007, 2006, and 2005, respectively, are related to investments that the Company does
not have the intent to retain for a period of time sufficient to allow for recovery in fair
value. The following table summarizes these write-downs by type for the years ended
December 31, 2007, 2006, and 2005.
49
2007
2006
2005
No. of
No. of
No. of
Impairment
Securities
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
*
1
$ 0.1
1
$ 0.1
1
U.S. Corporate
70.6
161
15.8
63
2.6
11
Foreign
21.4
68
3.5
13
-
-
Residential mortgage-backed
1.0
5
1.7
4
0.4
1
Other asset-backed
29.3
84
1.2
2
-
-
Total
$ 122.3
319
$ 22.3
83
$ 3.1
13
* Less than $0.1.
The Company may sell securities during the period in which fair value has declined
below amortized cost for fixed maturities or cost for equity securities.  In certain
situations new factors, including changes in the business environment, can change the
Company's previous intent to continue holding a security.
Net Realized Capital Gains (Losses)
Net realized capital gains (losses) are comprised of the difference between the
amortized cost of investments and proceeds from sale, and redemption, as well as
losses incurred due to the other-than-temporary impairment of investments and
changes in fair value of derivatives.  The cost of the investments on disposal is
determined based on specific identification of securities. Net realized capital gains
(losses) on investments were as follows for the years ended December 31, 2007,
2006, and 2005.
2007
2006
2005
Fixed maturities, available-for-sale
$ (100.3)
$ (43.8)
$ 45.4
Equity securities, available-for-sale
0.5
0.9
0.2
Derivatives
(291.0)
(48.2)
(48.3)
Other
(0.4)
0.7
(0.2)
Net realized capital losses
$ (391.2)
$ (90.4)
$ (2.9)
After-tax net realized capital losses
$ (254.3)
$ (58.8)
$ (1.9)
Net realized capital losses increased for the year ended December 31, 2007, primarily
due to higher losses on derivatives, along with higher losses on fixed maturities. The
changes in derivatives were primarily driven by interest rate swaps and call options,
partially offset by lower losses on futures as a result of lower equity market
performance. The losses on fixed maturities for the year ended December 31, 2007,
were due to other-than-temporary impairments driven by the slow economic
environment and widening of credit spreads in 2007.
Liquidity and Capital Resources
Liquidity is the ability of the Company to generate sufficient cash flows to meet the
cash requirements of operating, investing, and financing activities.
50
Sources and Uses of Liquidity
The Company's principal sources of liquidity are annuity product charges, GIC
deposits, investment income, proceeds from the maturing and sale of investments,
proceeds from debt issuance, and capital contributions. Primary uses of these funds
are payments of commissions and operating expenses, interest and premium credits,
payments under guaranteed death and living benefits, investment purchases,
repayment of debt, and contract maturities, withdrawals, and surrenders.
The Company's liquidity position is managed by maintaining adequate levels of
liquid
assets,
such as
cash,
cash
equivalents,
and short-term
investments.
Asset/liability management is integrated into many aspects of the Company's
operations, including investment decisions, product development, and determination
of crediting rates.  As part of the risk management process, different economic
scenarios are modeled, including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet projected liability
cash flows. Key variables in the modeling process include interest rates, anticipated
contractowner behavior, and variable separate account performance. Contractowners
bear the investment risk related to variable annuity products, subject to the minimum
guaranteed death and living benefits included in these contracts.
The fixed account liabilities are supported by a general account portfolio, principally
composed of fixed rate investments with matching duration characteristics that can
generate predictable, steady rates of return. The portfolio management strategy for
the fixed account considers the assets available-for-sale.  This strategy enables the
Company to respond to changes in market interest rates, prepayment risk, relative
values of asset sectors and individual securities and loans, credit quality outlook, and
other relevant factors. The objective of portfolio management is to maximize returns,
taking into account interest rate and credit risk, as well as other risks.  The
Company's asset/liability management discipline includes strategies to minimize
exposure to loss as interest rates and economic and market conditions change.
Liquidity and Capital Resources
Additional sources of liquidity include borrowing facilities to meet short-term cash
requirements that arise in the ordinary course of business. The Company maintains
the following agreements:
§
A reciprocal loan agreement with ING America Insurance Holdings, Inc. ("ING AIH"), an affiliate, whereby either party can borrow from the other up to 3.0% of the Company's
statutory admitted assets as of the prior December 31. As of December 31, 2007 and 2006, the Company had no amounts due to or due from ING AIH under the reciprocal loan agreement.
§
A $100.0 uncommitted, perpetual revolving note facility with the Bank of New York. At December 31, 2007 and 2006, the Company had no amounts outstanding under the revolving note
facility.
51
§
A $75.0 uncommitted line-of-credit agreement with PNC Bank. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to ING AIH and its affiliates
of $75.0. As of December 31, 2007 and 2006, the Company had no amounts outstanding under the line-of-credit agreement.
§
A $100.0 uncommitted line-of-credit agreement with Svenska Handelsbanken AB (Publ.), effective June 2, 2006. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings
outstanding at anytime to ING AIH and its affiliates of $100.0. As of December 31, 2007 and 2006, the Company had no amounts outstanding under the line-of-credit agreement.
Management believes that these sources of liquidity are adequate to meet the
Company's short-term cash obligations.
The Company is a member of the Federal Home Loan Bank of Des Moines ("FHLB")
and is required to maintain a collateral deposit that backs funding agreements issued
to the FHLB. As of December 31, 2007 and 2006, the Company had $2,898.7 and
$226.7, respectively, in non-putable funding agreements, including accrued interest,
issued to FHLB.  The level of funding agreements issued to the FHLB as of
December 31, 2007 increased significantly from the amount issued as of
December 31, 2006. During the second half of 2007, the Company took advantage of
the credit market dislocation to purchase highly rated assets and issue FHLB funding
agreements.  As of December 31, 2007 and 2006, assets with a carrying value of
approximately $3,270.1 and $703.0, respectively, collateralized the funding
agreements issued to the FHLB. Assets pledged to the FHLB are included in Fixed
maturities, available-for-sale, on the Balance Sheets.
Funding Agreement
On August 10, 2007, the Company issued an extendable funding agreement to its
parent, Lion, upon receipt of a single deposit in the amount of $500.0. To fund the
purchase of the funding agreement, Lion issued a promissory note to its indirect
parent company, ING Verzekeringen N.V. ("ING V"), which has been guaranteed by
Lion's immediate parent, ING AIH.
Under the terms of the funding agreement, the Company will pay Lion interest
quarterly at the credited interest rate until maturity, and on the maturity date, the
Company will pay Lion the single deposit and any accrued and unpaid interest. The
credited interest rate shall be the three-month London Interbank Offered Rate
("LIBOR"), plus 0.05%, and shall be reset quarterly. The maturity date of the funding
agreement shall be August 10, 2009, or such later date to which the maturity date may
be extended; provided, however, that the maturity date may not be extended beyond
August 10, 2012.
52
Capital Contributions and Distributions
During 2007, the Company received $150.0 in capital contributions from Lion. During
2006, the Company did not receive any capital contributions from its Parent. During
2005, the Company received capital contributions of $100.0 from its Parent to support
sales activities.
During 2007 and 2005, the Company did not pay any dividends or return of capital
distributions on its common stock to Lion. During 2006, the Company paid $170.0 in
a return of capital distribution to its Parent.  On February 21, 2008, the Company
received a $1.1 billion capital contribution from Lion.
Cash Collateral
Under the terms of the Company's Over-The-Counter Derivative International Swaps
and Derivatives Association, Inc. Agreements ("ISDA Agreements"), the Company
may receive from, or deliver to, counterparties, collateral to assure that all terms of
the ISDA Agreements will be met with regard to the Credit Support Annex ("CSA").
The terms of the CSA call for the Company to pay interest on any cash received equal
to the Federal Funds rate. As of December 31, 2007, the Company held $11.5 of cash
collateral, which was included in Collateral held, including payables under securities
loan agreement and was reinvested in Short-term investments under securities loan
agreement on the Balance Sheets. The Company held no cash collateral under the
ISDA Agreements as of December 31, 2006.
Facultative Reinsurance Agreement
The Company is a party to a Facultative Coinsurance Agreement with its affiliate,
Security Life of Denver Insurance Company ("Security Life") effective August 20,
1999.  Under the terms of this agreement, the Company facultatively cedes to
Security Life, from time to time, certain GICs on a 100% coinsurance basis.  The
value of GIC reserves ceded by the Company under this agreement was $2.3 billion
and $2.2 billion at December 31, 2007 and 2006, respectively. The Company utilizes
this reinsurance facility primarily for diversification and asset-liability management
purposes in connection with this business, which is facilitated by the fact that Security
Life is also a major GIC issuer. Senior management of the Company has established
a current maximum of $4.0 billion for GIC reserves ceded under this agreement.
Separate Accounts
Separate account assets and liabilities generally represent funds maintained to meet
specific investment objectives of contractowners who bear the investment risk,
subject, in limited cases, to certain minimum guarantees.  Investment income and
investment gains and losses generally accrue directly to such contractowners.  The
assets of each account are legally segregated and are not subject to claims that arise
out of any other business of the Company or its affiliates.
53
Separate account assets supporting variable options under variable annuity contracts
are invested, as designated by the contractowner or participant (who bears the
investment risk subject, in limited cases, to minimum guaranteed rates) under a
contract, in shares of mutual funds that are managed by affiliates of the Company, or
in other selected mutual funds not managed by affiliates of the Company.
Variable annuity deposits are allocated to various subaccounts established within the
separate account.  Each subaccount represents a different investment option into
which the contractowner may allocate premiums.  The account value of a variable
annuity contract is equal to the aggregate value of the subaccounts selected by the
contractowner (including the value allocated to any fixed account), less fees and
expenses. The Company offers investment options for its variable annuity contracts
covering a wide range of investment styles, including large, mid, and small cap equity
funds, as well as fixed income alternatives. Therefore, unlike fixed annuities, under
variable annuity contracts, contractowners bear the risk of investment gains and
losses associated with the selected investment allocation.  The Company, however,
offers certain guaranteed death and living benefits (described below) under which it
bears specific risks associated with these benefits.  Many of the variable annuity
contracts issued by the Company are combination contracts offering both variable and
fixed options under which some or all of the deposits may be allocated by the
contractowner to a fixed account available under the contract.
The Company's major source of income from variable annuities is the base contract
mortality fees, expense fees, and guaranteed death and living benefit rider fees
charged to the contractowner, less the cost of administering the product, as well as the
cost of providing for the guaranteed death and living benefits.
Minimum Guarantees
Variable annuity contracts containing minimum guaranteed death and living benefits
expose the Company to equity risk. A decrease in the equity markets may cause a
decrease in the account values, thereby increasing the possibility that the Company
may be required to pay amounts to contractowners due to guaranteed death and living
benefits. An increase in the value of the equity markets may increase account values
for these contracts, thereby decreasing the Company's risk associated with guaranteed
death and living benefits.
The Company's variable annuities offer one or more of the following guaranteed
death and living benefits:
Guaranteed Minimum Death Benefits ("GMDBs")
:
§
Standard - Guarantees that, upon death, the death benefit will be no less than the premiums paid by the contractowner, adjusted for any contract withdrawals.
§
Ratchet - Guarantees that, upon the death of the annuitant, the death benefit will be no less than the greater of (1) Standard or (2) the maximum contract anniversary (or quarterly) value of
the variable annuity, adjusted for contract withdrawals.
54
§
Rollup (7.0% or 5.5% Solution) - Guarantees that, upon death, the death benefit will be no less than the aggregate premiums paid by the contractowner accruing interest at 7.0% or 5.5% per
annum, adjusted for contract withdrawals, which may be subject to a maximum cap on the rolled up amount. (The Company has discontinued this option for new sales.)
§
Combo (Max 7) - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.
For contracts issued prior to January 1, 2000, most contracts with enhanced death
benefit guarantees were reinsured to third party reinsurers to mitigate the risk
produced by such guaranteed death benefits. For contracts issued after December 31,
1999, the Company instituted an equity hedging program in lieu of reinsurance. The
equity hedging program is based on the Company entering into derivative positions to
offset exposures to guaranteed minimum death benefits due to adverse changes in the
equity markets.
At December 31, 2007 and 2006, the guaranteed value of these death benefits in
excess of account values was estimated to be $2.7 billion and $2.2 billion,
respectively, before reinsurance. The increase was primarily driven by the decrease
in account values due to unfavorable equity market performance in the second half of
2007.
At December 31, 2007, the guaranteed value of minimum guaranteed death benefits
in excess of account values, net of reinsurance, was estimated to be $1.8 billion, of
which $537.6 was projected to be covered by the Company's equity hedging
program. At December 31, 2006, the guaranteed value of minimum guaranteed death
benefits in excess of account values, net of reinsurance, was estimated to be $1.3
billion, of which $381.7 was projected to be covered by the Company's equity
hedging program.  As of December 31, 2007 and 2006, the Company recorded a
liability of $209.4 and $139.7, respectively, net of reinsurance, representing the
estimated net present value of the Company's future obligation for guaranteed
minimum death benefits in excess of account values. The liability increased mainly
due to the accumulation of fees used to fund the reserve during 2007 and higher
future projected benefits in excess of account values.
Guaranteed Living Benefits
:
§
Guaranteed Minimum Income Benefit - Guarantees a minimum income payout, exercisable each contract anniversary on or after a specified date, in most cases the 10th rider anniversary. This
type of living benefit is the predominant selection in the Company's sales of variable annuities.
§
Guaranteed Minimum Withdrawal Benefit ("GMWB") - Guarantees annual withdrawals for life of a percentage of premiums received during the growth phase (before taking withdrawals and
after age 60). The percentage may vary by age at first withdrawal, depending on the base annuity contract. For certain versions, before withdrawals begin there are annual step-up (for 10 years) and quarterly ratchet features that may increase the
amount used to calculate the annual withdrawal amount. Other versions have a quarterly ratchet feature only.
A joint life-time withdrawal benefit option is available to include coverage for spouses. Most versions of the withdrawal benefit have reset and/or step up
55
features that may increase the guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0 % of eligible
premiums may be made until eligible premiums previously paid by the contractowner are returned, regardless of account value performance. Asset allocation requirements apply at all times where withdrawals are guaranteed for life.
§
Guaranteed Minimum Accumulation Benefit - Guarantees that the account value will be at least 100% of the eligible premiums paid by the contractowner after 10 years, net of any contract
withdrawals (GMAB 10). In the past, the Company offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contractowners after 20 years (GMAB 20).
All living benefits are covered by the Company's equity hedging program.
At December 31, 2007 and 2006, the guaranteed value of these living benefits in
excess of account values was $506.5 and $227.4, respectively.  The increase was
primarily driven by the decrease in account values due to unfavorable equity market
performance in the second half of 2007.  As of December 31, 2007 and 2006, the
Company recorded a liability of $149.3 and $76.1, respectively, representing the
estimated net present value of its future obligation for living benefits in excess of
account values. The liability increased mainly due to the accumulation of fees used
to fund the reserve during 2007, as well as higher future projected benefits in excess
of account values.
Equity Hedging Program
: In order to hedge equity risk associated with GMDBs and
guaranteed living benefits, the Company enters into futures positions on various
public market equity indices chosen to closely replicate contractowner variable fund
returns. The Company uses market consistent valuation techniques to establish its
derivative position and to rebalance the derivative positions in response to market
fluctuations. One aspect of the hedging program is designed to offset changes related
to equity experience in the liability and to pay excess claims not covered by the
contractowner account value. The Company also administers a hedging program that
mitigates both equity risk and equity volatility risk associated with its Principal Guard
GMWB product issued in 2005 and beyond. This hedge strategy primarily involves
entering into put options.
Other risks posed by market conditions, such as interest rate risk and the majority of
the Company's equity volatility risk, and risks posed by contractowner experience,
such as surrender and mortality experience deviations, are not explicitly mitigated by
this program. In addition, certain funds, where there is no replicating market index
and where hedging is not appropriate, are excluded from the program.
For those risks addressed by the equity hedging program, the Company is exposed to
the risk that the market indices will not adequately replicate actual contractowner
variable fund growth. Any differences between actual results and the market indices
result in income volatility.
56
Fixed Indexed Annuities
The crediting mechanism for FIAs exposes the Company to changes in the equity
market ("S&P 500").  Under these contracts, the Company credits interest to the
contractowner accounts at the greater of a fixed interest rate or a rate based upon
performance of a specified equity index. The Company bears the investment risk as
the Company credits contractowner accounts with a stated interest rate, but cannot be
certain that the investment income earned on the general account assets will exceed
that rate.  For accounting purposes, the equity return component of the FIA is
considered an embedded derivative. See Critical Accounting Policies "Reserves" for
further discussion.
S&P 500 call options are purchased and written to hedge equity risk associated with
the FIA contracts.  During the fourth quarter of 2007, the Company began using
futures contracts to hedge certain FIA contracts. The FIA hedging program is limited
to currently accruing liabilities resulting from participation rates, that have already
been set, and measured using capital market valuation techniques.  Future equity
returns, which may be reflected in FIA credited rates beyond the current policy term,
are not hedged.
Derivatives
The Company's use of derivatives is limited mainly to hedging purposes to reduce the
Company's exposure to cash flow variability of assets and liabilities, interest rate risk,
credit risk, and market risk. Generally, derivatives are not accounted for using hedge
accounting treatment under FAS No. 133, as the Company has not historically sought
hedge accounting treatment.
The Company enters into interest rate, equity market, credit default, total return, and
currency contracts, including swaps, caps, floors, and options, to reduce and manage
risks associated with changes in value, yield, price, cash flow, or exchange rates of
assets or liabilities held or intended to be held, or to assume or reduce credit exposure
associated with a referenced asset, index, or pool. The Company also utilizes options
and futures on equity indices to reduce and manage risks associated with its annuity
products. Open derivative contracts are reported as either Other investments or Other
liabilities, as appropriate, on the Balance Sheets. Changes in the fair value of such
derivatives are recorded in Net realized capital gains (losses) in the Statements of
Operations.
The Company also has investments in certain fixed maturity instruments, and has
issued certain retail annuity products, that contain embedded derivatives whose
market value is at least partially determined by, among other things, levels of or
changes in domestic and/or foreign interest rates (short- or long-term), exchange
rates, prepayment rates, equity markets, or credit ratings/spreads.
Embedded derivatives within fixed maturity instruments are included in Fixed
maturities, available-for-sale, on the Balance Sheets, and changes in fair value are
recorded in Net realized capital gains (losses) in the Statements of Operations.
57
Embedded derivatives within retail annuity products are included in Future policy
benefits and claims reserves on the Balance Sheets, and changes in the fair value are
recorded in Interest credited and other benefits to contractowners in the Statements of
Operations.
Deposits and Reinsurance Recoverable
The Company utilizes reinsurance agreements to reduce its exposure to large losses in
most aspects of its insurance business.  Such reinsurance permits recovery of a
portion of losses from reinsurers, although it does not discharge the primary liability
of the Company as direct insurer of the risks reinsured. The Company evaluates the
financial strength of potential reinsurers and continually monitors the financial
condition of reinsurers.  Only those reinsurance recoverable balances deemed
probable of recovery are reflected as assets on the Company's Balance Sheets.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Through the normal course of investment operations, the Company commits to either
purchase or sell securities, commercial mortgage loans, or money market instruments,
at a specified future date and at a specified price or yield.  The inability of
counterparties to honor these commitments may result in either a higher or lower
replacement cost. Also, there is likely to be a change in the value of the securities
underlying the commitments.
At December 31, 2007, the Company had off-balance sheet commitments to purchase
investments equal to their fair value of $616.3, $156.5 of which was with related
parties. At December 31, 2006, the Company had off-balance sheet commitments to
purchase investments equal to their fair value of $537.9, $143.2 of which was with
related parties. During 2007 and 2006, $33.1 and $32.4, respectively, was funded to
related parties under these commitments.
The Company has entered into various credit default swaps to assume credit exposure
to certain assets that the Company does not own.  Credit default swaps involve a
transfer of credit risk from one party to another in exchange for periodic payments.
In the event of a default on the underlying credit exposure, the Company will either
receive an additional payment (purchased credit protection) or will be required to
make an additional payment (sold credit protection) equal to the notional value of the
swap contract. At December 31, 2007, the fair value of credit default swaps of $8.5
and $30.6 was included in Other investments and Other liabilities, respectively, on
the Balance Sheets. At December 31, 2006, the fair value of credit default swaps of
$0.6 and $0.7 was included in Other investments and Other liabilities, respectively,
on the Balance Sheets.  As of December 2007, the maximum potential future
exposure to the Company on the sale of credit protection under credit default swaps
was $235.4.
58
The Company owns a 3-year credit-linked note arrangement, whereby the Company
agrees to reimburse the guaranteed party upon payment default of the referenced
obligation. Upon such default, the Company will reimburse the guaranteed party for
the loss under the reference obligation, and the Company receives that reference
obligation in settlement. The Company can then seek recovery of any losses under
the agreement by sale or collection of the received reference obligation.  As of
December 31, 2007, the maximum potential future exposure to the Company under
the guarantee was $32.5.
As of December 31, 2007, the Company had certain contractual obligations due over
a period of time as summarized in the following table.
Payments Due by Period
Less than
More than
Contractual Obligations
Total
1 Year
1-3 Years
3-5 Years
5 Years
Long-term debt
(1)
$ 1,181.9
$ 28.2
$ 56.4
$ 56.4
$ 1,040.9
Operating lease obligations
(2)
59.6
8.6
15.6
11.2
24.2
Purchase obligations
(3)
616.3
616.3
-
-
-
Reserves for insurance obligations
(4)
117,729.3
10,544.0
19,616.6
21,548.6
66,020.1
Pension obligations
(5)
21.0
1.8
3.9
4.3
11.0
Total
$ 119,608.1
$ 11,198.9
$ 19,692.5
$ 21,620.5
$ 67,096.2
(1)
Long-term debt, including interest, consists of the following:
§
A surplus note in the principal amount of $35.0, and the related interest payable with its affiliate, Security Life. As of December 31, 2007, the outstanding principal, interest rate,
and maturity date, of the surplus note were $35.0, 7.98%, and December 7, 2029, respectively.
§
Surplus notes in the aggregate principal amount of $400.0 and the related interest payable, with its affiliates, ING Life Insurance and Annuity Company, ReliaStar Life Insurance Company,
and Security Life of Denver International, Limited. As of December 31, 2007, the aggregate amount of outstanding principal, interest rate, and maturity date, of these surplus notes were $435.0, 6.26%, and December 29, 2034,
respectively.
(2)
Operating lease obligations relate to the rental of office space under various non-cancelable operating lease agreements, the longest term of which expires in 2017.
(3)
Purchase obligations consist primarily of outstanding commitments under limited partnerships that may occur any time within the term of the partnership.
The exact timing of funding these commitments, however, cannot be estimated. Therefore, the total amount of the commitments is included in the category "Less than 1
Year."
(4)
Reserves for insurance obligations consist of amounts required to meet the Company's future obligations under its variable annuity, fixed annuity, GIC, and other insurance
products.
59
(5)
Pension obligations consist of actuarially-determined pension obligations, contribution matching obligations, and other supplemental retirement and insurance obligations, under various
benefit plans.
Repurchase Agreements
The Company engages in dollar repurchase agreements ("dollar rolls") and
repurchase agreements to increase its return on investments and improve liquidity.
These transactions involve a sale of securities and an agreement to repurchase
substantially the same securities as those sold. Company policies require a minimum
of 95% of the fair value of securities pledged under dollar rolls and repurchase
agreement transactions to be maintained as collateral.  Cash collateral received is
invested in fixed maturities, and the offsetting collateral liability is included in
Borrowed money on the Balance Sheets.  At December 31, 2007 and 2006, the
carrying value of the securities pledged in dollar rolls and repurchase agreement
transactions was $745.5 and $765.7, respectively. The carrying value of the securities
pledged in dollar rolls and repurchase agreement transactions is included in Securities
pledged on the Balance Sheets. The repurchase obligation related to dollar rolls and
repurchase agreements totaled $711.9 and $769.6 at December 31, 2007 and 2006,
respectively.  The repurchase obligation related to dollar rolls and repurchase
agreements is included in Borrowed money on the Balance Sheets.
The Company also enters into reverse repurchase agreements.  These transactions
involve a purchase of securities and an agreement to sell substantially the same
securities as those purchased. Company policies require a minimum of 102% of the
fair value of securities pledged under reverse repurchase agreements to be pledged as
collateral. At December 31, 2007, the Company did not have any securities pledged
under reverse repurchase agreements. At December 31, 2006, the carrying value of
the securities in reverse repurchase agreements was $16.4.  Reverse repurchase
agreements are included in Cash and cash equivalents on the Balance Sheets.
The primary risk associated with short-term collateralized borrowings is that the
counterparty will be unable to perform under the terms of the contract.  The
Company's exposure is limited to the excess of the net replacement cost of the
securities over the value of the short-term investments, an amount that was
immaterial at December 31, 2007. The Company believes the counterparties to the
dollar roll, repurchase, and reverse repurchase agreements are financially responsible
and that the counterparty risk is minimal.
Securities Lending
The Company engages in securities lending whereby certain securities from its
portfolio are loaned to other institutions for short periods of time. Initial collateral,
primarily cash, is required at a rate of 102% of the market value of the loaned
domestic securities. The collateral is deposited by the borrower with a lending agent,
and retained and invested by the lending agent according to the Company's guidelines
to generate additional income. The market value of the loaned securities is monitored
on a daily basis with additional collateral obtained or refunded as the market value of
the loaned securities fluctuates.
60
Risk-Based Capital
The National Association of Insurance Commissioners ("NAIC") risk-based capital
requirements require insurance companies to calculate and report information under a
risk-based capital formula. These requirements are intended to allow insurance
regulators to monitor the capitalization of insurance companies based upon the type
and mixture of risks inherent in a company's operations. The formula includes
components for asset risk, liability risk, interest rate exposure, and other factors. The
Company has complied with the NAIC's risk-based capital reporting requirements.
Amounts reported indicate that, as of December 31, 2007, the Company has total
adjusted capital above all required capital levels.
Income Taxes
On September 25, 2007, the Internal Revenue Service ("IRS") issued Revenue Ruling
2007-61, which announced its intention to issue regulations with respect to certain
computational aspects of the dividend received deduction ("DRD") on separate
account assets held in connection with variable annuity and life insurance contracts.
Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 issued in August 2007
that purported to change accepted industry and IRS interpretations of the statutes
governing these computational questions. Any regulations that the IRS ultimately
proposes for issuance in this area will be subject to public notice and comment, at
which time insurance companies and other members of the public will have the
opportunity to raise legal and practical questions about the content, scope and
application of such regulations. As a result, the ultimate timing, substance, and
effective date of any such regulations are unknown, but they could result in the
elimination of some or all of the separate account DRD tax benefit that the Company
receives. Management believes that such regulations will apply prospectively.
Income tax obligations include the allowance on uncertain tax benefits related to IRS
tax audits and state tax exams that have not been completed. The current liability of
$2.6 may be paid in less than one year, upon completion of such audits and exams.
The timing of the payment of the remaining allowance of $66.8 cannot be reliably
estimated.
Recently Adopted Accounting Standards
(See the Organization and Significant Accounting Policies footnote to the financial
statements for further information.)
Accounting for Uncertainty in Income Taxes
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"),
which creates a single model to address the accounting for the uncertainty in income
tax positions recognized in a company's financial statements. FIN 48 prescribes a
recognition threshold and measurement criteria that must be satisfied to recognize a
financial statement benefit of tax positions taken, or expected to be taken, on an
income tax return.  Additionally, FIN 48 provides guidance on derecognition,
61
classification, interest and penalties, accounting in interim periods, disclosure, and
transition.
FIN 48 was adopted by the Company on January 1, 2007.  As a result of
implementing FIN 48, the Company recognized a cumulative effect of change in
accounting principle of $1.7 as a reduction to January 1, 2007 Retained earnings
(deficit).
Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection
With Modifications or Exchanges of Insurance Contracts
In September 2005, the American Institute of Certified Public Accountants
("AICPA") issued SOP 05-1, "Accounting by Insurance Enterprises for Deferred
Acquisition Costs in Connection with Modifications or Exchanges of Insurance
Contracts" ("SOP 05-1"), which states that when an internal replacement transaction
results in a substantially changed contract, the unamortized deferred acquisition costs,
unearned revenue liabilities, and deferred sales inducement assets, related to the
replaced contract should not be deferred in connection with the new contract.
Contract modifications that meet various conditions defined by SOP 05-1 and result
in a new contract that is substantially unchanged from the replaced contract, however,
should be accounted for as a continuation of the replaced contract.
SOP 05-1 defines an internal replacement as a modification in product benefits,
features, rights, or coverage, that occurs by the exchange of a contract for a new
contract, by amendment, endorsement, or rider, to a contract, or by the election of a
feature or coverage within a contract.  SOP 05-1 applies to internal replacements
made primarily to contracts defined by FAS No. 60, "Accounting and Reporting by
Insurance Enterprises" ("FAS No. 60"), as short-duration and long-duration insurance
contracts, and by FAS No. 97 as investment contracts.
SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for
internal replacements occurring on or after that date.  As a result of implementing
SOP 05-1, the Company recognized a cumulative effect of change in accounting
principle of $4.8, before tax, or $3.1, net of $1.7 of income taxes, as a reduction to
January 1, 2007 Retained earnings (deficit).  In addition, the Company revised its
accounting policy on the amortization of DAC and VOBA to include internal
replacements.
Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans
In September 2006, the FASB issued Statement of Financial Accounting Standards
("FAS") No. 158, "Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans - An Amendment of FASB Statements No. 87, 88, 106, and
132R" ("FAS No. 158"). FAS No. 158 requires an employer to:
§
Recognize in the statement of financial position, an asset for a plan's overfunded status or a liability for a plan's underfunded status;
§
Measure a plan's assets and obligations that determine its funded status as of the end of the fiscal year; and
62
§
Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur, reporting such changes in comprehensive income.
On December 31, 2006, the Company adopted the recognition and disclosure
provisions of FAS No. 158. The effect of adopting FAS No. 158 on the Company's
financial condition at December 31, 2006 is included in the accompanying financial
statements. FAS No. 158 did not have a significant effect on the Company's financial
condition at December 31, 2006.  The provisions regarding the change in the
measurement date of postretirement benefit plans were not applicable, as the
Company already used a measurement date of December 31 for its pension plans.
The incremental effects of adopting the provisions of FAS No. 158 on the Company's
Balance Sheets at December 31, 2006 was $(1.6) .
New Accounting Pronouncements
Business Combinations
In December 2007, the FASB issued FAS No. 141 (revised 2007), "Business
Combinations" ("FAS No. 141R"), which replaces FAS No. 141, "Business
Combinations," as issued in 2001. FAS No. 141R requires most identifiable assets,
liabilities, noncontrolling interest, and goodwill acquired in a business combination to
be recorded at full fair value as of the acquisition date, even for acquisitions achieved
in stages. In addition, the statement requires:
§
Acquisition-related costs to be recognized separately and generally expensed;
§
Non-obligatory restructuring costs to be recognized separately when the liability is incurred;
§
Contractual contingencies acquired to be recorded at acquisition-date fair values;
§
A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a
gain; and
§
The nature and financial effects of the business combination to be disclosed.
FAS No. 141R also amends or eliminates various other authoritative literature.
The provisions of FAS No. 141R are effective for fiscal years beginning on or after
December 15, 2008 for all business combinations occurring on or after that date. As
such, this standard will impact any Company acquisitions that occur on or after
January 1, 2009.
The Fair Value Option for Financial Assets and Financial Liabilities
In February 2007, the FASB issued FAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("FAS No. 159"), which allows a
company to make an irrevocable election, on specific election dates, to measure
eligible items at fair value with unrealized gains and losses recognized in earnings at
each subsequent reporting date. The election to measure an item at fair value may be
63
determined on an instrument by instrument basis, with certain exceptions. If the fair
value option is elected, any upfront costs and fees related to the item will be
recognized in earnings as incurred. Items eligible for the fair value option include:
§
Certain recognized financial assets and liabilities;
§
Rights and obligations under certain insurance contracts that are not financial instruments;
§
Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and
§
Certain commitments.
FAS No. 159 is generally effective for fiscal years beginning after November 15,
2007.  As of the effective date, the fair value option may be elected for certain
eligible items that exist on that date. The effect of the first remeasurement to fair
value shall be reported as a cumulative effect adjustment to the opening balance of
Retained earnings (deficit). The Company will not be electing the fair value option
for any eligible assets or liabilities in existence on January 1, 2008.
Fair Value Measurements
In September 2006, the FASB issued FAS No. 157, "Fair Value Measurements"
("FAS No. 157"). FAS No. 157 provides guidance for using fair value to measure
assets and liabilities whenever other standards require (or permit) assets or liabilities
to be measured at fair value. FAS No. 157 does not expand the use of fair value to
any new circumstances.
Under FAS No. 157, the FASB clarifies the principle that fair value should be based
on the assumptions market participants would use when pricing the asset or liability.
In support of this principle, FAS No. 157 establishes a fair value hierarchy that
prioritizes the information used to develop such assumptions. The fair value hierarchy
gives the highest priority to quoted prices in active markets and the lowest priority to
unobservable data.  FAS No. 157 also requires separate disclosure of fair value
measurements by level within the hierarchy and expanded disclosure of the effect on
earnings for items measured using unobservable data.
The provisions of FAS No. 157 are effective for financial statements issued for fiscal
years beginning after November 15, 2007.  The Company is in the process of
determining the impact of adoption of FAS No. 157.
Legislative Initiatives
Legislative proposals, which have been or are being considered by Congress, include
repealing/modifying the estate tax, reducing the taxation on annuity benefits,
changing the tax treatment of insurance products relative to other financial products,
and changing life insurance company taxation. Some of these proposals, if enacted,
could have a material adverse effect on life insurance, annuity, and other retirement
savings product sales, while others could have a material beneficial effect. There
are no indications at the present time, however, that Congress will enact tax changes
that will adversely affect the Company's products in 2008. The SEC has a regulatory
initiative underway to improve fee disclosure in financial products and legislative
proposals on financial product fee disclosure may also be considered by Congress as
64
it undertakes a review of fee disclosures in the defined contribution plan arena.
However, the timing and content of legislative or regulatory action to change fee
disclosure requirements are uncertain at this time. The IRS and the Treasury have
published final regulations, effective in 2009, that update and consolidate the rules
applicable to 403(b) tax deferred annuity arrangements. The final regulations impose
broad written plan document and operational compliance requirements on all 403(b)
plan sponsors and contain new restrictions on annuity exchanges, which have the
potential to adversely impact the Company's 403(b) annuity business.  For a
description of Revenue Ruling 2007-61 issued by the IRS in September of 2007, see
the "Liquidity and Capital Resources, Income Taxes" section of "Management's
Narrative Analysis of the Results of Operations and Financial Condition" above.
Other Regulatory Matters
Regulatory Matters
As with many financial services companies, the Company and its affiliates have
received informal and formal requests for information from various state and federal
governmental agencies and self-regulatory organizations in connection with inquiries
and investigations of the products and practices of the financial services industry. In
each case, the Company and its affiliates have been and are providing full
cooperation.
Insurance and Retirement Plan Products and Other Regulatory Matters
Federal and state regulators, and self-regulatory agencies are conducting broad
inquiries and investigations involving the insurance and retirement industries. These
initiatives currently focus on, among other things, compensation, revenue sharing,
and other sales incentives; potential conflicts of interest; potential anti-competitive
activity; reinsurance; sales and marketing practices (including sales to seniors);
specific product types (including group annuities and indexed annuities); and
disclosure.  It is likely that the scope of these industry investigations will further
broaden before they conclude. The Company and certain of its U.S. affiliates have
received formal and informal requests in connection with such investigations, and are
cooperating fully with each request for information.  Some of these matters could
result in regulatory action involving the Company. These initiatives also may result
in new legislation and regulation that could significantly affect the financial services
industry, including businesses in which the Company is engaged. In light of these
and other developments, U.S. affiliates of ING, including the Company, periodically
review whether modifications to their business practices are appropriate.
Investment Product Regulatory Issues
Since 2002, there has been increased governmental and regulatory activity relating to
mutual funds and variable insurance products. This activity has primarily focused on
inappropriate trading of fund shares; directed brokerage; compensation; sales
practices, suitability, and supervision; arrangements with service providers; pricing;
compliance and controls; adequacy of disclosure; and document retention.
65
In addition to responding to governmental and regulatory requests on fund trading
issues, ING management, on its own initiative, conducted, through special counsel
and a national accounting firm, an extensive internal review of mutual fund trading in
ING insurance, retirement, and mutual fund products. The goal of this review was to
identify any instances of inappropriate trading in those products by third parties or by
ING investment professionals and other ING personnel.
The internal review identified several isolated arrangements allowing third parties to
engage in frequent trading of mutual funds within the variable insurance and mutual
fund products of ING, and identified other circumstances where frequent trading
occurred despite measures taken by ING intended to combat market timing. Each of
the arrangements has been terminated and disclosed to regulators, to the independent
trustees of ING Funds (U.S.), and in Company reports previously filed with the SEC
pursuant to the Securities Exchange Act of 1934, as amended.
Action may be taken by regulators with respect to the Company or certain affiliates
before investigations relating to fund trading are completed. The potential outcome
of such action is difficult to predict but could subject the Company or certain
affiliates to adverse consequences, including, but not limited to, settlement payments,
penalties, and other financial liability. It is not currently anticipated, however, that
the actual outcome of any such action will have a material adverse effect on ING or
ING's U.S.-based operations, including the Company.
ING has agreed to indemnify and hold harmless the ING Funds from all damages
resulting from wrongful conduct by ING or its employees or from ING's internal
investigation, any investigations conducted by any governmental or self-regulatory
agencies, litigation or other formal proceedings, including any proceedings by the
SEC. Management reported to the ING Funds Board that ING management believes
that the total amount of any indemnification obligations will not be material to ING or
ING's U.S.-based operations, including the Company.
For further discussion of the risks to the Company as a result of recent regulatory
inquiries and possible changes in U.S. regulation, see Part I, Item 1A. Risk Factors.
66
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
(Dollar amounts in millions, unless otherwise stated)
Asset/liability management is integrated into many aspects of the Company's
operations, including investment decisions, product development, and determination
of crediting rates. As part of the risk management process, different economic
scenarios are modeled, including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet projected liability
cash flows. Key variables in the modeling process include interest rates, anticipated
contractowner behavior, and variable separate account performance. Contractowners
bear the investment risk related to variable annuity products, subject to the minimum
guaranteed death and living benefits included in these contracts.
The fixed account liabilities are supported by a general account portfolio principally
composed of fixed rate investments with matching duration characteristics that can
generate predictable, steady rates of return. The portfolio management strategy for the
fixed account considers the assets available-for-sale. This enables the Company to
respond to changes in market interest rates, prepayment risk, relative values of asset
sectors and individual securities and loans, credit quality outlook, and other relevant
factors. The objective of portfolio management is to maximize returns, taking into
account interest rate and credit risk, as well as other risks. The Company's
asset/liability management discipline includes strategies to minimize exposure to loss
as interest rates and economic and market conditions change.
On the basis of these analyses, management believes there is currently no material
solvency risk to the Company.
Interest Rate Risk
The Company defines interest rate risk as the risk of an economic loss due to adverse
changes in interest rates.  This risk arises from the Company's primary activity of
investing fixed annuity premiums and guaranteed investment contract deposits
received in interest-sensitive assets and carrying these funds as interest-sensitive
liabilities.  The Company manages the interest rate risk in its general account
investments relative to the interest rate risk in its liabilities.  The current product
portfolio also includes products where interest rate risks are entirely or partially
passed on to the contractowner, thereby reducing the Company's exposure to interest
rate movements. Changes in interest rates can impact present and future earnings, the
levels of new sales, surrenders, or withdrawals.
The following schedule demonstrates the potential changes in the 2007 earnings from
an instantaneous, parallel increase/decrease in interest rates of 1% on December 31,
2007.  These changes to income could relate to future investment income, interest
paid to contractowners, market-value adjustments, amortization of DAC and VOBA,
sales levels, or any other net income item that would be affected by interest rate
changes. The effect of interest rate changes is different by product. In addition, the
Company has estimated the impact to December 31, 2007 Shareholder's equity from
the same instantaneous change in interest rates. The effect on Shareholder's equity
includes the impact of interest rate fluctuations on income, unrealized capital gains
67
(losses) on available-for-sale securities, and DAC and VOBA adjustments for
unrealized capital gains (losses) on available-for-sale securities.
Interest rate sensitivity and effect on Net income and Shareholder's equity:
Effect on
Shareholder's
Effect on Net
Equity as of
Income for
December 31,
2007
2007
Increase of 1%
$ (9.6)
$ (23.7)
Decrease of 1%
(14.3)
0.9
The above analysis includes the following changes in DAC and VOBA related to an
instantaneous, parallel increase/decrease in interest rates.
Interest rate sensitivity and effect on DAC and VOBA:
Effect on
Effect on
Amortization of
DAC and VOBA
DAC and VOBA
Assets as of
for
December 31,
2007
2007
Increase of 1%
$ 94.1
$ 25.1
Decrease of 1%
(16.0)
(111.6)
Equity Market Risk
The Company's operations are significantly influenced by changes in the equity
markets. The Company's profitability depends largely on the amount of assets under
management ("AUM"), which is primarily driven by the level of sales, equity market
appreciation and depreciation, and the persistency of the in force block of business.
Prolonged and precipitous declines in the equity markets can have a significant
impact on the Company's operations.  As a result, sales of variable products may
decline and surrender activity may increase, as contractowner sentiment towards the
equity market turns negative. Lower AUM will have a negative impact on the
Company's financial results, primarily due to lower fee income on variable annuities.
Furthermore, the Company may experience a reduction in profit margins if a
significant portion of the assets held in the variable annuity separate account move to
the general account and the Company is unable to earn an acceptable investment
margin, particularly in light of the low interest rate environment and the presence of
contractually guaranteed interest credited rates.
68
In addition, prolonged declines in the equity market may also decrease the
Company's expectations of future gross profits, which are utilized to determine the
amount of DAC and VOBA to be amortized in a given financial statement period. A
significant decrease in the Company's estimated gross profits would require the
Company to accelerate the amount of amortization of DAC and VOBA in a given
period, potentially causing a material adverse deviation in the period's Net income.
The following schedule demonstrates the potential changes in the 2007 earnings
resulting from an instantaneous increase/decrease in equity markets of 10% on
December 31, 2007. These changes to income could relate to future fee income,
unrealized or realized capital gains (losses), amortization of DAC and VOBA, sales
levels, or any other net income item that would be affected by a substantial change to
equity markets. In addition, the Company has estimated the impact to Shareholder's
equity as of December 31, 2007 from the same instantaneous change in equity
markets.  The effect on Shareholder's equity include the impact of equity market
fluctuations on income, unrealized gains or losses on available-for-sale securities, and
DAC and VOBA adjustments for unrealized capital gains (losses) on available-for-
sale securities.
Equity sensitivity and effect on Net income and Shareholder's equity
Effect on
Shareholder's
Effect on Net
Equity as of
Income for
December 31,
2007
2007
Increase of 10%
$ 56.5
$ 56.5
Decrease of 10%
(49.5)
(49.5)
The above analysis includes the following changes in DAC and VOBA related to an
instantaneous increase/decrease in equity markets.
Equity sensitivity and effect on DAC and VOBA:
Effect on
Effect on
Amortization of
DAC and VOBA
DAC and VOBA
Assets as of
for
December 31,
2007
2007
Increase of 10%
$ (137.8)
$ 137.8
Decrease of 10%
116.6
(116.6)
69
Hedging of Minimum Guarantees
The Company sells variable annuities that offer various guaranteed death and living
benefits, including guaranteed minimum death benefits ("GMDBs"), guaranteed
minimum income benefits ("GMIBs"), guaranteed minimum withdrawals benefits
("GMWBs"), and guaranteed minimum accumulation benefits ("GMABs"). See Part
II, Item 7., discussion of Minimum Guarantees under Liquidity and Capital
Resources.
The liabilities associated with GMDBs, GMIBs, and GMWBs with life contingent
payouts, are recorded in accordance with Statement of Position ("SOP") 03-1,
"Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts for Separate Accounts" ("SOP 03-1"). The liabilities
associated with GMABs and GMWBs without life contingent payouts represent
embedded derivative liabilities within variable annuities, which are required to be
reported separately from the host variable annuity contract. These guarantees are
carried at fair value in accordance with Statement of Financial Accounting Standards
("FAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("FAS No. 133"), and are reported in Future policy benefits and claims reserves in the
Balance Sheets.
Both the liabilities recorded in accordance with SOP 03-1, and the liabilities carried at
fair value in accordance with FAS No. 133, are calculated based on actuarial
assumptions related to projected cash flows, including benefits and related contract
charges, over the lives of the contracts, incorporating expectations concerning
contractowner behavior. These liability assumptions, such as lapses, partial
withdrawals, and mortality, are based on Company experience and are, where
appropriate, consistent with those used for DAC and VOBA.
Declines in the equity market may increase the Company's net exposure to the death
and living benefit guarantees offered under these contracts. Such declines would
cause a decrease in account values, and increase the possibility that the Company may
be required to pay amounts related to these guarantees.  The following schedule
demonstrates the potential change in the 2007 reserve liabilities for minimum
guarantees resulting from an instantaneous increase/decrease in equity markets of
10% on December 31, 2007.
Effect on Reserves
GMDBs
GMIBs
GMABs
GMWBs
$ $
$
Increase of 10%
$ (36.7)
(33.0)
(4.4)
(7.2)
56.6
45.7
4.4
7.2
Decrease of 10%
In order to hedge equity risk associated with guaranteed death and living benefits, the
Company enters into futures positions on various public market indices chosen to
closely replicate contractowner variable fund returns.  The Company uses market
consistent valuation techniques to establish its derivative positions and to rebalance
the derivative positions in response to market fluctuation. One aspect of the hedging
70
program is designed to offset changes related to equity experience in the liability and
to pay excess claims not covered by the contractowner account value. The Company
also administers a hedging program that mitigates both equity risk and equity
volatility risk associated with its Principal Guard GMWB product issued in 2005 and
beyond. This hedge strategy primarily involves entering into put options.
Other risks posed by market conditions, such as interest rate risk and the majority of
the Company's equity volatility risk, and risks posed by contractowner experience,
such as surrender and mortality experience deviations, are not explicitly mitigated by
this program. In addition, certain funds where there is no replicating market index
and where hedging is not appropriate are excluded from the program.
For those risks addressed by the equity hedging program, the Company is exposed to
the risk that the market indices will not adequately replicate actual contractowner
variable fund growth. Any differences between actual results and the market indices
result in income volatility.
Hedging of Indexed Annuity Guarantees
The crediting mechanism for fixed indexed annuities ("FIA") exposes the Company
to changes in the equity market ("S&P 500"). The Company mitigates this exposure
by purchasing over-the-counter S&P 500 call options from broker-dealer derivative
counterparties who generally have a minimum credit rating of Aa3 from Moody's
Investor's Service, Inc., and AA- from Standard & Poor's. For each broker-dealer
counterparty, the Company's derivative exposure to that counterparty is aggregated
with any fixed income exposure to the same counterparty, and is maintained within
applicable state requirements and National Association of Insurance Commissioners
insurance regulatory guidelines.  The FIA hedging program is limited to currently
accruing liabilities resulting from participation rates that have been determined using
capital market valuation techniques. Future equity returns, which may be reflected in
FIA credited rates beyond the current policy term, are not hedged.
The following schedule demonstrates the potential change in the 2007 FIA reserve
liabilities resulting from instantaneous increase/decrease in equity markets of 10% on
December 31, 2007.
Effect on
Reserves
Increase of 10%
$ 166.2
Decrease of 10%
(113.8)
71
Item 8.
Financial Statements and Supplementary Data
Index to Financial Statements
Page
Report of Independent Registered Public Accounting Firm
73
Financial Statements:
Statements of Operations for the years ended
December 31, 2007, 2006, and 2005
74
Balance Sheets as of December 31, 2007 and 2006
75
Statements of Changes in Shareholder's Equity for the years ended
December 31, 2007, 2006, and 2005
77
Statements of Cash Flows for the years ended
December 31, 2007, 2006, and 2005
78
Notes to Financial Statements
80
Report of Independent Registered Public Accounting Firm
The Board of Directors
ING USA Annuity and Life Insurance Company
We have audited the accompanying balance sheets of ING USA Annuity and Life Insurance
Company as of December 31, 2007 and 2006, and the related statements of operations, changes
in shareholder's equity, and cash flows for each of the three years in the period ended
December 31, 2007.  These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these 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. We were not engaged to perform an audit of the Company's internal control over
financial reporting. Our audits include consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal control over
financial reporting.  Accordingly, we express no such opinion.  An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of ING USA Annuity and Life Insurance Company as of December 31,
2007 and 2006, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2007, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Atlanta, Georgia
March 25, 2008
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion
Connecticut Holdings Inc.)
Statements of Operations
(In millions)
Year Ended December 31,
2007
2006
2005
Revenue:
Net investment income
$ 1,346.4
$ 1,156.4
$ 1,102.2
Fee income
1,198.9
939.2
745.6
Premiums
19.6
20.5
21.8
Net realized capital losses
(391.2)
(90.4)
(2.9)
Other income
0.1
-
0.7
Total revenue
2,173.8
2,025.7
1,867.4
Benefits and expenses:
Interest credited and other benefits to contractowners
1,312.0
1,169.7
1,085.8
Operating expenses
269.6
228.0
192.5
Amortization of deferred policy acquisition
costs and value of business acquired
408.1
293.0
318.9
Interest expense
32.5
30.3
29.6
Other expense
24.2
28.1
16.5
Total benefits and expenses
2,046.4
1,749.1
1,643.3
Income before income taxes
127.4
276.6
224.1
Income tax (benefit) expense
(1.6)
64.4
34.2
Net income
$ 129.0
$ 212.2
$ 189.9
The accompanying notes are an integral part of these financial statements.
74
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Balance Sheets
(In millions, except share data)
As of December 31,
2007
2006
Assets
Investments:
Fixed maturities, available-for-sale, at fair value
(amortized cost of $21,945.0 at 2007 and $17,071.8 at 2006)
$ 21,833.4
$ 17,054.4
Equity securities, available-for-sale, at fair value
(cost of $216.6 at 2007 and $39.1 at 2006)
211.1
40.6
Short-term investments
188.0
134.3
Mortgage loans on real estate
3,701.7
3,687.6
Policy loans
155.8
162.5
Limited partnerships/corporations
454.5
149.4
Other investments
394.1
493.5
Securities pledged
(amortized cost of $953.3 at 2007 and $875.5 at 2006)
942.6
864.0
Total investments
27,881.2
22,586.3
Cash and cash equivalents
204.4
608.6
Short-term investments under securities loan agreement
128.5
102.6
Accrued investment income
216.9
183.7
Receivable for securities sold
4.6
20.3
Deposits and reinsurance recoverable from affiliate
4,616.1
4,759.0
Deferred policy acquisition costs
2,908.4
2,669.9
Value of business acquired
128.7
110.1
Sales inducements to contractowners
645.4
630.7
Due from affiliates
22.9
29.7
Current income taxes
-
4.6
Other assets
41.3
43.8
Assets held in separate accounts
44,477.8
37,928.3
Total assets
$ 81,276.2
$ 69,677.6
The accompanying notes are an integral part of these financial statements.
75
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Balance Sheets
(In millions, except share data)
As of December 31,
2007
2006
Liabilities and Shareholder's Equity
Future policy benefits and claims reserves
$ 31,461.6
$ 26,696.4
Payables for securities purchased
-
48.3
Collateral held, including payables under securities loan agreement
140.0
102.6
Borrowed money
715.5
769.6
Notes to affiliates
435.0
435.0
Due to affiliates
95.6
46.4
Current income taxes
40.7
-
Deferred income taxes
184.5
262.5
Other liabilities
606.5
399.4
Liabilities related to separate accounts
44,477.8
37,928.3
Total liabilities
78,157.2
66,688.5
Shareholder's equity
Common stock (250,000 shares authorized, issued
and outstanding; $10 per share value)
2.5
2.5
Additional paid-in capital
4,132.7
3,978.4
Accumulated other comprehensive loss
(160.7)
(12.1)
Retained earnings (deficit)
(855.5)
(979.7)
Total shareholder's equity
3,119.0
2,989.1
Total liabilities and shareholder's equity
$ 81,276.2
$ 69,677.6
The accompanying notes are an integral part of these financial statements.
76
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Statements of Changes in Shareholder's Equity
(In millions)
Accumulated
Additional
Other
Retained
Total
Common
Paid-In
Comprehensive
Earnings
Shareholder's
Stock
Capital
Income (Loss)
(Deficit)
Equity
Balance at December 31, 2004
$ 2.5
$ 4,041.1
$ 112.7
$ (1,381.8)
$ 2,774.5
Comprehensive income:
Net income
-
-
-
189.9
189.9
Other comprehensive loss, net of tax:
Change in net unrealized capital gains (losses)
on securities ($(185.2) pretax)
-
-
(118.4)
-
(118.4)
Minimum pension liability ($(1.1) pretax)
-
-
1.0
-
1.0
Total comprehensive income
72.5
Contribution of capital
-
100.0
-
-
100.0
Employee share-based payments
-
2.0
-
-
2.0
Balance at December 31, 2005
2.5
4,143.1
(4.7)
(1,191.9)
2,949.0
Comprehensive income:
Net income
-
-
-
212.2
212.2
Other comprehensive loss, net of tax:
Change in net unrealized capital gains (losses)
on securities ($(10.7) pretax)
-
-
(7.3)
-
(7.3)
Pension liability ($0.6 pretax)
-
-
0.4
-
0.4
Other
-
-
1.1
-
1.1
Total comprehensive income
206.4
Cumulative effect of change of accounting
principle ($(2.4) pretax)
-
-
(1.6)
-
(1.6)
Capital distribution paid
-
(170.0)
-
-
(170.0)
Employee share-based payments
-
4.1
-
-
4.1
Other
-
1.2
-
-
1.2
Balance at December 31, 2006
2.5
3,978.4
(12.1)
(979.7)
2,989.1
Cumulative effect of change of accounting principles
-
-
-
(4.8)
(4.8)
Balance at January 1, 2007
2.5
3,978.4
(12.1)
(984.5)
2,984.3
Comprehensive loss:
Net income
-
-
-
129.0
129.0
Other comprehensive loss, net of tax:
Change in net unrealized capital gains (losses)
on securities ($(158.7) pretax), including
valuation allowance of $(46.9)
-
-
(149.7)
-
(149.7)
Pension liability ($3.4 pretax)
-
-
2.2
-
2.2
Other
-
-
(1.1)
-
(1.1)
Total comprehensive loss
(19.6)
Capital contribution
-
150.0
-
-
150.0
Employee share-based payments
-
4.3
-
-
4.3
Balance at December 31, 2007
$ 2.5
$ 4,132.7
$ (160.7)
$ (855.5)
$ 3,119.0
The accompanying notes are an integral part of these financial statements.
77
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion
Connecticut Holdings Inc.)
Statements of Cash Flows
(In millions)
Year Ended December 31,
2007
2006
2005
Cash Flows from Operating Activities:
Net income
$ 129.0 $
212.2 $
189.9
Adjustments to reconcile net income to
net cash provided by operating activities:
Capitalization of deferred policy acquisition costs
and sales inducements
(864.5)
(831.9)
(715.3)
Amortization of deferred policy acquisition costs,
value of business acquired, and sales inducements
528.3
367.1
387.7
Net accretion/decretion of discount/premium
52.2
57.7
93.1
Future policy benefits, claims reserves, and
interest credited
1,368.5
1,179.9
1,078.4
Provision for deferred income taxes
(69.0)
131.4
192.0
Net realized capital losses
391.2
90.4
2.9
Change in:
Accrued investment income
(33.2)
(8.7)
26.7
Reinsurance recoverable (excluding GICs)
117.6
(52.1)
(31.1)
Other receivables and asset accruals
2.5
(13.9)
(1.6)
Due to/from affiliates
56.0
(8.0)
(18.9)
Other payables and accruals
42.9
(3.1)
39.3
Employee share-based payments
4.3
4.1
2.0
Other, net
2.2
1.1
-
Net cash provided by operating activities
1,728.0
1,126.2
1,245.1
Cash Flows from Investing Activities:
Proceeds from the sale, maturity, or redemption of:
Fixed maturities, available-for-sale
10,631.8
10,496.1
16,027.0
Equity securities, available-for-sale
16.5
15.8
20.7
Mortgage loans on real estate
776.1
523.7
739.7
Acquisition of:
Fixed maturities, available-for-sale
(15,767.5)
(11,446.3)
(17,518.1)
Equity securities, available-for-sale
(193.5)
(25.4)
(14.1)
Mortgage loans on real estate
(790.6)
(444.4)
(658.0)
Derivatives, net
22.9
(198.1)
(139.9)
Limited partnerships, net
(305.4)
(69.9)
(23.4)
Short-term investments, net
(53.8)
(79.7)
(49.1)
Other, net
13.4
4.7
(21.2)
Net cash used in investing activities
(5,650.1)
(1,223.5)
(1,636.4)
The accompanying notes are an integral part of these financial statements.
78
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion
Connecticut Holdings Inc.)
Statements of Cash Flows
(In millions)
Year Ended December 31,
2007
2006
2005
Cash Flows from Financing Activities:
Deposits received for investment contracts
$ 10,458.9
$ 5,788.4
$ 5,225.6
Maturities and withdrawals from investment contracts
(7,062.2)
(4,497.2)
(5,039.7)
Reinsurance recoverable on investment contracts
25.3
(638.8)
(120.5)
Notes to affiliates
-
45.0
-
Short-term loan to affiliate
-
-
139.2
Short-term borrowings
(54.1)
(36.7)
92.9
Capital distribution to Parent
-
(170.0)
-
Capital contribution from Parent
150.0
-
100.0
Net cash provided by financing activities
3,517.9
490.7
397.5
Net (decrease) increase in cash and cash equivalents
(404.2)
393.4
6.2
Cash and cash equivalents, beginning of year
608.6
215.2
209.0
Cash and cash equivalents, end of year
$ 204.4
$ 608.6
$ 215.2
Supplemental cash flow information:
Income taxes paid (received), net
$ 21.3
$ (30.2)
$ (174.7)
Interest paid
$ 67.1
$ 66.2
$ 52.1
The accompanying notes are an integral part of these financial statements.
79
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
1. Organization and Significant Accounting Policies
Basis of Presentation
ING USA Annuity and Life Insurance Company ("ING USA" or the "Company," as
appropriate) is a stock life insurance company domiciled in the State of Iowa and
provides financial products and services in the United States. ING USA is authorized to
conduct its insurance business in all states, except New York, and in the District of
Columbia.
ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.
("Lion" or "Parent"), which is an indirect, wholly-owned subsidiary of ING Groep N.V.
("ING"). ING is a global financial services holding company based in The Netherlands,
with American Depository Shares listed on the New York Stock Exchange under the
symbol "ING".
Description of Business
The Company offers various insurance products, including immediate and deferred
variable and fixed annuities. The Company's annuity products are distributed by national
wirehouses, regional securities firms, independent broker-dealers, banks, life insurance
companies with captive agency sales forces, independent insurance agents, independent
marketing organizations, and affiliated broker-dealers. The Company's primary annuity
customers are individual consumers.
The Company also offers guaranteed investment contracts and funding agreements
(collectively referred to as "GICs"), sold primarily to institutional investors and corporate
benefit plans.  These products are marketed by home office personnel or through
specialty insurance brokers.
The Company previously provided interest-sensitive, traditional life insurance, and health
insurance. The Company no longer issues these products. The life insurance business is
in run-off, and the Company has ceded to other insurers all health insurance.
The Company has one operating segment.
80
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Recently Adopted Accounting Standards
Accounting for Uncertainty in Income Taxes
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"), which
creates a single model to address the accounting for the uncertainty in income tax
positions recognized in a company's financial statements.  FIN 48 prescribes a
recognition threshold and measurement criteria that must be satisfied to recognize a
financial statement benefit of tax positions taken, or expected to be taken, on an income
tax return.  Additionally, FIN 48 provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and transition.
FIN 48 was adopted by the Company on January 1, 2007. As a result of implementing
FIN 48, the Company recognized a cumulative effect of change in accounting principle of
$1.7 as a reduction to January 1, 2007 Retained earnings (deficit).
Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With
Modifications or Exchanges of Insurance Contracts
In September 2005, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position ("SOP") 05-1, "Accounting by Insurance Enterprises for
Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance
Contracts" ("SOP 05-1"), which states that when an internal replacement transaction
results in a substantially changed contract, the unamortized deferred acquisition costs,
unearned revenue liabilities, and deferred sales inducement assets, related to the replaced
contract should not be deferred in connection with the new contract.  Contract
modifications that meet various conditions defined by SOP 05-1 and result in a new
contract that is substantially unchanged from the replaced contract, however, should be
accounted for as a continuation of the replaced contract.
SOP 05-1 defines an internal replacement as a modification in product benefits, features,
rights, or coverage, that occurs by the exchange of a contract for a new contract, by
amendment, endorsement, or rider, to a contract, or by the election of a feature or
coverage within a contract. SOP 05-1 applies to internal replacements made primarily to
contracts defined by Statement of Financial Accounting Standards ("FAS") No. 60,
"Accounting and Reporting by Insurance Enterprises" ("FAS No. 60"), as short-duration
and long-duration insurance contracts, and by FAS No. 97, "Accounting and Reporting
by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and
Losses from the Sale of Investments" ("FAS No. 97"), as investment contracts.
81
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for internal
replacements occurring on or after that date. As a result of implementing SOP 05-1, the
Company recognized a cumulative effect of change in accounting principle of $4.8,
before tax, or $3.1, net of $1.7 of income taxes, as a reduction to January 1, 2007
Retained earnings (deficit). In addition, the Company revised its accounting policy on
the amortization of deferred policy acquisition costs ("DAC") and value of business
acquired ("VOBA") to include internal replacements.
Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans
In September 2006, FASB issued No. 158, "Employers' Accounting for Defined Benefit
Pension and Other Postretirement Plans - An Amendment of FASB Statements No. 87,
88, 106, and 132R" ("FAS No. 158"). FAS No. 158 requires an employer to:
§
Recognize in the statement of financial position, an asset for a plan's overfunded status or a liability for a plan's underfunded status;
§
Measure a plan's assets and obligations that determine its funded status as of the end of the fiscal year; and
§
Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur, reporting such changes in comprehensive income.
On December 31, 2006, the Company adopted the recognition and disclosure provisions
of FAS No. 158.  The effect of adopting FAS No. 158 on the Company's financial
condition at December 31, 2006 is included in the accompanying financial statements.
FAS No. 158 did not have a significant effect on the Company's financial condition at
December 31, 2006. The provisions regarding the change in the measurement date of
postretirement benefit plans are not applicable, as the Company already uses a
measurement date of December 31 for its pension plans.
The incremental effects of adopting the provisions of FAS No. 158 on the Company's
Balance Sheets at December 31, 2006 was $(1.6) .
Accounting for Certain Hybrid Financial Instruments
In February 2006, the FASB issued FAS No. 155, "Accounting for Certain Hybrid
Financial Instruments - an amendment of FASB Statements No. 133 and 140" ("FAS No.
155"), which permits the application of fair value accounting to certain hybrid financial
instruments in their entirety if they contain embedded derivatives that would otherwise
require bifurcation under FAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("FAS No. 133"). Under this approach, changes in fair value would
be recognized currently in earnings. In addition, FAS No. 155 does the following:
82
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
§
Clarifies which interest-only strips and principal-only strips are not subject to derivative accounting under FAS No. 133;
§
Requires that interests in securitized financial assets be analyzed to identify interests that are freestanding derivatives or that are hybrid instruments that contain embedded derivatives
requiring bifurcation;
§
Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and
§
Allows a qualifying special-purpose entity to hold derivative financial instruments that pertain to beneficial interests, other than another derivative financial instrument.
FAS No. 155 was adopted by the Company on January 1, 2007, and is effective for all
instruments acquired, issued, or subject to a remeasurement event, occurring on or after
that date. The adoption of FAS No. 155 did not have a material effect on the Company's
financial position, results of operations, or cash flows.
New Accounting Pronouncements
Business Combinations
In December 2007, the FASB issued FAS No. 141 (revised 2007), "Business
Combinations" ("FAS No. 141R"), which replaces FAS No. 141, "Business
Combinations," as issued in 2001.  FAS No. 141R requires most identifiable assets,
liabilities, noncontrolling interest, and goodwill, acquired in a business combination to be
recorded at full fair value as of the acquisition date, even for acquisitions achieved in
stages. In addition, the statement requires:
§
Acquisition-related costs to be recognized separately and generally expensed;
§
Non-obligatory restructuring costs to be recognized separately when the liability is incurred;
§
Contractual contingencies acquired to be recorded at acquisition-date fair values;
§
A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a
gain; and
§
The nature and financial effects of the business combination to be disclosed.
FAS No. 141R also amends or eliminates various other authoritative literature.
The provisions of FAS No. 141R are effective for fiscal years beginning on or after
December 15, 2008 for all business combinations occurring on or after that date.  As
such, this standard will impact any Company acquisitions that occur on or after
January 1, 2009.
83
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Fair Value Option for Financial Assets and Financial Liabilities
In February 2007, the FASB issued FAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities" ("FAS No. 159"), which allows a company to make an
irrevocable election, on specific election dates, to measure eligible items at fair value.
The election to measure an item at fair value may be determined on an instrument by
instrument basis, with certain exceptions. If the fair value option is elected, unrealized
gains and losses will be recognized in earnings at each subsequent reporting date, and any
upfront costs and fees related to the item will be recognized in earnings as incurred.
Items eligible for the fair value option include:
§
Certain recognized financial assets and liabilities;
§
Rights and obligations under certain insurance contracts that are not financial instruments;
§
Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and
§
Certain commitments.
FAS No. 159 is effective for fiscal years beginning after November 15, 2007. As of the
effective date, the fair value option may be elected for eligible items that exist on that
date. The effect of the first remeasurement to fair value shall be reported as a cumulative
effect adjustment to the opening balance of Retained earnings (deficit). The Company
will not be electing the fair value option for any eligible assets or liabilities in existence
on January 1, 2008.
Fair Value Measurements
In September 2006, the FASB issued FAS No. 157, "Fair Value Measurements" ("FAS
No. 157"). FAS No. 157 provides guidance for using fair value to measure assets and
liabilities whenever other standards require (or permit) assets or liabilities to be measured
at fair value.  FAS No. 157 does not expand the use of fair value in any new
circumstances.
Under FAS No. 157, the FASB clarifies the principle that fair value should be based on
the assumptions market participants would use when pricing the asset or liability. In
support of this principle, FAS No. 157 establishes a fair value hierarchy that prioritizes
the information used to develop such assumptions. The fair value hierarchy gives the
highest priority to quoted prices in active markets and the lowest priority to unobservable
data. FAS No. 157 also requires separate disclosure of fair value measurements by level
within the hierarchy and expanded disclosure of the effect on earnings for items
measured using unobservable data.
84
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The provisions of FAS No. 157 are effective for financial statements issued for fiscal
years beginning after November 15, 2007. The Company is in the process of determining
the impact of adoption of FAS No. 157.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States ("US GAAP") requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from reported results using those
estimates.
Reclassifications
Certain reclassifications have been made to prior year financial information to conform to
the current year classifications.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, money market instruments, and other
debt issues with a maturity of 90 days or less when purchased.
Investments
All of the Company's fixed maturities and equity securities are currently designated as
available-for-sale. Available-for-sale securities are reported at fair value and unrealized
capital gains (losses) on these securities are recorded directly in Shareholder's equity,
after adjustment for related changes in DAC, VOBA, and deferred income taxes.
Other-Than-Temporary-Impairments
The Company analyzes the general account investments to determine whether there has
been an other-than-temporary decline in fair value below the amortized cost basis.
Management considers the length of the time and the extent to which the fair value has
been less than amortized cost, the issuer's financial condition and near-term prospects,
future economic conditions and market forecasts, and the Company's intent and ability to
retain the investment for a period of time sufficient to allow for recovery in fair value. If
it is probable that all amounts due according to the contractual terms of a debt security
will not be collected, an other-than-temporary impairment is considered to have occurred.
85
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
In addition, the Company invests in structured securities that meet the criteria of the
Emerging Issues Task Force ("EITF") Issue No. 99-20, "Recognition of Interest Income
and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial
Assets" ("EITF 99-20").  Under EITF 99-20, a further determination of the required
impairment is based on credit risk and the possibility of significant prepayment risk that
restricts the Company's ability to recover the investment. An impairment is recognized if
the fair value of the security is less than amortized cost and there has been an adverse
change in cash flow since the remeasurement date.
When a decline in fair value is determined to be other-than-temporary, the individual
security is written down to fair value, and the loss is recorded in Net realized capital
gains (losses).
Purchases and Sales
Purchases and sales of fixed maturities and equity securities, excluding private
placements, are recorded on the trade date. Purchases and sales of private placements
and mortgage loans are recorded on the closing date.
Valuation
The fair values for fixed maturities are largely determined by one of two pricing methods:
published price quotations or valuation techniques with market inputs. Security pricing is
applied using a hierarchy or "waterfall" approach, whereby prices are first sought from
published price quotations, including pricing services or broker-dealer quotations.
Published price quotations may be unavailable or deemed unreliable due to a limited
market for securities that are rarely traded or are traded only in privately negotiated
transactions.  As such, fair values for the remaining securities, consisting primarily of
privately placed bonds, are then determined using risk-free interest rates, current
corporate spreads, the credit quality of the issuer and cash flow characteristics of the
security. The fair values for actively traded equity securities are based on quoted market
prices.  For equity securities not actively traded, estimated fair values are based upon
values of issues of comparable yield and quality or conversion value, where applicable.
Mortgage loans on real estate are reported at amortized cost, less impairment write-
downs. If the value of any mortgage loan is determined to be impaired (i.e., when it is
probable that the Company will be unable to collect all amounts due according to the
contractual terms of the loan agreement), the carrying value of the mortgage loan is
reduced to either the present value of expected cash flows from the loan, discounted at
the loan's effective interest rate, or fair value of the collateral.  If the loan is in
foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net
of estimated costs to obtain and sell. The carrying value of the impaired loans is reduced
by establishing a permanent write-down recorded in Net realized capital gains (losses).
At December 31, 2007 and 2006, the Company had no allowance for mortgage loan
86
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
credit losses. The properties collateralizing mortgage loans are geographically dispersed
throughout the United States, with the largest concentration of 24.5% and 19.9% of
properties in California at December 31, 2007 and 2006, respectively.
Policy loans are carried at unpaid principal balances.
Short-term investments, consisting primarily of money market instruments and other
fixed maturity issues purchased with an original maturity of 91 days to one year, are
considered available-for-sale and are carried at fair value.
Derivative instruments are reported at fair value primarily using the Company's
derivative accounting system. The system uses key financial data, such as yield curves,
exchange rates, Standard & Poor's ("S&P") 500 Index prices, and London Inter Bank
Offered Rates ("LIBOR"), which are obtained from third party sources and uploaded into
the system. For those derivatives that are unable to be valued by the accounting system,
the Company utilizes values established by third party brokers.
Embedded derivative instruments within investments are reported at fair value based
upon internally established valuations that are consistent with external valuation models
or market quotations. Guaranteed minimum withdrawals benefits ("GMWBs") without
life contingent payouts and guaranteed minimum accumulation benefits ("GMABs")
represent an embedded derivative liability in the variable annuity contract that is required
to be reported separately from the host variable annuity contract. The option component
of a fixed indexed annuity ("FIA") also represents an embedded derivative.  These
embedded derivatives are carried at fair value based on actuarial assumptions related to
projected cash flows, including benefits and related contract charges, over the lives of the
contracts, incorporating expectations concerning contractowner behavior.
Repurchase Agreements
The Company engages in dollar repurchase agreements ("dollar rolls") and repurchase
agreements to increase the return on investments and improve liquidity.  These
transactions involve a sale of securities and an agreement to repurchase substantially the
same securities as those sold. Company policies require a minimum of 95% of the fair
value of securities pledged under dollar rolls and repurchase agreement transactions to be
maintained as collateral. Cash collateral received is invested in fixed maturities, and the
carrying value of the securities pledged in dollar rolls and repurchase agreement
transactions is included in Securities pledged on the Balance Sheets.  The repurchase
obligation related to dollar rolls and repurchase agreements is included in Borrowed
money on the Balance Sheets.
87
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Company also enters into reverse repurchase agreements. These transactions involve
a purchase of securities and an agreement to sell substantially the same securities as those
purchased. Company policies require a minimum of 102% of the fair value of securities
pledged under reverse repurchase agreements to be pledged as collateral.  Reverse
repurchase agreements are included in Cash and cash equivalents on the Balance Sheets.
Securities Lending
The Company engages in securities lending whereby certain securities from its portfolio
are loaned to other institutions for short periods of time. Initial collateral, primarily cash,
is required at a rate of 102% of the market value of the loaned domestic securities. The
collateral is deposited by the borrower with a lending agent, and retained and invested by
the lending agent according to the Company's guidelines to generate additional income.
The market value of the loaned securities is monitored on a daily basis with additional
collateral obtained or refunded as the market value of the loaned securities fluctuates.
Derivatives
The Company's use of derivatives is limited mainly to hedging purposes to reduce the
Company's exposure to cash flow variability of assets and liabilities, interest rate risk,
credit risk, and market risk.  Generally, derivatives are not accounted for using hedge
accounting treatment under FAS No. 133, as the Company has not historically sought
hedge accounting treatment.
The Company enters into interest rate, equity market, credit default, total return, and
currency contracts, including swaps, caps, floors, and options, to reduce and manage risks
associated with changes in value, yield, price, cash flow, or exchange rates of assets or
liabilities held or intended to be held, or to assume or reduce credit exposure associated
with a referenced asset, index, or pool. The Company also utilizes options and futures on
equity indices to reduce and manage risks associated with its annuity products.  Open
derivative contracts are reported as either Other investments or Other liabilities, as
appropriate, on the Balance Sheets.  Changes in the fair value of such derivatives are
recorded in Net realized capital gains (losses) in the Statements of Operations.
The Company also has investments in certain fixed maturity instruments, and has issued
certain retail annuity products, that contain embedded derivatives whose market value is
at least partially determined by, among other things, levels of or changes in domestic
and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates,
equity markets, or credit ratings/spreads.
Embedded derivatives within fixed maturity instruments are included in Fixed maturities,
available-for-sale, on the Balance Sheets, and changes in fair value are recorded in Net
realized capital gains (losses) in the Statements of Operations.
88
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Embedded derivatives within retail annuity products are included in Future policy
benefits and claims reserves on the Balance Sheets, and changes in the fair value are
recorded in Interest credited and other benefits to contractowners in the Statements of
Operations.
Deferred Policy Acquisition Costs and Value of Business Acquired
General
DAC represents policy acquisition costs that have been capitalized and are subject to
amortization.  Such costs consist principally of certain commissions, underwriting,
contract issuance, and agency expenses, related to the production of new and renewal
business.
VOBA represents the outstanding value of in force business capitalized in purchase
accounting when the Company was acquired and is subject to amortization. The value is
based on the present value of estimated profits embedded in the Company's contracts.
FAS No. 97 applies to universal life and investment-type products, such as fixed and
variable deferred annuities. Under FAS No. 97, DAC and VOBA are amortized, with
interest, over the life of the related contracts in relation to the present value of estimated
future gross profits from investment, mortality, and expense margins, plus surrender
charges. DAC related to GICs, however, is amortized on a straight-line basis over the life
of the contract.
Internal Replacements
Contractowners may periodically exchange one contract for another, or make
modifications to an existing contract. Beginning January 1, 2007, these transactions are
identified as internal replacements and are accounted for in accordance with SOP 05-1.
Internal replacements that are determined to result in substantially unchanged contracts
are accounted for as continuations of the replaced contracts. Any costs associated with
the issuance of the new contracts are considered maintenance costs and expensed as
incurred. Unamortized DAC and VOBA related to the replaced contracts continue to be
deferred and amortized in connection with the new contracts. For deferred annuities, the
estimated future gross profits of the new contracts are treated as revisions to the estimated
future gross profits of the replaced contracts in the determination of amortization.
Internal replacements that are determined to result in contracts that are substantially
changed are accounted for as extinguishments of the replaced contracts, and any
unamortized DAC and VOBA related to the replaced contracts are written off to Net
amortization of deferred policy acquisition costs and value of business acquired in the
Statements of Operations.
89
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
As a result of implementing SOP 05-1, the Company recognized a cumulative effect of
change in accounting principle of $4.8, before tax, or $3.1, net of $1.7 of income taxes, as
a reduction to January 1, 2007 Retained earnings (deficit).
Unlocking
Changes in assumptions can have a significant impact on DAC and VOBA balances and
amortization rates. Several assumptions are considered significant in the estimation of
future gross profits associated with variable universal life and variable deferred annuity
products. One of the most significant assumptions involved in the estimation of future
gross profits is the assumed return associated with the variable account performance. To
reflect the volatility in the equity markets, this assumption involves a combination of
near-term expectations and long-term assumptions regarding market performance. The
overall return on the variable account is dependent on multiple factors, including the
relative mix of the underlying sub-accounts among bond funds and equity funds, as well
as equity sector weightings. Other significant assumptions include surrender and lapse
rates, estimated interest spread, and estimated mortality.
Due to the relative size and sensitivity to minor changes in underlying assumptions of
DAC and VOBA balances, the Company performs quarterly and annual analyses of DAC
and VOBA for the annuity and life businesses, respectively.  The DAC and VOBA
balances are evaluated for recoverability.
At each evaluation date, actual historical gross profits are reflected, and estimated future
gross profits and related assumptions are evaluated for continued reasonableness. Any
adjustment in estimated profit requires that the amortization rate be revised
("unlocking"), retroactively to the date of the policy or contract issuance.  The
cumulative unlocking adjustment is recognized as a component of current period
amortization.  In general, sustained increases in investment, mortality, and expense
margins, and thus estimated future profits, lower the rate of amortization.  Sustained
decreases in investment, mortality, and expense margins, and thus estimated future
profits, however, increase the rate of amortization.
Reserves
Future policy benefits and claims reserves include reserves for deferred annuities and
immediate annuities with and without life contingent payouts, universal and traditional
life insurance contracts, and GICs. Generally, reserves are calculated using mortality and
withdrawal rate assumptions based on relevant Company experience and are periodically
reviewed against both industry standards and experience.
90
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Reserves for deferred annuity investment contracts and immediate annuities without life
contingent payouts are equal to cumulative deposits, less charges and withdrawals, plus
credited interest thereon.  Deferred annuity crediting rates and reserve interest rates
varied by product up to 10.0% for 2007, 7.8% for 2006, and 8.0% for 2005.
Reserves for individual immediate annuities with life contingent payout benefits are
computed on the basis of assumed interest discount rate, mortality, and expenses,
including a margin for adverse deviations. Such assumptions generally vary by annuity
plan type, year of issue, and policy duration.  For 2007, 2006, and 2005, immediate
annuity reserve interest discount rates varied up to 8.0% .
Reserves for FIAs are computed in accordance with FAS No. 97 and FAS No. 133.
Accordingly, the aggregate initial liability is equal to the deposit received, plus a bonus,
if applicable, and is split into a host component and an embedded derivative component.
Thereafter, the host liability accumulates at a set interest rate, and the embedded
derivative liability is recognized at fair value, with the change in fair value recorded in
the Statements of Operations.
Reserves for universal life products are equal to cumulative deposits, less withdrawals
and charges, plus credited interest thereon. Reserves for traditional life insurance
contracts represent the present value of future benefits to be paid to or on behalf of
contractowners and related expenses, less the present value of future net premiums.
Under Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises
for Certain Nontraditional Long-Duration Contracts for Separate Accounts" ("SOP 03-
1"), the Company calculates additional liabilities ("SOP 03-1 reserves") for certain
guaranteed benefits and for universal life products with certain patterns of cost of
insurance charges and certain other fees. The SOP 03-1 reserve recognized for such
products is in addition to the liability previously held and recognizes the portion of
contract assessments received in early years used to compensate the insurer for services
provided in later years.
The Company calculates a benefit ratio for each block of business subject to SOP 03-1,
and calculates an SOP 03-1 reserve by accumulating amounts equal to the benefit ratio
multiplied by the assessments for each period, reduced by excess death benefits during
the period. The SOP 03-1 reserve is accumulated at interest rates using the contract-
credited rate for the period. The calculated reserve includes a provision for universal life
contracts with patterns of cost of insurance charges that produce expected gains from the
insurance benefit function followed by losses from that function in later years.
GMABs and GMWBs without life contingent payouts are considered to be derivatives
under FAS No. 133. The additional reserves for these guarantees are recognized at fair
value through the Statements of Operations.
91
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Reserves for GICs are calculated using the amount deposited with the Company, less
withdrawals, plus interest accrued to the ending valuation date. Interest on these contracts
is accrued by a predetermined index, plus a spread or a fixed rate, established at the issue
date of the contract.
Sales Inducements
Sales inducements represent benefits paid to contractowners for a specified period that
are incremental to the amounts the Company credits on similar contracts and are higher
than the contract's expected ongoing crediting rates for periods after the inducement.
Sales inducements are amortized as a component of Interest credited and other benefits to
contractowners using methodologies and assumptions consistent with those used for
amortization of DAC.
Revenue Recognition
For universal life and most annuity contracts, charges assessed against contractowner
funds for the cost of insurance, surrender, expenses, and other fees are recorded as
revenue as charges are assessed. Other amounts received for these contracts are reflected
as deposits and are not recorded as premium or revenue. Related policy benefits are
recorded in relation to the associated premiums or gross profit so that profits are
recognized over the expected lives of the contracts. When annuity payments with life
contingencies begin under contracts that were initially investment contracts, the
accumulated balance in the account is treated as a single premium for the purchase of an
annuity and reflected as an offsetting amount in both Premiums and Interest credited and
other benefits to contractowners in the Statements of Operations.
Premiums on the Statements of Operations primarily represent amounts received under
traditional life insurance policies.
For GICs, deposits made to the Company are not recorded as revenue in the Statements
of Operations, but are recorded directly to Future policy benefits and claims reserves on
the Balance Sheets.
Separate Accounts
Separate account assets and liabilities generally represent funds maintained to meet
specific investment objectives of contractowners who bear the investment risk, subject, in
limited cases, to certain minimum guarantees. Investment income and investment gains
and losses generally accrue directly to such contractowners. The assets of each account
are legally segregated and are not subject to claims that arise out of any other business of
the Company or its affiliates.
92
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Separate account assets supporting variable options under variable annuity contracts are
invested, as designated by the contractowner or participant (who bears the investment
risk subject, in limited cases, to minimum guaranteed rates) under a contract, in shares of
mutual funds that are managed by the Company or its affiliates, or in other selected
mutual funds not managed by the Company or its affiliates.
Separate account assets and liabilities are carried at fair value and shown as separate
captions in the Balance Sheets.  Deposits, investment income, and net realized and
unrealized capital gains (losses) of the separate accounts, however, are not reflected in
the Statements of Operations (with the exception of realized and unrealized capital gains
(losses) on the assets supporting the guaranteed interest option). The Statements of Cash
Flows do not reflect investment activity of the separate accounts.
Assets and liabilities of separate account arrangements that do not meet the criteria in
SOP 03-1 for separate presentation in the Balance Sheets (primarily guaranteed interest
options), and revenue and expenses related to such arrangements, are consolidated in the
financial statements with the general account.  At December 31, 2007 and 2006,
unrealized capital gains (losses) of $21.1 and $(4.1), respectively, after taxes, on assets
supporting a guaranteed interest option are reflected in Shareholder's equity.
Reinsurance
The Company utilizes reinsurance agreements to reduce its exposure to large losses in
most aspects of its insurance business. Such reinsurance permits recovery of a portion of
losses from reinsurers, although it does not discharge the primary liability of the
Company as the direct insurer of the risks reinsured.  The Company evaluates the
financial strength of potential reinsurers and continually monitors the financial condition
of reinsurers. Only those reinsurance recoverable balances deemed probable of recovery
are reflected as assets on the Company's Balance Sheets.
Participating Insurance
Participating business approximates 8.5% of the Company's ordinary life insurance in
force and 27.1% of life insurance premium income. The amount of dividends to be paid
is determined annually by the Board of Directors.  Amounts allocable to participating
contractowners are based on published dividend projections or expected dividend scales.
Dividends to participating policyholders of $14.8, $15.4, and $15.8, were incurred during
the years ended December 31, 2007, 2006, and 2005, respectively.
93
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Income Taxes
The Company is taxed at regular corporate rates after adjusting income reported for
financial statement purposes for certain items. Deferred income tax expenses (benefits)
result from changes during the year in cumulative temporary differences between the tax
basis and book basis of assets and liabilities.
2. Investments
Fixed Maturities and Equity Securities
Fixed maturities and equity securities, available-for-sale, were as follows as of
December 31, 2007.
Gross
Gross
Unrealized
Unrealized
Amortized
Capital
Capital
Fair
Cost
Gains
Losses
Value
Fixed maturities:
U.S. Treasuries
$ 18.4
$ 1.0
$ -
$ 19.4
U.S. government agencies and authorities
86.1
1.0
0.3
86.8
State, municipalities, and political subdivisions
49.7
-
2.5
47.2
U.S. corporate securities:
Public utilities
1,417.5
22.8
13.4
1,426.9
Other corporate securities
6,742.7
81.1
67.0
6,756.8
Total U.S. corporate securities
8,160.2
103.9
80.4
8,183.7
Foreign securities
(1)
:
Government
525.2
14.9
7.1
533.0
Other
3,280.6
40.5
59.4
3,261.7
Total foreign securities
3,805.8
55.4
66.5
3,794.7
Residential mortgage-backed securities
4,988.4
53.3
85.8
4,955.9
Commercial mortgage-backed securities
3,842.2
37.6
36.4
3,843.4
Other asset-backed securities
1,947.5
5.7
108.3
1,844.9
Total fixed maturities, including securities pledged
22,898.3
257.9
380.2
22,776.0
Less: securities pledged
953.3
6.1
16.8
942.6
Total fixed maturities
21,945.0
251.8
363.4
21,833.4
Equity securities
216.6
2.8
8.3
211.1
Total investments, available-for-sale
$ 22,161.6
$ 254.6
$ 371.7
$ 22,044.5
(1)
Primarily U.S. dollar denominated.
94
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Fixed maturities and equity securities, available-for-sale, were as follows as of
December 31, 2006.
Gross
Gross
Unrealized
Unrealized
Amortized
Capital
Capital
Fair
Cost
Gains
Losses
Value
Fixed maturities:
U.S. Treasuries
$ 276.9
$ 0.2
$ 1.4
$ 275.7
U.S. government agencies and authorities
220.9
0.6
2.2
219.3
State, municipalities, and political subdivisions
43.0
0.5
0.4
43.1
U.S. corporate securities:
Public utilities
1,324.5
21.1
17.8
1,327.8
Other corporate securities
5,138.6
50.3
49.7
5,139.2
Total U.S. corporate securities
6,463.1
71.4
67.5
6,467.0
Foreign securities
(1)
:
Government
486.1
16.2
4.3
498.0
Other
2,843.9
32.3
46.6
2,829.6
Total foreign securities
3,330.0
48.5
50.9
3,327.6
Residential mortgage-backed securities
3,841.4
44.8
62.8
3,823.4
Commercial mortgage-backed securities
1,928.6
15.1
20.2
1,923.5
Other asset-backed securities
1,843.4
5.2
9.8
1,838.8
Total fixed maturities, including securities pledged
17,947.3
186.3
215.2
17,918.4
Less: securities pledged
875.5
2.4
13.9
864.0
Total fixed maturities
17,071.8
183.9
201.3
17,054.4
Equity securities
39.1
1.5
-
40.6
Total investments, available-for-sale
$ 17,110.9
$ 185.4
$ 201.3
$ 17,095.0
(1)
Primarily U.S. dollar denominated.
At December 31, 2007 and 2006, net unrealized loss was $127.8 and $27.4, respectively,
on total fixed maturities, including securities pledged to creditors, and equity securities.
95
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The amortized cost and fair value of fixed maturities as of December 31, 2007, are shown
below by contractual maturity. Actual maturities may differ from contractual maturities
as securities may be restructured, called, or prepaid.
Amortized
Fair
Cost
Value
Due to mature:
One year or less
$ 550.8
$ 551.3
After one year through five years
5,800.7
5,856.5
After five years through ten years
3,797.6
3,776.3
After ten years
1,971.1
1,947.7
Mortgage-backed securities
8,830.6
8,799.3
Other asset-backed securities
1,947.5
1,844.9
Less: securities pledged
953.3
942.6
Fixed maturities, excluding securities pledged
$ 21,945.0
$ 21,833.4
The Company did not have any investments in a single issuer, other than obligations of
the U.S. government and government agencies, with a carrying value in excess of 10.0%
of the Company's Shareholder's equity at December 31, 2007 or 2006.
At December 31, 2007 and 2006, fixed maturities with fair values of $11.2 and $10.7,
respectively, were on deposit as required by regulatory authorities.
The Company invests in various categories of collateralized mortgage obligations
("CMOs") that are subject to different degrees of risk from changes in interest rates and,
for CMOs that are not agency-backed, defaults. The principal risks inherent in holding
CMOs are prepayment and extension risks related to dramatic decreases and increases in
interest rates resulting in the prepayment of principal from the underlying mortgages,
either earlier or later than originally anticipated.  At December 31, 2007 and 2006,
approximately 7.5% and 6.7%, respectively, of the Company's CMO holdings were
invested in those types of CMOs which are subject to more prepayment and extension
risk than traditional CMOs, such as interest-only or principal-only strips.
The Company is a member of the Federal Home Loan Bank of Des Moines ("FHLB")
and is required to maintain a collateral deposit that backs funding agreements issued to
the FHLB.  At December 31, 2007 and 2006, the Company had $2,898.7 and $226.7,
respectively, in non-putable funding agreements, including accrued interest, issued to the
FHLB. The level of funding agreements issued to the FHLB as of December 31, 2007
increased significantly from the amount issued as of December 31, 2006.  During the
second half of 2007, the Company took advantage of the credit market dislocation to
purchase highly rated assets and issue FHLB funding agreements. At December 31, 2007
and 2006, assets with a carrying value of approximately $3,270.1 and $703.0,
respectively, collateralized the funding agreements to the FHLB. Assets pledged to the
FHLB are included in Fixed maturities, available-for-sale, in the Balance Sheets.
96
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Repurchase Agreements
The Company engages in dollar repurchase agreements ("dollar rolls") and repurchase
agreements.  At December 31, 2007 and 2006, the carrying value of the securities
pledged in dollar rolls and repurchase agreement transactions was $745.5 and $765.7,
respectively. The repurchase obligation related to dollar rolls and repurchase agreements
totaled $711.9 and $769.6 at December 31, 2007 and 2006, respectively.
The Company also enters into reverse repurchase agreements. At December 31, 2007,
the Company did not have any securities in reverse repurchase agreements.  At
December 31, 2006, the carrying value of the securities in reverse repurchase agreements
was $16.4.
The primary risk associated with short-term collateralized borrowings is that the
counterparty will be unable to perform under the terms of the contract. The Company's
exposure is limited to the excess of the net replacement cost of the securities over the
value of the short-term investments, an amount that was immaterial at December 31,
2007 and 2006. The Company believes the counterparties to the dollar rolls, repurchase,
and reverse repurchase agreements are financially responsible and that the counterparty
risk is minimal.
Unrealized Capital Losses
Unrealized capital losses in fixed maturities at December 31, 2007 and 2006, were
primarily related to interest rate movement or changes in credit spreads to mortgage and
other asset-backed securities.  Mortgage and other asset-backed securities include U.S.
government-backed securities, principal protected securities, and structured securities,
which did not have an adverse change in cash flows. The following table summarizes the
unrealized capital losses by duration and reason, along with the fair value of fixed
maturities, including securities pledged to creditors, in unrealized capital loss positions at
December 31, 2007 and 2006.
97
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Less than
More than
Six Months
Six Months and
More than
Total
Below
less than Twelve
Twelve Months
Unrealized
Amortized
Months Below
Below
Capital
2007
Cost
Amortized Cost
Amortized Cost
Losses
Interest rate or spread widening
$ 37.8
$ 49.2
$ 62.7
$ 149.7
Mortgage and other asset-backed securities
73.3
134.8
22.4
230.5
Total unrealized capital losses
$ 111.1
$ 184.0
$ 85.1
$ 380.2
Fair value
$ 5,322.0
$ 3,248.4
$ 3,300.6
$ 11,871.0
2006
Interest rate or spread widening
$ 12.8
$ 6.2
$ 103.4
$ 122.4
Mortgage and other asset-backed securities
14.6
5.6
72.6
92.8
Total unrealized capital losses
$ 27.4
$ 11.8
$ 176.0
$ 215.2
Fair value
$ 3,095.9
$ 905.9
$ 6,026.5
$ 10,028.3
Of the unrealized capital losses aged more than twelve months, the average market value
of the related fixed maturities is 97.1% of the average book value.  In addition, this
category includes 753 securities, which have an average quality rating of A+. No other-
than-temporary impairment loss was considered necessary for these fixed maturities as of
December 31, 2007.
Other-Than-Temporary Impairments
The following table identifies the Company's other-than-temporary impairments by type
for the years ended December 31, 2007, 2006, and 2005.
2007
2006
2005
No. of
No. of
No. of
Impairment
Securities
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
*
1
$ 0.1
1
$ 0.1
1
U.S. Corporate
81.0
173
15.8
63
3.0
12
Foreign
25.7
74
3.5
13
0.1
1
Residential mortgage-backed
3.0
24
12.7
68
16.4
86
Commercial mortgage-backed
-
-
-
-
1.2
1
Other asset-backed
43.3
91
1.2
2
0.5
2
Limited partnerships
0.3
1
0.5
2
0.5
1
Total
$ 153.3
364
$ 33.8
149
$ 21.8
104
*
Less than $0.1.
The above schedule includes $31.0, $11.5, and $18.7 in other-than-temporary write-
downs for the years ended December 31, 2007, 2006, and 2005, respectively, related to
the analysis of credit risk and the possibility of significant prepayment risk.  The
98
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
remaining $122.3, $22.3, and $3.1 in write-downs for the years ended December 31,
2007, 2006, and 2005, respectively, are related to investments that the Company does not
have the intent to retain for a period of time sufficient to allow for recovery in fair value.
The following table summarizes these write-downs by type for the years ended
December 31, 2007, 2006, and 2005.
2007
2006
2005
No. of
No. of
No. of
Impairment
Securities
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
*
1
$ 0.1
1
$ 0.1
1
U.S. Corporate
70.6
161
15.8
63
2.6
11
Foreign
21.4
68
3.5
13
-
-
Residential mortgage-backed
1.0
5
1.7
4
0.4
1
Other asset-backed
29.3
84
1.2
2
-
-
Total
$ 122.3
319
$ 22.3
83
$ 3.1
13
* Less than $0.1.
The remaining fair value of fixed maturities with other-than-temporary impairments at
December 31, 2007, 2006, and 2005 was $2,353.8, $437.4, and $275.1, respectively.
The Company may sell securities during the period in which fair value has declined
below amortized cost for fixed maturities or cost for equity securities.  In certain
situations new factors, including changes in the business environment, can change the
Company's previous intent to continue holding a security.
Net Investment Income
Sources of Net investment income were as follows for the years ended December 31,
2007, 2006, and 2005.
2007
2006
2005
Fixed maturities, available-for-sale
$ 1,176.1
$ 1,009.7
$ 936.4
Equity securities, available-for-sale
3.3
1.9
1.2
Mortgage loans on real estate
233.1
225.3
238.4
Policy loans
9.0
9.1
9.1
Short-term investments and cash equivalents
6.7
5.5
4.1
Other
35.1
13.9
10.5
Gross investment income
1,463.3
1,265.4
1,199.7
Less: investment expenses
116.9
109.0
97.5
Net investment income
$ 1,346.4
$ 1,156.4
$ 1,102.2
At December 31, 2007 and 2006, the Company had $60.3 and $30.5, respectively, of
non-income producing investments in fixed maturities.
99
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Net Realized Capital Gains (Losses)
Net realized capital gains (losses) are comprised of the difference between the amortized
cost of investments and proceeds from sale, and redemption, as well as losses incurred
due to the other-than-temporary impairment of investments and changes in fair value of
derivatives.  The cost of the investment on disposal is determined based on specific
identification of securities using the first-in, first-out method. Net realized capital gains
(losses) on investments were as follows for the years ended December 31, 2007, 2006,
and 2005.
2007
2006
2005
Fixed maturities, available-for-sale
$ (100.3)
$ (43.8)
$ 45.4
Equity securities, available-for-sale
0.5
0.9
0.2
Derivatives
(291.0)
(48.2)
(48.3)
Other
(0.4)
0.7
(0.2)
Net realized capital losses
$ (391.2)
$ (90.4)
$ (2.9)
After-tax net realized capital losses
$ (254.3)
$ (58.8)
$ (1.9)
Net realized capital losses increased for the year ended December 31, 2007, primarily due
to higher losses on derivatives, along with higher losses on fixed maturities. The
changes in derivatives were primarily driven by interest rate swaps and call options,
partially offset by improvements in futures as a result of lower equity market
performance. The losses on fixed maturities for the year ended December 31, 2007, were
due to other-than-temporary impairments driven by the slow economic environment and
widening of credit spreads in 2007.
Proceeds from the sale of fixed maturities and equity securities, available-for-sale, and
the related gross gains and losses were as follows for the years ended December 31,
2007, 2006, and 2005.
2007
2006
2005
Proceeds on sales
$ 5,859.3
$ 5,543.1
$ 9,317.1
Gross gains
41.1
64.5
97.2
Gross losses
57.0
78.0
75.2
100
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
3. Financial Instruments
Estimated Fair Value
The following disclosures are made in accordance with the requirements of FAS No. 107,
"Disclosures about Fair Value of Financial Instruments" ("FAS No. 107"). FAS No. 107
requires disclosure of fair value information about financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on estimates using
present value or other valuation techniques. Those techniques are significantly affected
by the assumptions used, including the discount rate and estimates of future cash flows.
In that regard, the derived fair value estimates, in many cases, could not be realized in
immediate settlement of the instrument.
FAS No. 107 excludes certain financial instruments, including insurance contracts, and
all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate
fair value amounts presented do not represent the underlying value of the Company.
The following valuation methods and assumptions were used by the Company in
estimating the fair value of the following financial instruments:
Fixed maturities, available-for-sale
: The fair values for the actively traded marketable
bonds are determined based upon the quoted market prices or dealer quotes.  The fair
values for marketable bonds without an active market are obtained through several
commercial pricing services which provide the estimated fair values.  Fair values of
privately placed bonds are determined using a matrix-based pricing model. The model
considers the current level of risk-free interest rates, current corporate spreads, the credit
quality of the issuer, and cash flow characteristics of the security. Also considered are
factors such as the net worth of the borrower, the value of collateral, the capital structure
of the borrower, the presence of guarantees, and the Company's evaluation of the
borrower's ability to compete in their relevant market.  Using this data, the model
generates estimated market values which the Company considers reflective of the fair
value of each privately placed bond.
Equity securities, available-for-sale
: Fair values of these securities are based upon quoted
market price. For equity securities not actively traded, estimated fair values are based
upon values of issues of comparable yield and quality or conversion price, where
applicable.
Mortgage loans on real estate
: The fair values for mortgage loans on real estate are
estimated using discounted cash flow analyses and rates currently being offered in the
marketplace for similar loans to borrowers with similar credit ratings. Loans with similar
characteristics are aggregated for purposes of the calculations.
101
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Cash and cash equivalents, Short-term investments under securities loan agreement, and
Policy loans
: The carrying amounts for these assets approximate the assets' fair values.
Assets held in separate accounts
: Assets held in separate accounts are reported at the
quoted fair values of the individual securities in the separate accounts.
Investment contract liabilities (included in Future policy benefits and claims reserves)
:
With a fixed maturity
: Fair value is estimated by discounting cash flows at interest
rates currently being offered by, or available to, the Company for similar contracts.
Without a fixed maturity
: Fair value is estimated as the amount payable to the
contractowner upon demand.  However, the Company has the right under such
contracts to delay payment of withdrawals, which may ultimately result in paying an
amount different than that determined to be payable on demand.
Notes to affiliates
: Estimated fair value of the Company's notes to affiliates is based upon
discounted future cash flows using a discount rate approximating the current market
value.
Other financial instruments reported as assets and liabilities
: The carrying amounts for
these financial instruments (primarily derivatives and limited partnerships) approximate
the fair value of the assets and liabilities. Derivatives are carried at fair value, which is
determined using the Company's derivative accounting system in conjunction with key
financial data from third party sources or through values established by third party
brokers, on the Balance Sheets.
The carrying values and estimated fair values of certain of the Company's financial
instruments were as follows at December 31, 2007 and 2006.
102
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
2007
2006
Carrying
Fair
Carrying
Fair
Value
Value
Value
Value
Assets:
Fixed maturities, available-for-sale,
including securities pledged
$ 22,776.0
$ 22,776.0
$ 17,918.4
$ 17,918.4
Equity securities, available-for-sale
211.1
211.1
40.6
40.6
Mortgage loans on real estate
3,701.7
3,739.4
3,687.6
3,657.0
Policy loans
155.8
155.8
162.5
162.5
Cash, cash equivalents,
and Short-term investments
under securities loan agreement
332.9
332.9
711.2
711.2
Other investments
1,036.6
1,045.3
777.2
782.1
Assets held in separate accounts
44,477.8
44,477.8
37,928.3
37,928.3
Liabilities:
Investment contract liabilities:
Deferred annuities
19,733.8
18,150.4
19,732.4
18,108.0
Guaranteed investment contracts
and funding agreements
9,415.1
9,498.2
4,603.8
4,591.1
Supplementary contracts and
immediate annuities
900.3
900.3
931.1
931.1
Derivatives
273.8
273.8
64.2
64.2
Notes to affiliates
435.0
420.6
435.0
459.2
Fair value estimates are made at a specific point in time, based on available market
information and judgments about various financial instruments, such as estimates of
timing and amounts of future cash flows. Such estimates do not reflect any premium or
discount that could result from offering for sale at one time the Company's entire
holdings of a particular financial instrument, nor do they consider the tax impact of the
realization of unrealized capital gains (losses). In many cases, the fair value estimates
cannot be substantiated by comparison to independent markets, nor can the disclosed
value be realized in immediate settlement of the instruments.  In evaluating the
Company's management of interest rate, price, and liquidity risks, the fair values of all
assets and liabilities should be taken into consideration, not only those presented above.
103
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Derivative Financial Instruments
Notional Amount
Fair Value
2007
2006
2007
2006
Interest Rate Caps
Interest rate caps are used to manage the interest
rate risk in the Company's fixed maturity portfolio.
Interest rate caps are purchased contracts that
provide the Company with an annuity in an
increasing interest rate environment.
$ 50.0
$ -
$ 0.1 $
-
Interest Rate Swaps
Interest rate swaps are used to manage the interest
rate risk in the Company's fixed maturity portfolio,
as well as the Company's liabilities. Interest rate
swaps represent contracts that require the exchange
of cash flows at regular interim periods, typically
monthly or quarterly.
8,533.5
3,856.1
(138.2)
40.8
Foreign Exchange Swaps
Foreign exchange swaps are used to reduce the risk
of a change in the value, yield, or cash flow with
respect to invested assets. Foreign exchange
swaps represent contracts that require the
exchange of foreign currency cash flows for
U.S. dollar cash flows at regular interim periods,
typically quarterly or semi-annually.
288.3
244.8
(44.0)
(28.7)
Credit Default Swaps
Credit default swaps are used to reduce the credit loss
exposure with respect to certain assets that the
Company owns, or to assume credit exposure on
certain assets that the Company does not own.
Payments are made to or received from the
counterparty at specified intervals and amounts
for the purchase or sale of credit protection. In the
event of a default on the underlying credit exposure,
the Company will either receive an additional
payment (purchased credit protection) or will be
required to make an additional payment (sold credit
protection) equal to the notional value of the swap
contract.
488.9
260.3
(22.1)
(0.1)
104
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Notional Amount
Fair Value
2007
2006
2007
2006
Total Return Swaps
Total return swaps are used to assume credit exposure
to a referenced index or asset pool. The difference
between different floating-rate interest amounts
calculated by reference to an agreed upon notional
principal amount is exchanged with other parties
at specified intervals.
$ -
$ 65.0
$ -
$ 0.1
Swaptions
Swaptions are used to manage interest rate risk in
the Company's collateralized mortgage obligations
portfolio. Swaptions are contracts that give the
Company the option to enter into an interest rate
swap at a specific future date.
302.5
665.0
-
**
3.7
Futures
Futures contracts are used to hedge against a decrease
in certain equity indices. Such decrease may result
in a decrease in variable annuity account values,
which would increase the possibility of the Company
incurring an expense for guaranteed benefits in
excess of account values. The futures income would
serve to offset this increased expense. Futures
contracts are also used to hedge against an increase
in certain equity indices. Such increase may result
in increased payments to contract holders of fixed
indexed annuity contracts, and the futures income
offset this increased expense. The underlying
reserve liabilities are valued under either
SOP 03-01, or FAS No. 133 (see discussion under
"Reserves" section) and the change in reserve
liability is recorded in Interest credited and other
benefits to contractowners. The gain or loss on
futures is recorded in Net realized capital gains
(losses).
1,584.6
1,265.9
(6.4)
3.8
105
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Notional Amount
Fair Value
2007
2006
2007
2006
Options
Call options are used to hedge against an increase
in the various equity indices. Such increase may
result in increased payments to contract holders
of fixed indexed annuity contracts, and the options
offset this increased expense. Put options are used
to hedge the liability associated with embedded
derivatives in certain variable annuity contracts.
Both the options and the embedded derivative
reserve are carried at fair value. The change in value
of the options are recorded in Net realized capital
gains (losses); the change in value of the embedded
derivative is recorded in Interest credited and
other benefits to contractowners.
6,666.0
6,341.7
303.5
387.0
Embedded Derivatives
The Company also has investments in certain fixed
maturity instruments, and has issued certain retail
annuity products, that contain embedded derivatives
whose market value is at least partially determined by,
among other things, levels of or changes in domestic
and/or foreign interest rates (short- or long-term),
exchange rates, prepayment rates, equity rates, or
credit ratings/spreads.
Within securities
N/A*
N/A*
33.8
5.1
Within retail annuity products
N/A*
N/A*
960.4
820.2
* N/A - not applicable.
**Less than $0.1.
Interest Rate Swaps
Interest rate swaps included two interest rate swaps with Security Life of Denver
Insurance Company ("Security Life"), an affiliate, each with notional amounts of $100.0
and fair values of $(1.6) and $(0.1), respectively, as of the date of termination at
August 31, 2007.
See Related Party Transactions footnote for further information.
Credit Default Swaps
As of December 31, 2007, the maximum potential future exposure to the Company on the
sale of credit protection under credit default swaps was $235.4.
106
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
4. Deferred Policy Acquisition Costs and Value of Business Acquired
Activity within DAC was as follows for the years ended December 31, 2007, 2006, and
2005.
Balance at January 1, 2005
$ 1,704.1
Deferrals of commissions and expenses
614.0
Amortization:
Amortization
(400.2)
Interest accrued at 5% to 6%
105.5
Net amortization included in the Statements of Operations
(294.7)
Change in unrealized capital gains (losses) on available-for-sale securities
232.0
Balance at December 31, 2005
2,255.4
Deferrals of commissions and expenses
681.9
Amortization:
Amortization
(421.7)
Interest accrued at 5% to 6%
138.1
Net amortization included in the Statements of Operations
(283.6)
Change in unrealized capital gains (losses) on available-for-sale securities
16.2
Balance at December 31, 2006
2,669.9
Deferrals of commissions and expenses
729.1
Amortization:
Amortization
(592.0)
Interest accrued at 5% to 6%
162.2
Net amortization included in the Statements of Operations
(429.8)
Change in unrealized capital gains (losses) on available-for-sale securities
(56.0)
Implementation of SOP 05-1
(4.8)
Balance at December 31, 2007
$ 2,908.4
The estimated amount of DAC to be amortized, net of interest, is $478.9, $444.2, $414.2,
$360.4, and $311.3, for the years 2008, 2009, 2010, 2011, and 2012, respectively. Actual
amortization incurred during these years may vary as assumptions are modified to
incorporate actual results.
107
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Activity within VOBA was as follows for the years ended December 31, 2007, 2006, and
2005.
Balance at January 1, 2005
$ 112.2
Amortization:
Amortization
(30.8)
Interest accrued at 4% to 5%
6.6
Net amortization included in the Statements of Operations
(24.2)
Change in unrealized capital gains (losses) on available-for-sale securities
34.1
Balance at December 31, 2005
122.1
Amortization:
Amortization
(15.0)
Interest accrued at 4% to 5%
5.6
Net amortization included in the Statements of Operations
(9.4)
Change in unrealized capital gains (losses) on available-for-sale securities
(2.6)
Balance at December 31, 2006
110.1
Amortization:
Amortization
16.8
Interest accrued at 4% to 6%
4.9
Net amortization included in the Statements of Operations
21.7
Change in unrealized capital gains (losses) on available-for-sale securities
(3.1)
Balance at December 31, 2007
$ 128.7
The estimated amount of VOBA to be amortized, net of interest, is $13.4, $13.1, $11.9,
$10.6, and $9.7, for the years 2008, 2009, 2010, 2011, and 2012, respectively. Actual
amortization incurred during these years may vary as assumptions are modified to
incorporate actual results.
Analysis of DAC and VOBA - Annuity Products
The increase in Amortization of DAC and VOBA in 2007 compared to 2006 is due in
part to a $67.0 change in estimate recorded during the fourth quarter of 2007.  This
change resulted from refinements of the DAC model, partially offset by favorable
unlocking of mutual fund and mortality and persistency unlocking.
The decrease in Amortization of DAC and VOBA in 2006 compared to 2005 is due to
higher expected gross profits, which reflect revisions in prospective assumptions based
on positive persistency experience and favorable equity market performance.  The
decrease was partially offset, however, by an increase in amortization driven by higher
actual gross profits experience in 2006.
108
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Company revised and unlocked certain assumptions for its fixed and variable annuity
products during 2007, 2006, and 2005. Unlocking adjustments and their acceleration
(deceleration) impact on Amortization of DAC and VOBA were as follows for the years
ended December 31, 2007, 2006, and 2005.
2007
2006
2005
Impact of separate account growth and contractowner
withdrawal behavior favorable to assumptions
$ 1.3
$ (42.6)
$ (13.3)
Unlock of contractowner withdrawal behavior
assumptions for certain fixed deferred annuities
-
-
17.7
Unlock of future rate of spread income assumptions
on some fixed annuity liabilities
-
-
2.3
Unlock on long-term separate account growth assumption
-
-
4.8
Unlock of mortality and persistency assumptions
(12.0)
(19.8)
(4.2)
Impact of DAC model refinements
67.0
-
-
Unlock of mutual fund revenue sharing assumptions
(31.6)
-
-
Total unlocking effect on Amortization of DAC and VOBA
$ 24.7
$ (62.4)
$ 7.3
5.
Dividend Restrictions and Shareholder's Equity
The Company's ability to pay dividends to its parent is subject to the prior approval of
the Insurance Division of the State of Iowa (the "Division") for payment of any dividend,
which, when combined with other dividends paid within the preceding twelve months,
exceeds the greater of (1) ten percent (10.0%) of the Company's statutory surplus at the
prior year end or (2) the Company's prior year statutory net gain from operations.
During 2007 and 2005, the Company did not pay any dividends or return of capital
distributions to Lion.  During 2006, the Company paid $170.0 in a return of capital
distribution to its Parent.
During 2007, the Company received $150.0 in capital contributions from Lion. During
2006, the Company did not receive any capital contributions from its Parent.  During
2005, the Company received capital contributions of $100.0 from its Parent to support
sales activities.  On February 21, 2008, the Company received a $1.1 billion capital
contribution from Lion.
109
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Division recognizes as net income and capital and surplus those amounts determined
in conformity with statutory accounting practices prescribed or permitted by the Division,
which differ in certain respects from accounting principles generally accepted in the
United States. Statutory net income (loss) was $(40.1), $(1.6), and $6.9, for the years
ended December 31, 2007, 2006, and 2005, respectively. Statutory capital and surplus
was $2,552.6 and $1,660.7 as of December 31, 2007 and 2006, respectively.  As
specifically required by statutory accounting practices, statutory surplus as of December
31, 2007 includes the impact of the $1.1 billion capital contribution.
As of December 31, 2007, the Company did not utilize any statutory accounting practices
that are not prescribed by state regulatory authorities that, individually or in the
aggregate, materially affected statutory capital and surplus.
6. Additional Insurance Benefits and Minimum Guarantees
Under SOP 03-1, the Company calculates SOP 03-1 reserves for certain guaranteed
benefits and for universal life products with certain patterns of cost of insurance charges
and certain other fees.
The following assumptions and methodology were used to determine the GMDB SOP
03-1 reserve at December 31, 2007.
Area
Assumptions/Basis for Assumptions
Data used
Based on 100 investment performance scenarios stratified based on
10,000 random generated scenarios
Mean investment performance
8.125%
Volatility
18.0%
Mortality
1999 and prior issues – 80.0%, 80.0%, 90.0%, 90.0%, grading to 100%
from age 80 to 120, of the 90-95 ultimate mortality table for standard,
ratchet, rollup, and combination rollup and ratchet, respectively.
2000 and later issues – 60.0%, 60.0%, 75.0%, 75.0%, grading to 100%
from age 80 to 120, of the 90-95 ultimate mortality table for standard,
ratchet, rollup, and combination rollup and ratchet, respectively.
Lapse rates
Vary by contract type and duration; range between 1.0% and 40.0%
Discount rates
6.5%, based on the portfolio earned rate of the general account
The assumptions used for calculating the additional GMIB and Guaranteed Minimum
Withdrawal for Life Benefit (LifePay and LifePay Plus) liabilities at December 31, 2007,
are consistent with those used for the calculating the additional GMDB liability.  In
addition, the calculation of the GMIB liability assumes dynamic surrenders and dynamic
annuitization reflecting the extent to which the benefit, at the time of payment, has a
positive value.
110
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The separate account liabilities subject to SOP 03-1 for minimum guaranteed benefits,
and the additional liabilities recognized related to minimum guarantees, by type, as of
December 31, 2007 and 2006, and the paid and incurred amounts by type for the years
ended December 31, 2007 and 2006, were as follows:
Guaranteed
Guaranteed
Guaranteed
Guaranteed
Minimum
Minimum
Minimum
Withdrawal
Death
Accumulation/
Income
For Life
Benefit
Withdrawal Benefit
Benefit
Benefit
(GMDB)
(GMAB/GMWB)
(GMIB)
(LP/LPP)
Separate account liability
at December 31, 2007
$ 44,477.8
$ 2,556.4
$ 20,066.1
$ 5,900.0
Separate account liability
at December 31, 2006
$ 37,928.3
$ 2,759.3
$ 18,036.9
$ 1,846.8
Additional liability balance:
Balance at January 1, 2006
$ 112.8
$ 9.4
$ 60.9
$ -
Incurred guaranteed benefits
43.4
(18.3)
22.4
1.7
Paid guaranteed benefits
(16.5)
-
-
-
Balance at December 31, 2006
139.7
(8.9)
83.3
1.7
Incurred guaranteed benefits
88.9
20.1
48.9
4.2
Paid guaranteed benefits
(19.2)
-
-
-
Balance at December 31, 2007
$ 209.4
$ 11.2
$ 132.2
$ 5.9
The net amount at risk, net of reinsurance, and the weighted average attained age of
contractowners by type
of
minimum
guaranteed benefit,
were as
follows as of
December 31, 2007 and 2006.
Guaranteed
Guaranteed
Guaranteed
Guaranteed
Minimum
Minimum
Minimum
Minimum
Death
Accumulation/
Income
Income
Benefit
Withdrawal Benefit
Benefit
GMWB-For-Life
2007
(GMDB)
(GMAB/GMWB)
(GMIB)
(LP/LPP)
Net amount at risk, net of reinsurance
$ 1,796.0
$ 109.0
$ 391.9
$ 5.6
Weighted average attained age
63
63
59
63
2006
Net amount at risk, net of reinsurance
$ 1,252.7
$ 27.4
$ 200.0
$ -
Weighted average attained age
62
64
58
-
The aggregate fair value of equity securities, including mutual funds, supporting separate
accounts with additional insurance benefits and minimum investment return guarantees as
of December 31, 2007 and 2006 was $44.5 billion and $37.9 billion, respectively.
111
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
7.
Sales Inducements
During the year ended December 31, 2007, the Company capitalized and amortized $135.4 and $120.2, respectively, of sales inducements. During the year ended December 31, 2006, the
Company capitalized and amortized $150.0 and $74.1, respectively, of sales inducements. The unamortized balance of capitalized sales inducements, net of unrealized capital gains (losses) on available-for-sale securities, was $645.4 and
$630.7 as of December 31, 2007 and 2006, respectively.
8.
Income Taxes
Effective January 1, 2005, the Company files a consolidated federal income tax return with ING America Insurance Holdings, Inc. ("ING AIH"), an affiliate, and certain other
subsidiaries of ING AIH that are eligible corporations qualified to file consolidated federal income tax returns as part of the ING AIH affiliated group. Effective January 1, 2005, the Company is a party to a federal tax allocation agreement with
ING AIH and its subsidiaries that are part of the group, whereby ING AIH charges its subsidiaries for federal taxes each subsidiary would have incurred were it not a member of the consolidated group and credits each subsidiary for losses at the
statutory federal tax rate.
Income tax expense (benefit) consisted of the following for the years ended December 31, 2007, 2006, and 2005.
2007
2006
2005
Current tax expense (benefit):
Federal
$ 26.6
$ (67.6)
$ (156.7)
Total current tax expense (benefit)
26.6
(67.6)
(156.7)
Deferred tax (benefit) expense:
Operations and capital loss carryforwards
-
151.0
43.6
Other federal deferred tax
(28.2)
(19.0)
147.3
Total deferred tax (benefit) expense
(28.2)
132.0
190.9
Total income tax (benefit) expense
$ (1.6)
$ 64.4
$ 34.2
112
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Income taxes were different from the amount computed by applying the federal income
tax rate to income before income taxes for the following reasons for the years ended
December 31, 2007, 2006, and 2005.
Income before income taxes
Tax rate
Income tax at federal statutory rate
Tax effect of:
Meals and entertainment
Dividend received deduction
IRS audit settlements
Other
Income tax (benefit) expense
2007
2006
2005
$ 127.4
$ 276.6
$ 224.1
35.0%
35.0%
35.0%
44.6
96.8
78.4
0.7
0.6
0.4
(49.5)
(42.9)
(20.4)
-
-
(24.4)
2.6
9.9
0.2
$ (1.6)
$ 64.4
$ 34.2
Temporary Differences
The tax effects of temporary differences that give rise to Deferred tax assets and Deferred
tax liabilities at December 31, 2007 and 2006, are presented below.
2007
2006
Deferred tax assets:
Operations and capital loss carryforwards
$ 14.6
$ -
Future policy benefits
731.1
734.5
Goodwill
5.1
6.5
Investments
103.8
6.9
Employee compensation and benefits
45.4
31.3
Unrealized losses on investments
59.6
3.8
Other
68.0
9.7
Total gross assets before valuation allowance
1,027.6
792.7
Less: valuation allowance
(46.9)
-
Total gross assets, net of valuation allowance
980.7
792.7
Deferred tax liabilities:
Deferred policy acquisition cost
(1,120.3)
(1,018.9)
Value of purchased insurance in force
(42.7)
(34.4)
Other
(2.2)
(1.9)
Total gross liabilities
(1,165.2)
(1,055.2)
Net deferred income tax liability
$ (184.5)
$ (262.5)
Net unrealized capital gains (losses) are presented as a component of Other
comprehensive income (loss) in Shareholder's equity, net of deferred taxes.
113
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Valuation allowances are provided when it is considered unlikely that deferred tax assets
will be realized.  As of December 31, 2007, the Company had a $46.9 valuation
allowance related to unrealized capital losses on investments, which is included in
Accumulated other comprehensive income (loss).  The Company had no valuation
allowance as of December 31, 2006.
Tax Sharing Agreement
The Company had a payable to ING AIH of $40.7 and a receivable from ING AIH of
$4.6 at December 31, 2007 and 2006, respectively, for federal income taxes under the
intercompany tax sharing agreement.
See Related Party Transactions footnote for more information.
Unrecognized Tax Benefits
As a result of implementing FIN 48, the Company recognized a cumulative effect of
change in accounting principle of $1.7 as a reduction to January 1, 2007 Retained
earnings (deficit). In addition, the Company had $61.5 of unrecognized tax benefits as of
January 1, 2007, of which $41.4 would affect the Company's effective tax rate if
recognized.
A reconciliation of the change in the unrecognized income tax benefits for the years is as
follows:
Balance at January 1, 2007
$ 61.5
Additions for tax positions related to the current year
6.9
Additions (reduction) for tax positions related to prior years
(2.0)
Balance at December 31, 2007
$ 66.4
The Company had $43.2 of unrecognized tax benefits as of December 31, 2007 that
would affect the Company's effective tax rate if recognized.
Interest and Penalties
The Company recognizes accrued interest and penalties related to unrecognized tax
benefits in Current income taxes and Income tax expense on the Balance Sheets and
Statements of Operations, respectively. The Company had accrued interest of $4.7 as of
December 31, 2007.
114
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Regulatory Matters
The Company is under audit by the Internal Revenue Service ("IRS") for tax years 2002
through 2005.  It is anticipated that the IRS audit of tax years 2002 and 2003 will be
finalized within the next twelve months.  The settlement is not expected to have a
material impact on the Company's financial position. The timing of the settlement and
any potential future payment of the remaining allowance related to the IRS audit of tax
years 2004 and 2005 cannot be reliably estimated.
On September 25, 2007, the IRS issued Revenue Ruling 2007-61, which announced its
intention to issue regulations with respect to certain computational aspects of the
dividend received deduction ("DRD") on separate account assets held in connection with
variable annuity and life insurance contracts.  Revenue Ruling 2007-61 suspended
Revenue Ruling 2007-54 issued in August 2007 that purported to change accepted
industry and IRS interpretation of the statutes governing these computational questions.
Any regulations that the IRS ultimately proposes for issuance in this area will be subject
to public notice and comment, at which time insurance companies and other members of
the public will have the opportunity to raise legal and practical questions about the
content, scope and application of such regulations.  As a result, the ultimate timing,
substance, and effective date of any such regulations are unknown, but they could result
in the elimination of some or all of the separate account DRD tax benefit that the
Company receives.
Under prior law, life insurance companies were allowed to defer from taxation a portion
of income.  Prior to 2006, deferred income of $14.4 was accumulated in the
Policyholder's Surplus Account and would only become taxable under certain conditions,
which management believed to be remote. In 2004, Congress passed the American Jobs
Creation Act of 2004, allowing certain tax-free distributions from the Policyholders'
Surplus Account during 2005 and 2006. During 2006, the Company made a return of
capital distribution of $170.0, which eliminated the $14.4 balance in the Policyholders'
Surplus Account and, therefore, any potential tax on the accumulated balance.
9. Benefit Plans
Defined Benefit Plan
ING North America Insurance Corporation ("ING North America") sponsors the ING
Americas Retirement Plan (the "Retirement Plan"), effective as of December 31, 2001.
Substantially all employees of ING North America and its affiliates (excluding certain
employees) are eligible to participate, including the Company's employees.
115
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
The Retirement Plan is a tax-qualified defined benefit plan, the benefits of which are
guaranteed (within certain specified legal limits) by the Pension Benefit Guaranty
Corporation ("PBGC"). As of January 1, 2002, each participant in the Retirement Plan
(except for certain specified employees) earns a benefit under a final average
compensation formula.  Subsequent to December 31, 2001, ING North America is
responsible for all Retirement Plan liabilities. The costs allocated to the Company for its
employees' participation in the Retirement Plan were $13.0, $17.1, and $15.9, for the
years ended 2007, 2006, and 2005, respectively, and are included in Operating expenses
in the Statements of Operations.
Defined Contribution Plan
ING North America sponsors the ING Savings Plan and ESOP (the "Savings Plan").
Substantially all employees of ING North America and its affiliates (excluding certain
employees) are eligible to participate, including the Company's employees other than
Company agents. The Savings Plan is a tax-qualified profit sharing and stock bonus plan,
which includes an employee stock ownership plan ("ESOP") component. Savings Plan
benefits are not guaranteed by the PBGC. The Savings Plan allows eligible participants
to defer into the Savings Plan a specified percentage of eligible compensation on a pre-
tax basis. ING North America matches such pre-tax contributions, up to a maximum of
6.0% of eligible compensation.  Matching contributions are subject to a 4-year graded
vesting schedule, although certain specified participants are subject to a 5-year graded
vesting schedule. All contributions made to the Savings Plan are subject to certain limits
imposed by applicable law.  Pre-tax charges to operations of the Company for the
Savings Plan were $4.9, $4.6, and $4.2, for the years ended December 31, 2007, 2006,
and 2005, respectively, and are included in Operating expenses in the Statements of
Operations.
Stock Option and Share Plans
ING sponsors the ING Group Long Term Equity Ownership Plan ("leo"), which provides
employees of the Company who are selected by the ING Board of Directors to be granted
options and/or performance shares. The terms applicable to an award under leo are set
out in an award agreement which is signed by the participant when he or she accepts the
award.
Options granted under leo are nonqualified options on ING shares in the form of
American Depository Receipts ("ADRs"). Leo options have a ten (10) year term and vest
three years from the grant date. Options awarded under leo may vest earlier in the event
of the participant's death, permanent disability or retirement. Retirement for purposes of
leo means a participant terminates service after attaining age 55 and completing 5 years
of service. Early vesting in all or a portion of a grant of options may also occur in the
event the participant is terminated due to redundancy or business divestiture. Unvested
options are generally subject to forfeiture when a participant voluntarily terminates
116
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
employment or is terminated for cause (as defined in leo).  Upon vesting, participants
generally have up to seven years in which to exercise their vested options.  A shorter
exercise period applies in the event of termination due to redundancy, business
divestiture, voluntary termination or termination for cause. An option gives the recipient
the right to purchase an ING share in the form of ADRs at a price equal to the fair market
value of one ING share on the date of grant. On exercise, participant's have three options
(i) retain the shares and remit a check for applicable taxes due on exercise, (ii) request the
administrator to remit a cash payment for the value of the options being exercised, less
applicable taxes, or (iii) retain some of the shares and have the administrator liquidate
sufficient shares to satisfy the participant's tax obligation. The share price is in Euros and
converted to U.S. dollars, as determined by ING.
Awards of performance shares may also be made under leo. Performance shares are a
contingent grant of ING stock and on vesting, the participant has the right to receive a
cash amount equal to the closing price per ING share on the Euronext Amsterdam Stock
Market on the vesting date times the number of vested Plan shares. Performance shares
generally vest three years from the date of grant, with the amount payable based on
ING's share price on the vesting date.  Payments made to participants on vesting are
based on the performance targets established in connection with leo and payments can
range from 0% to 200% of target.  Performance is based on ING's total shareholder
return relative to a peer group as determined at the end of the vesting period. To vest, a
participant must be actively employed on the vesting date, although vesting will continue
to occur in the event of the participant's death, disability or retirement. If a participant is
terminated due to redundancy or business divestiture, vesting will occur but in only a
portion of the award.  Unvested shares are generally subject to forfeiture when an
employee voluntarily terminates employment or is terminated for cause (as defined in
leo). Upon vesting, participants have three options (i) retain the shares and remit a check
for applicable taxes due on exercise, (ii) request the administrator to remit a cash
payment for the value of the shares, less applicable taxes, or (iii) retain some of the shares
and have the administrator liquidate sufficient shares to satisfy the participant's tax
obligation.  The amount is converted from Euros to U.S. dollars based on the daily
average exchange rate between the Euro and the U.S. dollar, as determined by ING.
The Company recognized compensation expense for the leo options and performance
shares of $4.7, $7.4, and $4.0 for the years ended December 31, 2007, 2006, and 2005
respectively.
For leo, the Company recognized tax benefits of $2.5 in 2007 and minimal tax benefits in
2006 and 2005.
117
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Other Benefit Plans
In addition to providing retirement plan benefits, the Company, in conjunction with ING
North America, provides certain supplemental retirement benefits to eligible employees
and health care and life insurance benefits to retired employees and other eligible
dependents. The supplemental retirement plan includes a non-qualified defined benefit
pension plan and a non-qualified defined contribution plan, which means all benefits are
payable from the general assets of the Company. The post-retirement health care plan is
contributory, with retiree contribution levels adjusted annually. The life insurance plan
provides a flat amount of noncontributory coverage and optional contributory coverage.
The benefits charges allocated to the Company related to all of these plans for the years
ended December 31, 2007, 2006, and 2005, were $0.6, $1.3, and $1.1, respectively.
10.
Related Party Transactions
Operating Agreements
The Company has certain agreements whereby it generates revenues and incurs expenses with affiliated entities. The agreements are as follows:
§
Underwriting and distribution agreement with Directed Services LLC ("DSL") (successor by merger to Directed Services, Inc.), an affiliated broker-dealer, whereby DSL serves as the
principal underwriter for variable insurance products issued by the Company. DSL is authorized to enter into agreements with broker-dealers to distribute the Company's variable products and appoint representatives of the broker- dealers as
agents. For the years ended December 31, 2007, 2006, and 2005, commissions were incurred in the amounts of $553.8, $418.0, and $371.5, respectively.
§
Asset management agreement with ING Investment Management LLC ("IIM"), an affiliate, in which IIM provides asset management, administration, and accounting services for ING
USA's general account. The Company records a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2007, 2006, and 2005, expenses were incurred in the amounts of $78.0, $69.5,
and $71.8, respectively.
118
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
§
Service agreement with DSL, in which the Company provides managerial and supervisory services to DSL and earns a fee that is calculated as a percentage of average assets in the
Company's variable separate accounts deposited in ING
Investors Trust. On August 9, 2007, the Company and DSL entered into an amendment to the service agreement effective July 31, 2007, which modifies the method for calculating the compensation
owed to the Company for its provision of managerial and supervisory services to DSL. As a result of this amendment, DSL pays the Company the total net revenue associated with the Company's deposits in ING Investors Trust. For the years ended
December 31, 2007, 2006, and 2005, revenue for these services was $109.0, $62.0, and $43.0, respectively.
§
Services agreements with ING North America, dated September 1, 2000 and January 1, 2001, respectively, for administrative, management, financial, information technology, and finance and
treasury services. For the years ended December 31, 2007, 2006, and 2005, expenses were incurred in the amounts of $96.6, $95.4, and $82.5, respectively.
§
Services agreement between the Company and its U.S. insurance company affiliates dated January 1, 2001, amended effective January 1, 2002 and December 31, 2007, for administrative,
management, professional, advisory, consulting, and other services. For the years ended December 31, 2007, 2006, and 2005, expenses related to the agreements were incurred in the amount of $19.0, $6.1, and $5.7,
respectively.
§
Administrative Services Agreement between the Company, ReliaStar Life Insurance Company of New York ("RLNY"), an affiliate, and other U.S. insurance company affiliates dated March
1, 2003, amended effective August 1, 2004, in which the Company and affiliates provide services to RLNY. For the years ended December 31, 2007, 2006, and 2005, revenue related to the agreement was $6.3, $5.8, and $2.5,
respectively.
§
ING Advisors Network, a group of broker-dealers affiliated with the Company, distributes the Company's annuity products. For the years ended December 31, 2007, 2006, and 2005, ING
Advisors Network sold new contracts of $1,429.3, $1,255.4, and $1,082.0, respectively.
Management and service contracts and all cost sharing arrangements with other affiliated
companies are allocated in accordance with the Company's expense and cost allocation
methods.
Reinsurance Agreements
Effective May 1, 2005, ING USA entered into a coinsurance agreement with its affiliate,
Security Life. Under the terms of the agreement, Security Life assumed and accepted the
responsibility for paying, when due, 100% of the liabilities arising under the multi-year
guaranteed fixed annuity contracts issued by ING USA between January 1, 2001 and
December 31, 2003. In addition, ING USA assigned to Security Life all future premiums
received by ING USA attributable to the ceded contracts.
119
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Under the terms of the agreement, ING USA ceded $2.5 billion in account balances and
transferred a ceding commission and $2.7 billion in assets to Security Life, resulting in a
realized capital gain of $47.9 to the Company.
The coinsurance agreement is accounted for using the deposit method.  As such, $2.7
billion of Deposit receivable from affiliate was established on the Balance Sheets. The
receivable will be adjusted over the life of the agreement based on cash settlements and
the experience of the contracts, as well as for amortization of the ceding commission.
The Company incurred amortization expense of the negative ceding commission of $21.2
and $23.5 for the years ended December 31, 2007 and 2006, respectively, which is
included in Other expenses in the Statements of Operations.
In addition, the Company entered into a 100% coinsurance agreement with Security Life
dated January 1, 2000, covering certain universal life policies which had been issued and
in force as of, as well as any such policies issued after, the effective date of the
agreement.  As of December 31, 2007 and 2006, the value of reserves ceded by the
Company under this agreement was $16.6 and $16.0, respectively.
The Company is a party to a Facultative Coinsurance Agreement with its affiliate,
Security Life, effective August 20, 1999.  Under the terms of this agreement, the
Company facultatively cedes to Security Life, from time to time, certain GICs on a 100%
coinsurance basis.  The value of GIC reserves ceded by the Company under this
agreement was $2.3 billion and $2.2 billion at December 31, 2007 and 2006, respectively.
Financing Agreements
The Company maintains a reciprocal loan agreement with ING AIH, an affiliate, to
facilitate the handling of unanticipated short-term cash requirements that arise in the
ordinary course of business. Under this agreement, which became effective in January
2004 and expires on January 14, 2014, either party can borrow from the other up to 3.0%
of the Company's statutory admitted assets as of the preceding December 31. Interest on
any ING USA borrowing is charged at the rate of ING AIH's cost of funds for the
interest period, plus 0.15% .  Interest on any ING AIH borrowing is charged at a rate
based on the prevailing interest rate of U.S. commercial paper available for purchase with
a similar duration.
Under this agreement, the Company incurred interest expense of $3.5, $1.5, and $0.9, for
the years ended December 31, 2007, 2006, and 2005, respectively. The Company earned
interest income of $6.7, $4.9, and $4.3, for the years ended December 31, 2007, 2006,
and 2005, respectively. Interest expense and income are included in Interest expense and
Net investment income, respectively, on the Statements of Operations. At December 31,
2007 and 2006, the Company had no amounts outstanding with ING AIH under the
reciprocal loan agreement.
120
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Notes with Affiliates
The Company issued a 30-year surplus note in the principal amount of $35.0 on
December 8, 1999, to its affiliate, Security Life, which matures on December 7, 2029.
Interest is charged at an annual rate of 7.98% . Payment of the note and related accrued
interest is subordinate to payments due to contractowners and claimant and beneficiary
claims, as well as debts owed to all other classes of debtors, other than surplus note
holders, of ING USA. Any payment of principal and/or interest made is subject to the
prior approval of the Iowa Insurance Commissioner. Interest expense was $2.8, for each
of the years ended December 31, 2007, 2006, and 2005, respectively.
On December 29, 2004, the Company issued surplus notes in the aggregate principal
amount of $400.0 (the "Notes"), scheduled to mature on December 29, 2034, to its
affiliates, ING Life Insurance and Annuity Company, ReliaStar Life Insurance Company,
and Security Life of Denver International, Limited, in an offering that was exempt from
the registration requirements of the Securities Act of 1933. The Notes bear interest at a
rate of 6.26% per year. Any payment of principal and/or interest is subject to the prior
approval of the Iowa Insurance Commissioner.  Interest is scheduled to be paid semi-
annually in arrears on June 29 and December 29 of each year, commencing on June 29,
2005. Interest expense was $25.4 for each of the years ended December 31, 2007, 2006,
and 2005, respectively.
Funding Agreement
On August 10, 2007, the Company issued an extendable funding agreement to its parent,
Lion, upon receipt of a single deposit in the amount of $500.0. To fund the purchase of
the funding agreement, Lion issued a promissory note to its indirect parent company,
ING Verzekeringen N.V. ("ING V"), which has been guaranteed by Lion's immediate
parent, ING AIH.
Under the terms of the funding agreement, the Company will pay Lion interest quarterly
at the credited interest rate until maturity, and on the maturity date, the Company will pay
Lion the single deposit and any accrued and unpaid interest. The credited interest rate
shall be the three-month LIBOR, plus 0.05%, and shall be reset quarterly. The maturity
date of the funding agreement shall be August 10, 2009, or such later date to which the
maturity date may be extended; provided, however, that the maturity date may not be
extended beyond August 10, 2012.
121
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Proprietary Alpha Fund
On September 4, 2007, ING USA invested $125.0 into the ING Proprietary Alpha Fund,
LLC ("PAF"). PAF is a newly-formed multi-strategy investment fund established as a
U.S. domiciled limited liability company managed by ING Alternative Asset
Management LLC ("IAAM").  PAF's initial capital of $300.0 was provided by ING
USA's affiliated insurance and non-insurance companies.
The investment strategies
within PAF include both long and short exposures to various investments and utilize
various fixed income, equity and derivative financial instruments.
Tax Sharing Agreements
Effective January 1, 2005, the Company is a party to a federal tax allocation agreement
with ING AIH and its subsidiaries that are part of the ING AIH consolidated group.
Under the federal tax allocation agreement, ING AIH charges its subsidiaries for federal
taxes each subsidiary would have incurred were it not a member of the consolidated
group and credits each subsidiary for losses at the statutory federal tax rate.
The Company has entered into a state tax sharing agreement with ING AIH and each of
the specific subsidiaries that are parties to the agreement. The state tax agreement applies
to situations in which ING AIH and all or some of the subsidiaries join in the filing of a
state or local franchise, income tax, or other tax return on a consolidated, combined, or
unitary basis.
Derivatives
On August 31, 2007, ING USA terminated two interest rate swaps with Security Life to
reduce the Company's exposure to cash flow variability of assets and liabilities. Under
the terms of the agreement, the Company paid the quarterly quoted 3-month LIBOR rate
and received a fixed rate of 4.8% and 4.9% for swaps that mature on December 30, 2010
and 2015, respectively. The notional amount of each swap was $100.0. The fair values
of the swaps were $(1.6) and $(0.1) for the December 30, 2010 and 2015 swaps,
respectively, at the date of termination.
As of December 31, 2007 and 2006, the Company had call options with a notional
amount of $167.8 and $935.4 respectively, and market value of $42.6 and $78.6,
respectively, with ING Bank, an affiliate. Each of these contracts was entered into as a
result of a competitive bid, which included unaffiliated counterparties.
122
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Purchase of Investments
On September 27, 2007, the Company purchased at fair value financial assets with a fair
value of $435.0 from Security Life, an affiliate.  The investments, which primarily
consisted of AAA rated collateralized mortgage obligations were purchased by the
Company with the intent to use them as part of the FHLB funding agreement program.
These assets are included in fixed maturities on the Balance Sheets.
On August 21, 2007, ING USA purchased at fair value U.S. commercial mortgage loans
with a fair value of $17.9 from ING Bank of Canada, an affiliate.
11. Financing Agreements
The Company maintains a $100.0 uncommitted, perpetual revolving note facility with the
Bank of New York ("BONY"). Interest on any of the Company borrowing accrues at an
annual rate equal to a rate quoted by BONY to the Company for the borrowing. Under
this agreement, the Company incurred minimal interest expense for the years ended
December 31, 2007, 2006, and 2005. At December 31, 2007 and 2006, the Company had
no amounts outstanding under the revolving note facility.
The Company also maintains a $75.0 uncommitted line-of-credit agreement with PNC
Bank ("PNC"), effective December 19, 2005. Borrowings are guaranteed by ING AIH,
with maximum aggregate borrowings outstanding at anytime to ING AIH and its
affiliates of $75.0. Interest on any of the Company borrowing accrues at an annual rate
equal to the rate quoted by PNC to the Company for the borrowing.  Under this
agreement, the Company incurred minimal interest expense for the year ended
December 31, 2007 and 2006. At December 31, 2007 and 2006, the Company had no
amounts outstanding under the line-of-credit agreement.
The Company maintains a $100.0 uncommitted line-of-credit agreement with Svenska
Handelsbanken AB (Publ.) ("Svenska"), effective June 2, 2006. Borrowings are
guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to
ING AIH and its affiliates of $100.0. Interest on any of the Company's borrowing
accrues at an annual rate equal to the rate quoted by Svenska to the Company for the
borrowing. Under this agreement, the Company incurred minimal interest expense for the
year ended December 31, 2007. At December 31, 2007, the Company had no amounts
outstanding under the line-of-credit agreement.
Also see Financing Agreements in the Related Party Transactions footnote.
123
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
12. Reinsurance
At December 31, 2007, the Company had reinsurance treaties with 16 unaffiliated
reinsurers covering a portion of the mortality risks and guaranteed death and living
benefits under its annuity contracts. The Company also has reinsurance treaties with one
affiliate, Security Life, related to GICs, fixed annuities, and universal life insurance
policies.  The Company remains liable to the extent its reinsurers do not meet their
obligations under the reinsurance agreements.
Reinsurance ceded in force for life mortality risks were $689.1 and $755.3 at
December 31, 2007 and 2006, respectively.  Net receivables were comprised of the
following at December 31, 2007 and 2006.
2007
2006
Claims recoverable from reinsurers
$ 6.9
$ 7.2
Payable for reinsurance premiums
1.4
(2.3)
Reinsured amounts due to reinsurers
(36.2)
(29.9)
Reserve credits
5.1
9.1
Reinsurance ceded
2,452.1
2,265.7
Deposits
2,153.2
2,478.4
Other
33.6
30.8
Total
$ 4,616.1
$ 4,759.0
Premiums and Interest credited and other benefits to contractowners were reduced by the
following amounts for reinsurance ceded for the years ended December 31, 2007, 2006,
and 2005.
2007
2006
2005
Deposits ceded under reinsurance
$ 1,309.1
$ 1,144.3
$ 722.2
Premiums ceded under reinsurance
2.4
2.5
3.0
Reinsurance recoveries
1,723.2
657.6
703.4
Also see Reinsurance Agreements in the Related Party Transactions footnote.
13. Commitments and Contingent Liabilities
Leases
The Company leases its office space and certain equipment under operating leases, the
longest term of which expires in 2017.
124
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
For the years ended December 31, 2007, 2006, and 2005, rent expense for leases was
$7.9, $8.3, and $8.0, respectively.
The future net minimum payments under
noncancelable leases for the years ended December 31, 2008 through 2012 are estimated
to be $8.6, $8.6, $7.0, $5.7, and $5.5, respectively, and $24.2, thereafter. The Company
pays substantially all expenses associated with its leased and subleased office properties.
Expenses not paid directly by the Company are paid for by an affiliate and allocated back
to the Company.
Commitments
Through the normal course of investment operations, the Company commits to either
purchase or sell securities, commercial mortgage loans, or money market instruments, at
a specified future date and at a specified price or yield. The inability of counterparties to
honor these commitments may result in either a higher or lower replacement cost. Also,
there is likely to be a change in the value of the securities underlying the commitments.
At December 31, 2007, the Company had off-balance sheet commitments to purchase
investments equal to their fair value of $616.3, $156.5 of which was with related parties.
At December 31, 2006, the Company had off-balance sheet commitments to purchase
investments equal to their fair value of $537.9, $143.2 of which was with related parties.
During 2007 and 2006, $33.1 and $32.4, respectively, was funded to related parties under
these commitments.
Financial Guarantees
The Company owns a 3-year credit-linked note arrangement, whereby the Company will
reimburse the guaranteed party upon payment default of the referenced obligation. Upon
such default, the Company will reimburse the guaranteed party for the loss under the
reference obligation, and the Company receives that reference obligation in settlement.
The Company can seek recovery of any losses under the agreements by sale or collection
of the received reference obligation. As of December 31, 2007, the maximum potential
future exposure to the Company under the guarantee was $32.5.
Cash Collateral
Under the terms of the Company's Over-The-Counter Derivative International Swaps and
Derivatives Association, Inc. Agreements ("ISDA Agreements"), the Company may
receive from, or deliver to, counterparties, collateral to assure that all terms of the ISDA
Agreements will be met with regard to the Credit Support Annex ("CSA"). The terms of
the CSA call for the Company to pay interest on any cash received equal to the Federal
Funds rate. As of December 31, 2007, the Company held $11.5 of cash collateral, which
was included in Collateral held, including payables under securities loan agreement and
was reinvested in Short-term investments under securities loan agreement on the
125
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Condensed Balance Sheets.  The Company held no cash collateral under the ISDA
Agreements as of December 31, 2006.
Litigation
The Company is involved in threatened or pending lawsuits/arbitrations arising from the
normal conduct of business.  Due to the climate in insurance and business
litigation/arbitrations, suits against the Company sometimes include claims for substantial
compensatory, consequential, or punitive damages, and other types of relief. Moreover,
certain claims are asserted as class actions, purporting to represent a group of similarly
situated individuals.  While it is not possible to forecast the outcome of such
lawsuits/arbitrations, in light of existing insurance, reinsurance, and established reserves,
it is the opinion of management that the disposition of such lawsuits/arbitrations will not
have a materially adverse effect on the Company's operations or financial position.
Other Regulatory Matters
Regulatory Matters
As with many financial services companies, the Company and its affiliates have received
informal and formal requests for information from various state and federal governmental
agencies and self-regulatory organizations in connection with inquiries and investigations
of the products and practices of the financial services industry.  In each case, the
Company and its affiliates have been and are providing full cooperation.
Insurance and Retirement Plan Products and Other Regulatory Matters
Federal and state regulators, and self-regulatory agencies are conducting broad inquiries
and investigations involving the insurance and retirement industries.  These initiatives
currently focus on, among other things, compensation, revenue sharing, and other sales
incentives; potential conflicts of interest; potential anti-competitive activity; reinsurance;
sales and marketing practices (including sales to seniors); specific product types
(including group annuities and indexed annuities); and disclosure.  It is likely that the
scope of these industry investigations will further broaden before they conclude.  The
Company and certain of its U.S. affiliates have received formal and informal requests in
connection with such investigations, and are cooperating fully with each request for
information.  Some of these matters could result in regulatory action involving the
Company. These initiatives also may result in new legislation and regulation that could
significantly affect the financial services industry, including businesses in which the
Company is engaged. In light of these and other developments, U.S. affiliates of ING,
including the Company, periodically review whether modifications to their business
practices are appropriate.
126
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Investment Product Regulatory Issues
Since 2002, there has been increased governmental and regulatory activity relating to
mutual funds and variable insurance products.  This activity has primarily focused on
inappropriate trading of fund shares; directed brokerage; compensation; sales practices,
suitability, and supervision; arrangements with service providers; pricing; compliance
and controls; adequacy of disclosure; and document retention.
In addition to responding to governmental and regulatory requests on fund trading issues,
ING management, on its own initiative, conducted, through special counsel and a
national accounting firm, an extensive internal review of mutual fund trading in ING
insurance, retirement, and mutual fund products. The goal of this review was to identify
any instances of inappropriate trading in those products by third parties or by ING
investment professionals and other ING personnel.
The internal review identified several isolated arrangements allowing third parties to
engage in frequent trading of mutual funds within the variable insurance and mutual fund
products of ING, and identified other circumstances where frequent trading occurred
despite measures taken by ING intended to combat market timing. Each of the
arrangements has been terminated and disclosed to regulators, to the independent trustees
of ING Funds (U.S.) and in Company reports previously filed with the Securities and
Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as
amended.
Action may be taken by regulators with respect to the Company or certain affiliates
before investigations relating to fund trading are completed. The potential outcome of
such action is difficult to predict but could subject the Company or certain affiliates to
adverse consequences, including, but not limited to, settlement payments, penalties, and
other financial liability. It is not currently anticipated, however, that the actual outcome
of any such action will have a material adverse effect on ING or ING's U.S.-based
operations, including the Company.
ING has agreed to indemnify and hold harmless the ING Funds from all damages
resulting from wrongful conduct by ING or its employees or from ING's internal
investigation, any investigations conducted by any governmental or self-regulatory
agencies, litigation or other formal proceedings, including any proceedings by the SEC.
Management reported to the ING Funds Board that ING management believes that the
total amount of any indemnification obligations will not be material to ING or ING's
U.S.-based operations, including the Company.
127
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
14.
Accumulated Other Comprehensive Income (Loss)
Shareholder's equity included the following components of Accumulated
other
comprehensive income (loss) as of December 31, 2007, 2006, and 2005.
2007
2006
2005
Net unrealized capital (losses) gains:
Fixed maturities, available-for-sale
$ (122.3) $
(28.9) $
(6.9)
Equity securities, available-for-sale
(5.5)
1.5
1.1
DAC/VOBA adjustment on
available-for-sale securities
(36.9)
21.1
7.5
Sales inducements adjustment on
available-for-sale securities
0.5
1.0
2.5
Other investments
Unrealized capital (losses) gains , before tax
(6.4)
(6.6)
(5.4)
(170.6)
(11.9)
(1.2)
Deferred income tax asset (liability)
59.7
3.8
0.4
Deferred tax asset valuation allowance
(46.9)
-
-
Net unrealized capital (losses) gains
(157.8)
(8.1)
(0.8)
Pension liability, net of tax
(2.9)
(5.1)
(3.9)
Other
-
1.1
-
Accumulated other comprehensive (loss) income
$ (160.7)
$ (12.1)
$ (4.7)
Changes in Accumulated other comprehensive income (loss), net of DAC, VOBA, and
tax (excluding the tax valuation allowance), related to changes in unrealized capital gains
(losses) on securities, including securities pledged, were as follows for the years ended
December 31, 2007, 2006, and 2005.
2007
2006
2005
Fixed maturities, available-for-sale
$ (93.4)
$ (22.0)
$ (458.3)
Equity securities, available-for-sale
(7.0)
0.4
0.6
DAC/VOBA adjustment on
available-for-sale securities
(58.0)
13.6
266.1
Sales inducements adjustment on
available-for-sale securities
(0.5)
(1.5)
9.2
Other investments
0.2
(1.2)
(2.8)
Unrealized capital (losses) gains, before tax
(158.7)
(10.7)
(185.2)
Deferred income tax asset (liability)
55.9
3.4
66.8
Net change in unrealized capital (losses) gains
$ (102.8)
$ (7.3)
$ (118.4)
128
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Net unrealized capital holding (losses) gains
arising during the year
(1)
Less: reclassification adjustment for (losses) gains
and other items included in Net income
(2)
Net change in unrealized capital (losses)
gains on securities
2007
2006
2005
$ (210.5)
$ (49.5)
$ (69.2)
(107.7)
(42.2)
49.2
$ (102.8)
$ (7.3)
$ (118.4)
(1)
Pretax unrealized capital holding gains (losses) arising during the year were $(324.9), $(72.6), and $(108.3), for the years ended December 31, 2007, 2006, and 2005,
respectively.
(2)
Pretax reclassification adjustments for gains (losses) and other items included in Net income were $(166.2), $(61.9), and $76.9, for the years ended December 31, 2007,
2006, and 2005, respectively.
129
QUARTERLY DATA (UNAUDITED)
(Dollar amounts in millions, unless otherwise stated)
2007
First
Second
Third
Fourth
Total revenue
$ 512.4
$ 632.7
$ 534.7
$ 494.0
Income (loss) before income taxes
96.6
138.1
37.1
(144.4)
Income tax expense (benefit)
26.9
41.0
(11.1)
(58.4)
Net income (loss)
$ 69.7
$ 97.1
$ 48.2
$ (86.0)
2006
First
Second
Third
Fourth
Total revenue
$ 425.1
$ 502.2
$ 535.6
$ 562.8
Income before income taxes
54.1
54.2
75.6
92.7
Income tax expense
13.5
13.0
2.1
35.8
Net income
$ 40.6
$ 41.2
$ 73.5
$ 56.9
130
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
None.
Item 9A.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company carried out an evaluation, under the supervision and with the
participation of its management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended ("Exchange Act")) as of the end of the
period covered by this report. Based on that evaluation, the Chief Executive Officer
and the Chief Financial Officer have concluded that the Company's current disclosure
controls and procedures are effective in ensuring that material information relating to
the Company required to be disclosed in the Company's periodic SEC filings is made
known to them in a timely manner.
Management's Annual Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) for the Company.  The Company's internal
control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of the financial statements of
the Company in accordance with U.S. generally accepted accounting principles. The
Company's internal control over financial reporting includes those policies and
procedures that:
§
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
§
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and
that receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors; and
§
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
131
Management has assessed the effectiveness of the Company's internal control over
financial reporting as of December 31, 2007. In making its assessment, management
has used the criteria set forth in "Internal Control – Integrated Framework" issued by
the Committee of Sponsoring Organizations of the Treadway Commission.  Based
upon its assessment, management has concluded that the Company's internal control
over financial reporting was effective as of December 31, 2007.
This annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's report in this
annual report.
Changes in Internal Control Over Financial Reporting
There has not been any change in the internal controls over financial reporting of the
Company that occurred during the period covered by this report that has materially
affected or is reasonably likely to materially affect these internal controls.
Item 9B. Other Information
None.
132
PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Omitted pursuant to General Instruction I(2) of Form 10-K, except with respect to
compliance with Sections 406 and 407 of the Sarbanes-Oxley Act of 2002.
a)
Code of Ethics for Financial Professionals
The Company has approved and adopted a Code of Ethics for Financial Professionals (which was filed as Exhibit 14 to the Company's Form 10-K, as filed with the Securities and Exchange
Commission on March 29, 2004, File No. 033-87270), pursuant to the requirements of Section 406 of the Sarbanes- Oxley Act of 2002. Any waiver of the Code of Ethics will be disclosed by the Company by way of a Form 8-K filing.
b)
Designation of Board Financial Expert
The Company has designated David A. Wheat, Director, Executive Vice President and Chief Financial Officer of the Company, as its Board Financial Expert, pursuant to the requirements of
Section 407 of the Sarbanes-Oxley Act of 2002. Because the Company is not subject to the requirements of Exchange Act Rule 10A-3, it does not have any outside directors sitting on its board.
Item 11. Executive Compensation
Omitted pursuant to General Instruction I(2) of Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Omitted pursuant to General Instruction I(2) of Form 10-K.
Item 13. Certain Relationships, Related Transactions, and Director Independence
Omitted pursuant to General Instruction I(2) of Form 10-K.
133
Item 14. Principal Accounting Fees and Services
(Dollar amounts in millions, unless otherwise stated)
In 2007 and 2006, Ernst & Young LLP ("Ernst & Young") served as the principal
external auditing firm for ING, including ING USA.
ING subsidiaries, including
ING USA, are allocated Ernst & Young fees attributable to services rendered by Ernst
& Young to each subsidiary. Ernst & Young fees allocated to the Company for the
years ended December 31, 2007 and 2006 are detailed below, along with a
description of the services rendered by Ernst & Young to the Company.
2007
2006
Audit fees
$ 3.2
$ 3.5
Audit-related fees
0.2
0.1
Tax fees
-
*
-
*
All other fees
-
*
-
*
$ 3.4
$ 3.6
*Less than $0.1.
Audit Fees
Fees for audit services include fees associated with professional services rendered by
the auditors for the audit of the annual financial statements of the Company and
review of the Company's interim financial statements.
Audit-related Fees
Audit-related fees were allocated to ING USA for assurance and related services that
are reasonably related to the performance of the audit or review of the financial
statements and are not reported under the audit fee item above.  These services
consisted primarily of the audit of SEC product filings.
Tax Fees
There were minimal tax fees allocated to ING USA in 2007 and 2006.  Tax fees
allocated to ING USA were primarily for tax compliance and accounting for income
taxes.  These services consisted of tax compliance, including the review of tax
disclosures and proper completion of tax forms, assistance with questions regarding
tax audits, and tax planning and advisory services relating to common forms of
domestic taxation (i.e., income tax and capital tax).
All Other Fees
There were minimal fees allocated to ING USA in 2007 and 2006 under the category
"all other fees."  Other fees allocated to ING USA under this category typically
include fees paid for products and services other than the audit fees, audit-related
fees, and tax fees described above, and consist primarily of non-recurring support and
advisory services.
134
Pre-approval Policies and Procedures
ING USA has adopted the pre-approval policies and procedures of ING. Audit, audit-
related, and non-audit, services provided to the Company by ING's independent
auditors are pre-approved by ING's audit committee. Pursuant to ING's pre-approval
policies and procedures, the ING audit committee is required to pre-approve all
services provided by ING's independent auditors to ING and its affiliates, including
the Company. The ING pre-approval policies and procedures distinguish five types
of services: (1) audit services, (2) audit-related services, (3) tax services, (4) other
services that are not audit, audit-related, tax, or prohibited services, and (5) prohibited
services (as described in the Sarbanes-Oxley Act).
The ING pre-approval procedures consist of a general pre-approval procedure and a
specific pre-approval procedure.
General Pre-approval Procedure
ING's audit committee pre-approves audit, audit-related, tax, and other, services to be
provided by ING's external audit firms on an annual basis. The audit committee also
sets the maximum annual amount for such pre-approved services.  Throughout the
year, ING's audit committee receives from ING's external audit firms an overview of
all services provided, including related fees and supported by sufficiently detailed
information.  ING's audit committee evaluates this overview periodically on a
retrospective basis during the year.  Additionally, ING's external audit firms and
Corporate Audit Services monitor the amounts paid versus the pre-approved amounts
throughout the year.
Specific Pre-approval Procedure
In addition to the general pre-approval procedure, each proposed independent auditor
engagement that is expected to generate fees in excess of the pre-approved amounts,
must be approved by the audit committee after recommendation of local management
on a case-by-case basis.
In 2007 and 2006, 100% of each of the audit related services, tax services, and all
other services were pre-approved by ING's audit committee.
135
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)
The following documents are filed as part of this report:
1.
Financial statements. See Item 8. on page 72.
2.
Financial statement schedules. See Index to Financial Statement Schedules on page 137.
3.
Exhibits. See Exhibit Index on page 142.
136
Index to Financial Statement Schedules
Page
Report of Independent Registered Public Accounting Firm
138
I.
Summary of Investments - Other than Investments in Affiliates as of
December 31, 2007
139
IV.
Reinsurance Information as of and for the years ended
December 31, 2007, 2006, and 2005
140
Schedules other than those listed above are omitted because they are not required or
not applicable.
Report of Independent Registered Public Accounting Firm
The Board of Directors
ING USA Annuity and Life Insurance Company
We have audited the financial statements of ING USA Annuity and Life Insurance Company as
of December 31, 2007 and 2006, and for each of the three years in the period ended
December 31, 2007, and have issued our report thereon dated March 25, 2008. Our audits also
included the financial statement schedules listed in Item 15. These schedules are the
responsibility of the Company's management. Our responsibility is to express an opinion based
on our audits.
In our opinion, the financial statement schedules referred to above, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
/s/ Ernst & Young LLP
Atlanta, Georgia
March 25, 2008
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Schedule I
Summary of Investments – Other than Investments in Affiliates
As of December 31, 2007
(In millions)
Amount
Shown on
Type of Investments
Cost
Value*
Balance Sheets
Fixed maturities, available-for-sale:
U.S. Treasuries
$ 18.4
$ 19.4
$ 19.4
U.S. government agencies and authorities
86.1
86.8
86.8
State, municipalities, and political subdivisions
49.7
47.2
47.2
Public utilities securities
1,417.5
1,426.9
1,426.9
Other U.S. corporate securities
6,742.7
6,756.8
6,756.8
Foreign securities
(1)
3,805.8
3,794.7
3,794.7
Residential mortgage-backed securities
4,988.4
4,955.9
4,955.9
Commercial mortgage-backed securities
3,842.2
3,843.4
3,843.4
Other asset-backed securities
1,947.5
1,844.9
1,844.9
Total fixed maturities, available-for-sale, including
securities pledged to creditors
$ 22,898.3
$ 22,776.0
$ 22,776.0
Equity securities, available-for-sale
$ 216.6
$ 211.1
$ 211.1
Mortgage loans on real estate
$ 3,701.7
$ 3,739.4
$ 3,701.7
Policy loans
155.8
155.8
155.8
Other investments
1,030.9
1,045.3
1,036.6
Total investments
$ 28,003.3
$ 27,927.6
$ 27,881.2
* See Notes 2 and 3 of Notes to Financial Statements.
(1)
The term "foreign" includes foreign governments, foreign political subdivisions, foreign public utilities, and all other bonds of foreign issuers. Substantially all of the Company's
foreign securities are denominated in U.S. dollars.
139
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Schedule IV
Reinsurance Information
As of and for the years ended December 31, 2007, 2006, and 2005
(In millions)
Percentage of
Gross
Ceded
Assumed
Net
Assumed to Net
Year ended December 31, 2007
Life insurance in force
$ 8,351.5
$ 689.1
$ -
$ 7,662.4
0.0%
Premiums:
Life insurance
21.8
2.2
-
19.6
Accident and health insurance
0.2
0.2
-
-
Total premiums
$ 22.0
$ 2.4
$ -
$ 19.6
Year ended December 31, 2006
Life insurance in force
$ 6,596.5
$ 755.3
$ - $
5,841.2
0.0%
Premiums:
Life insurance
22.8
2.3
-
20.5
Accident and health insurance
0.2
0.2
-
-
Total premiums
$ 23.0
$ 2.5
$ - $
20.5
Year ended December 31, 2005
Life insurance in force
$ 7,012.4
$ 822.2
$ - $
6,190.2
0.0%
Premiums:
Life insurance
24.5
2.7
-
21.8
Accident and health insurance
0.3
0.3
-
-
Total premiums
$ 24.8
$ 3.0
$ - $
21.8
140
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
March 25, 2008
ING USA Annuity and Life Insurance Company
(Date)
(Registrant)
By: /s/
David A. Wheat
David A. Wheat
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities indicated on or
before March 25, 2008.
Signatures
Title
/s/
David A. Wheat
Director, Executive Vice President and
David A. Wheat
Chief Financial Officer
/s/
Bridget M. Healy
Director
Bridget M. Healy
/s/
Robert G. Leary
Director
Robert G. Leary
/s/
Thomas J. McInerney
Director and Chairman
Thomas J. McInerney
/s/
Kathleen A. Murphy
Director
Kathleen A. Murphy
/s/
Catherine H. Smith
Director
Catherine H. Smith
/s/
Harry N. Stout
President
Harry N. Stout
/s/
Steven T. Pierson
Senior Vice President and
Steven T. Pierson
Chief Accounting Officer
141
ING USA ANNUITY AND LIFE INSURANCE COMPANY
Form 10-K for Fiscal Year Ended December 31, 2007
Exhibit Index
Exhibit Number
Description of Exhibit
2.1
Agreement and Plan of Merger dated June 25, 2003, by and between USG
Annuity & Life Company, United Life & Annuity Insurance Company,
Equitable Life Insurance Company of Iowa and Golden American Life
Insurance Company, incorporated by reference in Exhibit 99-8 in the
Company's Form 8K filed with the SEC on January 2, 2004 (File No. 333-
87270).
3.1 Restated Articles of Incorporation Providing for the Redomestication of Golden
American Life Insurance Company dated July 2 and 3, 2003, effective January
1, 2004, incorporated by reference to Company's 10-K, as filed with the SEC
on March 29, 2004 (File No. 033-87270).
3.2 Amendment to Articles of Incorporation Providing for the Name Change of
Golden American Life Insurance Company dated November 20, 2003, effective
January 1, 2004, incorporated by reference to the Company's 10-K, as filed
with the SEC on March 29, 2004 (File No. 033-87270).
3.3 Amendment to Articles of Incorporation Providing for the Change in Purpose
and Powers of ING USA Annuity and Life Insurance Company dated March 3
and 4, 2004, effective March 11, 2004, incorporated by reference to the
Company's 10-Q, as filed with the SEC on May 17, 2004 (File No. 033-87270).
3.4 Amended and Restated By-Laws of ING USA Annuity and Life Insurance
Company effective January 1, 2005, incorporated by reference to the
Company's Form 10-Q, as filed with the SEC on May 13, 2005 (File No. 033-
87270).
4.1 Single Premium Deferred Modified Guaranteed Annuity Contract, Single
Premium Deferred modified Guaranteed Annuity Master Contract, and Single
Premium Deferred Modified Guaranteed Annuity Certificate - Incorporated
herein by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form S-1 for Golden American Life Insurance Company as filed
with the SEC on February 8, 2002 (File No. 333-67660).
4.2 Single Premium Deferred Modified Guaranteed Annuity Master Contract and
Single Premium Deferred Modified guaranteed Annuity Certificate –
Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 for Golden American Life Insurance Company, as filed
with the SEC on September 13, 2000 (File No. 333-40596).
142
4.3 Individual Retirement Annuity Rider; Roth Individual Retirement Annuity
Rider; Simple Retirement Account Rider; and 403(b) Rider - Incorporated
herein by reference to Post-Effective Amendment No. 34 to Registration
Statement on Form N-4 for Golden American Life Insurance Company
Separate Account B, as filed with the SEC on April 15, 2003 (File No. 033-
23351).
4.4 403(b) Rider - Incorporated herein by reference to Initial Registration Statement
on Form S-2 for Golden American Life Insurance Company, as filed with the
SEC on April 15, 2003 (File No. 333-104547).
4.5 Single Premium Deferred Equity Indexed Modified Guaranteed Annuity
Contract; Single Premium Deferred Modified Guaranteed Annuity Group
Master Contract; and Single Premium Deferred Equity Indexed Modified
Guaranteed Annuity Certificate, - Incorporated herein by reference to Pre-
Effective Amendment No. 1 to Registration Statement on Form S-2, as filed
with the SEC on August 13, 2004 (File No. 333-116137).
4.6 Interest in Fixed Account I under Variable Annuity Contracts - Incorporated
herein by reference to: Post-Effective Amendment No. 12 to Registration
Statement on Form N-4 for Golden American Life Insurance Company
Separate Account B, as filed with the Securities and Exchange Commission on
April 23, 1999 (File Nos. 033-59261, 811-5626); Incorporated by reference to
Post-Effective Amendment No. 3 to Registration Statement on Form N-4 for
Golden American life Insurance Company, as filed with the SEC on April 23,
1999 (File Nos. 333-28769, 811-5626); and Incorporated by reference to Pre-
Effective Amendment No. 1 to Registration statement on Form N-4 for Golden
American Life Insurance Company Separate Account B, as filed with the SEC
on June 24, 2000 (File Nos. 333-33914, 811-5626).
4.7 Interests in Fixed Account II under Variable Annuity Contracts - Incorporated
herein by reference to Post-Effective Amendment No. 7 to Registration
Statement on Form N-4 for Separate Account B of Golden American Life
Insurance Company as filed with the SEC on October 2, 2000 (File No. 333-
28679, 811-5626), Incorporated herein by reference to Post-Effective
Amendment No. 2 to Registration Statement on Form N-4 for Separate Account
B of Golden American Life Insurance Company as filed with the SEC on
October 2, 2000 (File No. 333-30180, 811-5626), Incorporated herein by
reference to Post-Effective Amendment No. 5 to Registration Statement on
Form N-4 for Separate Account B of Golden American Life Insurance
Company as filed with the SEC on April 23, 1999 (File No. 333-28755, 811-
5626), Incorporated herein by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form N-4 for Separate Account B of Golden
American Life Insurance Company as filed with the SEC on April 23, 1999
(File No. 333-66757, 811-5626), Incorporated herein by reference to Pre-
Effective Amendment No. 1 to Registration Statement on Form N-4 for
Separate Account B of Golden American Life Insurance Company as filed with
the SEC on October 26, 2001 (File No. 333-63692, 811-5626), Incorporated
herein by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 for Separate Account B of Golden American Life
Insurance Company as filed with the SEC on December 11, 2001 (File No.333-
143
70600, 811-5626), Incorporated by reference to Post-Effective Amendment No.
1 to Registration Statement on Form N-4 for Golden American Life Insurance
Company Separate Account B, as filed with the SEC on April 16, 2003 (File
No. 333-90516, 811-5626) and Incorporated by reference to Pre-Effective
Amendment No. 1 to Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B, as filed with the SEC
on July 3, 2003 (File No. 333-101487, 811-5626).
4.8 Interest in the Guaranteed Account under Variable Annuity Contracts -
Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Registration Statement on Form S-2 for Golden American Life Insurance
Company, as filed with the SEC on June 29, 2001 (File No. 333-57212).
10.1 Service Agreement, dated as of January 1, 1994, as amended March 7, 1995,
between Golden American and Directed Services, Inc., incorporated by
reference from Exhibit 10(b) to a Registration Statement on Form S-1 filed with
the SEC on April 29, 1998 (File No. 333-51353).
10.2 Asset Management Agreement, dated January 20, 1998, between Golden
American and ING Investment Management LLC, incorporated by reference
from Exhibit 10(f) to Golden American's Form 10-Q filed with the SEC on
August 14, 1998 (File No. 033-87270).
10.3 Reciprocal Loan Agreement dated January 1, 2004, between ING USA Annuity
and Life Insurance Company and ING America Insurance Holdings, Inc.,
incorporated by reference from Exhibit 10.A(a) to ING USA Annuity and Life
Insurance Company's Form 10-Q filed with the SEC on or about May 17, 2004
(File No. 333-87270).
10.4 Surplus Note, dated December 8, 1999, between Golden American and First
Columbine Life Insurance Company, incorporated by reference from Exhibit
10(g) to Amendment No. 7 to a Registration Statement for Golden American on
Form S-1 filed with the SEC on or about January 27, 2000 (File No. 333-
28765).
10.5 Services Agreement between Golden American and the affiliated companies
listed in Exhibit B to that Agreement, dated as of January 1, 2001, as amended
effective January 1, 2002, incorporated by reference from Exhibit 10.A (k) to
ING USA Annuity and Life Insurance Company's Form 10-K filed with the
SEC on March 29, 2004 (File No. 033-87270).
10.6 Services Agreement between Golden American and ING North America
Insurance Corporation effective January 1, 2001, incorporated by reference
from Exhibit 10.A (g) to ING USA Annuity and Life Insurance Company's
Form 10-K filed with the SEC on March 29, 2004 (File No. 033-87270).
10.7 Form of Shared Services Center Services Agreement by and among ING North
America Insurance Corporation ("Service Provider") and Ameribest Life
Insurance Company, a Georgia corporation; Equitable Life Insurance Company
of Iowa, an Iowa corporation; USG Annuity & Life Company, an Oklahoma
corporation; Golden American, a Delaware corporation; First Columbine Life
144
Insurance Company, a Colorado corporation; Life Insurance Company of
Georgia, a Georgia corporation; Southland Life Insurance Company, a Texas
corporation; Security Life of Denver Insurance Company, a Colorado
corporation; Midwestern United Life Insurance Company, an Indiana
corporation; and United Life & Annuity Insurance Company, a Texas
corporation, incorporated by reference from Exhibit 10(r) to Pre-Effective
Amendment No. 1 to a Registration Statement on Form S-1 filed by Registrant
with the SEC on or about December 11, 2001 (File No. 333-70602).
10.8 Tax Sharing Agreement between Golden American, ING America Insurance
Holdings, Inc. and affiliated companies, effective January 1, 2001, incorporated
by reference from Exhibit 10.A (j) to ING USA Annuity and Life Insurance
Company's Form 10-K filed with the SEC on March 29, 2004 (File No. 033-
87270).
10.9 Administrative Services Agreement between Golden American, ReliaStar Life
Insurance Company of New York and affiliated companies listed on Exhibit A
to the Agreement, effective March 1, 2003, incorporated by reference from
Exhibit 10.A (m) to ING USA Annuity and Life Insurance Company's Form
10-K filed with the SEC on March 29, 2004 (File No. 033-87270).
10.10 First Amendment to the Administrative Services Agreement between ING USA
Annuity and Life Insurance Company and its affiliates, effective as of August
1, 2004, incorporated by reference from Exhibit 10.(i) to ING USA Annuity
and Life Insurance Company's Form 10-K filed with the SEC on March 18,
2005 (File No. 033-87270).
10.11 Amendments to Asset Management Agreement between Golden American and
ING Investment Management LLC, effective January 1, 2003, incorporated by
reference from Exhibit 10.A (l) to ING USA Annuity and Life Insurance
Company's Form 10-K filed with the SEC on March 29, 2004 (File No. 033-
87270).
10.12 Third Amendment to the Asset Management Agreement, between Golden
American and ING Investment Management LLC, effective August 18, 2003,
incorporated by reference from Exhibit 10.A (n) to ING USA Annuity and Life
Insurance Company's Form 10-K filed with the SEC on March 29, 2004 (File
No. 033-87270).
10.13 Lease Agreement, dated as of April 16, 1998, by and between Golden
American and Dunwoody Associates, incorporated by reference from Exhibit
10.A (o) to ING USA Annuity and Life Insurance Company's Form 10-K filed
with the SEC on March 29, 2004 (File No. 033-87270).
10.14 First Amendment to Lease Agreement, dated November 4, 1998, between
Golden American and Dunwoody Associates, incorporated by reference from
Exhibit 10.A (p) to ING USA Annuity and Life Insurance Company's Form 10-
K filed with the SEC on March 29, 2004 (File No. 033-87270).
145
10.15 Second Amendment to Lease Agreement, dated June 1, 2000, between Golden
American and Dunwoody Associates, incorporated by reference from Exhibit
10.A (q) to ING USA Annuity and Life Insurance Company's Form 10-K filed
with the SEC on March 29, 2004 (File No. 033-87270).
10.16 Services Agreement with ING Financial Advisers, LLC ("INGFA"), entered
into June 1, 2002 by Equitable Life Insurance Company of Iowa, as subsumed
by ING USA pursuant to the January 1, 2004 merger, incorporated by reference
from Exhibit 10.(p) to ING USA Annuity and Life Insurance Company's Form
10-K filed with the SEC on March 18, 2005 (File No. 033-87270).
10.17 Surplus Note for $50,000,000 aggregate principal amount, dated December 29,
2004, issued by ING USA Annuity and Life Insurance Company to its affiliate,
Security Life of Denver International Limited, incorporated by reference from
Exhibit 10.(q) to ING USA Annuity and Life Insurance Company's Form 10-K
filed with the SEC on March 18, 2005 (File No. 033-87270).
10.18 Surplus Note for $175,000,000 aggregate principal amount, dated December
29, 2004, issued by ING USA Annuity and Life Insurance Company to its
affiliate, ING Life Insurance and Annuity Company, incorporated by reference
from Exhibit 10.(r) to ING USA Annuity and Life Insurance Company's Form
10-K filed with the SEC on March 18, 2005 (File No. 033-87270).
10.19 Surplus Note for $175,000,000 aggregate principal amount, dated December
29, 2004, issued by ING USA Annuity and Life Insurance Company to its
affiliate, ReliaStar Life Insurance Company, incorporated by reference from
Exhibit 10.(s) to ING USA Annuity and Life Insurance Company's Form 10-K
filed with the SEC on March 18, 2005 (File No. 033-87270).
10.20 Lease Agreement dated August 31, 1995, between The Graham Group, Inc. and
Equitable Life Insurance Company of Iowa, as subsumed by ING USA Annuity
and Life Insurance Company pursuant to the January 1, 2004 merger,
incorporated by reference from Exhibit 10.(t) to ING USA Annuity and Life
Insurance Company's Form 10-K filed with the SEC on March 18, 2005 (File
No. 033-87270).
10.21 Joinder Number 2005-1 to Tax Sharing Agreement, dated January 20, 2006,
between ING USA Annuity and Life Insurance Company and ING America
Insurance Holdings Inc., incorporated by reference from Exhibit 10. to ING
USA Annuity and Life Insurance Company's Form 10-Q filed with the SEC on
May 12, 2006 (File No. 001-32625).
10.22 Coinsurance Agreement, effective May 1, 2005, between ING USA Annuity
and Life Insurance Company and Security Life of Denver Insurance Company,
incorporated by reference from Exhibit 10. to ING USA Annuity and Life
Insurance Company's Form 10-Q filed with the SEC on May 13, 2005 (File No.
033-87270).
146
10.23
10.24
+
10.25
+
10.26
+
10.27
14
31.1
+
31.2
+
32.1
+
32.2
+
+
Filed herewith.
Amendment Number 2006-1, dated as of September 11, 2006, to the Services
Agreement between ING USA Annuity and Life Insurance Company and ING
North America Insurance Company, incorporated by reference from Exhibit 10.
to ING USA Annuity and Life Insurance Company's Form 10-Q filed with the
SEC on November 14, 2006 (File No. 001-32625).
Second Amendment, effective as of July 31, 2007, to Services Agreement,
between Golden American Life Insurance Company (nka ING USA Annuity
and Life Insurance Company) & Directed Services Inc. (nka Directed Services
LLC).
Amendment Number 2007-1 to Reciprocal Loan Agreement, dated as of
December 31, 2007, between ING USA and ING America Insurance Holdings,
Inc.
Amendment Number 2007-1 to Services Agreement, dated as of December 31,
2007, between ING USA and the affiliated companies listed on Exhibit B to the
Agreement.
ING USA Guaranteed Funding Agreement, effective August 10, 2007, issued
by ING USA Annuity and Life Insurance Company to Lion Connecticut
Holdings, Inc., incorporated by reference from Exhibit 10.2 to ING USA
Annuity and Life Insurance Company's Form 10-Q filed with the SEC on
November 13, 2007 (File No. 001-32625).
Computation of Ratio of Earnings to Fixed Charges, filed herewith.
ING Code of Ethics for Financial Professionals, incorporated by reference from
Exhibit 14 to ING USA Annuity and Life Insurance Company's Form 10-K
filed with the SEC on March 29, 2004 (File No. 033-87270).
Certificate of David A. Wheat pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
Certificate of Harry N. Stout pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
Certificate of David A. Wheat pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
Certificate of Harry N. Stout pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
147
Exhibit 12
ING USA ANNUITY AND LIFE INSURANCE COMPANY
COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO
2007
2006
2005
2004
2003
Earnings:
1.
Income before income taxes and cumulative
effect of changes in accounting principles
$ 127.4
$ 276.6
$ 224.1
$ 173.6
$ 56.5
Fixed Charges:
2.
Interest expense
32.5
30.3
29.6
5.1
8.2
3.
Interest factor on rental expense
5.5
6.5
8.0
5.0
5.3
4.
Interest credited to contractowners
1,067.0
980.8
946.5
903.6
896.7
5.
Net (undistributed) distributed income from
equity investees
(11.7)
(1.7)
(1.6)
(1.8)
13.7
6.
Total fixed charges (2 + 3 + 4 + 5)
1,093.3
1,015.9
982.5
911.9
923.9
7.
Total fixed charges excluding interest
credited to contractowners (6 - 4)
26.3
35.1
36.0
8.3
27.2
8.
Earnings and fixed charges (1 + 6)
1,220.7
1,292.5
1,206.6
1,085.5
980.4
9.
Earnings and fixed charges, excluding
interest credited to contractowners (1 + 7)
153.7
311.7
260.1
181.9
83.7
Ratios:
10. Earnings and fixed charges, to total fixed charges (8 / 6)
1.1
1.3
1.2
1.2
1.1
11. Earnings and fixed charges, excluding interest credited to
contractowners to total fixed charges (9 / 7)
5.8
8.9
7.2
21.9
3.1
12. Deficiency of earnings to fixed charges (6 - 8)*
$ -
$ -
$ -
$ -
$ -
*Represents additional earnings that would be necessary to result in a one to one ratio of earnings to fixed charges.
NM - Not meaningful.
Exhibit 31.1
CERTIFICATION
I, David A. Wheat, certify that:
1.
I have reviewed this annual report on Form 10-K of ING USA Annuity and Life Insurance Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
Date:
March 25, 2008
By: /s/
David A. Wheat
David A. Wheat
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Exhibit 31.2
CERTIFICATION
I, Harry N. Stout, certify that:
1.
I have reviewed this annual report on Form 10-K of ING USA Annuity and Life Insurance Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
Date:
March 25, 2008
By: /s/
Harry N. Stout
Harry N. Stout
President
(Duly Authorized Officer and Principal Officer)
Exhibit 32.1
CERTIFICATION
Pursuant to 18 U.S.C. §1350, the undersigned officer of ING USA Annuity and Life Insurance
Company (the "Company") hereby certifies that, to the officer's knowledge, the Company's
Annual Report on Form 10-K for the year ended December 31, 2007 (the "Report") fully
complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange
Act of 1934 and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
March 25, 2008
By: /s/
David A. Wheat
(Date)
David A. Wheat
Executive Vice President and
Chief Financial Officer
Exhibit 32.2
CERTIFICATION
Pursuant to 18 U.S.C. §1350, the undersigned officer of ING USA Annuity and Life Insurance
Company (the "Company") hereby certifies that, to the officer's knowledge, the Company's
Annual Report on Form 10-K for the year ended December 31, 2007 (the "Report") fully
complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange
Act of 1934 and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
March 25, 2008
By: /s/
Harry N. Stout
(Date)
Harry N. Stout
President
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended
March 31, 2008
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
___________________
to
____________________
Commission File Number:
333-133154, 333-133076, 333-133156, 333-133153, 333-133155,
333-133152
ING USA ANNUITY AND LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Iowa
41-0991508
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
1475 Dunwoody Drive
19380-1478
West Chester, Pennsylvania
(Zip Code)
(Address of principal executive offices)
(610) 425-3400
(Registrant's telephone number, including area code)
(
Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
No
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the
definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer
£
Accelerated filer
£
Non-accelerated filer
Smaller reporting company
£
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
¨
No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 250,000 shares of Common Stock, $10 par
value, as of May 12, 2008, are authorized, issued, and outstanding, all of which were directly owned by Lion Connecticut Holdings Inc.
NOTE: WHEREAS ING USA ANNUITY AND LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION
H(1)(a) AND (b) OF FORM 10-Q, THIS FORM IS BEING FILED WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL
INSTRUCTION H(2).
1
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Form 10-Q for the period ended March 31, 2008
INDEX
PART I.
FINANCIAL INFORMATION (UNAUDITED)
PAGE
Item 1.
Financial Statements:
Condensed Statements of Operations
3
Condensed Balance Sheets
4
Condensed Statements of Changes in Shareholder's Equity
6
Condensed Statements of Cash Flows
7
Notes to Condensed Financial Statements
8
Item 2.
Management's Narrative Analysis of the Results of Operations and
24
Financial Condition
Item 4.
Controls and Procedures
48
PART II.
OTHER INFORMATION
Item 1.
Legal Proceedings
49
Item 1A.
Risk Factors
49
Item 6.
Exhibits
49
Signature
50
Exhibit Index
51
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
PART I. FINANCIAL INFORMATION (UNAUDITED)
Item 1. Financial Statements
Condensed Statements of Operations
(Unaudited)
(In millions)
Three Months Ended March 31,
2008
2007
Revenues:
Net investment income
$ 373.3
$ 301.3
Fee income
322.4
267.9
Premiums
4.7
5.0
Net realized capital losses
(271.1)
(61.9)
Other income
0.6
0.1
Total revenue
429.9
512.4
Benefits and expenses:
Interest credited and other benefits
to contractowners
266.0
246.2
Operating expenses
71.9
58.9
Net amortization of deferred policy acquisition
costs and value of business acquired
191.6
96.5
Interest expense
7.5
7.2
Other expense
6.2
7.0
Total benefits and expenses
543.2
415.8
(Loss) income before income taxes
(113.3)
96.6
Income tax (benefit) expense
(51.4)
26.9
Net (loss) income
$ (61.9)
$ 69.7
The accompanying notes are an integral part of these financial statements.
3
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Condensed Balance Sheets
(In millions, except share data)
As of
As of
March 31,
December 31,
2008
2007
(Unaudited)
Assets
Investments:
Fixed maturities, available-for-sale, at fair value
(amortized cost of $21,840.7 at 2008 and $21,945.0 at 2007)
$ 21,105.0
$ 21,833.4
Equity securities, available-for-sale, at fair value
(cost of $235.5 at 2008 and $216.6 at 2007)
224.7
211.1
Short-term investments
162.2
188.0
Mortgage loans on real estate
3,849.5
3,701.7
Policy loans
154.1
155.8
Limited partnerships/corporations
472.4
454.5
Other investments
268.6
394.1
Securities pledged (amortized cost of $1,009.8 at 2008 and $953.3 at 2007)
991.0
942.6
Total investments
27,227.5
27,881.2
Cash and cash equivalents
1,412.5
204.4
Short-term investments under securities loan agreement,
including collateral delivered
201.8
128.5
Accrued investment income
242.0
216.9
Receivable for securities sold
29.1
4.6
Deposits and reinsurance recoverable from affiliates
4,610.2
4,616.1
Deferred policy acquisition costs
3,044.7
2,908.4
Value of business acquired
149.0
128.7
Sales inducements to contractowners
666.5
645.4
Due from affiliates
76.3
22.9
Deferred income tax asset
39.3
-
Other assets
42.4
41.3
Assets held in separate accounts
42,774.5
44,477.8
Total assets
$ 80,515.8
$ 81,276.2
The accompanying notes are an integral part of these financial statements.
4
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Condensed Balance Sheets
(In millions, except share data)
As of
As of
March 31,
December 31,
2008
2007
(Unaudited)
Liabilities and Shareholder's Equity
Future policy benefits and claims reserves
$ 31,657.7
$ 31,461.6
Payable for securities purchased
21.2
-
Collateral held, including payables under securities loan agreement
136.0
140.0
Borrowed money
660.7
715.5
Notes to affiliates
435.0
435.0
Due to affiliates
132.4
95.6
Current income taxes
61.9
40.7
Deferred income taxes
-
184.5
Other liabilities
803.0
606.5
Liabilities related to separate accounts
42,774.5
44,477.8
Total liabilities
76,682.4
78,157.2
Shareholder's equity:
Common stock (250,000 shares authorized, issued,
and outstanding; $10 per share value)
2.5
2.5
Additional paid-in capital
5,233.3
4,132.7
Accumulated other comprehensive loss
(485.0)
(160.7)
Retained earnings (deficit)
(917.4)
(855.5)
Total shareholder's equity
3,833.4
3,119.0
Total liabilities and shareholder's equity
$ 80,515.8
$ 81,276.2
The accompanying notes are an integral part of these financial statements.
5
The accompanying notes are an integral part of these financial statements.
6
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Condensed Statements of Cash Flows
(Unaudited)
(In millions)
Three Months Ended March 31,
2008
2007
Net cash provided by operating activities
$ 354.6
$ 371.4
Cash Flows from Investing Activities:
Proceeds from the sale, maturity, or redemption of:
Fixed maturities, available-for-sale
1,916.3
3,072.3
Equity securities, available-for-sale
1.7
4.6
Mortgage loans on real estate
97.3
185.3
Acquisition of:
Fixed maturities, available-for-sale
(1,937.9)
(3,683.0)
Equity securities, available-for-sale
(20.2)
(28.0)
Mortgage loans on real estate
(245.0)
(147.7)
Derivatives, net
108.9
(22.3)
Limited partnerships, net
(26.3)
(15.8)
Short-term investments, net
26.3
91.4
Collateral delivered
(77.3)
-
Other investments, net
(0.3)
3.9
Other, net
1.7
1.5
Net cash used in investing activities
(154.8)
(537.8)
Cash Flows from Financing Activities:
Deposits received for investment contracts
1,880.5
1,332.8
Maturities and withdrawals from investment contracts
(1,956.5)
(1,385.5)
Reinsurance recoverable on investment contracts
39.1
(56.8)
Short-term loans to affiliate
-
(45.0)
Short-term borrowings
(54.8)
(86.7)
Capital contribution from Parent
1,100.0
-
Net cash provided by (used in) financing activities
1,008.3
(241.2)
Net increase (decrease) in cash and cash equivalents
1,208.1
(407.6)
Cash and cash equivalents, beginning of period
204.4
608.6
Cash and cash equivalents, end of period
$ 1,412.5
$ 201.0
The accompanying notes are an integral part of these financial statements.
7
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
1. Organization and Significant Accounting Policies
Basis of Presentation
ING USA Annuity and Life Insurance Company ("ING USA" or the "Company," as
appropriate) is a stock life insurance company domiciled in the State of Iowa and
provides financial products and services in the United States. ING USA is authorized to
conduct its insurance business in all states, except New York, and the District of
Columbia.
ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.
("Lion" or "Parent"), which is an indirect, wholly-owned subsidiary of ING Groep N.V.
("ING"). ING is a global financial services holding company based in The Netherlands,
with American Depository Shares listed on the New York Stock Exchange under the
symbol "ING".
The condensed financial statements and notes as of March 31, 2008, and for the three
months ended March 31, 2008 and 2007, have been prepared in accordance with
accounting principles generally accepted in the United States ("US GAAP") and are
unaudited.
The condensed financial statements reflect all adjustments (consisting only of normal,
recurring accruals) which are, in the opinion of management, necessary for the fair
presentation of the financial position, results of operations, and cash flows, for the interim
periods. These condensed financial statements and notes should be read in conjunction
with the financial statements and related notes as presented in the Company's 2007
Annual Report on Form 10-K. The results of operations for the interim periods may not
be considered indicative of results to be expected for the full year.
Description of Business
The Company offers various insurance products, including immediate and deferred
variable and fixed annuities. The Company's annuity products are distributed by national
wirehouses, regional securities firms, independent broker-dealers, banks, life insurance
companies with captive agency sales forces, independent insurance agents, independent
marketing organizations, and an affiliated broker-dealer network.  The Company's
primary annuity customers are individual consumers.
The Company also offers guaranteed investment contracts and funding agreements
(collectively referred to as "GICs"), sold primarily to institutional investors and corporate
benefit plans.  These products are marketed by home office personnel or through
specialty insurance brokers.
8
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the amounts reported in the
condensed financial statements and accompanying notes. Actual results could differ from
reported results using those estimates.
Reclassifications
Certain reclassifications have been made to prior year financial information to conform to
the current year classifications.
Significant Accounting Policies
For a description of significant accounting policies, see the Organization and Significant
Accounting Policies footnote to the Financial Statements included in the Company's
2007 Annual Report on Form 10-K.  There have been no material changes to the
Company's significant accounting policies since the filing of the Company's 2007
Annual Report on Form 10-K, except as noted in the Recently Adopted Accounting
Standards footnote.
2. Recently Adopted Accounting Standards
Fair Value Measurements
In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("FAS") No. 157, "Fair Value
Measurements" ("FAS No. 157"). FAS No. 157 provides guidance for using fair value to
measure assets and liabilities whenever other standards require (or permit) assets or
liabilities to be measured at fair value.  FAS No. 157 does not expand the use of fair
value to any new circumstances.
Under FAS No. 157, the FASB clarifies the principle that fair value should be based on
the assumptions market participants would use when pricing the asset or liability. In
support of this principle, FAS No. 157 establishes a fair value hierarchy that prioritizes
the information used to develop such assumptions. The fair value hierarchy gives the
highest priority to quoted prices in active markets and the lowest priority to unobservable
data. FAS No. 157 also requires separate disclosure of fair value measurements by level
within the hierarchy and expanded disclosure of the effect on earnings for items
measured using unobservable data.
9
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
FAS 157 was adopted by the Company on January 1, 2008. As a result of implementing
FAS 157, the Company recognized $69.6, before tax, as an increase to Net income on the
date of adoption related to the fair value measurements of investment contract guarantees.
The impact of implementation was included in Interest credited and other benefits to
contractholders on the Condensed Statements of Operations. The Company recognized
no other adjustments to its financial statements related to the adoption of FAS 157, and
new disclosures are included in the Financial Instruments footnote.
The Fair Value Option for Financial Assets and Financial Liabilities
In February 2007, the FASB issued FAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities" ("FAS No. 159"), which allows a company to make an
irrevocable election, on specific election dates, to measure eligible items at fair value
with unrealized gains and losses recognized in earnings at each subsequent reporting
date. The election to measure an item at fair value may be determined on an instrument
by instrument basis, with certain exceptions.  If the fair value option is elected, any
upfront costs and fees related to the item will be recognized in earnings as incurred.
Items eligible for the fair value option include:
§
Certain recognized financial assets and liabilities;
§
Rights and obligations under certain insurance contracts that are not financial instruments;
§
Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and
§
Certain commitments.
FAS No. 159 was adopted by the Company on January 1, 2008. In implementing FAS
No. 159, the Company however, elected not to take the fair value option for any eligible
assets or liabilities in existence on January 1, 2008.
Offsetting of Amounts Related to Certain Contracts
On April 30, 2007, the FASB issued a Staff Position on FASB Interpretation No. 39,
"Offsetting of Amounts Related to Certain Contracts" ("FSP FIN 39-1"), which permits a
reporting entity to offset fair value amounts recognized for the right to reclaim or the
obligation to return cash collateral against fair value amounts recognized for derivative
instruments under master netting arrangements. FSP FIN 39-1 had no effect on the
financial condition, results of operations, or cash flows upon adoption by the Company
on January 1, 2008, as it is the Company's accounting policy to not offset such fair value
amounts.
10
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
Accounting for Uncertainty in Income Taxes
In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes" ("FIN 48"), which creates a single model to address the accounting for
the uncertainty in income tax positions recognized in a company's financial statements.
FIN 48 prescribes a recognition threshold and measurement criteria that must be satisfied
to recognize a financial statement benefit of tax positions taken, or expected to be taken,
on an income tax return.  Additionally, FIN 48 provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure, and
transition.
FIN 48 was adopted by the Company on January 1, 2007. As a result of implementing
FIN 48, the Company recognized a cumulative effect of change in accounting principle of
$1.7 as a reduction to January 1, 2007 Retained earnings (deficit).
Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection
With Modifications or Exchanges of Insurance Contracts
In September 2005, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position ("SOP") 05-1, "Accounting by Insurance Enterprises for
Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance
Contracts" ("SOP 05-1"), which states that when an internal replacement transaction
results in a substantially changed contract, the unamortized deferred acquisition costs,
unearned revenue liabilities, and deferred sales inducement assets, related to the replaced
contract should not be deferred in connection with the new contract.  Contract
modifications that meet various conditions defined by SOP 05-1 and result in a new
contract that is substantially unchanged from the replaced contract, however, should be
accounted for as a continuation of the replaced contract.
SOP 05-1 defines an internal replacement as a modification in product benefits, features,
rights, or coverage, that occurs by the exchange of a contract for a new contract, by
amendment, endorsement, or rider, to a contract, or by the election of a feature or
coverage within a contract. SOP 05-1 applies to internal replacements made primarily to
contracts defined by FAS No. 60, "Accounting and Reporting by Insurance Enterprises"
("FAS No. 60"), as short-duration and long-duration insurance contracts, and by FAS No.
97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration
Contracts and for Realized Gains and Losses from the Sale of Investments" ("FAS No.
97"), as investment contracts.
11
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for internal
replacements occurring on or after that date. As a result of implementing SOP 05-1, the
Company recognized a cumulative effect of change in accounting principle of $4.8,
before tax, or $3.1, net of $1.7 of income taxes, as a reduction to January 1, 2007
Retained earnings (deficit). In addition, the Company revised its accounting policy on
the amortization of deferred policy acquisition costs ("DAC") and value of business
acquired ("VOBA") to include internal replacements.
3.
New Accounting Pronouncements
Disclosures about Derivative Instruments and Hedging Activities
In March 2008, the FASB issued FAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS No. 161"), which requires enhanced disclosures about
objectives and strategies for using derivatives, fair value amounts of and gains and losses on derivative instruments, and credit-risk-related contingent features in derivative agreements, including:
§
How and why derivative instruments are used;
§
How derivative instruments and related hedged items are accounted for under FAS No. 133,"Accounting for Derivative Instruments and Hedging Activities" ("FAS
No. 133"), and its related interpretations; and
§
How derivative instruments and related hedged items affect an entity's financial statements.
The provisions of FAS No. 161 are effective for financial statements issued for fiscal years and interim periods after November 15, 2008, with early application encouraged. The Company is in
the process of determining the impact of adoption of FAS No. 161 for its derivative instruments. The Company's derivatives, however, are generally not accounted for using hedge accounting treatment under FAS No. 133, as the Company has not
historically sought hedge accounting treatment.
Business Combinations
In December 2007, the FASB issued FAS No. 141 (revised 2007), "Business Combinations" ("FAS No. 141R"), which replaces FAS No. 141, "Business Combinations," as
issued in 2001. FAS No. 141R requires most identifiable assets, liabilities, noncontrolling interest, and goodwill, acquired in a business combination to be recorded at full fair value as of the acquisition date, even for acquisitions achieved in
stages. In addition, the statement requires:
12
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
§
Acquisition-related costs to be recognized separately and generally expensed;
§
Non-obligatory restructuring costs to be recognized separately when the liability is incurred;
§
Contractual contingencies acquired to be recorded at acquisition-date fair values;
§
A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a
gain; and
§
The nature and financial effects of the business combination to be disclosed.
FAS No. 141R also amends or eliminates various other authoritative literature.
The provisions of FAS No. 141R are effective for fiscal years beginning on or after
December 15, 2008 for all business combinations occurring on or after that date.  As
such, this standard will impact any Company acquisitions that occur on or after
January 1, 2009.
4.
Financial Instruments
Fair Value Measurements
FAS No. 157 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances
disclosure requirements for fair value measurements.
Fair Value Hierarchy
The Company has categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique.
The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.
Financial assets and liabilities recorded at fair value on the Condensed Balance Sheets are categorized as follows:
§
Level 1 - Unadjusted quoted prices for identical assets or liabilities in an active market.
§
Level 2 - Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.
13
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
Level 2 inputs include the following:
a)
Quoted prices for similar assets or liabilities in active markets;
b)
Quoted prices for identical or similar assets or liabilities in non-active markets;
c)
Inputs other than quoted market prices that are observable; and
d)
Inputs that are derived principally from or corroborated by observable market data through correlation or other means.
§
Level 3 - Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These valuations, whether derived internally or
obtained from a third party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability.
The following table presents the Company's hierarchy for its assets and liabilities
measured at fair value on a recurring basis as of March 31, 2008.
(1)
Level 3 assets and liabilities accounted for 1.3% of total assets and liabilities measured at fair value on a recurring basis. Excluding separate accounts assets for which the
policyholder bears the risk, the Level 3 assets and liabilities in relation to total assets and liabilities measured at fair value on a recurring basis totaled 3.7%.
14
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
The following valuation methods and assumptions were used by the Company in
estimating the fair value of the following financial instruments:
Fixed maturities, available-for-sale
: The fair values for the actively traded marketable
bonds are determined based upon the quoted market prices or dealer quotes.  The fair
values for marketable bonds without an active market are obtained through several
commercial pricing services, which provide the estimated fair values.  Fair values of
privately placed bonds are determined using a matrix-based pricing model. The model
considers the current level of risk-free interest rates, current corporate spreads, the credit
quality of the issuer, and cash flow characteristics of the security. Also considered are
factors such as the net worth of the borrower, the value of collateral, the capital structure
of the borrower, the presence of guarantees, and the Company's evaluation of the
borrower's ability to compete in their relevant market.  Using this data, the model
generates estimated market values which the Company considers reflective of the fair
value of each privately placed bond.
Equity securities, available-for-sale
: Fair values of these securities are based upon quoted
market price.
Cash and cash equivalents and Short-term investments under securities loan agreement
:
The carrying amounts for cash reflect the assets' fair values.  The fair values for cash
equivalents and short-term investments are determined based on quoted market prices.
Assets held in separate accounts
: Assets held in separate accounts are reported at the
quoted fair values of the underlying investments in the separate accounts.
Other financial instruments reported as assets and liabilities
: The carrying amounts for
these financial instruments (primarily derivatives) reflect the fair value of the assets and
liabilities. Derivatives are carried at fair value (on the Condensed Balance Sheets), which
is determined using the Company's derivative accounting system in conjunction with key
financial data from third party sources or through values established by third party
brokers.
Investment contract guarantees
: The Company records liabilities, which can be either
positive or negative, for annuity contracts containing guaranteed riders for GMABs and
GMWBs without life contingencies in accordance with FAS No. 133. The guarantee is
treated as an embedded derivative and is required to be reported separately from the host
variable annuity contract. The fair value of the obligation is calculated based on actuarial
and capital market assumptions related to the projected cash flows, including benefits and
related contract charges, over the anticipated life of the related contracts. The cash flow
estimates are produced by using stochastic techniques under a variety of market return
scenarios and other best estimate assumptions.
15
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
The Company also records for its FIA contracts an embedded derivative liability for
interest payments to contractholders above the minimum guaranteed interest rate, in
accordance with FAS No. 133. The guarantee is treated as an embedded derivative and is
required to be reported separately from the host contract. The fair value of the obligation
is calculated based on actuarial and capital market assumptions related to the projected
cash flows, including benefits and related contract charges, over the anticipated life of the
related contracts. The cash flow estimates are produced by best estimate assumptions.
The following table summarizes the changes in fair value of the Company's Level 3
assets and liabilities as of March 31, 2008.
(1)
This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations.
(2)
The amounts in this line are included in Accumulated other comprehensive income (loss) on the Condensed Balance Sheets.
(3)
This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations and contains unrealized gains (losses) on Level 3 derivatives held at March
31, 2008. All gains and losses on Level 3 assets are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately by security.
(4)
These amounts are included in Interest credited and other benefits to contractowners on the Condensed Statements of Operations. All gains and losses on Level 3 liabilities are
classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis.
16
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
5. Investments
Other-Than-Temporary Impairments
The following table identifies the Company's other-than-temporary impairments by type
for the three months ended March 31, 2008 and 2007.
Three Months Ended March 31,
2008
2007
No. of
No. of
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
-
$ -
*
1
U.S. corporate
26.9
50
6.3
26
Foreign
(1)
39.8
24
2.2
8
Residential mortgage-backed
15.4
7
0.2
4
Other asset-backed
27.6
23
-
-
Limited partnerships
0.5
1
-
-
Total
$ 110.2
105
$ 8.7
39
(1)
Primarily U.S. dollars denominated.
*
Less than $0.1.
The above schedule includes $50.8 and $0.2 in other-than-temporary write-downs for the
three months ended March 31, 2008 and 2007, respectively, related to the analysis of
credit risk, the possibility of significant prepayment risk, and severity and duration of
unrealized losses.  The remaining write-downs are related to investments that the
Company does not have the intent to retain for a period of time sufficient to allow for
recovery in fair value. The following table summarizes these write-downs by type for the
three months ended March 31, 2008 and 2007.
Three Months Ended March 31,
2008
2007
No. of
No. of
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
- $
-
*
1
U.S. corporate
19.5
39
6.3
26
Foreign
(1)
39.8
24
2.2
8
Residential mortgage-backed
0.1
2
-
-
Total
$ 59.4
65 $
8.5
35
(1)
Primarily U.S. dollars denominated.
*
Less than $0.1.
17
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
The remaining fair value of fixed maturities with other-than-temporary impairments as of
March 31, 2008 and 2007 was $2,473.3 and $798.1, respectively.
The Company may sell securities during the period in which fair value has declined
below amortized cost for fixed maturities or cost for equity securities.  In certain
situations new factors, including changes in the business environment, can change the
Company's previous intent to continue holding a security.
6. Deferred Policy Acquisition Costs and Value of Business Acquired
Activity within DAC was as follows for the three months ended March 31, 2008 and
2007.
2008 2007
Balance at January 1
$ 2,908.4
$ 2,669.9
Deferrals of commissions and expenses
214.6
139.8
Amortization:
Amortization
(237.9)
(134.3)
Interest accrued at 5% to 6%
43.3
38.1
Net amortization included in the Condensed
Statements of Operations
(194.6)
(96.2)
Change in unrealized capital (gains) losses on
available-for-sale securities
116.3
(36.9)
Implementation of SOP 05-1
-
(4.8)
Balance at March 31
$ 3,044.7
$ 2,671.8
Activity within VOBA was as follows for the three months ended March 31, 2008 and
2007.
18
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
During the first quarter of 2008, the Company revised and unlocked the assumptions
related to mutual fund revenue and to the gross profit projections for separate account
returns for its annuity products, resulting in a $70.8 increase in amortization of DAC and
VOBA.
During the first quarter of 2007, the Company revised and unlocked the mutual fund
revenue assumption for its annuity products, resulting in a $20.1 reduction in Net
amortization of DAC and VOBA for the three months ended March 31, 2007.
7.
Capital Contributions and Distributions
During the three months ended March 31, 2008, the Company received a $1.1 billion capital contribution from its Parent. During the three months ended March 31, 2007, the Company did not
receive any capital contributions from its Parent.
During the three months ended March 31, 2008 and 2007, the Company did not pay any dividends or return of capital distributions to its Parent.
8.
Income Taxes
The Company's effective tax rates for the three months ended March 31, 2008 and 2007 were (45.4)% and 27.8%, respectively. The effective rates differ from the expected rate primarily
due to the benefit from the dividends received deduction. The decrease in the effective rate from March 31, 2007 to 2008 is primarily due to pre-tax loss and an increase in the deduction allowed for dividends received.
Temporary Differences
At March 31, 2008 and December 31, 2007, the Company had a valuation allowance of $46.9 related to unrealized capital losses on investments, which is included in Accumulated other
comprehensive income (loss).
Unrecognized Tax Benefits
In the first quarter of 2008, the Internal Revenue Service ("IRS") finalized the audit of tax year 2003. The 2003 settlement did not have a material impact on the Company's
financial position. The IRS is currently examining tax years 2002, 2004, 2005 and 2006. In addition, the Company and the IRS have agreed to enter the Compliance Assurance Program ("CAP") for tax year 2008.
19
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
9.
Financing Agreements
Reciprocal Loan Agreement
The Company maintains a reciprocal loan agreement with ING America Insurance Holdings, Inc. ("ING AIH"), an affiliate, to facilitate the handling of unanticipated short- term cash
requirements that arise in the ordinary course of business. Under this agreement, which became effective in January 2004 and expires on January 14, 2014, either party can borrow from the other up to 3.0% of the Company's statutory admitted assets as
of the preceding December 31. Interest on any ING USA borrowing is charged at the rate of ING AIH's cost of funds for the interest period, plus 0.15%. Interest on any ING AIH borrowing is charged at a rate based on the prevailing interest rate
of U.S. commercial paper available for purchase with a similar duration.
Under this agreement, the Company incurred $0.3 interest expense for the three months ended March 31, 2008 and minimal interest expense for the three months ended March 31, 2007. The
Company earned interest income of $0.6 and $2.6 for the three months ended March 31, 2008 and 2007, respectively. Interest expense and income are included in Interest expense and Net investment income, respectively, on the Condensed
Statements of Operations. As of March 31, 2008 and December 31, 2007, the Company had no amounts due to or due from ING AIH under the reciprocal loan agreement.
For information on the Company's additional financing agreements, see the Financing Agreements footnote to the Financial Statements included in the Company's 2007 Annual Report on
Form 10-K.
10.
Commitments and Contingent Liabilities
Commitments
Through the normal course of investment operations, the Company commits to either purchase or sell securities, commercial mortgage loans, or money market instruments, at a specified future
date and at a specified price or yield. The inability of counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a change in the value of the securities underlying the
commitments.
At March 31, 2008, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $672.8, $258.9 of which was with related parties. At December
31, 2007, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $616.3, $156.5 of which was with related parties. During the three months ended March 31, 2008, $67.2 was funded to related
parties under these commitments.
20
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
Financial Guarantees
The Company owns a 3-year credit-linked note arrangement, whereby the Company will
reimburse the guaranteed party upon payment default of the referenced obligation. Upon
such default, the Company will reimburse the guaranteed party for the loss under the
reference obligation, and the Company receives that reference obligation in settlement.
The Company can seek recovery of any losses under the agreements by sale or collection
of the received reference obligation. As of March 31, 2008, the maximum liability of the
Company under the guarantee was $32.5.
Cash Collateral
Under the terms of the Company's Over-The-Counter Derivative International Swaps and
Derivatives Association, Inc. Agreements ("ISDA Agreements"), the Company may
receive from, or deliver to, counterparties, collateral to assure that all terms of the ISDA
Agreements will be met with regard to the Credit Support Annex ("CSA"). The terms of
the CSA call for the Company to pay interest on any cash received equal to the Federal
Funds rate.  As of March 31, 2008, the Company delivered $65.8 of cash collateral,
which was included in Short-term investments under securities loan agreement, including
collateral delivered, on the Condensed Balance Sheets. As of December 31, 2007, the
Company held $11.5 of cash collateral, which was included in Collateral held, including
payables under securities loan agreement on the Balance Sheets and was reinvested in
short-term investments.
Litigation
The Company is involved in threatened or pending lawsuits/arbitrations arising from the
normal conduct of business.  Due to the climate in insurance and business
litigation/arbitrations, suits against the Company sometimes include claims for substantial
compensatory, consequential, or punitive damages, and other types of relief. Moreover,
certain claims are asserted as class actions, purporting to represent a group of similarly
situated individuals.  While it is not possible to forecast the outcome of such
lawsuits/arbitrations, in light of existing insurance, reinsurance, and established reserves,
it is the opinion of management that the disposition of such lawsuits/arbitrations will not
have a materially adverse effect on the Company's operations or financial position.
21
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
Regulatory Matters
As with many financial services companies, the Company and its affiliates have received
informal and formal requests for information from various state and federal governmental
agencies and self-regulatory organizations in connection with inquiries and investigations
of the products and practices of the financial services industry.  In each case, the
Company and its affiliates have been and are providing full cooperation. For information
on the focus of such regulatory inquiries and the actions undertaken by ING in
connection therewith, see the Other Regulatory Matters section of the Commitments and
Contingent Liabilities footnote to the Financial Statements included in the Company's
2007 Annual Report on Form 10-K.
11.
Accumulated Other Comprehensive Income (Loss)
Shareholder's equity included the following components of Accumulated other
comprehensive income (loss) as of March 31, 2008 and 2007.
2008
2007
Net unrealized capital gains (losses):
Fixed maturities, available-for-sale
$ (754.5)
$ 43.3
Equity securities, available-for-sale
(10.8)
2.3
DAC/VOBA adjustment on available-for-sale securities
96.8
(19.0)
Sales inducements adjustment on available-for-sale securities
4.8
(0.2)
Other investments
(5.8)
(5.4)
Unrealized capital (losses) gains, before tax
(669.5)
21.0
Deferred income tax asset (liability)
234.3
(7.3)
Deferred tax liability valuation allowance
(46.9)
-
Net unrealized capital (losses) gains
(482.1)
13.7
Pension liability, net of tax
(2.9)
(5.1)
Accumulated other comprehensive (loss) income
$ (485.0)
$ 8.6
22
ING USA Annuity and Life Insurance Company
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Condensed Financial Statements (Unaudited)
(Dollar amounts in millions, unless otherwise stated)
Changes in Accumulated other comprehensive income (loss), net of DAC, VOBA, and
tax (excluding the tax valuation allowance), related to changes in unrealized capital gains
(losses) on securities, including securities pledged, were as follows for the three months
ended March 31, 2008 and 2007.
2008
2007
Net unrealized capital holding gains (losses) arising
during the period
(1)
$ (374.7)
$ 11.8
Less: reclassification adjustment for gains (losses) and
other items included in Net income
(2)
(50.4)
(8.9)
Net change in unrealized capital gains (losses) on securities
$ (324.3)
$ 20.7
(1)
Pretax net unrealized capital holding gains (losses) arising during the period were $(576.5) and $18.2 for the three months ended March 31, 2008 and 2007,
respectively.
(2)
Pretax reclassification adjustments for gains (losses) and other items included in Net income were $(77.6) and $(13.6) for the three months ended March 31, 2008 and 2007,
respectively.
23
Item 2. Management's Narrative Analysis of the Results of Operations and Financial
Condition
(Dollar amounts in millions, unless otherwise stated)
Overview
The following narrative analysis presents a review of the results of operations of ING
USA Annuity and Life Insurance Company ("ING USA" or the "Company", as
appropriate) for each of the three months ended March 31, 2008 and 2007, and
financial condition as of March 31, 2008 and December 31, 2007. This item should
be read in its entirety and in conjunction with the condensed financial statements and
related notes, which can be found under Part I, Item 1. contained herein, as well as the
"Management's Narrative Analysis of the Results of Operations and Financial
Condition" section contained in the Company's 2007 Annual Report on Form 10-K.
Forward-Looking Information/Risk Factors
In connection with the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the Company cautions readers regarding certain forward-
looking statements contained in this report and in any other statements made by, or on
behalf of, the Company, whether or not in future filings with the Securities and
Exchange Commission ("SEC"). Forward-looking statements are statements not
based on historical information and which relate to future operations, strategies,
financial results, or other developments. Statements using verbs such as "expect,"
"anticipate," "believe," or words of similar import, generally involve forward-looking
statements.  Without limiting the foregoing, forward-looking statements include
statements that represent the Company's beliefs concerning future levels of sales and
redemptions of the Company's products, investment spreads and yields, or the
earnings and profitability of the Company's activities.
Forward-looking statements are necessarily based on estimates and assumptions that
are inherently subject to significant business, economic, and competitive uncertainties
and contingencies, many of which are beyond the Company's control and many of
which are subject to change.  These uncertainties and contingencies could cause
actual results to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company. Whether or not actual results
differ materially from forward-looking statements may depend on numerous
foreseeable and unforeseeable developments, including, but not limited to the
following:
(1)
Equity market volatility could negatively impact profitability and financial condition;
(2)
Changes in interest rates could have a negative impact on profitability and financial condition;
24
(3)
The Company's investment portfolio is subject to risks that may reduce the value of invested assets and adversely affect sales, profitability, and investment returns credited to
contractowners;
(4)
Changes in underwriting and actual experience could materially affect profitability;
(5)
Changes in reserve estimates may reduce profitability;
(6)
A downgrade in the Company's ratings may negatively affect profitability and financial condition;
(7)
The continued availability of capital may affect the ability to grow;
(8)
The Company's results of operations and financial condition may be adversely affected by general economic and business conditions or adverse capital market conditions that are less
favorable than anticipated;
(9)
A loss of key product distribution relationships could materially affect sales;
(10)
Competition could negatively affect the ability to maintain or increase profitability;
(11)
Changes in federal income tax law or interpretations of existing tax law could affect profitability and financial condition by making some products less attractive to contractowners and
increasing tax costs of contractowners or the Company;
(12)
Litigation may adversely affect profitability and financial condition;
(13)
Changes in regulation in the United States and recent regulatory investigations may reduce profitability;
(14)
The Company's products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability;
(15)
A failure of the Company's operating systems or a compromise of security with respect to operating systems or portable electronic devices could adversely affect the Company's
results of operations and financial condition;
(16)
Reinsurance subjects the Company to the credit risk of reinsurers and may not be adequate to protect against losses arising from ceded reinsurance;
(17)
The occurrence of natural or man-made disasters may adversely affect the Company's results of operations and financial condition; and
(18)
The occurrence of unidentified or unanticipated risks could negatively affect the Company's business or result in losses.
Investors are also directed to consider the risks and uncertainties discussed in this
Item 2. and in Item 1A. of Part II contained herein, as well as in other documents filed
by the Company with the SEC. Except as may be required by the federal securities
laws, the Company disclaims any obligation to update forward-looking information.
Basis of Presentation
The Company is a stock life insurance company domiciled in the State of Iowa and
provides financial products and services in the United States. ING USA is authorized
to conduct its insurance business in all states, except New York, and in the District of
Columbia.
ING USA is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc.
25
("Lion" or "Parent"), which is an indirect, wholly-owned subsidiary of ING Groep
N.V. ("ING").  ING is a global financial services holding company based in The
Netherlands, with American Depository Shares listed on the New York Stock
Exchange under the symbol "ING".
The Company has one operating segment.
Critical Accounting Policies
There have been no material changes to the Company's critical accounting policies
since the filing of the Company's 2007 Annual Report on Form 10-K.
Results of Operations
Overview
Products offered by the Company include immediate and deferred variable and fixed
annuities, designed to address individual customer needs for tax-advantaged savings,
retirement needs, and wealth-protection concerns, and guaranteed investment
contracts and funding agreements (collectively referred to as "GICs"), sold primarily
to institutional investors and corporate benefit plans.
The Company derives its revenue mainly from (a) fee income generated on variable
assets under management ("AUM"), (b) investment income earned on fixed AUM,
and (c) certain other management fees. Fee income is primarily generated from
separate account assets supporting variable options under variable annuity contract
investments, as designated by contractowners. Investment income from fixed AUM
is mainly generated from annuity products with fixed investment options and GICs.
The Company's expenses primarily consist of (a) interest credited and other benefits
to contractowners, (b) amortization of deferred policy acquisition costs ("DAC") and
value of business acquired ("VOBA"), (c) expenses related to the selling and
servicing of the various products offered by the Company, and (d) other general
business expenses.
Economic Analysis
The current economic environment presents challenges for the Company and the
insurance industry.  The Company's financial results continue to be affected by
economic trends.
26
Equity market performance affects the Company, as fee revenue from variable AUM
is generally impacted by equity market performance as well as other factors. While
the decline in equity market performance presented challenges for the Company's
variable products, the increase in sales during 2007 and the first quarter of 2008
favorably impacted variable AUM in 2008, as compared to the first quarter of 2007.
The changing market interest rate environment during the first quarter of 2008, in
combination with the slow economic growth resulted in a substantial increase in
unrealized and realized losses in 2008, as compared to the same period for 2007.
Results of Operations
The Company's results of operations for the three months ended March 31, 2008, and
changes therein, reflected higher realized capital losses and increased amortization of
DAC and VOBA driven by unfavorable market conditions, as well as, higher interest
credited and other benefits to contractowners and operating expenses. These losses,
however, were partially offset by the impact of the adoption of FAS 157 and by
positive product experience as a result of increased AUM, primarily driven by higher
sales of variable annuity products during 2007 and the first quarter of 2008 and a
higher block of business in force.
27
Revenues
Total revenue for the three months ended March 31, 2008, decreased primarily due to
increases in Net realized capital losses, partially offset by increases in Net investment
income and Fee income.
Net investment income
for the three months ended March 31, 2008, increased as the
result of higher average assets supporting fixed AUM and surplus, which reflects a
larger block of GICs, and fixed indexed annuities in force.
The increase in
Fee income
for the three
months ended March 31, 2008, reflected an
increase in average variable AUM, primarily driven by higher sales of variable
annuities in 2007 and the first quarter of 2008.
Net realized capital losses
increased for the three months ended March 31, 2008,
primarily due to higher losses on derivatives and fixed maturities. The losses on
derivatives were related to interest rate swaps and driven by the decline of LIBOR
rates. The losses on fixed maturities for the three months ended March 31, 2008, were
due to other-than-temporary impairments driven by the slow economic environment
and widening of credit spreads in the first quarter of 2008.
Benefits and Expenses
Total benefits and expenses for the three months ended March 31, 2008, increased
primarily due to higher Net amortization of DAC and VOBA, Interest credited and
other benefits to contractowners and Operating expenses.
The
Net amortization of DAC and VOBA
increased for the three months ended
March 31, 2008, reflecting lower estimated future gross profits driven by the decline
in equity market performance.
Interest credited and other benefits to contractowners
increased for the three months
ended March 31, 2008, primarily driven by the rise in interest credited on GICs
mainly attributable to higher average fixed AUM, as well as an increase in reserves
for variable annuity guarantees, primarily due to the decline in equity market
performance and due to a change in the discount rate on reserves. These increases
were partially offset by the impact of the adoption of FAS 157 and by a decrease in
reserves on fixed indexed annuities due to unfavorable equity market performance in
the first quarter of 2008.
Operating expenses
increased for the three months ended March 31, 2008, primarily
due to higher non-deferred asset-based commissions and marketing expenses, as well
as the continued growth of the business.
28
Income Taxes
Income tax (benefit) expense
decreased for the three months ended March 31, 2008,
primarily due to lower Income before taxes relative to the deduction allowed for
dividends received.
Financial Condition
Investments
Investment Strategy
The Company's investment strategy focuses on diversification by asset class.  The
Company seeks to achieve economic diversification, while reducing overall credit
risk and liquidity risks. In addition, the Company seeks to mitigate the impact of cash
flow variability from embedded options within certain investment products, such as
prepayment options and interest rate options embedded in collateralized mortgage
obligations and call options embedded in corporate bonds.  The investment
management function is centralized under ING Investment Management LLC, an
affiliate, pursuant to an investment advisory agreement.  Separate portfolios are
established for groups of products with similar liability characteristics within the
Company.
Fair Value Measurements
The fair values of Level 3 assets and liabilities are determined using prices or
valuation techniques that require inputs that are both unobservable and significant to
the overall fair value measurement. These valuations, whether derived internally or
obtained from a third party, use critical assumptions that are not widely available to
estimate market participant expectations in valuing the asset or liability. In light of
the methodologies employed to obtain the fair values of financial assets and liabilities
classified as Level 3, additional information is presented below with particular
attention addressed to changes in derivatives, fixed indexed annuities ("FIA"), and
guaranteed minimum withdrawal and accumulation benefits ("GMWB" and
"GMAB") due to their impacts on current Net income.
29
The following table summarizes the changes in fair value of the Company's Level 3
assets and liabilities as of March 31, 2008.
(1)
This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations.
(2)
The amounts in this line are included in Accumulated other comprehensive income (loss) on the Condensed Balance Sheets.
(3)
This amount is included in Net realized capital gains (losses) on the Condensed Statements of Operations and contains unrealized gains (losses) on Level 3 derivatives held at March
31, 2008. All gains and losses on Level 3 assets are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately by security.
(4)
These amounts are included in Interest credited and other benefits to contractowners on the Condensed Statements of Operations. All gains and losses on Level 3 liabilities are
classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis.
The decline in the fair values of FIAs was partially offset by a decline in the value of
Level 3 derivatives that hedge the FIA exposure and an increase in the reserves for
GMWB/GMABs.  The gains on the FIA embedded derivatives and the partially
offsetting losses on GMWBs and GMABs were primarily driven by unfavorable
equity market performance and changes in interest rates during the first quarter of
2008.  In addition, derivatives experienced losses related to unfavorable equity
market performance, resulting in a decline in the fair values of these assets.
30
Portfolio Composition
The following table presents the investment portfolio at March 31, 2008 and
December 31, 2007.
2008
2007
Fair
% of
Fair
% of
Carrying Value
Total
Carrying Value
Total
Fixed maturities, available-for-sale,
including securities pledged
$ 22,096.0
81.2%
$ 22,776.0
81.7%
Equity securities, available-for-sale
224.7
0.8%
211.1
0.8%
Short-term investments
162.2
0.6%
188.0
0.7%
Mortgage loans on real estate
3,849.5
14.1%
3,701.7
13.3%
Policy loans
154.1
0.6%
155.8
0.5%
Other investments
741.0
2.7%
848.6
3.0%
Total investments
$ 27,227.5
100.0%
$ 27,881.2
100.0%
Fixed Maturities
Fixed maturities, available-for-sale, were as follows as of March 31, 2008.
Gross
Gross
Unrealized
Unrealized
Amortized
Capital
Capital
Fair
Cost
Gains
Losses
Value
Fixed maturities:
U.S. Treasuries
$ 42.3
$ 2.6
$ -
$ 44.9
U.S. government agencies and authorities
89.8
2.5
0.3
92.0
State, municipalities, and political subdivisions
46.7
-
1.7
45.0
U.S. corporate securities:
Public utilities
1,442.9
30.6
13.0
1,460.5
Other corporate securities
6,892.9
104.9
142.2
6,855.6
Total U.S. corporate securities
8,335.8
135.5
155.2
8,316.1
Foreign securities
(1)
:
Government
522.0
17.4
9.7
529.7
Other
3,258.4
51.1
104.4
3,205.1
Total foreign securities
3,780.4
68.5
114.1
3,734.8
Residential mortgage-backed securities
4,897.3
74.5
376.1
4,595.7
Commercial mortgage-backed securities
3,833.1
6.1
194.5
3,644.7
Other asset-backed securities
1,825.1
5.3
207.6
1,622.8
Total fixed maturities, including securities pledged
22,850.5
295.0
1,049.5
22,096.0
Less: securities pledged
1,009.8
9.3
28.1
991.0
Total fixed maturities
$ 21,840.7
$ 285.7
$ 1,021.4
$ 21,105.0
(1)
Primarily U.S. dollar denominated.
31
Fixed maturities, available-for-sale, were as follows as of December 31, 2007.
It is management's objective that the portfolio of fixed maturities be of high quality
and be well diversified by market sector.  The fixed maturities in the Company's
portfolio are generally rated by external rating agencies and, if not externally rated,
are rated by the Company on a basis believed to be similar to that used by the rating
agencies. The average quality rating of the Company's fixed maturities portfolio was
AA- at March 31, 2008 and December 31, 2007, respectively. Ratings are calculated
using a rating hierarchy that considers S&P, Moody's Investor's Service, Inc., and
internal ratings.
32
Total fixed maturities by quality rating category, including securities pledged to
creditors, were as follows at March 31, 2008 and December 31, 2007.
95.9% and 95.8% of the fixed maturities were invested in securities rated BBB and
above (Investment Grade) at March 31, 2008 and December 31, 2007, respectively.
Fixed maturities rated BB and below (Below Investment Grade) may have
speculative characteristics, and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the issuer to make
principal and interest payments than is the case with higher rated fixed maturities.
Total fixed maturities, including securities pledged to creditors, by market sector
were as follows at March 31, 2008 and December 31, 2007.
2008
2007
Fair
% of
Fair
% of
Value
Total
Value
Total
U.S. Treasuries
$ 44.9
0.2%
$ 19.4
0.1%
U.S. government agencies and authorities
92.0
0.4%
86.8
0.4%
U.S. corporate, state, and municipalities
8,361.1
37.9%
8,230.9
36.0%
Foreign
3,734.8
16.9%
3,794.7
16.7%
Residential mortgage-backed
4,595.7
20.8%
4,955.9
21.8%
Commercial mortgage-backed
3,644.7
16.5%
3,843.4
16.9%
Other asset-backed
1,622.8
7.3%
1,844.9
8.1%
Total
$ 22,096.0
100.0%
$ 22,776.0
100.0%
33
The amortized cost and fair value of fixed maturities, excluding securities pledged, as
of March 31, 2008, are shown below by contractual maturity. Actual maturities may
differ from contractual maturities as securities may be restructured, called, or prepaid.
Amortized
Fair
Cost
Value
Due to mature:
One year or less
$ 570.1
$ 572.8
After one year through five years
5,903.6
5,980.8
After five years through ten years
3,619.5
3,580.3
After ten years
2,201.8
2,098.9
Mortgage-backed securities
8,730.4
8,240.4
Other asset-backed securities
1,825.1
1,622.8
Less: securities pledged
1,009.8
991.0
Fixed maturities, excluding securities pledged
$ 21,840.7
$ 21,105.0
Subprime Mortgage Exposure
Since the third quarter of 2007, credit markets have become more turbulent amid
concerns about subprime mortgages and collateralized debt obligations ("CDOs").
This in turn has resulted in a general widening of credit spreads, reduced price
transparency, reduced liquidity, increased rating agency downgrades and increased
volatility across certain markets.
To date, this market disruption has had a limited impact on the Company, which does
not originate or purchase subprime or Alt-A whole-loan mortgages.  Subprime
lending is the origination of loans to customers with weaker credit profiles.  The
Company defines Alt-A Loans to include residential mortgage loans to customers
who have strong credit profiles but lack some element(s), such as documentation to
substantiate income.  Commencing in the fourth quarter of 2007, the Company
expanded its definition of Alt-A loans to include residential mortgage loans to
borrowers that would otherwise be classified as prime but whose loan structure
provides repayment options to the borrower that increase the risk of default. Further,
during the fourth quarter, the industry coalesced around classifying any residential
mortgage backed securities ("RMBS") not clearly identifiable as prime or subprime
into the Alt-A category and the Company is following that lead.  The following
summarizes the Company's exposure to subprime and Alt-A mortgages as of
March 31, 2008 and December 31, 2007.
As of March 31, 2008, the fair value and gross unrealized losses related to the
Company's exposure to subprime mortgages was $760.7 and $155.8, respectively,
representing 2.8% of total investments. 89.5% of these securities were rated "AAA"
or "AA". As of December 31, 2007, the fair value and gross unrealized losses related
to the Company's exposure to subprime mortgages was $879.3 and $86.4,
respectively, representing 3.2% of total investments. This exposure was primarily in
the form of asset-backed securities ("ABS") structures, collateralized by subprime
residential mortgages ("ABS Home Equity") and one CDO position backed by ABS
Home Equity. Of the total subprime residential mortgage backed securities portfolio
34
as of March 31, 2008, 38.3% were issued in 2007, 10.8% in 2006, and 50.9% in 2005
and prior. Of the total subprime residential mortgage backed securities portfolio as of
December 31, 2007, 28.0% were issued in 2007, 11.5% in 2006, and 60.5% in 2005
and prior. The ABS CDO had no unrealized loss and fair value of $0.2 at March 31,
2008. At December 31, 2007, the ABS CDO has no unrealized loss and fair value of
$0.8.
As of March 31, 2008, the Company's exposure to Alt-A mortgages was concentrated
in RMBS, and the fair value and gross unrealized losses aggregated to $1.5 billion
and $322.9, respectively, representing 5.6% of total investments at March 31, 2008.
99.9% of these securities were AAA-rated.  As of December 31, 2007, the
Company's exposure to Alt-A mortgages was concentrated in RMBS, and the fair
value and gross unrealized losses aggregated to $1.9 billion and $69.9, respectively,
representing 6.8% of total investments. 99.9% of these securities were AAA-rated.
As of March 31, 2008, the Alt-A mortgage backed securities portfolio included
32.9% issued in 2007, 22.3% in 2006, and 44.8% in 2005 and prior.  As of
December 31, 2007, the Alt-A mortgage backed securities portfolio included 36.2%
issued in 2007, 24.0% in 2006, and 39.8% in 2005 and prior.
As of March 31, 2008, total RMBS (including CMO and ABS structures) was $4.6
billion with 16.6% consisting of subprime residential mortgage backed securities and
33.0% consisting of Alt-A mortgage backed securities. As of December 31, 2007,
total RMBS (including CMO and ABS structures) was $4.9 billion with 17.8%
consisting of subprime residential mortgage backed securities and 38.0% consisting
of Alt-A mortgage backed securities. The RMBS portfolio is of high credit quality
with 100.0% of the portfolio rated AAA and 99.9% of the portfolio rated AAA as of
March 31, 2008 and December 31, 2007, respectively. Further, as of March 31, 2008
and December 31, 2007, 6.7% and 1.0%, respectively, of the RMBS portfolio was
issued by the Government National Mortgage Association ("GNMA" or "Ginnie
Mae"), the Federal National Mortgage Association ("FNMA" or "Fannie Mae"), or
the Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac"), which
are government agencies or instrumentalities that guarantee the credit quality of the
underlying mortgage pools.
Commercial Mortgage-backed and Other Asset-backed Securities
While the delinquency rates on commercial mortgages have been stable in recent
years, commercial real estate rents and property values have recently become more
volatile. In addition, there are growing concerns with consumer loans as a result of
the current economic environment, which includes lower family income and higher
unemployment rates.
As of March 31, 2008, and December 31, 2007, the fair value of the Company's
Commercial mortgage-backed securities ("CMBS") totaled $3.6 billion and $3.8
billion, respectively, and Other ABS, excluding subprime exposure, totaled $860.5
and $984.1, respectively.  CMBS investments represent pools of commercial
mortgages that are broadly diversified across property types and geographical areas.
As of March 31, 2008, the Other ABS was also broadly diversified both by type and
35
issuer with credit card receivables, collateralized loan obligations and automobile
receivables comprising 40.6%, 31.0% and 13.4%, respectively, of total Other ABS,
excluding subprime exposure. As of December 31, 2007, the Other ABS was broadly
diversified both by type and issuer with credit card receivables, collateralized loan
obligations and automobile receivables comprising 41.3%, 29.7% and 14.3%,
respectively, of total Other ABS, excluding subprime exposure.
The following tables summarize the Company's exposure to CMBS and Other ABS
holdings by credit quality and vintage year as of March 31, 2008:
Mortgage Loans on Real Estate
Mortgage loans on real estate, primarily commercial mortgage loans, totaled $3,849.5
and $3,701.7 at March 31, 2008 and December 31, 2007, respectively. These loans
are reported at amortized cost, less impairment write-downs.  If the value of any
mortgage loan is determined to be impaired (i.e., when it is probable that the
Company will be unable to collect on all amounts due according to the contractual
terms of the loan agreement), the carrying value of the mortgage loan is reduced to
either the present value of expected cash flows from the loan, discounted at the loan's
effective interest rate, or fair value of the collateral. If the loan is in foreclosure, the
carrying value is reduced to the fair value of the underlying collateral, net of
estimated costs to obtain and sell. At March 31, 2008 and December 31, 2007, the
Company had no allowance for mortgage loan credit losses.  The properties
collateralizing mortgage loans are geographically dispersed throughout the United
States, with the largest concentration of 24.4% and 24.5% of properties in California
at March 31, 2008 and December 31, 2007, respectively.
36
Unrealized Capital Losses
Unrealized capital losses in fixed maturities, including securities pledged to creditors,
for Investment Grade ("IG") and Below Investment Grade ("BIG") securities by
duration were as follows at March 31, 2008 and December 31, 2007.
Unrealized losses in fixed maturities at March 31, 2008 and December 31, 2007, were
primarily related to interest rate movement or changes in credit spreads to mortgage
and other asset-backed securities. Mortgage and other asset-backed securities include
U.S. government-backed securities, principal protected securities, and structured
securities, which did not have an adverse change in cash flows. The following table
summarizes the unrealized capital losses by duration and reason, along with the fair
value of fixed maturities, including securities pledged to creditors, in unrealized
capital loss positions at March 31, 2008 and December 31, 2007.
More Than
Less Than
Six Months
More Than
Six Months
and Less Than
Twelve Months
Below
Twelve Months
Below
Amortized
Below
Amortized
2008
Cost
Amortized Cost
Cost
Total
Interest rate or spread widening
$ 113.0
$ 66.5
$ 91.8
$ 271.3
Mortgage and other asset-backed securities
234.2
418.7
125.3
778.2
Total unrealized capital loss
$ 347.2
$ 485.2
$ 217.1
$ 1,049.5
Fair value
$ 6,779.0
$ 3,153.1
$ 2,513.5
$ 12,445.6
2007
Interest rate or spread widening
$ 37.8
$ 49.2
$ 62.7
$ 149.7
Mortgage and other asset-backed securities
73.3
134.8
22.4
230.5
Total unrealized capital loss
$ 111.1
$ 184.0
$ 85.1
$ 380.2
Fair value
$ 5,322.0
$ 3,248.4
$ 3,300.6
$ 11,871.0
37
Unrealized capital losses in fixed maturities, including securities pledged to creditors,
by market sector and duration were as follows at March 31, 2008 and December 31,
2007.
More Than
Less Than
Six Months
More Than
Six Months
and Less Than
Twelve Months
Total
Below
Twelve Months
Below
Unrealized
Amortized
Below
Amortized
Capital
2008
Cost
Amortized Cost
Cost
Loss
U.S. government agencies and authorities
$ 0.3
$ -
$ -
$ 0.3
U.S. corporate, state, and municipalities
70.9
38.3
47.7
156.9
Foreign
41.8
28.2
44.1
114.1
Residential mortgage-backed
136.3
216.4
23.4
376.1
Commercial mortgage-backed
69.1
59.2
66.2
194.5
Other asset-backed
28.8
143.1
35.7
207.6
Total unrealized capital loss
$ 347.2
$ 485.2
$ 217.1
$ 1,049.5
More Than
Less Than
Six Months
More Than
Six Months
and Less Than
Twelve Months
Total
Below
Twelve Months
Below
Unrealized
Amortized
Below
Amortized
Capital
2007
Cost
Amortized Cost
Cost
Loss
U.S. government agencies and authorities
$ -
$ -
$ 0.3
$ 0.3
U.S. corporate, state, and municipalities
16.6
31.4
34.9
82.9
Foreign
21.2
17.8
27.5
66.5
Residential mortgage-backed
51.1
29.3
5.4
85.8
Commercial mortgage-backed
3.8
27.0
5.6
36.4
Other asset-backed
18.4
78.5
11.4
108.3
Total unrealized capital loss
$ 111.1
$ 184.0
$ 85.1
$ 380.2
Of the unrealized losses aged more than twelve months, the average market value of
the related fixed maturities was 91.7% of the average book value as of March 31,
2008.  In addition, this category includes 690 securities, which have an average
quality rating of AA-.  No other-than-temporary impairment loss was considered
necessary for these fixed maturities as of March 31, 2008.
Other-Than-Temporary Impairments
The Company analyzes the general account investments to determine whether there
has been an other-than-temporary decline in fair value below amortized cost basis.
Management considers the length of time and the extent to which the fair value has
been less than amortized cost, the issuer's financial condition and near-term
prospects, future economic conditions and market forecasts, interest rate changes, and
the Company's intent to retain the investment for a period of time sufficient to allow
for recovery in fair value.  If it is probable that all amounts due according to the
38
contractual terms of an investment will not be collected, an other-than-temporary
impairment is considered to have occurred.
In addition, the Company invests in asset-backed securities.  Determination of the
required impairment is based on the analysis discussed in the preceding paragraph, as
well as credit risk and the possibility of significant prepayment risk that restricts the
Company's ability to recover the investment. An impairment is recognized if the fair
value of the security is less than book value and there has been an adverse change in
cash flow since the last remeasurement date.
When a decline in fair value is determined to be other-than-temporary, the individual
security is written down to fair value, and the loss is recorded in Net realized capital
gains (losses).
The following table identifies the Company's other-than-temporary impairments by
type for the three months ended March 31, 2008 and 2007.
Three Months Ended March 31,
2008
2007
No. of
No. of
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
-
$ -
*
1
U.S. corporate
26.9
50
6.3
26
Foreign
(1)
39.8
24
2.2
8
Residential mortgage-backed
15.4
7
0.2
4
Other asset-backed
27.6
23
-
-
Limited partnerships
0.5
1
-
-
Total
$ 110.2
105
$ 8.7
39
(1)
Primarily U.S. dollar denominated.
*
Less than $0.1.
The above schedule includes $50.8 and $0.2 in other-than-temporary write-downs for
the three months ended March 31, 2008 and 2007, respectively, related to the analysis
of credit risk, the possibility of significant prepayment risk, and severity and duration
of unrealized losses. The remaining write-downs are related to investments that the
Company does not have the intent to retain for a period of time sufficient to allow for
recovery in fair value. The following table summarizes these write-downs by type for
the three months ended March 31, 2008 and 2007.
39
Three Months Ended March 31,
2008
2007
No. of
No. of
Impairment
Securities
Impairment
Securities
U.S. Treasuries
$ -
- $
-
*
1
U.S. corporate
19.5
39
6.3
26
Foreign
39.8
24
2.2
8
Residential mortgage-backed
0.1
2
-
-
Total
$ 59.4
65 $
8.5
35
*
Less than $0.1.
The Company may sell securities during the period in which fair value has declined
below amortized cost for fixed maturities or cost for equity securities.  In certain
situations new factors, including changes in the business environment, can change the
Company's previous intent to continue holding a security.
Net Realized Capital Gains (Losses)
Net realized capital gains (losses) are comprised of the difference between the
amortized cost of investments and proceeds from sale, and redemption, as well as
losses incurred due to the other-than-temporary impairment of investments and
changes in fair value of derivatives.  The cost of the investments on disposal is
determined based on specific identification of securities. Net realized capital gains
(losses) on investments were as follows for the three months ended March 31, 2008
and 2007.
Three Months Ended March 31,
2008
2007
Fixed maturities, available-for-sale
$ (47.9)
$ (8.0)
Equity securities, available-for-sale
0.4
-
Derivatives
(223.0)
(52.2)
Other
(0.6)
(1.7)
Net realized capital losses
$ (271.1)
$ (61.9)
After-tax net realized capital losses
$ (176.2)
$ (40.2)
Net realized capital losses
increased for the three months ended March 31, 2008,
primarily due to higher losses on derivatives and fixed maturities. The losses on
derivatives are related to interest rate swaps and driven by the decline of LIBOR
rates.  The losses on fixed maturities for the three months ended March 31, 2008,
were due to other-than-temporary impairments driven by the slow economic
environment and widening of credit spreads in the first quarter of 2008.
40
Liquidity and Capital Resources
Liquidity is the ability of the Company to generate sufficient cash flows to meet the
cash requirements of operating, investing, and financing activities.
Sources and Uses of Liquidity
The Company's principal sources of liquidity are annuity product charges, GIC
deposits, investment income, proceeds from the maturing and sale of investments,
proceeds from debt issuance, and capital contributions. Primary uses of these funds
are payments of commissions and operating expenses, interest and premium credits,
payments under guaranteed death and living benefits, investment purchases,
repayment of debt, and contract maturities, withdrawals, and surrenders.
The Company's liquidity position is managed by maintaining adequate levels of
liquid assets, such as cash, cash equivalents, and short-term investments.
Asset/liability management is integrated into many aspects of the Company's
operations, including investment decisions, product development, and determination
of crediting rates.  As part of the risk management process, different economic
scenarios are modeled, including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet projected liability
cash flows. Key variables in the modeling process include interest rates, anticipated
contractowner behavior, and variable separate account performance. Contractowners
bear the investment risk related to variable annuity products, subject to the minimum
guaranteed death and living benefits included in these contracts.
The fixed account liabilities are supported by a general account portfolio, principally
composed of fixed rate investments with matching duration characteristics that can
generate predictable, steady rates of return. The portfolio management strategy for
the fixed account considers the assets available-for-sale.  This strategy enables the
Company to respond to changes in market interest rates, prepayment risk, relative
values of asset sectors and individual securities and loans, credit quality outlook, and
other relevant factors. The objective of portfolio management is to maximize returns,
taking into account interest rate and credit risk, as well as other risks.  The
Company's asset/liability management discipline includes strategies to minimize
exposure to loss as interest rates and economic and market conditions change.
Liquidity and Capital Resources
Additional sources of liquidity include borrowing facilities to meet short-term cash
requirements that arise in the ordinary course of business. The Company maintains
the following agreements:
41
§
A reciprocal loan agreement with ING America Insurance Holdings, Inc. ("ING AIH"), an affiliate, whereby either party can borrow from the other up to 3.0% of the Company's
statutory admitted assets as of the prior December 31. As of March 31, 2008 and December 31, 2007, the Company had no amounts due to or due from ING AIH under the reciprocal loan agreement.
§
A $100.0 uncommitted, perpetual revolving note facility with the Bank of New York. As of March 31, 2008 and December 31, 2007, the Company had no amounts outstanding under the revolving
note facility.
§
A $75.0 uncommitted line-of-credit agreement with PNC Bank. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to ING AIH and its affiliates
of $75.0. As of March 31, 2008 and December 31, 2007, the Company had no amounts outstanding under the line- of-credit agreement.
§
A $100.0 uncommitted line-of-credit agreement with Svenska Handelsbanken AB (Publ.), effective June 2, 2006. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings
outstanding at anytime to ING AIH and its affiliates of $100.0. As of March 31, 2008 and December 31, 2007, the Company had no amounts outstanding under the line-of-credit agreement.
Management believes that these sources of liquidity are adequate to meet the
Company's short-term cash obligations.
The Company is a member of the Federal Home Loan Bank of Des Moines ("FHLB")
and is required to maintain a collateral deposit that backs funding agreements issued
to the FHLB.  As of March 31, 2008 and December 31, 2007, the Company had
$3,043.9 and $2,898.7, respectively, in non-putable funding agreements, including
accrued interest, issued to FHLB. As of March 31, 2008 and December 31, 2007,
assets with a carrying value of approximately $3,207.3 and $3,270.1, respectively,
collateralized the funding agreements issued to the FHLB.  Assets pledged to the
FHLB are included in Fixed maturities, available-for-sale, on the Condensed Balance
Sheets.
Capital Contributions and Distributions
For the three months ended March 31, 2008, the Company received a $1.1 billion
capital contribution from its Parent. During the three months ended March 31, 2007,
the Company did not receive any capital contributions from its Parent.
During the three months ended March 31, 2008 and 2007, the Company did not pay
any dividends or return of capital distributions to its Parent.
42
Financial Guarantees
The Company owns a 3-year credit-linked note arrangement, whereby the Company
will reimburse the guaranteed party upon payment default of the referenced
obligation. Upon such default, the Company will reimburse the guaranteed party for
the loss under the reference obligation, and the Company receives that reference
obligation in settlement.  The Company can seek recovery of any losses under the
agreements by sale or collection of the received reference obligation.  As of
March 31, 2008, the maximum liability of the Company under the guarantee was
$32.5.
Cash Collateral
Under the terms of the Company's Over-The-Counter Derivative International Swaps
and Derivatives Association, Inc. Agreements ("ISDA Agreements"), the Company
may receive from, or deliver to, counterparties, collateral to assure that all terms of
the ISDA Agreements will be met with regard to the Credit Support Annex ("CSA").
The terms of the CSA call for the Company to pay interest on any cash received equal
to the Federal Funds rate. As of March 31, 2008, the Company delivered $65.8 of
cash collateral, which was included in Short-term investments under securities loan
agreement, including collateral delivered, on the Condensed Balance Sheets. As of
December 31, 2007, the Company held $11.5 of cash collateral, which was included
in Collateral held, including payables under securities loan agreement on the Balance
Sheets and was reinvested in short-term investments.
Facultative Reinsurance Agreement
The Company is a party to a Facultative Coinsurance Agreement with its affiliate,
Security Life of Denver Insurance Company ("Security Life") effective August 20,
1999.  Under the terms of this agreement, the Company facultatively cedes to
Security Life, from time to time, certain GICs on a 100% coinsurance basis.  The
value of GIC reserves ceded by the Company under this agreement was $2.4 billion
and $2.3 billion at March 31, 2008 and December 31, 2007, respectively.  The
Company utilizes this reinsurance facility primarily for diversification and asset-
liability management purposes in connection with this business, which is facilitated
by the fact that Security Life is also a major GIC issuer. Senior management of the
Company has established a current maximum of $4.0 billion for GIC reserves ceded
under this agreement.
43
Minimum Guarantees
Variable annuity contracts containing minimum guaranteed death and living benefits
expose the Company to equity risk. A decrease in the equity markets may cause a
decrease in the account values, thereby increasing the possibility that the Company
may be required to pay amounts to contractowners due to guaranteed death and living
benefits. An increase in the value of the equity markets may increase account values
for these contracts, thereby decreasing the Company's risk associated with guaranteed
death and living benefits.
The Company's variable annuities offer one or more of the following guaranteed
death and living benefits:
Guaranteed Minimum Death Benefits ("GMDBs")
:
§
Standard - Guarantees that, upon death, the death benefit will be no less than the premiums paid by the contractowner, adjusted for any contract withdrawals.
§
Ratchet - Guarantees that, upon the death of the annuitant, the death benefit will be no less than the greater of (1) Standard or (2) the maximum contract anniversary (or quarterly) value of
the variable annuity, adjusted for contract withdrawals.
§
Rollup (7.0% or 5.5% Solution) - Guarantees that, upon death, the death benefit will be no less than the aggregate premiums paid by the contractowner accruing interest at 7.0% or 5.5% per
annum, adjusted for contract withdrawals, which may be subject to a maximum cap on the rolled up amount. (The Company has discontinued this option for new sales.)
§
Combo (Max 7) - Guarantees that, upon death, the death benefit will be no less than the greater of (1) Ratchet or (2) Rollup.
For contracts issued prior to January 1, 2000, most contracts with enhanced death
benefit guarantees were reinsured to third party reinsurers to mitigate the risk
produced by such guaranteed death benefits. For contracts issued after December 31,
1999, the Company instituted an equity hedging program in lieu of reinsurance. The
equity hedging program is based on the Company entering into derivative positions to
offset exposures to guaranteed minimum death benefits due to adverse changes in the
equity markets.
As of March 31, 2008 and December 31, 2007, the guaranteed value of these death
benefits in excess of account values was estimated to be $5.0 billion and $2.7 billion,
respectively, before reinsurance. The increase was primarily driven by the decrease
in the account values of contractowners due to unfavorable equity market
performance in the first quarter of 2008.
44
As of March 31, 2008, the guaranteed value of minimum guaranteed death benefits in
excess of account values, net of reinsurance, was estimated to be $3.9 billion, of
which $1.6 was projected to be covered by the Company's equity hedging program.
At December 31, 2007, the guaranteed value of minimum guaranteed death benefits
in excess of account values, net of reinsurance, was estimated to be $1.8 billion, of
which $537.6 was projected to be covered by the Company's equity hedging
program. As of March 31, 2008 and December 31, 2007, the Company recorded a
liability of $283.5 and $209.4, respectively, net of reinsurance, representing the
estimated net present value of the Company's future obligation for guaranteed
minimum death benefits in excess of account values. The liability increased mainly
due to the accumulation of fees used to fund the reserve in the first quarter of 2008,
higher future projected benefits in excess of account values, and a change in the
discount rate on reserves.
Guaranteed Living Benefits
:
§
Guaranteed Minimum Income Benefit - Guarantees a minimum income payout, exercisable each contract anniversary on or after a specified date, in most cases the 10th rider anniversary. This
type of living benefit is the predominant selection in the Company's sales of variable annuities.
§
Guaranteed Minimum Withdrawal Benefit ("GMWB") - Guarantees annual withdrawals for life of a percentage of premiums received during the growth phase (before taking withdrawals and
after age 60). The percentage may vary by age at first withdrawal, depending on the base annuity contract. For certain versions, before withdrawals begin there are annual step-up (for 10 years) and quarterly ratchet features that may increase the
amount used to calculate the annual withdrawal amount. Other versions have a quarterly ratchet feature only.
A joint life-time withdrawal benefit option is available to include coverage for spouses. Most versions of the withdrawal benefit have reset and/or step up features that may increase the
guaranteed withdrawal amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0% of eligible premiums may be made until eligible premiums previously paid by the contractowner are
returned, regardless of account value performance. Asset allocation requirements apply at all times where withdrawals are guaranteed for life.
§
Guaranteed Minimum Accumulation Benefit - Guarantees that the account value will be at least 100% of the eligible premiums paid by the contractowner after 10 years, net of any contract
withdrawals (GMAB 10). In the past, the Company offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contractowners after 20 years (GMAB 20).
All living benefits are covered by the Company's equity hedging program.
45
As of March 31, 2008 and December 31, 2007, the guaranteed value of these living
benefits in excess of account values was $2,068.8 and $506.5, respectively.  The
increase was primarily driven by the decrease in account values of contractowners
due to unfavorable equity market performance in the first quarter of 2008.  As of
March 31, 2008 and December 31, 2007, the Company recorded a liability of $257.8
and $149.3, respectively, representing the estimated net present value of its future
obligation for living benefits in excess of account values.  The liability increased
mainly due to the accumulation of fees used to fund the reserve in the first quarter of
2008, as well as higher future projected benefits in excess of account values, and a
change in the discount rate on reserves.
Equity Hedging Program
: In order to hedge equity risk associated with GMDBs and
guaranteed living benefits, the Company enters into futures positions on various
public market equity indices chosen to closely replicate contractowner variable fund
returns. The Company uses market consistent valuation techniques to establish its
derivative position and to rebalance the derivative positions in response to market
fluctuations. One aspect of the hedging program is designed to offset changes related
to equity experience in the liability and to pay excess claims not covered by the
contractowner account value. The Company also administers a hedging program that
mitigates both equity risk and equity volatility risk associated with its Principal Guard
GMWB product issued in 2005 and beyond. This hedge strategy primarily involves
entering into put options.
Other risks posed by market conditions, such as interest rate risk and the majority of
the Company's equity volatility risk, and risks posed by contractowner experience,
such as surrender and mortality experience deviations, are not explicitly mitigated by
this program. In addition, certain funds, where there is no replicating market index
and where hedging is not appropriate, are excluded from the program.
For those risks addressed by the equity hedging program, the Company is exposed to
the risk that the market indices will not adequately replicate actual contractowner
variable fund growth. Any differences between actual results and the market indices
result in income volatility.
Recently Adopted Accounting Standards
(See the Recently Adopted and New Accounting Standards footnotes to the
condensed financial statements.)
46
Legislative and Regulatory Initiatives
Legislative proposals, which have been or are being considered by Congress, include
repealing/modifying the estate tax, reducing the taxation on annuity benefits,
changing the tax treatment of insurance products relative to other financial products,
and changing life insurance company taxation. Some of these proposals, if enacted,
could have a material adverse effect on life insurance, annuity, and other retirement
savings product sales, while others could have a material beneficial effect. There are
no indications at the present time, however, that Congress will enact tax changes that
will adversely affect the Company's products in 2008. The SEC has a regulatory
initiative underway to improve fee disclosure in financial products and legislative
proposals on financial product fee disclosure may also be considered by Congress as
it undertakes a review of fee disclosures in the defined contribution plan arena.
However, the timing and content of legislative or regulatory action to change fee
disclosure requirements are uncertain at this time. The IRS and the Treasury have
published final regulations, effective in 2009, that update and consolidate the rules
applicable to 403(b) tax deferred annuity arrangements. The final regulations impose
broad written plan document and operational compliance requirements on all 403(b)
plan sponsors and contain new restrictions on annuity exchanges, which have the
potential to adversely impact the Company's 403(b) annuity business.
47
Item 4. Controls and Procedures
a)
The Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's current disclosure controls and procedures are effective in ensuring that material information relating to the Company required to be
disclosed in the Company's periodic SEC filings is made known to them in a timely manner.
b)
There has not been any change in the internal controls over financial reporting of the Company that occurred during the period covered by this report that has materially affected or is
reasonably likely to materially affect these internal controls.
48
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
ING USA Annuity and Life Insurance Company ("the Company") is involved in
threatened or pending lawsuits/arbitrations arising from the normal conduct of
business.  Due to the climate in insurance and business litigation/arbitrations, suits
against the Company sometimes include claims for substantial compensatory,
consequential, or punitive damages, and other types of relief.  Moreover, certain
claims are asserted as class actions, purporting to represent a group of similarly
situated individuals.  While it is not possible to forecast the outcome of such
lawsuits/arbitrations, in light of existing insurance, reinsurance, and established
reserves, it is the opinion of management that the disposition of such
lawsuits/arbitrations will not have a materially adverse effect on the Company's
operations or financial position.
As with many financial services companies, the Company and its affiliates have
received informal and formal requests for information from various state and federal
governmental agencies and self-regulatory organizations in connection with inquiries
and investigations of the products and practices of the financial services industry. In
each case, the Company and its affiliates have been and are providing full
cooperation. For information on the focus of such regulatory inquiries and the actions
undertaken by ING in connection therewith, see the "Other Regulatory Matters"
section of "Management's Narrative Analysis of the Results of Operations and
Financial Condition" included in the Company's 2007 Annual Report on Form 10-K
filed on March 28, 2008 (SEC File No. 001-32625).
Item 1A. Risk Factors
There are no material changes from the risk factors set forth under Part I, Item 1A.
"Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007.
Item 6.
Exhibits
See Exhibit Index on pages 51-53 hereof.
49
.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
May 12, 2008
ING USA Annuity and Life Insurance Company
(Date)
(Registrant)
By: /s/
David A. Wheat
David A. Wheat
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
50
Exhibit Index
Exhibit Number
Description of Exhibit
2.1
Agreement and Plan of Merger dated June 25, 2003, by and between USG
Annuity & Life Company, United Life & Annuity Insurance Company,
Equitable Life Insurance Company of Iowa and Golden American Life
Insurance Company, incorporated by reference in Exhibit 99-8 in the
Company's Form 8K filed with the SEC on January 2, 2004 (File No. 333-
87270).
3.1
Restated Articles of Incorporation Providing for the Redomestication of Golden
American Life Insurance Company dated July 2 and 3, 2003, effective January
1, 2004, incorporated by reference to Company's 10-K, as filed with the SEC
on March 29, 2004 (File No. 033-87270).
3.2
Amendment to Articles of Incorporation Providing for the Name Change of
Golden American Life Insurance Company dated November 20, 2003, effective
January 1, 2004, incorporated by reference to the Company's 10-K, as filed
with the SEC on March 29, 2004 (File No. 033-87270).
3.3
Amendment to Articles of Incorporation Providing for the Change in Purpose
and Powers of ING USA Annuity and Life Insurance Company dated March 3
and 4, 2004, effective March 11, 2004, incorporated by reference to the
Company's 10-Q, as filed with the SEC on May 17, 2004 (File No. 033-87270).
3.4
Amended and Restated By-Laws of ING USA Annuity and Life Insurance
Company effective January 1, 2005, incorporated by reference to the
Company's Form 10-Q, as filed with the SEC on May 13, 2005 (File No. 033-
87270).
4.1
Single Premium Deferred Modified Guaranteed Annuity Contract, Single
Premium Deferred modified Guaranteed Annuity Master Contract, and Single
Premium Deferred Modified Guaranteed Annuity Certificate - Incorporated
herein by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form S-1 for Golden American Life Insurance Company as filed
with the SEC on February 8, 2002 (File No. 333-67660).
4.2
Single Premium Deferred Modified Guaranteed Annuity Master Contract and
Single Premium Deferred Modified guaranteed Annuity Certificate –
Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 for Golden American Life Insurance Company, as filed
with the SEC on September 13, 2000 (File No. 333-40596).
51
4.3 Individual Retirement Annuity Rider; Roth Individual Retirement Annuity
Rider; Simple Retirement Account Rider; and 403(b) Rider - Incorporated
herein by reference to Post-Effective Amendment No. 34 to Registration
Statement on Form N-4 for Golden American Life Insurance Company
Separate Account B, as filed with the SEC on April 15, 2003 (File No. 033-
23351).
4.4 403(b) Rider - Incorporated herein by reference to Initial Registration Statement
on Form S-2 for Golden American Life Insurance Company, as filed with the
SEC on April 15, 2003 (File No. 333-104547).
4.5 Single Premium Deferred Equity Indexed Modified Guaranteed Annuity
Contract; Single Premium Deferred Modified Guaranteed Annuity Group
Master Contract; and Single Premium Deferred Equity Indexed Modified
Guaranteed Annuity Certificate, - Incorporated herein by reference to Pre-
Effective Amendment No. 1 to Registration Statement on Form S-2, as filed
with the SEC on August 13, 2004 (File No. 333-116137).
4.6 Interest in Fixed Account I under Variable Annuity Contracts - Incorporated
herein by reference to: Post-Effective Amendment No. 12 to Registration
Statement on Form N-4 for Golden American Life Insurance Company
Separate Account B, as filed with the Securities and Exchange Commission on
April 23, 1999 (File Nos. 033-59261, 811-5626); Incorporated by reference to
Post-Effective Amendment No. 3 to Registration Statement on Form N-4 for
Golden American life Insurance Company, as filed with the SEC on April 23,
1999 (File Nos. 333-28769, 811-5626); and Incorporated by reference to Pre-
Effective Amendment No. 1 to Registration statement on Form N-4 for Golden
American Life Insurance Company Separate Account B, as filed with the SEC
on June 24, 2000 (File Nos. 333-33914, 811-5626).
4.7 Interests in Fixed Account II under Variable Annuity Contracts - Incorporated
herein by reference to Post-Effective Amendment No. 7 to Registration
Statement on Form N-4 for Separate Account B of Golden American Life
Insurance Company as filed with the SEC on October 2, 2000 (File No. 333-
28679, 811-5626), Incorporated herein by reference to Post-Effective
Amendment No. 2 to Registration Statement on Form N-4 for Separate Account
B of Golden American Life Insurance Company as filed with the SEC on
October 2, 2000 (File No. 333-30180, 811-5626), Incorporated herein by
reference to Post-Effective Amendment No. 5 to Registration Statement on
Form N-4 for Separate Account B of Golden American Life Insurance
Company as filed with the SEC on April 23, 1999 (File No. 333-28755, 811-
5626), Incorporated herein by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form N-4 for Separate Account B of Golden
American Life Insurance Company as filed with the SEC on April 23, 1999
(File No. 333-66757, 811-5626), Incorporated herein by reference to Pre-
52
Effective Amendment No. 1 to Registration Statement on Form N-4 for
Separate Account B of Golden American Life Insurance Company as filed with
the SEC on October 26, 2001 (File No. 333-63692, 811-5626), Incorporated
herein by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 for Separate Account B of Golden American Life
Insurance Company as filed with the SEC on December 11, 2001 (File No.333-
70600, 811-5626), Incorporated by reference to Post-Effective Amendment No.
1 to Registration Statement on Form N-4 for Golden American Life Insurance
Company Separate Account B, as filed with the SEC on April 16, 2003 (File
No. 333-90516, 811-5626) and Incorporated by reference to Pre-Effective
Amendment No. 1 to Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B, as filed with the SEC
on July 3, 2003 (File No. 333-101487, 811-5626).
4.8 Interest in the Guaranteed Account under Variable Annuity Contracts -
Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Registration Statement on Form S-2 for Golden American Life Insurance
Company, as filed with the SEC on June 29, 2001 (File No. 333-57212).
12.
+
Computation of Ratio of Earnings to Fixed Charges, filed herewith.
31.1
+
Certificate of David A. Wheat pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2
+
Certificate of Valerie G. Brown pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1
+
Certificate of David A. Wheat pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
32.2
+
Certificate of Valerie G. Brown pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
+
Filed herewith.
53
Exhibit 31.1
CERTIFICATION
I, David A. Wheat, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of ING USA Annuity and Life Insurance Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
Date:
By: /s/
May 12, 2008
David A. Wheat David A. Wheat
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Exhibit 31.2
CERTIFICATION
I, Valerie G. Brown, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of ING USA Annuity and Life Insurance Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial
reporting.
Date:
By: /s/
May 12, 2008
Valerie G. Brown Valerie G. Brown President
(Duly Authorized Officer and Principal Officer)
Exhibit 32.1
CERTIFICATION
Pursuant to 18 U.S.C. §1350, the undersigned officer of ING USA Annuity and Life Insurance
Company (the "Company") hereby certifies that, to the officer's knowledge, the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (the "Report") fully
complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange
Act of 1934 and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
May 12, 2008
By: /s/
David A. Wheat
(Date)
David A. Wheat
Executive Vice President and
Chief Financial Officer
Exhibit 32.2
CERTIFICATION
Pursuant to 18 U.S.C. §1350, the undersigned officer of ING USA Annuity and Life Insurance
Company (the "Company") hereby certifies that, to the officer's knowledge, the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (the "Report") fully
complies with the requirements of Section 13 or 15(d), as applicable, of the Securities Exchange
Act of 1934 and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
May 12, 2008
By: /s/
Valerie G. Brown
(Date)
Valerie G. Brown
President
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not Applicable
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
ING USA Annuity and Life Insurance Company (ING USA) shall indemnify (including therein the prepayment of
expenses) any person who is or was a director, officer or employee, or who is or was serving at the request of ING
USA as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise for
expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him with respect to any threatened, pending or completed action, suit or proceedings against him by
reason of the fact that he is or was such a director, officer or employee to the extent and in the manner permitted by
law.
ING USA may also, to the extent permitted by law, indemnify any other person who is or was serving ING USA in
any capacity. The Board of Directors shall have the power and authority to determine who may be indemnified
under this paragraph and to what extent (not to exceed the extent provided in the above paragraph) any such person
may be indemnified.
A corporation may procure indemnification insurance on behalf of an individual who is or was a director of the
corporation. ING America Insurance Holdings, Inc. maintains a Professional Liability umbrella insurance policy
issued by an international insurer. The policy covers ING America Insurance Holdings, Inc. and any company in
which ING America Insurance Holdings, Inc. has a controlling interest of 50% or more. This would encompass the
principal underwriter as well as the depositor. Additionally, the parent company of ING America Insurance
Holdings, Inc., ING Groep N.V., maintains an excess umbrella cover with limits in excess of $125,000,000. The
policy provides for the following types of coverage: errors and omissions/professional liability, directors and
officers, employment practices, fiduciary and fidelity.
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, as provided above or otherwise, the Registrant has been
advised that in the opinion of the SEC such indemnification by the Depositor is against public policy, as expressed
in the Securities Act of 1933, and therefore may be unenforceable. In the event that a claim of such indemnification
(except insofar as it provides for the payment by the Depositor of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding) is asserted against the Depositor by
such director, officer or controlling person and the SEC is still of the same opinion, the Depositor or 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 of whether such indemnification by the Depositor is against public policy as
expressed by the Securities Act of 1933 and will be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Not Applicable
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
3(a)
Amendment to Articles of Incorporation Providing for the Name Change of Golden American Life
Insurance Company, dated (11/21/03), incorporated herein by reference to Post-Effective
Amendment No. 1 to a Registration Statement on Form S-1 for ING USA Annuity and Life
Insurance Company filed with the Securities and Exchange Commission on April 9, 2007 (File
Nos. 333-133076).
3(b)
Amendment to Articles of Incorporation Providing for the Change in Purpose and Powers of ING
USA Annuity and Life Insurance Company, dated (03/04/04), incorporated herein by reference to
Post-Effective Amendment No. 1 to a Registration Statement on Form S-1 for ING USA Annuity
and Life Insurance Company filed with the Securities and Exchange Commission on April 9, 2007
(File Nos. 333-133076).
3(c)
Amended and Restated By-Laws of ING USA Annuity and Life Insurance Company, dated
(12/15/04), incorporated herein by reference to Post-Effective Amendment No. 1 to a Registration
Statement on Form S-1 for ING USA Annuity and Life Insurance Company filed with the
Securities and Exchange Commission on April 9, 2007 (File Nos. 333-133076).
3(d)
Resolution of Board of Directors for Powers of Attorney, dated (04/23/99), incorporated herein by
reference to Post Effective Amendment No. 5 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on April 23, 1999 (File Nos. 333-28679, 811-05626).
3(e)
Articles of Merger and Agreement and Plan of Merger of USGALC, ULAIC, ELICI into GALIC
and renamed ING USA Annuity and Life Insurance Company, effective date (01/01/04), dated
(06/25/03), incorporated herein by reference to Post-Effective Amendment No. 25 to a Registration
Statement on Form N-4 for ING USA Annuity and Life Insurance Company Separate Account B
filed with the Securities and Exchange Commission on February 13, 2004 (File Nos. 333-28679,
811-05626).
4(a)
Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on April 23, 1999 (File Nos. 333-28769, 811-05626).
4(b)
Group Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on April 23, 1999 (File Nos. 333-28769, 811-05626).
4(c)
Individual Deferred Variable Annuity Contract, incorporated herein by reference to Post-Effective
Amendment No. 3 to a Registration Statement on Form N-4 for Golden American Life Insurance
Company Separate Account B filed with the Securities and Exchange Commission on April 23,
1999 (File Nos. 333-28769, 811-05626).
4(d)
Deferred Combination Variable and Fixed Annuity Certificate, incorporated herein by reference to
Post-Effective Amendment No. 3 to a Registration Statement on Form N-4 for Golden American
Life Insurance Company Separate Account B filed with the Securities and Exchange Commission
on April 23, 1999 (File Nos. 333-28769, 811-05626).
4(e)
Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by
reference to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on February 26, 2001 (File Nos. 333-30180, 811-05626).
4(f)
Flexible Premium Individual Deferred Combination Variable and Fixed Annuity Contract,
incorporated herein by reference to Post-Effective Amendment No. 2 to a Registration Statement
on Form N-4 for Golden American Life Insurance Company Separate Account B filed with the
Securities and Exchange Commission on February 26, 2001 (File Nos. 333-30180, 811-05626).
4(g)
Flexible Premium Individual Deferred Variable Annuity Contract, incorporated herein by reference
to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4 for Golden American
Life Insurance Company Separate Account B filed with the Securities and Exchange Commission
on February 26, 2001 (File Nos. 333-30180, 811-05626).
4(h)
Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated
herein by reference to Post-Effective Amendment No. 2 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on February 26, 2001 (File Nos. 333-30180, 811-05626).
4(i)
Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 5 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company for Separate Account B filed with the Securities and Exchange
Commission on April 23, 1999 (File Nos. 333-28755, 811-05626).
4(j)
Group Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 5 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company for Separate Account B filed with the Securities and Exchange
Commission on April 23, 1999 (File Nos. 333-28755, 811-05626).
4(k)
Individual Deferred Variable Annuity Contract, incorporated herein by reference to Post-Effective
Amendment No. 5 to a Registration Statement on Form N-4 for Golden American Life Insurance
Company for Separate Account B filed with the Securities and Exchange Commission on April 23,
1999 (File Nos. 333-28755, 811-05626).
4(l)
Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 1 to a Registration Statement on N-4 for Golden
American Life Insurance Company for Separate Account B filed with the Securities and Exchange
Commission on or about April 23, 1999 (File Nos. 333-66757, 811-05626).
4(m)
Group Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 1 to a Registration Statement on N-4 for Golden
American Life Insurance Company for Separate Account B filed with the Securities and Exchange
Commission on or about April 23, 1999 (File Nos. 333-66757, 811-05626).
4(n)
Individual Deferred Variable Annuity Contract, incorporated herein by reference to Post-Effective
Amendment No. 1 to a Registration Statement on N-4 for Golden American Life Insurance
Company for Separate Account B filed with the Securities and Exchange Commission on or about
April 23, 1999 (File Nos. 333-66757, 811-05626).
4(o)
Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by
reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on October 26, 2001 (File Nos. 333-63692, 811-05626).
4(p)
Flexible Premium Deferred Combination Variable and Fixed Annuity Contract, incorporated
herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on October 26, 2001 (File Nos. 333-63692, 811-05626).
4(q)
Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated
herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on October 26, 2001 (File Nos. 333-63692, 811-05626).
4(r)
Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by
reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on December 11, 2001 (File Nos. 333-70600, 811-05626).
4(s)
Flexible Premium Deferred Combination Variable and Fixed Annuity Contract, incorporated
herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on December 11, 2001 (File Nos. 333-70600, 811-05626).
4(t)
Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated
herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on December 11, 2001 (File Nos. 333-70600, 811-05626).
4(u)
Group Deferred Combination Variable and Fixed Annuity Master Contract, incorporated herein by
reference to Post-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on April 16, 2003 (File Nos. 333-90516, 811-05626).
4(v)
Individual Deferred Combination Variable and Fixed Annuity Contract, incorporated herein by
reference to Post-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on April 16, 2003 (File Nos. 333-90516, 811-05626).
4(w)
Deferred Combination Variable and Fixed Annuity Certificate, incorporated herein by reference to
Post-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden American
Life Insurance Company Separate Account B filed with the Securities and Exchange Commission
on April 16, 2003 (File Nos. 333-90516, 811-05626).
4(x)
Deferred Combination Variable and Fixed Annuity Group Master Contract, incorporated herein by
reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4 for Golden
American Life Insurance Company Separate Account B filed with the Securities and Exchange
Commission on July 3, 2003 (File Nos. 333-101481, 811-05626).
4(y)
Flexible Premium Deferred Combination Variable and Fixed Annuity Contract, incorporated
herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on July 3, 2003 (File Nos. 333-101481, 811-05626).
4(z)
Flexible Premium Deferred Combination Variable and Fixed Annuity Certificate, incorporated
herein by reference to Pre-Effective Amendment No. 1 to a Registration Statement on Form N-4
for Golden American Life Insurance Company Separate Account B filed with the Securities and
Exchange Commission on July 3, 2003 (File Nos. 333-101481, 811-05626).
4(aa)
Company Address and Name Change Endorsement, incorporated herein by reference to Post-
Effective Amendment No. 25 to a Registration Statement on Form N-4 for ING USA Annuity and
Life Insurance Company Separate Account B filed with the Securities and Exchange Commission
on February 13, 2004 (File Nos. 333-28679, 811-05626).
5
Opinion of Counsel, attached.
10
Material contracts are listed under exhibit 10 in the Company's Form 10-K for the fiscal year ended
December 31, 2007 (File Nos. 333-133076, 333-133156, 333-133154, 333-133155, 333-133153,
333-133152), as filed with the Commission on March 28, 2008. Each of the Exhibits so listed is
incorporated by reference as indicated in the Form 10-K.
21
Subsidiaries of the Registrant, incorporated herein by reference to Item 26 in Post-Effective
Amendment No. 10 to Registration Statement on Form N-4 for Variable Annuity Account C of
ING Life Insurance and Annuity Company (File No. 333-105479), as filed with the Securities and
Exchange Commission on April 11, 2008.
23(a)
Consent of Independent Registered Public Accounting Firm, attached.
23(b)
Consent of Counsel, incorporated in Item 5 of this Part II, together with the Opinion of Counsel.
24
Powers of Attorney, see below.
Exhibits other than those listed above are omitted because they are not required or are not
applicable.
(b)
ING USA Annuity and Life Insurance Company Form 10-K for the fiscal year ended December
31, 2007 is incorporated in Part I within the Prospectus.
ING USA Annuity and Life Insurance Company Form 10-Q for the fiscal quarter ended March 31,
2008 is incorporated in Part I within the Prospectus.
ITEM 17. UNDERTAKINGS
(a) Rule 415 offerings. The undersigned registrant hereby undertakes as follows, pursuant to Reg. 229.512. Item
of Regulation S-K:
(1) To file, during any period in which offers or sales of the registered securities 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 changes 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.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(ii) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relaying on Rule 430B or other than prospectuses filed in
reliance on
Rule 430A, shall be deemed to be part of and included in the registration statement as of the date
it is
first used after effectiveness. Provided, however, that no statement made in a registration
statement or
prospectus that is part of the registration statement or made in a document incorporated or
deemed
incorporated by reference into the registration statement or prospectus that is part of the
registration
statement will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or
modify any statement that was made in the registration statement or prospectus that was part of
the
registration statement or made in any such document immediately prior to such date of first
use.
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser
in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf
of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(h)
Request for Acceleration of Effective Date:
Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Act 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, officer 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 Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration
Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of West
Chester, Commonwealth of Pennsylvania, on this 20th day of May, 2008.
By:
ING USA ANNUITY AND
LIFE INSURANCE COMPANY
(Registrant)
By:
/s/ Valerie G. Brown
Valerie G. Brown
President (Principal Executive Officer)
As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated. Each person whose signature appears below hereby constitutes and
appoints John S. (Scott) Kreighbaum, Julie E. Rockmore and Michael Pignatella and each of them individually, such
person's true and lawful attorneys and agents with full power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to sign for such person and in such person's name and
capacity indicated below, any signatures as it may be signed by said attorneys to any and all amendments (pre-
effective and post-effective amendments). This Registration Statement has been signed by the following persons in
the capacities indicated on May 20, 2008.
SIGNATURE
TITLE
President
/s/ Valerie G. Brown
(Principal Executive Officer)
Valerie G. Brown
/s/ Steven T. Pierson
Chief Accounting Officer
Steven T. Pierson
DIRECTORS
/s/ David A. Wheat
Chief Financial Officer
David A. Wheat
/s/ Bridget M. Healy
Bridget M. Healy
/s/ Robert G. Leary
Robert G. Leary
/s/ Thomas J. McInerney
Chairman
Thomas J. McInerney
/s/ Kathleen A. Murphy
Kathleen A. Murphy
/s/ Catherine H. Smith
Catherine H. Smith
EXHIBIT INDEX
ITEM
EXHIBIT
PAGE #
5
Opinion of Counsel
EX-5
23(a)
Consent of Independent Registered Public Accounting Firm
EX-23.A
23(b)
Consent of Counsel
*
*Included in Exhibit 5 above