ING Life Insurance and Annuity Company
Variable Annuity Account B
Individual Nonqualified Variable Annuity
CONTRACT PROSPECTUS – APRIL 29, 2011
		The Funds
The Contract. The contracts described in this prospectus are individual		Fidelity® VIP Contrafund® Portfolio
nonqualified deferred fixed and variable annuity contracts issued by ING		(Initial Class)
Life Insurance and Annuity Company (the Company, we, us, our). They are		Fidelity® VIP Equity-Income Portfolio
intended to provide retirement benefits to individuals who either are not		(Initial Class)
participating in a formal retirement plan or are participating in a formal		Fidelity® VIP Growth Portfolio
retirement plan but want to supplement their benefits.		(Initial Class)
		Fidelity® VIP Overseas Portfolio
		(Initial Class)
Why Reading this Prospectus Is Important. This prospectus contains facts		ING Balanced Portfolio (Class I)
about the contracts and their investment options you should know before		ING BlackRock Large Cap Growth
purchasing. This information will help you decide if the contracts are right		Portfolio (Class I)
for you. Please read this prospectus carefully and keep it for future		ING BlackRock Science and Technology
reference.		Opportunities Portfolio (Class I)
		ING Global Bond Portfolio (I Class)
Investment Options. The contracts offer variable investment options and a		ING Growth and Income Portfolio
fixed interest option. When we establish your account, you instruct us to		(Class I)
direct your account dollars to any of the available investment options.		ING Intermediate Bond Portfolio
		(Class I)
		ING International Index Portfolio
Variable Investment Options. These options are called subaccounts. The		(Class S)
subaccounts are within Variable Annuity Account B (the separate account),		ING Invesco Van Kampen Equity and
a separate account of the Company. Each subaccount invests in one of the		Income Portfolio (Class I)(2)
mutual funds listed on this page. Earnings on amounts invested in a		ING Large Cap Growth (Class I)
subaccount will vary depending upon the performance of its underlying		ING Money Market Portfolio
mutual fund. You do not invest directly in or hold shares of the funds.		(Class I)
		ING Oppenheimer Global Portfolio
Fixed Interest Option.		(Class I)
		ING RussellTM Large Cap Growth Index
•	Fixed Account	Portfolio (Class I)
		ING Strategic Allocation Conservative
Except as specifically mentioned, this prospectus describes only the variable		Portfolio (Class I)(1)
investment options. However, we describe the Fixed Account in Appendix I		ING Strategic Allocation Growth
of this prospectus.		Portfolio (Class I)(1)
		ING Strategic Allocation Moderate
		Portfolio (Class I)(1)
Risks Associated with Investing in the Funds. The funds in which the		ING Templeton Foreign Equity Portfolio
subaccounts invest have various risks. Information about the risks of		(Class I)
investing in the funds is located in the “Investment Options” section on		ING Thornburg Value Portfolio
page 10 and in each fund prospectus. Read this prospectus in conjunction		(Class I)
with the fund prospectuses, and retain the prospectuses for future reference.		ING T. Rowe Price Diversified Mid Cap
		Growth Portfolio (Class I)
These contracts are not deposits with, obligations of or guaranteed or		ING T. Rowe Price Growth Equity
endorsed by any bank, nor are they insured by the FDIC. The contracts		Portfolio (Class I)
		ING UBS U.S. Large Cap Equity
are subject to investment risk, including the possible loss of the		Portfolio (Class I)
principal amount invested.
(1)	These funds are structured as fund of funds that invest directly in shares of underlying funds. See “Fees – Fund Fees and
	Expenses” for additional information.
(2)	This fund has changed its name to the name listed above on or about the date of this prospectus. See Appendix II –
	Description of Underlying Funds for a complete list of former and current fund names.
PRO.75998-11

CONTRACT PROSPECTUS – APRIL 29, 2011 (CONTINUED)
Compensation. We pay compensation to broker/dealers whose registered representatives sell the contracts.
See “Contract Distribution” for further information about the amount of compensation we pay.
Getting Additional Information. If you received a summary prospectus for any of the funds available through your
contract, you may obtain a full prospectus and other fund information free of charge by either accessing the internet
address, calling the telephone number or sending an email request to the email address shown on the front of the
fund’s summary prospectus. You may obtain the April 29, 2011 Statement of Additional Information (“SAI”) free of
charge by indicating your request on your application materials, by calling the Company at 1-800-262-3862 or by
writing us at the address listed in the “Contract Overview - Questions: Contacting the Company” section of this
prospectus. You may also obtain a prospectus or an SAI for any of the funds by calling that number. This
prospectus, the SAI and other information about the separate account may be obtained by accessing the Securities
and Exchange Commission’s (“SEC”) web site, http://www.sec.gov. Copies of this information may also be
obtained, after paying a duplicating fee, by contacting the SEC Public Branch. Information on the operation of the
SEC Public Reference Branch may be obtained by calling 1-202-551-8090 or 1-800-SEC-0330, e-mailing
publicinfo@sec.gov or by writing to SEC Public Reference Branch, 100 F Street, NE, Room 1580, Washington,
D.C. 20549. When looking for information regarding the contracts offered through this prospectus, you may find it
useful to use the number assigned to the registration statement under the Securities Act of 1933. This number is
033-75998. The SAI table of contents is listed on page 39 of this prospectus. The SAI is incorporated into this
prospectus by reference.
Additional Disclosure Information. Neither the SEC nor any state securities commission has approved or
disapproved the securities offered through this prospectus or passed on the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense. We do not intend for this prospectus to be an offer to sell or
a solicitation of an offer to buy these securities in any state that does not permit their sale. We have not authorized
anyone to provide you with information that is different from that contained in this prospectus.
PRO.75998-11	2

TABLE OF CONTENTS
Contract Overview			4
Contract Design
Contract Facts
Questions: Contacting the Company (sidebar)
Sending Forms and Written Requests in Good Order (sidebar)
Contract Phases: The Accumulation Phase, The Income Phase			5
Fee Table			6
Condensed Financial Information			8
Variable Annuity Account B			8
The Company			9
Investment Options			10
Transfers Among Investment Options			11
Purchase and Rights			14
Right to Cancel			15
Fees			16
Your Account Value			20
Withdrawals			22
Systematic Distribution Options			23
Death Benefit			24
The Income Phase			26
Contract Distribution			29
Tax Considerations			32
Other Topics			36
Anti-Money Laundering - Payment Delay or Suspension - Performance Reporting - Voting Rights - Contract
Modification - Transfer of Ownership: Assignment - Legal Matters and Proceedings
Contents of the Statement of Additional Information			39
Appendix I	-	Fixed Account	40
Appendix II	-	Description of Underlying Funds	41
Appendix III	-	Condensed Financial Information	CFI - 1
PRO.75998-11		3

	CONTRACT OVERVIEW
Questions: Contacting the
Company. To answer your	The following summarizes contract information. Read each section of this
questions, contact your local	prospectus for additional information.
representative or write or call the
Company through:	Contract Design
ING	The contracts described in this prospectus are individual nonqualified
USFS Customer Service	fixed and variable annuity contracts. They are intended as a retirement
Defined Contribution	savings vehicle that defers taxes on investment earnings and offers a
Administration	variety of investment options to help meet long-term financial goals.
P.O. Box 990063
Hartford, CT 06199-0063	Contract Facts
1-800-262-3862
	Free Look/Right to Cancel: You may cancel your contract within ten
Sending Forms and Written	days (some states may require more than ten days) of receipt. See “Right
Requests in Good Order.	to Cancel.”
If you are writing to change your
beneficiary, request a withdrawal,	Death Benefit: Your beneficiary may receive a financial benefit in the
or for any other purpose, contact	event of your death during both the accumulation and income phases. The
us or your local representative to	availability of a death benefit during the income phase depends on the
learn what information is required	income phase payment option selected. See “Death Benefit” and “The
for the request to be in “good	Income Phase.”
order.” By contacting us, we can
provide you with the appropriate	Withdrawals: During the accumulation phase you may withdraw all or
administrative form for your	part of your account value. Certain fees, taxes and early withdrawal
requested transaction.	penalties may apply. See “Withdrawals.”
Generally, a request is considered	Systematic Distribution Options: These are made available for you to
to be in “good order” when it is	receive periodic withdrawals from your account, while retaining the
signed, dated and made with such	account in the accumulation phase. See “Systematic Distribution
clarity and completeness that we	Options.”
are not required to exercise any
discretion in carrying it out.	Fees and Expenses: Certain fees and expenses are deducted from the
	value of your contract. See “Fee Table” and “Fees.”
We can only act upon requests that
are received in good order.	Taxation: You will generally not pay taxes on any earnings from the
	annuity contract described in this prospectus until they are withdrawn.
	Taxes will generally be due when you receive a distribution. Tax penalties
	may apply in some circumstances. See “Tax Considerations.”
PRO.75998-11	4

Contract Phases
The Accumulation Phase (accumulating dollars under your contract)
STEP 1: You provide us with your completed		Payments to
application and initial purchase payment. We		Your Account
establish an account for you and credit that			Step 1 ||
account with your initial purchase payment.
		ING Life Insurance and Annuity Company
STEP 2: You direct us to invest your purchase
payment in one or more of the following		||	Step 2		||
			Variable Annuity
investment options:		Fixed		Account B
		Interest
·	Fixed Interest Option	Option	Variable Investment Options
·	Variable Investment Options. (The variable
	investment options are the subaccounts of		The Subaccounts
	Variable Annuity Account B. Each one	A		B	Etc.
	invests in a specific mutual fund.)
		||	Step 3	||
STEP 3: Each subaccount you select purchases
shares of its assigned fund.		Mutual		Mutual
		Fund A		Fund B
The Income Phase (receiving income phase payments from your contract)
When you want to begin receiving payments from your contract, you may select from the options available. The
contract offers several income phase payment options (see “The Income Phase”). In general, you may:
•	Receive income phase payments for a specified period of time or for life;
•	Receive income phase payments monthly, quarterly, semi-annually or annually;
•	Select an income phase payment option that provides for payments to your beneficiary; and
•	Select income phase payments that are fixed or that vary depending on the performance of the variable
	investment options you select.
PRO.75998-11		5

		FEE TABLE
In This Section:
•	Maximum Contract Holder	The following tables describe the fees and expenses that you will pay
	Transaction Expenses	when buying, owning, and withdrawing account value from your
•	Maximum Periodic Fees and	contract. The first table describes the fees and expenses that you may
	Charges	pay at the time that you buy the contract, withdraw account value
		from the contract, or transfer cash value between investment options.
•	Total Annual Fund Operating	State premium taxes may also be deducted.* See “The Income Phase”
	Expenses	for fees that may apply after you begin receiving payments under the
•	Examples	contract.
•	Fees Deducted by the Funds
See “Fees” for:		Maximum Contract Holder Transaction Expenses
•	How, When and Why Fees	Early Withdrawal Charge1
	are Deducted	(as a percentage of amount withdrawn)	5%
•	Reduction, Waiver and/or
	Elimination of Certain Fees	The next table describes the fees and expenses that you may
•	Redemption Fees	pay periodically during the time that you own the contract, not
•	Premium and Other Taxes	including fund fees and expenses.
		Maximum Periodic Fees and Charges
		Annual Maintenance Fee
		Installment Purchase Payment Contracts2	$20.00
		Maximum Separate Account Annual Expenses
		(as a percentage of average account value)
		Mortality and Expense Risk Charge	1.25%
		Administrative Expense Charge3	0.00% - 0.25%
		Total Separate Account Annual Expenses	1.25% - 1.50%
*	State premium taxes (which currently range from 0% to 4% of premium payments) may apply but are not
	reflected in the fee tables or examples. See “Premium and Other Taxes.”
1	This is a deferred sales charge. The percentage will be determined by the applicable early withdrawal charge
	schedule in the “Fees” section. In certain cases, this charge may not apply to a portion or all of your withdrawal.
	The early withdrawal charge reduces over time. These fees may be waived, reduced or eliminated in certain
	circumstances. See the “Fees” section.
2	The annual maintenance fee is generally deducted only from installment purchase payment contracts. Under
	certain contracts, the annual maintenance fee may also be deducted upon full withdrawals. See “Fees - Annual
	Maintenance Fee.”
3	We currently do not impose this charge, however; if allowed by your contract, we reserve the right to charge up to
	0.25% annually. See “Fees - Administrative Expense Charge.”
PRO.75998-11		6

The next item shows the minimum and maximum total operating expenses charged by the funds that you may
pay periodically during the time that you own the contract. The minimum and maximum expenses listed
below are based on expenses for the funds’ most recent fiscal year ends without taking into account any fee
waiver or expense reimbursement arrangements that may apply. More detail concerning each fund’s fees and
expenses is contained in the prospectus for each fund.
Total Annual Fund Operating Expenses						Minimum		Maximum
(expenses that are deducted from fund assets, including management fees
and other expenses)						0.34%		1.05%
Examples
The following Examples are intended to help you compare the cost of investing in the contract with the cost of
investing in other variable annuity contracts. These costs include contract holder transaction expenses,
contract fees including the annual maintenance fee of $20 (converted to a percentage of assets equal to
(0.066%), separate account annual expenses, and fund fees and expenses.
Example 1: The following Examples assume that you invest $10,000 in the contract for the time periods indicated.
The Examples also assume that your investment has a 5% return each year and assume the maximum fees and
expenses of any of the funds.			Although your actual costs may be higher or lower, based on these assumptions, your
costs would be:
(A) If you withdraw your entire account value at the					(B) If you do not withdraw your entire account
end of the applicable time period*:					value or if you select an income phase payment
					option at the end of the applicable time period**:
1 Year		3 Years	5 Years	10 Years	1 Year	3 Years	5 Years	10 Years
	$725	$1,296	$1,894	$2,950	$265	$813	$1,388	$2,950
Example 2: The following Examples assume that you invest $10,000 in the contract for the time periods indicated.
The Examples also assume that your investment has a 5% return each year and assume the minimum fees and
expenses of any of the funds.			Although your actual costs may be higher or lower, based on these assumptions, your
costs would be:
(A) If you withdraw your entire account value at the					(B) If you do not withdraw your entire account
end of the applicable time period*:					value or if you select an income phase payment
					option at the end of the applicable time period**:
1 Year		3 Years	5 Years	10 Years	1 Year	3 Years	5 Years	10 Years
	$657	$1,092	$1,554	$2,228	$194	$599	$1,029	$2,228
*	This example reflects deduction of an early withdrawal charge calculated using the schedule applicable to
	Installment Purchase Payment Contracts. The Installment Purchase Payment Contracts schedule is listed in
	“Fees.” Under that schedule, if only one $10,000 payment was made as described above, fewer than 5
	purchase payment periods would have been completed at the end of years 1, 3 and 5, and the 5% charge would
	apply. At the end of the tenth year the early withdrawal charge is waived regardless of the number of purchase
	payment periods completed, and no early withdrawal charge would apply.
**	This example does not apply during the income phase if you elect to receive income phase payments under a
	nonlifetime variable payment option and subsequently request a lump-sum withdrawal after the income phase
	payments start. In this circumstance, the lump-sum payment is treated as a withdrawal during the accumulation
	phase and may be subject to an early withdrawal charge as shown in Example A.
PRO.75998-11					7

Fees Deducted by the Funds
Fund Fee Information. The fund prospectuses show the investment advisory fees, 12b-1 fees and other expenses
including service fees (if applicable) charged annually by each fund. See the “Fees” section of this prospectus, and
the fund prospectuses, for further information. Fund fees are one factor that impact the value of a fund share. To
learn about additional factors, refer to the fund prospectuses.
The Company may receive compensation from each of the funds or the funds’ affiliates based on an annual
percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund
company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that
are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the fund prospectuses. The
Company may also receive additional compensation from certain funds for administrative, recordkeeping or other
services provided by the Company to the funds or the funds’ affiliates. These additional payments may also be used
by the Company to finance distribution. These additional payments are made by the funds or the funds’ affiliates to
the Company and do not increase, directly or indirectly, the fund fees and expenses. See “Fees - Fund Fees and
Expenses” for additional information.
In the case of fund companies affiliated with the Company, where the affiliated investment adviser employs
subadvisers to manage the funds, no direct payments are made to the Company or the affiliated investment adviser
by the subadvisers. Subadvisers may provide reimbursement for employees of the Company or its affiliates to attend
business meetings or training conferences. Investment management fees are apportioned between the affiliated
investment adviser and subadviser. This apportionment varies by subadviser, resulting in varying amounts of
revenue retained by the investment adviser. This apportionment of the investment advisory fee does not increase,
directly or indirectly, fund fees and expenses. See “Fees - Fund Fees and Expenses” for additional information.
How Fees are Deducted. Fees are deducted from the value of the fund shares on a daily basis, which in turn affects
the value of each subaccount that purchases fund shares.
CONDENSED FINANCIAL INFORMATION
Understanding Condensed Financial Information. In Appendix III of this prospectus, we provide condensed
financial information about Variable Annuity Account B subaccounts you may invest in through the contract. The
tables show value of the subaccounts over the past 10 years. For subaccounts that were not available 10 years ago,
we show the year-end unit values of each subaccount from the time purchase payments were first received in the
subaccounts under the contract.
Financial Statements. The statements of assets and liabilities, the statements of operations, the statements of
changes in net assets and the related notes to financial statements for Variable Annuity Account B and the
consolidated financial statements and the related notes to financial statements for ING Life Insurance and Annuity
Company (the Company) are located in the Statement of Additional Information.
VARIABLE ANNUITY ACCOUNT B
We established Variable Annuity Account B (the “separate account”) under Connecticut Law in 1976 as a
continuation of the separate account established in 1974 under Arkansas law by Aetna Variable Annuity Life
Insurance Company. The separate account was established as a segregated asset account to fund variable annuity
contracts. The separate account is registered as a unit investment trust under the Investment Company Act of 1940
(the “40 Act”). It also meets the definition of “separate account” under the federal securities laws.
The separate account is divided into “subaccounts.” Each subaccount invests directly in shares of a pre-assigned
fund.
Although we hold title to the assets of the separate account, such assets are not chargeable with the liabilities of any
other business that we conduct. Income, gains or losses of the separate account are credited to or charged against the
assets of the separate account without regard to other income, gains or losses of ING Life Insurance and Annuity
Company. All obligations arising under the contracts are obligations of ING Life Insurance and Annuity Company.
All guarantees and benefits provided under the contracts that are not related to the separate account are subject to the
claims paying ability of the company and our general account.
PRO.75998-11	8

THE COMPANY
ING Life Insurance and Annuity Company (the Company, we, us, our) issues the contracts described in this
prospectus and is responsible for providing each contract’s insurance and annuity benefits. All guarantees and
benefits provided under the contracts that are not related to the separate account are subject to the claims paying
ability of the company and our general account. We are a direct, wholly owned subsidiary of Lion Connecticut
Holding Inc.
We are a stock life insurance company organized under the insurance laws of the State of Connecticut in 1976 and
an indirect wholly owned subsidiary of ING Groep N.V. (“ING”), a global financial institution active in the fields of
insurance, banking and asset management. Through a merger, our operations include the business of Aetna Variable
Annuity Life Insurance Company (formerly known as Participating Annuity Life Insurance Company, an Arkansas
life insurance company organized in 1954). Prior to January 1, 2002, the Company was known as Aetna Life
Insurance and Annuity Company.
As part of a restructuring plan approved by the European Commission, ING Groep N.V. has agreed to separate its
banking and insurance business by 2013. ING Groep N.V. intends to achieve this separation by divestment of its
insurance and investment management operations, including the Company. ING Groep has announced that it will
explore all options for implementing the separation including initial public offerings, sales or a combination thereof.
We are engaged in the business of issuing life insurance and annuities. Our principal executive offices are located at:
One Orange Way
Windsor, Connecticut 06095-4774
Regulatory Matters. As with many financial services companies, the Company and its affiliates periodically
receive 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
Company or financial services industry. Some of these investigations and inquires could result in regulatory action
against the Company. The potential outcome of such action is difficult to predict but could subject the Company or
its affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, fines, and other
financial liability. It is not currently anticipated that the outcome of any such action will have a material adverse
effect on ING or ING’s U.S. based operations, including the Company. It is the practice of the company and its
affiliates to cooperate fully in these matters.
Product Regulation. Our 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 governmental and self-
regulatory authorities, including state insurance regulators, state securities administrators, the SEC, the Financial
Industry Regulatory Authority (“FINRA”), the Department of Labor and the Internal Revenue Service (“IRS”).For
example, U.S. federal income tax law imposes requirements relating to product design, administration, and
investments that are conditions for beneficial tax treatment of such products under the Tax Code. See “TAX
CONSIDERATIONS” for further discussion of some of these requirements. Failure to administer certain
product features could affect such beneficial tax treatment. In addition, 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 and
unanticipated claims and costs associated with remedying such failure. Additionally, such failure could harm the
Company’s reputation, interrupt the Company’s operations or adversely impact profitability.
PRO.75998-11	9

INVESTMENT OPTIONS
The contract offers variable investment options and a fixed interest option.
Variable Interest Options. These options are called subaccounts. The subaccounts are within Variable Annuity
Account B (“the separate account”), a separate account of the Company. Each subaccount invests in a specific
mutual fund. You do not invest directly in or hold shares of the funds.
•	Mutual Fund (fund) Descriptions: We provide brief descriptions of the funds in Appendix II. Refer to the
	fund prospectuses for additional information. Fund prospectuses may be obtained, free of charge, from our
	administrative service center at the address and phone number listed in “Contract Overview - Questions:
	Contacting the Company,” by accessing the SEC’s web site or by contacting the SEC Public Reference Branch.
Fixed Interest Option. The Fixed Account guarantees payment of the minimum interest rate specified in the
contract. For a description of the Fixed Account, see Appendix I.
When Selecting Investment Options:
•	Choose options appropriate for you. Your sales representative can help you evaluate which investment
	options may be appropriate for your financial goals;
•	Understand the risks associated with the options you choose. Some subaccounts invest in funds that are
	considered riskier than others. Funds with additional risks are expected to have values that rise and fall more
	rapidly and to a greater degree than other funds. For example, funds investing in foreign or international
	securities are subject to risks not associated with domestic investments, and their investment performance may
	vary accordingly. Also, funds using derivatives in their investment strategy may be subject to additional risks;
	and
•	Be informed. Read this prospectus, the fund prospectuses and Appendix I.
Limits on Availability of Options. Some funds or the fixed interest option may be unavailable through your
contract or in your state. We may add, withdraw or substitute funds, subject to conditions in your contract and
compliance with regulatory requirements. In the case of a substitution, the new fund may have different fees and
charges than the fund it replaced.
Limits on How Many Investment Options You May Select. You may select no more than 18 investment options
during the accumulation phase. Each subaccount you select and the Fixed Account counts as one option once you
have made an allocation to it, even if you no longer have amounts allocated to that option.
Additional Risks of Investing in the Funds.
Insurance-Dedicated Funds (Mixed and Shared Funding). The funds described in this prospectus are available
only to insurance companies for their variable contracts (or directly to certain retirement plans, as allowed by the
Tax Code). Such funds are often referred to as “insurance-dedicated funds,” and are used for “mixed” and “shared”
funding.
“Mixed funding” occurs when shares of a fund, which the subaccount buys for variable annuity contracts, are bought
for variable life insurance contracts issued by us or other insurance companies.
“Shared funding” occurs when shares of a fund, which the subaccount buys for variable annuity contracts, are also
bought by other insurance companies for their variable annuity contracts. In other words:
•	Mixed funding - bought for annuities and life insurance
•	Shared funding - bought by more than one company
PRO.75998-11		10

It is possible that a conflict of interest may arise due to mixed and/or shared funding, which could adversely impact
the value of a fund. For example, if a conflict of interest occurred and one of the subaccounts withdrew its
investment in a fund, the fund may be forced to sell its securities at disadvantageous prices, causing its share value
to decrease. Each fund’s Board of Directors or Trustees will monitor events to identify any conflicts which may
arise and to determine what action, if any, should be taken to address such conflicts.
TRANSFERS AMONG INVESTMENT OPTIONS
During the accumulation phase, you may transfer amounts among the available subaccounts. Transfers from the
Fixed Account may be restricted as outlined in Appendix I, and the total number of investment options that you may
select during the accumulation period is limited. See “Investment Options - Limits on How Many Investment
Options You May Select.” The minimum transfer amount is $500. You may establish automated transfers of account
value. See “Dollar Cost Averaging.” Transfers must be made in accordance with the terms of your contract. You
may not make transfers once you enter the income phase. See “The Income Phase.”
Transfer Requests. Requests may be made in writing, by telephone or, where applicable, electronically.
Limits on Frequent or Disruptive Transfers
The contract is not designed to serve as a vehicle for frequent transfers. Frequent transfer activity can disrupt
management of a fund and raise its expenses through:
•	Increased trading and transaction costs;
•	Forced and unplanned portfolio turnover;
•	Lost opportunity costs; and
•	Large asset swings that decrease the fund’s ability to provide maximum investment return to all contract
	owners.
This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use
market-timing investment strategies or make frequent transfers should not purchase the contract.
Excessive Trading Policy. We and the other members of the ING family of companies that provide multi-fund
variable insurance and retirement products have adopted a common Excessive Trading Policy to respond to the
demands of the various fund families that make their funds available through our products to restrict excessive fund
trading activity and to ensure compliance with Rule 22c-2 of the 1940 Act.
We actively monitor fund transfer and reallocation activity within our variable insurance products to identify
violations of our Excessive Trading Policy. Our Excessive Trading Policy is violated if fund transfer and
reallocation activity:
•	Meets or exceeds our current definition of Excessive Trading, as defined below; or
•	Is determined, in our sole discretion, to be disruptive or not in the best interests of other owners of our variable
	insurance and retirement products.
We currently define “Excessive Trading” as:
•	More than one purchase and sale of the same fund (including money market funds) within a 60 calendar day
	period (hereinafter, a purchase and sale of the same fund is referred to as a “round-trip”). This means two or
	more round-trips involving the same fund within a 60 calendar day period would meet our definition of
	Excessive Trading; or
•	Six round-trips involving the same fund within a rolling twelve month period.
PRO.75998-11		11

The following transactions are excluded when determining whether trading activity is excessive:
•	Purchases or sales of shares related to non-fund transfers (for example, new purchase payments, withdrawals
	and loans);
•	Transfers associated with scheduled dollar cost averaging, scheduled rebalancing, or scheduled asset allocation
	programs;
•	Purchases and sales of fund shares in the amount of $5,000 or less;
•	Purchases and sales of funds that affirmatively permit short-term trading in their fund shares, and movement
	between such funds and a money market fund; and
•	Transactions initiated by us, another member of the ING family of companies, or a fund.
If we determine that an individual or entity has made a purchase of a fund within 60 days of a prior round-trip
involving the same fund, we will send them a letter (once per year) warning that another sale of that same fund
within 60 days of the beginning of the prior round-trip will be deemed to be Excessive Trading and result in a six
month suspension of their ability to initiate fund transfers or reallocations through the Internet, facsimile, Voice
Response Unit (VRU), telephone calls to the ING Customer Service Center, or other electronic trading medium that
we may make available from time to time (“Electronic Trading Privileges”). Likewise, if we determine that an
individual or entity has made five round-trips involving the same fund within a rolling twelve month period, we will
send them a letter warning that another purchase and sale of that same fund within twelve months of the initial
purchase in the first round-trip will be deemed to be Excessive Trading and result in a suspension of their Electronic
Trading Privileges. According to the needs of the various business units, a copy of any warning letters may also be
sent, as applicable, to the person(s) or entity authorized to initiate fund transfers or reallocations, the agent/registered
representative, or the investment adviser for that individual or entity. A copy of the warning letters and details of
the individual’s or entity’s trading activity may also be sent to the fund whose shares were involved in the trading
activity.
If we determine that an individual or entity has violated our Excessive Trading Policy, we will send them a letter
stating that their Electronic Trading Privileges have been suspended for a period of six months. Consequently, all
fund transfers or reallocations, not just those that involve the fund whose shares were involved in the activity that
violated our Excessive Trading Policy, will then have to be initiated by providing written instructions to us via
regular U.S. mail. Suspension of Electronic Trading Privileges may also extend to products other than the product
through which the Excessive Trading activity occurred. During the six month suspension period, electronic “inquiry
only” privileges will be permitted where and when possible. A copy of the letter restricting future transfer and
reallocation activity to regular U.S. mail and details of the individual’s or entity’s trading activity may also be sent,
as applicable, to the person(s) or entity authorized to initiate fund transfers or reallocations, the agent/registered
representative or investment adviser for that individual or entity, and the fund whose shares were involved in the
activity that violated our Excessive Trading Policy.
Following the six month suspension period during which no additional violations of our Excessive Trading Policy
are identified, Electronic Trading Privileges may again be restored. We will continue to monitor the fund transfer
and reallocation activity, and any future violations of our Excessive Trading Policy will result in an indefinite
suspension of Electronic Trading Privileges. A violation of our Excessive Trading Policy during the six month
suspension period will also result in an indefinite suspension of Electronic Trading Privileges.
We reserve the right to suspend Electronic Trading Privileges with respect to any individual or entity, with or
without prior notice, if we determine, in our sole discretion, that the individual’s or entity’s trading activity is
disruptive or not in the best interests of other owners of our variable insurance and retirement products, regardless of
whether the individual’s or entity’s trading activity falls within the definition of Excessive Trading set forth above.
Our failure to send or an individual’s or entity’s failure to receive any warning letter or other notice contemplated
under our Excessive Trading Policy will not prevent us from suspending that individual’s or entity’s Electronic
Trading Privileges or taking any other action provided for in our Excessive Trading Policy.
The Company does not allow exceptions to our Excessive Trading Policy. We reserve the right to modify our
Excessive Trading Policy, or the policy as it relates to a particular fund, at any time without prior notice, depending
on, among other factors, the needs of the underlying fund(s), the best interests of contract owners and fund investors,
and/or state or federal regulatory requirements. If we modify our policy, it will be applied uniformly to all contract
owners or, as applicable, to all contract owners investing in the underlying fund.
PRO.75998-11		12

Our Excessive Trading Policy may not be completely successful in preventing market-timing or excessive trading
activity. If it is not completely successful, fund performance and management may be adversely affected, as noted
above.
Limits Imposed by the Funds. Each underlying fund available through the variable insurance and retirement
products offered by us and/or the other members of the ING family of companies, either by prospectus or stated
policy, has adopted or may adopt its own excessive/frequent trading policy, and orders for the purchase of fund
shares are subject to acceptance or rejection by the underlying fund. We reserve the right, without prior notice, to
implement fund purchase restrictions and/or limitations on an individual or entity that the fund has identified as
violating its excessive/frequent trading policy and to reject any allocation or transfer request to a subaccount if the
corresponding fund will not accept the allocation or transfer for any reason. All such restrictions and/or limitations
(which may include, but are not limited to, suspension of Electronic Trading Privileges and/or blocking of future
purchases of a fund or all funds within a fund family) will be done in accordance with the directions we receive from
the fund.
Agreements to Share Information with Fund Companies. As required by Rule 22c-2 under the 1940 Act, we
have entered into information sharing agreements with each of the fund companies whose funds are offered through
the contract. Contract owner trading information is shared under these agreements as necessary for the fund
companies to monitor fund trading and our implementation of our Excessive Trading Policy. Under these
agreements, the Company is required to share information regarding contract owner transactions, including but not
limited to information regarding fund transfers initiated by you. In addition to information about contract owner
transactions, this information may include personal contract owner information, including names and social security
numbers or other tax identification numbers.
As a result of this information sharing, a fund company may direct us to restrict a contract owner’s transactions if
the fund determines that the contract owner has violated the fund’s excessive/frequent trading policy. This could
include the fund directing us to reject any allocations of purchase payments or contract value to the fund or all funds
within the fund family.
Charges for Transfers. We currently do not charge for transfers.
Value of Your Transferred Dollars. The value of amounts transferred into or out of subaccounts will be based on
the subaccount unit values next determined after we receive your transfer request in good order at our the address
listed in “Contract Overview-Questions: Contacting the Company,” or, if you are participating in the dollar cost
averaging program, after your scheduled transfer.
Telephone and Electronic Transactions: Security Measures. To prevent fraudulent use of telephone and
electronic transactions (including, but not limited to, Internet transactions), we have established security procedures.
These include recording calls on our toll-free telephone lines and requiring use of a personal identification number
(PIN) to execute transactions. You are responsible for keeping your PIN and account information confidential. If we
fail to follow reasonable security procedures, we may be liable for losses due to unauthorized or fraudulent
telephone or other electronic transactions. We are not liable for losses resulting from following telephone or
electronic instructions we believe to be genuine. If a loss occurs when we rely on such instructions, you will bear the
loss.
The Dollar Cost Averaging Program. Dollar cost averaging is an investment strategy whereby you purchase fixed
dollar amounts of an investment at regular intervals, regardless of price. Under this program a fixed dollar amount is
automatically transferred from one of your investment options to one or more of the subaccounts. Transfers from the
Fixed Account under the dollar cost averaging program may be restricted. (See Appendix I.) Dollar cost averaging
neither ensures a profit nor guarantees against loss in a declining market. You should consider your financial ability
to continue purchases through periods of low price levels. There is no additional charge for this program. For
additional information about this program, contact your local representative or call us at the number listed in
“Contract Overview - Questions: Contacting the Company.” Subaccount reallocations or changes outside of the
dollar cost averaging may affect the program.	Changes such as fund mergers, substitutions, or closures may also
affect the program.
PRO.75998-11	13

PURCHASE AND RIGHTS
How to Purchase. Complete the application and deliver it along with your initial purchase payment to us. Upon
our approval, we will issue you a contract and set up an account for you.
Two types of contracts are available:
•	Installment Purchase Payment contracts. Under these contracts, you make continuing periodic payments.
•	Single Purchase Payment contracts. Under these contracts you make a single payment to the contract or a
	lump-sum transfer of amounts accumulated under a pre-existing annuity or retirement arrangement.
Payment Amounts. The minimum payment amount for each type of contract is as follows:
•	The minimum payment for a single purchase payment contract is $5,000; and
•	Installment purchase payments must be at least $100 per month ($1,200 annually) and may not be less than $25
	per payment.
Acceptance or Rejection of Your Application. We must accept or reject your application within two business days
of receipt. If the application is incomplete, we may hold any forms and accompanying purchase payment(s) for five
business days. We may hold purchase payments for longer periods, pending acceptance of the application, only with
your permission. If the application is rejected, the application and any purchase payments will be returned to you.
Allocating Purchase Payments to the Investment Options. We will allocate your purchase payments among the
investment options you select. Allocations must be in whole percentages and there may be a limit on the number of
investment options you may select. When selecting investment options, you may find it helpful to review the
“Investment Options” section.
Factors to Consider in the Purchase Decision. The decision to purchase the contract should be discussed with
your financial representative. Make sure that you understand the investment options it provides, its other features,
the risks and potential benefits you will face, and the fees and expenses you will incur when, together with your
financial representative, you consider an investment in the contract. You should pay attention to the following
issues, among others:
•	Long-Term Investment - This contract is a long-term investment, and is typically most useful as part of a
	personal retirement plan. Early withdrawals may expose you to early withdrawal charges or tax penalties. The
	value of deferred taxation on earnings grows with the amount of time funds are left in the contract. You should
	not participate in this contract if you are looking for a short-term investment or expect to need to make
	withdrawals before you are 59½;
•	Investment Risk - The value of investment options available under this contract may fluctuate with the markets
	and interest rates. You should not participate in this contract in order to invest in these options if you cannot risk
	getting back less money than you put in;
•	Features and Fees - The fees for this contract reflect costs associated with the features and benefits it provides.
	As you consider this contract, you should determine the value that these various benefits and features have for
	you, given your particular circumstances, and consider the charges for those features; and
•	Exchanges - Replacing an existing insurance contract with this contract may not be beneficial to you. If this
	contract will be a replacement for another annuity contract, you should compare the two options carefully,
	compare the costs associated with each, and identify additional benefits available under this contract. You
	should consider whether these additional benefits justify incurring a new schedule of early withdrawal charges
	or any increased charges that might apply under this contract. Also, be sure to talk to your financial professional
	or tax adviser to make sure that the exchange will be handled so that it is tax-free.
PRO.75998-11		14

When considering whether to purchase or participate in the contract, you should consult with your financial
representative about your financial goals, investment time horizon and risk tolerance.
Other Products. We and our affiliates offer various other products with different features and terms than these
contracts, which may offer some or all of the same funds. These products have different benefits, fees and charges,
and may offer different share classes of the funds offered in this contract that are less expensive. These other
products may or may not better match your needs. You should be aware that there are alternative options available,
and, if you are interested in learning more about these other products, contact your registered representative.
RIGHT TO CANCEL
When and How to Cancel. You may cancel the contract within ten days of receipt (some states require more than
ten days) by returning it to the address listed in “Contract Overview-Questions: Contacting the Company” along
with a written notice of cancellation.
Refunds. We will issue you a refund within seven calendar days of our receipt of your contract and written notice of
cancellation. Unless your state requires otherwise, your refund will equal the purchase payments made plus any
earnings or minus any losses attributable to those amounts allocated to the subaccounts. Any mortality and expense
risk charges and administrative expense charges (if any) deducted during the period you held the contract will not be
returned. We will not deduct an early withdrawal charge. In other words, you will bear the entire investment risk for
amounts allocated among the subaccounts during this period and the amount refunded could be less than the amount
paid. If your state requires, we will refund all purchase payments made.
If the purchase payments for your cancelled contract came from a transfer or rollover from another contract issued
by us or one of our affiliates where an early withdrawal charge was reduced or eliminated, the purchase payments
will be restored to your prior contract.
PRO.75998-11	15

FEES
		Types of Fees
The following repeats and adds to information provided under “Fee Table.”		The following types of fees or
Please review both sections for information on fees.		deductions may affect your
		account:
Transaction Fees		•	Periodic Fees and Charges
			> Early Withdrawal
Early Withdrawal Charge			Charge
			> Redemption Fees
Withdrawals of all or a portion of your account value may be subject to a		•	Periodic Fees and Charges
charge. In the case of a partial withdrawal where you request a specified			> Annual Maintenance
dollar amount, the amount withdrawn from your account will be the amount			Fee
you specified plus adjustment for any applicable early withdrawal charge.			> Mortality and
			Expense Risk Charge
Amount. The charge is a percentage of the amount that you withdraw. The			> Administrative
percentage will be determined by the early withdrawal charge schedule that			Expense Charge
applies to your contract. The schedules are listed below and appear on your		•	Fund Fees and Expenses
contract schedule page. The charge will never be more than 8.5% of your		•	Premium and Other Taxes
total payments to the contract.
		Terms to Understand
Early Withdrawal Charge Schedules		•	“Payment Period” (for
			installment purchase
Schedule A - Installment Purchase Payment Contracts			payment contracts) - The
Completed Payment Periods	Early Withdrawal Charge		period of time it takes to
Less than 5	5%		complete the number of
5 or more but less than 7	4%		installment payments
7 or more but less than 9	3%		expected to be made to
9 or more but less than 10	2%		your account over a year.
10 or more	0%		For example, if your
			payment frequency is
Schedule B - Single Purchase Payment Contracts*			monthly, a payment period
Completed Contract Years	Early Withdrawal Charge		is completed after 12
Less than 5	5%		payments are made. If
5 or more but less than 6	4%		only 11 payments are
6 or more but less than 7	3%		made, the payment period
7 or more but less than 8	2%		is not completed until the
8 or more but less than 9	1%		twelfth payment is made.
9 or more	0%		The number of payment
			periods completed cannot
* Schedule B may also apply to certain older contracts that accept more			exceed the number of
than one purchase payment. Check your contract to determine which			account years completed,
early withdrawal charge schedule applies to you.			regardless of the number
			of payments made.
Purpose. This is a deferred sales charge. It reimburses us for some of the
sales and administrative expenses associated with the contract. If our		•	Contract Year (for single
expenses are greater than the amount we collect for the early withdrawal			purchase payment
charge, we may use any of our corporate assets, including potential profit			contracts) - A 12 month
that may arise from the mortality and expense risk charge, to make up any			period measured from the
difference.			date we establish your
			account, or measured from
			any anniversary of that
			date.
PRO.75998-11	16

Waiver. The early withdrawal charge is waived if the withdrawal is:
• Used to provide income phase payments to you;
• Paid because of your death;
• Taken under a systematic distribution option (see “Systematic Distribution Options”);
• Taken on or after the tenth anniversary of the effective date of an installment purchase payment contract;
• Paid when your account value is $2,500 or less and no withdrawal has been taken from the account within the
prior 12 months;
• Taken in part or in full from an installment purchase payment contract provided you are at least 59½ and nine
purchase payment periods have been completed; or
• Taken in an amount of ten percent or less of your account value. This applies only to the first partial withdrawal
in each calendar year and does not apply to full withdrawals or withdrawals under a systematic distribution
option. The ten percent amount will be calculated using your account value as of the next valuation after your
withdrawal request is received in good order at the address listed in “Contract Overview-Questions: Contacting
the Company.” This waiver does not apply to contracts issued in the state of Washington.
Redemption Fees
Certain funds may deduct redemption fees as a result of withdrawals, transfers, or other fund transactions you
initiate. If applicable, we may deduct the amount of any redemption fees imposed by the underlying mutual funds as
a result of withdrawals, transfers or other fund transactions you initiate. Redemption fees, if any, are separate and
distinct from any transaction charges or other charges deducted from your account value. For a more complete
description of the funds’ fees and expenses, review each fund’s prospectus.
Periodic Fees and Charges
Annual Maintenance Fee
Maximum Amount. $20.00 for installment purchase payment contracts. There is no maintenance fee for single
purchase payment contracts.
When/How. Each year during the accumulation phase, we deduct this fee from your account value on your account
anniversary. It is also deducted at the time of a full withdrawal, to the extent permitted under state law. It is deducted
proportionately from each subaccount and fixed interest option in which you have interest.
Purpose. This fee reimburses us for administrative expenses related to the establishment and maintenance of your
account.
Mortality and Expense Risk Charge
Maximum Amount. 1.25% annually of your account value invested in the subaccounts. See “The Income Phase -
Charges Deducted.”
When/How. We deduct this charge daily from the subaccounts corresponding to the funds you select. We do not
deduct this charge from any fixed interest option. This charge is deducted during the accumulation phase and the
income phase.
PRO.75998-11	17

Purpose. This charge compensates us for the mortality and expense risks we assume under the contracts. Namely:
•	Mortality risks are those risks associated with our promises to pay the death benefit available under the contract
	and to make lifetime income phase payments based on annuity rates specified in the contract; and
•	Expense risk is the risk that the actual expenses we incur under the contracts will exceed the maximum costs
	that we can charge.
If the amount we deduct for this charge is not enough to cover our mortality costs and expenses under the contracts,
we will bear the loss. We may use any excess to recover distribution costs relating to the contract and as a source of
profit. We expect to make a profit from this charge.
Administrative Expense Charge
Maximum Amount. 0.25%. We currently do not impose this charge. We reserve the right, however, on 30 days’
notice, if allowed by your contract, to charge up to 0.25% annually of your daily net assets invested in the
subaccounts.
When/How. If imposed, we will deduct this charge daily from the subaccounts corresponding to the funds you
select. We do not deduct this charge from the fixed interest option. This charge may be assessed during the
accumulation phase and/or the income phase. If we are imposing this charge when you enter the income phase, the
charge will apply to you during the entire income phase.
Purpose. This charge helps defray our administrative expenses that cannot be recovered by the mortality and
expense risk charge described above. The charge is not intended to exceed the average expected cost of
administering the contracts. We do not expect to make a profit from this charge.
Fund Fees and Expenses
As shown in the fund prospectuses and described in the “Fees Deducted by the Funds” section of this prospectus,
each fund deducts management fees from the amounts allocated to the fund. In addition, each fund deducts other
expenses, which may include service fees that may be used to compensate service providers, including the Company
and its affiliates, for administrative and contract holder services provided on behalf of the fund. Furthermore, certain
funds deduct a distribution or 12b-1 fee, which is used to finance any activity that is primarily intended to result in
the sale of fund shares. For a more complete description of the funds’ fees and expenses, review each fund’s
prospectus.
Less expensive share classes of the funds offered through this contract may be available for investment outside of
this contract. You should evaluate the expenses associated with the funds available through this contract before
making a decision to invest.
The Company may receive substantial revenue from each of the funds or the funds’ affiliates, although the amount
and types of revenue vary with respect to each of the funds offered through the contract. This revenue is one of
several factors we consider when determining contract fees and charges and whether to offer a fund through our
contracts. Fund revenue is important to the Company’s profitability and it is generally more profitable for us
to offer affiliated funds than to offer unaffiliated funds.
Assets allocated to affiliated funds, meaning funds managed by Directed Services LLC, ING Investments, LLC or
another Company affiliate, generate the largest dollar amount of revenue for the Company. Affiliated funds may
also be subadvised by a Company affiliate or by an unaffiliated third party. Assets allocated to unaffiliated funds,
meaning funds managed by an unaffiliated third party, generate lesser, but still substantial dollar amounts of revenue
for the Company. The Company expects to earn a profit from this revenue to the extent it exceeds the Company’s
expenses, including the payment of sales compensation to our distributors.
PRO.75998-11		18

Revenue Received from Affiliated Funds
The revenues received by the Company from affiliated funds may be deducted from fund assets and may include:
•	A share of the management fee;
•	Service fees;
•	For certain share classes, compensation paid from 12b-1 fees; and
•	Other revenues that may be based either on an annual percentage of average net assets held in the fund by the
	Company or a percentage of the fund’s management fees.
In the case of affiliated funds subadvised by unaffiliated third parties, any sharing of the management fee between
the Company and the affiliated investment adviser is based on the amount of such fee remaining after the
subadvisory fee has been paid to the unaffiliated subadviser. Because subadvisory fees vary by subadviser, varying
amounts of revenue are retained by the affiliated investment adviser and ultimately shared with the Company. The
Company may also receive additional compensation in the form of intercompany payments from an affiliated fund’s
investment advisor or the investment advisor’s parent in order to allocate revenue and profits across the
organization. The intercompany payments and other revenue received from affiliated funds provide the Company
with a financial incentive to offer affiliated funds through the contract rather than unaffiliated funds.
Revenue Received from Unaffiliated Funds
Revenue received from each of the unaffiliated funds or their affiliates is based on an annual percentage of the
average net assets held in that fund by the Company. Some unaffiliated funds or their affiliates pay us more than
others and some of the amounts we receive may be significant.
The revenues received by the Company or its affiliates from unaffiliated funds may be deducted from fund assets
and may include:
•	Service Fees;
•	For certain share classes, compensation paid from 12b-1 fees; and
•	Additional payments for administrative, recordkeeping or other services which we provide to the funds or their
	affiliates, such as processing purchase and redemption requests, and mailing fund prospectuses, periodic reports
	and proxy materials. These additional payments do not increase directly or indirectly the fees and expenses
	shown in each fund prospectus. These additional payments may be used by us to finance distribution of the
	contract.
As of the date of this prospectus, Fidelity Investments is the only unaffiliated fund family offered through this
prospectus. The Company receives the most fund revenue from Directed Services LLC, ING Investments, LLC and
other Company affiliates.
In addition to the types of revenue received from affiliated and unaffiliated funds described above, affiliated and
unaffiliated funds and their investment advisers, subadvisers or affiliates may participate at their own expense in
Company sales conferences or educational and training meetings. In relation to such participation, a fund’s
investment adviser, subadviser or affiliate may help offset the cost of the meetings or sponsor events associated with
the meetings. In exchange for these expense offset or sponsorship arrangements, the investment adviser, subadviser
or affiliate may receive certain benefits and access opportunities to Company sales representatives and wholesalers
rather than monetary benefits. These benefits and opportunities include, but are not limited to: co-branded
marketing materials; targeted marketing sales opportunities; training opportunities at meetings; training modules for
sales personnel; and opportunities to host due diligence meetings for representatives and wholesalers.
Certain funds may be structured as “fund of funds.” These funds may have higher fees and expenses than a fund
that invests directly in debt and equity securities because they also incur the fees and expenses of the underlying
funds in which they invest. These funds are affiliated funds, and the underlying funds in which they invest may be
affiliated as well. The fund prospectuses disclose the aggregate annual operating expenses of each fund and its
corresponding underlying fund or funds. These funds are identified in the investment option list in the front of this
prospectus.
Please note certain management personnel and other employees of the Company or its affiliates may receive a
portion of their total employment compensation based on the amount of net assets allocated to affiliated funds. See
also “Contract Distribution.”
PRO.75998-11		19

Premium and Other Taxes
Maximum Amount. Some states and municipalities charge a premium tax on annuities. These taxes currently range
from 0% to 4%, depending upon the jurisdiction.
When/How. We reserve the right to deduct a charge for premium taxes from your account value or from purchase
payments to the account at any time, but not before there is a tax liability under state law. For example, we may
deduct a charge for premium taxes at the time of a complete withdrawal or we may reflect the cost of premium taxes
in our income phase payment rates when you commence income phase payments.
We will not deduct a charge for any municipal premium tax of 1% or less, but we reserve the right to reflect such an
expense in our income phase payment rates.
In addition, the Company reserves the right to assess a charge for any federal taxes due against the separate account,
see “Tax Considerations.”
YOUR ACCOUNT VALUE
During the accumulation phase, your account value at any given time equals:
•	The current dollar value of amounts held in the subaccounts, which takes into account investment performance
	and fees deducted from the subaccounts; plus
•	The current dollar value of amounts held in the Fixed Account, including interest to date.
Subaccount Accumulation Units. When you select a fund as an investment option, your account dollars invest in
“accumulation units” of the Variable Annuity Account B subaccount corresponding to that fund. The subaccount
invests directly in the fund’s shares. The value of your interest in a subaccount is expressed as the number of
accumulation units you hold multiplied by an “Accumulation Unit Value,” as described below, for each unit.
Accumulation Unit Value (AUV). The value of each accumulation unit in a subaccount is called the accumulation
unit value or AUV. The AUV varies daily in relation to the underlying fund’s investment performance. The value
also reflects deductions for fund fees and expenses, the mortality and expense risk charge and the administrative
expense charge (if any). We discuss these deductions in more detail in “Fee Table” and “Fees.”
Valuation. We determine the AUV every normal business day after the close of the New York Stock Exchange
(normally at 4:00 p.m. Eastern Time). At that time, we calculate the current AUV by multiplying the AUV last
calculated by the “net investment factor” of the subaccount. The net investment factor measures the investment
performance of the subaccount from one valuation to the next.
Current AUV = Prior AUV x Net Investment Factor
PRO.75998-11		20

Net Investment Factor. The net investment factor for a subaccount between two consecutive valuations equals the
sum of 1.0000 plus the net investment rate.
Net Investment Rate. The net investment rate is computed according to a formula that is equivalent to the
following:
•	The net assets of the fund held by the subaccount as of the current valuation; minus
•	The net assets of the fund held by the subaccount at the preceding valuation; plus or minus
•	Taxes or provisions for taxes, if any, due to subaccount operations (with any federal income tax liability offset
	by foreign tax credits to the extent allowed); divided by
•	The total value of the subaccount’s units at the preceding valuation; minus
•	A daily deduction for the mortality and expense risk charge and the administrative expense charge, if any, and
	any other fees deducted daily from investments in the separate account. See “Fees.”
The net investment rate may be either positive or negative.
Illustration. As a hypothetical illustration, assume that your initial purchase payment is $5,000 and you direct us to
invest $3,000 in Fund A and $2,000 in Fund B. Also assume that on the day we receive the purchase payment, the
applicable AUV’s after the next close of business of the New York Stock Exchange (normally at 4:00 p.m. Eastern
Time) are $10 for Subaccount A and $25 for Subaccount B. Your account is credited with 300 accumulation units of
Subaccount A and 80 accumulation units of Subaccount B.
	$5,000 Purchase Payment		Step 1: You make an initial purchase payment of $5,000.
	Step 1 ||
			Step 2:
	ING Life Insurance and Annuity Company		·	You direct us to invest $3,000 in Fund A. The purchase
				payment purchases 300 accumulation units of Subaccount
	Step 2 ||			A ($3,000 divided by the current $10 AUV).
	Variable Annuity Account B
			·	You direct us to invest $2,000 in Fund B. The purchase
	Subaccount A	Subaccount B Etc.		payment purchases 80 accumulation units of Subaccount
	300	80		B ($2,000 divided by the current $25 AUV).
	accumulation	accumulation
	units	units	Step 3: The separate account purchases shares of the
			applicable funds at the then current market value (net asset
	|| Step 3 ||		value or NAV).
	Mutual	Mutual
	Fund A	Fund B
Each fund’s subsequent investment performance, expenses and charges, and the daily charges deducted from the
subaccount, will cause the AUV to move up or down on a daily basis.
Purchase Payments to Your Account. If all or a portion of the initial purchase payment is directed to the
subaccounts, it will purchase subaccount accumulation units at the AUV next computed after our acceptance of your
application as described in “Purchase and Rights.” Subsequent payments or transfers directed to the subaccounts
will purchase subaccount accumulation units at the AUV next computed following our receipt of the purchase
payment or transfer request in good order. The value of subaccounts may vary day to day.
PRO.75998-11				21

WITHDRAWALS
			Taxes, Fees and Deductions
You may withdraw all or a portion of your account value at any time during			Amounts withdrawn may be
the accumulation phase.			subject to one or more of the
			following:
Steps for Making A Withdrawal. To make withdrawal:			•	Early Withdrawal Charge
•	Select the withdrawal amount. You must properly complete a		•	(see “Fees - Early
	disbursement form and deliver it to our administrative service center at the			Withdrawal Charge”)
	address listed in “Contract Overview – Questions: Contacting the		•	Annual Maintenance Fee
	Company”:			(see “Fees - Annual
	> Full Withdrawal: You will receive, reduced by any required tax, your			Maintenance Fee”)
	account value, minus any applicable early withdrawal charge,		•	Redemption Fees (See
	redemption fees, and annual maintenance fee; or			“Fees - Redemption Fees”)
	> Partial Withdrawal (Percentage or Specified Dollar Amount):		•	Tax Penalty (see “Tax
				Considerations”)
	You will receive, reduced by any required tax, the amount you specify,		•	Tax Withholding (see “Tax
	subject to the value available in your account. However, the amount			Considerations”)
	actually withdrawn from your account will be adjusted by any
	applicable early withdrawal charge and redemption fees. See		To determine which may apply
	Appendix I for more information about withdrawals from the Fixed		to you, refer to the appropriate
	Account; and		sections of this prospectus,
•	Select investment options. If you do not specify, we will withdraw dollars		contact your local
	from each investment option in which you have account value in the same		representative or call us at the
	proportion as that value bears to your total account value; and		number listed in “Contract
•	Properly complete a disbursement form and send it to the address listed in		Overview - Questions:
	“Contract Overview-Questions: Contacting the Company.”		Contacting the Company.”
Calculation of Your Withdrawal. We determine your account value every
normal business day after the close of the New York Stock Exchange
(normally at 4:00 p.m. Eastern Time). We pay withdrawal amounts based on
your account value as of the next valuation after we receive a request for
withdrawal in good order at the address listed in “Contract Overview-
Questions: Contacting the Company.”
Delivery of Payment. Payments for withdrawal requests will be made in
accordance with SEC requirements. Normally, your withdrawal amount will be
sent no later than seven calendar days following our receipt of your properly
completed disbursement form in good order.
Reinvesting a Full Withdrawal. Within 30 days after a full withdrawal, if
allowed by law and the contract, you may elect to reinvest all or a portion of
the withdrawal. We must receive any reinvested amounts within 60 days of the
withdrawal. We reserve the right, however, to accept a reinvestment election
received more than 30 days after the withdrawal and accept proceeds received
more than 60 days after the withdrawal. We will credit your account for the
amount reinvested based upon the subaccount values next computed following
our receipt of your request and the amount to be reinvested. We will credit the
amount reinvested proportionally for annual maintenance fees and for early
withdrawal charges imposed at the time of withdrawal. We will deduct from
the amount reinvested any annual maintenance fee which fell due after the
withdrawal and before the reinvestment. We will reinvest in the same
investment options and proportions in place at the time of withdrawal.
PRO.75998-11		22

	SYSTEMATIC DISTRIBUTION OPTIONS
Features of a Systematic
Distribution Option	These options may be exercised at any time during the accumulation
A systematic distribution	phase of the contract.
option allows you to receive
regular payments from your	The following systematic distribution options may be available:
contract, without moving into	•	SWO - Systematic Withdrawal Option. SWO is a series of
the income phase. By		automatic partial withdrawals from your account based on a
remaining in the accumulation		payment method you select. Consider this option if you would like a
phase, you retain certain rights		periodic income while retaining investment flexibility for amounts
and investment flexibility not		accumulated in the account.; and
available during the income	•	Other Systematic Distribution Options. We may add additional
phase. Because the account		systematic distribution options from time to time. You may obtain
remains in the accumulation		additional information relating to any of the systematic distribution
phase, all accumulation phase		options from your local representative or by calling us at the number
charges continue to apply.		listed in “Contract Overview - Questions: Contacting the
		Company.”
	Systematic Distribution Option Availability. If allowed by applicable
	law, we may discontinue the availability of one or more of the
	systematic distribution options for new elections at any time, and/or to
change the terms of future elections.
	Eligibility for a Systematic Distribution Option. To determine if you
	meet the age and account value criteria and to assess terms and
	conditions that may apply, contact your local representative or the
	Company at the number listed in “Contract Overview - Questions:
	Contacting the Company.”
	Terminating a Systematic Distribution Option. You may revoke a
	systematic distribution option at any time by submitting a written request
	to the address listed in “Contract Overview-Questions: Contacting the
	Company.” Once you revoke an option, you may not elect it again, until
	the next calendar year, nor may you elect any other systematic
	distribution option that may be available, unless you are allowed under
	the Internal Revenue Code of 1986, as amended (Tax Code).
	Charges and Taxation. When you elect a systematic distribution
	option, your account value remains in the accumulation phase and
	subject to the charges and deductions described in the “Fees” and “Fee
	Table” sections. Taking a withdrawal under a systematic distribution
	option may have tax consequences. See “Tax Considerations.”
PRO.75998-11		23

DEATH BENEFIT
		This section provides
During the Accumulation Phase		information about the death
		benefit during the
Who Receives the Death Benefit? If you would like certain individuals or		accumulation phase. For death
entities to receive a death benefit when it becomes payable, you may name		benefit information applicable
them as your beneficiaries. If you die and no beneficiary exists, the death		to the income phase, see “The
benefit will be paid in a lump sum to your estate.		Income Phase.”
Designating Your Beneficiary. You may designate a beneficiary on your		Terms to Understand:
application or by contacting your local representative or us as indicated in		•	Annuitant(s): The
“Contract Overview - Questions: Contacting the Company.”			person(s) on whose life
			(lives) or life
When is a Death Benefit Payable? During the accumulation phase a death			expectancy(ies) the income
benefit is payable when you, the contract holder, die.			phase payments are based.
		•	Beneficiary(ies): The
Death Benefit Amount. The death benefit will equal your account value as			person(s) or entity(ies)
of the next time we value your account after the date on which we receive			entitled to receive death
proof of death and a payment request in a form acceptable to us. In addition			benefit proceeds under the
to this amount, some states require we pay interest on fixed interest options,			contract.
calculated from date of death at a rate specified by law.		•	Claim Date: The date proof
			of death and the
			beneficiary’s right to receive
Death Benefit - Methods of Payment			the death benefit and
			election of a death benefit
(For payment options during the income phase, see “The Income Phase.”)			payment option are received
			in good order at our
If you die during the accumulation phase of your contract, the following			administrative service
payment options are available to your beneficiary, if allowed by the Tax			center. Please contact our
Code:			administrative service center
> Lump-sum payment; or			to learn what information is
			required for a request for
> Payment in accordance with any of the available income phase			payment of the death benefit
payment plans. See “The Income Phase - Payment Plans.”			to be in good order.
		•	Contingent
Unless the beneficiary elects otherwise, lump-sum payments will generally be			Beneficiary(ies): The
made into an interest bearing retained asset account that is backed by our			person(s) or entity(ies)
general account. This account is not FDIC insured and can be accessed by			entitled to receive death
the beneficiary through a draftbook feature. The beneficiary may access the			benefit proceeds under the
entire death benefit proceeds at any time through the draftbook without			contract.
penalty. Interest credited under this account may be less than you could earn if
the lump sum payment was invested outside of the contract. Additionally,
interest credited on this account may be less than under other settlement
options available through the contract, and the Company seeks to earn a profit
on this account.
At the time of death benefit election, the beneficiary may elect to receive the
death benefit proceeds directly by check rather than through the retained asset
account draftbook feature by notifying us at the address shown in the
“Contract Overview - Questions: Contacting the Company” section of this
prospectus.
PRO.75998-11	24

The following options are also available, however, the Tax Code limits how long the death benefit proceeds may
be left in these options:
•	Leave the account value invested in the contract; or
•	Leave the account value on deposit in the Company’s general account, and receive monthly, quarterly, semi-
	annual or annual interest payments at the interest rate then being credited on such deposits. Your beneficiary
	can withdraw the balance on deposit at any time or request to receive payment in accordance with any of the
	available income phase payment plans. See “The Income Phase - Payment Plans.”
Steps Required for Death Benefits to be Paid to Your Beneficiary:
•	You must have designated a beneficiary(ies) for your contract;
•	Your beneficiary or someone on their behalf must provide us with proof of your death acceptable to us; and
•	Your beneficiary must elect one of the payment options available under the contract.
We will not pay any death proceeds until the beneficiary elects a method of payment. Prior to the election of a
payment method by the beneficiary, the account value will remain in the account and continue to be affected by the
investment performance of the investment option(s) selected. The beneficiary will have the right to allocate or
transfer amounts among available investment options. (Limitations may apply to transfers from the Fixed Account -
see Appendix I.)
We will mail payment to the beneficiary within seven calendar days after we receive proof of death and an election
of the method of payment acceptable to us.
Taxation. In general, payments received by your beneficiary after your death are taxed to the beneficiary in the
same manner as if you had received those payments. Additionally, your beneficiary may be subject to tax penalties
if he or she does not begin receiving death benefit payments within the time frame required by the Tax Code. See
“Tax Considerations.”
PRO.75998-11		25

THE INCOME PHASE
			We may have used the
During the income phase you stop contributing dollars to your account and			following terms in prior
start receiving payments from your accumulated account value.			prospectuses:
			• Annuity Phase - Income
Initiating Payments. At least 30 days before the date you want to start			Phase
receiving income phase payments, you must notify us in writing of all of the			• Annuity Option - Income
following:			Phase Payment Option
•	Payment start date;		• Annuity Payment - Income
•	Income phase payment option (see the payment options table in this		Phase Payment
	section);		• Annuitization - Initiating
•	Payment frequency (i.e. monthly, quarterly, semi-annually or annually);		Income Phase Payments
•	Choice of fixed or variable payments or a combination of fixed and
	variable payments; and
•	Selection of an assumed net investment rate (only if variable payments are
	elected).
Your account will continue in the accumulation phase until you properly
initiate income phase payments. Once an income phase payment option is
selected, it may not be changed.
What Affects Payment Amounts? Some of the factors that may affect the
amount of your income phase payments include your age, gender, account
value, the income phase payment option selected, the number of guaranteed
payments (if any) selected, and whether you select fixed, variable or a
combination of both fixed and variable payments, and, for variable payments,
the assumed net investment rate selected.
Fixed Payments. Amounts funding fixed income phase payments will be held
in the Company’s general account. The amount of fixed payments does not
vary with investment performance over time.
Variable Payments. Amounts funding your variable income phase payments
will be invested in subaccount(s) you select. Subaccounts available during the
accumulation phase may not be available during the income phase. Currently,
the ING Balanced Portfolio, ING Intermediate Bond Portfolio and ING
Growth and Income Portfolio are the only subaccounts available during the
income phase. For variable payments, you must also select an assumed net
investment rate.
Assumed Net Investment Rate. If you select variable income phase
payments, you must also select an assumed net investment rate of either 5% or
3.5%. If you select a 5% rate, your first payment will be higher, but subsequent
payments will increase only if the investment performance of the subaccounts
you selected is greater than 5% annually, after deduction of fees. Payment
amounts will decline if the investment performance is less than 5%, after
deduction of fees.
PRO.75998-11		26

If you select a 3.5% rate, your first income phase payment will be lower and subsequent payments will increase
more rapidly or decline more slowly depending upon changes to the net investment performance of the subaccounts
you selected. For more information about selecting an assumed net investment rate, call us for a copy of the SAI.
See “Contract Overview - Questions: Contacting the Company.”
Minimum Payment Amounts. The income phase payment option you select must result in:
•	A first income phase payment of at least $20; or
•	Total yearly income phase payments of at least $100.
If your account value is too low to meet these minimum payment amounts you will receive one lump-sum payment.
Restrictions on Start Dates and the Duration of Payments. When income phase payments start, the age of the
annuitant plus the number of years for which payments are guaranteed may not exceed 95.
Income phase payments will not begin until you have selected an income phase payment option. Failure to select an
income phase payment option may have adverse tax consequences. You should consult with a qualified tax adviser
if you are considering this course of action.
Charges Deducted. When you select an income payment phase option (one of the options listed in the tables
immediately below), a mortality and expense risk charge, consisting of a daily deduction of 1.25% on an annual
basis, will be deducted from amounts held in the subaccounts. This charge compensates us for mortality and
expense risks we assume under variable income phase payout options and is applicable to all variable income phase
payout options, including variable nonlifetime options under which we do not assume mortality risk. In this
situation, this charge will be used to cover expenses. Although we expect to make a profit from this fee, we do not
always do so. For variable options under which we do not assume a mortality risk, we may make a larger profit than
under other options. We may also deduct a daily administrative charge of 0.25% annually from amounts held in the
subaccounts.
Death Benefit During the Income Phase. The death benefits that may be available to a beneficiary are outlined in
the income phase payment option table below. If a lump-sum payment is due as a death benefit, we will make
payment within seven calendar days after we receive proof of death acceptable to us and the request for payment in
good order at the address listed in “Contract Overview-Questions: Contacting the Company.” If the continuing
income phase payments are elected, the beneficiary may not elect to receive a lump-sum at a future date unless the
income phase payment option specifically allows a withdrawal right. We will calculate the value of any death
benefit at the next valuation after we receive proof of death and a request for payment. Such value will be reduced
by any payments we made after the date of death.
Unless the beneficiary elects otherwise, lump-sum payments will generally be made into an interest bearing retained
asset account that is backed by our general account. This account is not FDIC insured and can be accessed by the
beneficiary through a draftbook feature. The beneficiary may access the entire death benefit proceeds at any time
through the draftbook without penalty. Interest credited under this account may be less than you could earn if the
lump sum payment was invested outside of the contract. Additionally, interest credited on this account may be less
than under other settlement options available through the contract, and the Company seeks to earn a profit on this
account.
At the time of death benefit election, the beneficiary may elect to receive the death benefit proceeds directly by
check rather than through the retained asset account draftbook feature by notifying us at the address shown in the
“Contract Overview - Questions: Contacting the Company” section of this prospectus.
Partial Entry into the Income Phase. You may elect an income phase payment option for a portion of your
account dollars, while leaving the remaining portion invested in the accumulation phase. Consult a tax adviser
before electing this option. The same or a different income phase payment option may be selected for the portion left
invested in the accumulation phase. See Tax Considerations – Taxation of Income Phase Annuity Payments.
Taxation. To avoid certain tax penalties, you or your beneficiary must meet the distribution rules imposed by the
Tax Code. Additionally, when selecting an income phase payment option, the Tax Code requires that your expected
payments will not exceed certain durations. See “Tax Considerations” for additional information.
PRO.75998-11		27

Income Phase Payment Options
The following table lists the income phase payment options and accompanying death benefits available during the
income phase. We may offer additional income phase payment options under the contract from time to time.
Once income phase payments begin, the income phase payment option selected may not be changed.
Terms to understand:
•Annuitant(s): The person(s) on whose life expectancy(ies) the income phase payments are based; and
•Beneficiary(ies): The person(s) or entity(ies) entitled to receive a death benefit under the contract.
Lifetime Income Phase Payment Options
	Length of Payments: For as long as the annuitant lives. It is possible that only one payment will be
Life Income	made if the annuitant dies prior to the second payment’s due date.
	Death Benefit - None: All payments end upon the annuitant’s death.
	Length of Payments: For as long as the annuitant lives, with payments guaranteed for your choice
	of 5, 10, 15 or 20 years or as otherwise specified in the contract.
Life Income -	Death Benefit - Payment to the Beneficiary: If the annuitant dies before we have made all the
Guaranteed	guaranteed payments, we will continue to pay the beneficiary the remaining guaranteed payments
Payments*	unless the beneficiary elects to receive a lump-sum payment equal to the present value of the
	remaining guaranteed payments.
	Length of Payments: For as long as either annuitant lives. It is possible that only one payment will
	be made if both annuitants die before the second payment’s due date.
	Continuing Payments:
Life Income - Two	• When you select this option you choose for 100%, 66 2/3% or 50% of the payment to continue to
Lives	the surviving annuitant after the first death; or
	• 100% of the payment to continue to the annuitant on the second annuitant’s death, and 50% of the
payment will continue to the second annuitant on the annuitant’s death.
	Death Benefit - None: All payments end upon the death of both annuitants.
	Length of Payments: For as long as either annuitant lives, with payments guaranteed for a
	minimum of 120 months.
Life Income - Two	Continuing Payments: 100% of the payment will continue to the surviving annuitant after the first
Lives with	death.
Guaranteed	Death Benefit - Payment to the Beneficiary: If both annuitants die before the guaranteed
Payments*	payments have all been paid, we will continue to pay the beneficiary the remaining guaranteed
	payments, unless the beneficiary elects to receive a lump-sum payment equal to the present value of
	the remaining guaranteed payments.
Nonlifetime Income Phase Payment Options
	Length of Payment: You may select payments for 3-30 years. In certain cases a lump-sum payment
	may be requested at any time. (see below)
Nonlifetime-	Death Benefit - Payment to the Beneficiary: If the annuitant dies before we make all the
Guaranteed	guaranteed payments, we will continue to pay the beneficiary the remaining guaranteed payments,
Payments*	unless the beneficiary elects to receive a lump-sum payment equal to the present value of the
	remaining guaranteed payments.
Lump-Sum Payment: If the Nonlifetime - Guaranteed Payments option is elected with variable payments, you may
request at any time that all or a portion of the present value of the remaining payments be paid in one lump sum.
Any such lump-sum payment will be treated as a withdrawal during the accumulation phase and if the election is
made during the early withdrawal charge period we will charge the applicable early withdrawal charge. If the early
withdrawal charge is based on completed purchase payment periods, each year that passes after income payments
have begun is treated as a completed purchase payment period even though no additional purchase payments have
been made. See “Fees - Early Withdrawal Charge.” We will send lump-sum payments within seven calendar days
after we receive the request for payment in good order at the address listed in “Contract Overview-Questions:
Contacting the Company.”
Calculation of Lump-Sum Payments: If a lump-sum payment is available under the income phase payment
options above, the rate used to calculate the present value for the remaining guaranteed payments is the same rate we
used to calculate the income phase payments (i.e. the actual fixed rate used for the fixed payments or the 3.5% or
5% assumed net investment rate used for variable payments).
*Guaranteed period payments may not extend beyond the shorter of your life expectancy or until your age 95.
PRO.75998-11	28

CONTRACT DISTRIBUTION
General. The Company’s subsidiary, ING Financial Advisers, LLC, serves as the principal underwriter for the
contracts. ING Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-dealer with
the SEC. ING Financial Advisers, LLC is also a member of the Financial Industry Regulatory Authority (“FINRA”)
and the Securities Investor Protection Corporation (“SIPC”). ING Financial Advisers, LLC’s principal office is
located at One Orange Way, Windsor, Connecticut 06095-4774.
We sell the contracts through licensed insurance agents who are registered representatives of broker-dealers that
have entered into selling agreements with ING Financial Advisers, LLC. We refer to these broker-dealers as
“distributors.” The following distributors are affiliated with the company and have entered into selling agreements
with ING Financial Advisers, LLC or the sale of our variable annuity contracts:
•	ING Financial Partners, Inc; and
•	Systematized Benefits Administrators, Inc.
Registered representatives of distributors who solicit sales of the contracts typically receive a portion of the
compensation paid to the distributor in the form of commissions or other compensation, depending upon the
agreement between the distributor and the registered representative. This compensation, as well as other incentives
or payments, is not paid directly by contract holders or the separate account, but instead is paid by us through ING
Financial Advisers, LLC. We intend to recoup this compensation and sales expenses paid to distributors through
fees and charges imposed under the contracts.
Occasionally, ING Financial Advisers, LLC may enter into arrangements with independent entities to help find
broker-dealers or banks interested in distributing the contract or to provide training, marketing and other sales-
related functions, or administrative services. We will reimburse such entities for expenses related to and may pay
fees to such entities in return for these services.
ING Financial Advisers, LLC may also contract with independent third party broker-dealers who will act as
wholesalers by assisting us in selecting broker-dealers or banks interested in acting as distributors. These
wholesalers may also provide training, marketing and other sales related functions to the distributors and may
provide certain administrative services in connection with the contract. ING Financial Advisers, LLC may pay such
wholesalers compensation based upon purchase payments to contracts purchased through distributors that they
select.
ING Financial Advisers, LLC may also designate third parties to provide services in connection with the contracts
such as reviewing applications for completeness and compliance with insurance requirements and providing the
distributors with approved marketing material, prospectuses or other supplies. These parties may also receive
payments for their services based upon purchase payments. ING Financial Advisers, LLC will pay all costs and
expenses related to these services.
PRO.75998-11		29

Compensation Arrangements. Registered representatives who offer and sell the contracts may be paid a
commission. The maximum percentage amount that may be paid with respect to a given purchase payment is
2.75%. We may also pay asset-based compensation up to 0.10%. In addition, we may pay ongoing annual
compensation of up to 40% of the commissions paid during the year in connection with certain premium received
during that year, if the registered representative attains a certain threshold of sales of Company contracts. Individual
registered representatives may receive all or a portion of compensation paid to their distributor, depending upon the
firm’s practices. Commissions and annual payments, when combined, could exceed 2.75% of total premium
payments. To the extent permitted by SEC and FINRA rules and other applicable laws and regulations, we may also
pay or allow other promotional incentives or payments in the form of cash payments or other compensation to
distributors, which may require the registered representative to attain a certain threshold of sales of Company
products.
We may also enter into special compensation arrangements with certain distributors based on those firms’ aggregate
or anticipated assets under management, sales of the contracts or other criteria. These arrangements may include
commission specials, in which additional commissions may be paid in connection with premium payments received
for a limited time period, within the maximum 2.75% commission rate noted above. These special compensation
arrangements will not be offered to all distributors, the terms of such arrangements may differ among distributors
based on various factors, and may be limited only to ING Financial Partners, Inc. and other distributors affiliated
with the Company. Any such compensation payable to a distributor will not result in any additional direct charge to
you by us.
Some sales personnel may receive various types of non-cash compensation as special sales incentives, including
trips, and we may also pay for some sales personnel to attend educational and/or business seminars. Any such
compensation will be paid in accordance with SEC and FINRA rules. Management personnel of the Company, and
of its affiliated broker-dealers, may receive additional compensation if the overall amount of investments in funds
advised by the Company or its affiliates meets certain target levels or increases over time. Compensation for certain
management personnel, including sales management personnel, may be enhanced if the overall amount of
investments in the contracts and other products issued or advised by the Company or its affiliates increases over
time. Certain sales management personnel may also receive compensation that is a specific percentage of the
commissions paid to distributors or of purchase payments received under the contracts.
In addition to direct cash compensation for sales of contracts described above, through ING Financial Advisers,
LLC we may also pay distributors additional compensation or reimbursement of expenses for their efforts in selling
contracts to you and other customers. These amounts may include:
•	Marketing/distribution allowances that may be based on the percentages of purchase payments received, the
	aggregate commissions paid and/or the aggregate assets held in relation to certain types of designated
	insurance products issued by the Company and/or its affiliates during the year;
•	Loans or advances of commissions in anticipation of future receipt of purchase payments (a form of lending to
	registered representatives). These loans may have advantageous terms, such as reduction or elimination of the
	interest charged on the loan and/or forgiveness of the principal amount of the loan, which may be conditioned
	on sales;
•	Education and training allowances to facilitate our attendance at certain educational and training meetings to
	provide information and training about our products. We also hold training programs from time to time at our
	own expense;
•	Sponsorship payments or reimbursements for distributors to use in sales contests and/or meetings for their
	registered representatives who sell our products. We do not hold contests based solely on sales of this product;
•	Certain overrides and other benefits that may include cash compensation based on the amount of earned
	commissions, representative recruiting or other activities that promote the sale of contracts; and
•	Additional cash or noncash compensation and reimbursements permissible under existing law. This may
	include, but is not limited to, cash incentives, merchandise, trips, occasional entertainment, meals and tickets
	to sporting events, client appreciation events, business and educational enhancement items, payment for travel
	expenses (including meals and lodging) to pre-approved training and education seminars, and payment for
	advertising and sales campaigns.
We pay dealer concessions, wholesaling fees, overrides, bonuses, other allowances and benefits and the costs of all
other incentives or training programs from our resources, which include the fees and charges imposed under the
contracts.
PRO.75998-11		30

The following is a list of the top 25 distributors that, during 2010, received the most compensation, in the aggregate,
from us in connection with the sale of registered variable annuity contracts issued by the Company, ranked by total
dollars received:
•	LPL Financial Corporation	•	Morgan Keegan and Company, Inc.
•	Symetra Investment Services, Inc.	•	Cadaret, Grant & Co., Inc.
•	ING Financial Partners, Inc.	•	Financial Telesis Inc./Jhw Financial Services Inc.
•	American Portfolios Financial Services, Inc.	•	Lincoln Investment Planning, Inc.
•	NIA Securities, L.L.C.	•	Wells Fargo & Company
•	Morgan Stanley Smith Barney LLC	•	Multi-Financial Securities Corporation
•	SagePoint Financial, Inc.	•	M Holdings Securities, Inc.
•	Valor Insurance Agency Inc.	•	NRP Financial, Inc.
•	Lincoln Financial Group	•	UVEST Financial Services Group, Inc.
•	Financial Network Investment Corporation	•	Securities America, Inc.
•	Walnut Street Securities, Inc.®	•	National Planning Corporation
•	NFP Securities, Inc.	•	Royal Alliance Associates, Inc.
		•	Woodbury Financial Services, Inc.
If the amounts paid to ING Financial Advisers, LLC were included, ING Financial Advisers, LLC would be first on
the list.
This is a general discussion of the types and levels of compensation paid by us for the sale of our variable annuity
contracts. It is important for you to know that the payment of volume or sales-based compensation to a distributor
or registered representative may provide that registered representative a financial incentive to promote our contracts
and/or services over those of another Company, and may also provide a financial incentive to promote one of our
contracts over another.
Third Party Compensation Arrangements. Please be aware that:
•	The Company may seek to promote itself and the contracts by sponsoring or contributing to events sponsored
	by various associations, professional organizations and labor organizations; and
•	The Company may make payments to associations and organizations, including labor organizations, which
	endorse or otherwise recommend the contracts to their membership. If an endorsement is a factor in your
	contract purchasing decision, more information on the payment arrangement, if any, is available upon your
	request.
PRO.75998-11		31

TAX CONSIDERATIONS
			In this Section
Introduction
The contract described in this prospectus is designed to be treated as an			Introduction
annuity for U.S. federal income tax purposes. This section discusses our			Taxation of Nonqualified
understanding of current federal income tax laws affecting the contract. The			Contracts
U.S. federal income tax treatment of the contract is complex and sometimes
uncertain. You should keep the following in mind when reading this section:			Possible Changes in Taxation
·	Your tax position (or the tax position of the designated beneficiary, as
	applicable) may influence the federal taxation of amounts held or paid out		Taxation of the Company
	under the contract;
·	Tax laws change. It is possible that a change in the future could affect		When consulting a qualified
	contracts issued in the past, including the contract described in this		tax adviser, be certain that he
	prospectus;		or she has expertise in the Tax
·	This section addresses some, but not all, applicable federal income tax		Code sections applicable to
	rules and does not discuss federal estate and gift tax implications, state		your tax concerns.
	and local taxes or any other tax provisions; and
·	No assurance can be given that the IRS would not assert, or that a court
	would not sustain, a position contrary to any of those set forth below.
We do not intend this information to be tax advice. No attempt is made to provide more than a general
summary of information about the use of the contract with tax-qualified retirement arrangements, and the
Tax Code may contain other restrictions and conditions that are not included in this summary. You should
consult with a qualified tax adviser for advice about the effect of federal income tax laws, state tax laws or
any other tax laws affecting the contract or any transactions involving the contract.
Types of Contracts: Nonqualified
The contracts described in this prospectus may be purchased on a non-tax qualified basis (“nonqualified contracts”)
or purchased on a tax-qualified basis (“qualified contracts”).
Nonqualified Contracts. Nonqualified contracts are not related to retirement plans that receive special income tax
treatment under the Tax Code. Rather, they are purchased with after- tax contributions and are purchased to save
money for retirement in exchange for with the right to receive annuity payments for either a specified period of time
or over the a lifetime of an individual
Taxation of Nonqualified Contracts
Taxation of Gains Prior to Distribution.
General. Tax Code section 72 governs the general federal income taxation of annuity contracts in general. We
believe that if the contract owner is you are a natural person (in other words, an individual), the contract owner you
will generally not be taxed on increases in the value of his or her nonqualified contract until a distribution occurs or
until income phase annuity payments begin. This assumes that the contract will qualify as an annuity contract for
federal income tax purposes. For these purposes, the agreement to assign or pledge any portion of the contract’s
account contract value generally will be treated as a distribution. In order to be eligible to defer federal income
receive deferral of taxation on increases in the account value, each of, the following requirements must be satisfied.
·	Diversification. Tax Code section 817(h) requires that in a nonqualified contract the investments of the funds
	be “adequately diversified” in accordance with Treasury Regulations in order for the contract to qualify as an
	annuity contract under federal tax law. The separate account, through the funds, intends to comply with the
	diversification requirements prescribed by Tax Code section 817(h) and by the Treasury in Reg. Sec. 1.817-5,
	which affects how the funds’ assets may be invested. If it is determined, however, that your contract does not
	satisfy the applicable diversification requirements and rulings because a subaccount’s corresponding fund fails
	to be adequately diversified for whatever reason, we will take appropriate steps to bring your contract into
	compliance with such regulations and rulings, and we reserve the right to modify your contract as necessary to
	do so;
PRO.75998-11		32

·	Investor Control. Although earnings under nonqualified contracts are generally are not taxed until withdrawn,
	the Internal Revenue Service (IRS) has stated in published rulings that a variable contract owner will be
	considered the owner of separate account assets if the contract owner possesses incidents of investment control
	over such assets In these circumstances, income and gains from the separate account assets would be currently
	includible in the variable contract owner’s gross income. Future guidance regarding the extent to which
	contract owners could direct their investments among subaccounts without being treated as owners of the
	underlying assets of the separate account may adversely affect the tax treatment of existing contracts, such as
	the contract described in this prospectus. The Company therefore reserves the right to modify the contracts
	contract as necessary to attempt to prevent the contract holder from being considered the federal tax owner of a
	pro rata share of the assets of the separate account for federal income tax purposes.;
·	Required Distributions. In order to be treated as an annuity contract for federal income tax purposes, the Tax
	Code requires any nonqualified contract to contain certain provisions specifying how your interest in the
	contract will be distributed in the event of your death. The nonqualified contracts contain provisions that are
	intended to comply with these Tax Code requirements, although no regulations interpreting these requirements
	have yet been issued. When such requirements are clarified by regulation or otherwise, we intend to review
	such distribution provisions and modify them if necessary to assure that they comply with the applicable
	requirements;
·	Non-Natural Holders of a Nonqualified-Qualified Contract. If the contract owner of If you are not a natural
	person, a nonqualified contract is not a natural person, the contract generally is not treated as an annuity for
	federal income tax purposes and any such the income on such contract for the applicable taxable year is
	currently taxable as ordinary income. Income on the contract during the taxable year is equal to any increase in
	the account contract value over the “investment in the contract” (generally, the premiums or other consideration
	you paid for the contract, less any nontaxable withdrawals) during the taxable year. There are some exceptions
	to this rule, and a non-natural person considering an investment in the contract should consult with a qualified
	its tax adviser prior to purchasing the contract. When the contract owner is not a natural person and the primary
	annuitant dies, the same rules apply on the death of the primary annuitant as outlined above for the death of a
	contract owner. When the contract owner is a non-natural person, a change in the annuitant is treated as the
	death of the contract owner.; and
·	Delayed Income Phase Annuity Starting Date. If the contract’s income phase annuity starting date occurs (or
	is scheduled to occur) at a time when the annuitant has reached, or will have reached, an advanced age (e.g.,
	after age 9585), it is possible that the contract could would not be treated as an annuity for federal income tax
	purposes. In that event, the income and gains under such the contract could be currently includible in your
	taxable income.
Taxation of Distributions
General. When a withdrawal from a nonqualified contract occurs, the amount received will be treated as ordinary
income subject to federal income tax up to an amount equal to the excess (if any) of the contract value (unreduced
by the amount of any early withdrawal surrender charge) immediately before the distribution over the contract
owner’s investment in the contract at such that time. Investment in the contract is generally equal to the amount of
all premiums to the contract, plus amounts previously included in your taxable gross income as the result of certain
loans, assignments or gifts, less the aggregate amount of non-taxable distributions previously made.
In the case of a surrender under a nonqualified contract, the amount received generally will be taxable only to the
extent it exceeds the contract owner’s investment in the contract (cost basis).
10% Penalty Tax. A distribution from a nonqualified contract may be subject to a federal tax penalty equal to 10%
of the amount treated as income. In general, however, there is no penalty on distributions:
·	Made on or after the taxpayer reaches age 59½;
·	Made on or after the death of a contract owner (the annuitant if the contract owner is a non-natural person);
·	Attributable to the taxpayer’s becoming disabled as defined in the Tax Code;
·	Made as part of a series of substantially equal periodic payments (at least annually) over your life or life
	expectancy or the joint lives or joint life expectancies of you and your designated beneficiary; or
·	The distribution is allocable to investment in the contract before August 14, 1982.
PRO.75998-11		33

The 10% penalty does not apply to distributions from an immediate annuity as defined in the Tax Code. Other
exceptions may be applicable under certain circumstances and special rules may be applicable in connection with
the exceptions enumerated above. A tax adviser should be consulted with regard to exceptions from the penalty tax.
Tax-Free Exchanges. Section 1035 of the Tax Code permits the exchange of a life insurance, endowment or
annuity contract for an annuity contract on a tax-free basis. In such instance, the “investment in the contract” in the
old contract will carry over to the new contract. You should consult with your tax advisor regarding procedures for
making section 1035 exchanges.
If your contract is purchased through a tax-free exchange of a life insurance, endowment or annuity contract that
was purchased prior to August 14, 1982, then any distributions other than annuity payments will be treated, for tax
purposes, as coming:
·	First, from any remaining “investment in the contract” made prior to August 14, 1982 and exchanged into the
	contract;
·	Next, from any “income on the contract” attributable to the investment made prior to August 14, 1982;
·	Then, from any remaining “income on the contract;” and
·	Lastly, from any remaining “investment in the contract.”
The IRS has concluded that in certain instances, the partial exchange of a portion of one annuity contract for another
contract will be tax-free. Pursuant to IRS guidance, receipt of withdrawals, surrenders or annuity payments
(annuitizations) from either the original contract or the new contract during the 12 month period following the
partial exchange may retroactively negate the partial exchange. If the partial exchange is retroactively negated, the
partial surrender of the original contract will be treated as a withdrawal, taxable as ordinary income to the extent of
gain in the original contract and, if the partial exchange occurred prior to you reaching age 59½ , may be subject to
an additional 10% tax penalty. A taxable event may be avoided if requirements identified as a qualifying event are
satisfied. We are not responsible for the manner in which any other insurance company, for tax reporting purposes,
or the IRS, with respect to the ultimate tax treatment, recognizes or reports a partial exchange. We strongly advise
you to discuss any proposed 1035 exchange or subsequent distribution within 12 months with your tax advisor prior
to proceeding with the transaction.
Taxation of Annuity Payments. Although tax consequences may vary depending on the payment option elected
under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as
ordinary income. The non-taxable portion of an annuity payment is generally determined in a manner that is
designed to allow you to recover your investment in the contract ratably on a tax-free basis over the expected stream
of annuity payments, as determined when annuity payments start. Once your investment in the contract has been
fully recovered, however, the full amount of each subsequent annuity payment is subject to tax as ordinary income.
On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 which included
language that permits the partial annuitization of non-qualified annuities, effective for amounts received in taxable
years beginning after December 31, 2010. The provision applies an exclusion ratio to any amount received as an
annuity under a portion of an annuity provided that the annuity payments are made for a period of 10 years or more
or for life. Pending the issuance of clarifying guidance, the application of this law change is unclear. Please consult
your tax adviser before electing a partial annuitization.
Death Benefits. Amounts may be distributed from a contract because of your death or the death of the annuitant.
Generally, such amounts are includible in the income of the recipient as follows:
·	If distributed in a lump sum, they are taxed in the same manner as a surrender of the contract, or
·	If distributed under a payment option, they are taxed in the same way as annuity payments.
Special rules may apply to amounts distributed after a Beneficiary has elected to maintain contract value and receive
payments.
Different distribution requirements apply if your death occurs:
·	After you begin receiving annuity payments under the contract; or
·	Before you begin receiving such distributions.
PRO.75998-11		34

If your death occurs after you begin receiving annuity payments, distributions must be made at least as rapidly as
under the method in effect at the time of your death.
If your death occurs before you begin receiving annuity payments, your entire balance must be distributed within
five years after the date of your death. For example, if you died on September 1, 2010, your entire balance must be
distributed by August 31, 2015. However, if distributions begin within one year of your death, then payments may
be made over one of the following timeframes:
·	Over the life of the designated beneficiary; or
·	Over a period not extending beyond the life expectancy of the designated beneficiary.
If the designated beneficiary is your spouse, the contract may be continued with the surviving spouse as the new
contract owner. If the contract owner is a non-natural person and the primary annuitant dies, the same rules apply
on the death of the primary annuitant as outlined above for the death of a contract owner.
The contract offers a death benefit that may exceed the greater of the premium payments and the contract value.
Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion
thereof) could be treated for federal tax purposes as a distribution from the contract.
Assignments and Other Transfers. A transfer, pledge or assignment of ownership of a nonqualified contract, the
selection of certain annuity dates, or the designation of an annuitant or payee other than an owner may result in
certain tax consequences to you that are not discussed herein. The assignment, pledge or agreement to assign or
pledge any portion of the contract value generally will be treated as a distribution. Anyone contemplating any such
transfer, pledge, assignment, or designation or exchange, should consult a tax adviser regarding the potential tax
effects of such a transaction.
Immediate Annuities. Under section 72 of the Tax Code, an immediate annuity means an annuity:
·	Which is purchased with a single premium;
·	With annuity payments starting within one year from the date of purchase; and
·	Which provides a series of substantially equal periodic payments made annually or more frequently.
While this contract is not designed as an immediate annuity, treatment as an immediate annuity would have
significance with respect to exceptions from the 10% early withdrawal penalty, to contracts owned by non-natural
persons, and for certain exchanges.
Multiple Contracts. Tax laws require that all nonqualified deferred annuity contracts that are issued by a company
or its affiliates to the same contract owner during any calendar year be treated as one annuity contract for purposes
of determining the amount includible in gross income under Tax Code section 72(e). In addition, the Treasury
Department has specific authority to issue regulations that prevent the avoidance of Tax Code section 72(e) through
the serial purchase of annuity contracts or otherwise.
Withholding. We will withhold and remit to the IRS a part of the taxable portion of each distribution made under a
contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any
amounts withheld. Withholding is mandatory, however, if the distributee fails to provide a valid taxpayer
identification number or if we are notified by the IRS that the taxpayer identification number we have on file is
incorrect. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the
withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the
taxable portion of non-periodic payments. Regardless of whether you elect to have federal income tax withheld, you
are still liable for payment of federal income tax on the taxable portion of the payment.
Certain states have indicated that state income tax withholding will also apply to payments from the contracts made
to residents. Generally, an election out of federal withholding will also be considered an election out of state
withholding. In some states, you may elect out of state withholding, even if federal withholding applies. If you
need more information concerning a particular state or any required forms, please contact our Customer Contact
Center.
PRO.75998-11		35

If you or your designated beneficiary is a non-resident alien, then any withholding is governed by Tax Code section
1441 based on the individual’s citizenship, the country of domicile and treaty status, and we may require additional
documentation prior to processing any requested transaction.
Same-Sex Marriages. Pursuant to Section 3 of the federal Defense of Marriage Act (“DOMA”), same-sex
marriages currently are not recognized for purposes of federal law. Therefore, the favorable income-deferral options
afforded by federal tax law to an opposite-sex spouse under Tax Code sections 72(s) and 401(a)(9) are currently
NOT available to a same-sex spouse. Same-sex spouses who own or are considering the purchase of annuity
products that provide benefits based upon status as a spouse should consult a tax advisor. In some states, to the
extent that an annuity contract accords to spouses other rights or benefits that are not affected by DOMA, same-sex
spouses remain entitled to such rights or benefits to the same extent as any contract holder’s spouse.
Possible Changes in Taxation
Although the likelihood of changes in tax legislation, regulation, rulings and other interpretation thereof is uncertain,
there is always the possibility that the tax treatment of the contracts could change by legislation or other means. It is
also possible that any change could be retroactive (that is, effective before the date of the change). You should
consult a qualified tax adviser with respect to legislative developments and their effect on the contract.
Taxation of the Company
We are taxed as a life insurance company under the Tax Code. Variable Annuity Account B is not a separate entity
from us. Therefore, it is not taxed separately as a “regulated investment company” but is taxed as part of the
Company.
We automatically apply investment income and capital gains attributable to the separate account to increase reserves
under the contracts. Because of this, under existing federal tax law we believe that any such income and gains will
not be taxed to the extent that such income and gains are applied to increase reserves under the contracts. In
addition, any foreign tax credits attributable to the separate account will be first used to reduce any income taxes
imposed on the separate account before being used by the Company.
In summary, we do not expect that we will incur any federal income tax liability attributable to the separate account
and we do not intend to make any provision for such taxes. However, changes in federal tax laws and/or their
interpretation thereof may result in our being taxed on income or gains attributable to the separate account. In this
case we may impose a charge against the separate account (with respect to some or all of the contracts) to set aside
provisions to pay such taxes. We may deduct this amount from the separate account, including from your contract
value invested in the subaccounts.
OTHER TOPICS
Anti-Money Laundering
In order to protect against the possible misuse of our products in money laundering or terrorist financing, we have
adopted an anti-money laundering program satisfying the requirements of the USA PATRIOT Act and other current
anti-money laundering laws. Among other things, this program requires us, our agents and customers to comply with
certain procedures and standards that will allow us to verify the identity of the sponsoring organization and that
contributions and loan repayments are not derived from improper sources.
Under our anti-money laundering program, we may require customers, and/or beneficiaries to provide sufficient
evidence of identification, and we reserve the right to verify any information provided to us by accessing
information databases maintained internally or by outside firms.
PRO.75998-11	36

We may also refuse to accept certain forms of payments or loan repayments (traveler’s cheques, cashier's checks,
bank drafts, bank checks and treasurer's checks, for example) or restrict the amount of certain forms of payments or
loan repayments (money orders totaling more than $5,000, for example). In addition, we may require information as
to why a particular form of payment was used (third party checks, for example) and the source of the funds of such
payment in order to determine whether or not we will accept it. Use of an unacceptable form of payment may result
in us returning the payment to you.
Applicable laws designed to prevent terrorist financing and money laundering might, in certain
circumstances, require us to block certain transactions until authorization is received from the appropriate
regulator. We may also be required to provide additional information about you and your policy to
government regulators.
Our anti-money laundering program is subject to change without notice to take account of changes in applicable
laws or regulations and our ongoing assessment of our exposure to illegal activity.
Payment Delay or Suspension
We reserve the right to suspend or postpone the date of any payment of benefits or values under any one of the
following circumstances:
·	On any valuation date when the New York Stock Exchange is closed (except customary weekend and holiday
	closings) or when trading on the New York Stock Exchange is restricted;
·	When an emergency exists as determined by the SEC so that disposal of the securities held in the subaccounts is
	not reasonably practicable or it is not reasonably practicable to fairly determine the value of the subaccount’s
	assets; or
·	During any other periods the SEC may by order permit for the protection of investors.
The conditions under which restricted trading or an emergency exists shall be determined by the rules and
regulations of the SEC.
Performance Reporting
We may advertise different types of historical performance for the subaccounts including:
·	Standardized average annual total returns; and
·	Non-standardized average annual total returns.
We may also advertise certain ratings, rankings or other information related to the Company, the subaccounts or the
funds.
Standardized Average Annual Total Returns. We calculate standardized average annual total returns according to
a formula prescribed by the SEC. This shows the percentage return applicable to $1,000 invested in the subaccounts
over the most recent month-end, one, five and ten-year periods. If the investment option was not available for the
full period, we give a history from the date money was first received in that option under the separate account or
from the date the fund was first available under the separate account. As an alternative to providing the most recent
month-end performance, we may provide a phone number, website or both where these returns may be obtained.
Standardized average annual total returns reflect deduction of all recurring charges during each period (i.e. mortality
and expense risk charges, annual maintenance fees, administrative expense charges, if any, and any applicable early
withdrawal charges).
Non-Standardized Average Annual Total Returns. We calculate non-standardized average annual total returns in
a similar manner as that stated above, except we may include returns that do not reflect the deduction of any
applicable early withdrawal charge. Some non-standardized returns may also exclude the effect of an annual
maintenance fee. If we reflected these charges in the calculation it would decrease the level of performance reflected
by the calculation. Non-standardized returns may include performance from the fund’s inception date, if that date is
earlier than the one we use for standardized returns.
PRO.75998-11		37

Voting Rights
Each of the subaccounts holds shares in a fund and each is entitled to vote at regular and special meetings of that
fund. Under our current view of applicable law, we will vote the shares for each subaccount as instructed by persons
having a voting interest in the subaccount. We will vote shares for which we receive no instructions in the same
proportion as those for which we receive instructions. You will receive periodic reports relating to the funds in
which you have an interest as well as any proxy materials and a form on which to give voting instructions. Voting
instructions will be solicited by a written communication at least 14 days before the meeting.
The number of votes (including fractional votes) you are entitled to direct will be determined as of the record date
set by any fund you invest in through the subaccounts:
·	During the accumulation phase the number of votes is equal to the portion of your account value invested in the
	fund, divided by the net asset value of one share of that fund; and
·	During the income phase the number of votes is equal to the portion of reserves set aside for the contract’s
	share of the fund, divided by the net asset value of one share of that fund.
Contract Modification
We may change the contract as required by federal or state law or as otherwise permitted in the contract. Certain
changes will require the approval of appropriate state or federal regulatory authorities.
Transfer of Ownership: Assignment
We will accept assignments or transfers of ownership where such assignments are not prohibited, with proper
notification. The date of any such assignment or transfer of ownership will be the date we receive the notification at
the address listed in “Contract Overview-Questions: Contacting the Company.” An assignment or transfer of
ownership may have tax consequences and you should consult with a tax adviser before assigning or transferring
ownership of the contract.
An assignment of a contract will only be binding on the Company if it is made in writing and sent to us at the
address listed in “Contract Overview-Questions: Contacting the Company.” We will use reasonable procedures to
confirm that the assignment is authentic, including verification of signature. If we fail to follow our own procedures,
we will be liable for any losses to you directly resulting from such failure. Otherwise, we are not responsible for the
validity of any assignment. Your rights and the interest of the annuitant and any beneficiary will be subject to the
rights of any assignee we have on our records.
Legal Matters and Proceedings
We are not aware of any pending legal proceedings which involve the separate account as a party.
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.
ING Financial Advisers, LLC, the principal underwriter and distributor of the contract (the “distributor”), 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. ING Financial Advisers, 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.
PRO.75998-11		38

CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information (SAI) contains more specific information on the separate account and the
contract, as well as the financial statements of the separate account and the Company. The following is a list of the
contents of the SAI:
• General Information and History		2
• Variable Annuity Account B		2
• Offering and Purchase of Contract		3
• Income Phase Payments		3
• Sales Material and Advertising		4
• Experts		5
• Financial Statements of the Separate Account		S-1
• Consolidated Financial Statements of ING Life Insurance and Annuity Company		C-1
You may request an SAI by calling the Company at the number listed in “Contract Overview - Questions:
Contacting the Company.”
PRO.75998-11	39

APPENDIX I
FIXED ACCOUNT
The Fixed Account is an investment option available during the accumulation phase of the contract.
Additional information about this option may be found in the contract.
Amounts allocated to the Fixed Account are held in the Company’s general account, which supports insurance and
annuity obligations.
General Disclosure.
·	Interests in the Fixed Account have not been registered with the SEC in reliance on exemptions under the
	Securities Act of 1933, as amended.
·	Disclosure in this prospectus regarding the Fixed Account may be subject to certain generally applicable
	provisions of the federal securities laws relating to the accuracy and completeness of the statements.
·	The SEC has not reviewed disclosure in this Appendix regarding the Fixed Account.
Interest Rates.
·	The Fixed Account guarantees that amounts allocated to this option will earn the minimum interest rate
	specified in the contract. We may credit a higher interest rate from time to time, but the rate we credit will never
	fall below the guaranteed minimum specified in the contract. Amounts applied to the Fixed Account will earn
	the interest rate in effect at the time money is applied. Amounts in the Fixed Account will receive a compound
	interest rate as credited by us. The rate we quote is an annual effective yield. Among other factors, the safety of
	the interest rate guarantee depends upon the claims-paying ability of the Company.
·	Our determination of credited interest rates reflects a number of factors, including mortality and expense risks,
	interest rate guarantees, the investment income earned on invested assets and the amortization of any capital
	gains and/or losses realized on the sale of invested assets. Under this option, we assume the risk of investment
	gain or loss by guaranteeing the amounts you allocate to this option and promising a minimum interest rate and
	income phase payment.
Withdrawals. Except for contracts issued in the state of New York, withdrawals from the Fixed Account over
$250,000 (for contracts issued prior to 1988) or $500,000 (for contracts issued after 1988) will be paid pursuant to a
five year schedule. See your contract for details. Under certain emergency conditions, some contracts allow us to
defer payment of any withdrawal for period of up to 6 months or as provided by applicable federal or state law.
Charges. We do not make deductions from amounts in the Fixed Account to cover mortality and expense risks. We
consider these risks when determining the credited rate.
If you make a withdrawal from amounts in the Fixed Account, an early withdrawal charge may apply. See “Fees.”
Transfers. During the accumulation phase, you may transfer account dollars from the Fixed Account to any other
available investment option once during each calendar year. We may vary the dollar amount that you are allowed to
transfer, but it will never be less than 10% of your account value held in the Fixed Account.
By notifying us at the address listed in “Contract Overview-Questions: Contacting the Company” at least 30 days
before income payments begin you may elect to have amounts transferred to one or more of the funds available
during the income phase to provide variable payments.
PRO.75998-11		40

APPENDIX II
DESCRIPTION OF UNDERLYING FUNDS
List of Fund Name Changes
Former Fund Name	New Fund Name
ING Van Kampen Equity and Income Portfolio	ING Invesco Van Kampen Equity and Income Portfolio
The investment results of the mutual funds (funds) are likely to differ significantly and there is no assurance
that any of the funds will achieve their respective investment objectives. You should consider the investment
objectives, risks and charges, and expenses of the funds carefully before investing. Please refer to the fund
prospectuses for additional information. Shares of the funds will rise and fall in value and you could lose
money by investing in the funds. Shares of the funds are not bank deposits and are not guaranteed, endorsed
or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government
agency. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940.
Fund prospectuses may be obtained free of charge at the address and telephone number listed in “Contract
Overview – Questions: Contacting the Company,” by accessing the SEC’s web site or by contacting the SEC
Public Reference Branch. If you received a summary prospectus for any of the funds available through your
contract, you may obtain a full prospectus and other fund information free of charge by either accessing the
internet address, calling the telephone number or sending an email request to the email address shown on the
front of the fund’s summary prospectus.
Certain funds offered under the contracts have investment objectives and policies similar to other funds
managed by the fund’s investment adviser. The investment results of a fund may be higher or lower than
those of other funds managed by the same adviser. There is no assurance and no representation is made that
the investment results of any fund will be comparable to those of another fund managed by the same
investment adviser.
For the share class of each fund offered through your contract, please see the cover page.
Fund Name
Investment Adviser/Subadviser	Investment Objective(s)
	Seeks long-term capital appreciation.
Fidelity -VIP Contrafund® Portfolio
Investment Adviser: Fidelity Management &
Research Company (“FMR”)
Subadvisers: FMR Co., Inc. and other affiliates of
FMR
Fidelity -VIP Equity-Income Portfolio	Seeks reasonable income. Also considers the potential for
	capital appreciation. Seeks to achieve a yield which
Investment Adviser: Fidelity Management &	exceeds the composite yield on the securities comprising
Research Company (“FMR”)	the S&P 500® Index.
Subadvisers: FMR Co., Inc. and other affiliates of
FMR
PRO.75998-11	41

Fund Name
Investment Adviser/Subadviser	Investment Objective(s)
Fidelity -VIP Growth Portfolio	Seeks to achieve capital appreciation.
Investment Adviser: Fidelity Management &
Research Company (“FMR”)
Subadvisers: FMR Co., Inc. and other affiliates of
FMR
Fidelity -VIP Overseas Portfolio	Seeks long-term growth of capital.
Investment Adviser: Fidelity Management &
Research Company (“FMR”)
Subadvisers: FMR Co., Inc. and other affiliates of
FMR
ING Balanced Portfolio	Seeks total return consisting of capital appreciation (both
	realized and unrealized) and current income; the
Investment Adviser: ING Investments, LLC	secondary investment objective is long-term capital
	appreciation.
Subadviser: ING Investment Management Co.
ING BlackRock Large Cap Growth Portfolio	Seeks long-term growth of capital.
Investment Adviser: Directed Services LLC
Subadviser: BlackRock Investment Management,
LLC
ING BlackRock Science and Technology	Seeks long-term capital appreciation.
Opportunities Portfolio
Investment Adviser: ING Investments, LLC
Subadviser: BlackRock Advisors, LLC
ING Global Bond Portfolio	Seeks to maximize total return through a combination of
	current income and capital appreciation.
Investment Adviser: Directed Services LLC
Subadviser: ING Investment Management Co.
PRO.75998-11	42

Fund Name		Investment Objective(s)
Investment Adviser/Subadviser
ING Growth and Income Portfolio		Seeks to maximize total return through investments in a
		diversified portfolio of common stocks and securities
Investment Adviser: ING Investments, LLC		convertible into common stocks. It is anticipated that
		capital appreciation and investment income will both be
Subadviser: ING Investment Management Co.		major factors in achieving total return.
ING Intermediate Bond Portfolio		Seeks to maximize total return consistent with
		reasonable risk. The Portfolio seeks its objective
Investment Adviser: ING Investments, LLC		through investments in a diversified portfolio consisting
		primarily of debt securities. It is anticipated that capital
Subadviser: ING Investment Management Co.		appreciation and investment income will both be major
		factors in achieving total return.
ING International Index Portfolio		Seeks investment results (before fees and expenses) that
		correspond to the total return of a widely accepted
Investment Adviser: ING Investments, LLC		international index.
ING Invesco Van Kampen Equity and Income		Seeks total return, consisting of long-term capital
Portfolio		appreciation and current income.
Investment Adviser: Invesco Advisers, Inc.
ING Large Cap Growth Portfolio		Seeks long-term capital growth.
Investment Adviser: Directed Services LLC
Subadviser: ING Investment Management Co.
ING Money Market Portfolio*		Seeks to provide high current return, consistent with
		preservation of capital and liquidity, through investment
Investment Adviser: ING Investments, LLC		in high-quality money market instruments while
		maintaining a stable share price of $1.00.
Subadviser: ING Investment Management Co.
*There is no guarantee that the ING Money Market Subaccount
will have a positive or level return.
ING Oppenheimer Global Portfolio		Seeks capital appreciation.
Investment Adviser: Directed Services LLC
Subadviser: OppenheimerFunds, Inc.
PRO.75998-11	43

Fund Name	Investment Objective(s)
Investment Adviser/Subadviser
ING RussellTM Large Cap Growth Index Portfolio	A non-diversified Portfolio that seeks investment results
	(before fees and expenses) that correspond to the total
Investment Adviser: ING Investments, LLC	return of the Russell Top 200® Growth Index.
Subadviser: ING Investment Management Co.
ING Strategic Allocation Conservative Portfolio	Seeks to provide total return (i.e., income and capital
	growth, both realized and unrealized) consistent with
Investment Adviser: ING Investments, LLC	preservation of capital.
Subadviser: ING Investment Management Co.
ING Strategic Allocation Growth Portfolio	Seeks to provide capital appreciation.
Investment Adviser: ING Investments, LLC
Subadviser: ING Investment Management Co.
ING Strategic Allocation Moderate Portfolio	Seeks to provide total return (i.e., income and capital
	appreciation, both realized and unrealized).
Investment Adviser: ING Investments, LLC
Subadviser: ING Investment Management Co.
ING Templeton Foreign Equity Portfolio	Seeks long-term capital growth
Investment Adviser: Directed Services LLC
Subadviser: Templeton Investment Counsel, LLC
ING Thornburg Value Portfolio	Seeks long-term capital appreciation, and secondarily,
	current income.
Investment Adviser: Directed Services LLC
Subadviser: Thornburg Investment Management,
Inc.
PRO.75998-11	44

Fund Name	Investment Objective(s)
Investment Adviser/Subadviser
ING T. Rowe Price Diversified Mid Cap Growth	Seeks long-term capital appreciation.
Portfolio
Investment Adviser: Directed Services LLC
Subadviser: T. Rowe Price Associates, Inc.
ING T. Rowe Price Growth Equity Portfolio	Seeks long-term capitl growth, and secondarily,
	increasing dividend income.
Investment Adviser: Directed Services LLC
Subadviser: T. Rowe Price Associates, Inc.
ING UBS U.S. Large Cap Equity Portfolio	Seeks long-term growth of capital and future income.
Investment Adviser: Directed Services LLC
Subadviser: UBS Global Asset Management
(Americas) Inc.
PRO.75998-11	45

APPENDIX III
CONDENSED FINANCIAL INFORMATION
Except for subaccounts which did not commence operations as of December 31, 2010, the following tables give (1) the accumulation unit value ("AUV") at the
beginning of the period, (2) the AUV at the end of the period and (3) the total number of accumulation units outstanding at the end of the period for each
subaccount of Variable Annuity Account B available under the contracts for the indicated periods. For those subaccounts that commenced operations during the
period ended December 31, 2010, the "Value at beginning of period" shown is the value at first date of investment. Fund name changes after December 31, 2010 are
not reflected in the following information.
TABLE I
FOR CONTRACTS ISSUED AFTER MARCH 1994 WITH TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES OF 1.25%
(Selected data for accumulation units outstanding throughout each period)
	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
FIDELITY® VIP CONTRAFUND® PORTFOLIO
Value at beginning of period	$28.22	$21.06	$37.09	$31.94	$28.95	$25.07	$21.98	$17.33	$19.354	$22.333
Value at end of period	$32.67	$28.22	$21.06	$37.09	$31.94	$28.95	$25.07	$21.98	$17.33	$19.354
Number of accumulation units outstanding at end of period	301,881	336,876	381,493	507,337	603,500	638,978	578,222	459,840	368,356	350,846
FIDELITY® VIP EQUITY-INCOME PORTFOLIO
Value at beginning of period	$19.35	$15.05	$26.57	$26.50	$22.33	$21.35	$19.39	$15.06	$18.363	$19.565
Value at end of period	$22.00	$19.35	$15.05	$26.57	$26.50	$22.33	$21.35	$19.39	$15.06	$18.363
Number of accumulation units outstanding at end of period	157,760	186,032	218,532	345,239	390,753	444,733	517,940	447,621	362,704	304,410
FIDELITY® VIP GROWTH PORTFOLIO
Value at beginning of period	$15.71	$12.40	$23.76	$18.95	$17.96	$17.19	$16.83	$12.83	$18.588	$22.858
Value at end of period	$19.26	$15.71	$12.40	$23.76	$18.95	$17.96	$17.19	$16.83	$12.83	$18.588
Number of accumulation units outstanding at end of period	142,167	148,639	172,394	206,681	248,285	300,061	376,032	444,798	424,020	497,068
FIDELITY® VIP OVERSEAS PORTFOLIO
Value at beginning of period	$16.64	$13.32	$24.00	$20.71	$17.76	$15.11	$13.46	$9.51	$12.077	$15.514
Value at end of period	$18.59	$16.64	$13.32	$24.00	$20.71	$17.76	$15.11	$13.46	$9.51	$12.077
Number of accumulation units outstanding at end of period	77,854	92,767	102,748	128,515	129,186	131,286	132,647	99,214	41,584	40,745
ING BALANCED PORTFOLIO
Value at beginning of period	$25.04	$21.26	$29.94	$28.72	$26.44	$25.68	$23.77	$20.25	$22.856	$24.163
Value at end of period	$28.21	$25.04	$21.26	$29.94	$28.72	$26.44	$25.68	$23.77	$20.25	$22.856
Number of accumulation units outstanding at end of period	558,020	602,421	720,069	917,406	1,060,627	1,203,120	1,342,969	1,352,428	1,483,863	1,725,814
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO
(Funds were first received in this option during April 2007)
Value at beginning of period	$8.09	$6.27	$10.40	$10.67
Value at end of period	$9.08	$8.09	$6.27	$10.40
Number of accumulation units outstanding at end of period	136,293	158,773	168,583	207,180
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES
PORTFOLIO
Value at beginning of period	$4.44	$2.94	$4.95	$4.21	$3.98	$3.60	$3.70	$2.57	$4.436	$5.831
Value at end of period	$5.20	$4.44	$2.94	$4.95	$4.21	$3.98	$3.60	$3.70	$2.57	$4.436
Number of accumulation units outstanding at end of period	129,462	127,833	87,832	94,120	131,384	184,668	238,094	325,256	240,058	172,469
ING GROWTH AND INCOME PORTFOLIO
Value at beginning of period	$20.45	$15.90	$25.81	$24.34	$21.58	$20.20	$18.87	$15.16	$20.465	$25.397
Value at end of period	$23.05	$20.45	$15.90	$25.81	$24.34	$21.58	$20.20	$18.87	$15.16	$20.465
Number of accumulation units outstanding at end of period	1,354,950	1,472,079	1,651,069	2,022,081	2,298,689	2,705,207	3,268,534	3,649,456	4,278,162	5,447,988
ING INTERMEDIATE BOND PORTFOLIO
Value at beginning of period	$20.66	$18.75	$20.74	$19.81	$19.27	$18.92	$18.27	$17.40	$16.266	$15.147
Value at end of period	$22.41	$20.66	$18.75	$20.74	$19.81	$19.27	$18.92	$18.27	$17.40	$16.266
Number of accumulation units outstanding at end of period	421,242	448,725	532,304	677,264	769,351	897,910	1,012,407	688,345	807,470	862,575
CFI 1

Condensed Financial Information (continued)
	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
ING INTERNATIONAL INDEX PORTFOLIO
(Funds were first received in this option during August 2009)
Value at beginning of period	$12.72	$11.74
Value at end of period	$13.52	$12.72
Number of accumulation units outstanding at end of period	3,922	3,325
ING LEGG MASON CLEARBRIDGE AGGRESSIVE GROWTH PORTFOLIO
Value at beginning of period	$13.02	$9.97	$16.60	$17.08	$15.69	$14.25	$13.15	$9.64	$15.086	$20.426
Value at end of period	$16.01	$13.02	$9.97	$16.60	$17.08	$15.69	$14.25	$13.15	$9.64	$15.086
Number of accumulation units outstanding at end of period	145,187	151,591	165,318	200,911	246,323	280,808	327,368	365,960	353,915	420,422
ING MONEY MARKET PORTFOLIO
Value at beginning of period	$15.26	$15.40	$15.19	$14.62	$14.12	$13.88	$13.91	$13.95	$13.905	$13.547
Value at end of period	$15.10	$15.26	$15.40	$15.19	$14.62	$14.12	$13.88	$13.91	$13.95	$13.905
Number of accumulation units outstanding at end of period	228,953	290,406	471,161	456,245	457,899	400,551	546,292	760,049	1,044,246	1,134,800
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.61	$8.42	$14.29	$13.57	$11.65	$10.01
Value at end of period	$13.31	$11.61	$8.42	$14.29	$13.57	$11.65
Number of accumulation units outstanding at end of period	465,820	523,838	567,230	768,015	872,887	946,187
ING OPPENHEIMER STRATEGIC INCOME PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.53	$9.60	$11.51	$10.72	$10.01	$9.88
Value at end of period	$13.20	$11.53	$9.60	$11.51	$10.72	$10.01
Number of accumulation units outstanding at end of period	212,251	191,664	208,418	279,773	212,296	235,801
ING RUSSELLTM LARGE CAP GROWTH INDEX PORTFOLIO
(Funds were first received in this option during July 2009)
Value at beginning of period	$12.54	$10.70
Value at end of period	$13.96	$12.54
Number of accumulation units outstanding at end of period	974	921
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO
Value at beginning of period	$16.91	$14.53	$19.25	$18.42	$17.21	$16.78	$15.74	$14.02	$14.844	$15.397
Value at end of period	$18.55	$16.91	$14.53	$19.25	$18.42	$17.21	$16.78	$15.74	$14.02	$14.844
Number of accumulation units outstanding at end of period	16,258	27,916	41,708	52,539	54,761	53,837	49,393	52,209	88,782	82,972
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO
Value at beginning of period	$16.86	$13.63	$21.59	$20.81	$18.62	$17.75	$16.05	$13.07	$15.344	$17.566
Value at end of period	$18.83	$16.86	$13.63	$21.59	$20.81	$18.62	$17.75	$16.05	$13.07	$15.344
Number of accumulation units outstanding at end of period	32,561	40,958	39,243	71,729	75,157	74,359	69,724	75,583	72,637	76,069
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO
Value at beginning of period	$16.78	$13.94	$20.31	$19.50	$17.76	$17.17	$15.78	$13.37	$14.966	$16.295
Value at end of period	$18.56	$16.78	$13.94	$20.31	$19.50	$17.76	$17.17	$15.78	$13.37	$14.966
Number of accumulation units outstanding at end of period	38,888	37,701	37,418	52,633	58,717	59,246	63,295	77,501	89,224	99,986
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$10.87	$7.52	$13.39	$11.95	$11.09	$9.93
Value at end of period	$13.79	$10.87	$7.52	$13.39	$11.95	$11.09
Number of accumulation units outstanding at end of period	413,503	423,967	477,757	612,088	691,090	810,723
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO
Value at beginning of period	$20.95	$14.84	$26.01	$23.96	$21.41	$20.42	$18.80	$14.54	$19.189	$21.643
Value at end of period	$24.18	$20.95	$14.84	$26.01	$23.96	$21.41	$20.42	$18.80	$14.54	$19.189
Number of accumulation units outstanding at end of period	96,633	105,890	102,326	145,889	164,311	196,161	217,537	218,596	192,650	212,838
CFI 2

Condensed Financial Information (continued)
	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
ING TEMPLETON FOREIGN EQUITY PORTFOLIO
(Funds were first received in this option during April 2008)
Value at beginning of period	$8.20	$6.28	$10.20
Value at end of period	$8.82	$8.20	$6.28
Number of accumulation units outstanding at end of period	373,838	415,687	465,424
ING THORNBURG VALUE PORTFOLIO
Value at beginning of period	$27.54	$19.26	$32.37	$30.57	$26.49	$26.41	$23.69	$18.73	$27.159	$36.551
Value at end of period	$30.29	$27.54	$19.26	$32.37	$30.57	$26.49	$26.41	$23.69	$18.73	$27.159
Number of accumulation units outstanding at end of period	82,310	88,751	97,407	114,239	117,112	147,962	177,277	204,828	249,445	300,792
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO
Value at beginning of period	$13.70	$10.53	$17.70	$17.71	$15.66	$14.50	$12.79	$10.37	$13.976	$17.889
Value at end of period	$15.35	$13.70	$10.53	$17.70	$17.71	$15.66	$14.50	$12.79	$10.37	$13.976
Number of accumulation units outstanding at end of period	137,853	144,256	181,081	194,855	215,491	248,139	261,134	279,653	300,021	351,117
ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.15	$9.20	$12.16	$11.89	$10.69	$9.98
Value at end of period	$12.37	$11.15	$9.20	$12.16	$11.89	$10.69
Number of accumulation units outstanding at end of period	267,662	301,174	413,810	523,595	608,591	666,187
TABLE II
FOR CONTRACTS CONTAINING LIMITS ON FEES
(Selected data for accumulation units outstanding throughout each period)
	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
FIDELITY® VIP CONTRAFUND® PORTFOLIO
Value at beginning of period	$28.22	$21.06	$37.09	$31.94	$28.95	$25.07	$21.98	$17.33	$19.354	$22.333
Value at end of period	$32.67	$28.22	$21.06	$37.09	$31.94	$28.95	$25.07	$21.98	$17.33	$19.354
Number of accumulation units outstanding at end of period	10,435	8,961	12,125	18,196	24,115	27,427	25,162	22,238	18,503	11,769
FIDELITY® VIP EQUITY-INCOME PORTFOLIO
Value at beginning of period	$19.35	$15.05	$26.57	$26.50	$22.33	$21.35	$19.39	$15.06	$18.363	$19.565
Value at end of period	$22.00	$19.35	$15.05	$26.57	$26.50	$22.33	$21.35	$19.39	$15.06	$18.363
Number of accumulation units outstanding at end of period	10,714	10,879	22,407	24,016	35,909	35,428	34,515	16,683	28,494	5,108
FIDELITY® VIP GROWTH PORTFOLIO
Value at beginning of period	$15.71	$12.40	$23.76	$18.95	$17.96	$17.19	$16.83	$12.83	$18.588	$22.858
Value at end of period	$19.26	$15.71	$12.40	$23.76	$18.95	$17.96	$17.19	$16.83	$12.83	$18.588
Number of accumulation units outstanding at end of period	1,636	1,847	3,860	4,116	6,352	7,210	13,505	13,739	16,200	30,698
FIDELITY® VIP OVERSEAS PORTFOLIO
Value at beginning of period	$16.64	$13.32	$24.00	$20.71	$17.76	$15.11	$13.46	$12.60
Value at end of period	$18.59	$16.64	$13.32	$24.00	$20.71	$17.76	$15.11	$13.46
Number of accumulation units outstanding at end of period	91	36	47	18,290	17,029	23,281	2,467	680
ING BALANCED PORTFOLIO
Value at beginning of period	$25.83	$21.88	$30.74	$29.42	$27.01	$26.17	$24.16	$20.53	$23.119	$24.379
Value at end of period	$29.19	$25.83	$21.88	$30.74	$29.42	$27.01	$26.17	$24.16	$20.53	$23.119
Number of accumulation units outstanding at end of period	86,310	94,481	107,148	118,074	135,748	189,050	217,194	210,963	226,171	340,426
CFI 3

Condensed Financial Information (continued)
	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO
(Funds were first received in this option during April 2007)
Value at beginning of period	$8.10	$6.28	$10.41	$10.67
Value at end of period	$9.08	$8.10	$6.28	$10.41
Number of accumulation units outstanding at end of period	8,561	8,554	12,302	13,169
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES
PORTFOLIO
Value at beginning of period	$4.52	$3.00	$5.04	$4.28	$4.03	$3.65	$3.73	$2.59	$4.454	$5.841
Value at end of period	$5.29	$4.52	$3.00	$5.04	$4.28	$4.03	$3.65	$3.73	$2.59	$4.454
Number of accumulation units outstanding at end of period	404	0	0	0	3,642	3,642	14,402	10,422	1,785	7,505
ING GROWTH AND INCOME PORTFOLIO
Value at beginning of period	$21.10	$16.36	$26.50	$24.93	$22.04	$20.59	$19.19	$15.37	$20.70	$25.624
Value at end of period	$23.84	$21.10	$16.36	$26.50	$24.93	$22.04	$20.59	$19.19	$15.37	$20.70
Number of accumulation units outstanding at end of period	486,741	562,385	659,379	793,302	950,496	1,152,266	1,401,295	1,674,699	1,943,271	2,540,138
ING INTERMEDIATE BOND PORTFOLIO
Value at beginning of period	$21.05	$19.07	$21.07	$20.10	$19.52	$19.14	$18.45	$17.55	$16.378	$15.229
Value at end of period	$22.87	$21.05	$19.07	$21.07	$20.10	$19.52	$19.14	$18.45	$17.55	$16.378
Number of accumulation units outstanding at end of period	68,530	80,339	110,037	121,126	145,608	170,190	237,188	248,725	332,174	362,413
ING LEGG MASON CLEARBRIDGE AGGRESSIVE GROWTH PORTFOLIO
Value at beginning of period	$13.02	$9.97	$16.60	$17.08	$15.69	$14.25	$13.15	$9.64	$15.086	$20.426
Value at end of period	$16.01	$13.02	$9.97	$16.60	$17.08	$15.69	$14.25	$13.15	$9.64	$15.086
Number of accumulation units outstanding at end of period	4,561	5,469	6,491	6,500	8,232	13,528	16,173	15,712	9,981	15,417
ING MONEY MARKET PORTFOLIO
Value at beginning of period	$15.26	$15.40	$15.19	$14.62	$14.12	$13.88	$13.91	$13.95	$13.905	$13.547
Value at end of period	$15.10	$15.26	$15.40	$15.19	$14.62	$14.12	$13.88	$13.91	$13.95	$13.905
Number of accumulation units outstanding at end of period	55,687	71,098	81,227	142,592	168,142	165,286	182,060	236,795	340,943	362,580
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.61	$8.42	$14.29	$13.57	$11.65	$9.72
Value at end of period	$13.31	$11.61	$8.42	$14.29	$13.57	$11.65
Number of accumulation units outstanding at end of period	17,607	17,610	18,704	20,539	28,855	35,013
ING OPPENHEIMER STRATEGIC INCOME PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.53	$9.60	$11.51	$10.72	$10.01	$9.89
Value at end of period	$13.20	$11.53	$9.60	$11.51	$10.72	$10.01
Number of accumulation units outstanding at end of period	9,958	2,838	32,501	4,627	10,508	11,136
ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO
Value at beginning of period	$17.67	$15.13	$19.97	$19.05	$17.74	$17.24	$16.10	$14.30	$14.41
Value at end of period	$19.45	$17.67	$15.13	$19.97	$19.05	$17.74	$17.24	$16.10	$14.30
Number of accumulation units outstanding at end of period	0	0	5,339	5,341	5,340	5,339	23,796	20,520	22,791
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO
Value at beginning of period	$17.62	$14.20	$22.40	$21.52	$19.19	$18.23	$16.42	$13.33	$15.591	$17.786
Value at end of period	$19.74	$17.62	$14.20	$22.40	$21.52	$19.19	$18.23	$16.42	$13.33	$15.591
Number of accumulation units outstanding at end of period	3,999	3,999	9,861	10,406	10,405	10,401	11,857	18,356	19,199	21,776
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO
Value at beginning of period	$17.53	$14.52	$21.08	$20.16	$18.30	$17.63	$16.14	$13.63	$15.207	$16.499
Value at end of period	$19.47	$17.53	$14.52	$21.08	$20.16	$18.30	$17.63	$16.14	$13.63	$15.207
Number of accumulation units outstanding at end of period	1,286	0	2,679	2,679	2,679	2,679	4,239	9,896	9,897	9,895
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$10.87	$7.52	$13.39	$11.95	$11.09	$9.48
Value at end of period	$13.79	$10.87	$7.52	$13.39	$11.95	$11.09
Number of accumulation units outstanding at end of period	12,053	15,073	17,418	17,064	20,517	27,390
CFI 4

Condensed Financial Information (continued)
	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO
Value at beginning of period	$20.95	$14.84	$26.01	$23.96	$21.41	$20.42	$18.80	$14.54	$19.189	$21.643
Value at end of period	$24.18	$20.95	$14.84	$26.01	$23.96	$21.41	$20.42	$18.80	$14.54	$19.189
Number of accumulation units outstanding at end of period	12,198	12,200	5,446	6,163	7,951	9,403	10,065	9,380	6,422	6,688
ING TEMPLETON FOREIGN EQUITY PORTFOLIO
(Funds were first received in this option during April 2008)
Value at beginning of period	$8.20	$6.28	$10.20
Value at end of period	$8.82	$8.20	$6.28
Number of accumulation units outstanding at end of period	4,565	5,164	8,167
ING THORNBURG VALUE PORTFOLIO
Value at beginning of period	$27.54	$19.26	$32.37	$30.57	$26.49	$26.41	$23.69	$18.73	$27.159	$36.551
Value at end of period	$30.29	$27.54	$19.26	$32.37	$30.57	$26.49	$26.41	$23.69	$18.73	$27.159
Number of accumulation units outstanding at end of period	3,333	3,544	3,715	4,644	3,729	3,729	5,194	5,195	9,460	9,287
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO
Value at beginning of period	$13.70	$10.53	$17.70	$17.71	$15.66	$14.50	$12.79	$10.37	$13.976	$17.889
Value at end of period	$15.35	$13.70	$10.53	$17.70	$17.71	$15.66	$14.50	$12.79	$10.37	$13.976
Number of accumulation units outstanding at end of period	46,077	56,771	74,615	84,934	96,025	114,960	136,060	108,922	121,245	141,938
ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.15	$9.20	$12.16	$11.89	$10.69	$9.81
Value at end of period	$12.37	$11.15	$9.20	$12.16	$11.89	$10.69
Number of accumulation units outstanding at end of period	3,935	3,941	6,325	10,552	18,613	22,007
TABLE III
FOR CERTAIN CONTRACTS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.95%
(Selected data for accumulation units outstanding throughout each period)
	2010	2009	2008	2007	2006	2005	2004	2003	2002
FIDELITY® VIP CONTRAFUND® PORTFOLIO
(Funds were first received in this option during December 2002)
Value at beginning of period	$16.00	$11.90	$20.91	$17.95	$16.22	$14.00	$12.24	$17.33	$9.70
Value at end of period	$18.58	$16.00	$11.90	$20.91	$17.95	$16.22	$14.00	$12.24	$17.33
Number of accumulation units outstanding at end of period	42,673	45,165	43,318	47,295	55,171	80,017	37,912	25,359	2,695
FIDELITY® VIP EQUITY-INCOME PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.33	$9.56	$16.83	$16.73	$14.05	$13.40	$12.13	$8.78
Value at end of period	$14.06	$12.33	$9.56	$16.83	$16.73	$14.05	$13.40	$12.13
Number of accumulation units outstanding at end of period	3,490	5,390	8,694	14,069	11,871	11,456	11,244	5,511
FIDELITY® VIP GROWTH PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$11.58	$9.12	$17.42	$13.85	$13.09	$12.49	$12.19	$8.80
Value at end of period	$14.25	$11.58	$9.12	$17.42	$13.85	$13.09	$12.49	$12.19
Number of accumulation units outstanding at end of period	6,610	2,237	2,510	1,881	2,235	3,344	4,116	5,490
FIDELITY® VIP OVERSEAS PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$15.16	$12.09	$21.73	$18.70	$15.98	$13.56	$12.04	$8.09
Value at end of period	$16.98	$15.16	$12.09	$21.73	$18.70	$15.98	$13.56	$12.04
Number of accumulation units outstanding at end of period	4,733	6,207	6,271	7,686	7,070	6,566	6,279	1,756
CFI 5

Condensed Financial Information (continued)
	2010	2009	2008	2007	2006	2005	2004	2003	2002
ING BALANCED PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.38	$10.48	$14.71	$14.07	$12.91	$12.51	$11.54	$9.56
Value at end of period	$13.99	$12.38	$10.48	$14.71	$14.07	$12.91	$12.51	$11.54
Number of accumulation units outstanding at end of period	4,804	0	0	82,646	93,249	91,215	12	12
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO
(Funds were first received in this option during April 2007)
Value at beginning of period	$8.16	$6.31	$10.43	$10.67
Value at end of period	$9.18	$8.16	$6.31	$10.43
Number of accumulation units outstanding at end of period	889	888	888	888
ING BLACKROCK SCIENCE AND TECHNOLOGY OPPORTUNITIES
PORTFOLIO
Value at beginning of period	$14.96	$9.89	$16.58	$14.07	$13.24	$11.96	$12.23	$8.44
Value at end of period	$17.57	$14.96	$9.89	$16.58	$14.07	$13.24	$11.96	$12.23
Number of accumulation units outstanding at end of period	1,427	1,207	865	586	578	311	223	223
ING GROWTH AND INCOME PORTFOLIO
(Funds were first received in this option during December 2002)
Value at beginning of period	$12.55	$9.73	$15.75	$14.81	$13.09	$12.22	$11.38	$15.16	$9.42
Value at end of period	$14.19	$12.55	$9.73	$15.75	$14.81	$13.09	$12.22	$11.38	$15.16
Number of accumulation units outstanding at end of period	28,576	26,993	27,883	34,872	40,044	39,142	49,972	69,060	94,985
ING INTERMEDIATE BOND PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.60	$11.40	$12.58	$11.97	$11.62	$11.37	$10.94	$10.51
Value at end of period	$13.71	$12.60	$11.40	$12.58	$11.97	$11.62	$11.37	$10.94
Number of accumulation units outstanding at end of period	4,097	4,203	4,166	5,124	4,483	3,884	6,479	4,656
ING LEGG MASON CLEARBRIDGE AGGRESSIVE GROWTH PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.65	$9.65	$16.02	$16.44	$15.05	$13.63	$12.55	$8.77
Value at end of period	$15.59	$12.65	$9.65	$16.02	$16.44	$15.05	$13.63	$12.55
Number of accumulation units outstanding at end of period	1,107	201	201	550	1,079	723	1,505	5,591
ING MONEY MARKET PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$11.19	$11.26	$11.07	$10.63	$10.23	$10.12	$10.02	$10.02
Value at end of period	$11.11	$11.19	$11.26	$11.07	$10.63	$10.23	$10.02	$10.02
Number of accumulation units outstanding at end of period	3,390	11,063	19,892	24,749	68,143	9,105	0	3,292
ING OPPENHEIMER GLOBAL PORTFOLIO (CLASS I)
Value at beginning of period	$11.78	$8.52	$14.41	$13.65	$11.68	$10.02
Value at end of period	$13.54	$11.78	$8.52	$14.41	$13.65	$11.68
Number of accumulation units outstanding at end of period	22,363	29,598	27,487	37,111	36,554	38,507
ING OPPENHEIMER STRATEGIC INCOME PORTFOLIO
Value at beginning of period	$11.70	$9.72	$11.61	$10.78	$10.03	$9.91
Value at end of period	$13.43	$11.70	$9.72	$11.61	$10.78	$10.03
Number of accumulation units outstanding at end of period	14,792	8,891	9,583	11,365	11,291	15,502
ING STRATEGIC ALLOCATION GROWTH PORTFOLIO
(Funds were first received in this option during April 2008)
Value at beginning of period	$12.43	$10.02	$14.42
Value at end of period	$13.92	$12.43	$10.02
Number of accumulation units outstanding at end of period	4,516	4,516	4,516
ING STRATEGIC ALLOCATION MODERATE PORTFOLIO
(Funds were first received in this option during November 2005)
Value at beginning of period	$12.38	$10.26	$14.90	$14.26	$12.95	$12.72
Value at end of period	$13.74	$12.38	$10.26	$14.90	$14.26	$12.95
Number of accumulation units outstanding at end of period	0	4,349	3,933	3,581	3,282	2,925
		CFI 6

	Condensed Financial Information (continued)
	2010	2009	2008	2007	2006	2005	2004	2003	2002
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.03	$7.60	$13.50	$12.02	$11.12	$9.93
Value at end of period	$14.04	$11.03	$7.60	$13.50	$12.02	$11.12
Number of accumulation units outstanding at end of period	6,324	1,879	1,316	1,834	4,473	5,717
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$14.39	$10.16	$17.75	$16.31	$14.53	$13.82	$12.68	$9.30
Value at end of period	$16.66	$14.39	$10.16	$17.75	$16.31	$14.53	$13.82	$12.68
Number of accumulation units outstanding at end of period	3,072	8,923	8,699	34,631	7,393	7,203	4,347	3,154
ING TEMPLETON FOREIGN EQUITY PORTFOLIO
(Funds were first received in this option during April 2008)
Value at beginning of period	$8.24	$6.30	$10.20
Value at end of period	$8.89	$8.24	$6.30
Number of accumulation units outstanding at end of period	1,269	2,427	2,857
ING THORNBURG VALUE PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$14.03	$9.79	$16.40	$15.44	$13.34	$13.26	$11.86	$8.79
Value at end of period	$15.48	$14.03	$9.79	$16.40	$15.44	$13.34	$13.26	$11.86
Number of accumulation units outstanding at end of period	376	376	287	287	287	287	287	287
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO
(Funds were first received in this option during March 2007)
Value at beginning of period	$12.73	$9.76	$16.35	$16.25
Value at end of period	$14.31	$12.73	$9.76	$16.35
Number of accumulation units outstanding at end of period	244	244	244	585
ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO
(Funds were first received in this option during April 2005)
Value at beginning of period	$11.32	$9.31	$12.27	$11.96	$10.71	$10.00
Value at end of period	$12.59	$11.32	$9.31	$12.27	$11.96	$10.71
Number of accumulation units outstanding at end of period	13,007	13,233	17,039	8,513	8,390	8,585
		CFI 7

FOR MASTER APPLICATIONS ONLY

I hereby acknowledge receipt of Variable Account B Individual Nonqualified Variable Annuity Prospectus dated 

April 29, 2011. 

Please send an Account B Statement of Additional Information (Form No. SAI. 75998-11) dated April 29, 2011. 

CONTRACT HOLDER’ S SIGNATURE

DATE

PRO.75998-11 

VARIABLE ANNUITY ACCOUNT B
OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statement of Additional Information dated April 29, 2011
Individual Nonqualified Variable Annuity Contracts
This Statement of Additional Information is not a prospectus and should be read in conjunction with the current
prospectus for Variable Annuity Account B (the “Separate Account”) dated April 29, 2011.
A free prospectus is available upon request from the local ING Life Insurance and Annuity Company office or by
writing to or calling:
ING
USFS Customer Service
Defined Contribution Administration
P.O. Box 990063
Hartford, CT 06199-0063
1-800-262-3862
Read the prospectus before you invest. Terms used in this Statement of Additional Information shall have the same
meaning as in the prospectus.
TABLE OF CONTENTS
	Page
General Information and History	2
Variable Annuity Account B	2
Offering and Purchase of Contracts	3
Income Phase Payments	3
Sales Material and Advertising	4
Experts	5
Financial Statements of the Separate Account	S-1
Consolidated Financial Statements of ING Life Insurance and Annuity Company	C-1

GENERAL INFORMATION AND HISTORY

ING Life Insurance and Annuity Company (the “Company,” we, us, our) is a stock life insurance company which 

was organized under the insurance laws of the State of Connecticut in 1976. Prior to January 1, 2002, the Company 

was known as Aetna Life Insurance and Annuity Company. Through a merger, it succeeded to the business of Aetna 

Variable Annuity Life Insurance Company (formerly Participating Annuity Life Insurance Company organized in 

1954). 

The Company is an indirect wholly owned subsidiary of ING Groep N.V. (“ING”), a global financial institution 

active in the fields of insurance, banking and asset management and is a direct, wholly owned subsidiary of Lion 

Connecticut Holdings Inc. The Company is engaged in the business of issuing life insurance policies and annuity 

contracts. Our Home Office is located at One Orange Way, Windsor, Connecticut 06095-4774. 

The Company serves as the depositor for the separate account. 

Other than the mortality and expense risk charge and administrative expense charge, if any, described in the 

prospectus, all expenses incurred in the operations of the separate account are borne by the Company. However, the 

Company does receive compensation for certain administrative or distribution costs from the funds or affiliates of the 

funds used as funding options under the contract. (See “Fees” in the prospectus.) 

The assets of the separate account are held by the Company. The separate account has no custodian. However, the 

funds in whose shares the assets of the separate account are invested each have custodians, as discussed in their 

respective prospectuses. 

VARIABLE ANNUITY ACCOUNT B

Variable Annuity Account B is a separate account established by the Company for the purpose of funding variable 

annuity contracts issued by the Company. The separate account is registered with the Securities and Exchange 

Commission (SEC) as a unit investment trust under the Investment Company Act of 1940, as amended. Payments to 

accounts under the contract may be allocated to one or more of the subaccounts. Each subaccount invests in the 

shares of only one of the funds offered under the contract. We may make additions to, deletions from or 

substitutions of available investment options as permitted by law and subject to the conditions of the contract. The 

availability of the funds is subject to applicable regulatory authorization. Not all funds are available in all 

jurisdictions or under all contracts. 

A complete description of each of the funds, including their investment objectives, policies, risks and fees and 

expenses, are contained in the prospectuses and statements of additional information for each of the funds. 

2

OFFERING AND PURCHASE OF CONTRACTS

The Company’s subsidiary, ING Financial Advisers, LLC serves as the principal underwriter for the contracts. ING 

Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-dealer with the SEC. ING 

Financial Advisers, LLC is also a member of the Financial Industry Regulatory Authority and the Securities Investor 

Protection Corporation. ING Financial Advisers, LLC’s principal office is located at One Orange Way, Windsor, 

Connecticut 06095-4774. The contracts are distributed through life insurance agents licensed to sell variable 

annuities who are registered representatives of ING Financial Advisers, LLC or of other registered broker-dealers 

who have entered into sales arrangements with ING Financial Advisers, LLC. The offering of the contracts is 

continuous. A description of the manner in which contracts are purchased may be found in the prospectus under the 

sections entitled “Purchase and Rights” and “Your Account Value.” 

Compensation paid to the principal underwriter, ING Financial Advisers, LLC, for the years ending December 31, 

2010, 2009 and 2008 amounted to $1,947,487.78, $1,658,134.85, and $2,501,353.46 respectively. These amounts 

reflect compensation paid to ING Financial Advisers, LLC attributable to regulatory and operating expenses 

associated with the distribution of all registered variable annuity products issued by Variable Annuity Account B of 

ING Life Insurance and Annuity Company. 

INCOME PHASE PAYMENTS

When you begin receiving payments under the contract during the income phase (see “Income Phase” in the 

prospectus), the value of your account is determined using accumulation unit values as of the tenth valuation before 

the first payment is due. Such value (less any applicable premium tax charge) is applied to provide payments to you 

in accordance with the payment option and investment options elected. 

The annuity option tables found in the contract show, for each option, the amount of the first payment for each 

$1,000 of value applied. When you select variable income payments, your account value purchases annuity units of 

the separate account subaccounts corresponding to the funds you select. The number of annuity units purchased is 

based on your account value and the value of each unit on the day the annuity units are purchased. Thereafter, 

variable payments fluctuate as the annuity unit value(s) fluctuates with the investment experience of the selected 

investment option(s). The first payment and subsequent payments also vary depending on the assumed net 

investment rate selected (3.5% or 5% per annum). Selection of a 5% rate causes a higher first payment, but 

payments will increase thereafter only to the extent that the net investment rate increases by more than 5% on an 

annual basis. Payments would decline if the rate failed to increase by 5%. Use of the 3.5% assumed rate causes a 

lower first payment, but subsequent payments would increase more rapidly or decline more slowly as changes occur 

in the net investment rate. 

When the income phase begins, the annuitant is credited with a fixed number of annuity units (which does not change 

thereafter) in each of the designated investment options. This number is calculated by dividing (a) by (b), where (a) 

is the amount of the first payment based on a particular investment option, and (b) is the then current annuity unit 

value for that investment option. As noted, annuity unit values fluctuate from one valuation period to the next (see 

“Account Value” in the prospectus): such fluctuations reflect changes in the net investment factor for the appropriate 

subaccount(s) (with a ten day valuation lag which gives the Company time to process payments) and a mathematical 

adjustment which offsets the assumed net investment rate of 3.5% or 5% per annum. 

The operation of all these factors can be illustrated by the following hypothetical example. These procedures will be 

performed separately for the investment options selected during the income phase. 

EXAMPLE: 

Assume that, at the date payments are to begin, there are 3,000 accumulation units credited under a particular 

contract or account and that the value of an accumulation unit for the tenth valuation period prior to retirement was 

$13.650000. This produces a total value of $40,950. 

Assume also that no premium tax charge is payable and that the annuity table in the contract provides, for the 

payment option elected, a first monthly variable payment of $6.68 per $1000 of value applied; the annuitant's first 

monthly payment would thus be 40.950 multiplied by $6.68, or $273.55. 

3

Assume then that the value of an annuity unit upon the valuation period in which the first payment was due was 

$13.400000. When this value is divided into the first monthly payment, the number of annuity units is determined to 

be 20.414. The value of this number of annuity units will be paid in each subsequent month. 

Suppose there were 30 days between the initial and second payment valuation dates. If the net investment factor with 

respect to the appropriate subaccount is 1.0032737 as of the tenth valuation preceding the due date of the second 

monthly income phase payment, multiplying this factor by .9971779* = .9999058^30 (to take into account 30 days 

of the assumed net investment rate of 3.5% per annum built into the number of Annuity Units determined above) 

produces a result of 1.000442. This is then multiplied by the Annuity Unit value for the prior valuation ($13.400000 

from above) to produce an Annuity Unit value of $13.405928 for the valuation occurring when the second income 

phase payment is due. 

The second monthly income phase payment is then determined by multiplying the number of Annuity Units by the 

current Annuity Unit value, or 20.414 times $13.405928, which produces a payment of $273.67. 

*If an assumed net investment rate of 5% is elected, the appropriate factor to take into account such assumed rate 

would be .9959968 = .9998663^30. 

SALES MATERIAL AND ADVERTISING

We may include hypothetical illustrations in our sales literature that explain the mathematical principles of dollar 

cost averaging, compounded interest, tax deferred accumulation, and the mechanics of variable annuity contracts. 

We may also discuss the difference between variable annuity contracts and other types of savings or investment 

products such as, personal savings accounts and certificates of deposit. 

We may distribute sales literature that compares the percentage change in accumulation unit values for any of the 

subaccounts to established market indices such as the Standard & Poor’s 500 Stock Index and the Dow Jones 

Industrial Average or to the percentage change in values of other management investment companies that have 

investment objectives similar to the subaccount being compared. 

We may publish in advertisements and reports, the ratings and other information assigned to us by one or more 

independent rating organizations such as A.M. Best Company, Duff & Phelps, Standard & Poor’s Corporation and 

Moody’s Investors Service, Inc. The purpose of the ratings is to reflect our financial strength and/or claims-paying 

ability. We may also quote ranking services such as Morningstar’s Variable Annuity/Life Performance Report and 

Lipper’s Variable Insurance Products Performance Analysis Service (VIPPAS), which rank variable annuity or life 

subaccounts or their underlying funds by performance and/or investment objective. We may categorize funds in 

terms of the asset classes they represent and use such categories in marketing material for the contracts. We may 

illustrate in advertisements the performance of the underlying funds, if accompanied by performance which also 

shows the performance of such funds reduced by applicable charges under the separate account. We may also show 

in advertisements the portfolio holdings of the underlying funds, updated at various intervals. From time to time, we 

will quote articles from newspapers and magazines or other publications or reports such as, The Wall Street Journal, 

Money magazine, USA Today and The VARDS Report. 

We may provide in advertising, sales literature, periodic publications or other materials information on various 

topics of interest to current and prospective contract holders. These topics may include the relationship between 

sectors of the economy and the economy as a whole and its effect on various securities markets, investment strategies 

and techniques (such as value investing, market timing, dollar cost averaging, asset allocation, constant ratio transfer 

and account rebalancing), the advantages and disadvantages of investing in tax-deferred and taxable investments, 

customer profiles and hypothetical purchase and investment scenarios, financial management and tax and retirement 

planning, and investment alternatives to certificates of deposit and other financial instruments, including comparison 

between the contracts and the characteristics of and market for such financial instruments. 

4

EXPERTS

The statements of assets and liabilities of the Variable Annuity Account B, of ING Life Insurance and Annuity 

Company, as of December 31, 2010, and the related statements of operations and changes in net assets for the 

periods disclosed in the financial statements, and the consolidated financial statements of ING Life Insurance and 

Annuity Company as of December 31, 2010 and 2009, and for each of the three years in the period ended December 

31, 2010, included in the Statement of Additional Information, have been audited by Ernst & Young LLP, 

independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and 

are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. 

The primary business address of Ernst & Young LLP is Suite 1000, 55 Ivan Allen Jr. Boulevard, Atlanta, GA 30308. 

5

FINANCIAL STATEMENTS
Variable Annuity Account B of
ING Life Insurance and Annuity Company
Year ended December 31, 2010
with Report of Independent Registered Public Accounting Firm

S-1

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VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Financial Statements
Year ended December 31, 2010

Contents
Report of Independent Registered Public Accounting Firm	1
Audited Financial Statements
Statements of Assets and Liabilities	4
Statements of Operations	32
Statements of Changes in Net Assets	61
Notes to Financial Statements	98

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Participants
ING Life Insurance and Annuity Company

We have audited the accompanying statements of assets and liabilities of the investment divisions (the “Divisions”) constituting Variable Annuity Account B of ING Life Insurance and Annuity Company (the “Account”) as of December 31, 2010, and the related statements of operations and changes in net assets for the periods disclosed in the financial statements. These financial statements are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The Account is comprised of the following Divisions:

American Funs Insurance Series:
  American Funds Insurance Series® International Fund - Class 2
Calvert Variable Series, Inc.:
  Calvert VP SRI Balanced Portfolio
Federated Insurance Series:
  Federated Capital Appreciation Fund II - Primary Shares
  Federated Capital Income Fund II
  Federated Clover Value Fund II - Primary Shares
  Federated Equity Income Fund II
  Federated Fund for U.S. Government Securities II
  Federated High Income Bond Fund II - Primary Shares
  Federated International Equity Fund II
  Federated Kaufmann Fund II - Primary Shares
  Federated Mid Cap Growth Strategies Fund II
  Federated Prime Money Fund II
  Fidelity® Variable Insurance Products:
  Fidelity® VIP Equity-Income Portfolio - Initial Class
  Fidelity® VIP Growth Portfolio - Initial Class
  Fidelity® VIP High Income Portfolio - Initial Class
  Fidelity® VIP Overseas Portfolio - Initial Class
  Fidelity® Variable Insurance Products II:
  Fidelity® VIP Contrafund® Portfolio - Initial Class
  Fidelity® VIP Index 500 Portfolio - Initial Class
  Fidelity® Variable Insurance Products V:
  Fidelity® VIP Investment Grade Bond Portfolio - Initial Class
Franklin Templeton Variable Insurance Products Trust:
  Franklin Small Cap Value Securities Fund - Class 2
ING Balanced Portfolio, Inc.:
  ING Balanced Portfolio - Class I
ING Intermediate Bond Portfolio:
  ING Intermediate Bond Portfolio - Class I
ING Investors Trust:
  ING American Funds Growth Portfolio
  ING American Funds Growth-Income Portfolio
  ING American Funds International Portfolio
  ING Artio Foreign Portfolio - Service Class
  ING BlackRock Inflation Protected Bond Portfolio - Institutional Class
  ING BlackRock Large Cap Growth Portfolio - Institutional Class
  ING Clarion Global Real Estate Portfolio - Institutional Class
  ING Clarion Global Real Estate Portfolio - Service Class
  ING Clarion Real Estate Portfolio - Service Class
  ING FMR^SM Diversified Mid Cap Portfolio - Institutional Class
  ING FMR^SM Diversified Mid Cap Portfolio - Service Class

ING Investors Trust (continued):
  ING Franklin Income Portfolio - Service Class
  ING Franklin Mutual Shares Portfolio - Service Class
  ING Global Resources Portfolio - Service Class
  ING Janus Contrarian Portfolio - Service Class
  ING JPMorgan Emerging Markets Equity Portfolio - Institutional Class
  ING JPMorgan Emerging Markets Equity Portfolio - Service Class
  ING JPMorgan Small Cap Core Equity Portfolio - Institutional Class
  ING JPMorgan Small Cap Core Equity Portfolio - Service Class
  ING Large Cap Growth Portfolio - Institutional Class
  ING Lord Abbett Growth and Income Portfolio - Institutional Class
  ING Lord Abbett Growth and Income Portfolio - Service Class
  ING Marsico Growth Portfolio - Service Class
  ING Marsico International Opportunities Portfolio - Service Class
  ING MFS Total Return Portfolio - Institutional Class
  ING MFS Total Return Portfolio - Service Class
  ING MFS Utilities Portfolio - Service Class
  ING PIMCO High Yield Portfolio - Service Class
  ING Pioneer Equity Income Portfolio - Institutional Class
  ING Pioneer Fund Portfolio - Institutional Class
  ING Pioneer Mid Cap Value Portfolio - Institutional Class
  ING Pioneer Mid Cap Value Portfolio - Service Class
  ING Retirement Growth Portfolio - Adviser Class
  ING Retirement Moderate Growth Portfolio - Adviser Class
  ING Retirement Moderate Portfolio - Adviser Class
  ING T. Rowe Price Capital Appreciation Portfolio - Service Class
  ING T. Rowe Price Equity Income Portfolio - Service Class
  ING Templeton Global Growth Portfolio - Service Class
  ING U.S. Stock Index Portfolio - Service Class
  ING Van Kampen Growth and Income Portfolio - Service Class
  ING Wells Fargo HealthCare Portfolio - Service Class
  ING Wells Fargo Small Cap Disciplined Portfolio - Service Class
ING Money Market Portfolio:
  ING Money Market Portfolio - Class I
  ING Money Market Portfolio - Class S

ING Partners, Inc.:
  ING American Century Small-Mid Cap Value Portfolio - Service Class
  ING Baron Asset Portfolio - Service Class
  ING Baron Small Cap Growth Portfolio - Service Class
  ING Columbia Small Cap Value Portfolio - Service Class
  ING Davis New York Venture Portfolio - Service Class
  ING JPMorgan Mid Cap Value Portfolio - Service Class
  ING Legg Mason ClearBridge Aggressive Growth Portfolio - Initial Class
  ING Oppenheimer Global Portfolio - Initial Class
  ING Oppenheimer Global Strategic Income Portfolio - Initial Class
  ING Oppenheimer Global Strategic Income Portfolio - Service Class
  ING PIMCO Total Return Portfolio - Service Class
  ING Pioneer High Yield Portfolio - Initial Class
  ING Solution 2015 Portfolio - Service Class
  ING Solution 2025 Portfolio - Service Class
  ING Solution 2035 Portfolio - Service Class
  ING Solution 2045 Portfolio - Service Class
  ING Solution Income Portfolio - Service Class
  ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial Class
  ING T. Rowe Price Growth Equity Portfolio - Initial Class
  ING Templeton Foreign Equity Portfolio - Initial Class
  ING Thornburg Value Portfolio - Initial Class
  ING UBS U.S. Large Cap Equity Portfolio - Initial Class
  ING Van Kampen Comstock Portfolio - Service Class
  ING Van Kampen Equity and Income Portfolio - Initial Class
  ING Strategic Allocation Portfolios, Inc.:
  ING Strategic Allocation Conservative Portfolio - Class I
  ING Strategic Allocation Growth Portfolio - Class I
  ING Strategic Allocation Moderate Portfolio - Class I
ING Variable Funds:
  ING Growth and Income Portfolio - Class I
  ING Variable Insurance Trust:
  ING GET U.S. Core Portfolio - Series 5
  ING GET U.S. Core Portfolio - Series 6
  ING GET U.S. Core Portfolio - Series 7
  ING GET U.S. Core Portfolio - Series 8
  ING GET U.S. Core Portfolio - Series 9
  ING GET U.S. Core Portfolio - Series 10
  ING GET U.S. Core Portfolio - Series 11
  ING GET U.S. Core Portfolio - Series 12
  ING GET U.S. Core Portfolio - Series 13
  ING GET U.S. Core Portfolio - Series 14
ING Variable Portfolios, Inc.:
  ING BlackRock Science and Technology Opportunities Portfolio - Class I
  ING Euro STOXX 50 Index Portfolio - Institutional Class

ING Variable Portfolios, Inc. (continued):
  ING Index Plus LargeCap Portfolio - Class I
  ING Index Plus MidCap Portfolio - Class I
  ING Index Plus SmallCap Portfolio - Class I
  ING International Index Portfolio - Class I
  ING International Index Portfolio - Class S
  ING Opportunistic Large Cap Portfolio - Class I
  ING Russell™ Large Cap Growth Index Portfolio - Class I
  ING Russell™ Large Cap Index Portfolio - Class I
  ING Russell™ Large Cap Value Index Portfolio - Class I
  ING Russell™ Large Cap Value Index Portfolio - Class S
  ING Russell™ Mid Cap Growth Index Portfolio - Class S
  ING Russell™ Mid Cap Index Portfolio - Class I
  ING Russell™ Small Cap Index Portfolio - Class I
  ING Small Company Portfolio - Class I
  ING U.S. Bond Index Portfolio - Class I
ING Variable Products Trust:
  ING International Value Portfolio - Class I
  ING MidCap Opportunities Portfolio - Class I
  ING MidCap Opportunities Portfolio - Class S
  ING SmallCap Opportunities Portfolio - Class I
  ING SmallCap Opportunities Portfolio - Class S
Invesco Variable Insurance Funds:
   Invesco V.I. Capital Appreciation Fund - Series I Shares
  Invesco V.I. Core Equity Fund - Series I Shares
Janus Aspen Series:
  Janus Aspen Series Balanced Portfolio - Institutional Shares
  Janus Aspen Series Enterprise Portfolio - Institutional Shares
  Janus Aspen Series Flexible Bond Portfolio - Institutional Shares
  Janus Aspen Series Janus Portfolio - Institutional Shares
  Janus Aspen Series Worldwide Portfolio - Institutional Shares
Lord Abbett Series Fund, Inc.:
  Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC
Oppenheimer Variable Account Funds:
  Oppenheimer Global Securities/VA
  Oppenheimer Main Street Fund®/VA
  Oppenheimer Main Street Small Cap Fund®/VA
  Oppenheimer Small- & Mid-Cap Growth Fund/VA
PIMCO Variable Insurance Trust:
  PIMCO Real Return Portfolio - Administrative Class
  Pioneer Variable Contracts Trust:
  Pioneer Emerging Markets VCT Portfolio - Class I
  Pioneer High Yield VCT Portfolio - Class I
Premier VIT:
  Premier VIT OpCap Mid Cap Portfolio - Class I
Wanger Advisors Trust:
  Wanger International
  Wanger Select
  Wanger USA

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 Account’s internal control over financial reporting. Our audits included 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 Account’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. Our procedures included confirmation of securities owned as of December 31, 2010, by correspondence with the transfer agents or custodian. 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 each of the respective Divisions constituting Variable Annuity Account B of ING Life Insurance and Annuity Company at December 31, 2010, the results of their operations and changes in their net assets for the periods disclosed in the financial statements, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young, LLP

Atlanta, Georgia
April 7, 2011

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		American
		Funds				Federated
		Insurance				Capital				Federated Fund
		Series®		Calvert VP		Appreciation		Federated		for U.S.
		International		SRI Balanced		Fund II -		Capital Income		Government
		Fund - Class 2		Portfolio		Primary Shares		Fund II		Securities II
Assets
Investments in mutual funds
at fair value	$	4	$	962	$	6,511	$	3,562	$	1,260
Total assets		4		962		6,511		3,562		1,260
Net assets	$	4	$	962	$	6,511	$	3,562	$	1,260
Net assets
Accumulation units	$	4	$	962	$	6,442	$	3,530	$	1,260
Contracts in payout (annuitization)
period		-		-		69		32		-
Total net assets	$	4	$	962	$	6,511	$	3,562	$	1,260
Total number of mutual fund shares		225		567,477		1,017,401		389,328		109,596
Cost of mutual fund shares	$	4	$	935	$	5,984	$	3,326	$	1,224

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

4

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities December 31, 2010
(Dollars in thousands)

		Federated High		Federated				Fidelity® VIP		Fidelity® VIP
		Income Bond		Kaufmann		Federated		Equity-Income		Growth
		Fund II -		Fund II -		Prime Money		Portfolio -		Portfolio -
		Primary Shares		Primary Shares		Fund II		Initial Class		Initial Class
Assets
Investments in mutual funds
at fair value	$	4,115	$	2,136	$	1,959	$	63,098	$	9,794
Total assets		4,115		2,136		1,959		63,098		9,794
Net assets	$	4,115	$	2,136	$	1,959	$	63,098	$	9,794
Net assets
Accumulation units	$	4,075	$	2,136	$	1,947	$	63,098	$	9,794
Contracts in payout (annuitization)
period		40		-		12		-		-
Total net assets	$	4,115	$	2,136	$	1,959	$	63,098	$	9,794
Total number of mutual fund shares		585,398		142,795		1,958,968		3,317,473		264,048
Cost of mutual fund shares	$	3,934	$	1,866	$	1,959	$	78,002	$	9,237

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

5

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

										Fidelity® VIP
		Fidelity® VIP		Fidelity® VIP		Fidelity® VIP		Fidelity® VIP		Investment
		High Income		Overseas		Contrafund®		Index 500		Grade Bond
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Initial Class		Initial Class		Initial Class		Initial Class		Initial Class
Assets
Investments in mutual funds
at fair value	$	187	$	4,929	$	127,170	$	22,102	$	868
Total assets		187		4,929		127,170		22,102		868
Net assets	$	187	$	4,929	$	127,170	$	22,102	$	868
Net assets
Accumulation units	$	-	$	4,929	$	127,170	$	22,102	$	868
Contracts in payout (annuitization)
period		187		-		-		-		-
Total net assets	$	187	$	4,929	$	127,170	$	22,102	$	868
Total number of mutual fund shares		33,645		293,931		5,325,386		166,945		67,637
Cost of mutual fund shares	$	157	$	5,192	$	147,137	$	20,560	$	857

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

6

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		Franklin Small				ING				ING American
		Cap Value		ING Balanced		Intermediate		ING American		Funds Growth-
		Securities		Portfolio -		Bond Portfolio -		Funds Growth		Income
		Fund - Class 2		Class I		Class I		Portfolio		Portfolio
Assets
Investments in mutual funds
at fair value	$	3,417	$	81,044	$	101,061	$	12,525	$	10,115
Total assets		3,417		81,044		101,061		12,525		10,115
Net assets	$	3,417	$	81,044	$	101,061	$	12,525	$	10,115
Net assets
Accumulation units	$	3,417	$	57,212	$	91,846	$	10,247	$	8,270
Contracts in payout (annuitization)
period		-		23,832		9,215		2,278		1,845
Total net assets	$	3,417	$	81,044	$	101,061	$	12,525	$	10,115
Total number of mutual fund shares		210,285		7,004,628		8,372,923		247,586		300,958
Cost of mutual fund shares	$	2,822	$	88,281	$	102,007	$	12,874	$	11,129

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

7

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

						ING BlackRock		ING BlackRock		ING Clarion
						Inflation		Large Cap		Global Real
		ING American		ING Artio		Protected Bond		Growth		Estate
		Funds		Foreign		Portfolio -		Portfolio -		Portfolio -
		International		Portfolio -		Institutional		Institutional		Institutional
		Portfolio		Service Class		Class		Class		Class
Assets
Investments in mutual funds
at fair value	$	13,439	$	4,771	$	297	$	24,230	$	1,619
Total assets		13,439		4,771		297		24,230		1,619
Net assets	$	13,439	$	4,771	$	297	$	24,230	$	1,619
Net assets
Accumulation units	$	11,401	$	4,771	$	297	$	22,309	$	1,619
Contracts in payout (annuitization)
period		2,038		-		-		1,921		-
Total net assets	$	13,439	$	4,771	$	297	$	24,230	$	1,619
Total number of mutual fund shares		802,827		413,050		28,582		2,472,495		166,047
Cost of mutual fund shares	$	13,901	$	4,399	$	299	$	28,465	$	1,427

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

8

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING Clarion				ING FMRSM
		Global Real		ING Clarion		Diversified Mid		ING FMRSM		ING Franklin
		Estate		Real Estate		Cap Portfolio -		Diversified Mid		Income
		Portfolio -		Portfolio -		Institutional		Cap Portfolio -		Portfolio -
		Service Class		Service Class		Class		Service Class		Service Class
Assets
Investments in mutual funds
at fair value	$	1,145	$	2,302	$	18,278	$	2,007	$	4,307
Total assets		1,145		2,302		18,278		2,007		4,307
Net assets	$	1,145	$	2,302	$	18,278	$	2,007	$	4,307
Net assets
Accumulation units	$	1,145	$	2,302	$	16,128	$	2,007	$	4,307
Contracts in payout (annuitization)
period		-		-		2,150		-		-
Total net assets	$	1,145	$	2,302	$	18,278	$	2,007	$	4,307
Total number of mutual fund shares		118,066		105,036		1,199,370		132,150		429,432
Cost of mutual fund shares	$	1,205	$	1,871	$	15,852	$	1,620	$	4,002

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

9

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

								ING JPMorgan
								Emerging		ING JPMorgan
		ING Franklin		ING Global		ING Janus		Markets Equity		Emerging
		Mutual Shares		Resources		Contrarian		Portfolio -		Markets Equity
		Portfolio -		Portfolio -		Portfolio -		Institutional		Portfolio -
		Service Class		Service Class		Service Class		Class		Service Class
Assets
Investments in mutual funds
at fair value	$	1,831	$	8,254	$	1,340	$	8,255	$	11,521
Total assets		1,831		8,254		1,340		8,255		11,521
Net assets	$	1,831	$	8,254	$	1,340	$	8,255	$	11,521
Net assets
Accumulation units	$	1,831	$	8,254	$	1,340	$	8,255	$	11,521
Contracts in payout (annuitization)
period		-		-		-		-		-
Total net assets	$	1,831	$	8,254	$	1,340	$	8,255	$	11,521
Total number of mutual fund shares		227,738		383,911		111,035		360,167		504,183
Cost of mutual fund shares	$	1,741	$	7,311	$	1,196	$	6,736	$	9,639

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

10

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING JPMorgan						ING Lord
		Small Cap Core		ING JPMorgan		ING Large Cap		Abbett Growth		ING Lord
		Equity		Small Cap Core		Growth		and Income		Abbett Growth
		Portfolio -		Equity		Portfolio -		Portfolio -		and Income
		Institutional		Portfolio -		Institutional		Institutional		Portfolio -
		Class		Service Class		Class		Class		Service Class
Assets
Investments in mutual funds
at fair value	$	2,093	$	324	$	8,989	$	2,705	$	432
Total assets		2,093		324		8,989		2,705		432
Net assets	$	2,093	$	324	$	8,989	$	2,705	$	432
Net assets
Accumulation units	$	2,093	$	324	$	7,964	$	2,705	$	432
Contracts in payout (annuitization)
period		-		-		1,025		-		-
Total net assets	$	2,093	$	324	$	8,989	$	2,705	$	432
Total number of mutual fund shares		158,223		24,643		677,414		301,233		47,853
Cost of mutual fund shares	$	2,022	$	299	$	7,231	$	2,796	$	335

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

11

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

				ING Marsico		ING MFS Total
		ING Marsico		International		Return		ING MFS		ING MFS
		Growth		Opportunities		Portfolio -		Total Return		Utilities
		Portfolio -		Portfolio -		Institutional		Portfolio -		Portfolio -
		Service Class		Service Class		Class		Service Class		Service Class
Assets
Investments in mutual funds
at fair value	$	1,523	$	4,700	$	40,810	$	1,091	$	2,489
Total assets		1,523		4,700		40,810		1,091		2,489
Net assets	$	1,523	$	4,700	$	40,810	$	1,091	$	2,489
Net assets
Accumulation units	$	1,523	$	4,700	$	40,810	$	1,091	$	2,489
Contracts in payout (annuitization)
period		-		-		-		-		-
Total net assets	$	1,523	$	4,700	$	40,810	$	1,091	$	2,489
Total number of mutual fund shares		88,954		403,079		2,724,308		72,858		187,106
Cost of mutual fund shares	$	1,203	$	5,408	$	44,770	$	974	$	2,394

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

12

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

				ING Pioneer				ING Pioneer
		ING PIMCO		Equity Income		ING Pioneer		Mid Cap Value		ING Pioneer
		High Yield		Portfolio -		Fund Portfolio -		Portfolio -		Mid Cap Value
		Portfolio -		Institutional		Institutional		Institutional		Portfolio -
		Service Class		Class		Class		Class		Service Class
Assets
Investments in mutual funds
at fair value	$	4,727	$	3,430	$	10,904	$	2,795	$	831
Total assets		4,727		3,430		10,904		2,795		831
Net assets	$	4,727	$	3,430	$	10,904	$	2,795	$	831
Net assets
Accumulation units	$	4,727	$	3,430	$	7,937	$	2,795	$	831
Contracts in payout (annuitization)
period		-		-		2,967		-		-
Total net assets	$	4,727	$	3,430	$	10,904	$	2,795	$	831
Total number of mutual fund shares		462,481		425,558		977,105		254,581		75,724
Cost of mutual fund shares	$	4,329	$	3,448	$	10,810	$	2,703	$	690

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

13

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING		ING Retirement		ING		ING T. Rowe		ING T. Rowe
		Retirement		Moderate		Retirement		Price Capital		Price Equity
		Growth		Growth		Moderate		Appreciation		Income
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Adviser Class		Adviser Class		Adviser Class		Service Class		Service Class
Assets
Investments in mutual funds
at fair value	$	5,538	$	6,453	$	7,174	$	11,444	$	5,791
Total assets		5,538		6,453		7,174		11,444		5,791
Net assets	$	5,538	$	6,453	$	7,174	$	11,444	$	5,791
Net assets
Accumulation units	$	5,538	$	6,453	$	7,174	$	11,444	$	5,791
Contracts in payout (annuitization)
period		-		-		-		-		-
Total net assets	$	5,538	$	6,453	$	7,174	$	11,444	$	5,791
Total number of mutual fund shares		529,995		604,782		666,117		504,805		491,569
Cost of mutual fund shares	$	4,907	$	5,754	$	6,528	$	10,250	$	4,733

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

14

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

						ING Van
						Kampen		ING Wells
		ING Templeton		ING U.S. Stock		Growth and		Fargo		ING Money
		Global Growth		Index		Income		HealthCare		Market
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Service Class		Service Class		Service Class		Service Class		Class I
Assets
Investments in mutual funds
at fair value	$	327	$	60	$	857	$	214	$	97,671
Total assets		327		60		857		214		97,671
Net assets	$	327	$	60	$	857	$	214	$	97,671
Net assets
Accumulation units	$	327	$	60	$	857	$	214	$	92,757
Contracts in payout (annuitization)
period		-		-		-		-		4,914
Total net assets	$	327	$	60	$	857	$	214	$	97,671
Total number of mutual fund shares		28,988		5,522		39,502		19,397		97,671,427
Cost of mutual fund shares	$	323	$	54	$	827	$	184	$	97,671

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

15

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

				ING American		ING Baron		ING Columbia
		ING Money		Century Small-		Small Cap		Small Cap		ING Davis New
		Market		Mid Cap Value		Growth		Value		York Venture
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Class S		Service Class		Service Class		Service Class		Service Class
Assets
Investments in mutual funds
at fair value	$	313	$	2,244	$	3,700	$	719	$	2,620
Total assets		313		2,244		3,700		719		2,620
Net assets	$	313	$	2,244	$	3,700	$	719	$	2,620
Net assets
Accumulation units	$	313	$	2,244	$	3,700	$	719	$	2,620
Contracts in payout (annuitization)
period		-		-		-		-		-
Total net assets	$	313	$	2,244	$	3,700	$	719	$	2,620
Total number of mutual fund shares		313,015		189,817		195,236		69,155		147,442
Cost of mutual fund shares	$	313	$	1,773	$	3,262	$	650	$	2,170

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

16

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

				ING Legg				ING		ING
				Mason				Oppenheimer		Oppenheimer
		ING		ClearBridge		ING		Global		Global
		JPMorgan Mid		Aggressive		Oppenheimer		Strategic		Strategic
		Cap Value		Growth		Global		Income		Income
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Service Class		Initial Class		Initial Class		Initial Class		Service Class
Assets
Investments in mutual funds
at fair value	$	1,745	$	20,533	$	92,120	$	44,608	$	115
Total assets		1,745		20,533		92,120		44,608		115
Net assets	$	1,745	$	20,533	$	92,120	$	44,608	$	115
Net assets
Accumulation units	$	1,745	$	19,664	$	88,986	$	41,489	$	-
Contracts in payout (annuitization)
period		-		869		3,134		3,119		115
Total net assets	$	1,745	$	20,533	$	92,120	$	44,608	$	115
Total number of mutual fund shares		125,724		424,505		6,636,893		3,789,982		9,751
Cost of mutual fund shares	$	1,651	$	15,485	$	86,201	$	40,816	$	86

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

17

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING PIMCO		ING Pioneer
		Total Return		High Yield		ING Solution		ING Solution		ING Solution
		Portfolio -		Portfolio -		2015 Portfolio -		2025 Portfolio -		2035 Portfolio -
		Service Class		Initial Class		Service Class		Service Class		Service Class
Assets
Investments in mutual funds
at fair value	$	15,202	$	19,661	$	3,709	$	2,404	$	3,271
Total assets		15,202		19,661		3,709		2,404		3,271
Net assets	$	15,202	$	19,661	$	3,709	$	2,404	$	3,271
Net assets
Accumulation units	$	15,202	$	17,508	$	3,709	$	2,404	$	3,271
Contracts in payout (annuitization)
period		-		2,153		-		-		-
Total net assets	$	15,202	$	19,661	$	3,709	$	2,404	$	3,271
Total number of mutual fund shares		1,262,614		1,749,167		335,626		216,345		288,991
Cost of mutual fund shares	$	14,523	$	15,314	$	3,598	$	2,135	$	2,853

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

18

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

						ING T. Rowe
						Price		ING T. Rowe
				ING Solution		Diversified Mid		Price Growth		ING Templeton
		ING Solution		Income		Cap Growth		Equity		Foreign Equity
		2045 Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Service Class		Service Class		Initial Class		Initial Class		Initial Class
Assets
Investments in mutual funds
at fair value	$	940	$	879	$	48,429	$	32,431	$	19,635
Total assets		940		879		48,429		32,431		19,635
Net assets	$	940	$	879	$	48,429	$	32,431	$	19,635
Net assets
Accumulation units	$	940	$	879	$	48,429	$	28,147	$	18,173
Contracts in payout (annuitization)
period		-		-		-		4,284		1,462
Total net assets	$	940	$	879	$	48,429	$	32,431	$	19,635
Total number of mutual fund shares		82,443		80,156		5,631,304		595,168		1,776,887
Cost of mutual fund shares	$	778	$	833	$	44,100	$	29,141	$	21,003

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

19

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING		ING UBS U.S.		ING Van		ING Van		ING Strategic
		Thornburg		Large Cap		Kampen		Kampen Equity		Allocation
		Value		Equity		Comstock		and Income		Conservative
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Initial Class		Initial Class		Service Class		Initial Class		Class I
Assets
Investments in mutual funds
at fair value	$	17,212	$	15,770	$	937	$	61,835	$	8,905
Total assets		17,212		15,770		937		61,835		8,905
Net assets	$	17,212	$	15,770	$	937	$	61,835	$	8,905
Net assets
Accumulation units	$	14,643	$	15,770	$	937	$	61,835	$	6,441
Contracts in payout (annuitization)
period		2,569		-		-		-		2,464
Total net assets	$	17,212	$	15,770	$	937	$	61,835	$	8,905
Total number of mutual fund shares		538,201		1,740,595		92,001		1,806,977		855,468
Cost of mutual fund shares	$	15,116	$	14,717	$	855	$	61,784	$	9,523

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

20

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING Strategic		ING Strategic
		Allocation		Allocation		ING Growth
		Growth		Moderate		and Income		ING GET U.S.		ING GET U.S.
		Portfolio -		Portfolio -		Portfolio -		Core Portfolio -		Core Portfolio -
		Class I		Class I		Class I		Series 5		Series 6
Assets
Investments in mutual funds
at fair value	$	8,728	$	10,595	$	225,273	$	1,377	$	15,203
Total assets		8,728		10,595		225,273		1,377		15,203
Net assets	$	8,728	$	10,595	$	225,273	$	1,377	$	15,203
Net assets
Accumulation units	$	7,286	$	7,840	$	169,321	$	1,377	$	15,203
Contracts in payout (annuitization)
period		1,442		2,755		55,952		-		-
Total net assets	$	8,728	$	10,595	$	225,273	$	1,377	$	15,203
Total number of mutual fund shares		852,313		1,027,611		10,267,688		177,262		1,876,923
Cost of mutual fund shares	$	9,636	$	12,067	$	196,240	$	1,668	$	17,868

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

21

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING GET U.S.		ING GET U.S.		ING GET U.S.		ING GET U.S.		ING GET U.S.
		Core Portfolio -		Core Portfolio -		Core Portfolio -		Core Portfolio -		Core Portfolio -
		Series 7		Series 8		Series 9		Series 10		Series 11
Assets
Investments in mutual funds
at fair value	$	8,795	$	7,580	$	6,162	$	4,340	$	4,945
Total assets		8,795		7,580		6,162		4,340		4,945
Net assets	$	8,795	$	7,580	$	6,162	$	4,340	$	4,945
Net assets
Accumulation units	$	8,795	$	7,580	$	6,162	$	4,340	$	4,945
Contracts in payout (annuitization)
period		-		-		-		-		-
Total net assets	$	8,795	$	7,580	$	6,162	$	4,340	$	4,945
Total number of mutual fund shares		1,109,132		953,418		770,243		533,881		616,536
Cost of mutual fund shares	$	10,294	$	8,975	$	7,170	$	5,030	$	5,566

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

22

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

								ING BlackRock		ING Euro
								Science and		STOXX 50
								Technology		Index
		ING GET U.S.		ING GET U.S.		ING GET U.S.		Opportunities		Portfolio -
		Core Portfolio -		Core Portfolio -		Core Portfolio -		Portfolio -		Institutional
		Series 12		Series 13		Series 14		Class I		Class
Assets
Investments in mutual funds
at fair value	$	12,788	$	12,706	$	9,684	$	6,924	$	34
Total assets		12,788		12,706		9,684		6,924		34
Net assets	$	12,788	$	12,706	$	9,684	$	6,924	$	34
Net assets
Accumulation units	$	12,788	$	12,706	$	9,684	$	6,924	$	34
Contracts in payout (annuitization)
period		-		-		-		-		-
Total net assets	$	12,788	$	12,706	$	9,684	$	6,924	$	34
Total number of mutual fund shares		1,616,632		1,295,159		949,449		1,165,584		3,231
Cost of mutual fund shares	$	14,476	$	12,954	$	9,622	$	5,492	$	29

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

23

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

								ING	ING
		ING Index Plus		ING Index Plus		ING Index Plus		International	International
		LargeCap		MidCap		SmallCap		Index	Index
		Portfolio -		Portfolio -		Portfolio -		Portfolio -	Portfolio -
		Class I		Class I		Class I		Class I	Class S
Assets
Investments in mutual funds
at fair value	$	77,272	$	9,868	$	4,105	$	10,272	$	53
Total assets		77,272		9,868		4,105		10,272		53
Net assets	$	77,272	$	9,868	$	4,105	$	10,272	$	53
Net assets
Accumulation units	$	58,649	$	9,868	$	4,105	$	9,128	$	53
Contracts in payout (annuitization)
period		18,623		-		-		1,144		-
Total net assets	$	77,272	$	9,868	$	4,105	$	10,272	$	53
Total number of mutual fund shares		5,563,120		636,255		291,959		1,202,858	6,245
Cost of mutual fund shares	$	87,426	$	10,621	$	4,326	$	9,143	$	49

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

24

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		ING Russell™		ING Russell™		ING Russell™		ING Russell™		ING Russell™
		Large Cap		Large Cap		Large Cap		Large Cap		Mid Cap
		Growth Index		Index		Value Index		Value Index		Growth Index
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Class I		Class I		Class I		Class S		Class S
Assets
Investments in mutual funds
at fair value	$	27,852	$	19,011	$	8,621	$	1,547	$	367
Total assets		27,852		19,011		8,621		1,547		367
Net assets	$	27,852	$	19,011	$	8,621	$	1,547	$	367
Net assets
Accumulation units	$	27,438	$	15,241	$	8,621	$	1,547	$	367
Contracts in payout (annuitization)
period		414		3,770		-		-		-
Total net assets	$	27,852	$	19,011	$	8,621	$	1,547	$	367
Total number of mutual fund shares		1,935,494		1,963,925		684,208		123,099		22,487
Cost of mutual fund shares	$	21,207	$	15,233	$	7,455	$	1,350	$	340

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

25

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

				ING Russell™						ING
		ING Russell™		Small Cap		ING Small		ING U.S. Bond		International
		Mid Cap Index		Index		Company		Index		Value
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Portfolio -
		Class I		Class I		Class I		Class I		Class I
Assets
Investments in mutual funds
at fair value	$	260	$	373	$	33,287	$	1,305	$	1,872
Total assets		260		373		33,287		1,305		1,872
Net assets	$	260	$	373	$	33,287	$	1,305	$	1,872
Net assets
Accumulation units	$	260	$	373	$	28,347	$	1,305	$	1,872
Contracts in payout (annuitization)
period		-		-		4,940		-		-
Total net assets	$	260	$	373	$	33,287	$	1,305	$	1,872
Total number of mutual fund shares		22,503		30,212		1,814,976		121,464		220,466
Cost of mutual fund shares	$	229	$	354	$	32,729	$	1,312	$	1,747

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

26

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

										Invesco V.I.
		ING MidCap		ING MidCap		ING SmallCap		ING SmallCap		Capital
		Opportunities		Opportunities		Opportunities		Opportunities		Appreciation
		Portfolio -		Portfolio -		Portfolio -		Portfolio -		Fund - Series I
		Class I		Class S		Class I		Class S		Shares
Assets
Investments in mutual funds
at fair value	$	1,993	$	3,477	$	852	$	2,465	$	649
Total assets		1,993		3,477		852		2,465		649
Net assets	$	1,993	$	3,477	$	852	$	2,465	$	649
Net assets
Accumulation units	$	1,993	$	3,477	$	852	$	2,465	$	603
Contracts in payout (annuitization)
period		-		-		-		-		46
Total net assets	$	1,993	$	3,477	$	852	$	2,465	$	649
Total number of mutual fund shares		170,468		303,375		40,049		118,510		27,858
Cost of mutual fund shares	$	1,611	$	2,258	$	762	$	2,113	$	669

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

27

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

						Janus Aspen
				Janus Aspen		Series		Janus Aspen		Janus Aspen
		Invesco V.I.		Series Balanced		Enterprise		Series Flexible		Series Janus
		Core Equity		Portfolio -		Portfolio -		Bond Portfolio -		Portfolio -
		Fund - Series I		Institutional		Institutional		Institutional		Institutional
		Shares		Shares		Shares		Shares		Shares
Assets
Investments in mutual funds
at fair value	$	1,555	$	14	$	2	$	3	$	2
Total assets		1,555		14		2		3		2
Net assets	$	1,555	$	14	$	2	$	3	$	2
Net assets
Accumulation units	$	1,358	$	14	$	2	$	3	$	2
Contracts in payout (annuitization)
period		197		-		-		-		-
Total net assets	$	1,555	$	14	$	2	$	3	$	2
Total number of mutual fund shares		57,525		507		53		245		82
Cost of mutual fund shares	$	1,418	$	13	$	2	$	3	$	2

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

28

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

	Janus Aspen
	Series			Lord Abbett
	Worldwide			Series Fund -						Oppenheimer
	Portfolio -			Mid-Cap Value	Oppenheimer			Oppenheimer		Main Street
	Institutional			Portfolio -	Global			Main Street		Small Cap
	Shares			Class VC	Securities/VA			Fund®/VA		Fund®/VA
Assets
Investments in mutual funds
at fair value	$	1	$	2,550	$	63	$	286	$	871
Total assets		1		2,550		63		286		871
Net assets	$	1	$	2,550	$	63	$	286	$	871
Net assets
Accumulation units	$	1	$	2,550	$	63	$	-	$	871
Contracts in payout (annuitization)
period		-		-		-		286		-
Total net assets	$	1	$	2,550	$	63	$	286	$	871
Total number of mutual fund shares	46			153,989	2,079			13,700		49,312
Cost of mutual fund shares	$	2	$	2,667	$	66	$	318	$	803

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

29

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		Oppenheimer Small - & Mid- Cap Growth Fund/VA		PIMCO Real Return Portfolio - Administrative Class		Pioneer Emerging Markets VCT Portfolio - Class I		Pioneer High Yield VCT Portfolio - Class I		Wanger International
Assets
Investments in mutual funds
at fair value	$	55	$	7,054	$	4,363	$	502	$	1,990
Total assets		55		7,054		4,363		502		1,990
Net assets	$	55	$	7,054	$	4,363	$	502	$	1,990
Net assets
Accumulation units	$	-	$	7,054	$	4,363	$	502	$	1,990
Contracts in payout (annuitization)
period		55		-		-		-		-
Total net assets	$	55	$	7,054	$	4,363	$	502	$	1,990
Total number of mutual fund shares		1,179		536,838		138,415		47,199		55,039
Cost of mutual fund shares	$	52	$	6,799	$	3,800	$	396	$	1,695

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

30

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2010
(Dollars in thousands)

		Wanger Select		Wanger USA
Assets
Investments in mutual funds
at fair value	$	3,507	$	807
Total assets		3,507		807
Net assets	$	3,507	$	807
Net assets
Accumulation units	$	3,507	$	807
Contracts in payout (annuitization)
period		-		-
Total net assets	$	3,507	$	807
Total number of mutual fund shares		120,975		23,832
Cost of mutual fund shares	$	2,651	$	648

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

31

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	American Funds Insurance Series® International Fund - Class 2		Calvert VP SRI Balanced Portfolio			Federated Capital Appreciation Fund II - Primary Shares			Federated Capital Income Fund II		Federated Clover Value Fund II - Primary Shares
Net investment income (loss)
Income:
Dividends	$	-	$	14		$	-		$	106	$	144
Total investment income		-		14			-			106		144
Expenses:
Mortality and expense risk and
other charges		-		12			74			46		21
Total expenses		-		12			74			46		21
Net investment income (loss)		-		2			(74	)		60		123
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		-		(99	)		(23	)		1		(4,714	)
Capital gains distributions		-		-			-			-		-
Total realized gain (loss) on investments
and capital gains distributions		-		(99	)		(23	)		1		(4,714	)
Net unrealized appreciation
(depreciation) of investments		-		211			527			251		4,849
Net realized and unrealized gain (loss)
on investments		-		112			504			252		135
Net increase (decrease) in net assets
resulting from operations	$	-	$	114		$	430		$	312	$	258

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

32

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

					Federated			Federated High						Federated
		Federated			Fund for U.S.			Income Bond			Federated			Kaufmann
		Equity Income			Government			Fund II -			International			Fund II -
		Fund II			Securities II			Primary Shares			Equity Fund II			Primary Shares
Net investment income (loss)
Income:
Dividends	$	76		$	67		$	345		$	4		$	-
Total investment income		76			67			345			4			-
Expenses:
Mortality and expense risk and
other charges		6			20			59			4			24
Total expenses		6			20			59			4			24
Net investment income (loss)		70			47			286			-			(24	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(117	)		13			(112	)		78			8
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(117	)		13			(112	)		78			8
Net unrealized appreciation
(depreciation) of investments		82			(5	)		345			(189	)		270
Net realized and unrealized gain (loss)
on investments		(35	)		8			233			(111	)		278
Net increase (decrease) in net assets
resulting from operations	$	35		$	55		$	519		$	(111	)	$	254

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

33

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		Federated Mid						Fidelity® VIP			Fidelity® VIP			Fidelity® VIP
		Cap Growth			Federated			Equity-Income			Growth			High Income
		Strategies			Prime Money			Portfolio -			Portfolio -			Portfolio -
		Fund II			Fund II			Initial Class			Initial Class			Initial Class
Net investment income (loss)
Income:
Dividends	$	-		$	-		$	1,082		$	31		$	14
Total investment income		-			-			1,082			31			14
Expenses:
Mortality and expense risk and
other charges		6			29			752			77			2
Total expenses		6			29			752			77			2
Net investment income (loss)		(6	)		(29	)		330			(46	)		12
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(283	)		-			(4,229	)		149			6
Capital gains distributions		-			-			-			23			-
Total realized gain (loss) on investments
and capital gains distributions		(283	)		-			(4,229	)		172			6
Net unrealized appreciation
(depreciation) of investments		368			-			11,756			1,754			4
Net realized and unrealized gain (loss)
on investments		85			-			7,527			1,926			10
Net increase (decrease) in net assets
resulting from operations	$	79		$	(29	)	$	7,857		$	1,880		$	22

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

34

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

										Fidelity® VIP
		Fidelity® VIP			Fidelity® VIP			Fidelity® VIP		Investment		Franklin Small
		Overseas			Contrafund®			Index 500		Grade Bond		Cap Value
		Portfolio -			Portfolio -			Portfolio -		Portfolio -		Securities
		Initial Class			Initial Class			Initial Class		Initial Class		Fund - Class 2
Net investment income (loss)
Income:
Dividends	$	64		$	1,453		$	401	$	31	$	25
Total investment income		64			1,453			401		31		25
Expenses:
Mortality and expense risk and
other charges		45			1,387			300		12		28
Total expenses		45			1,387			300		12		28
Net investment income (loss)		19			66			101		19		(3	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(1,115	)		(3,857	)		754		3		(622	)
Capital gains distributions		9			53			426		9		-
Total realized gain (loss) on investments
and capital gains distributions		(1,106	)		(3,804	)		1,180		12		(622	)
Net unrealized appreciation
(depreciation) of investments		1,618			21,493			1,431		24		1,416
Net realized and unrealized gain (loss)
on investments		512			17,689			2,611		36		794
Net increase (decrease) in net assets
resulting from operations	$	531		$	17,755		$	2,712	$	55	$	791

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

35

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING Balanced Portfolio - Class I			ING Intermediate Bond Portfolio - Class I			ING American Funds Growth Portfolio			ING American Funds Growth- Income Portfolio			ING American Funds International Portfolio
Net investment income (loss)
Income:
Dividends	$	2,239		$	5,069		$	14		$	98		$	132
Total investment income		2,239			5,069			14			98			132
Expenses:
Mortality and expense risk and
other charges		949			1,252			155			130			172
Total expenses		949			1,252			155			130			172
Net investment income (loss)		1,290			3,817			(141	)		(32	)		(40	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(1,473	)		(1,292	)		(1,563	)		(1,195	)		(2,521	)
Capital gains distributions		-			-			-			-			19
Total realized gain (loss) on investments
and capital gains distributions		(1,473	)		(1,292	)		(1,563	)		(1,195	)		(2,502	)
Net unrealized appreciation
(depreciation) of investments		9,754			6,154			3,569			2,081			3,068
Net realized and unrealized gain (loss)
on investments		8,281			4,862			2,006			886			566
Net increase (decrease) in net assets
resulting from operations	$	9,571		$	8,679		$	1,865		$	854		$	526

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

36

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

					ING BlackRock			ING BlackRock		ING Clarion
					Inflation			Large Cap		Global Real				ING Clarion
		ING Artio			Protected Bond			Growth		Estate				Global Real
		Foreign			Portfolio -			Portfolio -		Portfolio -				Estate
		Portfolio -			Institutional			Institutional		Institutional				Portfolio -
		Service Class			Class			Class		Class				Service Class
Net investment income (loss)
Income:
Dividends	$	-		$	-		$	113		$	128		$	93
Total investment income		-			-			113			128			93
Expenses:
Mortality and expense risk and
other charges		50			1			283			13			12
Total expenses		50			1			283			13			12
Net investment income (loss)		(50	)		(1	)		(170	)		115			81
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(2,243	)		1			(1,602	)		(62	)		(158	)
Capital gains distributions		-			1			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(2,243	)		2			(1,602	)		(62	)		(158	)
Net unrealized appreciation
(depreciation) of investments		2,467			(2	)		4,463			164			224
Net realized and unrealized gain (loss)
on investments		224			-			2,861			102			66
Net increase (decrease) in net assets
resulting from operations	$	174		$	(1	)	$	2,691		$	217		$	147

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

37

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING Clarion Real Estate Portfolio - Service Class			ING FMRSM Diversified Mid Cap Portfolio - Institutional Class			ING FMRSM Diversified Mid Cap Portfolio - Service Class			ING Franklin Income Portfolio - Service Class			ING Franklin Mutual Shares Portfolio - Service Class
Net investment income (loss)
Income:
Dividends	$	74		$	62		$	2		$	227		$	9
Total investment income		74			62			2			227			9
Expenses:
Mortality and expense risk and
other charges		17			207			12			51			23
Total expenses		17			207			12			51			23
Net investment income (loss)		57			(145	)		(10	)		176			(14	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(150	)		(469	)		(60	)		(270	)		(272	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(150	)		(469	)		(60	)		(270	)		(272	)
Net unrealized appreciation
(depreciation) of investments		549			4,608			409			561			458
Net realized and unrealized gain (loss)
on investments		399			4,139			349			291			186
Net increase (decrease) in net assets
resulting from operations	$	456		$	3,994		$	339		$	467		$	172

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

38

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

								ING JPMorgan						ING JPMorgan
								Emerging			ING JPMorgan			Small Cap Core
		ING Global			ING Janus			Markets Equity			Emerging			Equity
		Resources			Contrarian			Portfolio -			Markets Equity			Portfolio -
		Portfolio -			Portfolio -			Institutional			Portfolio -			Institutional
		Service Class			Service Class			Class			Service Class			Class
Net investment income (loss)
Income:
Dividends	$	72		$	-		$	49		$	41		$	9
Total investment income		72			-			49			41			9
Expenses:
Mortality and expense risk and
other charges		75			10			89			71			23
Total expenses		75			10			89			71			23
Net investment income (loss)		(3	)		(10	)		(40	)		(30	)		(14	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(1,578	)		276			(357	)		(514	)		(104	)
Capital gains distributions		-			-			372			436			-
Total realized gain (loss) on investments
and capital gains distributions		(1,578	)		276			15			(78	)		(104	)
Net unrealized appreciation
(depreciation) of investments		2,924			(164	)		1,247			1,617			562
Net realized and unrealized gain (loss)
on investments		1,346			112			1,262			1,539			458
Net increase (decrease) in net assets
resulting from operations	$	1,343		$	102		$	1,222		$	1,509		$	444

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

39

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

								ING Lord
		ING JPMorgan			ING Large Cap			Abbett Growth			ING Lord
		Small Cap Core			Growth			and Income			Abbett Growth			ING Marsico
		Equity			Portfolio -			Portfolio -			and Income			Growth
		Portfolio -			Institutional			Institutional			Portfolio -			Portfolio -
		Service Class			Class			Class			Service Class			Service Class
Net investment income (loss)
Income:
Dividends	$	-		$	36		$	21		$	2		$	9
Total investment income		-			36			21			2			9
Expenses:
Mortality and expense risk and
other charges		2			109			26			5			14
Total expenses		2			109			26			5			14
Net investment income (loss)		(2	)		(73	)		(5	)		(3	)		(5	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(9	)		196			(609	)		(102	)		(175	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(9	)		196			(609	)		(102	)		(175	)
Net unrealized appreciation
(depreciation) of investments		47			928			1,073			172			394
Net realized and unrealized gain (loss)
on investments		38			1,124			464			70			219
Net increase (decrease) in net assets
resulting from operations	$	36		$	1,051		$	459		$	67		$	214

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

40

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING Marsico International Opportunities Portfolio - Service Class			ING MFS Total Return Portfolio - Institutional Class			ING MFS Total Return Portfolio - Service Class			ING MFS Utilities Portfolio - Service Class			ING PIMCO High Yield Portfolio - Service Class
Net investment income (loss)
Income:
Dividends	$	69		$	192		$	6		$	62		$	341
Total investment income		69			192			6			62			341
Expenses:
Mortality and expense risk and
other charges		55			530			10			18			52
Total expenses		55			530			10			18			52
Net investment income (loss)		14			(338	)		(4	)		44			289
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(835	)		(2,960	)		(173	)		(274	)		410
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(835	)		(2,960	)		(173	)		(274	)		410
Net unrealized appreciation
(depreciation) of investments		1,324			6,835			272			501			(144	)
Net realized and unrealized gain (loss)
on investments		489			3,875			99			227			266
Net increase (decrease) in net assets
resulting from operations	$	503		$	3,537		$	95		$	271		$	555

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

41

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING Pioneer				ING Pioneer			ING Pioneer					ING
	Equity Income				Fund			Mid Cap Value			ING Pioneer		Retirement
	Portfolio -				Portfolio -			Portfolio -			Mid Cap Value		Growth
	Institutional				Institutional			Institutional			Portfolio -		Portfolio -
	Class				Class			Class			Service Class		Adviser Class
Net investment income (loss)
Income:
Dividends	$	79		$	129		$	30		$	7		$	20
Total investment income		79			129			30			7			20
Expenses:
Mortality and expense risk and
other charges		23			126			23			10			65
Total expenses		23			126			23			10			65
Net investment income (loss)		56			3			7			(3	)		(45	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(200	)		(448	)		(176	)		(37	)		37
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(200	)		(448	)		(176	)		(37	)		37
Net unrealized appreciation
(depreciation) of investments		684			1,817			588			152			522
Net realized and unrealized gain (loss)
on investments		484			1,369			412			115			559
Net increase (decrease) in net assets
resulting from operations	$	540		$	1,372		$	419		$	112		$	514

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

42

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING
	Retirement			ING				ING T. Rowe			ING T. Rowe
	Moderate			Retirement				Price Capital			Price Equity			ING Templeton
	Growth			Moderate				Appreciation			Income			Global Growth
	Portfolio -			Portfolio -				Portfolio -			Portfolio -			Portfolio -
	Adviser Class			Adviser Class				Service Class			Service Class			Service Class
Net investment income (loss)
Income:
Dividends	$	32		$	48		$	181		$	89		$	5
Total investment income		32			48			181			89			5
Expenses:
Mortality and expense risk and
other charges		81			104			101			53			5
Total expenses		81			104			101			53			5
Net investment income (loss)		(49	)		(56	)		80			36			-
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		87			161			(671	)		(758	)		(107	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		87			161			(671	)		(758	)		(107	)
Net unrealized appreciation
(depreciation) of investments		574			522			1,956			1,404			120
Net realized and unrealized gain (loss)
on investments		661			683			1,285			646			13
Net increase (decrease) in net assets
resulting from operations	$	612		$	627		$	1,365		$	682		$	13

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

43

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

				ING Van
				Kampen		ING Wells				ING Wells
		ING U.S. Stock		Growth and		Fargo				Fargo Small			ING Money
		Index		Income		HealthCare				Cap Disciplined			Market
		Portfolio -		Portfolio -		Portfolio -				Portfolio -			Portfolio -
		Service Class		Service Class		Service Class				Service Class			Class I
Net investment income (loss)
Income:
Dividends	$	1	$	2		$	-		$	3		$	27
Total investment income		1		2			-			3			27
Expenses:
Mortality and expense risk and
other charges		-		7			2			3			1,413
Total expenses		-		7			2			3			1,413
Net investment income (loss)		1		(5	)		(2	)		-			(1,386	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		8		(47	)		1			33			-
Capital gains distributions		-		-			-			-			276
Total realized gain (loss) on investments
and capital gains distributions		8		(47	)		1			33			276
Net unrealized appreciation
(depreciation) of investments		6		139			14			(63	)		-
Net realized and unrealized gain (loss)
on investments		14		92			15			(30	)		276
Net increase (decrease) in net assets
resulting from operations	$	15	$	87		$	13		$	(30	)	$	(1,110	)

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

44

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

					ING American						ING Baron			ING Columbia
		ING Money			Century Small-		ING Baron				Small Cap			Small Cap
		Market			Mid Cap Value		Asset				Growth			Value
		Portfolio -			Portfolio -		Portfolio -				Portfolio -			Portfolio -
		Class S			Service Class		Service Class				Service Class			Service Class
Net investment income (loss)
Income:
Dividends	$	-		$	20		$	-		$	-		$	6
Total investment income		-			20			-			-			6
Expenses:
Mortality and expense risk and
other charges		1			13			2			31			6
Total expenses		1			13			2			31			6
Net investment income (loss)		(1	)		7			(2	)		(31	)		-
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		-			(18	)		(33	)		(11	)		(39	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		-			(18	)		(33	)		(11	)		(39	)
Net unrealized appreciation
(depreciation) of investments		-			360			32			822			168
Net realized and unrealized gain (loss)
on investments		-			342			(1	)		811			129
Net increase (decrease) in net assets
resulting from operations	$	(1	)	$	349		$	(3	)	$	780		$	129

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

45

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

								ING Legg					ING
								Mason					Oppenheimer
								ClearBridge			ING		Global
		ING Davis New			ING JPMorgan			Aggressive			Oppenheimer		Strategic
		York Venture			Mid Cap Value			Growth			Global		Income
		Portfolio -			Portfolio -			Portfolio -			Portfolio -		Portfolio -
		Service Class			Service Class			Initial Class			Initial Class		Initial Class
Net investment income (loss)
Income:
Dividends	$	10		$	12		$	-		$	1,449	$	1,378
Total investment income		10			12			-			1,449		1,378
Expenses:
Mortality and expense risk and
other charges		26			14			235			1,044		537
Total expenses		26			14			235			1,044		537
Net investment income (loss)		(16	)		(2	)		(235	)		405		841
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(185	)		(196	)		915			499		1,275
Capital gains distributions		-			-			-			-		-
Total realized gain (loss) on investments
and capital gains distributions		(185	)		(196	)		915			499		1,275
Net unrealized appreciation
(depreciation) of investments		453			535			3,283			11,231		3,922
Net realized and unrealized gain (loss)
on investments		268			339			4,198			11,730		5,197
Net increase (decrease) in net assets
resulting from operations	$	252		$	337		$	3,963		$	12,135	$	6,038

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

46

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING Oppenheimer Global Strategic Income Portfolio - Service Class		ING PIMCO Total Return Portfolio - Service Class		ING Pioneer High Yield Portfolio - Initial Class		ING Solution 2015 Portfolio - Service Class			ING Solution 2025 Portfolio - Service Class
Net investment income (loss)
Income:
Dividends	$	3	$	499	$	1,179	$	80		$	34
Total investment income		3		499		1,179		80			34
Expenses:
Mortality and expense risk and
other charges		1		131		236		29			16
Total expenses		1		131		236		29			16
Net investment income (loss)		2		368		943		51			18
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		-		327		686		(42	)		(51	)
Capital gains distributions		-		20		-		-			-
Total realized gain (loss) on investments
and capital gains distributions		-		347		686		(42	)		(51	)
Net unrealized appreciation
(depreciation) of investments		13		262		1,442		341			306
Net realized and unrealized gain (loss)
on investments		13		609		2,128		299			255
Net increase (decrease) in net assets
resulting from operations	$	15	$	977	$	3,071	$	350		$	273

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

47

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING Solution 2035 Portfolio - Service Class			ING Solution 2045 Portfolio - Service Class
											ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial Class
														ING T. Rowe Price Growth Equity Portfolio - Initial Class
							ING Solution Income Portfolio - Service Class
Net investment income (loss)
Income:
Dividends	$	33		$	12		$	32		$	126		$	11
Total investment income		33			12			32			126			11
Expenses:
Mortality and expense risk and
other charges		20			8			8			501			383
Total expenses		20			8			8			501			383
Net investment income (loss)		13			4			24			(375	)		(372	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(96	)		(122	)		70			(154	)		845
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(96	)		(122	)		70			(154	)		845
Net unrealized appreciation
(depreciation) of investments		464			203			(5	)		11,138			3,932
Net realized and unrealized gain (loss)
on investments		368			81			65			10,984			4,777
Net increase (decrease) in net assets
resulting from operations	$	381		$	85		$	89		$	10,609		$	4,405

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

48

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

					ING		ING UBS U.S.			ING Van			ING Van
		ING Templeton			Thornburg		Large Cap			Kampen			Kampen Equity
		Foreign Equity			Value		Equity			Comstock			and Income
		Portfolio -			Portfolio -		Portfolio -			Portfolio -			Portfolio -
		Initial Class			Initial Class		Initial Class			Service Class			Initial Class
Net investment income (loss)
Income:
Dividends	$	451		$	259	$	142		$	13		$	1,115
Total investment income		451			259		142			13			1,115
Expenses:
Mortality and expense risk and
other charges		223			198		194			8			744
Total expenses		223			198		194			8			744
Net investment income (loss)		228			61		(52	)		5			371
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(1,358	)		919		93			(136	)		(505	)
Capital gains distributions		-			-		-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(1,358	)		919		93			(136	)		(505	)
Net unrealized appreciation
(depreciation) of investments		2,480			578		1,702			277			6,484
Net realized and unrealized gain (loss)
on investments		1,122			1,497		1,795			141			5,979
Net increase (decrease) in net assets
resulting from operations	$	1,350		$	1,558	$	1,743		$	146		$	6,350

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

49

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING Strategic			ING Strategic			ING Strategic
		Allocation			Allocation			Allocation			ING Growth
		Conservative			Growth			Moderate			and Income			ING GET U.S.
		Portfolio -			Portfolio -			Portfolio -			Portfolio -			Core Portfolio -
		Class I			Class I			Class I			Class I			Series 5
Net investment income (loss)
Income:
Dividends	$	387		$	316		$	423		$	2,300		$	25
Total investment income		387			316			423			2,300			25
Expenses:
Mortality and expense risk and
other charges		113			99			129			2,315			22
Total expenses		113			99			129			2,315			22
Net investment income (loss)		274			217			294			(15	)		3
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(439	)		(826	)		(969	)		1,090			(40	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(439	)		(826	)		(969	)		1,090			(40	)
Net unrealized appreciation
(depreciation) of investments		979			1,551			1,666			25,612			43
Net realized and unrealized gain (loss)
on investments		540			725			697			26,702			3
Net increase (decrease) in net assets
resulting from operations	$	814		$	942		$	991		$	26,687		$	6

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

50

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING GET U.S.			ING GET U.S.			ING GET U.S.			ING GET U.S.			ING GET U.S.
		Core Portfolio -			Core Portfolio -			Core Portfolio -			Core Portfolio -			Core Portfolio -
		Series 6			Series 7			Series 8			Series 9			Series 10
Net investment income (loss)
Income:
Dividends	$	355		$	208		$	181		$	138		$	120
Total investment income		355			208			181			138			120
Expenses:
Mortality and expense risk and
other charges		291			172			139			112			78
Total expenses		291			172			139			112			78
Net investment income (loss)		64			36			42			26			42
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(844	)		(582	)		(331	)		(295	)		(144	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(844	)		(582	)		(331	)		(295	)		(144	)
Net unrealized appreciation
(depreciation) of investments		833			619			348			405			212
Net realized and unrealized gain (loss)
on investments		(11	)		37			17			110			68
Net increase (decrease) in net assets
resulting from operations	$	53		$	73		$	59		$	136		$	110

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

51

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

														ING BlackRock
														Science and
														Technology
		ING GET U.S.			ING GET U.S.			ING GET U.S.			ING GET U.S.			Opportunities
		Core Portfolio -			Core Portfolio -			Core Portfolio -			Core Portfolio -			Portfolio -
		Series 11			Series 12			Series 13			Series 14			Class I
Net investment income (loss)
Income:
Dividends	$	141		$	397		$	346		$	433		$	-
Total investment income		141			397			346			433			-
Expenses:
Mortality and expense risk and
other charges		92			240			230			180			64
Total expenses		92			240			230			180			64
Net investment income (loss)		49			157			116			253			(64	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(343	)		(1,049	)		(127	)		(25	)		(104	)
Capital gains distributions		-			-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		(343	)		(1,049	)		(127	)		(25	)		(104	)
Net unrealized appreciation
(depreciation) of investments		469			1,471			685			361			1,164
Net realized and unrealized gain (loss)
on investments		126			422			558			336			1,060
Net increase (decrease) in net assets
resulting from operations	$	175		$	579		$	674		$	589		$	996

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

52

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING Euro
	STOXX 50											ING
	Index			ING Index Plus			ING Index Plus			ING Index Plus		International
	Portfolio -			LargeCap			MidCap			SmallCap		Index
	Institutional			Portfolio -			Portfolio -			Portfolio -		Portfolio -
	Class			Class I			Class I			Class I		Class I
Net investment income (loss)
Income:
Dividends	$	-	$	1,572		$	104		$	29		$	393
Total investment income		-		1,572			104			29			393
Expenses:
Mortality and expense risk and
other charges		-		902			75			32			125
Total expenses		-		902			75			32			125
Net investment income (loss)		-		670			29			(3	)		268
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		-		(2,462	)		(480	)		(365	)		145
Capital gains distributions		-		-			-			-			-
Total realized gain (loss) on investments
and capital gains distributions		-		(2,462	)		(480	)		(365	)		145
Net unrealized appreciation
(depreciation) of investments		5		10,778			2,226			1,154			161
Net realized and unrealized gain (loss)
on investments		5		8,316			1,746			789			306
Net increase (decrease) in net assets
resulting from operations	$	5	$	8,986		$	1,775		$	786		$	574

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

53

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING			ING			ING Russell™			ING Russell™		ING Russell™
	International			Opportunistic			Large Cap			Large Cap		Large Cap
	Index			Large Cap			Growth Index			Index		Value Index
	Portfolio -			Portfolio -			Portfolio -			Portfolio -		Portfolio -
	Class S			Class I			Class I			Class I		Class I
Net investment income (loss)
Income:
Dividends	$	1	$	254		$	186		$	662	$	143
Total investment income		1		254			186			662		143
Expenses:
Mortality and expense risk and
other charges		1		94			345			231		103
Total expenses		1		94			345			231		103
Net investment income (loss)		-		160			(159	)		431		40
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		-		(1,279	)		736			686		351
Capital gains distributions		-		-			-			-		909
Total realized gain (loss) on investments
and capital gains distributions		-		(1,279	)		736			686		1,260
Net unrealized appreciation
(depreciation) of investments		1		243			2,292			751		(416	)
Net realized and unrealized gain (loss)
on investments		1		(1,036	)		3,028			1,437		844
Net increase (decrease) in net assets
resulting from operations	$	1	$	(876	)	$	2,869		$	1,868	$	884

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

54

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING Russell™		ING Russell™					ING Russell™
		Large Cap		Mid Cap				ING Russell™	Small Cap				ING Small
		Value Index		Growth Index				Mid Cap Index	Index				Company
		Portfolio -		Portfolio -				Portfolio -	Portfolio -				Portfolio -
		Class S		Class S				Class I	Class I				Class I
Net investment income (loss)
Income:
Dividends	$	22		$	-		$	1	$	-		$	170
Total investment income		22			-			1		-			170
Expenses:
Mortality and expense risk and
other charges		21			1			1		1			365
Total expenses		21			1			1		1			365
Net investment income (loss)		1			(1	)		-		(1	)		(195	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		25			5			28		38			(2,021	)
Capital gains distributions		150			1			-		-			-
Total realized gain (loss) on investments
and capital gains distributions		175			6			28		38			(2,021	)
Net unrealized appreciation
(depreciation) of investments		(41	)		17			5		(9	)		8,641
Net realized and unrealized gain (loss)
on investments		134			23			33		29			6,620
Net increase (decrease) in net assets
resulting from operations	$	135		$	22		$	33	$	28		$	6,425

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

55

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	ING U.S. Bond Index Portfolio - Class I			ING International Value Portfolio - Class I
							ING MidCap Opportunities Portfolio - Class I			ING MidCap Opportunities Portfolio - Class S			ING SmallCap Opportunities Portfolio - Class I
Net investment income (loss)
Income:
Dividends	$	28		$	47		$	9	$	15		$	-
Total investment income		28			47			9		15			-
Expenses:
Mortality and expense risk and
other charges		8			21			9		35			4
Total expenses		8			21			9		35			4
Net investment income (loss)		20			26			-		(20	)		(4	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		39			(900	)		22		256			123
Capital gains distributions		-			-			-		-			-
Total realized gain (loss) on investments
and capital gains distributions		39			(900	)		22		256			123
Net unrealized appreciation
(depreciation) of investments		(16	)		872			302		534			2
Net realized and unrealized gain (loss)
on investments		23			(28	)		324		790			125
Net increase (decrease) in net assets
resulting from operations	$	43		$	(2	)	$	324	$	770		$	121

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

56

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

		ING SmallCap Opportunities Portfolio - Class S								Janus Aspen Series Balanced Portfolio - Institutional Shares		Janus Aspen Series Enterprise Portfolio - Institutional Shares
					Invesco V.I. Capital Appreciation Fund - Series I Shares			Invesco V.I. Core Equity Fund - Series I Shares
Net investment income (loss)
Income:
Dividends	$	-		$	5		$	15		$	-	$	-
Total investment income		-			5			15			-		-
Expenses:
Mortality and expense risk and
other charges		24			5			16			-		-
Total expenses		24			5			16			-		-
Net investment income (loss)		(24	)		-			(1	)		-		-
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(27	)		(30	)		(27	)		-		-
Capital gains distributions		-			-			-			-		-
Total realized gain (loss) on investments
and capital gains distributions		(27	)		(30	)		(27	)		-		-
Net unrealized appreciation
(depreciation) of investments		615			118			153			1		-
Net realized and unrealized gain (loss)
on investments		588			88			126			1		-
Net increase (decrease) in net assets
resulting from operations	$	564		$	88		$	125		$	1	$	-

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

57

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	Janus Aspen Series Flexible Bond Portfolio - Institutional Shares		Janus Aspen Series Janus Portfolio - Institutional Shares		Janus Aspen Series Worldwide Portfolio - Institutional Shares		Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC			Oppenheimer Global Securities/VA
Net investment income (loss)
Income:
Dividends	$	-	$	-	$	-	$	9		$	1
Total investment income		-		-		-		9			1
Expenses:
Mortality and expense risk and
other charges		-		-		-		19			-
Total expenses		-		-		-		19			-
Net investment income (loss)		-		-		-		(10	)		1
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		-		-		-		(146	)		(2	)
Capital gains distributions		-		-		-		-			-
Total realized gain (loss) on investments
and capital gains distributions		-		-		-		(146	)		(2	)
Net unrealized appreciation
(depreciation) of investments		-		-		-		655			10
Net realized and unrealized gain (loss)
on investments		-		-		-		509			8
Net increase (decrease) in net assets
resulting from operations	$	-	$	-	$	-	$	499		$	9

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

58

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	Oppenheimer Main Street Fund®/VA			Oppenheimer Main Street Small Cap Fund®/VA			Oppenheimer Small - & Mid- Cap Growth Fund/VA			PIMCO Real Return Portfolio - Administrative Class		Pioneer Emerging Markets VCT Portfolio - Class I
Net investment income (loss)
Income:
Dividends	$	3		$	4		$	-		$	111	$	12
Total investment income		3			4			-			111		12
Expenses:
Mortality and expense risk and
other charges		3			6			2			63		24
Total expenses		3			6			2			63		24
Net investment income (loss)		-			(2	)		(2	)		48		(12	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		(9	)		(11	)		36			269		258
Capital gains distributions		-			-			-			66		-
Total realized gain (loss) on investments
and capital gains distributions		(9	)		(11	)		36			335		258
Net unrealized appreciation
(depreciation) of investments		47			149			1			147		207
Net realized and unrealized gain (loss)
on investments		38			138			37			482		465
Net increase (decrease) in net assets
resulting from operations	$	38		$	136		$	35		$	530	$	453

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

59

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2010
(Dollars in thousands)

	Pioneer High Yield VCT Portfolio - Class I		Premier VIT OpCap Mid Cap Portfolio - Class I			Wanger International		Wanger Select			Wanger USA
Net investment income (loss)
Income:
Dividends	$	29	$	1		$	39	$	17		$	-
Total investment income		29		1			39		17			-
Expenses:
Mortality and expense risk and
other charges		5		1			12		24			5
Total expenses		5		1			12		24			5
Net investment income (loss)		24		-			27		(7	)		(5	)
Realized and unrealized gain (loss)
on investments
Net realized gain (loss) on investments		16		167			66		(115	)		17
Capital gains distributions		-		-			-		-			-
Total realized gain (loss) on investments
and capital gains distributions		16		167			66		(115	)		17
Net unrealized appreciation
(depreciation) of investments		39		(100	)		238		801			103
Net realized and unrealized gain (loss)
on investments		55		67			304		686			120
Net increase (decrease) in net assets
resulting from operations	$	79	$	67		$	331	$	679		$	115

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

60

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

	American Funds Insurance Series® International Fund - Class 2		Calvert VP SRI Balanced Portfolio			Federated Capital Appreciation Fund II - Primary Shares			Federated Capital Income Fund II
Net assets at January 1, 2009	$	-	$	1,172		$	-		$	1,491
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-		12			-			71
Total realized gain (loss) on investments
and capital gains distributions		-		(153	)		-			(39	)
Net unrealized appreciation (depreciation)
of investments		-		366			-			300
Net increase (decrease) in net assets from operations		-		225			-			332
Changes from principal transactions:
Total unit transactions		-		(156	)		-			(286	)
Increase (decrease) in assets derived from principal
transactions		-		(156	)		-			(286	)
Total increase (decrease)		-		69			-			46
Net assets at December 31, 2009		-		1,241			-			1,537
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-		2			(74	)		60
Total realized gain (loss) on investments
and capital gains distributions		-		(99	)		(23	)		1
Net unrealized appreciation (depreciation)
of investments		-		211			527			251
Net increase (decrease) in net assets from operations		-		114			430			312
Changes from principal transactions:
Total unit transactions		4		(393	)		6,081			1,713
Increase (decrease) in assets derived from principal
transactions		4		(393	)		6,081			1,713
Total increase (decrease)		4		(279	)		6,511			2,025
Net assets at December 31, 2010	$	4	$	962		$	6,511		$	3,562

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

61

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		Federated						Federated Fund			Federated High
		Clover Value			Federated			for U.S.			Income Bond
		Fund II -			Equity Income			Government			Fund II -
		Primary Shares			Fund II			Securities II			Primary Shares
Net assets at January 1, 2009	$	8,770		$	2,394		$	1,916		$	3,488
Increase (decrease) in net assets
Operations:
Net investment income (loss)		102			70			64			397
Total realized gain (loss) on investments
and capital gains distributions		(2,805	)		(45	)		2			(288	)
Net unrealized appreciation (depreciation)
of investments		3,446			222			(2	)		1,488
Net increase (decrease) in net assets from operations		743			247			64			1,597
Changes from principal transactions:
Total unit transactions		(1,872	)		(426	)		(365	)		(771	)
Increase (decrease) in assets derived from principal
transactions		(1,872	)		(426	)		(365	)		(771	)
Total increase (decrease)		(1,129	)		(179	)		(301	)		826
Net assets at December 31, 2009		7,641			2,215			1,615			4,314
Increase (decrease) in net assets
Operations:
Net investment income (loss)		123			70			47			286
Total realized gain (loss) on investments
and capital gains distributions		(4,714	)		(117	)		13			(112	)
Net unrealized appreciation (depreciation)
of investments		4,849			82			(5	)		345
Net increase (decrease) in net assets from operations		258			35			55			519
Changes from principal transactions:
Total unit transactions		(7,899	)		(2,250	)		(410	)		(718	)
Increase (decrease) in assets derived from principal
transactions		(7,899	)		(2,250	)		(410	)		(718	)
Total increase (decrease)		(7,641	)		(2,215	)		(355	)		(199	)
Net assets at December 31, 2010	$	-		$	-		$	1,260		$	4,115

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

62

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

					Federated			Federated Mid
		Federated			Kaufmann			Cap Growth			Federated
		International			Fund II -			Strategies			Prime Money
		Equity Fund II			Primary Shares			Fund II			Fund II
Net assets at January 1, 2009	$	1,384		$	-		$	2,540		$	1,747
Increase (decrease) in net assets
Operations:
Net investment income (loss)		22			-			(33	)		(16	)
Total realized gain (loss) on investments
and capital gains distributions		(85	)		-			(359	)		-
Net unrealized appreciation (depreciation)
of investments		520			-			957			-
Net increase (decrease) in net assets from operations		457			-			565			(16	)
Changes from principal transactions:
Total unit transactions		(246	)		-			(681	)		(229	)
Increase (decrease) in assets derived from principal
transactions		(246	)		-			(681	)		(229	)
Total increase (decrease)		211			-			(116	)		(245	)
Net assets at December 31, 2009		1,595			-			2,424			1,502
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			(24	)		(6	)		(29	)
Total realized gain (loss) on investments
and capital gains distributions		78			8			(283	)		-
Net unrealized appreciation (depreciation)
of investments		(189	)		270			368			-
Net increase (decrease) in net assets from operations		(111	)		254			79			(29	)
Changes from principal transactions:
Total unit transactions		(1,484	)		1,882			(2,503	)		486
Increase (decrease) in assets derived from principal
transactions		(1,484	)		1,882			(2,503	)		486
Total increase (decrease)		(1,595	)		2,136			(2,424	)		457
Net assets at December 31, 2010	$	-		$	2,136		$	-		$	1,959

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

63

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		Fidelity® VIP			Fidelity® VIP			Fidelity® VIP			Fidelity® VIP
		Equity-Income			Growth			High Income			Overseas
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Initial Class			Initial Class			Initial Class			Initial Class
Net assets at January 1, 2009	$	61,149		$	7,951		$	69		$	4,584
Increase (decrease) in net assets
Operations:
Net investment income (loss)		607			(36	)		11			61
Total realized gain (loss) on investments
and capital gains distributions		(7,749	)		(412	)		(5	)		(772	)
Net unrealized appreciation (depreciation)
of investments		21,907			2,369			62			1,782
Net increase (decrease) in net assets from operations		14,765			1,921			68			1,071
Changes from principal transactions:
Total unit transactions		(10,027	)		(1,254	)		55			(203	)
Increase (decrease) in assets derived from principal
transactions		(10,027	)		(1,254	)		55			(203	)
Total increase (decrease)		4,738			667			123			868
Net assets at December 31, 2009		65,887			8,618			192			5,452
Increase (decrease) in net assets
Operations:
Net investment income (loss)		330			(46	)		12			19
Total realized gain (loss) on investments
and capital gains distributions		(4,229	)		172			6			(1,106	)
Net unrealized appreciation (depreciation)
of investments		11,756			1,754			4			1,618
Net increase (decrease) in net assets from operations		7,857			1,880			22			531
Changes from principal transactions:
Total unit transactions		(10,646	)		(704	)		(27	)		(1,054	)
Increase (decrease) in assets derived from principal
transactions		(10,646	)		(704	)		(27	)		(1,054	)
Total increase (decrease)		(2,789	)		1,176			(5	)		(523	)
Net assets at December 31, 2010	$	63,098		$	9,794		$	187		$	4,929

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

64

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

								Fidelity® VIP
		Fidelity® VIP			Fidelity® VIP			Investment			Franklin Small
		Contrafund®			Index 500			Grade Bond			Cap Value
		Portfolio -			Portfolio -			Portfolio -			Securities
		Initial Class			Initial Class			Initial Class			Fund - Class 2
Net assets at January 1, 2009	$	109,547		$	21,722		$	876		$	2,729
Increase (decrease) in net assets
Operations:
Net investment income (loss)		240			231			66			22
Total realized gain (loss) on investments
and capital gains distributions		(7,280	)		(94	)		(1	)		(262	)
Net unrealized appreciation (depreciation)
of investments		40,198			4,408			53			973
Net increase (decrease) in net assets from operations		33,158			4,545			118			733
Changes from principal transactions:
Total unit transactions		(16,135	)		(3,402	)		(80	)		(85	)
Increase (decrease) in assets derived from principal
transactions		(16,135	)		(3,402	)		(80	)		(85	)
Total increase (decrease)		17,023			1,143			38			648
Net assets at December 31, 2009		126,570			22,865			914			3,377
Increase (decrease) in net assets
Operations:
Net investment income (loss)		66			101			19			(3	)
Total realized gain (loss) on investments
and capital gains distributions		(3,804	)		1,180			12			(622	)
Net unrealized appreciation (depreciation)
of investments		21,493			1,431			24			1,416
Net increase (decrease) in net assets from operations		17,755			2,712			55			791
Changes from principal transactions:
Total unit transactions		(17,155	)		(3,475	)		(101	)		(751	)
Increase (decrease) in assets derived from principal
transactions		(17,155	)		(3,475	)		(101	)		(751	)
Total increase (decrease)		600			(763	)		(46	)		40
Net assets at December 31, 2010	$	127,170		$	22,102		$	868		$	3,417

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

65

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

					ING
					Intermediate						ING American
		ING Balanced			Bond			ING American			Funds Growth-
		Portfolio -			Portfolio -			Funds Growth			Income
		Class I			Class I			Portfolio			Portfolio
Net assets at January 1, 2009	$	81,353		$	100,529		$	12,540		$	11,419
Increase (decrease) in net assets
Operations:
Net investment income (loss)		2,645			5,517			90			129
Total realized gain (loss) on investments
and capital gains distributions		(3,562	)		(5,029	)		(392	)		(362	)
Net unrealized appreciation (depreciation)
of investments		13,330			10,087			4,367			3,133
Net increase (decrease) in net assets from operations		12,413			10,575			4,065			2,900
Changes from principal transactions:
Total unit transactions		(13,251	)		(6,287	)		(2,198	)		(1,825	)
Increase (decrease) in assets derived from principal
transactions		(13,251	)		(6,287	)		(2,198	)		(1,825	)
Total increase (decrease)		(838	)		4,288			1,867			1,075
Net assets at December 31, 2009		80,515			104,817			14,407			12,494
Increase (decrease) in net assets
Operations:
Net investment income (loss)		1,290			3,817			(141	)		(32	)
Total realized gain (loss) on investments
and capital gains distributions		(1,473	)		(1,292	)		(1,563	)		(1,195	)
Net unrealized appreciation (depreciation)
of investments		9,754			6,154			3,569			2,081
Net increase (decrease) in net assets from operations		9,571			8,679			1,865			854
Changes from principal transactions:
Total unit transactions		(9,042	)		(12,435	)		(3,747	)		(3,233	)
Increase (decrease) in assets derived from principal
transactions		(9,042	)		(12,435	)		(3,747	)		(3,233	)
Total increase (decrease)		529			(3,756	)		(1,882	)		(2,379	)
Net assets at December 31, 2010	$	81,044		$	101,061		$	12,525		$	10,115

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

66

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

								ING BlackRock			ING BlackRock
								Inflation			Large Cap
		ING American			ING Artio			Protected Bond			Growth
		Funds			Foreign			Portfolio -			Portfolio -
		International			Portfolio -			Institutional			Institutional
		Portfolio			Service Class			Class			Class
Net assets at January 1, 2009	$	13,434		$	7,156		$	-		$	21,426
Increase (decrease) in net assets
Operations:
Net investment income (loss)		337			186			-			(134	)
Total realized gain (loss) on investments
and capital gains distributions		706			(2,259	)		-			(2,825	)
Net unrealized appreciation (depreciation)
of investments		3,731			3,193			-			8,637
Net increase (decrease) in net assets from operations		4,774			1,120			-			5,678
Changes from principal transactions:
Total unit transactions		(1,773	)		(1,123	)		-			(2,785	)
Increase (decrease) in assets derived from principal
transactions		(1,773	)		(1,123	)		-			(2,785	)
Total increase (decrease)		3,001			(3	)		-			2,893
Net assets at December 31, 2009		16,435			7,153			-			24,319
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(40	)		(50	)		(1	)		(170	)
Total realized gain (loss) on investments
and capital gains distributions		(2,502	)		(2,243	)		2			(1,602	)
Net unrealized appreciation (depreciation)
of investments		3,068			2,467			(2	)		4,463
Net increase (decrease) in net assets from operations		526			174			(1	)		2,691
Changes from principal transactions:
Total unit transactions		(3,522	)		(2,556	)		298			(2,780	)
Increase (decrease) in assets derived from principal
transactions		(3,522	)		(2,556	)		298			(2,780	)
Total increase (decrease)		(2,996	)		(2,382	)		297			(89	)
Net assets at December 31, 2010	$	13,439		$	4,771		$	297		$	24,230

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

67

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Clarion Global Real			ING Clarion						ING FMRSM
		Estate			Global Real			ING Clarion			Diversified Mid
		Portfolio -			Estate			Real Estate			Cap Portfolio -
		Institutional			Portfolio -			Portfolio -			Institutional
		Class			Service Class			Service Class			Class
Net assets at January 1, 2009	$	1,087		$	902		$	1,064		$	13,578
Increase (decrease) in net assets
Operations:
Net investment income (loss)		19			13			33			(79	)
Total realized gain (loss) on investments
and capital gains distributions		(163	)		(226	)		(368	)		(1,834	)
Net unrealized appreciation (depreciation)
of investments		477			485			696			6,478
Net increase (decrease) in net assets from operations		333			272			361			4,565
Changes from principal transactions:
Total unit transactions		293			(56	)		128			(1,994	)
Increase (decrease) in assets derived from principal
transactions		293			(56	)		128			(1,994	)
Total increase (decrease)		626			216			489			2,571
Net assets at December 31, 2009		1,713			1,118			1,553			16,149
Increase (decrease) in net assets
Operations:
Net investment income (loss)		115			81			57			(145	)
Total realized gain (loss) on investments
and capital gains distributions		(62	)		(158	)		(150	)		(469	)
Net unrealized appreciation (depreciation)
of investments		164			224			549			4,608
Net increase (decrease) in net assets from operations		217			147			456			3,994
Changes from principal transactions:
Total unit transactions		(311	)		(120	)		293			(1,865	)
Increase (decrease) in assets derived from principal
transactions		(311	)		(120	)		293			(1,865	)
Total increase (decrease)		(94	)		27			749			2,129
Net assets at December 31, 2010	$	1,619		$	1,145		$	2,302		$	18,278

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

68

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING FMRSM			ING Franklin			ING Franklin			ING Global
		Diversified Mid			Income			Mutual Shares			Resources
		Cap Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Service Class			Service Class			Service Class			Service Class
Net assets at January 1, 2009	$	815		$	3,482		$	1,885		$	6,198
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(3	)		206			(21	)		(47	)
Total realized gain (loss) on investments
and capital gains distributions		(108	)		(474	)		(234	)		(1,006	)
Net unrealized appreciation (depreciation)
of investments		425			1,308			726			3,285
Net increase (decrease) in net assets from operations		314			1,040			471			2,232
Changes from principal transactions:
Total unit transactions		108			73			(7	)		305
Increase (decrease) in assets derived from principal
transactions		108			73			(7	)		305
Total increase (decrease)		422			1,113			464			2,537
Net assets at December 31, 2009		1,237			4,595			2,349			8,735
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(10	)		176			(14	)		(3	)
Total realized gain (loss) on investments
and capital gains distributions		(60	)		(270	)		(272	)		(1,578	)
Net unrealized appreciation (depreciation)
of investments		409			561			458			2,924
Net increase (decrease) in net assets from operations		339			467			172			1,343
Changes from principal transactions:
Total unit transactions		431			(755	)		(690	)		(1,824	)
Increase (decrease) in assets derived from principal
transactions		431			(755	)		(690	)		(1,824	)
Total increase (decrease)		770			(288	)		(518	)		(481	)
Net assets at December 31, 2010	$	2,007		$	4,307		$	1,831		$	8,254

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

69

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

					ING JPMorgan						ING JPMorgan
					Emerging			ING JPMorgan			Small Cap Core
		ING Janus			Markets Equity			Emerging			Equity
		Contrarian			Portfolio -			Markets Equity			Portfolio -
		Portfolio -			Institutional			Portfolio -			Institutional
		Service Class			Class			Service Class			Class
Net assets at January 1, 2009	$	139		$	3,328		$	4,184		$	1,919
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(1	)		13			27			(8	)
Total realized gain (loss) on investments
and capital gains distributions		(37	)		(1,259	)		(597	)		(218	)
Net unrealized appreciation (depreciation)
of investments		356			3,503			3,534			645
Net increase (decrease) in net assets from operations		318			2,257			2,964			419
Changes from principal transactions:
Total unit transactions		890			606			1,060			(338	)
Increase (decrease) in assets derived from principal
transactions		890			606			1,060			(338	)
Total increase (decrease)		1,208			2,863			4,024			81
Net assets at December 31, 2009		1,347			6,191			8,208			2,000
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(10	)		(40	)		(30	)		(14	)
Total realized gain (loss) on investments
and capital gains distributions		276			15			(78	)		(104	)
Net unrealized appreciation (depreciation)
of investments		(164	)		1,247			1,617			562
Net increase (decrease) in net assets from operations		102			1,222			1,509			444
Changes from principal transactions:
Total unit transactions		(109	)		842			1,804			(351	)
Increase (decrease) in assets derived from principal
transactions		(109	)		842			1,804			(351	)
Total increase (decrease)		(7	)		2,064			3,313			93
Net assets at December 31, 2010	$	1,340		$	8,255		$	11,521		$	2,093

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

70

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

								ING Lord
		ING JPMorgan			ING Large Cap			Abbett Growth			ING Lord
		Small Cap Core			Growth			and Income			Abbett Growth
		Equity			Portfolio -			Portfolio -			and Income
		Portfolio -			Institutional			Institutional			Portfolio -
		Service Class			Class			Class			Service Class
Net assets at January 1, 2009	$	102		$	6,965		$	4,020		$	458
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(1	)		(58	)		2			(3	)
Total realized gain (loss) on investments
and capital gains distributions		(4	)		(234	)		(1,358	)		(157	)
Net unrealized appreciation (depreciation)
of investments		32			2,959			1,854			244
Net increase (decrease) in net assets from operations		27			2,667			498			84
Changes from principal transactions:
Total unit transactions		14			(642	)		(1,335	)		(42	)
Increase (decrease) in assets derived from principal
transactions		14			(642	)		(1,335	)		(42	)
Total increase (decrease)		41			2,025			(837	)		42
Net assets at December 31, 2009		143			8,990			3,183			500
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(2	)		(73	)		(5	)		(3	)
Total realized gain (loss) on investments
and capital gains distributions		(9	)		196			(609	)		(102	)
Net unrealized appreciation (depreciation)
of investments		47			928			1,073			172
Net increase (decrease) in net assets from operations		36			1,051			459			67
Changes from principal transactions:
Total unit transactions		145			(1,052	)		(937	)		(135	)
Increase (decrease) in assets derived from principal
transactions		145			(1,052	)		(937	)		(135	)
Total increase (decrease)		181			(1	)		(478	)		(68	)
Net assets at December 31, 2010	$	324		$	8,989		$	2,705		$	432

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

71

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

					ING Marsico			ING MFS Total
		ING Marsico			International			Return			ING MFS Total
		Growth			Opportunities			Portfolio -			Return
		Portfolio -			Portfolio -			Institutional			Portfolio -
		Service Class			Service Class			Class			Service Class
Net assets at January 1, 2009	$	1,285		$	5,138		$	48,840		$	1,153
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			6			648			21
Total realized gain (loss) on investments
and capital gains distributions		(278	)		(1,112	)		(4,970	)		(235	)
Net unrealized appreciation (depreciation)
of investments		650			2,678			11,208			375
Net increase (decrease) in net assets from operations		372			1,572			6,886			161
Changes from principal transactions:
Total unit transactions		(62	)		(1,281	)		(9,057	)		(26	)
Increase (decrease) in assets derived from principal
transactions		(62	)		(1,281	)		(9,057	)		(26	)
Total increase (decrease)		310			291			(2,171	)		135
Net assets at December 31, 2009		1,595			5,429			46,669			1,288
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(5	)		14			(338	)		(4	)
Total realized gain (loss) on investments
and capital gains distributions		(175	)		(835	)		(2,960	)		(173	)
Net unrealized appreciation (depreciation)
of investments		394			1,324			6,835			272
Net increase (decrease) in net assets from operations		214			503			3,537			95
Changes from principal transactions:
Total unit transactions		(286	)		(1,232	)		(9,396	)		(292	)
Increase (decrease) in assets derived from principal
transactions		(286	)		(1,232	)		(9,396	)		(292	)
Total increase (decrease)		(72	)		(729	)		(5,859	)		(197	)
Net assets at December 31, 2010	$	1,523		$	4,700		$	40,810		$	1,091

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

72

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

								ING Pioneer			ING Pioneer
		ING MFS			ING PIMCO			Equity Income			Fund
		Utilities			High Yield			Portfolio -			Portfolio -
		Portfolio -			Portfolio -			Institutional			Institutional
		Service Class			Service Class			Class			Class
Net assets at January 1, 2009	$	2,161		$	1,748		$	3,765		$	10,140
Increase (decrease) in net assets
Operations:
Net investment income (loss)		92			226			(26	)		25
Total realized gain (loss) on investments
and capital gains distributions		(645	)		(214	)		(842	)		(695	)
Net unrealized appreciation (depreciation)
of investments		1,101			1,210			1,187			2,808
Net increase (decrease) in net assets from operations		548			1,222			319			2,138
Changes from principal transactions:
Total unit transactions		(471	)		1,560			(982	)		(897	)
Increase (decrease) in assets derived from principal
transactions		(471	)		1,560			(982	)		(897	)
Total increase (decrease)		77			2,782			(663	)		1,241
Net assets at December 31, 2009		2,238			4,530			3,102			11,381
Increase (decrease) in net assets
Operations:
Net investment income (loss)		44			289			56			3
Total realized gain (loss) on investments
and capital gains distributions		(274	)		410			(200	)		(448	)
Net unrealized appreciation (depreciation)
of investments		501			(144	)		684			1,817
Net increase (decrease) in net assets from operations		271			555			540			1,372
Changes from principal transactions:
Total unit transactions		(20	)		(358	)		(212	)		(1,849	)
Increase (decrease) in assets derived from principal
transactions		(20	)		(358	)		(212	)		(1,849	)
Total increase (decrease)		251			197			328			(477	)
Net assets at December 31, 2010	$	2,489		$	4,727		$	3,430		$	10,904

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

73

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

											ING
		ING Pioneer						ING			Retirement
		Mid Cap Value			ING Pioneer			Retirement			Moderate
		Portfolio -			Mid Cap Value			Growth			Growth
		Institutional			Portfolio -			Portfolio -			Portfolio -
		Class			Service Class			Adviser Class			Adviser Class
Net assets at January 1, 2009	$	2,428		$	700		$	-		$	-
Increase (decrease) in net assets
Operations:
Net investment income (loss)		15			-			(13	)		(17	)
Total realized gain (loss) on investments
and capital gains distributions		(356	)		(253	)		3			3
Net unrealized appreciation (depreciation)
of investments		867			378			109			125
Net increase (decrease) in net assets from operations		526			125			99			111
Changes from principal transactions:
Total unit transactions		(334	)		(88	)		5,526			7,553
Increase (decrease) in assets derived from principal
transactions		(334	)		(88	)		5,526			7,553
Total increase (decrease)		192			37			5,625			7,664
Net assets at December 31, 2009		2,620			737			5,625			7,664
Increase (decrease) in net assets
Operations:
Net investment income (loss)		7			(3	)		(45	)		(49	)
Total realized gain (loss) on investments
and capital gains distributions		(176	)		(37	)		37			87
Net unrealized appreciation (depreciation)
of investments		588			152			522			574
Net increase (decrease) in net assets from operations		419			112			514			612
Changes from principal transactions:
Total unit transactions		(244	)		(18	)		(601	)		(1,823	)
Increase (decrease) in assets derived from principal
transactions		(244	)		(18	)		(601	)		(1,823	)
Total increase (decrease)		175			94			(87	)		(1,211	)
Net assets at December 31, 2010	$	2,795		$	831		$	5,538		$	6,453

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

74

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING			ING T. Rowe			ING T. Rowe
		Retirement			Price Capital			Price Equity			ING Templeton
		Moderate			Appreciation			Income			Global Growth
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Adviser Class			Service Class			Service Class			Service Class
Net assets at January 1, 2009	$	-		$	7,963		$	4,389		$	438
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(21	)		104			45			4
Total realized gain (loss) on investments
and capital gains distributions		3			(1,192	)		(1,167	)		(101	)
Net unrealized appreciation (depreciation)
of investments		124			3,633			2,239			215
Net increase (decrease) in net assets from operations		106			2,545			1,117			118
Changes from principal transactions:
Total unit transactions		8,922			512			551			(67	)
Increase (decrease) in assets derived from principal
transactions		8,922			512			551			(67	)
Total increase (decrease)		9,028			3,057			1,668			51
Net assets at December 31, 2009		9,028			11,020			6,057			489
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(56	)		80			36			-
Total realized gain (loss) on investments
and capital gains distributions		161			(671	)		(758	)		(107	)
Net unrealized appreciation (depreciation)
of investments		522			1,956			1,404			120
Net increase (decrease) in net assets from operations		627			1,365			682			13
Changes from principal transactions:
Total unit transactions		(2,481	)		(941	)		(948	)		(175	)
Increase (decrease) in assets derived from principal
transactions		(2,481	)		(941	)		(948	)		(175	)
Total increase (decrease)		(1,854	)		424			(266	)		(162	)
Net assets at December 31, 2010	$	7,174		$	11,444		$	5,791		$	327

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

75

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

				ING Van
				Kampen			ING Wells			ING Wells
		ING U.S. Stock		Growth and			Fargo			Fargo Small
		Index		Income			HealthCare			Cap Disciplined
		Portfolio -		Portfolio -			Portfolio -			Portfolio -
		Service Class		Service Class			Service Class			Service Class
Net assets at January 1, 2009	$	-	$	835		$	666		$	123
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-		3			(4	)		(1	)
Total realized gain (loss) on investments
and capital gains distributions		-		(205	)		(196	)		(53	)
Net unrealized appreciation (depreciation)
of investments		-		373			239			134
Net increase (decrease) in net assets from operations		-		171			39			80
Changes from principal transactions:
Total unit transactions		-		(141	)		(422	)		113
Increase (decrease) in assets derived from principal
transactions		-		(141	)		(422	)		113
Total increase (decrease)		-		30			(383	)		193
Net assets at December 31, 2009		-		865			283			316
Increase (decrease) in net assets
Operations:
Net investment income (loss)		1		(5	)		(2	)		-
Total realized gain (loss) on investments
and capital gains distributions		8		(47	)		1			33
Net unrealized appreciation (depreciation)
of investments		6		139			14			(63	)
Net increase (decrease) in net assets from operations		15		87			13			(30	)
Changes from principal transactions:
Total unit transactions		45		(95	)		(82	)		(286	)
Increase (decrease) in assets derived from principal
transactions		45		(95	)		(82	)		(286	)
Total increase (decrease)		60		(8	)		(69	)		(316	)
Net assets at December 31, 2010	$	60	$	857		$	214		$	-

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

76

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

								ING American
		ING Money			ING Money			Century Small-
		Market			Market			Mid Cap Value			ING Baron
		Portfolio -			Portfolio -			Portfolio -			Asset Portfolio -
		Class I			Class S			Service Class			Service Class
Net assets at January 1, 2009	$	207,378		$	-		$	1,200		$	266
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(1,621	)		-			12			(2	)
Total realized gain (loss) on investments
and capital gains distributions		73			-			(248	)		(23	)
Net unrealized appreciation (depreciation)
of investments		-			-			626			107
Net increase (decrease) in net assets from operations		(1,548	)		-			390			82
Changes from principal transactions:
Total unit transactions		(65,472	)		-			(281	)		(10	)
Increase (decrease) in assets derived from principal
transactions		(65,472	)		-			(281	)		(10	)
Total increase (decrease)		(67,020	)		-			109			72
Net assets at December 31, 2009		140,358			-			1,309			338
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(1,386	)		(1	)		7			(2	)
Total realized gain (loss) on investments
and capital gains distributions		276			-			(18	)		(33	)
Net unrealized appreciation (depreciation)
of investments		-			-			360			32
Net increase (decrease) in net assets from operations		(1,110	)		(1	)		349			(3	)
Changes from principal transactions:
Total unit transactions		(41,577	)		314			586			(335	)
Increase (decrease) in assets derived from principal
transactions		(41,577	)		314			586			(335	)
Total increase (decrease)		(42,687	)		313			935			(338	)
Net assets at December 31, 2010	$	97,671		$	313		$	2,244		$	-

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

77

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Baron			ING Columbia
		Small Cap			Small Cap			ING Davis New			ING JPMorgan
		Growth			Value			York Venture			Mid Cap Value
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Service Class			Service Class			Service Class			Service Class
Net assets at January 1, 2009	$	2,765		$	761		$	2,118		$	1,530
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(27	)		1			(9	)		7
Total realized gain (loss) on investments
and capital gains distributions		(275	)		(114	)		(548	)		(157	)
Net unrealized appreciation (depreciation)
of investments		1,154			254			1,202			496
Net increase (decrease) in net assets from operations		852			141			645			346
Changes from principal transactions:
Total unit transactions		(282	)		(239	)		(282	)		(112	)
Increase (decrease) in assets derived from principal
transactions		(282	)		(239	)		(282	)		(112	)
Total increase (decrease)		570			(98	)		363			234
Net assets at December 31, 2009		3,335			663			2,481			1,764
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(31	)		-			(16	)		(2	)
Total realized gain (loss) on investments
and capital gains distributions		(11	)		(39	)		(185	)		(196	)
Net unrealized appreciation (depreciation)
of investments		822			168			453			535
Net increase (decrease) in net assets from operations		780			129			252			337
Changes from principal transactions:
Total unit transactions		(415	)		(73	)		(113	)		(356	)
Increase (decrease) in assets derived from principal
transactions		(415	)		(73	)		(113	)		(356	)
Total increase (decrease)		365			56			139			(19	)
Net assets at December 31, 2010	$	3,700		$	719		$	2,620		$	1,745

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

78

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Legg						ING		ING
		Mason						Oppenheimer		Oppenheimer
		ClearBridge			ING			Global		Global
		Aggressive			Oppenheimer			Strategic		Strategic
		Growth			Global			Income		Income
		Portfolio -			Portfolio -			Portfolio -		Portfolio -
		Initial Class			Initial Class			Initial Class		Service Class
Net assets at January 1, 2009	$	16,298		$	76,622		$	44,027		$	16
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(212	)		1,043			1,156			3
Total realized gain (loss) on investments
and capital gains distributions		439			(1,495	)		(694	)		(1	)
Net unrealized appreciation (depreciation)
of investments		4,349			26,495			7,170			20
Net increase (decrease) in net assets from operations		4,576			26,043			7,632			22
Changes from principal transactions:
Total unit transactions		(2,199	)		(11,001	)		(7,929	)		70
Increase (decrease) in assets derived from principal
transactions		(2,199	)		(11,001	)		(7,929	)		70
Total increase (decrease)		2,377			15,042			(297	)		92
Net assets at December 31, 2009		18,675			91,664			43,730			108
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(235	)		405			841			2
Total realized gain (loss) on investments
and capital gains distributions		915			499			1,275			-
Net unrealized appreciation (depreciation)
of investments		3,283			11,231			3,922			13
Net increase (decrease) in net assets from operations		3,963			12,135			6,038			15
Changes from principal transactions:
Total unit transactions		(2,105	)		(11,679	)		(5,160	)		(8	)
Increase (decrease) in assets derived from principal
transactions		(2,105	)		(11,679	)		(5,160	)		(8	)
Total increase (decrease)		1,858			456			878			7
Net assets at December 31, 2010	$	20,533		$	92,120		$	44,608		$	115

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

79

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING PIMCO			ING Pioneer
		Total Return			High Yield			ING Solution			ING Solution
		Portfolio -			Portfolio -			2015 Portfolio -			2025 Portfolio -
		Service Class			Initial Class			Service Class			Service Class
Net assets at January 1, 2009	$	9,940		$	12,668		$	2,423		$	1,467
Increase (decrease) in net assets
Operations:
Net investment income (loss)		294			1,054			90			45
Total realized gain (loss) on investments
and capital gains distributions		482			(769	)		(100	)		(257	)
Net unrealized appreciation (depreciation)
of investments		555			7,802			565			574
Net increase (decrease) in net assets from operations		1,331			8,087			555			362
Changes from principal transactions:
Total unit transactions		3,067			(1,370	)		327			180
Increase (decrease) in assets derived from principal
transactions		3,067			(1,370	)		327			180
Total increase (decrease)		4,398			6,717			882			542
Net assets at December 31, 2009		14,338			19,385			3,305			2,009
Increase (decrease) in net assets
Operations:
Net investment income (loss)		368			943			51			18
Total realized gain (loss) on investments
and capital gains distributions		347			686			(42	)		(51	)
Net unrealized appreciation (depreciation)
of investments		262			1,442			341			306
Net increase (decrease) in net assets from operations		977			3,071			350			273
Changes from principal transactions:
Total unit transactions		(113	)		(2,795	)		54			122
Increase (decrease) in assets derived from principal
transactions		(113	)		(2,795	)		54			122
Total increase (decrease)		864			276			404			395
Net assets at December 31, 2010	$	15,202		$	19,661		$	3,709		$	2,404

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

80

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

											ING T. Rowe
											Price
								ING Solution			Diversified Mid
		ING Solution			ING Solution			Income			Cap Growth
		2035 Portfolio -			2045 Portfolio -			Portfolio -			Portfolio -
		Service Class			Service Class			Service Class			Initial Class
Net assets at January 1, 2009	$	1,196		$	764		$	1,349		$	32,650
Increase (decrease) in net assets
Operations:
Net investment income (loss)		40			16			71			(265	)
Total realized gain (loss) on investments
and capital gains distributions		(120	)		(27	)		(134	)		(2,117	)
Net unrealized appreciation (depreciation)
of investments		526			269			264			15,853
Net increase (decrease) in net assets from operations		446			258			201			13,471
Changes from principal transactions:
Total unit transactions		697			178			(114	)		(3,996	)
Increase (decrease) in assets derived from principal
transactions		697			178			(114	)		(3,996	)
Total increase (decrease)		1,143			436			87			9,475
Net assets at December 31, 2009		2,339			1,200			1,436			42,125
Increase (decrease) in net assets
Operations:
Net investment income (loss)		13			4			24			(375	)
Total realized gain (loss) on investments
and capital gains distributions		(96	)		(122	)		70			(154	)
Net unrealized appreciation (depreciation)
of investments		464			203			(5	)		11,138
Net increase (decrease) in net assets from operations		381			85			89			10,609
Changes from principal transactions:
Total unit transactions		551			(345	)		(646	)		(4,305	)
Increase (decrease) in assets derived from principal
transactions		551			(345	)		(646	)		(4,305	)
Total increase (decrease)		932			(260	)		(557	)		6,304
Net assets at December 31, 2010	$	3,271		$	940		$	879		$	48,429

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

81

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING T. Rowe						ING			ING UBS U.S.
		Price Growth			ING Templeton			Thornburg			Large Cap
		Equity			Foreign Equity			Value			Equity
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Initial Class			Initial Class			Initial Class			Initial Class
Net assets at January 1, 2009	$	25,211		$	18,241		$	13,421		$	15,297
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(303	)		(211	)		5			36
Total realized gain (loss) on investments
and capital gains distributions		376			(2,245	)		65			(655	)
Net unrealized appreciation (depreciation)
of investments		9,652			7,347			5,152			4,612
Net increase (decrease) in net assets from operations		9,725			4,891			5,222			3,993
Changes from principal transactions:
Total unit transactions		(3,147	)		(2,062	)		(1,293	)		(2,674	)
Increase (decrease) in assets derived from principal
transactions		(3,147	)		(2,062	)		(1,293	)		(2,674	)
Total increase (decrease)		6,578			2,829			3,929			1,319
Net assets at December 31, 2009		31,789			21,070			17,350			16,616
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(372	)		228			61			(52	)
Total realized gain (loss) on investments
and capital gains distributions		845			(1,358	)		919			93
Net unrealized appreciation (depreciation)
of investments		3,932			2,480			578			1,702
Net increase (decrease) in net assets from operations		4,405			1,350			1,558			1,743
Changes from principal transactions:
Total unit transactions		(3,763	)		(2,785	)		(1,696	)		(2,589	)
Increase (decrease) in assets derived from principal
transactions		(3,763	)		(2,785	)		(1,696	)		(2,589	)
Total increase (decrease)		642			(1,435	)		(138	)		(846	)
Net assets at December 31, 2010	$	32,431		$	19,635		$	17,212		$	15,770

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

82

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Van			ING Van			ING Strategic			ING Strategic
		Kampen			Kampen Equity			Allocation			Allocation
		Comstock			and Income			Conservative			Growth
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Service Class			Initial Class			Class I			Class I
Net assets at January 1, 2009	$	1,370		$	67,293		$	8,278		$	8,438
Increase (decrease) in net assets
Operations:
Net investment income (loss)		13			436			573			754
Total realized gain (loss) on investments
and capital gains distributions		(475	)		(3,284	)		(886	)		(893	)
Net unrealized appreciation (depreciation)
of investments		691			15,032			1,547			1,880
Net increase (decrease) in net assets from operations		229			12,184			1,234			1,741
Changes from principal transactions:
Total unit transactions		(574	)		(12,682	)		(818	)		(1,485	)
Increase (decrease) in assets derived from principal
transactions		(574	)		(12,682	)		(818	)		(1,485	)
Total increase (decrease)		(345	)		(498	)		416			256
Net assets at December 31, 2009		1,025			66,795			8,694			8,694
Increase (decrease) in net assets
Operations:
Net investment income (loss)		5			371			274			217
Total realized gain (loss) on investments
and capital gains distributions		(136	)		(505	)		(439	)		(826	)
Net unrealized appreciation (depreciation)
of investments		277			6,484			979			1,551
Net increase (decrease) in net assets from operations		146			6,350			814			942
Changes from principal transactions:
Total unit transactions		(234	)		(11,310	)		(603	)		(908	)
Increase (decrease) in assets derived from principal
transactions		(234	)		(11,310	)		(603	)		(908	)
Total increase (decrease)		(88	)		(4,960	)		211			34
Net assets at December 31, 2010	$	937		$	61,835		$	8,905		$	8,728

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

83

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Strategic Allocation			ING Growth
		Moderate			and Income			ING GET U.S.			ING GET U.S.
		Portfolio -			Portfolio -			Core Portfolio -			Core Portfolio -
		Class I			Class I			Series 5			Series 6
Net assets at January 1, 2009	$	9,608		$	186,679		$	1,685		$	22,445
Increase (decrease) in net assets
Operations:
Net investment income (loss)		743			761			31			74
Total realized gain (loss) on investments
and capital gains distributions		(932	)		(5,761	)		(72	)		(1,088	)
Net unrealized appreciation (depreciation)
of investments		1,817			54,072			38			947
Net increase (decrease) in net assets from operations		1,628			49,072			(3	)		(67	)
Changes from principal transactions:
Total unit transactions		(1,191	)		(20,232	)		(201	)		(3,883	)
Increase (decrease) in assets derived from principal
transactions		(1,191	)		(20,232	)		(201	)		(3,883	)
Total increase (decrease)		437			28,840			(204	)		(3,950	)
Net assets at December 31, 2009		10,045			215,519			1,481			18,495
Increase (decrease) in net assets
Operations:
Net investment income (loss)		294			(15	)		3			64
Total realized gain (loss) on investments
and capital gains distributions		(969	)		1,090			(40	)		(844	)
Net unrealized appreciation (depreciation)
of investments		1,666			25,612			43			833
Net increase (decrease) in net assets from operations		991			26,687			6			53
Changes from principal transactions:
Total unit transactions		(441	)		(16,933	)		(110	)		(3,345	)
Increase (decrease) in assets derived from principal
transactions		(441	)		(16,933	)		(110	)		(3,345	)
Total increase (decrease)		550			9,754			(104	)		(3,292	)
Net assets at December 31, 2010	$	10,595		$	225,273		$	1,377		$	15,203

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

84

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING GET U.S.			ING GET U.S.			ING GET U.S.			ING GET U.S.
		Core Portfolio -			Core Portfolio -			Core Portfolio -			Core Portfolio -
		Series 7			Series 8			Series 9			Series 10
Net assets at January 1, 2009	$	12,593		$	10,922		$	8,130		$	6,522
Increase (decrease) in net assets
Operations:
Net investment income (loss)		61			49			42			57
Total realized gain (loss) on investments
and capital gains distributions		(571	)		(663	)		(343	)		(415	)
Net unrealized appreciation (depreciation)
of investments		393			596			274			180
Net increase (decrease) in net assets from operations		(117	)		(18	)		(27	)		(178	)
Changes from principal transactions:
Total unit transactions		(1,890	)		(2,221	)		(1,059	)		(1,565	)
Increase (decrease) in assets derived from principal
transactions		(1,890	)		(2,221	)		(1,059	)		(1,565	)
Total increase (decrease)		(2,007	)		(2,239	)		(1,086	)		(1,743	)
Net assets at December 31, 2009		10,586			8,683			7,044			4,779
Increase (decrease) in net assets
Operations:
Net investment income (loss)		36			42			26			42
Total realized gain (loss) on investments
and capital gains distributions		(582	)		(331	)		(295	)		(144	)
Net unrealized appreciation (depreciation)
of investments		619			348			405			212
Net increase (decrease) in net assets from operations		73			59			136			110
Changes from principal transactions:
Total unit transactions		(1,864	)		(1,162	)		(1,018	)		(549	)
Increase (decrease) in assets derived from principal
transactions		(1,864	)		(1,162	)		(1,018	)		(549	)
Total increase (decrease)		(1,791	)		(1,103	)		(882	)		(439	)
Net assets at December 31, 2010	$	8,795		$	7,580		$	6,162		$	4,340

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

85

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING GET U.S.			ING GET U.S.			ING GET U.S.			ING GET U.S.
		Core Portfolio -			Core Portfolio -			Core Portfolio -			Core Portfolio -
		Series 11			Series 12			Series 13			Series 14
Net assets at January 1, 2009	$	8,130		$	20,401		$	19,436		$	21,091
Increase (decrease) in net assets
Operations:
Net investment income (loss)		159			265			325			387
Total realized gain (loss) on investments
and capital gains distributions		(557	)		(1,488	)		(354	)		(123	)
Net unrealized appreciation (depreciation)
of investments		192			712			(694	)		(825	)
Net increase (decrease) in net assets from operations		(206	)		(511	)		(723	)		(561	)
Changes from principal transactions:
Total unit transactions		(1,900	)		(4,304	)		(4,261	)		(7,952	)
Increase (decrease) in assets derived from principal
transactions		(1,900	)		(4,304	)		(4,261	)		(7,952	)
Total increase (decrease)		(2,106	)		(4,815	)		(4,984	)		(8,513	)
Net assets at December 31, 2009		6,024			15,586			14,452			12,578
Increase (decrease) in net assets
Operations:
Net investment income (loss)		49			157			116			253
Total realized gain (loss) on investments
and capital gains distributions		(343	)		(1,049	)		(127	)		(25	)
Net unrealized appreciation (depreciation)
of investments		469			1,471			685			361
Net increase (decrease) in net assets from operations		175			579			674			589
Changes from principal transactions:
Total unit transactions		(1,254	)		(3,377	)		(2,420	)		(3,483	)
Increase (decrease) in assets derived from principal
transactions		(1,254	)		(3,377	)		(2,420	)		(3,483	)
Total increase (decrease)		(1,079	)		(2,798	)		(1,746	)		(2,894	)
Net assets at December 31, 2010	$	4,945		$	12,788		$	12,706		$	9,684

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

86

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING BlackRock		ING Euro
		Science and		STOXX 50
		Technology		Index			ING Index Plus			ING Index Plus
		Opportunities		Portfolio -			LargeCap			MidCap
		Portfolio -		Institutional			Portfolio -			Portfolio -
		Class I		Class			Class I			Class I
Net assets at January 1, 2009	$	3,743		$	-	$	79,909		$	7,814
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(51	)		-		1,552			74
Total realized gain (loss) on investments
and capital gains distributions		(185	)		-		(3,224	)		(608	)
Net unrealized appreciation (depreciation)
of investments		2,199			-		16,931			2,701
Net increase (decrease) in net assets from operations		1,963			-		15,259			2,167
Changes from principal transactions:
Total unit transactions		(50	)		-		(10,807	)		(682	)
Increase (decrease) in assets derived from principal
transactions		(50	)		-		(10,807	)		(682	)
Total increase (decrease)		1,913			-		4,452			1,485
Net assets at December 31, 2009		5,656			-		84,361			9,299
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(64	)		-		670			29
Total realized gain (loss) on investments
and capital gains distributions		(104	)		-		(2,462	)		(480	)
Net unrealized appreciation (depreciation)
of investments		1,164			5		10,778			2,226
Net increase (decrease) in net assets from operations		996			5		8,986			1,775
Changes from principal transactions:
Total unit transactions		272			29		(16,075	)		(1,206	)
Increase (decrease) in assets derived from principal
transactions		272			29		(16,075	)		(1,206	)
Total increase (decrease)		1,268			34		(7,089	)		569
Net assets at December 31, 2010	$	6,924		$	34	$	77,272		$	9,868

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

87

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Index Plus SmallCap Portfolio - Class I		ING International Index Portfolio - Class I			ING International Index Portfolio - Class S		ING Opportunistic Large Cap Portfolio - Class I
Net assets at January 1, 2009	$	3,465		$	211		$	-	$	4,682
Increase (decrease) in net assets
Operations:
Net investment income (loss)		36			(58	)		-		54
Total realized gain (loss) on investments
and capital gains distributions		(347	)		23			2		(643	)
Net unrealized appreciation (depreciation)
of investments		1,080			1,073			3		1,931
Net increase (decrease) in net assets from operations		769			1,038			5		1,342
Changes from principal transactions:
Total unit transactions		(295	)		10,608			37		7,464
Increase (decrease) in assets derived from principal
transactions		(295	)		10,608			37		7,464
Total increase (decrease)		474			11,646			42		8,806
Net assets at December 31, 2009		3,939			11,857			42		13,488
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(3	)		268			-		160
Total realized gain (loss) on investments
and capital gains distributions		(365	)		145			-		(1,279	)
Net unrealized appreciation (depreciation)
of investments		1,154			161			1		243
Net increase (decrease) in net assets from operations		786			574			1		(876	)
Changes from principal transactions:
Total unit transactions		(620	)		(2,159	)		10		(12,612	)
Increase (decrease) in assets derived from principal
transactions		(620	)		(2,159	)		10		(12,612	)
Total increase (decrease)		166			(1,585	)		11		(13,488	)
Net assets at December 31, 2010	$	4,105		$	10,272		$	53	$	-

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

88

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Russell™			ING Russell™			ING Russell™			ING Russell™
		Large Cap			Large Cap			Large Cap			Large Cap
		Growth Index			Index			Value Index			Value Index
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Class I			Class I			Class I			Class S
Net assets at January 1, 2009	$	-		$	641		$	-		$	-
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(165	)		(115	)		(56	)		(10	)
Total realized gain (loss) on investments
and capital gains distributions		270			321			188			20
Net unrealized appreciation (depreciation)
of investments		4,353			3,039			1,582			238
Net increase (decrease) in net assets from operations		4,458			3,245			1,714			248
Changes from principal transactions:
Total unit transactions		24,450			16,229			8,470			1,320
Increase (decrease) in assets derived from principal
transactions		24,450			16,229			8,470			1,320
Total increase (decrease)		28,908			19,474			10,184			1,568
Net assets at December 31, 2009		28,908			20,115			10,184			1,568
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(159	)		431			40			1
Total realized gain (loss) on investments
and capital gains distributions		736			686			1,260			175
Net unrealized appreciation (depreciation)
of investments		2,292			751			(416	)		(41	)
Net increase (decrease) in net assets from operations		2,869			1,868			884			135
Changes from principal transactions:
Total unit transactions		(3,925	)		(2,972	)		(2,447	)		(156	)
Increase (decrease) in assets derived from principal
transactions		(3,925	)		(2,972	)		(2,447	)		(156	)
Total increase (decrease)		(1,056	)		(1,104	)		(1,563	)		(21	)
Net assets at December 31, 2010	$	27,852		$	19,011		$	8,621		$	1,547

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

89

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

		ING Russell™					ING Russell™
		Mid Cap			ING Russell™		Small Cap				ING Small
		Growth Index			Mid Cap Index		Index				Company
		Portfolio -			Portfolio -		Portfolio -				Portfolio -
		Class S			Class I		Class I				Class I
Net assets at January 1, 2009	$	-		$	29		$	35		$	27,869
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			(1	)		(1	)		(143	)
Total realized gain (loss) on investments
and capital gains distributions		1			-			(9	)		(2,713	)
Net unrealized appreciation (depreciation)
of investments		10			39			38			9,234
Net increase (decrease) in net assets from operations		11			38			28			6,378
Changes from principal transactions:
Total unit transactions		90			92			60			(3,347	)
Increase (decrease) in assets derived from principal
transactions		90			92			60			(3,347	)
Total increase (decrease)		101			130			88			3,031
Net assets at December 31, 2009		101			159			123			30,900
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(1	)		-			(1	)		(195	)
Total realized gain (loss) on investments
and capital gains distributions		6			28			38			(2,021	)
Net unrealized appreciation (depreciation)
of investments		17			5			(9	)		8,641
Net increase (decrease) in net assets from operations		22			33			28			6,425
Changes from principal transactions:
Total unit transactions		244			68			222			(4,038	)
Increase (decrease) in assets derived from principal
transactions		244			68			222			(4,038	)
Total increase (decrease)		266			101			250			2,387
Net assets at December 31, 2010	$	367		$	260		$	373		$	33,287

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

90

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

					ING
		ING U.S. Bond			International			ING MidCap			ING MidCap
		Index			Value			Opportunities			Opportunities
		Portfolio -			Portfolio -			Portfolio -			Portfolio -
		Class I			Class I			Class I			Class S
Net assets at January 1, 2009	$	96		$	3,607		$	498		$	2,720
Increase (decrease) in net assets
Operations:
Net investment income (loss)		9			23			(3	)		(29	)
Total realized gain (loss) on investments
and capital gains distributions		15			(1,727	)		(133	)		125
Net unrealized appreciation (depreciation)
of investments		4			2,308			280			809
Net increase (decrease) in net assets from operations		28			604			144			905
Changes from principal transactions:
Total unit transactions		551			(891	)		(119	)		(636	)
Increase (decrease) in assets derived from principal
transactions		551			(891	)		(119	)		(636	)
Total increase (decrease)		579			(287	)		25			269
Net assets at December 31, 2009		675			3,320			523			2,989
Increase (decrease) in net assets
Operations:
Net investment income (loss)		20			26			-			(20	)
Total realized gain (loss) on investments
and capital gains distributions		39			(900	)		22			256
Net unrealized appreciation (depreciation)
of investments		(16	)		872			302			534
Net increase (decrease) in net assets from operations		43			(2	)		324			770
Changes from principal transactions:
Total unit transactions		587			(1,446	)		1,146			(282	)
Increase (decrease) in assets derived from principal
transactions		587			(1,446	)		1,146			(282	)
Total increase (decrease)		630			(1,448	)		1,470			488
Net assets at December 31, 2010	$	1,305		$	1,872		$	1,993		$	3,477

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

91

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

								Invesco V.I.
		ING SmallCap			ING SmallCap			Capital			Invesco V.I.
		Opportunities			Opportunities			Appreciation			Core Equity
		Portfolio -			Portfolio -			Fund - Series I			Fund - Series I
		Class I			Class S			Shares			Shares
Net assets at January 1, 2009	$	522		$	1,876		$	523		$	1,084
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(3	)		(22	)		(1	)		13
Total realized gain (loss) on investments
and capital gains distributions		(182	)		(167	)		(37	)		(50	)
Net unrealized appreciation (depreciation)
of investments		206			658			140			354
Net increase (decrease) in net assets from operations		21			469			102			317
Changes from principal transactions:
Total unit transactions		(223	)		(341	)		23			151
Increase (decrease) in assets derived from principal
transactions		(223	)		(341	)		23			151
Total increase (decrease)		(202	)		128			125			468
Net assets at December 31, 2009		320			2,004			648			1,552
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(4	)		(24	)		-			(1	)
Total realized gain (loss) on investments
and capital gains distributions		123			(27	)		(30	)		(27	)
Net unrealized appreciation (depreciation)
of investments		2			615			118			153
Net increase (decrease) in net assets from operations		121			564			88			125
Changes from principal transactions:
Total unit transactions		411			(103	)		(87	)		(122	)
Increase (decrease) in assets derived from principal
transactions		411			(103	)		(87	)		(122	)
Total increase (decrease)		532			461			1			3
Net assets at December 31, 2010	$	852		$	2,465		$	649		$	1,555

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

92

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

	Janus Aspen Series Balanced Portfolio - Institutional Shares			Janus Aspen Series Enterprise Portfolio - Institutional Shares		Janus Aspen Series Flexible Bond Portfolio - Institutional Shares		Janus Aspen Series Janus Portfolio - Institutional Shares
Net assets at January 1, 2009	$	16		$	1	$	3	$	5
Increase (decrease) in net assets
Operations:
Net investment income (loss)		1			-		-		-
Total realized gain (loss) on investments
and capital gains distributions		-			-		-		(1	)
Net unrealized appreciation (depreciation)
of investments		3			1		-		2
Net increase (decrease) in net assets from operations		4			1		-		1
Changes from principal transactions:
Total unit transactions		(7	)		-		-		(4	)
Increase (decrease) in assets derived from principal
transactions		(7	)		-		-		(4	)
Total increase (decrease)		(3	)		1		-		(3	)
Net assets at December 31, 2009		13			2		3		2
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			-		-		-
Total realized gain (loss) on investments
and capital gains distributions		-			-		-		-
Net unrealized appreciation (depreciation)
of investments		1			-		-		-
Net increase (decrease) in net assets from operations		1			-		-		-
Changes from principal transactions:
Total unit transactions		-			-		-		-
Increase (decrease) in assets derived from principal
transactions		-			-		-		-
Total increase (decrease)		1			-		-		-
Net assets at December 31, 2010	$	14		$	2	$	3	$	2

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

93

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

	Janus Aspen Series Worldwide Portfolio - Institutional Shares			Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC			Oppenheimer Global Securities/VA			Oppenheimer Main Street Fund®/VA
Net assets at January 1, 2009	$	2		$	2,000		$	47		$	255
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			(7	)		1			2
Total realized gain (loss) on investments
and capital gains distributions		-			(594	)		-			(14	)
Net unrealized appreciation (depreciation)
of investments		1			980			17			76
Net increase (decrease) in net assets from operations		1			379			18			64
Changes from principal transactions:
Total unit transactions		(2	)		(278	)		(3	)		(31	)
Increase (decrease) in assets derived from principal
transactions		(2	)		(278	)		(3	)		(31	)
Total increase (decrease)		(1	)		101			15			33
Net assets at December 31, 2009		1			2,101			62			288
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			(10	)		1			-
Total realized gain (loss) on investments
and capital gains distributions		-			(146	)		(2	)		(9	)
Net unrealized appreciation (depreciation)
of investments		-			655			10			47
Net increase (decrease) in net assets from operations		-			499			9			38
Changes from principal transactions:
Total unit transactions		-			(50	)		(8	)		(40	)
Increase (decrease) in assets derived from principal
transactions		-			(50	)		(8	)		(40	)
Total increase (decrease)		-			449			1			(2	)
Net assets at December 31, 2010	$	1		$	2,550		$	63		$	286

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

94

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

	Oppenheimer Main Street Small Cap Fund®/VA			Oppenheimer Small - & Mid- Cap Growth Fund/VA			PIMCO Real Return Portfolio - Administrative Class			Pioneer Emerging Markets VCT Portfolio - Class I
Net assets at January 1, 2009	$	382		$	37		$	5,888		$	1,033
Increase (decrease) in net assets
Operations:
Net investment income (loss)		-			(1	)		167			7
Total realized gain (loss) on investments
and capital gains distributions		(26	)		(22	)		157			(702	)
Net unrealized appreciation (depreciation)
of investments		173			31			821			1,653
Net increase (decrease) in net assets from operations		147			8			1,145			958
Changes from principal transactions:
Total unit transactions		57			150			1,679			829
Increase (decrease) in assets derived from principal
transactions		57			150			1,679			829
Total increase (decrease)		204			158			2,824			1,787
Net assets at December 31, 2009		586			195			8,712			2,820
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(2	)		(2	)		48			(12	)
Total realized gain (loss) on investments
and capital gains distributions		(11	)		36			335			258
Net unrealized appreciation (depreciation)
of investments		149			1			147			207
Net increase (decrease) in net assets from operations		136			35			530			453
Changes from principal transactions:
Total unit transactions		149			(175	)		(2,188	)		1,090
Increase (decrease) in assets derived from principal
transactions		149			(175	)		(2,188	)		1,090
Total increase (decrease)		285			(140	)		(1,658	)		1,543
Net assets at December 31, 2010	$	871		$	55		$	7,054		$	4,363

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

95

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

	Pioneer High Yield VCT Portfolio - Class I			Premier VIT OpCap Mid Cap Portfolio - Class I			Wanger International			Wanger Select
Net assets at January 1, 2009	$	308		$	-		$	406		$	1,732
Increase (decrease) in net assets
Operations:
Net investment income (loss)		24			(2	)		23			(17	)
Total realized gain (loss) on investments
and capital gains distributions		(124	)		1			(13	)		(652	)
Net unrealized appreciation (depreciation)
of investments		252			100			224			1,708
Net increase (decrease) in net assets from operations		152			99			234			1,039
Changes from principal transactions:
Total unit transactions		91			609			773			74
Increase (decrease) in assets derived from principal
transactions		91			609			773			74
Total increase (decrease)		243			708			1,007			1,113
Net assets at December 31, 2009		551			708			1,413			2,845
Increase (decrease) in net assets
Operations:
Net investment income (loss)		24			-			27			(7	)
Total realized gain (loss) on investments
and capital gains distributions		16			167			66			(115	)
Net unrealized appreciation (depreciation)
of investments		39			(100	)		238			801
Net increase (decrease) in net assets from operations		79			67			331			679
Changes from principal transactions:
Total unit transactions		(128	)		(775	)		246			(17	)
Increase (decrease) in assets derived from principal
transactions		(128	)		(775	)		246			(17	)
Total increase (decrease)		(49	)		(708	)		577			662
Net assets at December 31, 2010	$	502		$	-		$	1,990		$	3,507

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

96

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2010 and 2009
(Dollars in thousands)

	Wanger USA
Net assets at January 1, 2009	$	231
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(2	)
Total realized gain (loss) on investments
and capital gains distributions		(107	)
Net unrealized appreciation (depreciation)
of investments		219
Net increase (decrease) in net assets from operations		110
Changes from principal transactions:
Total unit transactions		91
Increase (decrease) in assets derived from principal
transactions		91
Total increase (decrease)		201
Net assets at December 31, 2009		432
Increase (decrease) in net assets
Operations:
Net investment income (loss)		(5	)
Total realized gain (loss) on investments
and capital gains distributions		17
Net unrealized appreciation (depreciation)
of investments		103
Net increase (decrease) in net assets from operations		115
Changes from principal transactions:
Total unit transactions		260
Increase (decrease) in assets derived from principal
transactions		260
Total increase (decrease)		375
Net assets at December 31, 2010	$	807

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

97

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

1. Organization

Variable Annuity Account B of ING Life Insurance and Annuity Company (the “Account”) was established by ING Life Insurance and Annuity Company (“ILIAC” or the “Company”) to support the operations of variable annuity contracts (“Contracts”). The Company is an indirect wholly owned subsidiary of ING America Insurance Holdings, Inc. (“ING AIH”), an insurance holding company domiciled in the State of Delaware. ING AIH is an indirect wholly owned subsidiary of ING Groep, N.V. (“ING”), a global financial services holding company based in The Netherlands.

As part of a restructuring plan approved by the European Commission (“EC”), ING has agreed to separate its banking and insurance businesses by 2013. ING intends to achieve this separation by divestment of its insurance and investment management operations, including the Company. ING has announced that it will explore all options for implementing the separation including one or more initial public offerings (“IPOs”), sales or a combination thereof. On November 10, 2010, ING announced that while the option of one global IPO remains open, ING and its U.S. insurance affiliates, including the Company, are going to prepare for a base case of two IPOs: one Europe-led IPO and one separate U.S. focused IPO.

The Account is registered as a unit investment trust with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended. The Account is exclusively for use with Contracts that may be entitled to tax-deferred treatment under specific sections of the Internal Revenue Code of 1986, as amended. ILIAC provides for variable accumulation and benefits under the Contracts by crediting annuity considerations to one or more divisions within the Account or the fixed separate account, which is not part of the Account, as directed by the contractowners. The portion of the Account’s assets applicable to Contracts will not be charged with liabilities arising out of any other business ILIAC may conduct, but obligations of the Account, including the promise to make benefit payments, are obligations of ILIAC. Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from the other assets and liabilities of ILIAC.

At December 31, 2010, the Account had 137 investment divisions (the “Divisions”), 34 of which invest in independently managed mutual funds and 103 of which invest in mutual funds managed by affiliates, either Directed Services LLC (“DSL”), or ING Investments, LLC (“IIL”). The assets in each Division are invested in shares of a designated fund (“Fund”) of various investment trusts (the “Trusts”). Investment Divisions with asset balances at December 31, 2010 and related Trusts are as follows:

American Funs Insurance Series:
  American Funds Insurance Series® International Fund - Class 2**
  Calvert Variable Series, Inc.:
  Calvert VP SRI Balanced Portfolio

Federated Insurance Series:
  Federated Capital Appreciation Fund II - Primary Shares**
  Federated Capital Income Fund II
  Federated Fund for U.S. Government Securities II
  Federated High Income Bond Fund II - Primary Shares

98

VARIABLE ANNUITY ACCOUNT B OF

ING LIFE INSURANCE AND ANNUITY COMPANY

Notes to Financial Statements

Federated Insurance Series (continued):
  Federated Kaufmann Fund II - Primary Shares**
  Federated Prime Money Fund II
Fidelity® Variable Insurance Products:
  Fidelity® VIP Equity-Income Portfolio - Initial Class
  Fidelity® VIP Growth Portfolio - Initial Class
  Fidelity® VIP High Income Portfolio - Initial Class
  Fidelity® VIP Overseas Portfolio - Initial Class
  Fidelity® Variable Insurance Products II:
  Fidelity® VIP Contrafund® Portfolio - Initial Class
  Fidelity® VIP Index 500 Portfolio - Initial Class
  Fidelity® Variable Insurance Products V:
  Fidelity® VIP Investment Grade Bond Portfolio - Initial Class
Franklin Templeton Variable Insurance Products Trust:
  Franklin Small Cap Value Securities Fund - Class 2
ING Balanced Portfolio, Inc.:
  ING Balanced Portfolio - Class I
ING Intermediate Bond Portfolio:
  ING Intermediate Bond Portfolio - Class I
ING Investors Trust:
  ING American Funds Growth Portfolio
  ING American Funds Growth-Income Portfolio
  ING American Funds International Portfolio
  ING Artio Foreign Portfolio - Service Class
  ING BlackRock Inflation Protected Bond Portfolio - Institutional Class**
  ING BlackRock Large Cap Growth Portfolio - Institutional Class
  ING Clarion Global Real Estate Portfolio - Institutional Class
  ING Clarion Global Real Estate Portfolio - Service Class
  ING Clarion Real Estate Portfolio - Service Class
  ING FMR^SM Diversified Mid Cap Portfolio - Institutional Class
  ING FMR^SM Diversified Mid Cap Portfolio - Service Class
  ING Franklin Income Portfolio - Service Class
  ING Franklin Mutual Shares Portfolio - Service Class
  ING Global Resources Portfolio - Service Class
  ING Janus Contrarian Portfolio - Service Class
  ING JPMorgan Emerging Markets Equity Portfolio - Institutional Class
  ING JPMorgan Emerging Markets Equity Portfolio - Service Class
  ING JPMorgan Small Cap Core Equity Portfolio - Institutional Class
  ING JPMorgan Small Cap Core Equity Portfolio - Service Class
  ING Large Cap Growth Portfolio - Institutional Class
  ING Lord Abbett Growth and Income Portfolio - Institutional Class
  ING Lord Abbett Growth and Income Portfolio - Service Class
  ING Marsico Growth Portfolio - Service Class

ING Investors Trust (continued):
  ING Marsico International Opportunities Portfolio - Service Class
  ING MFS Total Return Portfolio - Institutional Class
  ING MFS Total Return Portfolio - Service Class
  ING MFS Utilities Portfolio - Service Class
  ING PIMCO High Yield Portfolio - Service Class
  ING Pioneer Equity Income Portfolio - Institutional Class
  ING Pioneer Fund Portfolio - Institutional Class
  ING Pioneer Mid Cap Value Portfolio - Institutional Class
  ING Pioneer Mid Cap Value Portfolio - Service Class
  ING Retirement Growth Portfolio - Adviser Class*
  ING Retirement Moderate Growth Portfolio - Adviser Class*
  ING Retirement Moderate Portfolio - Adviser Class*
  ING T. Rowe Price Capital Appreciation Portfolio - Service Class
  ING T. Rowe Price Equity Income Portfolio - Service Class
  ING Templeton Global Growth Portfolio - Service Class
  ING U.S. Stock Index Portfolio - Service Class**
  ING Van Kampen Growth and Income Portfolio - Service Class 
  ING Wells Fargo HealthCare Portfolio - Service Class
ING Money Market Portfolio:
  ING Money Market Portfolio - Class I
  ING Money Market Portfolio - Class S**
ING Partners, Inc.:
  ING American Century Small-Mid Cap Value Portfolio - Service Class
  ING Baron Small Cap Growth Portfolio - Service Class
  ING Columbia Small Cap Value Portfolio - Service Class
  ING Davis New York Venture Portfolio - Service Class
  ING JPMorgan Mid Cap Value Portfolio - Service Class
  ING Legg Mason ClearBridge Aggressive Growth Portfolio - Initial Class
  ING Oppenheimer Global Portfolio - Initial Class
  ING Oppenheimer Global Strategic Income Portfolio - Initial Class
  ING Oppenheimer Global Strategic Income Portfolio - Service Class
  ING PIMCO Total Return Portfolio - Service Class
  ING Pioneer High Yield Portfolio - Initial Class
  ING Solution 2015 Portfolio - Service Class
  ING Solution 2025 Portfolio - Service Class
  ING Solution 2035 Portfolio - Service Class
  ING Solution 2045 Portfolio - Service Class
  ING Solution Income Portfolio - Service Class
  ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial Class

99

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

ING Partners, Inc. (continued):
  ING T. Rowe Price Growth Equity Portfolio - Initial Class
  ING Templeton Foreign Equity Portfolio - Initial Class
  ING Thornburg Value Portfolio - Initial Class
  ING UBS U.S. Large Cap Equity Portfolio - Initial Class
  ING Van Kampen Comstock Portfolio - Service Class
  ING Van Kampen Equity and Income Portfolio - Initial Class
ING Strategic Allocation Portfolios, Inc.:
  ING Strategic Allocation Conservative Portfolio - Class I
  ING Strategic Allocation Growth Portfolio - Class I
  ING Strategic Allocation Moderate Portfolio - Class
ING Variable Funds:
  ING Growth and Income Portfolio - Class I
ING Variable Insurance Trust:
  ING GET U.S. Core Portfolio - Series 5
  ING GET U.S. Core Portfolio - Series 6
  ING GET U.S. Core Portfolio - Series 7
  ING GET U.S. Core Portfolio - Series 8
  ING GET U.S. Core Portfolio - Series 9
  ING GET U.S. Core Portfolio - Series 10
  ING GET U.S. Core Portfolio - Series 11
  ING GET U.S. Core Portfolio - Series 12
  ING GET U.S. Core Portfolio - Series 13
  ING GET U.S. Core Portfolio - Series 14
ING Variable Portfolios, Inc.:
  ING BlackRock Science and Technology Opportunities Portfolio - Class I
  ING Euro STOXX 50 Index Portfolio - Institutional Class**
  ING Index Plus LargeCap Portfolio - Class I
  ING Index Plus MidCap Portfolio - Class I
  ING Index Plus SmallCap Portfolio - Class I
  ING International Index Portfolio - Class I
  ING International Index Portfolio - Class S*
  ING Russell™ Large Cap Growth Index Portfolio - Class I*
  ING Russell™ Large Cap Index Portfolio - Class I
  ING Russell™ Large Cap Value Index Portfolio - Class I*
  ING Russell™ Large Cap Value Index Portfolio - Class S*
  ING Russell™ Mid Cap Growth Index Portfolio - Class S*

ING Variable Portfolios, Inc. (continued):
  ING Russell™ Mid Cap Index Portfolio - Class I
  ING Russell™ Small Cap Index Portfolio - Class I
  ING Small Company Portfolio - Class I
  ING U.S. Bond Index Portfolio - Class I
ING Variable Products Trust:
  ING International Value Portfolio - Class I
  ING MidCap Opportunities Portfolio - Class I
  ING MidCap Opportunities Portfolio - Class S
  ING SmallCap Opportunities Portfolio - Class I
  ING SmallCap Opportunities Portfolio - Class S
Invesco Variable Insurance Funds:
  Invesco V.I. Capital Appreciation Fund - Series I Shares
  Invesco V.I. Core Equity Fund - Series I Shares
Janus Aspen Series:
  Janus Aspen Series Balanced Portfolio - Institutional Shares
  Janus Aspen Series Enterprise Portfolio - Institutional Shares
  Janus Aspen Series Flexible Bond Portfolio - Institutional Shares
  Janus Aspen Series Janus Portfolio - Institutional Shares
  Janus Aspen Series Worldwide Portfolio - Institutional Shares
Lord Abbett Series Fund, Inc.:
  Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC
Oppenheimer Variable Account Funds:
  Oppenheimer Global Securities/VA
  Oppenheimer Main Street Fund®/VA
  Oppenheimer Main Street Small Cap Fund®/VA
  Oppenheimer Small- & Mid-Cap Growth Fund/VA
PIMCO Variable Insurance Trust:
  PIMCO Real Return Portfolio - Administrative Class
Pioneer Variable Contracts Trust:
  Pioneer Emerging Markets VCT Portfolio - Class I
  Pioneer High Yield VCT Portfolio - Class I
  Wanger Advisors Trust:
  Wanger International
  Wanger Select
Wanger USA

* Division added to the list in 2009
** Division added to the list in 2010

100

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

The names of certain Divisions were changed during 2010. The following is a summary of current and former names for those Divisions:

Current Name	Former Name
Calvert Variable Series, Inc.:	Calvert Variable Series, Inc.:
Calvert VP SRI Balanced Portfolio	Calvert Social Balanced Portfolio
ING Investors Trust:	ING Investors Trust:
ING Large Cap Growth Portfolio - Institutional Class	ING Evergreen Omega Portfolio - Institutional Class
ING Lord Abbett Growth and Income Portfolio - Institutional Class	ING Lord Abbett Affiliated Portfolio - Institutional Class
ING Lord Abbett Growth and Income Portfolio - Service Class	ING Lord Abbett Affiliated Portfolio - Service Class
ING Wells Fargo HealthCare Portfolio - Service Class	ING Evergreen Health Sciences Portfolio - Service Class
ING Partners, Inc.:	ING Partners, Inc.:
ING Legg Mason ClearBridge Aggressive Growth Portfolio - Initial  Class	ING Legg Mason Partners Aggressive Growth Portfolio - Initial Class
ING Oppenheimer Global Strategic Income Portfolio - Initial Class	ING Oppenheimer Strategic Income Portfolio - Initial Class
ING Oppenheimer Global Strategic Income Portfolio - Service Class	ING Oppenheimer Strategic Income Portfolio - Service Class
ING U.S. Stock Index Portfolio - Service Class	ING Stock Index Portfolio - Service Class
ING Variable Portfolios, Inc.:	ING Variable Portfolios, Inc.:
ING Euro STOXX 50 Index Portfolio - Institutional Class	ING Dow Jones Euro STOXX 50 Index Portfolio - Institutional Class
Invesco Variable Insurance Funds:	AIM Variable Insurance Funds:
Invesco V.I. Capital Appreciation Fund - Series I Shares	AIM V.I. Capital Appreciation Fund - Series I Shares
Invesco V.I. Core Equity Fund - Series I Shares	AIM V.I. Core Equity Fund - Series I Shares
Oppenheimer Variable Account Funds:	Oppenheimer Variable Account Funds:
Oppenheimer Small- & Mid-Cap Growth Fund/VA	Oppenheimer MidCap Fund/VA

During 2010, the following Divisions were closed to contractowners:

Federated Insurance Series:
      Federated Clover Value Fund II - Primary Shares Federated Equity Income Fund II
      Federated International Equity Fund II Federated Mid Cap Growth Strategies Fund II

ING Investors Trust:
       ING Wells Fargo Small Cap Disciplined Portfolio - Service Class

ING Partners, Inc.: 
       ING Baron Asset Portfolio - Service Class 

ING Variable Portfolios, Inc.: 
       ING Opportunistic Large Cap Portfolio - Class I

Premier VIT:
     Premier VIT OpCap Mid Cap Portfolio - Class I

The following fund had no activity for the year ended December 31, 2010, and was closed:

ING Variable Portfolios, Inc.:
     ING Opportunistic Large Cap Portfolio - Class S

101

VARIABLE ANNUITY ACCOUNT B OF

ING LIFE INSURANCE AND ANNUITY COMPANY

Notes to Financial Statements

		The following Divisions were available to contractowners during 2010, but did not have
		any activity as of December 31, 2010:
		American Funds Insurance Series:	ING Partners, Inc. (continued):
		American Funds Insurance Series® Growth-Income	ING Templeton Foreign Equity Portfolio - Service
		Fund - Class 2	Class
		EuroPacific Growth Fund®:	ING Van Kampen Equity and Income Portfolio -
		American Funds EuroPacific Growth Fund® -	Service Class
		Class R-4	ING Variable Funds:
		Fidelity® Variable Insurance Products V:	ING Growth and Income Portfolio - Class S
		Fidelity® VIP Asset Manager Portfolio - Initial Class	ING Growth and Income Portfolio - Adviser Class
		The Growth Fund of America®, Inc.:	Oppenheimer Developing Markets Fund:
		American Funds The Growth Fund of America® -	Oppenheimer Developing Markets Fund - Class A
		Class R-4	Oppenheimer Variable Account Funds:
		ING Investors Trust:	Oppenheimer Strategic Bond Fund/VA
		ING BlackRock Large Cap Growth Portfolio - Service	Pax World Funds Series Trust I:
		Class	Pax World Balanced Fund - Individual Investor
		ING Global Resources Portfolio - Institutional Class	Class
		ING PIMCO High Yield Portfolio - Institutional Class	PIMCO Variable Insurance Trust:
		ING Retirement Moderate Growth Portfolio -	PIMCO VIT Foreign Bond Portfolio (Unhedged) -
		Institutional Class	Administrative Class
		ING U.S. Stock Index Portfolio - Institutional Class	Templeton Income Trust:
		ING Partners, Inc.:	Templeton Global Bond Fund - Class A
		ING Oppenheimer Global Portfolio - Service Class
		ING T. Rowe Price Diversified Mid Cap Growth
		Portfolio - Service Class
2	.	Significant Accounting Policies
		The following is a summary of the significant accounting policies of the Account:
		Use of Estimates
		The preparation of financial statements in conformity with accounting principles
		generally accepted in the United States 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.
		Investments
		Investments are made in shares of a Division and are recorded at fair value, determined
		by the net asset value per share of the respective Division. Investment transactions in each
		Division are recorded on the trade date. Distributions of net investment income and
		capital gains from each Division are recognized on the ex-distribution date. Realized
		gains and losses on redemptions of the shares of the Division are determined on a first-in,
		first-out basis. The difference between cost and current market value of investments
		owned on the day of measurement is recorded as unrealized appreciation or depreciation
		of investments.

102

VARIABLE ANNUITY ACCOUNT B OF

ING LIFE INSURANCE AND ANNUITY COMPANY

Notes to Financial Statements

Federal Income Taxes

Operations of the Account form a part of, and are taxed with, the total operations of ILIAC, which is taxed as a life insurance company under the Internal Revenue Code. Earnings and realized capital gains of the Account attributable to the contractowners are excluded in the determination of the federal income tax liability of ILIAC.

Contractowner Reserves

The annuity reserves of the Account are represented by net assets on the Statements of Assets and Liabilities and are equal to the aggregate account values of the contractowners invested in the Account Divisions. To the extent that benefits to be paid to the contractowners exceed their account values, ILIAC will contribute additional funds to the benefit proceeds. Conversely, if amounts allocated exceed amounts required, transfers may be made to ILIAC. Prior to the annuity date, the Contracts are redeemable for the net cash surrender value of the Contracts.

Changes from Principal Transactions

Included in Changes from Principal Transactions on the Statements of Changes in Net Assets are items which relate to contractowner activity, including deposits, surrenders and withdrawals, benefits, and contract charges. Also included are transfers between the fixed account and the Divisions, transfers between Divisions, and transfers to (from) ILIAC related to gains and losses resulting from actual mortality experience (the full responsibility for which is assumed by ILIAC). Any net unsettled transactions as of the reporting date are included in Due to related parties on the Statements of Assets and Liabilities.

Subsequent Events

The Account has evaluated subsequent events for recognition and disclosure through the date the financial statements as of December 31, 2010 and for the years ended December 31, 2010 and 2009, were issued.

103

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

3. Recently Adopted Accounting Standards

Improving Disclosures about Fair Value Measurements

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-06, “Fair Value Measurements and Disclosure (Topic 820): Improving Disclosures about Fair Value Measurements,” (“ASU 2010-06”), which requires several new disclosures, as well as clarification to existing disclosures, as follows:

§	Significant transfers in and out of Level 1 and Level 2 fair value measurements and the reason for the transfers;
§	Purchases, sales, issuances, and settlement, in the Level 3 fair value measurements reconciliation on a gross basis;
§	Fair value measurement disclosures for each class of assets and liabilities (i.e., disaggregated); and
§	Valuation techniques and inputs for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 fair value measurements.

The provisions of ASU 2010-06 were adopted by the Account on January 1, 2010, except for the disclosures related to the Level 3 reconciliation, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Account determined, however, that there was no effect on the Account’s disclosures, as the guidance is consistent with that previously applied by the Account under FASB Accounting Standards Codification^TM (“ASC”) Topic 820, “Fair Value Measurements and Disclosures” (“ASC Topic 820”). As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Account’s net assets and results of operations.

Subsequent Events

In May 2009, the FASB issued new guidance on subsequent events, included in ASC

Topic 855, “Subsequent Events,” which establishes:

§	The period after the balance sheet date during which an entity should evaluate events or transactions for potential recognition or disclosure in the financial statements;
§	The circumstances under which an entity should recognize such events or transactions in its financial statements; and
§	Disclosures regarding such events or transactions and the date through which an entity has evaluated subsequent events.

These provisions, as included in ASC Topic 855, were adopted by the Account on June 30, 2009. In addition, in February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure

104

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

Requirements,” which clarifies that an SEC filer should evaluate subsequent events through the date the financial statements are issued and eliminates the requirement for an SEC filer to disclose that date, effective upon issuance. The Account determined that there was no effect on the Account’s net assets and results of operations upon adoption, as the guidance is consistent with that previously applied by the Account under US auditing standards. The disclosure provisions included in ASC Topic 855, as amended, are presented in the Significant Accounting Policies footnote.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly

In April 2009, the FASB issued new guidance on determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly, included in ASC Topic 820, “Fair Value Measurements and Disclosures,” which confirms that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. In addition, this guidance, as included in ASC Topic 820:

§	Clarifies factors for determining whether there has been a significant decrease in market activity for an asset or liability;
§	Requires an entity to determine whether a transaction is not orderly based on the weight of the evidence; and
§	Requires an entity to disclose in interim and annual periods the input and valuation technique used to measure fair value and any change in valuation technique.

These provisions, as included in ASC Topic 820, were adopted by the Account on April 1, 2009. The Account determined, however, that there was no effect on the Account’s net assets and results of operations upon adoption, as its guidance is consistent with that previously applied by the Account under US GAAP.

4. Financial Instruments

The Account invests assets in shares of open-end mutual funds, which process orders to purchase and redeem shares on a daily basis at the fund's next computed net asset values (“NAV”). The fair value of the Account’s assets is based on the NAVs of mutual funds, which are obtained from the custodian and reflect the fair values of the mutual Fund Investments. The NAV is calculated daily upon close of the New York Stock Exchange and is based on the fair values of the underlying securities.

The Account’s financial assets are recorded at fair value on the Statements of Assets and Liabilities and are categorized as Level 1 as of December 31, 2010 and 2009, respectively, based on the priority of the inputs to the valuation technique below. The Account had no financial liabilities as of December 31, 2010.

105

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

The ASC Topic 820 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.

§	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. 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.

5. Charges and Fees

Under the terms of the Contracts, certain charges are allocated to the Contracts to cover ILIAC’s expenses in connection with the issuance and administration of the Contracts. Following is a summary of these charges:

Mortality and Expense Risk Charges

ILIAC assumes mortality and expense risks related to the operations of the Account and, in accordance with the terms of the Contracts, deducts a daily charge from the assets of the Account. Daily charges are deducted at annual rates of up to 1.50% of the average daily net asset value of each Division of the Account to cover these risks, as specified in the Contracts.

Asset Based Administrative Charges

A daily charge to cover administrative expenses of the Account is deducted at an annual rate of up to 0.25% of the assets attributable to the Contracts.

106

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

Contract Maintenance Charges

An annual Contract maintenance fee of up to $40 may be deducted from the accumulation value of Contracts to cover ongoing administrative expenses, as specified in the Contract.

Contingent Deferred Sales Charges

For certain Contracts, a contingent deferred sales charge (“Surrender Charge”) is imposed as a percentage that ranges up to 7.00% of each premium payment if the Contract is surrendered or an excess partial withdrawal is taken, as specified in the Contract.

Premium Taxes

For certain Contracts, premium taxes are deducted, where applicable, from the accumulation value of each Contract. The amount and timing of the deduction depends on the contractowner’s state of residence and currently ranges up to 4.00% of premiums.

Other Contract Charges

Under the Fixed/Variable Single Premium Immediate Annuity contract, an additional annual charge of 1.00% is deducted daily from the accumulation values for contractowners who select the Guaranteed Minimum Income feature. For Deferred Variable Annuity contracts, an additional annual charge of up to 0.50% is deducted daily from the accumulation value for amounts invested in the ING GET U.S. Core Portfolio Funds. In addition, an annual charge of up to 0.50% is deducted daily from the accumulation values for contractowners who select the Premium Bonus Option feature.

Fees Waived by ILIAC

Certain charges and fees for various types of Contracts are currently waived by ILIAC. ILIAC reserves the right to discontinue these waivers at its discretion or to conform with changes in the law.

6. Related Party Transactions

During the year ended December 31, 2010, management fees were paid indirectly to IIL, an affiliate of the Company, in its capacity as investment adviser to the ING Balanced Portfolio, Inc., ING Intermediate Bond Portfolio, ING Money Market Portfolio, ING Strategic Allocation Portfolios, Inc., ING Variable Funds, ING Variable Insurance Trust, ING Variable Portfolios, Inc., and ING Variable Products Trust. The annual fee rate ranged from 0.08% to 0.95% of the average net assets of each respective Fund.

Management fees were also paid indirectly to DSL, an affiliate of the Company, in its capacity as investment manager to ING Investors Trust and ING Partners, Inc. The Trusts’ advisory agreement provided for fees at annual rates ranging up to 1.25% of the average net assets of each respective Fund.

107

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

7. Purchases and Sales of Investment Securities

The aggregate cost of purchases and proceeds from sales of investments follows:

	Year ended December 31
	2010				2009
	Purchases		Sales		Purchases		Sales
	(Dollars in thousands)
American Funds Insurance Series:
American Funds Insurance Series® International Fund - Class 2	$	4	$	-	$	-	$         -
Calvert Variable Series, Inc.:
Calvert VP SRI Balanced Portfolio		89		480		209	353
Federated Insurance Series:
Federated Capital Appreciation Fund II - Primary Shares		7,553		1,546		-	-
Federated Capital Income Fund II		2,572		798		111	326
Federated Clover Value Fund II - Primary Shares		204		7,979		310	2,080
Federated Equity Income Fund II		140		2,320		136	492
Federated Fund for U.S. Government Securities II		232		595		97	397
Federated High Income Bond Fund II - Primary Shares		423		855		487	861
Federated International Equity Fund II		10		1,494		67	291
Federated Kaufmann Fund II - Primary Shares		2,383		525		-	-
Federated Mid Cap Growth Strategies Fund II		33		2,542		78	791
Federated Prime Money Fund II		1,511		1,054		1,305	1,549
Fidelity® Variable Insurance Products:
Fidelity® VIP Equity-Income Portfolio - Initial Class		2,025		12,340		2,018	11,438
Fidelity® VIP Growth Portfolio - Initial Class		1,119		1,847		309	1,593
Fidelity® VIP High Income Portfolio - Initial Class		15		30		461	396
Fidelity® VIP Overseas Portfolio - Initial Class		1,011		2,036		823	951
Fidelity® Variable Insurance Products II:
Fidelity® VIP Contrafund® Portfolio - Initial Class		5,057		22,093		4,286	20,151
Fidelity® VIP Index 500 Portfolio - Initial Class		1,034		3,982		1,437	4,123
Fidelity® Variable Insurance Products V:
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class		40		113		88	98
Franklin Templeton Variable Insurance Products Trust:
Franklin Small Cap Value Securities Fund - Class 2		1,128		1,883		755	690
ING Balanced Portfolio, Inc.:
ING Balanced Portfolio - Class I		4,418		12,170		4,550	15,156
ING Intermediate Bond Portfolio:
ING Intermediate Bond Portfolio - Class I		10,430		19,047		25,841	26,612
ING Investors Trust:
ING American Funds Growth Portfolio		452		4,339		3,078	3,481
ING American Funds Growth-Income Portfolio		532		3,797		1,839	2,690
ING American Funds International Portfolio		682		4,225		4,354	3,439
ING Artio Foreign Portfolio - Service Class		846		3,452		1,800	2,738
ING BlackRock Inflation Protected Bond Portfolio - Institutional
Class		375		77		-	-
ING BlackRock Large Cap Growth Portfolio - Institutional Class		884		3,833		876	3,796
ING Clarion Global Real Estate Portfolio - Institutional Class		658		855		746	433

108

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
	Year ended December 31
	2010				2009
	Purchases		Sales		Purchases		Sales
	(Dollars in thousands)
ING Investors Trust (continued):
ING Clarion Global Real Estate Portfolio - Service Class	$	234	$	273	$	210	$	253
ING Clarion Real Estate Portfolio - Service Class		1,391		1,041		465		277
ING FMRSM Diversified Mid Cap Portfolio - Institutional Class		1,232		3,242		1,196		3,270
ING FMRSM Diversified Mid Cap Portfolio - Service Class		889		467		394		290
ING Franklin Income Portfolio - Service Class		793		1,372		1,529		1,250
ING Franklin Mutual Shares Portfolio - Service Class		233		937		371		399
ING Global Resources Portfolio - Service Class		1,846		3,673		1,894		1,636
ING Janus Contrarian Portfolio - Service Class		916		1,034		1,141		251
ING JPMorgan Emerging Markets Equity Portfolio - Institutional
Class		2,854		1,681		2,238		1,619
ING JPMorgan Emerging Markets Equity Portfolio - Service Class		5,176		2,966		2,522		1,436
ING JPMorgan Small Cap Core Equity Portfolio - Institutional
Class		232		596		128		433
ING JPMorgan Small Cap Core Equity Portfolio - Service Class		176		33		26		10
ING Large Cap Growth Portfolio - Institutional Class		864		1,989		893		1,593
ING Lord Abbett Growth and Income Portfolio - Institutional
Class		304		1,245		208		1,542
ING Lord Abbett Growth and Income Portfolio - Service Class		77		216		130		175
ING Marsico Growth Portfolio - Service Class		384		675		487		549
ING Marsico International Opportunities Portfolio - Service Class		504		1,722		332		1,608
ING MFS Total Return Portfolio - Institutional Class		726		10,461		2,292		10,702
ING MFS Total Return Portfolio - Service Class		189		485		422		427
ING MFS Utilities Portfolio - Service Class		682		659		491		869
ING PIMCO High Yield Portfolio - Service Class		2,115		2,184		2,892		1,105
ING Pioneer Equity Income Portfolio - Institutional Class		528		683		431		1,439
ING Pioneer Fund Portfolio - Institutional Class		2,318		4,165		1,355		2,227
ING Pioneer Mid Cap Value Portfolio - Institutional Class		432		668		297		617
ING Pioneer Mid Cap Value Portfolio - Service Class		298		319		253		341
ING Retirement Growth Portfolio - Adviser Class		395		1,041		5,831		318
ING Retirement Moderate Growth Portfolio - Adviser Class		225		2,097		7,877		342
ING Retirement Moderate Portfolio - Adviser Class		1,123		3,660		9,334		434
ING T. Rowe Price Capital Appreciation Portfolio - Service Class		2,065		2,926		2,934		2,316
ING T. Rowe Price Equity Income Portfolio - Service Class		988		1,900		2,085		1,488
ING Templeton Global Growth Portfolio - Service Class		84		259		70		134
ING U.S. Stock Index Portfolio - Service Class		192		147		-		-
ING Van Kampen Growth and Income Portfolio - Service Class		38		138		175		313
ING Wells Fargo HealthCare Portfolio - Service Class		119		203		96		522
ING Wells Fargo Small Cap Disciplined Portfolio - Service Class		193		478		199		88
ING Money Market Portfolio:
ING Money Market Portfolio - Class I		19,116		61,802		26,385		93,406
ING Money Market Portfolio - Class S		387		74		-		-

109

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
	Year ended December 31
	2010				2009
	Purchases		Sales		Purchases		Sales
	(Dollars in thousands)
ING Partners, Inc.:
ING American Century Small-Mid Cap Value Portfolio - Service
Class	$	738	$	145	$	275	$	545
ING Baron Asset Portfolio - Service Class		2		339		18		30
ING Baron Small Cap Growth Portfolio - Service Class		390		837		420		730
ING Columbia Small Cap Value Portfolio - Service Class		327		400		41		279
ING Davis New York Venture Portfolio - Service Class		490		618		725		1,017
ING JPMorgan Mid Cap Value Portfolio - Service Class		357		715		231		312
ING Legg Mason ClearBridge Aggressive Growth Portfolio -
Initial Class		717		3,057		458		2,870
ING Oppenheimer Global Portfolio - Initial Class		2,778		14,053		4,431		12,950
ING Oppenheimer Global Strategic Income Portfolio - Initial
Class		7,927		12,246		4,836		11,608
ING Oppenheimer Global Strategic Income Portfolio - Service
Class		4		9		80		7
ING PIMCO Total Return Portfolio - Service Class		4,172		3,897		5,220		1,420
ING Pioneer High Yield Portfolio - Initial Class		4,224		6,076		4,998		5,315
ING Solution 2015 Portfolio - Service Class		424		320		866		421
ING Solution 2025 Portfolio - Service Class		457		318		694		468
ING Solution 2035 Portfolio - Service Class		957		393		926		188
ING Solution 2045 Portfolio - Service Class		352		692		312		110
ING Solution Income Portfolio - Service Class		331		953		849		887
ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial
Class		1,231		5,911		790		5,050
ING T. Rowe Price Growth Equity Portfolio - Initial Class		1,447		5,582		1,804		5,255
ING Templeton Foreign Equity Portfolio - Initial Class		2,201		4,757		1,554		3,827
ING Thornburg Value Portfolio - Initial Class		2,133		3,768		1,604		2,893
ING UBS U.S. Large Cap Equity Portfolio - Initial Class		480		3,121		481		3,119
ING Van Kampen Comstock Portfolio - Service Class		230		459		196		756
ING Van Kampen Equity and Income Portfolio - Initial Class		1,721		12,660		1,922		14,167
ING Strategic Allocation Portfolios, Inc.:
ING Strategic Allocation Conservative Portfolio - Class I		1,130		1,458		1,811		2,056
ING Strategic Allocation Growth Portfolio - Class I		512		1,203		1,628		1,894
ING Strategic Allocation Moderate Portfolio - Class I		1,815		1,962		1,819		1,984
ING Variable Funds:
ING Growth and Income Portfolio - Class I		17,723		34,671		13,004		32,475
ING Variable Insurance Trust:
ING GET U.S. Core Portfolio - Series 5		26		134		62		232
ING GET U.S. Core Portfolio - Series 6		355		3,636		646		4,456
ING GET U.S. Core Portfolio - Series 7		355		2,182		264		2,092
ING GET U.S. Core Portfolio - Series 8		181		1,302		222		2,394
ING GET U.S. Core Portfolio - Series 9		139		1,130		183		1,200
ING GET U.S. Core Portfolio - Series 10		120		626		150		1,657

110

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
	Year ended December 31
	2010				2009
	Purchases		Sales		Purchases		Sales
	(Dollars in thousands)
ING Variable Insurance Trust (continued):
ING GET U.S. Core Portfolio - Series 11	$	142	$	1,347	$	294	$	2,035
ING GET U.S. Core Portfolio - Series 12		398		3,618		572		4,611
ING GET U.S. Core Portfolio - Series 13		348		2,653		656		4,591
ING GET U.S. Core Portfolio - Series 14		438		3,667		786		8,351
ING Variable Portfolios, Inc.:
ING BlackRock Science and Technology Opportunities Portfolio -
Class I		2,302		2,094		1,629		1,730
ING Euro STOXX 50 Index Portfolio - Institutional Class		32		3		-		-
ING Index Plus LargeCap Portfolio - Class I		4,674		20,079		6,406		15,662
ING Index Plus MidCap Portfolio - Class I		526		1,704		445		1,052
ING Index Plus SmallCap Portfolio - Class I		459		1,081		292		551
ING International Index Portfolio - Class I		1,208		3,098		11,629		1,079
ING International Index Portfolio - Class S		19		10		56		19
ING Opportunistic Large Cap Portfolio - Class I		438		12,891		9,126		1,608
ING Russell™ Large Cap Growth Index Portfolio - Class I		504		4,588		27,255		2,970
ING Russell™ Large Cap Index Portfolio - Class I		2,406		4,947		18,026		1,912
ING Russell™ Large Cap Value Index Portfolio - Class I		1,514		3,013		9,784		1,370
ING Russell™ Large Cap Value Index Portfolio - Class S		209		214		1,470		160
ING Russell™ Mid Cap Growth Index Portfolio - Class S		281		36		109		20
ING Russell™ Mid Cap Index Portfolio - Class I		199		130		92		1
ING Russell™ Small Cap Index Portfolio - Class I		359		138		93		34
ING Small Company Portfolio - Class I		1,784		6,017		1,610		5,101
ING U.S. Bond Index Portfolio - Class I		1,295		690		812		247
ING Variable Products Trust:
ING International Value Portfolio - Class I		173		1,593		461		1,328
ING MidCap Opportunities Portfolio - Class I		1,418		272		126		249
ING MidCap Opportunities Portfolio - Class S		391		693		174		838
ING SmallCap Opportunities Portfolio - Class I		755		348		69		296
ING SmallCap Opportunities Portfolio - Class S		298		425		104		468
Invesco Variable Insurance Funds:
Invesco V.I. Capital Appreciation Fund - Series I Shares		42		129		98		77
Invesco V.I. Core Equity Fund - Series I Shares		193		317		486		322
Janus Aspen Series:
Janus Aspen Series Balanced Portfolio - Institutional Shares		-		-		1		6
Janus Aspen Series Enterprise Portfolio - Institutional Shares		-		-		-		-
Janus Aspen Series Flexible Bond Portfolio - Institutional Shares		-		-		-		-
Janus Aspen Series Janus Portfolio - Institutional Shares		-		-		-		4
Janus Aspen Series Worldwide Portfolio - Institutional Shares		-		-		-		1
Lord Abbett Series Fund, Inc.:
Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC		258		319		181		466

111

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
	Year ended December 31
	2010				2009
	Purchases		Sales		Purchases		Sales
	(Dollars in thousands)
Oppenheimer Variable Account Funds:
Oppenheimer Global Securities/VA	$	1	$	8	$	2	$	3
Oppenheimer Main Street Fund®/VA		3		44		5		34
Oppenheimer Main Street Small Cap Fund®/VA		236		90		102		44
Oppenheimer Small- & Mid-Cap Growth Fund/VA		436		613		294		145
PIMCO Variable Insurance Trust:
PIMCO Real Return Portfolio - Administrative Class		2,492		4,567		5,987		3,809
Pioneer Variable Contracts Trust:
Pioneer Emerging Markets VCT Portfolio - Class I		2,232		1,155		2,845		2,009
Pioneer High Yield VCT Portfolio - Class I		93		196		316		201
Premier VIT:
Premier VIT OpCap Mid Cap Portfolio - Class I		409		1,184		611		4
Wanger Advisors Trust:
Wanger International		1,039		766		1,449		654
Wanger Select		710		734		1,298		1,241
Wanger USA		362		106		292		202

112

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

8. Changes in Units

The changes in units outstanding were as follows:

	Year ended December 31
	2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
American Funds Insurance Series:
American Funds Insurance Series® International Fund - Class 2	290	-	290		-	-	-
Calvert Variable Series, Inc.:
Calvert VP SRI Balanced Portfolio	6,380	24,069	(17,689	)	14,851	38,693	(23,842	)
Federated Insurance Series:
Federated Capital Appreciation Fund II - Primary Shares	698,991	141,963	557,028		-	-	-
Federated Capital Income Fund II	142,394	42,173	100,221		13	20,716	(20,703	)
Federated Clover Value Fund II - Primary Shares	2,899	388,024	(385,125	)	799	115,699	(114,900	)
Federated Equity Income Fund II	1,299	168,427	(167,128	)	420	38,414	(37,994	)
Federated Fund for U.S. Government Securities II	6,880	28,772	(21,892	)	158	20,472	(20,314	)
Federated High Income Bond Fund II - Primary Shares	2,496	33,294	(30,798	)	372	43,405	(43,033	)
Federated International Equity Fund II	276	99,350	(99,074	)	1,020	21,618	(20,598	)
Federated Kaufmann Fund II - Primary Shares	221,247	46,291	174,956		-	-	-
Federated Mid Cap Growth Strategies Fund II	871	115,106	(114,235	)	744	40,712	(39,968	)
Federated Prime Money Fund II	111,832	75,698	36,134		94,937	111,757	(16,820	)
Fidelity® Variable Insurance Products:
Fidelity® VIP Equity-Income Portfolio - Initial Class	289,457	970,275	(680,818	)	273,940	1,141,026	(867,086	)
Fidelity® VIP Growth Portfolio - Initial Class	116,977	157,602	(40,625	)	84,281	148,777	(64,496	)
Fidelity® VIP High Income Portfolio - Initial Class	8,969	11,148	(2,179	)	52,727	44,351	8,376
Fidelity® VIP Overseas Portfolio - Initial Class	59,163	119,285	(60,122	)	85,872	95,732	(9,860	)
Fidelity® Variable Insurance Products II:
Fidelity® VIP Contrafund® Portfolio - Initial Class	433,266	1,334,176	(900,910	)	628,677	1,570,891	(942,214	)
Fidelity® VIP Index 500 Portfolio - Initial Class	16,847	180,953	(164,106	)	39,274	245,309	(206,035	)
Fidelity® Variable Insurance Products V:
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class	1,115	6,177	(5,062	)	1	4,478	(4,477	)

113

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
	Year ended December 31
	2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
Franklin Templeton Variable Insurance Products Trust:
Franklin Small Cap Value Securities Fund - Class 2	115,437	159,524	(44,087	)	71,984	79,435	(7,451	)
ING Balanced Portfolio, Inc.:
ING Balanced Portfolio - Class I	173,770	670,363	(496,593	)	123,503	898,954	(775,451	)
ING Intermediate Bond Portfolio:
ING Intermediate Bond Portfolio - Class I	1,144,645	1,890,687	(746,042	)	2,092,218	2,358,671	(266,453	)
ING Investors Trust:
ING American Funds Growth Portfolio	147,453	486,341	(338,888	)	277,156	543,521	(266,365	)
ING American Funds Growth-Income Portfolio	97,831	433,819	(335,988	)	199,214	425,532	(226,318	)
ING American Funds International Portfolio	138,273	401,481	(263,208	)	237,516	421,162	(183,646	)
ING Artio Foreign Portfolio - Service Class	95,056	349,996	(254,940	)	186,825	324,157	(137,332	)
ING BlackRock Inflation Protected Bond Portfolio - Institutional Class	35,269	7,252	28,017		-	-	-
ING BlackRock Large Cap Growth Portfolio - Institutional Class	181,753	539,064	(357,311	)	190,264	625,964	(435,700	)
ING Clarion Global Real Estate Portfolio - Institutional Class	86,513	121,479	(34,966	)	98,855	68,330	30,525
ING Clarion Global Real Estate Portfolio - Service Class	31,561	44,066	(12,505	)	35,469	43,225	(7,756	)
ING Clarion Real Estate Portfolio - Service Class	228,750	196,986	31,764		78,663	64,129	14,534
ING FMRSM Diversified Mid Cap Portfolio - Institutional Class	210,859	399,335	(188,476	)	246,515	523,391	(276,876	)
ING FMRSM Diversified Mid Cap Portfolio - Service Class	80,078	52,369	27,709		42,448	32,872	9,576
ING Franklin Income Portfolio - Service Class	77,979	150,930	(72,951	)	215,074	210,719	4,355
ING Franklin Mutual Shares Portfolio - Service Class	40,388	115,650	(75,262	)	65,643	66,760	(1,117	)
ING Global Resources Portfolio - Service Class	244,937	419,898	(174,961	)	323,567	296,460	27,107
ING Janus Contrarian Portfolio - Service Class	134,858	157,370	(22,512	)	212,435	52,267	160,168
ING JPMorgan Emerging Markets Equity Portfolio - Institutional Class	209,652	157,191	52,461		232,513	188,745	43,768
ING JPMorgan Emerging Markets Equity Portfolio - Service Class	257,454	184,636	72,818		182,617	128,172	54,445
ING JPMorgan Small Cap Core Equity Portfolio - Institutional Class	42,412	72,093	(29,681	)	25,050	62,483	(37,433	)
ING JPMorgan Small Cap Core Equity Portfolio - Service Class	13,316	3,097	10,219		2,312	935	1,377
ING Large Cap Growth Portfolio - Institutional Class	104,885	186,793	(81,908	)	93,499	159,508	(66,009	)
ING Lord Abbett Growth and Income Portfolio - Institutional Class	66,508	169,860	(103,352	)	49,183	236,015	(186,832	)
ING Lord Abbett Growth and Income Portfolio - Service Class	12,332	27,767	(15,435	)	21,080	25,670	(4,590	)

114

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
	Year ended December 31
	2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
ING Investors Trust (continued):
ING Marsico Growth Portfolio - Service Class	40,566	71,968	(31,402	)	74,585	82,980	(8,395	)
ING Marsico International Opportunities Portfolio - Service Class	111,257	217,466	(106,209	)	53,501	192,342	(138,841	)
ING MFS Total Return Portfolio - Institutional Class	234,608	1,089,895	(855,287	)	370,074	1,337,672	(967,598	)
ING MFS Total Return Portfolio - Service Class	25,429	47,593	(22,164	)	35,478	40,175	(4,697	)
ING MFS Utilities Portfolio - Service Class	58,828	60,712	(1,884	)	52,339	91,416	(39,077	)
ING PIMCO High Yield Portfolio - Service Class	139,713	165,323	(25,610	)	254,085	105,594	148,491
ING Pioneer Equity Income Portfolio - Institutional Class	72,737	98,172	(25,435	)	166,042	340,651	(174,609	)
ING Pioneer Fund Portfolio - Institutional Class	231,382	408,843	(177,461	)	168,119	272,504	(104,385	)
ING Pioneer Mid Cap Value Portfolio - Institutional Class	67,059	92,594	(25,535	)	53,856	97,088	(43,232	)
ING Pioneer Mid Cap Value Portfolio - Service Class	47,740	50,307	(2,567	)	51,790	66,134	(14,344	)
ING Retirement Growth Portfolio - Adviser Class	65,215	129,291	(64,076	)	633,277	33,374	599,903
ING Retirement Moderate Growth Portfolio - Adviser Class	41,628	226,481	(184,853	)	854,517	59,018	795,499
ING Retirement Moderate Portfolio - Adviser Class	205,859	449,115	(243,256	)	995,166	79,793	915,373
ING T. Rowe Price Capital Appreciation Portfolio - Service Class	181,228	254,436	(73,208	)	324,960	284,558	40,402
ING T. Rowe Price Equity Income Portfolio - Service Class	124,378	201,582	(77,204	)	258,791	225,432	33,359
ING Templeton Global Growth Portfolio - Service Class	48,423	69,503	(21,080	)	16,116	25,672	(9,556	)
ING U.S. Stock Index Portfolio - Service Class	19,078	13,935	5,143		-	-	-
ING Van Kampen Growth and Income Portfolio - Service Class	11,045	20,088	(9,043	)	22,385	37,254	(14,869	)
ING Wells Fargo HealthCare Portfolio - Service Class	46,222	53,338	(7,116	)	24,224	68,498	(44,274	)
ING Wells Fargo Small Cap Disciplined Portfolio - Service Class	39,046	76,206	(37,160	)	31,762	13,261	18,501
ING Money Market Portfolio:
ING Money Market Portfolio - Class I	3,612,313	6,809,933	(3,197,620	)	5,713,101	10,634,733	(4,921,632	)
ING Money Market Portfolio - Class S	38,861	7,275	31,586		-	-	-
ING Partners, Inc.:
ING American Century Small-Mid Cap Value Portfolio - Service Class	61,699	21,427	40,272		40,359	55,373	(15,014	)
ING Baron Asset Portfolio - Service Class	334	40,020	(39,686	)	2,824	4,752	(1,928	)
ING Baron Small Cap Growth Portfolio - Service Class	50,417	78,768	(28,351	)	66,262	97,489	(31,227	)
ING Columbia Small Cap Value Portfolio - Service Class	42,006	52,614	(10,608	)	22,323	55,869	(33,546	)

115

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
			Year ended December 31
		2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
ING Partners, Inc. (continued):
ING Davis New York Venture Portfolio - Service Class	82,822	97,897	(15,075	)	139,831	164,697	(24,866	)
ING JPMorgan Mid Cap Value Portfolio - Service Class	29,300	61,305	(32,005	)	66,213	57,313	8,900
ING Legg Mason ClearBridge Aggressive Growth Portfolio - Initial Class	109,880	317,684	(207,804	)	68,170	333,603	(265,433	)
ING Oppenheimer Global Portfolio - Initial Class	304,209	1,259,601	(955,392	)	361,352	1,528,009	(1,166,657	)
ING Oppenheimer Global Strategic Income Portfolio - Initial Class	964,257	1,373,171	(408,914	)	738,914	1,524,521	(785,607	)
ING Oppenheimer Global Strategic Income Portfolio - Service Class	-	620	(620	)	8,318	563	7,755
ING PIMCO Total Return Portfolio - Service Class	312,483	318,095	(5,612	)	411,921	184,842	227,079
ING Pioneer High Yield Portfolio - Initial Class	379,388	600,756	(221,368	)	558,294	690,660	(132,366	)
ING Solution 2015 Portfolio - Service Class	39,617	34,828	4,789		85,865	54,725	31,140
ING Solution 2025 Portfolio - Service Class	43,202	32,509	10,693		94,029	76,134	17,895
ING Solution 2035 Portfolio - Service Class	99,332	42,487	56,845		108,568	26,722	81,846
ING Solution 2045 Portfolio - Service Class	37,160	72,055	(34,895	)	41,522	18,629	22,893
ING Solution Income Portfolio - Service Class	20,737	77,576	(56,839	)	45,268	57,471	(12,203	)
ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial Class	184,164	533,457	(349,293	)	221,453	675,726	(454,273	)
ING T. Rowe Price Growth Equity Portfolio - Initial Class	103,190	261,068	(157,878	)	158,459	310,627	(152,168	)
ING Templeton Foreign Equity Portfolio - Initial Class	304,266	649,503	(345,237	)	372,466	711,560	(339,094	)
ING Thornburg Value Portfolio - Initial Class	165,842	273,917	(108,075	)	143,357	276,675	(133,318	)
ING UBS U.S. Large Cap Equity Portfolio - Initial Class	63,351	291,239	(227,888	)	50,284	324,188	(273,904	)
ING Van Kampen Comstock Portfolio - Service Class	16,522	34,715	(18,193	)	24,019	86,403	(62,384	)
ING Van Kampen Equity and Income Portfolio - Initial Class	153,573	1,128,815	(975,242	)	277,154	1,577,239	(1,300,085	)
ING Strategic Allocation Portfolios, Inc.:
ING Strategic Allocation Conservative Portfolio - Class I	44,515	83,054	(38,539	)	84,168	140,161	(55,993	)
ING Strategic Allocation Growth Portfolio - Class I	13,738	81,190	(67,452	)	35,818	172,862	(137,044	)
ING Strategic Allocation Moderate Portfolio - Class I	96,134	123,773	(27,639	)	50,859	147,962	(97,103	)
ING Variable Funds:
ING Growth and Income Portfolio - Class I	1,671,662	2,586,747	(915,085	)	1,402,356	2,163,221	(760,865	)

116

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
			Year ended December 31
		2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
ING Variable Insurance Trust:
ING GET U.S. Core Portfolio - Series 5	12,249	22,950	(10,701	)	8,447	28,132	(19,685	)
ING GET U.S. Core Portfolio - Series 6	84,099	408,334	(324,235	)	48,310	427,379	(379,069	)
ING GET U.S. Core Portfolio - Series 7	37,810	219,693	(181,883	)	5,681	191,041	(185,360	)
ING GET U.S. Core Portfolio - Series 8	9,261	121,291	(112,030	)	11,515	230,339	(218,824	)
ING GET U.S. Core Portfolio - Series 9	44	97,840	(97,796	)	18,353	123,182	(104,829	)
ING GET U.S. Core Portfolio - Series 10	141	53,512	(53,371	)	8,470	164,985	(156,515	)
ING GET U.S. Core Portfolio - Series 11	22,092	141,663	(119,571	)	2,059	187,548	(185,489	)
ING GET U.S. Core Portfolio - Series 12	29,847	351,555	(321,708	)	2,465	425,873	(423,408	)
ING GET U.S. Core Portfolio - Series 13	28,701	259,093	(230,392	)	60,925	483,678	(422,753	)
ING GET U.S. Core Portfolio - Series 14	70,821	404,076	(333,255	)	1,106,881	1,906,670	(799,789	)
ING Variable Portfolios, Inc.:
ING BlackRock Science and Technology Opportunities Portfolio - Class I	598,273	545,613	52,660		542,180	541,427	753
ING Euro STOXX 50 Index Portfolio - Institutional Class	3,928	302	3,626		-	-	-
ING Index Plus LargeCap Portfolio - Class I	728,151	2,186,850	(1,458,699	)	1,279,906	2,757,182	(1,477,276	)
ING Index Plus MidCap Portfolio - Class I	42,515	102,930	(60,415	)	57,554	90,970	(33,416	)
ING Index Plus SmallCap Portfolio - Class I	42,961	88,565	(45,604	)	53,811	73,198	(19,387	)
ING International Index Portfolio - Class I	125,044	330,349	(205,305	)	1,056,564	102,833	953,731
ING International Index Portfolio - Class S	1,418	821	597		4,775	1,450	3,325
ING Opportunistic Large Cap Portfolio - Class I	20,436	963,690	(943,254	)	731,488	122,505	608,983
ING Russell™ Large Cap Growth Index Portfolio - Class I	91,780	421,842	(330,062	)	2,724,954	266,795	2,458,159
ING Russell™ Large Cap Index Portfolio - Class I	180,172	412,538	(232,366	)	1,737,460	183,155	1,554,305
ING Russell™ Large Cap Value Index Portfolio - Class I	101,766	278,689	(176,923	)	925,886	113,716	812,170
ING Russell™ Large Cap Value Index Portfolio - Class S	2,790	15,308	(12,518	)	137,754	12,385	125,369
ING Russell™ Mid Cap Growth Index Portfolio - Class S	20,066	5,009	15,057		9,834	1,976	7,858
ING Russell™ Mid Cap Index Portfolio - Class I	19,562	15,869	3,693		16,541	2,210	14,331
ING Russell™ Small Cap Index Portfolio - Class I	33,574	15,063	18,511		13,743	4,745	8,998
ING Small Company Portfolio - Class I	132,154	323,791	(191,637	)	166,607	388,193	(221,586	)
ING U.S. Bond Index Portfolio - Class I	108,200	53,532	54,668		80,002	26,463	53,539

117

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
			Year ended December 31
		2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
ING Variable Products Trust:
ING International Value Portfolio - Class I	61,222	169,877	(108,655	)	51,096	141,564	(90,468	)
ING MidCap Opportunities Portfolio - Class I	91,197	16,051	75,146		19,819	33,072	(13,253	)
ING MidCap Opportunities Portfolio - Class S	56,680	82,298	(25,618	)	43,046	115,337	(72,291	)
ING SmallCap Opportunities Portfolio - Class I	78,398	39,447	38,951		13,871	42,808	(28,937	)
ING SmallCap Opportunities Portfolio - Class S	66,181	81,934	(15,753	)	64,317	120,283	(55,966	)
Invesco Variable Insurance Funds:
Invesco V.I. Capital Appreciation Fund - Series I Shares	4,959	14,831	(9,872	)	15,047	12,433	2,614
Invesco V.I. Core Equity Fund - Series I Shares	21,358	33,045	(11,687	)	75,788	55,158	20,630
Janus Aspen Series:
Janus Aspen Series Balanced Portfolio - Institutional Shares	-	-	-		-	175	(175	)
Janus Aspen Series Enterprise Portfolio - Institutional Shares	-	5	(5	)	-	6	(6	)
Janus Aspen Series Flexible Bond Portfolio - Institutional Shares	-	-	-		-	-	-
Janus Aspen Series Janus Portfolio - Institutional Shares	5	3	2		4	290	(286	)
Janus Aspen Series Worldwide Portfolio - Institutional Shares	-	-	-		-	56	(56	)
Lord Abbett Series Fund, Inc.:
Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC	23,853	27,402	(3,549	)	52,626	85,669	(33,043	)
Oppenheimer Variable Account Funds:
Oppenheimer Global Securities/VA	-	344	(344	)	-	132	(132	)
Oppenheimer Main Street Fund®/VA	17,184	21,456	(4,272	)	25	3,800	(3,775	)
Oppenheimer Main Street Small Cap Fund®/VA	23,149	11,757	11,392		13,285	7,094	6,191
Oppenheimer Small- & Mid-Cap Growth Fund/VA	50,783	71,559	(20,776	)	43,038	22,863	20,175
PIMCO Variable Insurance Trust:
PIMCO Real Return Portfolio - Administrative Class	216,671	379,940	(163,269	)	475,341	336,948	138,393
Pioneer Variable Contracts Trust:
Pioneer Emerging Markets VCT Portfolio - Class I	261,984	156,015	105,969		404,192	291,554	112,638
Pioneer High Yield VCT Portfolio - Class I	9,047	18,859	(9,812	)	30,462	25,542	4,920
Premier VIT:
Premier VIT OpCap Mid Cap Portfolio - Class I	49,724	140,204	(90,480	)	93,456	2,976	90,480

118

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
			Year ended December 31
		2010				2009
	Units	Units	Net Increase		Units	Units	Net Increase
	Issued	Redeemed	(Decrease)		Issued	Redeemed	(Decrease)
Wanger Advisors Trust:
Wanger International	209,869	186,808	23,061		189,878	93,957	95,921
Wanger Select	70,537	74,056	(3,519	)	166,783	167,389	(606	)
Wanger USA	38,053	19,433	18,620		30,356	21,192	9,164

119

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

9. Unit Summary

A summary of units outstanding at December 31, 2010 follows:

Division/Contract	Units	Unit Value		Extended Value
American Funds Insurance Series® International Fund -
Class 2
Contracts in accumulation period:
Non-Qualified V (0.75)	289.658	$	13.95	$	4,041
Calvert VP SRI Balanced Portfolio
Contracts in accumulation period:
Non-Qualified V	1,779.149	$	22.98	$	40,885
Non-Qualified V (0.75)	16,307.187		24.75		403,603
Non-Qualified VII	34,362.782		12.63		434,002
Non-Qualified VIII	6,339.050		12.88		81,647
Non-Qualified XXIII	167.542		10.37		1,737
	58,955.710			$	961,874
Federated Capital Appreciation Fund II - Primary
Shares
Currently payable annuity contracts:	6,438.681	$	10.79	$	69,473
Contracts in accumulation period:
Non-Qualified VII	550,589.155		11.70		6,441,893
	557,027.836			$	6,511,366
Federated Capital Income Fund II
Currently payable annuity contracts:	1,668.697	$	19.03	$	31,755
Contracts in accumulation period:
Non-Qualified VII	189,919.226		18.59		3,530,598
	191,587.923			$	3,562,353
Federated Fund for U.S. Government Securities II
Contracts in accumulation period:
Non-Qualified VII	66,509.165	$	18.95	$	1,260,349
Federated High Income Bond Fund II - Primary Shares
Currently payable annuity contracts:	1,577.428	$	25.41	$	40,082
Contracts in accumulation period:
Non-Qualified VII	164,126.727		24.83		4,075,267
	165,704.155			$	4,115,349
Federated Kaufmann Fund II - Primary Shares
Contracts in accumulation period:
Non-Qualified VII	174,955.834	$	12.21	$	2,136,211
Federated Prime Money Fund II
Currently payable annuity contracts:	1,253.159	$	9.90	$	12,406
Contracts in accumulation period:
Non-Qualified VII	145,919.199		13.34		1,946,562
	147,172.358			$	1,958,968

120

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
Fidelity® VIP Equity-Income Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified V	157,759.606	$	22.00	$	3,470,711
Non-Qualified V (0.75)	393,276.421		23.70		9,320,651
Non-Qualified VII	912,127.712		25.89		23,614,986
Non-Qualified VIII	225,371.234		18.88		4,255,009
Non-Qualified IX	14,293.550		21.26		303,881
Non-Qualified X	10,714.228		22.00		235,713
Non-Qualified XII	9,497.869		13.48		128,031
Non-Qualified XIII	560,282.571		12.99		7,278,071
Non-Qualified XIV	853,270.743		12.50		10,665,884
Non-Qualified XV	255,690.953		12.27		3,137,328
Non-Qualified XVI	4,909.683		11.73		57,591
Non-Qualified XIX	22,854.506		11.37		259,856
Non-Qualified XX	3,490.151		14.06		49,072
Non-Qualified XXIII	18,672.123		10.17		189,895
Non-Qualified XXIV	12,806.536		10.28		131,651
	3,455,017.886			$	63,098,330
Fidelity® VIP Growth Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified V	142,166.611	$	19.26	$	2,738,129
Non-Qualified V (0.75)	290,253.157		20.74		6,019,850
Non-Qualified IX	8,108.365		18.61		150,897
Non-Qualified X	1,635.798		19.26		31,505
Non-Qualified XII	11,760.131		12.47		146,649
Non-Qualified XX	6,609.966		14.25		94,192
Non-Qualified XXIII	14,906.089		9.86		146,974
Non-Qualified XXIV	46,674.584		9.97		465,346
	522,114.701			$	9,793,542
Fidelity® VIP High Income Portfolio - Initial Class
Currently payable annuity contracts	13,851.390	$	12.68 to $14.78	$	187,405
Fidelity® VIP Overseas Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified V	77,854.485	$	18.59	$	1,447,315
Non-Qualified V (0.75)	158,653.792		20.02		3,176,249
Non-Qualified IX	547.726		17.96		9,837
Non-Qualified X	90.607		18.59		1,684
Non-Qualified XII	2,099.386		13.89		29,160
Non-Qualified XX	4,733.385		16.98		80,373
Non-Qualified XXIII	5,343.641		9.31		49,749
Non-Qualified XXIV	14,330.951		9.41		134,854
	263,653.973			$	4,929,221

121

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
Fidelity® VIP Contrafund® Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified V	301,881.201	$	32.67	$	9,862,459
Non-Qualified V (0.75)	752,482.044		35.19		26,479,843
Non-Qualified VII	979,761.512		35.52		34,801,129
Non-Qualified VIII	194,473.959		28.93		5,626,132
Non-Qualified IX	17,633.129		31.57		556,678
Non-Qualified X	10,434.627		32.67		340,899
Non-Qualified XII	49,556.167		19.54		968,328
Non-Qualified XIII	1,003,929.675		18.07		18,141,009
Non-Qualified XIV	1,182,193.372		17.40		20,570,165
Non-Qualified XV	407,335.142		17.08		6,957,284
Non-Qualified XVI	6,266.377		13.52		84,721
Non-Qualified XVIII	410.449		12.90		5,295
Non-Qualified XIX	20,859.271		13.10		273,256
Non-Qualified XX	42,672.996		18.58		792,864
Non-Qualified XXII	2,584.281		11.32		29,254
Non-Qualified XXIII	56,322.174		10.81		608,843
Non-Qualified XXIV	98,083.568		10.93		1,072,053
	5,126,879.944			$	127,170,212
Fidelity® VIP Index 500 Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified VII	804,911.613	$	23.89	$	19,229,338
Non-Qualified VIII	141,782.480		20.26		2,872,513
	946,694.093			$	22,101,851
Fidelity® VIP Investment Grade Bond Portfolio - Initial
Class
Contracts in accumulation period:
Non-Qualified VII	42,476.053	$	20.43	$	867,786
Franklin Small Cap Value Securities Fund - Class 2
Contracts in accumulation period:
Non-Qualified V	36,674.018	$	18.80	$	689,472
Non-Qualified V (0.75)	123,199.935		19.71		2,428,271
Non-Qualified IX	3,135.325		18.36		57,565
Non-Qualified XII	4,069.531		19.62		79,844
Non-Qualified XX	3,458.741		19.17		66,304
Non-Qualified XXIII	8,319.992		11.50		95,680
	178,857.542			$	3,417,136

122

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Balanced Portfolio - Class I
Currently payable annuity contracts:	870,897.738	$	10.04 to $38.49	$	23,832,211
Contracts in accumulation period:
Non-Qualified V	558,020.057		28.21		15,741,746
Non-Qualified V (0.75)	313,193.617		30.39		9,517,954
Non-Qualified VI	11,450.583		23.90		273,669
Non-Qualified VII	540,902.329		27.15		14,685,498
Non-Qualified VIII	113,106.733		19.55		2,211,237
Non-Qualified IX	8,529.314		27.26		232,509
Non-Qualified X	86,309.555		29.19		2,519,376
Non-Qualified XI	1,102.336		24.73		27,261
Non-Qualified XII	4,373.710		14.34		62,719
Non-Qualified XIII	369,597.944		13.78		5,093,060
Non-Qualified XIV	322,199.695		13.27		4,275,590
Non-Qualified XV	155,579.668		13.02		2,025,647
Non-Qualified XVI	5,139.910		10.90		56,025
Non-Qualified XVIII	957.475		10.40		9,958
Non-Qualified XIX	3,267.242		10.56		34,502
Non-Qualified XX	4,804.336		13.99		67,213
Non-Qualified XXII	4,727.906		10.69		50,541
Non-Qualified XXIII	27,971.404		10.72		299,853
Non-Qualified XXIV	2,488.399		10.84		26,974
	3,404,619.951			$	81,043,543
ING Intermediate Bond Portfolio - Class I
Currently payable annuity contracts:	343,179.793	$	12.24 to $90.43	$	9,214,622
Contracts in accumulation period:
Non-Qualified V	421,242.167		22.41		9,440,037
Non-Qualified V (0.75)	588,933.168		24.13		14,210,957
Non-Qualified VI	2,371.848		20.63		48,931
Non-Qualified VII	767,354.921		21.56		16,544,172
Non-Qualified VIII	228,062.358		18.68		4,260,205
Non-Qualified IX	4,665.502		21.65		101,008
Non-Qualified X	68,530.229		22.87		1,567,286
Non-Qualified XI	655.635		21.05		13,801
Non-Qualified XII	498.139		17.21		8,573
Non-Qualified XIII	1,010,389.285		16.79		16,964,436
Non-Qualified XIV	1,214,589.400		16.17		19,639,911
Non-Qualified XV	459,375.165		15.86		7,285,690
Non-Qualified XVI	37,970.175		15.17		576,008
Non-Qualified XIX	55,772.463		14.70		819,855
Non-Qualified XX	4,096.940		13.71		56,169
Non-Qualified XXII	1,348.971		11.75		15,850
Non-Qualified XXIII	10,297.374		11.35		116,875
Non-Qualified XXIV	15,414.095		11.47		176,800
	5,234,747.628			$	101,061,186

123

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING American Funds Growth Portfolio
Currently payable annuity contracts:	176,208.105	$	12.93	$	2,278,371
Contracts in accumulation period:
Non-Qualified XIII	246,568.609		12.82		3,161,010
Non-Qualified XIV	333,630.437		12.58		4,197,071
Non-Qualified XV	228,091.880		12.47		2,844,306
Non-Qualified XVI	1,541.372		12.43		19,159
Non-Qualified XIX	2,087.181		12.20		25,464
	988,127.584			$	12,525,381
ING American Funds Growth-Income Portfolio
Currently payable annuity contracts:	165,807.667	$	11.13	$	1,845,439
Contracts in accumulation period:
Non-Qualified XIII	251,772.280		11.05		2,782,084
Non-Qualified XIV	322,683.302		10.84		3,497,887
Non-Qualified XV	178,472.129		10.74		1,916,791
Non-Qualified XIX	6,944.167		10.51		72,983
	925,679.545			$	10,115,184
ING American Funds International Portfolio
Currently payable annuity contracts:	135,478.851	$	15.04	$	2,037,602
Contracts in accumulation period:
Non-Qualified XIII	232,632.035		14.96		3,480,175
Non-Qualified XIV	338,482.369		14.68		4,968,921
Non-Qualified XV	199,692.415		14.54		2,903,528
Non-Qualified XVI	2,035.798		14.50		29,519
Non-Qualified XIX	1,376.079		14.23		19,582
	909,697.547			$	13,439,327
ING Artio Foreign Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	12,603.775	$	13.62	$	171,663
Non-Qualified V (0.75)	211,831.874		14.08		2,982,593
Non-Qualified XIII	76,904.383		8.82		678,297
Non-Qualified XIV	79,222.086		8.69		688,440
Non-Qualified XV	21,923.219		8.63		189,197
Non-Qualified XVI	517.614		8.61		4,457
Non-Qualified XIX	671.975		8.49		5,705
Non-Qualified XX	664.500		13.90		9,237
Non-Qualified XXIII	4,920.714		8.36		41,137
	409,260.140			$	4,770,726
ING BlackRock Inflation Protected Bond Portfolio -
Institutional Class
Contracts in accumulation period:
ING Select Opportunities	28,016.701	$	10.61	$	297,257

124

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING BlackRock Large Cap Growth Portfolio -
Institutional Class
Currently payable annuity contracts:	225,220.818	$	8.53 to $8.67	$	1,921,450
Contracts in accumulation period:
Non-Qualified V	136,293.330		9.08		1,237,543
Non-Qualified V (0.75)	226,391.547		9.25		2,094,122
Non-Qualified VII	664,773.601		8.48		5,637,280
Non-Qualified VIII	74,876.660		8.53		638,698
Non-Qualified IX	5,090.389		8.99		45,763
Non-Qualified X	8,560.517		9.08		77,729
Non-Qualified XII	4,129.725		9.23		38,117
Non-Qualified XIII	498,162.648		8.63		4,299,144
Non-Qualified XIV	690,111.726		8.53		5,886,653
Non-Qualified XV	261,337.233		8.48		2,216,140
Non-Qualified XVI	1,925.172		8.47		16,306
Non-Qualified XVIII	319.892		8.33		2,665
Non-Qualified XIX	1,320.272		8.37		11,051
Non-Qualified XX	888.631		9.18		8,158
Non-Qualified XXIII	7,266.049		10.46		76,003
Non-Qualified XXIV	2,233.131		10.58		23,627
	2,808,901.341			$	24,230,449
ING Clarion Global Real Estate Portfolio - Institutional
Class
Contracts in accumulation period:
Non-Qualified V	10,520.833	$	10.17	$	106,997
Non-Qualified V (0.75)	129,967.820		10.29		1,337,369
Non-Qualified IX	2,301.049		10.11		23,264
Non-Qualified XII	14,623.213		10.27		150,180
Non-Qualified XXIII	111.427		10.30		1,148
	157,524.342			$	1,618,958
ING Clarion Global Real Estate Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified XIII	53,734.224	$	11.08	$	595,375
Non-Qualified XIV	36,542.211		10.93		399,406
Non-Qualified XV	13,867.080		10.85		150,458
	104,143.515			$	1,145,239
ING Clarion Real Estate Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	27,965.769	$	10.29	$	287,768
Non-Qualified V (0.75)	176,443.133		10.53		1,857,946
Non-Qualified IX	8,734.547		10.17		88,830
Non-Qualified XII	3,425.344		10.51		36,000
Non-Qualified XX	1,752.105		10.43		18,274
Non-Qualified XXII	337.180		10.08		3,399
Non-Qualified XXIII	922.049		11.03		10,170
	219,580.127			$	2,302,387

125

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING FMRSM Diversified Mid Cap Portfolio - Institutional
Class
Currently payable annuity contracts:	180,961.258	$	11.88	$	2,149,820
Contracts in accumulation period:
Non-Qualified VII	416,049.461		11.71		4,871,939
Non-Qualified VIII	110,200.103		11.80		1,300,361
Non-Qualified XIII	329,052.875		11.96		3,935,472
Non-Qualified XIV	361,487.067		11.79		4,261,933
Non-Qualified XV	144,533.960		11.71		1,692,493
Non-Qualified XVI	3,822.414		11.68		44,646
Non-Qualified XVIII	195.059		11.44		2,231
Non-Qualified XIX	1,693.681		11.52		19,511
	1,547,995.878			$	18,278,406
ING FMRSM Diversified Mid Cap Portfolio - Service
Class
Contracts in accumulation period:
Non-Qualified V	10,986.143	$	15.47	$	169,956
Non-Qualified V (0.75)	90,700.075		15.92		1,443,945
Non-Qualified IX	7,114.046		15.25		108,489
Non-Qualified XII	1,885.008		15.87		29,915
Non-Qualified XX	13,199.639		15.74		207,762
Non-Qualified XXIII	4,011.585		11.79		47,297
	127,896.496			$	2,007,364
ING Franklin Income Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified XIII	150,126.543	$	11.42	$	1,714,445
Non-Qualified XIV	138,963.377		11.26		1,564,728
Non-Qualified XV	90,854.986		11.18		1,015,759
Non-Qualified XIX	1,115.305		11.00		12,268
	381,060.211			$	4,307,200
ING Franklin Mutual Shares Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified XIII	76,945.721	$	10.18	$	783,307
Non-Qualified XIV	62,710.584		10.06		630,868
Non-Qualified XV	37,826.093		10.01		378,639
Non-Qualified XVI	484.166		9.99		4,837
Non-Qualified XIX	3,376.486		9.88		33,360
	181,343.050			$	1,831,011

126

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Global Resources Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	101,027.686	$	12.79	$	1,292,144
Non-Qualified V (0.75)	299,898.172		13.06		3,916,670
Non-Qualified VII	37,365.720		13.41		501,074
Non-Qualified IX	4,373.118		12.66		55,364
Non-Qualified X	2,442.745		12.79		31,243
Non-Qualified XII	12,698.962		13.04		165,594
Non-Qualified XIII	81,161.267		12.61		1,023,444
Non-Qualified XIV	64,017.195		12.43		795,734
Non-Qualified XV	25,628.000		12.34		316,250
Non-Qualified XIX	774.979		12.14		9,408
Non-Qualified XX	784.987		12.95		10,166
Non-Qualified XXIII	13,405.099		10.22		137,000
	643,577.930			$	8,254,091
ING Janus Contrarian Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	1,622.957	$	8.09	$	13,130
Non-Qualified V (0.75)	155,558.967		8.19		1,274,028
Non-Qualified IX	617.946		8.03		4,962
Non-Qualified XII	4,770.192		8.18		39,020
Non-Qualified XX	324.529		8.15		2,645
Non-Qualified XXIII	684.208		9.36		6,404
	163,578.799			$	1,340,189
ING JPMorgan Emerging Markets Equity Portfolio -
Institutional Class
Contracts in accumulation period:
Non-Qualified VII	204,825.356	$	19.59	$	4,012,529
Non-Qualified VIII	24,928.898		19.74		492,096
Non-Qualified XIII	105,075.581		15.46		1,624,468
Non-Qualified XIV	105,703.359		15.25		1,611,976
Non-Qualified XV	32,247.674		15.14		488,230
Non-Qualified XVI	1,300.020		15.10		19,630
Non-Qualified XIX	409.807		14.89		6,102
	474,490.695			$	8,255,031
ING JPMorgan Emerging Markets Equity Portfolio -
Service Class
Contracts in accumulation period:
Non-Qualified V	37,520.606	$	23.81	$	893,366
Non-Qualified V (0.75)	409,680.741		24.50		10,037,178
Non-Qualified IX	11,138.767		23.48		261,538
Non-Qualified XII	2,531.863		24.43		61,853
Non-Qualified XX	6,960.448		24.22		168,582
Non-Qualified XXIII	8,199.792		11.96		98,070
	476,032.217			$	11,520,587

127

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING JPMorgan Small Cap Core Equity Portfolio -
Institutional Class
Contracts in accumulation period:
Non-Qualified XIII	56,578.948	$	14.30	$	809,079
Non-Qualified XIV	69,828.964		14.06		981,795
Non-Qualified XV	20,071.732		13.94		279,800
Non-Qualified XVI	371.898		13.90		5,169
Non-Qualified XIX	1,277.699		13.66		17,453
	148,129.241			$	2,093,296
ING JPMorgan Small Cap Core Equity Portfolio -
Service Class
Contracts in accumulation period:
Non-Qualified V	4,700.101	$	13.75	$	64,626
Non-Qualified V (0.75)	18,124.032		14.15		256,455
Non-Qualified XII	19.273		14.11		272
Non-Qualified XXIII	209.032		11.72		2,450
	23,052.438			$	323,803
ING Large Cap Growth Portfolio - Institutional Class
Currently payable annuity contracts:	71,711.924	$	13.73 to $14.30	$	1,025,330
Contracts in accumulation period:
Non-Qualified VII	216,085.101		13.35		2,884,736
Non-Qualified VIII	1,738.415		13.46		23,399
Non-Qualified XIII	119,805.885		15.26		1,828,238
Non-Qualified XIV	141,270.532		15.00		2,119,058
Non-Qualified XV	74,510.274		14.87		1,107,968
Non-Qualified XIX	37.979		14.57		553
	625,160.110			$	8,989,282
ING Lord Abbett Growth and Income Portfolio -
Institutional Class
Contracts in accumulation period:
Non-Qualified V	53,071.093	$	9.53	$	505,768
Non-Qualified V (0.75)	204,546.491		9.76		1,996,374
Non-Qualified IX	4,763.303		9.42		44,870
Non-Qualified XII	7,914.658		9.73		77,010
Non-Qualified XX	2,317.116		9.67		22,407
Non-Qualified XXIII	5,558.760		10.55		58,645
	278,171.421			$	2,705,074
ING Lord Abbett Growth and Income Portfolio - Service
Class
Contracts in accumulation period:
Non-Qualified XIII	9,532.245	$	9.57	$	91,224
Non-Qualified XIV	25,611.115		9.44		241,769
Non-Qualified XV	10,578.872		9.37		99,124
	45,722.232			$	432,117

128

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Marsico Growth Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	22,826.382	$	11.82	$	269,808
Non-Qualified V (0.75)	64,731.917		12.16		787,140
Non-Qualified XII	1,827.508		12.13		22,168
Non-Qualified IX	2,486.582		11.66		28,994
Non-Qualified XIII	7,228.145		10.25		74,088
Non-Qualified XIV	24,816.295		10.11		250,893
Non-Qualified XV	8,945.019		10.04		89,808
	132,861.848			$	1,522,899
ING Marsico International Opportunities Portfolio -
Service Class
Contracts in accumulation period:
Non-Qualified V	16,228.174	$	13.80	$	223,949
Non-Qualified V (0.75)	65,388.837		14.20		928,521
Non-Qualified VII	136,646.880		9.63		1,315,909
Non-Qualified VIII	6,149.338		9.70		59,649
Non-Qualified IX	2,849.192		13.61		38,778
Non-Qualified XII	3,741.362		14.16		52,978
Non-Qualified XIII	44,882.377		14.04		630,149
Non-Qualified XIV	82,387.022		13.80		1,136,941
Non-Qualified XV	19,311.111		13.68		264,176
Non-Qualified XVI	1,160.453		13.64		15,829
Non-Qualified XX	328.978		14.04		4,619
Non-Qualified XXIII	3,054.485		9.30		28,407
	382,128.209			$	4,699,905
ING MFS Total Return Portfolio - Institutional Class
Contracts in accumulation period:
Non-Qualified VII	866,175.197	$	11.51	$	9,969,677
Non-Qualified VIII	230,845.357		11.61		2,680,115
Non-Qualified XIII	822,341.570		11.82		9,720,077
Non-Qualified XIV	1,132,920.201		11.61		13,153,204
Non-Qualified XV	432,593.164		11.51		4,979,147
Non-Qualified XVI	15,021.527		11.48		172,447
Non-Qualified XVIII	146.544		11.18		1,638
Non-Qualified XIX	11,863.696		11.28		133,822
	3,511,907.256			$	40,810,127
ING MFS Total Return Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	4,172.581	$	13.85	$	57,790
Non-Qualified V (0.75)	62,984.287		14.39		906,344
Non-Qualified IX	681.404		14.15		9,642
Non-Qualified XII	7,543.225		14.33		108,094
Non-Qualified XX	673.646		14.17		9,546
	76,055.143			$	1,091,416

129

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING MFS Utilities Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	32,342.225	$	16.79	$	543,026
Non-Qualified V (0.75)	100,131.678		17.28		1,730,275
Non-Qualified IX	2,056.472		16.56		34,055
Non-Qualified XII	1,112.938		17.23		19,176
Non-Qualified XX	7,892.662		17.08		134,807
Non-Qualified XXIII	2,622.837		10.36		27,173
	146,158.812			$	2,488,512
ING PIMCO High Yield Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	18,046.006	$	14.59	$	263,291
Non-Qualified V (0.75)	114,611.232		15.01		1,720,315
Non-Qualified VII	167,220.849		14.51		2,426,375
Non-Qualified VIII	11,229.535		14.64		164,400
Non-Qualified IX	6,708.603		14.39		96,537
Non-Qualified XII	598.023		14.97		8,952
Non-Qualified XX	1,528.474		14.84		22,683
Non-Qualified XXII	931.371		13.84		12,890
Non-Qualified XXIII	825.406		13.47		11,118
	321,699.499			$	4,726,561
ING Pioneer Equity Income Portfolio - Institutional Class
Contracts in accumulation period:
Non-Qualified V	65,010.128	$	8.25	$	536,334
Non-Qualified V (0.75)	235,950.925		8.44		1,991,426
Non-Qualified IX	3,841.467		8.15		31,308
Non-Qualified XII	10,267.879		8.42		86,456
Non-Qualified XX	6,330.924		8.37		52,990
Non-Qualified XXIII	4,825.454		10.22		49,316
Non-Qualified XXIV	66,037.852		10.33		682,171
	392,264.629			$	3,430,001
ING Pioneer Fund Portfolio - Institutional Class
Currently payable annuity contracts:	246,389.880	$	10.74 to $12.05	$	2,967,086
Contracts in accumulation period:
Non-Qualified V	3,610.595		10.23		36,936
Non-Qualified V (0.75)	28,538.999		10.48		299,089
Non-Qualified XIII	172,868.836		12.26		2,119,372
Non-Qualified XIV	285,980.149		12.05		3,446,061
Non-Qualified XV	168,451.397		11.94		2,011,310
Non-Qualified XIX	2,104.081		11.71		24,639
	907,943.937			$	10,904,493

130

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Pioneer Mid Cap Value Portfolio - Institutional
Class
Contracts in accumulation period:
Non-Qualified V	30,257.842	$	10.60	$	320,733
Non-Qualified V (0.75)	173,595.042		10.85		1,883,506
Non-Qualified IX	10,428.555		10.48		109,291
Non-Qualified XII	24,928.691		10.83		269,978
Non-Qualified XX	8,070.461		10.75		86,757
Non-Qualified XXIII	11,471.010		10.90		125,034
	258,751.601			$	2,795,299
ING Pioneer Mid Cap Value Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified XIII	27,790.413	$	10.60	$	294,578
Non-Qualified XIV	29,095.332		10.45		304,046
Non-Qualified XV	17,637.502		10.38		183,077
Non-Qualified XVI	3,509.820		10.35		36,327
Non-Qualified XIX	1,240.597		10.21		12,666
	79,273.664			$	830,694
ING Retirement Growth Portfolio - Adviser Class
Contracts in accumulation period:
Non-Qualified XIII	158,076.352	$	10.37	$	1,639,252
Non-Qualified XIV	229,143.552		10.33		2,367,053
Non-Qualified XV	148,607.137		10.31		1,532,140
	535,827.041			$	5,538,445
ING Retirement Moderate Growth Portfolio - Adviser
Class
Contracts in accumulation period:
Non-Qualified XIII	180,398.203	$	10.60	$	1,912,221
Non-Qualified XIV	299,651.377		10.56		3,164,319
Non-Qualified XV	130,596.229		10.54		1,376,484
	610,645.809			$	6,453,024
ING Retirement Moderate Portfolio - Adviser Class
Contracts in accumulation period:
Non-Qualified XIII	173,061.574	$	10.71	$	1,853,489
Non-Qualified XIV	282,461.157		10.67		3,013,861
Non-Qualified XV	216,594.479		10.65		2,306,731
	672,117.210			$	7,174,081
ING T. Rowe Price Capital Appreciation Portfolio -
Service Class
Contracts in accumulation period:
Non-Qualified V	162,862.806	$	13.54	$	2,205,162
Non-Qualified V (0.75)	567,049.192		13.93		7,898,995
Non-Qualified IX	25,321.470		13.35		338,042
Non-Qualified XII	17,946.009		13.89		249,270
Non-Qualified XX	53,651.263		13.77		738,778
Non-Qualified XXIII	1,203.100		11.38		13,691
	828,033.840			$	11,443,938

131

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING T. Rowe Price Equity Income Portfolio - Service
Class
Contracts in accumulation period:
Non-Qualified V	47,792.015	$	15.10	$	721,659
Non-Qualified V (0.75)	197,441.813		15.69		3,097,862
Non-Qualified IX	1,783.249		15.76		28,104
Non-Qualified XIII	31,791.976		10.15		322,689
Non-Qualified XIV	98,124.063		10.01		982,222
Non-Qualified XV	27,363.277		9.94		271,991
Non-Qualified XVI	4,690.826		9.91		46,486
Non-Qualified XIX	873.045		9.77		8,530
Non-Qualified XX	16,002.476		15.45		247,238
Non-Qualified XXII	2,814.801		10.30		28,992
Non-Qualified XXIII	3,280.511		10.64		34,905
	431,958.052			$	5,790,678
ING Templeton Global Growth Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified XIII	9,998.802	$	9.45	$	94,489
Non-Qualified XIV	18,363.613		9.32		171,149
Non-Qualified XV	6,632.502		9.25		61,351
	34,994.917			$	326,989
ING U.S. Stock Index Portfolio - Service Class
Contracts in accumulation period:
ING Select Opportunities	5,143.430	$	11.67	$	60,024
ING Van Kampen Growth and Income Portfolio - Service
Class
Contracts in accumulation period:
Non-Qualified V	13,944.450	$	11.66	$	162,592
Non-Qualified V (0.75)	52,497.462		12.00		629,970
Non-Qualified IX	3,604.957		11.50		41,457
Non-Qualified XXIII	2,165.079		10.70		23,166
	72,211.948			$	857,185
ING Wells Fargo HealthCare Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	4,282.992	$	11.92	$	51,053
Non-Qualified V (0.75)	12,099.110		12.27		148,456
Non-Qualified XII	301.808		12.23		3,691
Non-Qualified XX	850.787		12.13		10,320
Non-Qualified XXIII	4.294		9.78		42
	17,538.991			$	213,562

132

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Money Market Portfolio - Class I
Currently payable annuity contracts:	387,870.829	$	10.97 to $12.72	$	4,914,446
Contracts in accumulation period:
Non-Qualified V	228,952.584		15.10		3,457,184
Non-Qualified V (0.75)	593,086.860		16.27		9,649,523
Non-Qualified VI	3,372.954		14.85		50,088
Non-Qualified VII	1,617,851.214		14.69		23,766,234
Non-Qualified VIII	286,508.583		13.53		3,876,461
Non-Qualified IX	4,750.717		14.59		69,313
Non-Qualified X	55,687.203		15.10		840,877
Non-Qualified XII	40,070.250		13.13		526,122
Non-Qualified XIII	1,343,088.578		12.84		17,245,257
Non-Qualified XIV	1,898,932.253		12.37		23,489,792
Non-Qualified XV	727,178.041		12.14		8,827,941
Non-Qualified XVI	14,212.518		11.07		157,333
Non-Qualified XVIII	602.947		10.56		6,367
Non-Qualified XIX	52,039.164		10.73		558,380
Non-Qualified XX	3,390.499		11.11		37,668
Non-Qualified XXII	180.062		10.65		1,918
Non-Qualified XXIII	6,809.945		9.97		67,895
Non-Qualified XXIV	12,747.950		10.09		128,627
	7,277,333.151			$	97,671,426
ING Money Market Portfolio - Class S
Contracts in accumulation period:
ING Select Opportunities	31,585.751	$	9.91	$	313,015
ING American Century Small-Mid Cap Value Portfolio -
Service Class
Contracts in accumulation period:
Non-Qualified V	15,490.990	$	17.67	$	273,726
Non-Qualified V (0.75)	76,358.687		18.46		1,409,581
Non-Qualified XII	3,544.903		18.38		65,155
Non-Qualified XX	4,178.298		20.82		86,992
Non-Qualified XXIV	31,399.019		13.00		408,187
	130,971.897			$	2,243,641
ING Baron Small Cap Growth Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	32,644.946	$	17.70	$	577,816
Non-Qualified V (0.75)	107,362.437		18.49		1,985,131
Non-Qualified IX	748.995		17.32		12,973
Non-Qualified XII	8,733.894		18.41		160,791
Non-Qualified XIII	25,020.253		10.38		259,710
Non-Qualified XIV	36,666.307		10.23		375,096
Non-Qualified XV	15,814.203		10.16		160,672
Non-Qualified XVI	1,512.928		10.14		15,341
Non-Qualified XIX	456.072		9.99		4,556
Non-Qualified XX	3,921.741		20.21		79,258
Non-Qualified XXIII	5,834.683		11.72		68,382
	238,716.459			$	3,699,726

133

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Columbia Small Cap Value Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	1,062.950	$	10.15	$	10,789
Non-Qualified V (0.75)	34,190.235		10.39		355,237
Non-Qualified XIII	10,618.187		10.29		109,261
Non-Qualified XIV	17,065.897		10.15		173,219
Non-Qualified XV	6,946.082		10.08		70,017
	69,883.351			$	718,523
ING Davis New York Venture Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	12,040.093	$	11.68	$	140,628
Non-Qualified V (0.75)	85,338.285		12.20		1,041,127
Non-Qualified IX	112.602		11.15		1,256
Non-Qualified XIII	24,828.032		9.87		245,053
Non-Qualified XIV	75,470.070		9.73		734,324
Non-Qualified XV	39,525.835		9.66		381,820
Non-Qualified XVI	1,084.603		9.64		10,456
Non-Qualified XX	3.350		14.34		48
Non-Qualified XXII	2,708.713		9.98		27,033
Non-Qualified XXIII	3,697.694		10.36		38,308
	244,809.277			$	2,620,053
ING JPMorgan Mid Cap Value Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	31,074.548	$	17.41	$	541,008
Non-Qualified V (0.75)	39,116.722		18.19		711,533
Non-Qualified IX	2,243.593		17.04		38,231
Non-Qualified XII	489.410		18.11		8,863
Non-Qualified XX	7,408.539		20.12		149,060
Non-Qualified XXIII	3,478.371		11.47		39,897
Non-Qualified XXIV	22,108.438		11.60		256,458
	105,919.621			$	1,745,050
ING Legg Mason ClearBridge Aggressive Growth
Portfolio - Initial Class
Currently payable annuity contracts:	79,682.148	$	10.85 to $11.82	$	868,558
Contracts in accumulation period:
Non-Qualified V	145,187.032		16.01		2,324,444
Non-Qualified V (0.75)	125,085.771		17.24		2,156,479
Non-Qualified VII	634,717.193		15.15		9,615,965
Non-Qualified VIII	93,320.600		10.47		977,067
Non-Qualified IX	3,982.074		15.47		61,603
Non-Qualified X	4,560.676		16.01		73,016
Non-Qualified XII	3,259.849		9.39		30,610
Non-Qualified XIII	162,609.231		8.83		1,435,840
Non-Qualified XIV	252,561.613		8.50		2,146,774
Non-Qualified XV	74,811.910		8.34		623,931
Non-Qualified XVI	1,759.842		5.84		10,277
Non-Qualified XVIII	312.557		5.57		1,741
Non-Qualified XX	1,106.770		15.59		17,255

134

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Legg Mason ClearBridge Aggressive Growth
Portfolio - Initial Class (continued)
Non-Qualified XXIII	16,628.979	$	11.18	$	185,912
Non-Qualified XXIV	339.019		11.30		3,831
	1,599,925.264			$	20,533,303
ING Oppenheimer Global Portfolio - Initial Class
Currently payable annuity contracts:	235,981.097	$	13.28 to $13.40	$	3,133,861
Contracts in accumulation period:
Non-Qualified V	465,820.271		13.31		6,200,068
Non-Qualified V (0.75)	1,195,014.196		13.70		16,371,694
Non-Qualified VII	2,403,245.564		13.60		32,684,140
Non-Qualified VIII	353,938.906		13.72		4,856,042
Non-Qualified IX	19,994.336		13.11		262,126
Non-Qualified X	17,606.671		13.31		234,345
Non-Qualified XII	10,975.989		13.66		149,932
Non-Qualified XIII	830,843.309		13.96		11,598,573
Non-Qualified XIV	827,568.682		13.72		11,354,242
Non-Qualified XV	261,515.304		13.60		3,556,608
Non-Qualified XVI	3,411.951		13.56		46,266
Non-Qualified XVIII	353.305		13.21		4,667
Non-Qualified XIX	2,123.847		13.33		28,311
Non-Qualified XX	22,363.083		13.54		302,796
Non-Qualified XXIII	65,367.524		11.18		730,809
Non-Qualified XXIV	53,593.025		11.30		605,601
	6,769,717.060			$	92,120,081
ING Oppenheimer Global Strategic Income Portfolio -
Initial Class
Currently payable annuity contracts:	233,688.587	$	12.61 to $13.70	$	3,119,436
Contracts in accumulation period:
Non-Qualified V	212,251.070		13.20		2,801,714
Non-Qualified V (0.75)	416,413.813		13.59		5,659,064
Non-Qualified VII	794,051.536		13.21		10,489,421
Non-Qualified VIII	185,064.953		13.33		2,466,916
Non-Qualified IX	428.893		13.00		5,576
Non-Qualified X	9,958.126		13.20		131,447
Non-Qualified XII	3,102.987		13.55		42,045
Non-Qualified XIII	512,491.259		13.56		6,949,381
Non-Qualified XIV	645,725.668		13.33		8,607,523
Non-Qualified XV	269,914.494		13.21		3,565,570
Non-Qualified XVI	10,472.822		13.17		137,927
Non-Qualified XIX	11,422.589		12.95		147,923
Non-Qualified XX	14,791.874		13.43		198,655
Non-Qualified XXIII	10,311.031		11.57		119,299
Non-Qualified XXIV	14,204.059		11.70		166,187
	3,344,293.761			$	44,608,084
ING Oppenheimer Global Strategic Income Portfolio -
Service Class
Currently payable annuity contracts	8,760.202	$	13.09	$	114,671

135

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING PIMCO Total Return Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	146,529.269	$	14.78	$	2,165,703
Non-Qualified V (0.75)	788,362.618		15.44		12,172,319
Non-Qualified IX	31,004.118		14.46		448,320
Non-Qualified XII	4,879.906		15.37		75,004
Non-Qualified XX	7,849.480		14.83		116,408
Non-Qualified XXII	1,559.210		13.08		20,394
Non-Qualified XXIII	17,119.425		11.90		203,721
	997,304.026			$	15,201,869
ING Pioneer High Yield Portfolio - Initial Class
Currently payable annuity contracts:	152,136.217	$	14.15	$	2,152,727
Contracts in accumulation period:
Non-Qualified V	18,148.606		14.99		272,048
Non-Qualified V (0.75)	62,135.849		15.34		953,164
Non-Qualified VII	371,493.213		13.99		5,197,190
Non-Qualified VIII	77,459.835		14.04		1,087,536
Non-Qualified XII	989.544		15.31		15,150
Non-Qualified XIII	214,261.975		14.14		3,029,664
Non-Qualified XIV	365,168.145		14.04		5,126,961
Non-Qualified XV	116,686.820		13.99		1,632,449
Non-Qualified XVI	3,541.989		13.97		49,482
Non-Qualified XVIII	314.386		13.82		4,345
Non-Qualified XIX	7,597.444		13.87		105,377
Non-Qualified XX	2,107.452		15.20		32,033
Non-Qualified XXIII	176.459		14.24		2,513
	1,392,217.934			$	19,660,639
ING Solution 2015 Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	38,507.309	$	11.57	$	445,530
Non-Qualified V (0.75)	242,892.288		11.90		2,890,418
Non-Qualified IX	10,635.299		11.41		121,349
Non-Qualified XXIII	23,647.619		10.63		251,374
	315,682.515			$	3,708,671
ING Solution 2025 Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	9,332.917	$	11.43	$	106,675
Non-Qualified V (0.75)	103,406.787		11.75		1,215,030
Non-Qualified IX	10,776.143		11.26		121,339
Non-Qualified XX	2,153.728		11.62		25,026
Non-Qualified XXIII	74,277.382		10.48		778,427
Non-Qualified XXIV	14,819.865		10.60		157,091
	214,766.822			$	2,403,588

136

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Solution 2035 Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	17,024.353	$	11.57	$	196,972
Non-Qualified V (0.75)	112,510.668		11.90		1,338,877
Non-Qualified XXIII	159,972.641		10.44		1,670,114
Non-Qualified XXIV	6,194.916		10.56		65,418
	295,702.578			$	3,271,381
ING Solution 2045 Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	10,915.789	$	11.59	$	126,514
Non-Qualified V (0.75)	19,721.071		11.92		235,075
Non-Qualified IX	238.179		11.43		2,722
Non-Qualified XX	405.237		11.79		4,778
Non-Qualified XXIII	44,247.800		10.25		453,540
Non-Qualified XXIV	11,315.084		10.36		117,224
	86,843.160			$	939,853
ING Solution Income Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	1,127.968	$	11.71	$	13,208
Non-Qualified V (0.75)	56,706.513		12.04		682,746
Non-Qualified XXIII	16,626.340		10.98		182,557
	74,460.821			$	878,511
ING T. Rowe Price Diversified Mid Cap Growth
Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified V	413,503.493	$	13.79	$	5,702,213
Non-Qualified V (0.75)	499,361.037		14.20		7,090,927
Non-Qualified VII	790,011.674		14.41		11,384,068
Non-Qualified VIII	131,603.189		14.54		1,913,510
Non-Qualified IX	12,549.385		13.59		170,546
Non-Qualified X	12,052.772		13.79		166,208
Non-Qualified XII	11,430.588		14.16		161,857
Non-Qualified XIII	648,915.698		14.79		9,597,463
Non-Qualified XIV	551,655.095		14.54		8,021,065
Non-Qualified XV	237,417.670		14.41		3,421,189
Non-Qualified XVI	754.469		14.37		10,842
Non-Qualified XVIII	164.478		14.00		2,303
Non-Qualified XIX	1,279.033		14.13		18,073
Non-Qualified XX	6,324.361		14.04		88,794
Non-Qualified XXII	2,261.236		13.11		29,645
Non-Qualified XXIII	44,062.837		11.70		515,535
Non-Qualified XXIV	11,409.412		11.83		134,973
	3,374,756.427			$	48,429,211

137

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING T. Rowe Price Growth Equity Portfolio - Initial
Class
Currently payable annuity contracts:	266,974.288	$	12.54 to $16.11	$	4,283,725
Contracts in accumulation period:
Non-Qualified V	96,633.465		24.18		2,336,597
Non-Qualified V (0.75)	174,883.797		26.05		4,555,723
Non-Qualified VII	612,776.876		30.17		18,487,478
Non-Qualified VIII	74,533.475		22.21		1,655,388
Non-Qualified IX	5,417.967		23.37		126,618
Non-Qualified X	12,197.921		24.18		294,946
Non-Qualified XII	3,989.126		15.36		61,273
Non-Qualified XX	3,072.306		16.66		51,185
Non-Qualified XXIII	23,352.288		10.93		255,241
Non-Qualified XXIV	29,164.230		11.06		322,556
	1,302,995.739			$	32,430,730
ING Templeton Foreign Equity Portfolio - Initial Class
Currently payable annuity contracts:	167,021.331	$	8.75 to $8.86	$	1,462,179
Contracts in accumulation period:
Non-Qualified V	373,837.915		8.82		3,297,250
Non-Qualified V (0.75)	325,900.672		8.94		2,913,552
Non-Qualified VII	217,454.140		8.73		1,898,375
Non-Qualified VIII	43,189.779		8.77		378,774
Non-Qualified IX	9,926.646		8.76		86,957
Non-Qualified X	4,565.176		8.82		40,265
Non-Qualified XII	2,512.003		8.93		22,432
Non-Qualified XIII	383,082.299		8.84		3,386,448
Non-Qualified XIV	520,350.926		8.77		4,563,478
Non-Qualified XV	153,898.719		8.73		1,343,536
Non-Qualified XVI	249.179		8.72		2,173
Non-Qualified XVIII	109.037		8.61		939
Non-Qualified XIX	4,807.503		8.65		41,585
Non-Qualified XX	1,269.467		8.89		11,286
Non-Qualified XXIII	10,580.218		9.84		104,109
Non-Qualified XXIV	8,167.041		9.95		81,262
	2,226,922.051			$	19,634,600
ING Thornburg Value Portfolio - Initial Class
Currently payable annuity contracts:	139,971.234	$	12.29 to $18.46	$	2,568,869
Contracts in accumulation period:
Non-Qualified V	82,310.247		30.29		2,493,177
Non-Qualified V (0.75)	62,861.563		32.62		2,050,544
Non-Qualified VII	193,073.973		14.11		2,724,274
Non-Qualified VIII	41,482.447		14.39		596,932
Non-Qualified IX	2,900.867		29.27		84,908
Non-Qualified X	3,332.697		30.29		100,947
Non-Qualified XIII	245,551.209		11.97		2,939,248
Non-Qualified XIV	233,145.460		11.53		2,688,167
Non-Qualified XV	72,538.306		11.31		820,408
Non-Qualified XVI	3,709.039		7.14		26,483
Non-Qualified XIX	3,582.052		6.92		24,788

138

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Thornburg Value Portfolio - Initial Class
(continued)
Non-Qualified XX	375.587	$	15.48	$	5,814
Non-Qualified XXIII	7,628.814		11.42		87,121
	1,092,463.495			$	17,211,680
ING UBS U.S. Large Cap Equity Portfolio - Initial Class
Contracts in accumulation period:
Non-Qualified V	137,853.183	$	15.35	$	2,116,046
Non-Qualified V (0.75)	109,258.270		16.53		1,806,039
Non-Qualified VI	13,516.028		13.06		176,519
Non-Qualified VII	443,216.769		14.91		6,608,362
Non-Qualified VIII	68,857.295		10.43		718,182
Non-Qualified IX	9,183.032		14.83		136,184
Non-Qualified X	46,077.388		15.35		707,288
Non-Qualified XI	2,386.933		13.06		31,173
Non-Qualified XIII	119,293.837		10.39		1,239,463
Non-Qualified XIV	159,603.824		10.00		1,596,038
Non-Qualified XV	57,019.386		9.82		559,930
Non-Qualified XVI	1,527.394		7.33		11,196
Non-Qualified XIX	62.544		7.10		444
Non-Qualified XX	243.954		14.31		3,491
Non-Qualified XXIII	5,821.016		10.21		59,433
	1,173,920.853			$	15,769,788
ING Van Kampen Comstock Portfolio - Service Class
Contracts in accumulation period:
Non-Qualified V	6,555.223	$	12.53	$	82,137
Non-Qualified V (0.75)	55,406.304		13.09		725,269
Non-Qualified IX	1,259.338		12.26		15,439
Non-Qualified XX	4,574.821		14.90		68,165
Non-Qualified XXIII	4,214.772		10.81		45,562
	72,010.458			$	936,572
ING Van Kampen Equity and Income Portfolio - Initial
Class
Contracts in accumulation period:
Non-Qualified V	267,661.517	$	12.37	$	3,310,973
Non-Qualified V (0.75)	453,916.516		12.74		5,782,896
Non-Qualified VII	1,177,287.488		12.49		14,704,321
Non-Qualified VIII	287,588.351		12.60		3,623,613
Non-Qualified IX	4,865.241		12.19		59,307
Non-Qualified X	3,934.788		12.37		48,673
Non-Qualified XII	428.891		12.70		5,447
Non-Qualified XIII	1,051,195.956		12.82		13,476,332
Non-Qualified XIV	1,179,640.670		12.60		14,863,472
Non-Qualified XV	413,204.657		12.49		5,160,926
Non-Qualified XVI	7,655.394		12.45		95,310
Non-Qualified XIX	7,548.431		12.24		92,393
Non-Qualified XX	13,006.963		12.59		163,758
Non-Qualified XXIII	4,565.325		11.40		52,045
Non-Qualified XXIV	34,284.002		11.53		395,295
	4,906,784.190			$	61,834,761

139

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Strategic Allocation Conservative Portfolio - Class I
Currently payable annuity contracts:	150,348.030	$	16.39	$	2,464,204
Contracts in accumulation period:
Non-Qualified V	16,258.326		18.55		301,592
Non-Qualified V (0.75)	44,516.217		19.98		889,434
Non-Qualified VII	220,514.466		18.10		3,991,312
Non-Qualified VIII	71,712.062		17.18		1,232,013
Non-Qualified IX	847.207		17.92		15,182
Non-Qualified XXIII	1,090.831		10.71		11,683
	505,287.139			$	8,905,420
ING Strategic Allocation Growth Portfolio - Class I
Currently payable annuity contracts:	112,533.305	$	9.28 to $12.93	$	1,441,947
Contracts in accumulation period:
Non-Qualified V	32,561.289		18.83		613,129
Non-Qualified V (0.75)	120,592.227		20.28		2,445,610
Non-Qualified VII	176,467.178		18.37		3,241,702
Non-Qualified VIII	39,487.821		16.62		656,288
Non-Qualified IX	2,815.342		18.19		51,211
Non-Qualified X	3,999.393		19.74		78,948
Non-Qualified XX	4,515.963		13.92		62,862
Non-Qualified XXIII	13,180.523		10.24		134,969
Non-Qualified XXIV	98.474		10.36		1,020
	506,251.515			$	8,727,686
ING Strategic Allocation Moderate Portfolio - Class I
Currently payable annuity contracts:	208,811.588	$	9.94 to $13.22	$	2,754,749
Contracts in accumulation period:
Non-Qualified V	38,888.396		18.56		721,769
Non-Qualified V (0.75)	39,292.606		19.99		785,459
Non-Qualified VII	283,315.707		18.11		5,130,847
Non-Qualified VIII	64,862.817		16.69		1,082,560
Non-Qualified IX	560.819		17.94		10,061
Non-Qualified X	1,286.394		19.47		25,046
Non-Qualified XXIII	2,025.472		10.49		21,247
Non-Qualified XXIV	5,930.901		10.61		62,927
	644,974.700			$	10,594,665
ING Growth and Income Portfolio - Class I
Currently payable annuity contracts:	1,118,478.283	$	7.34 to $292.82	$	55,952,492
Contracts in accumulation period:
Non-Qualified 1964	958.659		247.41		237,182
Non-Qualified V	1,354,950.216		23.05		31,231,602
Non-Qualified V (0.75)	2,190,980.878		24.83		54,402,055
Non-Qualified VI	460,124.224		21.74		10,003,101
Non-Qualified VII	1,265,313.891		22.55		28,532,828
Non-Qualified VIII	308,405.887		15.35		4,734,030
Non-Qualified IX	43,100.065		22.27		959,838
Non-Qualified X	486,740.564		23.84		11,603,895
Non-Qualified XI	4,542.112		22.49		102,152
Non-Qualified XII	5,834.971		9.96		58,116

140

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING Growth and Income Portfolio - Class I (continued)
Non-Qualified XIII	1,175,860.833	$	9.48	$	11,147,161
Non-Qualified XIV	1,156,166.389		9.13		10,555,799
Non-Qualified XV	404,304.769		8.96		3,622,571
Non-Qualified XVI	2,876.895		7.97		22,929
Non-Qualified XVIII	1,872.921		7.61		14,253
Non-Qualified XIX	13,059.845		7.73		100,953
Non-Qualified XX	28,576.178		14.19		405,496
Non-Qualified XXII	7,550.120		10.63		80,258
Non-Qualified XXIII	108,694.190		10.46		1,136,941
Non-Qualified XXIV	34,917.451		10.58		369,427
	10,173,309.341			$	225,273,079
ING GET U.S. Core Portfolio - Series 5
Contracts in accumulation period:
Non-Qualified VII	11,953.000	$	10.46	$	125,028
Non-Qualified VIII	1,299.055		10.56		13,718
Non-Qualified XIII	95,864.037		10.78		1,033,414
Non-Qualified XIV	17,797.221		10.56		187,939
Non-Qualified XV	1,646.859		10.46		17,226
	128,560.172			$	1,377,325
ING GET U.S. Core Portfolio - Series 6
Contracts in accumulation period:
Non-Qualified VII	197,723.446	$	10.24	$	2,024,688
Non-Qualified VIII	21,917.084		10.34		226,623
Non-Qualified XIII	366,665.151		10.54		3,864,651
Non-Qualified XIV	597,675.053		10.34		6,179,960
Non-Qualified XV	283,902.150		10.24		2,907,158
	1,467,882.884			$	15,203,080
ING GET U.S. Core Portfolio - Series 7
Contracts in accumulation period:
Non-Qualified VII	104,271.282	$	10.22	$	1,065,652
Non-Qualified VIII	4,632.522		10.31		47,761
Non-Qualified XIII	184,360.275		10.51		1,937,626
Non-Qualified XIV	275,830.818		10.31		2,843,816
Non-Qualified XV	283,812.048		10.22		2,900,559
	852,906.945			$	8,795,414
ING GET U.S. Core Portfolio - Series 8
Contracts in accumulation period:
Non-Qualified VII	95,672.554	$	10.27	$	982,557
Non-Qualified VIII	7,309.997		10.38		75,878
Non-Qualified XIII	251,777.058		10.53		2,651,212
Non-Qualified XIV	192,596.114		10.35		1,993,370
Non-Qualified XV	182,909.942		10.26		1,876,656
	730,265.665			$	7,579,673

141

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING GET U.S. Core Portfolio - Series 9
Contracts in accumulation period:
Non-Qualified VII	17,142.394	$	10.37	$	177,767
Non-Qualified XIII	227,976.597		10.61		2,418,832
Non-Qualified XIV	190,369.365		10.44		1,987,456
Non-Qualified XV	152,354.071		10.35		1,576,865
Non-Qualified XIX	101.147		10.15		1,027
	587,943.574			$	6,161,947
ING GET U.S. Core Portfolio - Series 10
Contracts in accumulation period:
Non-Qualified VII	8,712.430	$	10.23	$	89,128
Non-Qualified VIII	10,567.052		10.33		109,158
Non-Qualified XIII	141,225.353		10.46		1,477,217
Non-Qualified XIV	153,457.325		10.30		1,580,610
Non-Qualified XV	106,099.750		10.22		1,084,339
	420,061.910			$	4,340,452
ING GET U.S. Core Portfolio - Series 11
Contracts in accumulation period:
Non-Qualified VII	15,203.500	$	10.47	$	159,181
Non-Qualified VIII	573.467		10.56		6,056
Non-Qualified XIII	179,122.147		10.72		1,920,189
Non-Qualified XIV	178,988.997		10.56		1,890,124
Non-Qualified XV	73,722.797		10.47		771,878
Non-Qualified XVI	17,789.150		10.45		185,897
Non-Qualified XIX	1,097.470		10.29		11,293
	466,497.528			$	4,944,618
ING GET U.S. Core Portfolio - Series 12
Contracts in accumulation period:
Non-Qualified VII	37,695.322	$	10.54	$	397,309
Non-Qualified VIII	767.224		10.61		8,140
Non-Qualified XIII	489,771.890		10.77		5,274,843
Non-Qualified XIV	346,107.434		10.61		3,672,200
Non-Qualified XV	304,565.199		10.54		3,210,117
Non-Qualified XVI	5,930.622		10.51		62,331
Non-Qualified XVIII	9,519.502		10.28		97,860
Non-Qualified XIX	6,250.942		10.36		64,760
	1,200,608.135			$	12,787,560
ING GET U.S. Core Portfolio - Series 13
Contracts in accumulation period:
Non-Qualified VII	31,563.117	$	10.47	$	330,466
Non-Qualified VIII	1,307.523		10.54		13,781
Non-Qualified XIII	522,163.139		10.69		5,581,924
Non-Qualified XIV	379,816.280		10.54		4,003,264
Non-Qualified XV	259,888.262		10.47		2,721,030
Non-Qualified XVI	5,267.190		10.45		55,042
	1,200,005.511			$	12,705,507

142

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units	Unit Value		Extended Value
ING GET U.S. Core Portfolio - Series 14
Contracts in accumulation period:
Non-Qualified VII	24,197.642	$	10.55	$	255,285
Non-Qualified VIII	4,287.687		10.61		45,492
Non-Qualified XIII	448,098.900		10.75		4,817,063
Non-Qualified XIV	323,513.598		10.61		3,432,479
Non-Qualified XV	105,736.987		10.55		1,115,525
Non-Qualified XVI	1,590.004		10.53		16,743
Non-Qualified XVIII	172.996		10.33		1,787
	907,597.814			$	9,684,374
ING BlackRock Science and Technology Opportunities
Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	129,462.217	$	5.20	$	673,204
Non-Qualified V (0.75)	410,722.208		5.48		2,250,758
Non-Qualified VII	290,468.184		5.11		1,484,292
Non-Qualified VIII	30,069.497		5.19		156,061
Non-Qualified IX	6,867.542		5.06		34,750
Non-Qualified X	404.127		5.29		2,138
Non-Qualified XII	5,858.642		5.45		31,930
Non-Qualified XIII	213,010.879		5.36		1,141,738
Non-Qualified XIV	184,211.044		5.19		956,055
Non-Qualified XV	22,473.548		5.11		114,840
Non-Qualified XVI	1,196.271		5.31		6,352
Non-Qualified XIX	743.850		5.15		3,831
Non-Qualified XX	1,427.040		17.57		25,073
Non-Qualified XXIII	3,467.843		12.27		42,550
	1,300,382.892			$	6,923,572
ING Euro STOXX 50 Index Portfolio - Institutional
Class
Contracts in accumulation period:
ING Select Opportunities	3,625.645	$	9.42	$	34,154
ING Index Plus LargeCap Portfolio - Class I
Currently payable annuity contracts:	1,179,742.390	$	8.14 to $16.90	$	18,623,417
Contracts in accumulation period:
Non-Qualified V	81,760.465		19.23		1,572,254
Non-Qualified V (0.75)	514,030.064		20.66		10,619,861
Non-Qualified VII	418,311.105		18.80		7,864,249
Non-Qualified VIII	150,573.972		18.88		2,842,837
Non-Qualified IX	4,797.605		18.58		89,140
Non-Qualified XII	7,148.433		11.99		85,710
Non-Qualified XIII	1,379,248.381		11.37		15,682,054
Non-Qualified XIV	1,262,707.820		10.95		13,826,651
Non-Qualified XIX	14,180.637		7.97		113,020
Non-Qualified XV	504,734.564		10.75		5,425,897
Non-Qualified XVI	19,808.460		8.22		162,826
Non-Qualified XVIII	981.455		7.84		7,695
Non-Qualified XX	605.426		13.72		8,306
Non-Qualified XXIII	17,488.850		10.34		180,835
Non-Qualified XXIV	15,964.844		10.46		166,992
	5,572,084.471			$	77,271,744

143

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
ING Index Plus MidCap Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	42,377.771	$	22.43	$	950,533
Non-Qualified V (0.75)	346,852.232		23.90		8,289,768
Non-Qualified IX	3,539.086		21.73		76,904
Non-Qualified XII	6,636.927		24.80		164,596
Non-Qualified XX	2,311.856		17.73		40,989
Non-Qualified XXIII	11,506.407		10.85		124,845
Non-Qualified XXIV	20,117.027		10.97		220,684
	433,341.306			$	9,868,319
ING Index Plus SmallCap Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	32,884.115	$	15.96	$	524,830
Non-Qualified V (0.75)	178,310.956		17.00		3,031,286
Non-Qualified IX	4,258.461		15.46		65,836
Non-Qualified XII	15,779.016		18.23		287,651
Non-Qualified XX	2,402.293		16.92		40,647
Non-Qualified XXIII	6,662.667		11.02		73,423
Non-Qualified XXIV	7,294.845		11.14		81,265
	247,592.353			$	4,104,938
ING International Index Portfolio - Class I
Currently payable annuity contracts:	80,078.377	$	14.28 to $14.39	$	1,143,737
Contracts in accumulation period:
ING Select Opportunities	9,841.348		10.50		103,334
Non-Qualified V	15,784.361		7.96		125,644
Non-Qualified V (0.75)	164,290.878		8.06		1,324,184
Non-Qualified VII	243,403.595		14.85		3,614,543
Non-Qualified VIII	38,259.921		14.89		569,690
Non-Qualified IX	895.686		7.91		7,085
Non-Qualified XII	2,541.102		8.05		20,456
Non-Qualified XIII	95,193.416		14.96		1,424,094
Non-Qualified XIV	84,622.062		14.89		1,260,022
Non-Qualified XV	40,101.357		14.85		595,505
Non-Qualified XVI	126.325		14.83		1,873
Non-Qualified XIX	974.015		14.76		14,376
Non-Qualified XX	3,273.445		8.02		26,253
Non-Qualified XXIII	4,572.265		9.10		41,608
	783,958.153			$	10,272,404
ING International Index Portfolio - Class S
Contracts in accumulation period:
Non-Qualified V	3,921.835	$	13.52	$	53,023

144

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
ING Russell™ Large Cap Growth Index Portfolio -
Class I
Currently payable annuity contracts:	29,171.374	$	14.18	$	413,650
Contracts in accumulation period:
ING Select Opportunities	8,547.240		11.71		100,088
Non-Qualified V	974.309		13.96		13,601
Non-Qualified V (0.75)	5,023.027		14.08		70,724
Non-Qualified VII	945,642.937		13.05		12,340,640
Non-Qualified VIII	123,818.906		13.08		1,619,551
Non-Qualified IX	579.192		13.91		8,057
Non-Qualified XIII	388,904.865		13.14		5,110,210
Non-Qualified XIV	453,732.157		13.08		5,934,817
Non-Qualified XV	163,455.239		13.05		2,133,091
Non-Qualified XVI	2,442.900		13.04		31,855
Non-Qualified XVIII	205.765		12.96		2,667
Non-Qualified XIX	5,534.279		12.99		71,890
Non-Qualified XXIII	64.744		14.09		912
	2,128,096.934			$	27,851,753
ING Russell™ Large Cap Index Portfolio - Class I
Currently payable annuity contracts:	266,976.949	$	13.91 to $14.14	$	3,769,876
Contracts in accumulation period:
Non-Qualified V	28,844.356		8.97		258,734
Non-Qualified V (0.75)	202,137.386		9.09		1,837,429
Non-Qualified VII	283,647.243		14.26		4,044,810
Non-Qualified VIII	88,656.393		14.30		1,267,786
Non-Qualified IX	673.503		8.91		6,001
Non-Qualified XIII	175,663.717		14.37		2,524,288
Non-Qualified XIV	259,172.977		14.30		3,706,174
Non-Qualified XV	104,357.919		14.26		1,488,144
Non-Qualified XVI	330.862		14.25		4,715
Non-Qualified XVIII	3,534.828		14.14		49,982
Non-Qualified XIX	2,236.979		14.17		31,698
Non-Qualified XXIII	2,086.105		10.14		21,153
	1,418,319.217			$	19,010,790
ING Russell™ Large Cap Value Index Portfolio -
Class I
Contracts in accumulation period:
ING Select Opportunities	54,505.867	$	11.05	$	602,290
Non-Qualified XIII	221,902.380		13.86		3,075,567
Non-Qualified XIV	259,241.168		13.79		3,574,936
Non-Qualified XV	82,045.478		13.75		1,128,125
Non-Qualified XVI	2,445.196		13.74		33,597
Non-Qualified XIX	15,106.575		13.67		206,507
	635,246.664			$	8,621,022
ING Russell™ Large Cap Value Index Portfolio -
Class S
Contracts in accumulation period:
Non-Qualified VII	107,203.918	$	13.71	$	1,469,766
Non-Qualified VIII	5,646.599		13.74		77,584
	112,850.517			$	1,547,350

145

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
ING Russell™ Mid Cap Growth Index Portfolio - Class S
Contracts in accumulation period:
Non-Qualified V	3,618.370	$	15.93	$	57,641
Non-Qualified V (0.75)	17,356.587		16.06		278,747
Non-Qualified IX	1,742.565		15.87		27,655
Non-Qualified XII	197.769		16.05		3,174
	22,915.291			$	367,217
ING Russell™ Mid Cap Index Portfolio - Class I
Contracts in accumulation period:
ING Select Opportunities	9,933.558	$	12.80	$	127,150
Non-Qualified V	2,850.536		10.12		28,847
Non-Qualified V (0.75)	10,172.003		10.26		104,365
	22,956.097			$	260,362
ING Russell™ Small Cap Index Portfolio - Class I
Contracts in accumulation period:
ING Select Opportunities	8,542.519	$	12.74	$	108,832
Non-Qualified V	1,112.655		10.85		12,072
Non-Qualified V (0.75)	22,184.955		10.99		243,813
Non-Qualified IX	167.045		10.77		1,799
Non-Qualified XII	534.810		10.98		5,872
Non-Qualified XX	38.755		10.93		424
	32,580.739			$	372,812
ING Small Company Portfolio - Class I
Currently payable annuity contracts:	162,832.717	$	15.04 to $30.93	$	4,939,511
Contracts in accumulation period:
Non-Qualified V	15,067.747		30.69		462,429
Non-Qualified V (0.75)	89,437.103		32.87		2,939,798
Non-Qualified VII	272,765.615		30.03		8,191,151
Non-Qualified VIII	71,092.321		30.66		2,179,691
Non-Qualified IX	1,584.806		29.66		47,005
Non-Qualified X	4,066.939		30.69		124,814
Non-Qualified XII	1,308.474		22.61		29,585
Non-Qualified XIII	314,243.113		21.83		6,859,927
Non-Qualified XIV	274,076.806		21.02		5,761,094
Non-Qualified XV	67,587.636		20.62		1,393,657
Non-Qualified XVI	1,910.618		14.94		28,545
Non-Qualified XVIII	78.436		14.26		1,118
Non-Qualified XIX	2,750.570		14.48		39,828
Non-Qualified XX	415.047		19.87		8,247
Non-Qualified XXIII	18,691.726		11.38		212,712
Non-Qualified XXIV	5,868.634		11.51		67,548
	1,303,778.308			$	33,286,660

146

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
ING U.S. Bond Index Portfolio - Class I
Contracts in accumulation period:
ING Select Opportunities	32,126.165	$	10.54	$	338,610
Non-Qualified V	6,786.724		11.16		75,740
Non-Qualified V (0.75)	74,414.093		11.31		841,623
Non-Qualified IX	1,358.822		11.09		15,069
Non-Qualified XII	24.317		11.30		275
Non-Qualified XX	1,871.587		11.25		21,055
Non-Qualified XXIII	1,053.741		11.53		12,150
	117,635.449			$	1,304,522
ING International Value Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	26,095.584	$	13.20	$	344,462
Non-Qualified V (0.75)	92,772.070		13.84		1,283,965
Non-Qualified IX	9,560.490		12.89		123,235
Non-Qualified XII	5,424.297		13.77		74,693
Non-Qualified XX	412.442		14.97		6,174
Non-Qualified XXIII	4,582.738		8.56		39,228
	138,847.621			$	1,871,757
ING MidCap Opportunities Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	20,219.576	$	16.41	$	331,803
Non-Qualified V (0.75)	84,720.627		17.20		1,457,195
Non-Qualified XII	2,867.836		17.12		49,097
Non-Qualified XX	5,725.462		22.49		128,766
Non-Qualified XXIII	2,052.716		12.62		25,905
	115,586.217			$	1,992,766
ING MidCap Opportunities Portfolio - Class S
Contracts in accumulation period:
Non-Qualified XIII	108,202.973	$	14.85	$	1,606,814
Non-Qualified XIV	94,156.359		14.42		1,357,735
Non-Qualified XV	35,874.729		14.21		509,780
Non-Qualified XVI	166.313		14.14		2,352
	238,400.374			$	3,476,681
ING SmallCap Opportunities Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	11,117.628	$	10.57	$	117,513
Non-Qualified V (0.75)	59,136.907		11.09		655,828
Non-Qualified XII	5,914.083		11.03		65,232
Non-Qualified XX	435.807		18.54		8,080
Non-Qualified XXII	219.387		13.64		2,992
Non-Qualified XXIII	217.579		11.91		2,591
	77,041.391			$	852,236

147

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
ING SmallCap Opportunities Portfolio - Class S
Contracts in accumulation period:
Non-Qualified XIII	99,557.078	$	10.12	$	1,007,518
Non-Qualified XIV	102,961.012		9.83		1,012,107
Non-Qualified XV	44,284.221		9.68		428,671
Non-Qualified XVI	1,735.762		9.63		16,715
	248,538.073			$	2,465,011
Invesco V.I. Capital Appreciation Fund - Series I Shares
Currently payable annuity contracts:	4,398.205	$	9.90 to $11.09	$	45,528
Contracts in accumulation period:
Non-Qualified V	7,335.849		8.92		65,436
Non-Qualified V (0.75)	56,602.487		9.46		535,460
Non-Qualified IX	170.760		8.66		1,479
Non-Qualified XII	10.024		9.40		94
Non-Qualified XXIII	115.297		9.48		1,093
	68,632.622			$	649,090
Invesco V.I. Core Equity Fund - Series I Shares
Currently payable annuity contracts:	14,700.586	$	12.76 to $13.39	$	196,523
Contracts in accumulation period:
Non-Qualified V	51,693.112		10.05		519,516
Non-Qualified V (0.75)	70,510.371		10.66		751,641
Non-Qualified IX	1,933.910		9.76		18,875
Non-Qualified XII	15.208		10.60		161
Non-Qualified XX	3,122.667		15.78		49,276
Non-Qualified XXIII	1,393.108		10.41		14,502
Non-Qualified XXIV	418.502		10.53		4,407
	143,787.464			$	1,554,901
Janus Aspen Series Balanced Portfolio - Institutional
Shares
Contracts in accumulation period:
Non-Qualified V (0.75)	374.992	$	38.24	$	14,340
Janus Aspen Series Enterprise Portfolio - Institutional
Shares
Contracts in accumulation period:
Non-Qualified V (0.75)	2.382	$	33.10	$	79
Non-Qualified IX	66.994		29.69		1,989
	69.376			$	2,068
Janus Aspen Series Flexible Bond Portfolio - Institutional
Shares
Contracts in accumulation period:
Non-Qualified V (0.75)	103.416	$	30.14	$	3,117
Janus Aspen Series Janus Portfolio - Institutional Shares
Contracts in accumulation period:
Non-Qualified IX	98.224	$	20.25	$	1,989

148

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
Janus Aspen Series Worldwide Portfolio - Institutional
Shares
Contracts in accumulation period:
Non-Qualified V (0.75)	55.341	$	24.92	$	1,379
Lord Abbett Series Fund - Mid-Cap Value Portfolio -
Class VC
Contracts in accumulation period:
Non-Qualified V	48,248.958	$	13.71	$	661,493
Non-Qualified V (0.75)	98,966.646		14.37		1,422,151
Non-Qualified IX	10,963.520		13.39		146,802
Non-Qualified XX	2,470.729		16.65		41,138
Non-Qualified XXIII	9,760.874		11.30		110,298
Non-Qualified XXIV	14,713.143		11.43		168,171
	185,123.870			$	2,550,053
Oppenheimer Global Securities/VA
Contracts in accumulation period:
Non-Qualified V (0.75)	2,543.587	$	24.77	$	63,005
Oppenheimer Main Street Fund®/VA
Currently payable annuity contracts	27,189.979	$	9.81 to $11.64	$	286,059
Oppenheimer Main Street Small Cap Fund®/VA
Contracts in accumulation period:
Non-Qualified V	3,126.681	$	13.17	$	41,178
Non-Qualified V (0.75)	51,040.118		13.55		691,594
Non-Qualified IX	3,594.552		12.98		46,657
Non-Qualified XII	351.332		13.51		4,746
Non-Qualified XX	5,390.412		13.40		72,232
Non-Qualified XXIII	1,261.677		11.45		14,446
	64,764.772			$	870,853
Oppenheimer Small- & Mid-Cap Growth Fund/VA
Currently payable annuity contracts	4,830.860	$	9.06 to $11.44	$	54,868
PIMCO Real Return Portfolio - Administrative Class
Contracts in accumulation period:
Non-Qualified V	62,386.620	$	13.54	$	844,715
Non-Qualified V (0.75)	434,117.831		14.00		6,077,650
Non-Qualified IX	2,915.843		13.31		38,810
Non-Qualified XX	422.005		13.81		5,828
Non-Qualified XXIII	7,689.297		11.32		87,043
	507,531.596			$	7,054,046

149

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
Division/Contract	Units		Unit Value		Extended Value
Pioneer Emerging Markets VCT Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	36,147.174	$	10.37	$	374,846
Non-Qualified V (0.75)	347,364.278		10.56		3,668,167
Non-Qualified IX	151.203		10.28		1,554
Non-Qualified XII	18,877.820		10.54		198,972
Non-Qualified XX	5,940.125		10.49		62,312
Non-Qualified XXIII	5,641.000		10.10		56,974
	414,121.600			$	4,362,825
Pioneer High Yield VCT Portfolio - Class I
Contracts in accumulation period:
Non-Qualified V	9,779.018	$	14.15	$	138,373
Non-Qualified V (0.75)	21,636.072		14.63		316,536
Non-Qualified IX	2,839.759		13.91		39,501
Non-Qualified XXIII	621.432		12.54		7,793
	34,876.281			$	502,203
Wanger International
Contracts in accumulation period:
Non-Qualified V	22,975.795	$	10.27	$	235,961
Non-Qualified V (0.75)	147,941.124		10.46		1,547,464
Non-Qualified IX	2,301.428		10.18		23,429
Non-Qualified XII	7,569.702		10.44		79,028
Non-Qualified XX	7,590.482		10.39		78,865
Non-Qualified XXIII	2,193.403		11.61		25,465
	190,571.934			$	1,990,212
Wanger Select
Contracts in accumulation period:
Non-Qualified V	25,406.196	$	16.40	$	416,662
Non-Qualified V (0.75)	178,654.732		16.96		3,029,984
Non-Qualified IX	1,005.068		16.13		16,212
Non-Qualified XX	1,135.889		16.74		19,015
Non-Qualified XXIII	2,118.433		11.89		25,188
	208,320.318			$	3,507,061
Wanger USA
Contracts in accumulation period:
Non-Qualified V	4,948.094	$	14.37	$	71,104
Non-Qualified V (0.75)	47,483.750		14.86		705,609
Non-Qualified IX	983.955		14.13		13,903
Non-Qualified XX	159.159		14.66		2,333
Non-Qualified XXIII	1,208.737		11.58		13,997
	54,783.695			$	806,946

ING Select Opportunities

Modified single premium deferred variable annuity contracts issued since April 2010 and having mortality and expense charge of 0.75%.

150

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

Non-Qualified 1964

Individual Contracts issued from December 1, 1964 to March 14, 1967.

Non-Qualified V

Certain AetnaPlus Contracts issued in connection with deferred compensation plans issued since August 28, 1992, and certain individual non-qualified Contracts.

Non-Qualified V (0.75)

Subset of Non-Qualified V Contracts having a mortality and expense charge of 0.75%

Non-Qualified VI

Certain existing Contracts that were converted to ACES, an administrative system (previously valued under Non-Qualified I).

Non-Qualified VII

Certain individual and group Contracts issued as non-qualified deferred annuity contracts or Individual retirement annuity Contracts issued since May 4, 1994.

Non-Qualified VIII

Certain individual retirement annuity Contracts issued since May 1, 1998.

Non-Qualified IX

Group Aetna Plus Contracts assessing an administrative expense charge effective April 7, 1997 issued in connection with deferred compensation plans.

Non-Qualified X

Group AetnaPlus contracts containing contractual limits on fees, issued in connection with deferred compensation plans and as individual non-qualified Contracts, resulting in reduced daily charges for certain funding options effective May 29, 1997.

Non-Qualified XI

Certain Contracts, previously valued under Non-Qualified VI, containing contractual limits on fees, resulting in reduced daily charges for certain funding options effective May 29, 1997.

151

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

Non-Qualified XII

Certain individual retirement annuity contracts issued since March 1999.

Non-Qualified XIII

Certain individual retirement annuity Contracts issued since October 1, 1998.

Non-Qualified XIV

Certain individual retirement annuity Contracts issued since September 1, 1998.

Non-Qualified XV

Certain individual retirement annuity Contracts issued since September 1, 1998.

Non-Qualified XVI

Certain individual retirement annuity Contracts issued since August 2000.

Non-Qualified XVIII

Certain individual retirement annuity Contracts issued since September 2000.

Non-Qualified XIX

Certain individual retirement annuity Contracts issued since August 2000.

Non-Qualified XX

Certain deferred compensation Contracts issued since December 2002.

Non-Qualified XXII

Certain AetnaPlus Contracts issued in conjunction with deferred compensation plans issued since August 28, 1992, and certain individual non-qualified contracts having a mortality and expense charge of 0.90%.

Non-Qualified XXIII

Certain contracts issued in connection with deferred compensation plans since July 2008 and having mortality and expense charge of 0.70%.

Non-Qualified XXIV

Certain contracts issued in connection with deferred compensation plans since June 2009 and having mortality and expense charge of 0.35%.

152

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

10. Financial Highlights

A summary of unit values, units outstanding and net assets for variable annuity Contracts, expense ratios, excluding expenses of underlying Funds, investment income ratios, and total return for the years ended December 31, 2010, 2009, 2008, 2007 and 2006, follows:

										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
American Funds Insurance Series® International
Fund - Class 2
2010	-			$	13.95			$	4	(e)				0.75	%					(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
Calvert VP SRI Balanced Portfolio
2010	59	$	10.37		to	$	24.75	$	962	1.27	%	0.70	%	to		1.40	%	10.60	%	to	11.39	%
2009	77	$	9.31		to	$	22.24	$	1,241	1.99	%	0.70	%	to		1.50	%	23.46	%	to	24.32	%
2008	100	$	7.49		to	$	17.89	$	1,172	2.65	%	0.70	%	to		1.40	%	-32.28	%	to	-31.82	%
2007	103	$	13.66		to	$	26.24	$	1,766	2.22	%	0.75	%	to		1.40	%	1.34	%	to	1.98	%
2006	130	$	13.48		to	$	25.73	$	2,101	2.00	%	0.75	%	to		1.40	%	7.24	%	to	7.97	%
Federated Capital Appreciation Fund II - Primary
Shares
2010	557	$	10.79		to	$	11.70	$	6,511	(e)		1.25	%	to		1.40	%			(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
Federated Capital Income Fund II
2010	192	$	18.59		to	$	19.03	$	3,562	4.16	%	1.25	%	to		1.40	%	10.52	%	to	10.70	%
2009	91	$	14.18		to	$	17.19	$	1,537	6.01	%	1.25	%	to		1.40	%	26.47	%	to	26.72	%
2008	112	$	11.19		to	$	13.57	$	1,491	6.21	%	1.25	%	to		1.40	%	-21.49	%	to	-21.38	%
2007	150	$	14.24		to	$	17.26	$	2,537	5.27	%	1.25	%	to		1.40	%	2.54	%	to	2.74	%
2006	184	$	13.86		to	$	16.80	$	3,039	5.95	%	1.25	%	to		1.40	%	14.09	%	to	14.21	%

153

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
Federated Fund for U.S. Government Securities II
2010	67			$	18.95			$	1,260	4.66	%			1.40	%			3.72				%
2009	88			$	18.27			$	1,615	5.04	%			1.40	%			3.69				%
2008	109			$	17.62			$	1,916	5.00	%			1.40	%			2.86				%
2007	124			$	17.13			$	2,125	4.43	%			1.40	%			4.77				%
2006	146			$	16.35			$	2,385	4.88	%			1.40	%			2.70				%
Federated High Income Bond Fund II - Primary Shares
2010	166	$	24.83		to	$	25.41	$	4,115	8.19	%	1.25	%	to		1.40	%	13.12	%	to	13.29	%
2009	197	$	21.95		to	$	22.43	$	4,314	11.59	%	1.25	%	to		1.40	%	50.76	%	to	50.94	%
2008	240	$	14.56		to	$	14.86	$	3,488	10.54	%	1.25	%	to		1.40	%	-27.05	%	to	-26.91	%
2007	280	$	19.96		to	$	20.33	$	5,582	8.28	%	1.25	%	to		1.40	%	1.99	%	to	2.11	%
2006	333	$	19.57		to	$	19.91	$	6,523	8.64	%	1.25	%	to		1.40	%	9.27	%	to	9.46	%
Federated Kaufmann Fund II - Primary Shares
2010	175			$	12.21			$	2,136	(e)				1.40	%					(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
Federated Prime Money Fund II
2010	147	$	9.90		to	$	13.34	$	1,959	-		1.25	%	to		1.40	%	-1.40				%
2009	111			$	13.53			$	1,502	0.49	%			1.40	%			-0.95				%
2008	128			$	13.66			$	1,747	2.68	%			1.40	%			1.11				%
2007	142			$	13.51			$	1,915	4.73	%			1.40	%			3.45				%
2006	161			$	13.06			$	2,102	4.36	%			1.40	%			3.08				%
Fidelity® VIP Equity-Income Portfolio - Initial Class
2010	3,455	$	10.17		to	$	25.89	$	63,098	1.68	%	0.35	%	to		1.75	%	13.13	%	to	14.73	%
2009	4,136	$	8.89		to	$	22.81	$	65,887	2.09	%	0.35	%	to		1.90	%	27.71	%	to	29.24	%
2008	5,003	$	6.88		to	$	17.76	$	61,149	2.21	%	0.70	%	to		1.90	%	-43.73	%	to	-43.06	%
2007	6,848	$	13.79		to	$	31.42	$	144,175	1.66	%	0.75	%	to		1.90	%	-0.43	%	to	75.00	%
2006	9,118	$	13.85		to	$	31.39	$	187,746	3.26	%	0.75	%	to		1.90	%	17.97	%	to	19.32	%

154

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
Fidelity® VIP Growth Portfolio - Initial Class
2010	522	$	9.86	to	$	20.74	$	9,794	0.34	%	0.35	%	to	1.50	%	22.35	%	to	23.70	%
2009	563	$	8.00	to	$	16.83	$	8,618	0.41	%	0.35	%	to	1.50	%	26.33	%	to	27.39	%
2008	627	$	6.28	to	$	13.22	$	7,951	0.81	%	0.70	%	to	1.50	%	-47.95	%	to	-47.56	%
2007	696	$	15.18	to	$	25.21	$	16,955	0.80	%	0.75	%	to	1.50	%	25.09	%	to	25.99	%
2006	728	$	12.05	to	$	20.01	$	14,214	0.65	%	0.75	%	to	1.50	%	5.24	%	to	6.10	%
Fidelity® VIP High Income Portfolio - Initial Class
2010	14	$	12.68	to	$	14.78	$	187	7.39	%	0.80	%	to	1.25	%	12.41	%	to	12.91	%
2009	16	$	11.28	to	$	13.09	$	192	10.73	%	0.80	%	to	1.25	%	42.24	%	to	42.90	%
2008	8	$	7.93	to	$	9.16	$	69	9.30	%	0.80	%	to	1.25	%	-25.96	%	to	-25.59	%
2007	8	$	10.71	to	$	12.31	$	103	5.52	%	0.80	%	to	1.25	%	1.52				%
2006	20	$	10.55	to	$	12.08	$	223	0.24	%	0.80	%	to	1.25	%	9.78	%	to	10.42	%
Fidelity® VIP Overseas Portfolio - Initial Class
2010	264	$	9.31	to	$	20.02	$	4,929	1.23	%	0.35	%	to	1.50	%	11.41	%	to	12.69	%
2009	324	$	8.28	to	$	17.84	$	5,452	2.05	%	0.35	%	to	1.50	%	24.67	%	to	25.64	%
2008	334	$	6.59	to	$	14.20	$	4,584	2.41	%	0.70	%	to	1.50	%	-44.65	%	to	-44.23	%
2007	409	$	17.69	to	$	25.46	$	10,176	3.36	%	0.75	%	to	1.50	%	15.53	%	to	16.42	%
2006	399	$	15.20	to	$	21.87	$	8,523	1.26	%	0.75	%	to	1.50	%	16.34	%	to	17.20	%
Fidelity® VIP Contrafund® Portfolio - Initial Class
2010	5,127	$	10.81	to	$	35.52	$	127,170	1.15	%	0.35	%	to	1.90	%	14.97	%	to	16.77	%
2009	6,028	$	9.29	to	$	30.73	$	126,570	1.30	%	0.35	%	to	1.90	%	33.10	%	to	34.83	%
2008	6,970	$	6.89	to	$	22.97	$	109,547	0.91	%	0.70	%	to	1.90	%	-43.57	%	to	-42.94	%
2007	9,132	$	12.72	to	$	40.52	$	241,923	0.86	%	0.75	%	to	1.90	%	15.37	%	to	16.73	%
2006	11,979	$	10.91	to	$	34.95	$	267,443	1.27	%	0.75	%	to	1.90	%	9.56	%	to	10.88	%
Fidelity® VIP Index 500 Portfolio - Initial Class
2010	947	$	20.26	to	$	23.89	$	22,102	1.78	%	1.25	%	to	1.40	%	13.38	%	to	13.57	%
2009	1,111	$	17.84	to	$	21.07	$	22,865	2.33	%	1.25	%	to	1.40	%	24.82	%	to	25.02	%
2008	1,317	$	14.27	to	$	16.88	$	21,722	2.06	%	1.25	%	to	1.40	%	-37.87	%	to	-37.77	%
2007	1,559	$	22.93	to	$	27.17	$	41,388	3.60	%	1.25	%	to	1.40	%	3.98	%	to	4.09	%
2006	1,948	$	22.03	to	$	26.13	$	49,643	1.82	%	1.25	%	to	1.40	%	14.10	%	to	14.32	%

155

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
Fidelity® VIP Investment Grade Bond Portfolio -
Initial Class
2010	42			$	20.43			$	868	3.48	%			1.40	%			6.30				%
2009	48			$	19.22			$	914	8.83	%			1.40	%			14.13				%
2008	52			$	16.84			$	876	4.19	%			1.40	%			-4.64				%
2007	61			$	17.66			$	1,079	4.37	%			1.40	%			2.91				%
2006	71			$	17.16			$	1,210	4.63	%			1.40	%			2.88				%
Franklin Small Cap Value Securities Fund - Class 2
2010	179	$	11.50		to	$	19.71	$	3,417	0.74	%	0.70	%	to		1.50	%	26.27	%	to	27.35	%
2009	223	$	9.03		to	$	15.49	$	3,377	1.54	%	0.70	%	to		1.50	%	27.21	%	to	28.27	%
2008	230	$	7.04		to	$	12.08	$	2,729	1.32	%	0.70	%	to		1.50	%	-34.01	%	to	-33.52	%
2007	236	$	17.32		to	$	18.17	$	4,263	0.74	%	0.75	%	to		1.50	%	-3.83	%	to	-3.14	%
2006	267	$	18.01		to	$	18.76	$	4,969	0.65	%	0.75	%	to		1.50	%	15.30	%	to	16.09	%
ING Balanced Portfolio - Class I
2010	3,405	$	10.04		to	$	38.49	$	81,044	2.77	%	0.35	%	to		2.25	%	11.56	%	to	13.75	%
2009	3,901	$	9.00		to	$	34.05	$	80,515	4.40	%	0.35	%	to		2.25	%	16.58	%	to	18.98	%
2008	4,677	$	7.72		to	$	28.83	$	81,353	3.74	%	0.70	%	to		2.25	%	-29.69	%	to	-28.64	%
2007	6,094	$	10.98		to	$	40.47	$	145,449	2.69	%	0.75	%	to		2.25	%	3.20	%	to	4.78	%
2006	7,358	$	10.64		to	$	38.70	$	165,989	2.39	%	0.75	%	to		2.25	%	7.47	%	to	9.16	%
ING Intermediate Bond Portfolio - Class I
2010	5,235	$	11.35		to	$	90.43	$	101,061	4.92	%	0.35	%	to		2.25	%	7.41	%	to	9.45	%
2009	5,981	$	10.40		to	$	83.24	$	104,817	6.58	%	0.35	%	to		2.25	%	9.09	%	to	11.25	%
2008	6,247	$	9.39		to	$	75.43	$	100,529	5.89	%	0.70	%	to		2.25	%	-10.54	%	to	-9.18	%
2007	5,709	$	10.77		to	$	83.34	$	105,197	3.54	%	0.75	%	to		2.25	%	3.67	%	to	5.26	%
2006	6,657	$	10.25		to	$	79.47	$	115,703	3.76	%	0.75	%	to		2.25	%	1.75	%	to	3.26	%
ING American Funds Growth Portfolio
2010	988	$	12.20		to	$	12.93	$	12,525	0.10	%	0.95	%	to		1.75	%	16.08	%	to	16.97	%
2009	1,327	$	10.43		to	$	11.09	$	14,407	1.85	%	0.95	%	to		1.90	%	35.98	%	to	43.28	%
2008	1,593	$	7.67		to	$	7.98	$	12,540	0.80	%	0.95	%	to		1.90	%	-45.33	%	to	-44.81	%
2007	1,968	$	14.03		to	$	14.46	$	28,095	0.26	%	0.95	%	to		1.90	%	5.55	%	to	10.72	%
2006	2,461	$	12.80		to	$	13.33	$	31,969	0.17	%	0.95	%	to		1.90	%	7.65	%	to	8.56	%

156

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING American Funds Growth-Income Portfolio
2010	926	$	10.51		to	$	11.13	$	10,115	0.87	%	0.95	%	to		1.75	%	8.91	%	to	14.04	%
2009	1,262	$	9.58		to	$	10.06	$	12,494	2.25	%	0.95	%	to		1.90	%	28.07	%	to	29.31	%
2008	1,488	$	7.48		to	$	7.78	$	11,419	1.40	%	0.95	%	to		1.90	%	-41.41	%	to	-38.79	%
2007	1,948	$	12.33		to	$	12.92	$	24,551	0.99	%	0.95	%	to		1.90	%	2.49	%	to	3.50	%
2006	2,517	$	12.03		to	$	12.53	$	30,744	0.73	%	0.95	%	to		1.90	%	12.43	%	to	13.49	%
ING American Funds International Portfolio
2010	910	$	14.23		to	$	15.04	$	13,439	0.88	%	0.95	%	to		1.75	%	4.79	%	to	5.65	%
2009	1,173	$	13.47		to	$	14.28	$	16,435	3.43	%	0.95	%	to		1.90	%	39.59	%	to	46.31	%
2008	1,357	$	9.65		to	$	10.04	$	13,434	1.78	%	0.95	%	to		1.90	%	-45.38	%	to	-43.02	%
2007	1,687	$	17.09		to	$	17.87	$	29,453	0.89	%	0.95	%	to		1.90	%	17.14	%	to	18.33	%
2006	2,095	$	14.59		to	$	15.16	$	30,978	0.86	%	0.95	%	to		1.90	%	16.07	%	to	17.15	%
ING Artio Foreign Portfolio - Service Class
2010	409	$	8.36		to	$	14.08	$	4,771	-		0.70	%	to		1.75	%	4.94	%	to	6.09	%
2009	664	$	7.88		to	$	13.28	$	7,153	3.47	%	0.70	%	to		1.90	%	17.89	%	to	19.39	%
2008	802	$	6.60		to	$	11.13	$	7,156	-		0.70	%	to		1.90	%	-44.69	%	to	-44.04	%
2007	1,022	$	12.33		to	$	19.89	$	15,744	0.09	%	0.75	%	to		1.90	%	14.27	%	to	15.57	%
2006	1,083	$	10.79		to	$	17.21	$	13,881	-		0.75	%	to		1.90	%	27.57	%	to	28.24	%
ING BlackRock Inflation Protected Bond Portfolio -
Institutional Class
2010	28			$	10.61			$	297	(e)				0.75	%					(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
ING BlackRock Large Cap Growth Portfolio -
Institutional Class
2010	2,809	$	8.33		to	$	10.58	$	24,230	0.47	%	0.35	%	to		1.90	%	11.51	%	to	13.16	%
2009	3,166	$	7.47		to	$	9.35	$	24,319	0.58	%	0.35	%	to		1.90	%	28.13	%	to	29.79	%
2008	3,602	$	5.83		to	$	7.15	$	21,426	0.20	%	0.70	%	to		1.90	%	-40.14	%	to	-39.43	%
2007	4,435	$	9.74		to	$	10.45	$	43,667	(b)		0.75	%	to		1.90	%			(b)
2006	(b)				(b)				(b)	(b)				(b)						(b)

157

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Clarion Global Real Estate Portfolio -
Institutional Class
2010	158	$	10.11	to	$	10.30	$	1,619	7.68	%	0.70	%	to	1.50	%	14.63	%	to	15.49	%
2009	192	$	8.82	to	$	8.91	$	1,713	2.00	%	0.75	%	to	1.50	%	31.84	%	to	32.79	%
2008	162	$	6.69	to	$	6.71	$	1,087	(c)		0.75	%	to	1.50	%			(c)
2007	(c)			(c)				(c)	(c)				(c)					(c)
2006	(c)			(c)				(c)	(c)				(c)					(c)
ING Clarion Global Real Estate Portfolio - Service
Class
2010	104	$	10.85	to	$	11.08	$	1,145	8.22	%	0.95	%	to	1.40	%	14.33	%	to	14.82	%
2009	117	$	9.31	to	$	9.65	$	1,118	2.38	%	0.95	%	to	1.90	%	30.94	%	to	32.19	%
2008	124	$	7.11	to	$	7.30	$	902	-		0.95	%	to	1.90	%	-42.43	%	to	-41.83	%
2007	192	$	12.35	to	$	12.55	$	2,393	3.72	%	0.95	%	to	1.90	%	-9.06	%	to	-8.19	%
2006	148	$	13.58	to	$	13.67	$	2,017	(a)		0.95	%	to	1.90	%			(a)
ING Clarion Real Estate Portfolio - Service Class
2010	220	$	10.08	to	$	11.03	$	2,302	3.84	%	0.70	%	to	1.50	%	26.02	%	to	27.07	%
2009	188	$	8.07	to	$	8.68	$	1,553	3.21	%	0.70	%	to	1.50	%	33.83	%	to	34.99	%
2008	173	$	6.03	to	$	6.43	$	1,064	1.48	%	0.70	%	to	1.50	%	-39.40	%	to	-38.93	%
2007	149	$	9.95	to	$	10.07	$	1,504	2.63	%	0.75	%	to	1.50	%	-18.97	%	to	-18.40	%
2006	88	$	11.88	to	$	12.34	$	1,079	(a)		0.75	%	to	1.50	%			(a)
ING FMRSM Diversified Mid Cap Portfolio -
Institutional Class
2010	1,548	$	11.44	to	$	11.96	$	18,278	0.36	%	0.95	%	to	1.90	%	26.27	%	to	27.37	%
2009	1,736	$	9.06	to	$	9.39	$	16,149	0.67	%	0.95	%	to	1.90	%	36.86	%	to	38.29	%
2008	2,013	$	6.62	to	$	6.79	$	13,578	1.14	%	0.95	%	to	1.90	%	-40.14	%	to	-39.59	%
2007	2,569	$	11.06	to	$	11.27	$	28,743	0.26	%	0.95	%	to	1.90	%	12.63	%	to	13.65	%
2006	2,932	$	9.82	to	$	9.94	$	28,943	(a)		0.95	%	to	1.90	%			(a)
ING FMRSM Diversified Mid Cap Portfolio - Service
Class
2010	128	$	11.79	to	$	15.92	$	2,007	0.12	%	0.70	%	to	1.50	%	26.45	%	to	27.46	%
2009	100	$	9.25	to	$	12.49	$	1,237	0.49	%	0.70	%	to	1.50	%	37.05	%	to	38.16	%
2008	91	$	8.80	to	$	9.04	$	815	0.77	%	0.75	%	to	1.50	%	-40.05	%	to	-39.61	%
2007	84	$	14.68	to	$	14.97	$	1,256	0.07	%	0.75	%	to	1.50	%	12.84	%	to	13.58	%
2006	125	$	13.01	to	$	13.18	$	1,644	-		0.75	%	to	1.50	%	10.58	%	to	11.13	%

158

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Franklin Income Portfolio - Service Class
2010	381	$	11.00	to	$	11.42	$	4,307	5.10	%	0.95	%	to	1.75	%	11.00	%	to	11.85	%
2009	454	$	9.85	to	$	10.21	$	4,595	6.29	%	0.95	%	to	1.90	%	29.43	%	to	30.73	%
2008	450	$	7.61	to	$	7.81	$	3,482	3.07	%	0.95	%	to	1.90	%	-30.57	%	to	-29.89	%
2007	628	$	10.96	to	$	11.14	$	6,948	1.10	%	0.95	%	to	1.90	%	0.64	%	to	1.64	%
2006	395	$	10.89	to	$	10.96	$	4,316	(a)		0.95	%	to	1.90	%			(a)
ING Franklin Mutual Shares Portfolio - Service Class
2010	181	$	9.88	to	$	10.18	$	1,831	0.43	%	0.95	%	to	1.75	%	9.66	%	to	10.53	%
2009	257	$	8.97	to	$	9.21	$	2,349	0.14	%	0.95	%	to	1.90	%	24.07	%	to	25.31	%
2008	258	$	7.23	to	$	7.35	$	1,885	3.00	%	0.95	%	to	1.90	%	-38.99	%	to	-38.34	%
2007	307	$	11.85	to	$	11.92	$	3,654	(b)		0.95	%	to	1.90	%			(b)
2006	(b)			(b)				(b)	(b)				(b)					(b)
ING Global Resources Portfolio - Service Class
2010	644	$	10.22	to	$	13.41	$	8,254	0.85	%	0.70	%	to	1.75	%	19.61	%	to	20.80	%
2009	819	$	8.46	to	$	11.18	$	8,735	0.31	%	0.70	%	to	1.90	%	34.85	%	to	36.45	%
2008	791	$	6.20	to	$	8.25	$	6,198	2.14	%	0.70	%	to	1.90	%	-42.07	%	to	-41.43	%
2007	827	$	12.93	to	$	14.18	$	11,102	0.02	%	0.75	%	to	1.90	%	30.74	%	to	31.93	%
2006	162	$	9.89	to	$	9.96	$	1,610	(a)		0.95	%	to	1.90	%			(a)
ING Janus Contrarian Portfolio - Service Class
2010	164	$	8.03	to	$	9.36	$	1,340	-		0.70	%	to	1.50	%	12.31	%	to	13.12	%
2009	186	$	7.15	to	$	7.24	$	1,347	0.94	%	0.75	%	to	1.50	%	34.71	%	to	35.33	%
2008	26	$	5.33	to	$	5.35	$	139	(c)		0.75	%	to	1.25	%			(c)
2007	(c)			(c)				(c)	(c)				(c)					(c)
2006	(c)			(c)				(c)	(c)				(c)					(c)
ING JPMorgan Emerging Markets Equity Portfolio -
Institutional Class
2010	474	$	14.89	to	$	19.74	$	8,255	0.68	%	0.95	%	to	1.75	%	18.55	%	to	19.47	%
2009	422	$	12.49	to	$	16.58	$	6,191	1.49	%	0.95	%	to	1.90	%	68.78	%	to	70.26	%
2008	378	$	7.40	to	$	9.76	$	3,328	2.42	%	0.95	%	to	1.90	%	-52.10	%	to	-51.59	%
2007	548	$	15.45	to	$	20.23	$	9,890	1.13	%	0.95	%	to	1.90	%	36.12	%	to	37.48	%
2006	319	$	11.35	to	$	14.76	$	4,487	0.62	%	0.95	%	to	1.90	%	34.28	%	to	34.55	%

159

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING JPMorgan Emerging Markets Equity Portfolio -
Service Class
2010	476	$	11.96	to	$	24.50	$	11,521	0.42	%	0.70	%	to	1.50	%	18.53	%	to	19.48	%
2009	403	$	10.01	to	$	20.52	$	8,208	1.21	%	0.70	%	to	1.50	%	69.03	%	to	70.53	%
2008	349	$	5.87	to	$	12.05	$	4,184	2.52	%	0.70	%	to	1.50	%	-52.01	%	to	-51.65	%
2007	415	$	24.42	to	$	24.92	$	10,312	0.96	%	0.75	%	to	1.50	%	36.42	%	to	37.45	%
2006	349	$	17.90	to	$	18.13	$	6,325	0.56	%	0.75	%	to	1.50	%	33.78	%	to	34.80	%
ING JPMorgan Small Cap Core Equity Portfolio -
Institutional Class
2010	148	$	13.66	to	$	14.30	$	2,093	0.44	%	0.95	%	to	1.75	%	24.86	%	to	25.88	%
2009	178	$	10.86	to	$	11.36	$	2,000	0.71	%	0.95	%	to	1.90	%	24.97	%	to	26.22	%
2008	215	$	8.69	to	$	9.00	$	1,919	0.72	%	0.95	%	to	1.90	%	-30.98	%	to	-30.34	%
2007	327	$	12.59	to	$	12.92	$	4,187	0.32	%	0.95	%	to	1.90	%	-3.45	%	to	-2.49	%
2006	524	$	13.04	to	$	13.25	$	6,901	0.08	%	0.95	%	to	1.90	%	14.79	%	to	15.82	%
ING JPMorgan Small Cap Core Equity Portfolio -
Service Class
2010	23	$	11.72	to	$	14.15	$	324	-		0.70	%	to	1.25	%	25.11	%	to	25.89	%
2009	13	$	9.31	to	$	11.25	$	143	-		0.70	%	to	1.25	%	25.74	%	to	26.40	%
2008	11	$	7.37	to	$	8.90	$	102	0.81	%	0.70	%	to	1.25	%	-30.80	%	to	-30.47	%
2007	11	$	12.63	to	$	12.80	$	145	0.40	%	0.75	%	to	1.25	%	-2.92	%	to	-2.44	%
2006	27	$	13.01	to	$	13.12	$	358	-		0.75	%	to	1.25	%	15.80				%
ING Large Cap Growth Portfolio - Institutional Class
2010	625	$	13.35	to	$	15.26	$	8,989	0.40	%	0.95	%	to	1.75	%	12.60	%	to	13.46	%
2009	707	$	11.82	to	$	13.45	$	8,990	0.49	%	0.95	%	to	1.90	%	39.98	%	to	41.43	%
2008	773	$	8.40	to	$	9.51	$	6,965	0.51	%	0.95	%	to	1.90	%	-28.73	%	to	-28.01	%
2007	947	$	11.72	to	$	13.21	$	11,913	0.33	%	0.95	%	to	1.90	%	9.80	%	to	10.82	%
2006	1,258	$	10.62	to	$	11.92	$	14,399	-		0.95	%	to	1.90	%	3.90	%	to	4.93	%
ING Lord Abbett Growth and Income Portfolio -
Institutional Class
2010	278	$	9.42	to	$	10.55	$	2,705	0.71	%	0.70	%	to	1.50	%	15.72	%	to	16.75	%
2009	382	$	8.14	to	$	9.04	$	3,183	0.83	%	0.70	%	to	1.50	%	17.29	%	to	18.17	%
2008	568	$	6.94	to	$	7.65	$	4,020	3.22	%	0.70	%	to	1.50	%	-37.31	%	to	-36.84	%
2007	628	$	11.07	to	$	11.21	$	7,030	0.06	%	0.75	%	to	1.50	%	3.06	%	to	3.51	%
2006	4	$	10.79	to	$	10.83	$	45	(a)		0.75	%	to	1.25	%			(a)

160

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Lord Abbett Growth and Income Portfolio -
Service Class
2010	46	$	9.37	to	$	9.57	$	432	0.43	%	0.95	%	to	1.40	%	15.39	%	to	16.00	%
2009	61	$	8.10	to	$	8.25	$	500	0.63	%	0.95	%	to	1.45	%	17.05	%	to	17.69	%
2008	66	$	6.86	to	$	7.01	$	458	2.41	%	0.95	%	to	1.75	%	-37.75	%	to	-37.24	%
2007	86	$	11.02	to	$	11.17	$	955	1.58	%	0.95	%	to	1.75	%	2.32	%	to	3.23	%
2006	99	$	10.75	to	$	10.82	$	1,071	(a)		0.95	%	to	1.90	%			(a)
ING Marsico Growth Portfolio - Service Class
2010	133	$	10.04	to	$	12.16	$	1,523	0.58	%	0.75	%	to	1.50	%	18.14	%	to	18.92	%
2009	164	$	8.38	to	$	10.23	$	1,595	0.90	%	0.70	%	to	1.75	%	26.78	%	to	28.07	%
2008	173	$	6.61	to	$	7.99	$	1,285	0.58	%	0.70	%	to	1.75	%	-41.40	%	to	-40.73	%
2007	171	$	11.25	to	$	13.48	$	2,142	-		0.75	%	to	1.90	%	11.94	%	to	13.28	%
2006	83	$	10.05	to	$	11.90	$	918	-		0.75	%	to	1.90	%	3.60	%	to	4.20	%
ING Marsico International Opportunities Portfolio -
Service Class
2010	382	$	9.30	to	$	14.20	$	4,700	1.36	%	0.70	%	to	1.50	%	12.11	%	to	13.00	%
2009	488	$	8.23	to	$	12.57	$	5,429	1.23	%	0.70	%	to	1.75	%	35.17	%	to	36.71	%
2008	627	$	6.02	to	$	9.21	$	5,138	1.03	%	0.70	%	to	1.90	%	-50.48	%	to	-49.86	%
2007	822	$	12.70	to	$	18.37	$	13,733	1.00	%	0.75	%	to	1.90	%	18.26	%	to	19.67	%
2006	952	$	10.69	to	$	15.35	$	13,618	0.03	%	0.75	%	to	1.90	%	21.75	%	to	23.10	%
ING MFS Total Return Portfolio - Institutional Class
2010	3,512	$	11.18	to	$	11.82	$	40,810	0.44	%	0.95	%	to	1.90	%	8.02	%	to	9.14	%
2009	4,367	$	10.35	to	$	10.83	$	46,669	2.54	%	0.95	%	to	1.90	%	15.90	%	to	17.08	%
2008	5,335	$	8.93	to	$	9.25	$	48,840	5.92	%	0.95	%	to	1.90	%	-23.61	%	to	-22.92	%
2007	7,812	$	11.69	to	$	12.00	$	92,899	3.07	%	0.95	%	to	1.90	%	2.27	%	to	3.27	%
2006	10,701	$	11.43	to	$	11.62	$	123,605	2.62	%	0.95	%	to	1.90	%	10.01	%	to	11.09	%
ING MFS Total Return Portfolio - Service Class
2010	76	$	13.85	to	$	14.39	$	1,091	0.50	%	0.75	%	to	1.50	%	8.18	%	to	9.02	%
2009	98	$	9.87	to	$	13.20	$	1,288	2.46	%	0.70	%	to	1.50	%	16.16	%	to	17.08	%
2008	103	$	8.43	to	$	11.28	$	1,153	6.12	%	0.70	%	to	1.50	%	-23.51	%	to	-22.90	%
2007	111	$	14.29	to	$	14.72	$	1,623	2.99	%	0.75	%	to	1.50	%	2.44	%	to	3.25	%
2006	118	$	13.92	to	$	14.37	$	1,658	2.36	%	0.75	%	to	1.50	%	10.28	%	to	11.07	%

161

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING MFS Utilities Portfolio - Service Class
2010	146	$	10.36		to	$	17.28	$	2,489	2.62	%	0.70	%	to		1.50	%	12.04	%	to	12.87	%
2009	148	$	9.18		to	$	15.31	$	2,238	5.00	%	0.70	%	to		1.50	%	30.80	%	to	31.90	%
2008	187	$	6.96		to	$	11.62	$	2,161	3.26	%	0.70	%	to		1.50	%	-38.65	%	to	-38.16	%
2007	219	$	18.42		to	$	18.79	$	4,096	0.87	%	0.75	%	to		1.50	%	25.48	%	to	26.45	%
2006	81	$	14.68		to	$	14.86	$	1,201	0.06	%	0.75	%	to		1.50	%	28.88	%	to	29.78	%
ING PIMCO High Yield Portfolio - Service Class
2010	322	$	13.47		to	$	15.01	$	4,727	7.37	%	0.70	%	to		1.50	%	12.60	%	to	13.48	%
2009	347	$	11.87		to	$	13.24	$	4,530	8.35	%	0.70	%	to		1.50	%	47.37	%	to	48.38	%
2008	199	$	8.00		to	$	8.93	$	1,748	8.39	%	0.70	%	to		1.40	%	-23.67	%	to	-23.08	%
2007	248	$	10.75		to	$	11.61	$	2,850	6.50	%	0.75	%	to		1.40	%	1.42	%	to	2.11	%
2006	346	$	10.55		to	$	11.37	$	3,918	6.45	%	0.75	%	to		1.50	%	7.42	%	to	8.08	%
ING Pioneer Equity Income Portfolio - Institutional
Class
2010	392	$	8.15		to	$	10.33	$	3,430	2.42	%	0.35	%	to		1.50	%	17.60	%	to	18.87	%
2009	418	$	6.93		to	$	8.69	$	3,102	-		0.35	%	to		1.50	%	10.88	%	to	11.95	%
2008	592	$	6.25		to	$	7.70	$	3,765	2.84	%	0.70	%	to		1.50	%	-31.09	%	to	-30.69	%
2007	686	$	9.07		to	$	9.19	$	6,290	(b)		0.75	%	to		1.50	%			(b)
2006	(b)				(b)				(b)	(b)				(b)						(b)
ING Pioneer Fund Portfolio - Institutional Class
2010	908	$	10.23		to	$	12.26	$	10,904	1.16	%	0.75	%	to		2.25	%	13.53	%	to	15.29	%
2009	1,085	$	8.92		to	$	10.66	$	11,381	1.38	%	0.75	%	to		2.25	%	21.75	%	to	23.51	%
2008	1,190	$	7.26		to	$	8.64	$	10,140	3.23	%	0.75	%	to		2.25	%	-36.00	%	to	-34.98	%
2007	1,663	$	11.18		to	$	13.33	$	21,812	1.25	%	0.75	%	to		2.25	%	2.97	%	to	4.52	%
2006	2,078	$	10.78		to	$	12.77	$	26,316	-		0.75	%	to		2.25	%	14.47	%	to	15.88	%
ING Pioneer Mid Cap Value Portfolio - Institutional
Class
2010	259	$	10.48		to	$	10.90	$	2,795	1.11	%	0.70	%	to		1.50	%	16.44	%	to	17.33	%
2009	284	$	9.00		to	$	9.29	$	2,620	1.39	%	0.70	%	to		1.50	%	23.63	%	to	24.53	%
2008	328	$	7.28		to	$	7.46	$	2,428	2.07	%	0.70	%	to		1.50	%	-33.94	%	to	-33.42	%
2007	337	$	11.02		to	$	11.16	$	3,758	0.11	%	0.75	%	to		1.50	%	4.99				%
2006	3			$	10.63			$	36	(a)				0.75	%					(a)

162

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Pioneer Mid Cap Value Portfolio - Service Class
2010	79	$	10.21	to	$	10.60	$	831	0.89	%	0.95	%	to	1.75	%	15.89	%	to	16.74	%
2009	82	$	8.81	to	$	9.08	$	737	1.11	%	0.95	%	to	1.75	%	23.04	%	to	24.04	%
2008	96	$	7.14	to	$	7.32	$	700	1.54	%	0.95	%	to	1.90	%	-34.38	%	to	-33.76	%
2007	113	$	10.88	to	$	11.05	$	1,247	0.88	%	0.95	%	to	1.90	%	3.61	%	to	4.44	%
2006	33	$	10.52	to	$	10.58	$	344	(a)		0.95	%	to	1.75	%			(a)
ING Retirement Growth Portfolio - Adviser Class
2010	536	$	10.31	to	$	10.37	$	5,538	0.36	%	0.95	%	to	1.40	%	10.03	%	to	10.55	%
2009	600	$	9.36	to	$	9.38	$	5,625	(d)		0.95	%	to	1.90	%			(d)
2008	(d)			(d)				(d)	(d)				(d)					(d)
2007	(d)			(d)				(d)	(d)				(d)					(d)
2006	(d)			(d)				(d)	(d)				(d)					(d)
ING Retirement Moderate Growth Portfolio -
Adviser Class
2010	611	$	10.54	to	$	10.60	$	6,453	0.45	%	0.95	%	to	1.40	%	9.45	%	to	9.96	%
2009	795	$	9.62	to	$	9.64	$	7,664	(d)		0.95	%	to	1.75	%			(d)
2008	(d)			(d)				(d)	(d)				(d)					(d)
2007	(d)			(d)				(d)	(d)				(d)					(d)
2006	(d)			(d)				(d)	(d)				(d)					(d)
ING Retirement Moderate Portfolio - Adviser Class
2010	672	$	10.65	to	$	10.71	$	7,174	0.59	%	0.95	%	to	1.40	%	8.01	%	to	8.51	%
2009	915	$	9.85	to	$	9.87	$	9,028	(d)		0.95	%	to	1.90	%			(d)
2008	(d)			(d)				(d)	(d)				(d)					(d)
2007	(d)			(d)				(d)	(d)				(d)					(d)
2006	(d)			(d)				(d)	(d)				(d)					(d)
ING T. Rowe Price Capital Appreciation Portfolio -
Service Class
2010	828	$	11.38	to	$	13.93	$	11,444	1.61	%	0.70	%	to	1.50	%	12.37	%	to	13.23	%
2009	901	$	10.05	to	$	12.31	$	11,020	1.94	%	0.70	%	to	1.50	%	31.27	%	to	32.41	%
2008	861	$	7.59	to	$	9.30	$	7,963	4.70	%	0.70	%	to	1.50	%	-28.63	%	to	-28.07	%
2007	700	$	12.68	to	$	12.93	$	9,010	1.88	%	0.75	%	to	1.50	%	2.84	%	to	3.61	%
2006	466	$	12.33	to	$	12.48	$	5,804	1.29	%	0.75	%	to	1.50	%	13.27	%	to	13.76	%

163

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING T. Rowe Price Equity Income Portfolio - Service
Class
2010	432	$	9.77		to	$	15.76	$	5,791	1.50	%	0.70	%	to		1.75	%	12.95	%	to	14.11	%
2009	509	$	8.60		to	$	13.92	$	6,057	1.78	%	0.70	%	to		1.90	%	22.51	%	to	23.99	%
2008	476	$	7.02		to	$	11.30	$	4,389	4.20	%	0.75	%	to		1.90	%	-36.93	%	to	-36.15	%
2007	486	$	11.13		to	$	17.84	$	7,362	1.39	%	0.75	%	to		1.90	%	1.09	%	to	2.30	%
2006	419	$	11.01		to	$	17.57	$	6,350	1.24	%	0.75	%	to		1.90	%	17.29	%	to	18.16	%
ING Templeton Global Growth Portfolio - Service
Class
2010	35	$	9.25		to	$	9.45	$	327	1.23	%	0.95	%	to		1.40	%	6.20	%	to	6.78	%
2009	56	$	8.54		to	$	8.85	$	489	2.16	%	0.95	%	to		1.90	%	29.79	%	to	30.92	%
2008	66	$	6.58		to	$	6.76	$	438	1.06	%	0.95	%	to		1.90	%	-40.88	%	to	-40.23	%
2007	113	$	11.13		to	$	11.31	$	1,268	1.33	%	0.95	%	to		1.90	%	0.45	%	to	1.43	%
2006	62	$	11.08		to	$	11.15	$	692	(a)		0.95	%	to		1.90	%			(a)
ING U.S. Stock Index Portfolio - Service Class
2010	5			$	11.67			$	60	(e)				0.75	%					(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
ING Van Kampen Growth and Income Portfolio -
Service Class
2010	72	$	10.70		to	$	12.00	$	857	0.23	%	0.70	%	to		1.50	%	10.79	%	to	11.69	%
2009	81	$	9.58		to	$	10.75	$	865	1.18	%	0.70	%	to		1.50	%	22.12	%	to	23.14	%
2008	96	$	7.78		to	$	8.74	$	835	3.84	%	0.70	%	to		1.50	%	-33.23	%	to	-32.72	%
2007	92	$	12.73		to	$	12.99	$	1,195	1.42	%	0.75	%	to		1.50	%	1.03	%	to	1.80	%
2006	116	$	12.60		to	$	12.76	$	1,476	1.35	%	0.75	%	to		1.50	%	14.34	%	to	15.16	%
ING Wells Fargo HealthCare Portfolio - Service Class
2010	18	$	9.78		to	$	12.27	$	214	-		0.70	%	to		1.25	%	5.58	%	to	6.23	%
2009	25	$	11.29		to	$	11.55	$	283	-		0.75	%	to		1.25	%	18.59	%	to	19.20	%
2008	69	$	9.52		to	$	9.69	$	666	0.16	%	0.75	%	to		1.25	%	-29.53	%	to	-29.22	%
2007	41	$	13.51		to	$	13.69	$	556	0.18	%	0.75	%	to		1.25	%	7.22	%	to	7.71	%
2006	44	$	12.60		to	$	12.71	$	562	-		0.75	%	to		1.25	%	12.40	%	to	13.08	%

164

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING Money Market Portfolio - Class I
2010	7,277	$	9.97		to	$	16.27	$	97,671	0.02	%	0.35	%	to		1.90	%	-1.68	%	to	-0.10	%
2009	10,475	$	10.02		to	$	16.35	$	140,358	0.30	%	0.35	%	to		1.90	%	-1.56	%	to	0.10	%
2008	15,397	$	10.06		to	$	16.42	$	207,378	5.24	%	0.70	%	to		1.90	%	0.65	%	to	1.92	%
2007	15,622	$	10.59		to	$	16.11	$	204,844	4.10	%	0.75	%	to		1.90	%	3.14	%	to	4.34	%
2006	18,036	$	10.17		to	$	15.44	$	224,967	2.87	%	0.75	%	to		2.25	%	2.49	%	to	4.11	%
ING Money Market Portfolio - Class S
2010	32			$	9.91			$	313	(e)				0.75	%					(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
ING American Century Small-Mid Cap Value
Portfolio - Service Class
2010	131	$	13.00		to	$	20.82	$	2,244	1.13	%	0.35	%	to		1.25	%	20.45	%	to	21.61	%
2009	91	$	10.69		to	$	17.22	$	1,309	1.75	%	0.35	%	to		1.25	%	34.10	%	to	34.63	%
2008	106	$	10.76		to	$	12.82	$	1,200	0.69	%	0.75	%	to		1.50	%	-27.69	%	to	-27.11	%
2007	89	$	14.88		to	$	17.62	$	1,399	0.39	%	0.75	%	to		1.50	%	-4.31	%	to	-3.60	%
2006	102	$	15.55		to	$	18.32	$	1,650	0.01	%	0.75	%	to		1.50	%	13.67	%	to	14.58	%
ING Baron Small Cap Growth Portfolio - Service
Class
2010	239	$	9.99		to	$	20.21	$	3,700	-		0.70	%	to		1.75	%	24.25	%	to	25.62	%
2009	267	$	8.00		to	$	16.13	$	3,335	-		0.70	%	to		1.90	%	32.67	%	to	34.28	%
2008	298	$	6.03		to	$	12.04	$	2,765	-		0.70	%	to		1.90	%	-42.35	%	to	-41.71	%
2007	329	$	10.46		to	$	20.69	$	5,233	-		0.75	%	to		1.90	%	4.08	%	to	5.32	%
2006	541	$	10.05		to	$	19.69	$	7,061	-		0.75	%	to		1.90	%	13.49	%	to	14.40	%
ING Columbia Small Cap Value Portfolio - Service
Class
2010	70	$	10.08		to	$	10.39	$	719	0.87	%	0.75	%	to		1.40	%	23.53	%	to	24.28	%
2009	80	$	8.05		to	$	8.36	$	663	1.26	%	0.75	%	to		1.75	%	22.53	%	to	23.85	%
2008	114	$	6.54		to	$	6.75	$	761	0.08	%	0.75	%	to		1.90	%	-35.38	%	to	-34.59	%
2007	164	$	10.12		to	$	10.32	$	1,676	0.08	%	0.75	%	to		1.90	%	1.00	%	to	2.18	%
2006	327	$	10.02		to	$	10.10	$	3,294	(a)		0.75	%	to		1.90	%			(a)

165

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Davis New York Venture Portfolio - Service
Class
2010	245	$	9.64	to	$	14.34	$	2,620	0.39	%	0.70	%	to	1.50	%	10.40	%	to	11.28	%
2009	260	$	8.63	to	$	12.92	$	2,481	0.65	%	0.70	%	to	1.75	%	29.39	%	to	30.76	%
2008	285	$	6.65	to	$	9.91	$	2,118	0.76	%	0.70	%	to	1.90	%	-40.36	%	to	-39.73	%
2007	274	$	11.15	to	$	13.92	$	3,386	0.26	%	0.75	%	to	1.90	%	2.20	%	to	3.42	%
2006	173	$	10.91	to	$	15.96	$	2,083	-		0.75	%	to	1.90	%	12.11	%	to	13.01	%
ING JPMorgan Mid Cap Value Portfolio - Service
Class
2010	106	$	11.47	to	$	20.12	$	1,745	0.68	%	0.35	%	to	1.50	%	21.11	%	to	22.49	%
2009	138	$	9.40	to	$	16.52	$	1,764	1.21	%	0.35	%	to	1.50	%	23.86	%	to	24.83	%
2008	129	$	7.53	to	$	13.27	$	1,530	1.91	%	0.70	%	to	1.50	%	-34.07	%	to	-33.54	%
2007	165	$	17.23	to	$	20.01	$	2,982	0.52	%	0.75	%	to	1.50	%	0.82	%	to	1.58	%
2006	156	$	17.09	to	$	19.74	$	2,766	-		0.75	%	to	1.50	%	14.78	%	to	15.69	%
ING Legg Mason ClearBridge Aggressive Growth
Portfolio - Initial Class
2010	1,600	$	5.57	to	$	17.24	$	20,533	-		0.35	%	to	1.90	%	21.88	%	to	24.04	%
2009	1,808	$	4.57	to	$	13.96	$	18,675	-		0.35	%	to	1.90	%	29.83	%	to	31.40	%
2008	2,073	$	3.52	to	$	10.63	$	16,298	-		0.70	%	to	1.90	%	-40.34	%	to	-39.64	%
2007	2,545	$	5.90	to	$	17.61	$	32,332	-		0.75	%	to	1.90	%	-3.44	%	to	-2.34	%
2006	3,252	$	6.11	to	$	18.04	$	42,509	-		0.75	%	to	1.90	%	8.14	%	to	9.47	%
ING Oppenheimer Global Portfolio - Initial Class
2010	6,770	$	11.18	to	$	13.96	$	92,120	1.58	%	0.35	%	to	1.90	%	13.88	%	to	15.66	%
2009	7,725	$	9.70	to	$	12.14	$	91,664	2.37	%	0.35	%	to	1.90	%	36.95	%	to	38.57	%
2008	8,892	$	7.00	to	$	8.78	$	76,622	2.27	%	0.70	%	to	1.90	%	-41.47	%	to	-40.72	%
2007	10,904	$	12.18	to	$	14.86	$	159,447	1.08	%	0.75	%	to	1.90	%	4.48	%	to	5.77	%
2006	13,690	$	13.51	to	$	14.07	$	190,280	0.07	%	0.75	%	to	1.90	%	15.80	%	to	17.09	%
ING Oppenheimer Global Strategic Income Portfolio -
Initial Class
2010	3,344	$	11.57	to	$	13.70	$	44,608	3.12	%	0.35	%	to	2.25	%	13.30	%	to	15.50	%
2009	3,753	$	10.05	to	$	11.92	$	43,730	3.79	%	0.35	%	to	2.25	%	18.91	%	to	20.74	%
2008	4,539	$	8.33	to	$	9.88	$	44,027	5.46	%	0.70	%	to	2.25	%	-17.39	%	to	-16.18	%
2007	5,739	$	11.33	to	$	11.79	$	66,638	4.56	%	0.75	%	to	2.25	%	6.29	%	to	7.95	%
2006	6,500	$	10.54	to	$	10.93	$	70,286	0.38	%	0.75	%	to	2.25	%	6.07	%	to	7.66	%

166

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING Oppenheimer Global Strategic Income Portfolio -
Service Class
2010	9			$	13.09			$	115	2.69	%			1.25	%			14.12				%
2009	9			$	11.47			$	108	6.45	%			1.25	%			19.85				%
2008	2			$	9.57			$	16	5.56	%			1.25	%			-16.85				%
2007	2			$	11.51			$	20	9.52	%			1.25	%			7.27				%
2006	-			$	10.73			$	1	(a)				1.25	%					(a)
ING PIMCO Total Return Portfolio - Service Class
2010	997	$	11.90		to	$	15.44	$	15,202	3.38	%	0.70	%	to		1.50	%	5.93	%	to	6.82	%
2009	1,003	$	11.14		to	$	14.46	$	14,338	3.27	%	0.70	%	to		1.50	%	10.98	%	to	11.85	%
2008	776	$	9.96		to	$	12.94	$	9,940	4.66	%	0.70	%	to		1.50	%	-1.68	%	to	-0.92	%
2007	620	$	12.51		to	$	13.06	$	8,027	3.35	%	0.75	%	to		1.50	%	7.75	%	to	8.56	%
2006	563	$	11.61		to	$	12.03	$	6,721	1.62	%	0.75	%	to		1.50	%	2.47	%	to	3.26	%
ING Pioneer High Yield Portfolio - Initial Class
2010	1,392	$	13.82		to	$	15.34	$	19,661	6.04	%	0.70	%	to		1.90	%	16.72	%	to	18.09	%
2009	1,614	$	11.84		to	$	12.99	$	19,385	7.84	%	0.75	%	to		1.90	%	63.99	%	to	65.90	%
2008	1,746	$	7.22		to	$	7.83	$	12,668	7.56	%	0.75	%	to		1.90	%	-30.23	%	to	-29.96	%
2007	32	$	11.08		to	$	11.18	$	355	23.40	%	0.75	%	to		1.25	%	4.73	%	to	5.37	%
2006	2	$	10.58		to	$	10.61	$	21	(a)		0.75	%	to		1.25	%			(a)
ING Solution 2015 Portfolio - Service Class
2010	316	$	10.63		to	$	11.90	$	3,709	2.28	%	0.70	%	to		1.50	%	9.61	%	to	10.50	%
2009	311	$	9.62		to	$	10.78	$	3,305	3.95	%	0.70	%	to		1.50	%	20.49	%	to	21.46	%
2008	280	$	7.92		to	$	8.88	$	2,423	2.37	%	0.70	%	to		1.50	%	-27.94	%	to	-27.39	%
2007	119	$	11.99		to	$	12.23	$	1,452	0.58	%	0.75	%	to		1.50	%	3.01	%	to	3.82	%
2006	82	$	11.64		to	$	11.78	$	959	0.27	%	0.75	%	to		1.50	%	9.36	%	to	9.89	%
ING Solution 2025 Portfolio - Service Class
2010	215	$	10.48		to	$	11.75	$	2,404	1.54	%	0.35	%	to		1.50	%	12.04	%	to	13.37	%
2009	204	$	9.28		to	$	10.41	$	2,009	3.22	%	0.35	%	to		1.50	%	24.18	%	to	24.90	%
2008	186	$	7.43		to	$	8.34	$	1,467	1.08	%	0.70	%	to		1.25	%	-34.64	%	to	-34.33	%
2007	191	$	12.53		to	$	12.70	$	2,417	0.43	%	0.75	%	to		1.25	%	3.30	%	to	3.84	%
2006	70	$	12.13		to	$	12.23	$	853	0.23	%	0.75	%	to		1.25	%	11.18	%	to	11.79	%

167

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Solution 2035 Portfolio - Service Class
2010	296	$	10.44	to	$	11.90	$	3,271	1.18	%	0.35	%	to	1.25	%	13.10	%	to	14.16	%
2009	239	$	9.18	to	$	10.47	$	2,339	2.94	%	0.35	%	to	1.25	%	26.77	%	to	27.50	%
2008	157	$	7.20	to	$	8.22	$	1,196	1.34	%	0.70	%	to	1.25	%	-37.78	%	to	-37.49	%
2007	125	$	12.97	to	$	13.15	$	1,630	0.58	%	0.75	%	to	1.25	%	4.01	%	to	4.53	%
2006	36	$	12.47	to	$	12.58	$	453	0.11	%	0.75	%	to	1.25	%	12.65				%
ING Solution 2045 Portfolio - Service Class
2010	87	$	10.25	to	$	11.92	$	940	1.12	%	0.35	%	to	1.50	%	13.39	%	to	14.73	%
2009	122	$	8.96	to	$	10.44	$	1,200	2.34	%	0.35	%	to	1.50	%	28.18	%	to	28.92	%
2008	99	$	6.95	to	$	8.10	$	764	1.03	%	0.70	%	to	1.25	%	-40.58	%	to	-40.27	%
2007	102	$	13.38	to	$	13.56	$	1,381	0.36	%	0.75	%	to	1.25	%	4.45	%	to	4.95	%
2006	21	$	12.81	to	$	12.92	$	272	0.05	%	0.75	%	to	1.25	%	13.66				%
ING Solution Income Portfolio - Service Class
2010	74	$	10.98	to	$	12.04	$	879	2.76	%	0.70	%	to	1.25	%	8.33	%	to	8.82	%
2009	131	$	10.09	to	$	11.07	$	1,436	5.89	%	0.70	%	to	1.25	%	16.28	%	to	16.38	%
2008	144	$	8.67	to	$	9.52	$	1,349	1.53	%	0.70	%	to	0.75	%	-17.29				%
2007	110	$	11.35	to	$	11.51	$	1,264	1.20	%	0.75	%	to	1.25	%	3.94	%	to	4.45	%
2006	37	$	10.92	to	$	11.02	$	408	0.18	%	0.75	%	to	1.25	%	6.02				%
ING T. Rowe Price Diversified Mid Cap Growth
Portfolio - Initial Class
2010	3,375	$	11.70	to	$	14.79	$	48,429	0.28	%	0.35	%	to	1.90	%	26.01	%	to	28.03	%
2009	3,724	$	9.16	to	$	11.62	$	42,125	0.42	%	0.35	%	to	1.90	%	43.73	%	to	45.43	%
2008	4,178	$	6.30	to	$	8.01	$	32,650	0.46	%	0.70	%	to	1.90	%	-44.27	%	to	-43.58	%
2007	4,927	$	12.59	to	$	14.23	$	68,707	0.19	%	0.75	%	to	1.90	%	11.23	%	to	12.51	%
2006	6,287	$	11.90	to	$	12.67	$	78,292	-		0.75	%	to	1.90	%	7.04	%	to	8.35	%
ING T. Rowe Price Growth Equity Portfolio - Initial
Class
2010	1,303	$	10.93	to	$	30.17	$	32,431	0.03	%	0.35	%	to	1.50	%	15.12	%	to	16.42	%
2009	1,461	$	9.42	to	$	26.18	$	31,789	0.16	%	0.35	%	to	1.50	%	40.87	%	to	41.88	%
2008	1,613	$	6.64	to	$	18.58	$	25,211	1.34	%	0.70	%	to	1.50	%	-43.09	%	to	-42.62	%
2007	1,963	$	12.35	to	$	32.60	$	53,823	0.49	%	0.75	%	to	1.50	%	8.25	%	to	9.05	%
2006	2,343	$	12.35	to	$	30.09	$	60,240	0.23	%	0.75	%	to	1.50	%	11.65	%	to	12.44	%

168

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Templeton Foreign Equity Portfolio - Initial
Class
2010	2,227	$	8.61	to	$	9.95	$	19,635	2.22	%	0.35	%	to	1.90	%	6.69	%	to	8.51	%
2009	2,572	$	8.07	to	$	9.17	$	21,070	-		0.35	%	to	1.90	%	29.74	%	to	31.31	%
2008	2,911	$	6.22	to	$	6.93	$	18,241	(c)		0.70	%	to	1.90	%			(c)
2007	(c)			(c)				(c)	(c)				(c)					(c)
2006	(c)			(c)				(c)	(c)				(c)					(c)
ING Thornburg Value Portfolio - Initial Class
2010	1,092	$	6.92	to	$	32.62	$	17,212	1.50	%	0.70	%	to	1.75	%	9.49	%	to	10.66	%
2009	1,201	$	6.24	to	$	29.51	$	17,350	1.13	%	0.70	%	to	1.90	%	42.02	%	to	43.73	%
2008	1,334	$	4.39	to	$	20.54	$	13,421	0.52	%	0.70	%	to	1.90	%	-40.92	%	to	-40.20	%
2007	1,750	$	7.43	to	$	34.35	$	27,434	0.48	%	0.75	%	to	1.90	%	5.24	%	to	6.45	%
2006	2,035	$	7.06	to	$	32.27	$	28,919	0.47	%	0.75	%	to	1.90	%	14.61	%	to	15.95	%
ING UBS U.S. Large Cap Equity Portfolio - Initial
Class
2010	1,174	$	7.10	to	$	16.53	$	15,770	0.88	%	0.70	%	to	1.75	%	11.46	%	to	12.69	%
2009	1,402	$	6.28	to	$	14.68	$	16,616	1.39	%	0.70	%	to	1.90	%	29.22	%	to	30.74	%
2008	1,676	$	4.86	to	$	11.23	$	15,297	2.38	%	0.70	%	to	1.90	%	-40.95	%	to	-40.20	%
2007	2,083	$	8.23	to	$	18.78	$	30,926	0.72	%	0.75	%	to	1.90	%	-0.72	%	to	0.43	%
2006	2,519	$	8.29	to	$	18.70	$	36,982	0.79	%	0.75	%	to	1.90	%	12.33	%	to	13.68	%
ING Van Kampen Comstock Portfolio - Service Class
2010	72	$	10.81	to	$	14.90	$	937	1.33	%	0.70	%	to	1.50	%	13.41	%	to	14.39	%
2009	90	$	9.45	to	$	13.06	$	1,025	1.84	%	0.70	%	to	1.50	%	26.58	%	to	27.53	%
2008	153	$	7.41	to	$	10.26	$	1,370	3.71	%	0.70	%	to	1.50	%	-37.39	%	to	-36.94	%
2007	180	$	13.64	to	$	16.31	$	2,568	1.24	%	0.75	%	to	1.50	%	-3.74	%	to	-3.00	%
2006	221	$	14.17	to	$	16.85	$	3,248	0.66	%	0.75	%	to	1.50	%	14.09	%	to	14.99	%
ING Van Kampen Equity and Income Portfolio -
Initial Class
2010	4,907	$	11.40	to	$	12.82	$	61,835	1.73	%	0.35	%	to	1.75	%	10.37	%	to	11.94	%
2009	5,882	$	10.22	to	$	11.52	$	66,795	1.79	%	0.35	%	to	1.90	%	20.33	%	to	21.86	%
2008	7,182	$	8.39	to	$	9.48	$	67,293	4.97	%	0.70	%	to	1.90	%	-24.82	%	to	-23.94	%
2007	9,133	$	12.07	to	$	12.49	$	112,954	2.44	%	0.75	%	to	1.90	%	1.59	%	to	2.83	%
2006	11,772	$	11.84	to	$	12.18	$	142,375	1.91	%	0.75	%	to	1.90	%	10.52	%	to	11.84	%

169

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING Strategic Allocation Conservative Portfolio -
Class I
2010	505	$	10.71	to	$	19.98	$	8,905	4.40	%	0.70	%	to	1.50	%	9.40	%	to	10.30	%
2009	544	$	9.71	to	$	18.12	$	8,694	7.99	%	0.70	%	to	1.50	%	16.09	%	to	16.99	%
2008	600	$	8.30	to	$	15.49	$	8,278	4.46	%	0.70	%	to	1.50	%	-24.71	%	to	-24.14	%
2007	712	$	17.01	to	$	20.42	$	13,112	3.40	%	0.75	%	to	1.50	%	4.23	%	to	4.99	%
2006	802	$	16.28	to	$	19.45	$	14,115	2.69	%	0.75	%	to	1.50	%	6.77	%	to	7.58	%
ING Strategic Allocation Growth Portfolio - Class I
2010	506	$	9.28	to	$	20.28	$	8,728	3.63	%	0.35	%	to	2.25	%	10.61	%	to	12.73	%
2009	574	$	8.39	to	$	18.07	$	8,694	9.92	%	0.35	%	to	2.25	%	22.48	%	to	24.86	%
2008	711	$	6.85	to	$	14.54	$	8,438	2.39	%	0.70	%	to	2.25	%	-37.50	%	to	-36.53	%
2007	716	$	10.96	to	$	22.91	$	14,104	1.78	%	0.75	%	to	2.25	%	2.62	%	to	4.28	%
2006	800	$	10.68	to	$	21.97	$	15,119	1.35	%	0.75	%	to	2.25	%	10.67	%	to	12.32	%
ING Strategic Allocation Moderate Portfolio - Class I
2010	645	$	9.94	to	$	19.99	$	10,595	4.10	%	0.35	%	to	2.25	%	9.47	%	to	11.68	%
2009	673	$	9.08	to	$	17.98	$	10,045	8.73	%	0.35	%	to	2.25	%	19.16	%	to	21.48	%
2008	770	$	7.62	to	$	14.87	$	9,608	3.23	%	0.70	%	to	2.25	%	-32.02	%	to	-31.00	%
2007	893	$	11.21	to	$	21.55	$	16,300	2.24	%	0.75	%	to	2.25	%	3.13	%	to	4.71	%
2006	1,165	$	10.87	to	$	20.58	$	20,258	1.93	%	0.75	%	to	2.25	%	8.70	%	to	10.35	%
ING Growth and Income Portfolio - Class I
2010	10,173	$	7.34	to	$	292.82	$	225,273	1.04	%	0.35	%	to	2.25	%	11.72	%	to	13.76	%
2009	11,088	$	6.57	to	$	258.97	$	215,519	1.43	%	0.35	%	to	2.25	%	27.33	%	to	29.89	%
2008	11,849	$	5.16	to	$	200.72	$	186,679	1.48	%	0.70	%	to	2.25	%	-39.08	%	to	-38.10	%
2007	12,365	$	8.47	to	$	324.86	$	339,189	1.33	%	0.75	%	to	2.25	%	5.09	%	to	6.62	%
2006	14,714	$	8.06	to	$	305.35	$	372,591	1.14	%	0.75	%	to	2.25	%	11.63	%	to	13.32	%
ING GET U.S. Core Portfolio - Series 5
2010	129	$	10.46	to	$	10.78	$	1,377	1.75	%	1.45	%	to	1.90	%	0.10	%	to	0.56	%
2009	139	$	10.25	to	$	10.72	$	1,481	3.54	%	1.45	%	to	2.25	%	-0.58	%	to	0.19	%
2008	159	$	10.31	to	$	10.70	$	1,685	1.67	%	1.45	%	to	2.25	%	-9.48	%	to	-8.70	%
2007	206	$	11.32	to	$	11.72	$	2,393	1.73	%	1.45	%	to	2.40	%	-0.35	%	to	0.69	%
2006	284	$	11.36	to	$	11.64	$	3,282	1.93	%	1.45	%	to	2.40	%	8.60	%	to	9.60	%

170

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING GET U.S. Core Portfolio - Series 6
2010	1,468	$	10.24	to	$	10.54	$	15,203	2.11	%	1.45	%	to	1.90	%	0.10	%	to	0.57	%
2009	1,792	$	10.04	to	$	10.48	$	18,495	2.06	%	1.45	%	to	2.25	%	-0.59	%	to	0.19	%
2008	2,171	$	10.10	to	$	10.46	$	22,445	1.88	%	1.45	%	to	2.25	%	-8.27	%	to	-7.52	%
2007	2,779	$	10.96	to	$	11.31	$	31,137	2.38	%	1.45	%	to	2.40	%	0.83	%	to	1.80	%
2006	3,851	$	10.87	to	$	11.11	$	42,523	2.61	%	1.45	%	to	2.40	%	7.84	%	to	8.81	%
ING GET U.S. Core Portfolio - Series 7
2010	853	$	10.22	to	$	10.51	$	8,795	2.15	%	1.45	%	to	1.90	%	0.59	%	to	1.06	%
2009	1,035	$	9.98	to	$	10.40	$	10,586	2.28	%	1.45	%	to	2.25	%	-1.29	%	to	-0.48	%
2008	1,220	$	10.11	to	$	10.45	$	12,593	2.00	%	1.45	%	to	2.25	%	-7.16	%	to	-6.36	%
2007	1,751	$	10.84	to	$	11.16	$	19,355	2.47	%	1.45	%	to	2.40	%	0.84	%	to	1.73	%
2006	2,664	$	10.75	to	$	10.97	$	29,018	2.50	%	1.45	%	to	2.40	%	7.61	%	to	8.72	%
ING GET U.S. Core Portfolio - Series 8
2010	730	$	10.26	to	$	10.53	$	7,580	2.23	%	1.45	%	to	1.90	%	0.39	%	to	0.96	%
2009	842	$	10.18	to	$	10.43	$	8,683	2.16	%	1.45	%	to	1.95	%	-0.10	%	to	0.38	%
2008	1,061	$	10.02	to	$	10.39	$	10,922	1.90	%	1.45	%	to	2.40	%	-8.74	%	to	-7.81	%
2007	1,361	$	10.98	to	$	11.27	$	15,240	1.97	%	1.45	%	to	2.40	%	1.10	%	to	2.08	%
2006	2,552	$	10.86	to	$	11.04	$	28,056	1.80	%	1.45	%	to	2.40	%	8.06	%	to	9.09	%
ING GET U.S. Core Portfolio - Series 9
2010	588	$	10.15	to	$	10.61	$	6,162	2.09	%	1.45	%	to	2.25	%	1.40	%	to	2.22	%
2009	686	$	10.01	to	$	10.38	$	7,044	2.23	%	1.45	%	to	2.25	%	-0.69	%	to	0.10	%
2008	791	$	10.08	to	$	10.37	$	8,130	2.08	%	1.45	%	to	2.25	%	-7.35	%	to	-6.58	%
2007	1,076	$	10.88	to	$	11.10	$	11,868	2.53	%	1.45	%	to	2.25	%	1.59	%	to	2.49	%
2006	1,856	$	10.71	to	$	10.83	$	20,035	1.29	%	1.45	%	to	2.25	%	7.64	%	to	8.52	%
ING GET U.S. Core Portfolio - Series 10
2010	420	$	10.22	to	$	10.46	$	4,340	2.63	%	1.45	%	to	1.90	%	2.10	%	to	2.55	%
2009	473	$	9.98	to	$	10.20	$	4,779	2.65	%	1.45	%	to	1.95	%	-2.82	%	to	-2.30	%
2008	630	$	10.17	to	$	10.44	$	6,522	2.65	%	1.45	%	to	2.25	%	-6.01	%	to	-5.26	%
2007	909	$	10.82	to	$	11.02	$	9,950	2.31	%	1.45	%	to	2.25	%	1.22	%	to	2.04	%
2006	1,672	$	10.69	to	$	10.80	$	18,001	0.75	%	1.45	%	to	2.25	%	7.33	%	to	8.22	%

171

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING GET U.S. Core Portfolio - Series 11
2010	466	$	10.29		to	$	10.72	$	4,945	2.57	%	1.45	%	to	2.25	%	2.49	%	to	3.28	%
2009	586	$	10.04		to	$	10.38	$	6,024	3.90	%	1.45	%	to	2.25	%	-3.00	%	to	-2.17	%
2008	772	$	10.30		to	$	10.61	$	8,130	2.27	%	1.45	%	to	2.40	%	-1.90	%	to	-0.93	%
2007	1,072	$	10.50		to	$	10.71	$	11,430	3.86	%	1.45	%	to	2.40	%	-0.38	%	to	0.56	%
2006	1,783	$	10.54		to	$	10.65	$	18,897	0.11	%	1.45	%	to	2.40	%	5.29	%	to	6.29	%
ING GET U.S. Core Portfolio - Series 12
2010	1,201	$	10.28		to	$	10.77	$	12,788	2.80	%	1.45	%	to	2.40	%	3.21	%	to	4.26	%
2009	1,522	$	9.96		to	$	10.33	$	15,586	3.10	%	1.45	%	to	2.40	%	-2.92	%	to	-2.09	%
2008	1,946	$	10.26		to	$	10.55	$	20,401	1.62	%	1.45	%	to	2.40	%	-8.47	%	to	-7.54	%
2007	3,718	$	11.21		to	$	11.41	$	42,061	1.30	%	1.45	%	to	2.40	%	0.54	%	to	1.51	%
2006	4,373	$	11.15		to	$	11.24	$	48,943	(a)		1.45	%	to	2.40	%			(a)
ING GET U.S. Core Portfolio - Series 13
2010	1,200	$	10.45		to	$	10.69	$	12,706	2.55	%	1.45	%	to	1.95	%	4.60	%	to	5.01	%
2009	1,430	$	9.89		to	$	10.18	$	14,452	3.52	%	1.45	%	to	2.25	%	-4.26	%	to	-3.42	%
2008	1,853	$	10.33		to	$	10.54	$	19,436	2.20	%	1.45	%	to	2.25	%	0.10	%	to	0.86	%
2007	3,214	$	10.30		to	$	10.45	$	33,324	0.61	%	1.45	%	to	2.40	%	2.39	%	to	3.36	%
2006	4,416	$	10.06		to	$	10.11	$	44,505	(a)		1.45	%	to	2.40	%			(a)
ING GET U.S. Core Portfolio - Series 14
2010	908	$	10.33		to	$	10.75	$	9,684	3.89	%	1.45	%	to	2.40	%	4.24	%	to	5.39	%
2009	1,241	$	9.91		to	$	10.20	$	12,578	3.96	%	1.45	%	to	2.40	%	-3.22	%	to	-2.30	%
2008	2,041	$	10.24		to	$	10.44	$	21,091	1.89	%	1.45	%	to	2.40	%	0.59	%	to	1.56	%
2007	2,501	$	10.18		to	$	10.28	$	25,572	-		1.45	%	to	2.40	%	2.50	%	to	2.80	%
2006	9			$	10.00			$	85	(a)		0.95	%	to	1.25	%			(a)
ING BlackRock Science and Technology
Opportunities Portfolio - Class I
2010	1,300	$	5.06		to	$	17.57	$	6,924	-		0.70	%	to	1.75	%	16.52	%	to	17.75	%
2009	1,248	$	4.33		to	$	14.96	$	5,656	-		0.70	%	to	1.90	%	49.83	%	to	51.79	%
2008	1,247	$	2.88		to	$	9.89	$	3,743	-		0.70	%	to	1.90	%	-40.97	%	to	-40.27	%
2007	1,830	$	4.86		to	$	16.58	$	9,192	-		0.75	%	to	1.90	%	16.82	%	to	18.20	%
2006	1,911	$	4.14		to	$	14.07	$	8,139	-		0.75	%	to	1.90	%	5.24	%	to	6.60	%

172

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000 s)	RatioA		(lowest to highest)						(lowest to highest)
ING Euro STOXX 50 Index Portfolio - Institutional
Class
2010	4			$	9.42			$	34	(e)				0.75	%					(e)
2009	(e)				(e)				(e)	(e)				(e)						(e)
2008	(e)				(e)				(e)	(e)				(e)						(e)
2007	(e)				(e)				(e)	(e)				(e)						(e)
2006	(e)				(e)				(e)	(e)				(e)						(e)
ING Index Plus LargeCap Portfolio - Class I
2010	5,572	$	7.84		to	$	20.66	$	77,272	1.95	%	0.35	%	to		2.25	%	11.35	%	to	13.57	%
2009	7,031	$	7.02		to	$	18.26	$	84,361	3.02	%	0.35	%	to		2.25	%	20.43	%	to	22.96	%
2008	8,508	$	5.80		to	$	14.93	$	79,909	2.29	%	0.70	%	to		2.25	%	-38.56	%	to	-37.69	%
2007	10,284	$	9.42		to	$	23.96	$	155,324	1.17	%	0.75	%	to		2.25	%	2.70	%	to	4.22	%
2006	9,664	$	9.15		to	$	22.99	$	152,360	1.09	%	0.75	%	to		2.25	%	11.99	%	to	13.70	%
ING Index Plus MidCap Portfolio - Class I
2010	433	$	10.85		to	$	24.80	$	9,868	1.09	%	0.35	%	to		1.50	%	20.12	%	to	21.48	%
2009	494	$	8.96		to	$	20.51	$	9,299	1.60	%	0.35	%	to		1.50	%	29.77	%	to	31.44	%
2008	527	$	6.85		to	$	15.69	$	7,814	1.43	%	0.70	%	to		1.50	%	-38.51	%	to	-38.02	%
2007	606	$	11.44		to	$	25.34	$	14,668	0.80	%	0.75	%	to		1.50	%	3.90	%	to	4.68	%
2006	724	$	10.94		to	$	24.21	$	16,714	0.62	%	0.75	%	to		1.50	%	7.81	%	to	8.63	%
ING Index Plus SmallCap Portfolio - Class I
2010	248	$	11.02		to	$	18.23	$	4,105	0.72	%	0.35	%	to		1.50	%	21.06	%	to	22.42	%
2009	293	$	9.03		to	$	14.96	$	3,939	1.73	%	0.35	%	to		1.50	%	22.91	%	to	24.49	%
2008	313	$	7.28		to	$	12.08	$	3,465	0.94	%	0.70	%	to		1.50	%	-34.53	%	to	-34.09	%
2007	375	$	15.87		to	$	18.33	$	6,359	0.46	%	0.75	%	to		1.50	%	-7.63	%	to	-6.92	%
2006	480	$	11.11		to	$	19.70	$	8,727	0.41	%	0.75	%	to		1.50	%	12.07	%	to	13.00	%
ING International Index Portfolio - Class I
2010	784	$	7.91		to	$	14.96	$	10,272	3.55	%	0.70	%	to		1.75	%	5.96	%	to	7.06	%
2009	989	$	7.44		to	$	14.01	$	11,857	-		0.70	%	to		1.90	%	25.89	%	to	26.77	%
2008	36	$	5.91		to	$	5.94	$	211	(c)		0.75	%	to		1.50	%			(c)
2007	(c)				(c)				(c)	(c)				(c)						(c)
2006	(c)				(c)				(c)	(c)				(c)						(c)

173

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements

										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING International Index Portfolio - Class S
2010	4			$	13.52			$	53	2.11	%			1.25	%					6.29	%
2009	3			$	12.72			$	42	(d)				1.25	%					(d)
2008	(d)				(d)				(d)	(d)				(d)						(d)
2007	(d)				(d)				(d)	(d)				(d)						(d)
2006	(d)				(d)				(d)	(d)				(d)						(d)
ING Russell™ Large Cap Growth Index Portfolio -
Class I
2010	2,128	$	11.71		to	$	14.18	$	27,852	0.66	%	0.70	%	to		1.90	%	10.67	%	to 11.92	%
2009	2,458	$	11.71		to	$	12.73	$	28,908	(d)		0.75	%	to		1.90	%			(d)
2008	(d)				(d)				(d)	(d)				(d)						(d)
2007	(d)				(d)				(d)	(d)				(d)						(d)
2006	(d)				(d)				(d)	(d)				(d)						(d)
ING Russell™ Large Cap Index Portfolio - Class I
2010	1,418	$	8.91		to	$	14.37	$	19,011	3.38	%	0.70	%	to		2.25	%	9.70	%	to 11.43	%
2009	1,651	$	8.06		to	$	12.93	$	20,115	-		0.70	%	to		2.25	%	22.17	%	to 22.71	%
2008	96	$	6.63		to	$	6.65	$	641	(c)		0.75	%	to		1.25	%			(c)
2007	(c)				(c)				(c)	(c)				(c)						(c)
2006	(c)				(c)				(c)	(c)				(c)						(c)
ING Russell™ Large Cap Value Index Portfolio -
Class I
2010	635	$	11.05		to	$	13.86	$	8,621	1.52	%	0.75	%	to		1.75	%	9.45	%	to 10.35	%
2009	812	$	12.47		to	$	12.56	$	10,184	(d)		0.95	%	to		1.90	%			(d)
2008	(d)				(d)				(d)	(d)				(d)						(d)
2007	(d)				(d)				(d)	(d)				(d)						(d)
2006	(d)				(d)				(d)	(d)				(d)						(d)
ING Russell™ Large Cap Value Index Portfolio -
Class S
2010	113	$	13.71		to	$	13.74	$	1,547	1.41	%	1.25	%	to		1.40	%	9.59	%	to 9.74	%
2009	125	$	12.51		to	$	12.52	$	1,568	(d)		1.25	%	to		1.40	%			(d)
2008	(d)				(d)				(d)	(d)				(d)						(d)
2007	(d)				(d)				(d)	(d)				(d)						(d)
2006	(d)				(d)				(d)	(d)				(d)						(d)

174

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
ING Russell™ Mid Cap Growth Index Portfolio -
Class S
2010	23	$	15.87		to	$	16.06	$	367	-		0.75	%	to		1.50	%	23.98	%	to	24.88	%
2009	8	$	12.80		to	$	12.86	$	101	(d)		0.75	%	to		1.50	%			(d)
2008	(d)				(d)				(d)	(d)				(d)						(d)
2007	(d)				(d)				(d)	(d)				(d)						(d)
2006	(d)				(d)				(d)	(d)				(d)						(d)
ING Russell™ Mid Cap Index Portfolio - Class I
2010	23	$	10.12		to	$	12.80	$	260	0.48	%	0.75	%	to		1.25	%	23.72	%	to	24.36	%
2009	19	$	8.18		to	$	8.25	$	159	-		0.75	%	to		1.25	%	39.12				%
2008	5			$	5.93			$	29	(c)				0.75	%					(c)
2007	(c)				(c)				(c)	(c)				(c)						(c)
2006	(c)				(c)				(c)	(c)				(c)						(c)
ING Russell™ Small Cap Index Portfolio - Class I
2010	33	$	10.77		to	$	12.74	$	373	-		0.75	%	to		1.50	%	24.86	%	to	25.46	%
2009	14	$	8.69		to	$	8.76	$	123	-		0.75	%	to		1.25	%	25.68				%
2008	5			$	6.97			$	35	(c)				0.75	%					(c)
2007	(c)				(c)				(c)	(c)				(c)						(c)
2006	(c)				(c)				(c)	(c)				(c)						(c)
ING Small Company Portfolio - Class I
2010	1,304	$	11.38		to	$	32.87	$	33,287	0.53	%	0.35	%	to		1.90	%	21.98	%	to	24.03	%
2009	1,495	$	9.21		to	$	26.63	$	30,900	0.62	%	0.35	%	to		1.90	%	25.16	%	to	27.30	%
2008	1,717	$	7.27		to	$	21.03	$	27,869	1.10	%	0.70	%	to		1.90	%	-32.37	%	to	-31.57	%
2007	2,343	$	13.38		to	$	30.74	$	53,080	0.20	%	0.75	%	to		1.90	%	3.91	%	to	5.13	%
2006	3,127	$	13.29		to	$	29.24	$	68,006	0.41	%	0.75	%	to		1.90	%	14.57	%	to	15.93	%
ING U.S. Bond Index Portfolio - Class I
2010	118	$	10.54		to	$	11.53	$	1,305	2.83	%	0.70	%	to		1.50	%	4.79	%	to	5.39	%
2009	63	$	10.65		to	$	10.94	$	675	3.37	%	0.70	%	to		1.25	%	4.51	%	to	5.09	%
2008	9	$	10.19		to	$	10.22	$	96	(c)		0.75	%	to		1.25	%			(c)
2007	(c)				(c)				(c)	(c)				(c)						(c)
2006	(c)				(c)				(c)	(c)				(c)						(c)

175

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
ING International Value Portfolio - Class I
2010	139	$	8.56	to	$	14.97	$	1,872	1.81	%	0.70	%	to	1.50	%	0.94	%	to	1.78	%
2009	248	$	8.41	to	$	14.75	$	3,320	1.39	%	0.70	%	to	1.50	%	25.32	%	to	26.28	%
2008	338	$	6.66	to	$	11.71	$	3,607	2.63	%	0.70	%	to	1.50	%	-43.61	%	to	-43.17	%
2007	345	$	18.07	to	$	20.65	$	6,503	1.89	%	0.75	%	to	1.50	%	11.75	%	to	12.58	%
2006	401	$	16.17	to	$	18.38	$	6,725	2.18	%	0.75	%	to	1.50	%	27.52	%	to	28.53	%
ING MidCap Opportunities Portfolio - Class I
2010	116	$	12.62	to	$	22.49	$	1,993	0.72	%	0.70	%	to	1.25	%	28.71	%	to	29.44	%
2009	40	$	9.75	to	$	13.30	$	523	0.20	%	0.70	%	to	1.25	%	39.80	%	to	40.49	%
2008	54	$	6.94	to	$	9.47	$	498	-		0.70	%	to	1.25	%	-38.42	%	to	-38.10	%
2007	56	$	14.81	to	$	15.30	$	860	-		0.75	%	to	1.25	%	24.14	%	to	24.80	%
2006	34	$	11.93	to	$	12.26	$	411	-		0.75	%	to	1.25	%	6.42	%	to	7.00	%
ING MidCap Opportunities Portfolio - Class S
2010	238	$	14.14	to	$	14.85	$	3,477	0.46	%	0.95	%	to	1.45	%	28.08	%	to	28.79	%
2009	264	$	10.61	to	$	11.53	$	2,989	0.11	%	0.95	%	to	1.90	%	38.33	%	to	39.59	%
2008	336	$	7.67	to	$	8.26	$	2,720	-		0.95	%	to	1.90	%	-38.88	%	to	-38.27	%
2007	533	$	12.55	to	$	13.38	$	6,959	-		0.95	%	to	1.90	%	23.04	%	to	24.23	%
2006	742	$	10.20	to	$	10.77	$	7,822	-		0.95	%	to	1.90	%	5.59	%	to	6.63	%
ING SmallCap Opportunities Portfolio - Class I
2010	77	$	10.57	to	$	18.54	$	852	-		0.70	%	to	1.25	%	30.66	%	to	31.40	%
2009	38	$	8.09	to	$	14.14	$	320	-		0.70	%	to	1.25	%	29.44	%	to	30.13	%
2008	67	$	6.25	to	$	10.89	$	522	-		0.70	%	to	1.25	%	-35.30	%	to	-34.97	%
2007	41	$	9.66	to	$	16.79	$	410	-		0.75	%	to	1.25	%	8.66	%	to	9.31	%
2006	26	$	8.89	to	$	15.40	$	241	-		0.75	%	to	1.25	%	11.12	%	to	11.61	%
ING SmallCap Opportunities Portfolio - Class S
2010	249	$	9.63	to	$	10.12	$	2,465	-		0.95	%	to	1.45	%	30.11	%	to	30.75	%
2009	264	$	7.21	to	$	7.74	$	2,004	-		0.95	%	to	1.75	%	28.52	%	to	29.43	%
2008	320	$	5.55	to	$	5.98	$	1,876	-		0.95	%	to	1.90	%	-35.84	%	to	-35.14	%
2007	465	$	8.65	to	$	9.22	$	4,184	-		0.95	%	to	1.90	%	7.72	%	to	8.73	%
2006	629	$	8.03	to	$	8.48	$	5,223	-		0.95	%	to	1.90	%	10.30	%	to	11.29	%

176

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
Invesco V.I. Capital Appreciation Fund - Series I
Shares
2010	69	$	8.66		to	$	11.09	$	649	0.77	%	0.70	%	to		1.50	%	13.80	%	to	14.67	%
2009	79	$	7.61		to	$	9.73	$	648	0.68	%	0.35	%	to		1.50	%	19.28	%	to	20.72	%
2008	76	$	6.38		to	$	8.13	$	523	-		0.70	%	to		1.50	%	-43.39	%	to	-42.94	%
2007	77	$	11.27		to	$	14.32	$	929	-		0.75	%	to		1.50	%	10.38	%	to	11.18	%
2006	99	$	10.21		to	$	12.95	$	1,077	0.08	%	0.75	%	to		1.50	%	4.94	%	to	5.56	%
Invesco V.I. Core Equity Fund - Series I Shares
2010	144	$	9.76		to	$	15.78	$	1,555	0.97	%	0.35	%	to		1.50	%	7.85	%	to	9.23	%
2009	155	$	9.05		to	$	14.54	$	1,552	1.97	%	0.35	%	to		1.50	%	26.40	%	to	28.02	%
2008	135	$	7.16		to	$	11.44	$	1,084	2.41	%	0.70	%	to		1.50	%	-31.15	%	to	-30.63	%
2007	132	$	10.40		to	$	16.53	$	1,492	1.16	%	0.75	%	to		1.50	%	6.45	%	to	7.25	%
2006	154	$	9.77		to	$	13.27	$	1,623	0.72	%	0.75	%	to		1.50	%	15.08	%	to	15.90	%
Janus Aspen Series Balanced Portfolio - Institutional
Shares
2010	-			$	38.24			$	14	-				0.75	%			7.60				%
2009	-			$	35.54			$	13	6.90	%			0.75	%			24.92				%
2008	1			$	28.45			$	16	-				0.75	%			-16.45				%
2007	1			$	34.05			$	23	4.55	%			0.75	%			9.70				%
2006	1			$	31.04			$	21	2.16	%			0.75	%			9.88				%
Janus Aspen Series Enterprise Portfolio - Institutional
Shares
2010	-	$	29.69		to	$	33.10	$	2	-		0.75	%	to		1.50	%	23.97	%	to	24.91	%
2009	-	$	23.95		to	$	26.50	$	2	-		0.75	%	to		1.50	%	42.64	%	to	43.79	%
2008	-	$	16.79		to	$	18.43	$	1	-		0.75	%	to		1.50	%	-44.55	%	to	-44.15	%
2007	-	$	30.28		to	$	33.00	$	8	-		0.75	%	to		1.50	%	20.21	%	to	21.10	%
2006	-	$	25.19		to	$	27.25	$	7	-		0.75	%	to		1.50	%	11.96	%	to	12.79	%
Janus Aspen Series Flexible Bond Portfolio -
Institutional Shares
2010	-			$	30.14			$	3	-				0.75	%			7.18				%
2009	-			$	28.12			$	3	-				0.75	%			12.35				%
2008	-			$	25.03			$	3	-				0.75	%			5.26				%
2007	1			$	23.78			$	12	8.33	%			0.75	%			6.21				%
2006	1			$	22.39			$	12	4.88	%			0.75	%			3.47				%

177

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
										Investment
	Units		Unit Fair Value						Net Assets	Income		Expense RatioB						Total ReturnC
	(000's)		(lowest to highest)						(000's)	RatioA		(lowest to highest)						(lowest to highest)
Janus Aspen Series Janus Portfolio - Institutional
Shares
2010	-			$	20.25			$	2	-				1.50	%			12.81				%
2009	-			$	17.95			$	2	-				1.50	%			34.36				%
2008	-	$	13.36		to	$	14.67	$	5	-		0.75	%	to		1.50	%	-40.62	%	to	-40.20	%
2007	-	$	22.50		to	$	24.53	$	9	-		0.75	%	to		1.50	%	13.35	%		to 14.25	%
2006	-	$	19.85		to	$	21.47	$	8	0.49	%	0.75	%	to		1.50	%	9.73	%		to 10.56	%
Janus Aspen Series Worldwide Portfolio -
Institutional Shares
2010	-			$	24.92			$	1	-				0.75	%			15.00				%
2009	-			$	21.67			$	1	-				0.75	%			36.63				%
2008	-			$	15.86			$	2	-				0.75	%			-45.06				%
2007	-			$	28.87			$	8	-				0.75	%			8.82				%
2006	-			$	26.53			$	7	1.72	%			0.75	%			17.29				%
Lord Abbett Series Fund - Mid-Cap Value Portfolio -
Class VC
2010	185	$	11.30		to	$	16.65	$	2,550	0.39	%	0.35	%	to		1.50	%	23.52	%		to 25.05	%
2009	189	$	9.07		to	$	13.40	$	2,101	0.44	%	0.35	%	to		1.50	%	24.74	%		to 26.24	%
2008	222	$	7.21		to	$	10.69	$	2,000	1.17	%	0.70	%	to		1.50	%	-40.23	%	to	-39.78	%
2007	274	$	14.54		to	$	17.79	$	4,141	0.43	%	0.75	%	to		1.50	%	-0.95	%	to	-0.20	%
2006	306	$	11.47		to	$	17.86	$	4,642	0.42	%	0.75	%	to		1.50	%	10.54	%		to 11.36	%
Oppenheimer Global Securities/VA
2010	3			$	24.77			$	63	1.60	%			0.75	%			15.10				%
2009	3			$	21.52			$	62	1.83	%			0.75	%			38.75				%
2008	3			$	15.51			$	47	1.53	%			0.75	%			-40.64				%
2007	3			$	26.13			$	84	1.20	%			0.75	%			5.53				%
2006	3			$	24.76			$	83	0.98	%			0.75	%			16.79				%
Oppenheimer Main Street Fund®/VA
2010	27	$	9.81		to	$	11.64	$	286	1.05	%	0.80	%	to		1.25	%	14.74	%		to 15.13	%
2009	31	$	8.55		to	$	10.11	$	288	1.84	%	0.80	%	to		1.25	%	26.67	%		to 27.33	%
2008	35	$	6.75		to	$	7.94	$	255	1.74	%	0.80	%	to		1.25	%	-39.24	%	to	-38.97	%
2007	36	$	11.11		to	$	13.01	$	434	0.98	%	0.80	%	to		1.25	%	3.06				%
2006	32	$	10.78		to	$	12.56	$	381	2.21	%	0.80	%	to		1.25	%	13.59	%		to 14.08	%

178

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
Oppenheimer Main Street Small Cap Fund®/VA
2010	65	$	11.45	to	$	13.55	$	871	0.55	%	0.70	%	to	1.50	%	21.54	%	to	22.59	%
2009	53	$	9.34	to	$	11.06	$	586	0.83	%	0.70	%	to	1.50	%	35.19	%	to	36.21	%
2008	47	$	6.86	to	$	8.12	$	382	0.60	%	0.70	%	to	1.50	%	-38.76	%	to	-38.34	%
2007	47	$	12.90	to	$	13.17	$	617	0.30	%	0.75	%	to	1.50	%	-2.71	%	to	-1.94	%
2006	54	$	13.26	to	$	13.43	$	723	0.10	%	0.75	%	to	1.50	%	13.65	%	to	14.20	%
Oppenheimer Small- & Mid-Cap Growth Fund/VA
2010	5	$	9.06	to	$	11.44	$	55	-		0.80	%	to	1.25	%	25.83	%	to	26.41	%
2009	26	$	7.20	to	$	9.05	$	195	-		0.80	%	to	1.25	%	30.91	%	to	31.54	%
2008	5	$	5.50	to	$	6.88	$	37	-		0.80	%	to	1.25	%	-49.68	%	to	-49.49	%
2007	15	$	10.93	to	$	13.62	$	180	-		0.80	%	to	1.25	%	5.00				%
2006	6	$	10.41	to	$	12.91	$	74	-		0.80	%	to	1.25	%	1.66	%	to	2.14	%
PIMCO Real Return Portfolio - Administrative Class
2010	508	$	11.32	to	$	14.00	$	7,054	1.41	%	0.70	%	to	1.50	%	6.48	%	to	7.40	%
2009	671	$	10.54	to	$	13.04	$	8,712	3.08	%	0.70	%	to	1.50	%	16.60	%	to	17.50	%
2008	532	$	8.97	to	$	11.10	$	5,888	4.40	%	0.70	%	to	1.50	%	-8.21	%	to	-7.81	%
2007	383	$	11.82	to	$	12.04	$	4,609	3.17	%	0.75	%	to	1.25	%	9.14	%	to	9.75	%
2006	224	$	10.75	to	$	10.97	$	2,452	4.26	%	0.75	%	to	1.50	%	-0.37	%	to	0.09	%
Pioneer Emerging Markets VCT Portfolio - Class I
2010	414	$	10.10	to	$	10.56	$	4,363	0.33	%	0.70	%	to	1.50	%	14.22	%	to	15.03	%
2009	308	$	8.78	to	$	9.18	$	2,820	1.25	%	0.70	%	to	1.50	%	72.08	%	to	73.52	%
2008	196	$	5.06	to	$	5.30	$	1,033	0.51	%	0.70	%	to	1.50	%	-58.85	%	to	-58.50	%
2007	225	$	12.71	to	$	12.77	$	2,870	(b)		0.75	%	to	1.50	%			(b)
2006	(b)			(b)				(b)	(b)				(b)					(b)
Pioneer High Yield VCT Portfolio - Class I
2010	35	$	12.54	to	$	14.63	$	502	5.51	%	0.70	%	to	1.50	%	16.30	%	to	17.23	%
2009	45	$	10.70	to	$	12.48	$	551	6.29	%	0.70	%	to	1.50	%	57.99	%	to	59.46	%
2008	40	$	6.71	to	$	7.84	$	308	7.95	%	0.70	%	to	1.50	%	-36.33	%	to	-35.90	%
2007	119	$	11.89	to	$	12.23	$	1,452	5.69	%	0.75	%	to	1.50	%	4.53	%	to	5.07	%
2006	42	$	11.48	to	$	11.64	$	480	4.35	%	0.75	%	to	1.25	%	7.68				%

179

VARIABLE ANNUITY ACCOUNT B OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Notes to Financial Statements
									Investment
	Units		Unit Fair Value					Net Assets	Income		Expense RatioB					Total ReturnC
	(000's)		(lowest to highest)					(000's)	RatioA		(lowest to highest)					(lowest to highest)
Wanger International
2010	191	$	10.18	to	$	11.61	$	1,990	2.29	%	0.70	%	to	1.50	%	23.29	%	to	24.04	%
2009	168	$	8.33	to	$	9.36	$	1,413	3.19	%	0.70	%	to	1.25	%	47.96	%	to	48.81	%
2008	72	$	5.63	to	$	6.29	$	406	1.14	%	0.70	%	to	1.25	%	-46.28	%	to	-45.96	%
2007	112	$	10.46	to	$	10.51	$	1,172	(b)		0.75	%	to	1.50	%			(b)
2006	(b)			(b)				(b)	(b)				(b)					(b)
Wanger Select
2010	208	$	11.89	to	$	16.96	$	3,507	0.54	%	0.70	%	to	1.50	%	24.65	%	to	25.69	%
2009	212	$	9.46	to	$	13.50	$	2,845	-		0.70	%	to	1.50	%	63.80	%	to	65.10	%
2008	212	$	5.73	to	$	8.19	$	1,732	-		0.70	%	to	1.50	%	-49.84	%	to	-49.41	%
2007	267	$	15.75	to	$	16.19	$	4,305	-		0.75	%	to	1.50	%	7.73	%	to	8.58	%
2006	140	$	14.62	to	$	14.91	$	2,085	0.29	%	0.75	%	to	1.50	%	18.23	%	to	18.80	%
Wanger USA
2010	55	$	11.58	to	$	14.86	$	807	-		0.70	%	to	1.50	%	21.50	%	to	22.54	%
2009	36	$	9.45	to	$	12.13	$	432	-		0.70	%	to	1.50	%	40.12	%	to	41.26	%
2008	27	$	6.69	to	$	8.60	$	231	-		0.70	%	to	1.50	%	-40.59	%	to	-40.11	%
2007	30	$	13.97	to	$	14.36	$	436	-		0.75	%	to	1.50	%	3.79	%	to	4.59	%
2006	42	$	13.46	to	$	13.73	$	569	0.39	%	0.75	%	to	1.50	%	6.53	%	to	7.10	%

(a)	As investment Division had no investments until 2006, this data is not meaningful and is therefore not presented.
(b)	As investment Division had no investments until 2007, this data is not meaningful and is therefore not presented.
(c)	As investment Division had no investments until 2008, this data is not meaningful and is therefore not presented.
(d)	As investment Division had no investments until 2009, this data is not meaningful and is therefore not presented.
(e)	As investment Division had no investments until 2010, this data is not meaningful and is therefore not presented.
A	The Investment Income Ratio represents dividends received by the Division, excluding capital gains distributions divided by the average net assets. The recognition of investment income is determined by the timing of the declaration of dividends by the underlying Fund In which the Division invests.
B	The Expense Ratio considers only the expenses borne directly by the Account and is equal to the mortality and expense, administrative and other charges, as defined in Note 5. Certain items in this table are presented as a range of minimum and maximum values; however, such information is calculated independently for each column in the table.
C	Total Return is calculated as the change in unit value for each Contract presented in the Statements of Assets and Liabilities. Certain items in this table are presented as a range of minimum and maximum values; however, such information is calculated independently for each column in the table.

180

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	C-2
Consolidated Financial Statements:
Consolidated Statements of Operations for the years ended December 31, 2010, 2009, and 2008	C-3
Consolidated Balance Sheets as of December 31, 2010 and 2009	C-4
Consolidated Statements of Changes in Shareholder’s Equity for the years ended December 31, 2010, 2009, and 2008	C-6
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009, and 2008	C-8
Notes to Consolidated Financial Statements	C-10

C-1

Report of Independent Registered Public Accounting Firm

The Board of Directors

ING Life Insurance and Annuity Company

We have audited the accompanying consolidated balance sheets of ING Life Insurance and Annuity Company and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of operations, changes in shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2010.  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 consolidated financial position of ING Life Insurance and Annuity Company and subsidiaries at December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the financial statements, in 2009 the Company changed its method of accounting for the recognition and presentation of other-than-temporary impairments.

/s/    Ernst & Young LLP

Atlanta, Georgia

March 31, 2011

C-2

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Statements of Operations

(In millions)

	Years Ended December 31,
	2010			2009			2008
Revenues:
Net investment income	$	1,342.3		$	1,242.1		$	1,071.0
Fee income	589.7			533.8			612.9
Premiums	67.3			35.0			46.9
Broker-dealer commission revenue	220.0			275.3			622.5
Net realized capital gains (losses):
Total other-than-temporary impairment losses	(199.2		)	(433.5		)	(1,052.5		)
Portion of other-than-temporary impairment losses recognized in Other comprehensive income (loss)	52.1			39.0			-
Net other-than-temporary impairments recognized in earnings	(147.1		)	(394.5		)	(1,052.5		)
Other net realized capital gains	119.0			149.0			(215.1		)
Total net realized capital losses	(28.1		)	(245.5		)	(1,267.6		)
Other income	34.8			30.0			34.1
Total revenue	2,226.0			1,870.7			1,119.8
Benefits and expenses:
Interest credited and other benefits to contract owners	768.0			511.2			818.0
Operating expenses	710.6			597.6			687.5
Broker-dealer commission expense	220.0			275.3			622.5
Net amortization of deferred policy acquisition costs and value of business acquired	(53.2		)	79.6			128.9
Interest expense	2.9			3.5			1.4
Total benefits and expenses	1,648.3			1,467.2			2,258.3
Income (loss) before income taxes	577.7			403.5			(1,138.5		)
Income tax expense (benefit)	140.8			49.6			(108.3		)
Net income (loss)	$	436.9		$	353.9		$	(1,030.2	)

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

C-3

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Balance Sheets

(In millions, except share data)

	As of December 31,
	2010		2009
Assets
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $15,097.4 at 2010 and $14,758.4 at 2009)	$	16,002.2	$	14,905.7
Fixed maturities, at fair value using the fair value option	453.4		233.6
Equity securities, available-for-sale, at fair value (cost of $186.7 at 2010 and $175.1 at 2009)	211.0		187.9
Short-term investments	222.4		535.5
Mortgage loans on real estate	1,842.8		1,874.5
Loan - Dutch State obligation	539.4		674.1
Policy loans	253.0		254.7
Limited partnerships/corporations	463.5		426.2
Derivatives	234.2		175.2
Securities pledged (amortized cost of $936.5 at 2010 and $483.7 at 2009)	962.2		469.8
Total investments	21,184.1		19,737.2
Cash and cash equivalents	231.0		243.3
Short-term investments under securities loan agreement, including collateral delivered	675.4		351.0
Accrued investment income	240.5		217.2
Reinsurance recoverable	2,355.9		2,429.9
Deferred policy acquisition costs	1,023.0		901.8
Value of business acquired	716.4		991.5
Notes receivable from affiliate	175.0		175.0
Short-term loan to affiliate	304.1		287.2
Due from affiliates	48.3		49.1
Current income tax recoverable	-		23.9
Property and equipment	87.4		90.8
Other assets	133.8		103.9
Assets held in separate accounts	46,489.1		41,369.8
Total assets	$	73,664.0	$	66,971.6

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

C-4

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Balance Sheets

(In millions, except share data)

	As of December 31,
	2010			2009
Liabilities and Shareholder’s Equity
Future policy benefits and claims reserves	$	21,491.6		$	21,118.6
Payable for securities purchased	33.3			18.4
Payables under securities loan agreement, including collateral held	680.1			351.0
Borrowed money	214.7			0.1
Notes payable	4.9			4.9
Due to affiliates	121.2			159.9
Current income taxes	49.3			-
Deferred income taxes	466.9			351.2
Other liabilities	654.6			693.6
Liabilities related to separate accounts	46,489.1			41,369.8
Total liabilities	70,205.7			64,067.5
Shareholder’s equity:
Common stock (100,000 shares authorized, 55,000 issued and outstanding; $50 per share value)	2.8			2.8
Additional paid-in capital	4,326.0			4,528.2
Accumulated other comprehensive income (loss)	304.5			(15.0		)
Retained earnings (deficit)	(1,175.0		)	(1,611.9		)
Total shareholder’s equity	3,458.3			2,904.1
Total liabilities and shareholder’s equity	$	73,664.0		$	66,971.6

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

C-5

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated 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 January 1, 2008	$	2.8	$	4,159.3	$	(33.8	)	$	(1,087.3	)	$	3,041.0
Comprehensive loss:
Net loss	-		-		-			(1,030.2		)	(1,030.2		)
Other comprehensive loss, net of tax
Change in net unrealized capital gains (losses) on securities ($(635.4) pretax)	-		-		(435.3		)	-			(435.3		)
Pension and other post-employment benefits liability ($18.7 pretax)	-		-		(13.0		)	-			(13.0		)
Total comprehensive loss											(1,478.5		)
Employee share-based payments	-		2.0		-			-			2.0
Balance at December 31, 2008	2.8		4,161.3		(482.1		)	(2,117.5		)	1,564.5
Cumulative effect of change in accounting principle, net of deferred policy acquisition costs and tax	-		-		(151.7		)	151.7			-
Comprehensive income:
Net income	-		-		-			353.9			353.9
Other comprehensive income, net of tax
Change in net unrealized capital gains (losses) on securities ($832.3 pretax)	-		-		641.9			-			641.9
Change in other-than-temporary impairment losses recognized in other comprehensive income	-		-		(32.4		)	-			(32.4		)
Pension and other post-employment benefits liability ($14.3 pretax)	-		-		9.3			-			9.3
Total comprehensive income											972.7
Contribution of capital	-		365.0		-			-			365.0
Employee share-based payments	-		1.9		-			-			1.9
Balance at December 31, 2009	$	2.8	$	4,528.2	$	(15.0	)	$	(1,611.9	)	$	2,904.1

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

C-6

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated 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 January 1, 2010	$	2.8	$	4,528.2		$	(15.0	)	$	(1,611.9	)	$	2,904.1
Comprehensive income:
Net income	-		-			-			436.9			436.9
Other comprehensive income, net of tax
Change in net unrealized capital gains (losses) on securities ($387.5 pretax)	-		-			337.0			-			337.0
Change in other-than-temporary impairment losses recognized in other comprehensive income (loss)	-		-			(12.7		)	-			(12.7		)
Pension and other post-employment benefits liability ($(7.4) pretax)						(4.8		)				(4.8		)
Total comprehensive income												756.4
Dividends paid	-		(203.0		)	-			-			(203.0		)
Employee share-based payments	-		0.8			-			-			0.8
Balance at December 31, 2010	$	2.8	$	4,326.0		$	304.5		$	(1,175.0	)	$	3,458.3

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

C-7

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Statements of Cash Flows

(In millions)

		Years Ended December 31,
		2010			2009			2008
Cash Flows from Operating Activities:
Net income (loss)	$		436.9		$	353.9		$	(1,030.2	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Capitalization of deferred policy acquisition costs, value of business acquired, and sales inducements		(167.1		)	(152.8		)	(205.1		)
Net amortization of deferred policy acquisition costs, value of business acquired, and sales inducements		(48.9		)	83.3			128.3
Net accretion/decretion of discount/premium		44.3			45.4			87.1
Future policy benefits, claims reserves, and interest credited		599.5			386.9			682.3
Provision for deferred income taxes		65.3			36.7			25.3
Net realized capital losses		28.1			245.5			1,267.6
Depreciation		3.4			10.4			56.7
Change in:
Accrued investment income		(23.3		)	(11.4		)	(37.5		)
Reinsurance recoverable		74.0			79.3			88.8
Other receivable and assets accruals		(30.9		)	130.9			(115.3		)
Due to/from affiliates		(37.9		)	7.9			(17.2		)
Other payables and accruals		85.5			46.0			(120.3		)
Other, net		(42.0		)	(112.7		)	(44.0		)
Net cash provided by operating activities		986.9			1,149.3			766.5
Cash Flows from Investing Activities:
Proceeds from the sale, maturity, disposal or redemption of:
Fixed maturities		6,340.3			5,864.2			9,039.7
Equity securities, available-for-sale		12.9			99.4			135.0
Mortgage loans on real estate		179.2			308.7			146.5
Limited partnerships/corporations		87.2			116.2			510.1
Acquisition of:
Fixed maturities		(7,383.5		)	(6,215.4		)	(11,593.4		)
Equity securities, available-for-sale		(16.7		)	(25.2		)	(54.8		)
Mortgage loans on real estate		(147.2		)	(87.2		)	(168.0		)
Limited partnerships/corporations		(85.5		)	(49.3		)	(428.6		)
Derivatives, net		(147.3		)	(170.8		)	52.6
Policy loans, net		1.7			13.1			5.6
Short-term investments, net		313.1			(492.7		)	126.7
Loan-Dutch State obligation		134.7			124.8			-
Collateral received (delivered)		4.7			(4.4		)	23.2
Sales (purchases) of fixed assets, net		-			13.5			(24.0		)
Net cash used in investing activities		(706.4		)	(505.1		)	(2,229.4		)

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

C-8

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Statements of Cash Flows

(In millions)

		Years Ended December 31,
		2010			2009			2008
Cash Flows from Financing Activities:
Deposits received for investment contracts	$		2,022.2		$	2,069.6		$	3,836.4
Maturities and withdrawals from investment contracts		(2,309.7		)	(2,123.6		)	(2,312.2		)
Short-term (repayment) loans to (from) affiliates		(16.9		)	(300.2		)	13.0
Short-term repayments of repurchase agreements, net		214.6			(615.2		)	(123.1		)
Dividends to parent		(203.0		)	-			-
Contribution of capital		-			365.0			-
Net cash provided by (used in) financing activities		(292.8		)	(604.4		)	1,414.1
Net increase (decrease) in cash and cash equivalents		(12.3		)	39.8			(48.8		)
Cash and cash equivalents, beginning of period		243.3			203.5			252.3
Cash and cash equivalents, end of period	$		231.0		$	243.3		$	203.5
Supplemental cash flow information:
Income taxes paid (received), net	$		0.6		$	13.7		$	(44.1	)
Interest paid	$		-		$	4.8		$	23.6
Non-cash transfer Loan-Dutch State obligation	$		-		$	798.9		$	-

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

C-9

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

1.Organization and Significant Accounting Policies

Basis of Presentation

ING Life Insurance and Annuity Company (“ILIAC”) is a stock life insurance company domiciled in the state of Connecticut. ILIAC and its wholly-owned subsidiaries (collectively, the “Company”) are providers of financial products and services in the United States.  ILIAC is authorized to conduct its insurance business in all states and the District of Columbia.

The consolidated financial statements for the year ended December 31, 2010, include ILIAC and its wholly-owned subsidiaries, ING Financial Advisers, LLC (“IFA”) and Directed Services LLC (“DSL”).  ILIAC 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.”

As part of a restructuring plan approved by the European Commission (“EC”), ING has agreed to separate its banking and insurance businesses by 2013. ING intends to achieve this separation by divestment of its insurance and investment management operations, including the Company. ING has announced that it will explore all options for implementing the separation including one or more initial public offerings, sales, or a combination thereof. On November 10, 2010, ING announced that while the option of one global initial public offering (“IPO”) remains open, ING and its U.S. insurance affiliates, including the Company, are going to prepare for a base case of two IPOs: one Europe-led IPO and one separate U.S.-focused IPO.

Description of Business

The Company offers qualified and nonqualified annuity contracts that include a variety of funding and payout options for individuals and employer-sponsored retirement plans qualified under Internal Revenue Code Sections 401, 403, 408, and 457, as well as nonqualified deferred compensation plans. The Company’s products are offered primarily to individuals, pension plans, small businesses, and employer-sponsored groups in the health care, government, and education markets (collectively “not-for-profit” organizations) and corporate markets. The Company’s products are generally distributed through pension professionals, independent agents and brokers, third party administrators, banks, dedicated career agents, and financial planners.

Products offered by the Company include deferred and immediate (payout annuities) annuity contracts.  Company products also include programs offered to qualified plans and nonqualified deferred compensation plans that package administrative and record-keeping services along with a variety of investment options, including affiliated and nonaffiliated mutual funds and variable and fixed investment options. In addition, the

C-10

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Company offers wrapper agreements entered into with retirement plans, which contain certain benefit responsive guarantees (i.e., liquidity guarantees of principal and previously accrued interest for benefits paid under the terms of the plan) with respect to portfolios of plan-owned assets not invested with the Company. The Company also offers pension and retirement savings plan administrative services.

The Company has one operating segment.

Recently Adopted Accounting Standards

Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses

In July 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-20, “Receivables (Accounting Standards CodificationTM (“ASC”) Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses” (“ASU 2010-20”), which requires certain existing disclosures to be disaggregated by class of financing receivable, including the rollforward of the allowance for credit losses, with the ending balance further disaggregated on the basis of impairment method.  For each disaggregated ending balance, an entity is required to also disclose the related recorded investment in financing receivables, the nonaccrual status of financing receivables, and impaired financing receivables.

ASU 2010-20 also requires new disclosures by class of financing receivable, including credit quality indicators, aging of past due amounts, the nature and extent of troubled debt restructurings and related defaults, and significant purchases and sales of financing receivables disaggregated by portfolio segment.

In January 2011, the FASB issued ASU 2011-01, which temporarily delays the effective date of the disclosures about troubled debt restructurings in ASU 2010-20.

The provisions of ASU 2010-20 were adopted by the Company on December 31, 2010, and are included in the Financial Instruments footnote to the consolidated financial statements, as well as the Reinsurance section below, except for the disclosures that include information for activity that occurs during a reporting period, which are effective for periods beginning after December 15, 2010, and the disclosures about troubled debt restructurings.  As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Company’s financial condition, results of operations, or cash flows.

Scope Exception Related to Embedded Credit Derivatives

In March 2010, the FASB issued ASU 2010-11, “Derivatives and Hedging (ASC Topic 815): Scope Exception Related to Embedded Credit Derivatives” (“ASU 2010-11”), which clarifies that the only type of embedded credit derivatives that are exempt from

C-11

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

bifurcation requirements are those that relate to the subordination of one financial instrument to another.

The provisions of ASU 2010-11 were adopted by the Company on July 1, 2010.  The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the guidance is consistent with that previously applied by the Company under ASC Topic 815.

Improving Disclosures about Fair Value Measurements

In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosure (ASC Topic 820): Improving Disclosures about Fair Value Measurements,” (“ASU 2010-06”), which requires several new disclosures, as well as clarification to existing disclosures, as follows:

§Significant transfers in and out of Level 1 and Level 2 fair value measurements and the reason for the transfers;

§       Purchases, sales, issuances, and settlement, in the Level 3 fair value measurements reconciliation on a gross basis;

§       Fair value measurement disclosures for each class of assets and liabilities (i.e., disaggregated); and

§       Valuation techniques and inputs for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 fair value measurements.

The provisions of ASU 2010-06 were adopted by the Company on January 1, 2010, and are included in the Financial Instruments footnote to the consolidated financial statements, except for the disclosures related to the Level 3 reconciliation, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Company’s financial condition, results of operations, or cash flows.

Accounting and Reporting for Decreases in Ownership of a Subsidiary

In January 2010, the FASB issued ASU 2010-02 “Consolidations (ASC Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification,” (“ASU 2010-02”), which clarifies that the scope of the decrease in ownership provisions applies to the following:

C-12

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

§A subsidiary or group of assets that is a business or nonprofit activity;

§A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture; and

§An exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture).

ASU 2010-02 also notes that the decrease in ownership guidance does not apply to sales of in substance real estate and expands disclosure requirements.

The provisions of ASU 2010-02 were adopted, retrospectively, by the Company on January 1, 2010.  The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows for the years ended December 31, 2010, 2009, or 2008, as there were no decreases in ownership of a subsidiary during those periods.

Improvements to Financial Reporting by Enterprises Involved in Variable Interest Entities

In December 2009, the FASB issued ASU 2009-17, “Consolidations (ASC Topic 810): Improvements to Financial Reporting by Enterprises Involved in Variable Interest Entities,” (“ASU 2009-17”), which eliminates the exemption for qualifying special-purpose entities (“QSPEs”), as well as amends the consolidation guidance for variable interest entities (“VIEs”), as follows:

§Removes the quantitative-based assessment for consolidation of VIEs and, instead, requires a qualitative assessment of whether an entity has the power to direct the VIE’s activities, and whether the entity has the obligation to absorb losses or the right to reserve benefits that could be significant to the VIE; and

§Requires an ongoing reassessment of whether an entity is the primary beneficiary of a VIE.

In addition, in February 2010, the FASB issued ASU 2010-10, “Consolidation (ASC Topic 810): Amendments for Certain Investment Funds” (ASU 2010-10), which primarily defers to ASU 2009-17 for an investment in an entity that is accounted for as an investment company.

The provisions of ASU 2009-17 and ASU 2010-10 were adopted on January 1, 2010. The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the consolidation conclusions were consistent with those under previous accounting principles generally accepted in the United States (“US GAAP”). The disclosure provisions required by ASU 2009-17 are presented in the Financial Instruments footnote to these consolidated financial statements.

C-13

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Accounting for Transfers of Financial Assets

In December 2009, the FASB issued ASU 2009-16 “Transfers and Servicing (ASC Topic 860): Accounting for Transfers of Financial Assets” (“ASU 2009-16”), which eliminates the QSPE concept and requires a transferor of financial assets to:

§Consider the transferor’s continuing involvement in assets, limiting the circumstances in which a financial asset should be derecognized when the transferor has not transferred the entire asset to an entity that is not consolidated;

§Account for the transfer as a sale only if an entity transfers an entire financial asset and surrenders control, unless the transfer meets the conditions for a participating interest; and

§Recognize and initially measure at fair value all assets obtained and liabilities incurred as a result of a transfer of financial assets accounted for as a sale.

The provisions of ASU 2009-16 were adopted on January 1, 2010. The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the Company did not have any QSPEs under previous US GAAP, and the requirements for sale accounting treatment are consistent with those previously applied by the Company under US GAAP.

Measuring the Fair Value of Certain Alternative Investments

In September 2009, the FASB issued ASU 2009-12, “Fair Value Measurements and Disclosures (ASC Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (“ASU 2009-12”), which allows the use of net asset value to estimate the fair value of certain alternative investments, such as interests in hedge funds, private equity funds, real estate funds, venture capital funds, offshore fund vehicles, and funds of funds.  In addition, ASU 2009-12 requires disclosures about the attributes of such investments.

The provisions of ASU 2009-12 were adopted by the Company on December 31, 2009.  The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as its guidance is consistent with that previously applied by the Company under US GAAP.  The disclosure provisions required by ASU 2009-12 are presented in the Investments footnote to these consolidated financial statements.

Subsequent Events

In May 2009, the FASB issued new guidance on subsequent events, included in ASC Topic 855, “Subsequent Events,” which establishes:

C-14

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

§	The period after the balance sheet date during which an entity should evaluate events or transactions for potential recognition or disclosure in the financial statements;
§	The circumstances under which an entity should recognize such events or transactions in its financial statements; and
§	Disclosures regarding such events or transactions and the date through which an entity has evaluated subsequent events.

These provisions, as included in ASC Topic 855, were adopted by the Company on June 30, 2009.  In addition, in February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements”, which clarifies that a Securities and Exchange Commission (“SEC”) filer should evaluate subsequent events through the date the financial statements are issued and eliminates the requirement for an SEC filer to disclose that date, effective upon issuance. The Company determined that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the guidance is consistent with that previously applied by the Company under U.S. auditing standards. The disclosure provisions included in ASC Topic 855, as amended, are presented in the Organization and Significant Accounting Policies footnote to these consolidated financial statements.

Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, the FASB issued new guidance on recognition and presentation of other-than-temporary impairments, included in ASC Topic 320, “Investments-Debt and Equity Securities,” which requires:

§	Noncredit related impairments to be recognized in other comprehensive income (loss), if management asserts that it does not have the intent to sell the security and that it is more likely than not that the entity will not have to sell the security before recovery of the amortized cost basis;
§	Total other-than-temporary impairments (“OTTI”) to be presented in the Statement of Operations with an offset recognized in Accumulated other comprehensive income (loss) for the noncredit related impairments;
§	A cumulative effect adjustment as of the beginning of the period of adoption to reclassify the noncredit component of a previously recognized other-than-temporary impairment from Retained earnings (deficit) to Accumulated other comprehensive income (loss); and
§	Additional interim disclosures for debt and equity securities regarding types of securities held, unrealized losses, and other-than-temporary impairments.

These provisions, as included in ASC Topic 320, were adopted by the Company on April 1, 2009.  As a result of implementation, the Company recognized a cumulative effect of change in accounting principle of $151.7 after considering the effects of

C-15

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

deferred policy acquisition costs (“DAC”) and income taxes of $(134.0) and $46.9, respectively, as an increase to April 1, 2009 Retained earnings (deficit) with a corresponding decrease to Accumulated other comprehensive income (loss).

In addition, the Company recognized an increase in amortized cost for previously impaired securities due to the recognition of the cumulative effect of change in accounting principle as of April 1, 2009, as follows:

	Change in
	Amortized Cost
Fixed maturities:
U.S. corporate, state and municipalities	$	47.0
Foreign	45.0
Residential mortgage-backed	14.3
Commercial mortgage-backed	88.5
Other asset-backed	44.0
Total investments, available-for-sale	$	238.8

The disclosure provisions, as included in ASC Topic 320, are presented in the Investments footnote to these consolidated financial statements.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued new guidance on disclosures about derivative instruments and hedging activities, included in ASC Topic 815, “Derivatives and Hedging,” 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 US GAAP for derivative and hedging activities; and
§	How derivative instruments and related hedged items affect an entity’s financial statements.

These provisions, as included in ASC Topic 815, were adopted by the Company on January 1, 2009 and are included in the Financial Instruments footnote to these consolidated financial statements.  As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Company’s financial condition, results of operations, or cash flows.

C-16

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

New Accounting Pronouncements

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts

In October 2010, the FASB issued ASU 2010-26, “Financial Services - Insurance (ASC Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”), which clarifies what costs relating to the acquisition of new or renewal insurance contracts qualify for deferral.  Costs that should be capitalized include (1) incremental direct costs of successful contract acquisition and (2) certain costs related directly to successful acquisition activities (underwriting, policy issuance and processing, medical and inspection, and sales force contract selling) performed by the insurer for the contract. Advertising costs should be included in deferred acquisition costs only if the capitalization criteria in the US GAAP direct-response advertising guidance are met.  All other acquisition-related costs should be charged to expense as incurred.

The provisions of ASU 2010-26 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, and should be applied prospectively. Retrospective application is permitted, and early adoption is permitted at the beginning of an entity’s annual reporting period.  The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2010-26.

Consolidation Analysis of Investments Held through Separate Accounts

In April 2010, the FASB issued ASU 2010-15, “Financial Services - Insurance (ASC Topic 944): How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments” (“ASU 2010-15”), which clarifies that an insurance entity generally should not consider any separate account interests held for the benefit of policy holders in an investment to be the insurer’s interests, and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation.

The provisions of ASU 2010-15 are effective for fiscal years and interim periods beginning after December 15, 2010. The amendments are to be applied retrospectively to all prior periods as of the date of adoption.  The Company does not expect any effect on its financial condition, results of operations, or cash flows upon adoption, as the guidance is consistent with that previously applied by the Company under ASC Topic 944.

Accounting Policy Change

During the fourth quarter of 2010, the Company concluded that it should change its accounting for realized capital gains (losses) and unrealized capital gains (losses) on investments supporting experience-rated products.  The impact of this change in accounting policy on the Company’s financial statements is immaterial to all periods presented.  Therefore, this correction is reflected in the fourth quarter of 2010 (the period

C-17

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

in which the change was made).  Certain reclassifications, which increased (decreased) Realized gains (losses) and Interest credited and other benefits by $11.3 and $614.4 for the years ended December 31, 2009 and 2008, respectively, were made in connection with this change, and had no impact on net income.  This change in accounting policy has no impact on individual customer account values and no impact on credited rates for experience-rated products.

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 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, certain 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, except those accounted for using the fair value option, 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, if any, for related changes in DAC, value of business acquired (“VOBA”), and deferred income taxes.  Fixed maturities accounted for using the fair value option are reported at fair value with changes in fair value recognized in the Statement of Operations.

Other-Than-Temporary Impairments

The Company analyzes its general account investments to determine whether there has been an other-than-temporary decline in fair value below the amortized cost basis. Factors considered in this analysis include, but are not limited to, 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 changes in ratings of the security.

C-18

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

When assessing the Company’s intent to sell a security or if it is more likely than not it will be required to sell a security before recovery of its amortized cost basis, management evaluates facts and circumstances such as, but not limited to, decisions to rebalance the investment portfolio and sales of investments to meet cash flow needs.

When the Company has determined it has the intent to sell or if it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis and the fair value has declined below amortized cost (“intent impairment”) the individual security is written down from amortized cost to fair value and a corresponding charge is recorded in Net realized capital gains (losses) on the Consolidated Statements of Operations as an OTTI.  If the Company does not intend to sell the security nor is it more likely than not it will be required to sell the security before recovery of its amortized cost basis, but the Company has determined that there has been an other-than-temporary decline in fair value below the amortized cost basis, the OTTI is bifurcated into the amount representing the present value of the decrease in cash flows expected to be collected (“credit impairment”) and the amount related to other factors (“noncredit impairment”).  The credit impairment is recorded in Net realized capital gains (losses) on the Consolidated Statements of Operations. The noncredit impairment is recorded in Other comprehensive income (loss) on the Consolidated Balance Sheets.

In order to determine the amount of the OTTI that is considered a credit impairment, the Company utilizes the following methodology and significant inputs:

§	Recovery value is estimated by performing a discounted cash flow analysis based upon the best estimate of expected future cash flows, discounted at the effective interest rate implicit in the underlying debt security. The effective interest rate is the current yield prior to impairment for a fixed rate security or current coupon yield for a floating rate security.
§	Collectability and recoverability are estimated using the same considerations as the Company uses in its overall impairment analysis which includes, but is not limited to, 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 changes in ratings of the security.
§	Additional factors considered for structured securities such as RMBS, CMBS and other ABS include, but are not limited to, quality of underlying collateral, anticipated loss severities, collateral default rates, and other collateral characteristics such as vintage, repayment terms, and the geographical makeup of the collateral.

C-19

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 of Investments and Derivatives

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC Topic 820.  Valuations are obtained from third party commercial pricing services, brokers, and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from brokers and third-party commercial pricing services are non-binding. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes.

All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values.  There were no material changes to the valuation methods or assumptions used to determine fair values during 2010, except for the Company’s use of commercial pricing services to value certain collateralized mortgage obligations (“CMO-Bs”) which commenced in the first quarter of 2010. CMO-Bs were previously valued using an average of broker quotes when more than one broker quote is provided.

Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures,” 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.

C-20

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Financial assets and liabilities recorded at fair value on the Consolidated 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.  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 valuation methods and assumptions were used by the Company in estimating reported values for the investments and derivatives described below:

Fixed maturities: The fair values for the actively traded marketable bonds are determined based upon the quoted market prices and are classified as Level 1 assets.  Assets in this category would primarily include certain US Treasury securities.  The fair values for marketable bonds without an active market, excluding subprime residential mortgage-backed securities, are obtained through several commercial pricing services, which provide the estimated fair values, and are classified as Level 2 assets.  These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data.  This category includes US and foreign corporate bonds, Asset-backed Securities (“ABS”), US agency and government guaranteed securities, Commercial Mortgage-backed Securities (“CMBS”), and Residential Mortgage-backed Securities (“RMBS”), including CMO-Bs.

Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor, and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited.  Securities priced using independent broker quotes are classified as Level 3.

C-21

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Broker quotes and prices obtained from pricing services are reviewed and validated monthly through an internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes. At December 31, 2010, $73.3 and $13.2 billion of a total of $17.4 billion in fixed maturities were valued using unadjusted broker quotes and unadjusted prices obtained from pricing services, respectively, and verified through the review process. The remaining balance in fixed maturities consisted primarily of privately placed bonds valued using matrix-based pricing model.

All prices and broker quotes obtained go through the review process described above including valuations for which only one broker quote is obtained.  After review, for those instruments where the price is determined to be appropriate, the unadjusted price provided is used for financial statement valuation. If it is determined that the price is questionable, another price may be requested from a different vendor. The internal valuation committee then reviews all prices for the instrument again, along with information from the review, to determine which price best represents “exit price” for the instrument.

Fair values of privately placed bonds are determined using a matrix-based pricing model and are classified as Level 2 assets.  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 its 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.

Trading activity for the Company’s RMBS, particularly subprime and Alt-A RMBS, declined during 2008 as a result of the dislocation of the credit markets.  The Company continued to obtain pricing information from commercial pricing services and brokers. However, the pricing for subprime and Alt-A RMBS did not represent regularly occurring market transactions since the trading activity declined significantly in the second half of 2008.  As a result, the Company concluded in the second half of 2008 that the market for subprime and Alt-A RMBS was inactive and classified these securities as Level 3 assets. The Company did not change its valuation procedures, which are consistent with those used for Level 2 marketable bonds without an active market, as a result of determining that the market was inactive. Due to increased trade activity of Alt-A RMBS during the second half of 2009, the Company determined that the Alt-A RMBS should be transferred to Level 2 of the valuation hierarchy as its overall assessment of the market was that it was active. The market for subprime RMBS remains largely inactive, and as such these securities will remain in Level 3 of the valuation hierarchy.  The Company will continue to monitor market activity for RMBS to determine proper classification in the valuation hierarchy.

C-22

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Equity securities, available-for-sale: Fair values of publicly traded equity securities are based upon quoted market price and are classified as Level 1 assets. Other equity securities, typically private equities or equity securities not traded on an exchange, are valued by sources such as analytics or brokers and are classified as Level 3 assets.

Cash and cash equivalents, Short-term investments, 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. These assets are classified as Level 1. Other short-term investments are valued and classified in the fair value hierarchy consistent with the policies described herein, depending on investment type.

Derivatives: The carrying amounts for these financial instruments, which can be assets or liabilities, reflect the fair value of the assets and liabilities.  Derivatives are carried at fair value (on the Consolidated Balance Sheets), which is determined using the Company’s derivative accounting system in conjunction with observable key financial data from third party sources, such as yield curves, exchange rates, Standard & Poor’s (“S&P”) 500 Index prices, and London Inter Bank Offered Rates (“LIBOR”), or through values established by third party brokers. Counterparty credit risk is considered and incorporated in the Company’s valuation process through counterparty credit rating requirements and monitoring of overall exposure.  It is the Company’s policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company’s own credit risk is also considered and incorporated in the Company’s valuation process. Valuations for the Company’s futures contracts are based on unadjusted quoted prices from an active exchange and, therefore, are classified as Level 1. The Company also has certain credit default swaps that are priced using models that primarily use market observable inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. However, all other derivative instruments are valued based on market observable inputs and are classified as Level 2.

Product guarantees: The Company records product guarantees, which can be either assets or liabilities, for annuity contracts containing guaranteed credited rates in accordance with ASC 815.  The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value.  The fair value of the obligation is calculated based on the income approach as described in ASC 820.  The income associated with the contracts is projected using actuarial and capital market assumptions, 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 risk neutral scenarios and other best estimate assumptions.  These derivatives are classified as Level 3 liabilities or assets. Explicit risk margins in the actuarial assumptions underlying valuations are included, as well as an explicit recognition of all nonperformance risks as required by US GAAP.  Nonperformance risk for product guarantees contains adjustments to the fair values of these contract liabilities related to the current credit standing of ING and the

C-23

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Company based on credit default swaps with similar term to maturity and priority of payment.  The ING credit default spread is applied to the discount factors for product guarantees in the Company’s valuation model in order to incorporate credit risk into the fair values of these product guarantees.  As of December 31, 2010, the overall value of the derivative liability decreased.  This decrease was mainly due to an increase in interest rate levels, and also benefited from the change in credit spread of ING in relation to prior periods which decreased the derivative liability.

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.

The following investments are reported at values other than fair value on the Consolidated Balance Sheets, and therefore are not categorized in the fair value hierarchy:

Mortgage loans on real estate: Mortgage loans on real estate are reported at amortized cost, less impairment write-downs and allowance for losses. 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 lower of the present value of expected cash flows from the loan, discounted at the loan’s effective interest rate, or fair value of the collateral. For those mortgages that are determined to require foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure. The carrying value of the impaired loans is reduced by establishing a permanent write-down recorded in Net realized capital gains (losses).

Policy loans: The reported value of policy loans is equal to the carrying, or cash surrender, value of the loans. Policy loans are fully collateralized by the account value of the associated insurance contracts.

Loan - Dutch State obligation: The reported value of the State of the Netherlands (the “Dutch State”) loan obligation is based on the outstanding loan balance plus any unamortized premium.

Limited partnerships/corporations: The carrying value for these investments, primarily private equities and hedge funds, is determined based on the Company’s degree of influence over the investee’s operating and financial policies along with the percent of the investee that the Company owns. Those investments where the Company has determined it has significant influence are accounted for under the equity method, with the remainder accounted for under the cost method.

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

C-24

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

Repurchase Agreements

The Company engages in dollar repurchase agreements with mortgage-backed securities (“dollar rolls”) and repurchase agreements with other collateral types to increase its return on investments and improve liquidity. Such arrangements typically meet the requirements to be accounted for as financing arrangements. The Company enters into dollar roll transactions by selling existing mortgage-backed securities and concurrently entering into an agreement to repurchase similar securities within a short time frame in the future at a lower price. Under repurchase agreements, the Company borrows cash from a counterparty at an agreed upon interest rate for an agreed upon time frame and pledges collateral in the form of securities. At the end of the agreement, the counterparty returns the collateral to the Company and the Company, in turn, repays the loan amount along with the additional agreed upon interest. Company policy requires that at all times during the term of the dollar roll and repurchase agreements that cash or other collateral types obtained is sufficient to allow the Company to fund substantially all of the cost of purchasing replacement assets. Cash collateral received is invested in short-term investments, with the offsetting collateral liability included in Borrowed money on the Consolidated Balance Sheets.  At December 31, 2010, the carrying value of the securities pledged in dollar rolls and repurchase agreement transactions was $216.7. At December 31, 2009, there were no securities pledged in dollar rolls and repurchase agreement transactions.  The repurchase obligation related to dollar rolls and repurchase agreements, including accrued interest, totaled $214.7 and $0.1, respectively at December 31, 2010 and 2009, and is included in Borrowed money on the Consolidated Balance Sheets. In addition to the purchase obligation at December 31, 2010, the Company did not have any collateral posted by the counterparty in connection with the increase in the value of pledged securities that will be released upon settlement.

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 policy requires that, at all times during the term of the reverse repurchase agreements, cash or other collateral types provided is sufficient to allow the counterparty to fund substantially all of the cost of purchasing replacement assets. At December 31, 2010 and 2009, the Company did not have any securities pledged under reverse repurchase agreements.

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

C-25

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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, 2010.  The Company believes the counterparties to the dollar rolls, 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. At December 31, 2010 and 2009, the fair value of loaned securities was $651.7 and $339.5, respectively, and is included in Securities pledged on the Consolidated Balance Sheets.

Derivatives

The Company’s use of derivatives is limited mainly to economic hedging purposes to reduce the Company’s exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, and market risk.

The Company enters into interest rate, equity market, credit default, 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 Derivatives or Other liabilities, as appropriate, on the Consolidated Balance Sheets.  Changes in the fair value of such derivatives are recorded in Net realized capital gains (losses) in the Consolidated Statements of Operations.

If the Company’s current debt and claims paying ratings were downgraded in the future, the terms in the Company’s derivative agreements may be triggered, which could negatively impact overall liquidity.  For the majority of the Company’s counterparties, there is a termination event should the Company’s long-term debt ratings drop below BBB+/Baa1.

The Company also has investments in certain fixed maturity instruments, and has issued certain products with guarantees, that contain embedded derivatives whose market value is at least partially determined by, among other things, levels of or changes in domestic

C-26

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity markets, or credit ratings/spreads.

Embedded derivatives within retail annuity products are included in Future policy benefits and claims reserves on the Consolidated Balance Sheets, and changes in the fair value are recorded in Interest credited and benefits to contract owners in the Consolidated Statements of Operations.

DAC and VOBA

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 certain 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.

US GAAP guidance for universal life and investment-type products, such as fixed and variable deferred annuities, indicates 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.

Internal Replacements

Contract owners 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 US GAAP guidance for DAC related to modification or exchange of insurance contracts.

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.  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 Consolidated Statements of Operations.

C-27

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 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. 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 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 gross profits, lower the rate of amortization. Sustained decreases in investment, mortality, and expense margins, and thus estimated future gross profits, however, increase the rate of amortization.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation.  Expenditures for replacements and major improvements are capitalized; maintenance and repair expenditures are expensed as incurred.

At December 31, 2010 and 2009, total accumulated depreciation and amortization was $102.6 and $99.5, respectively. Depreciation on property and equipment is provided on a straight-line basis over the estimated useful lives of the assets with the exception of land and artwork, which are not depreciated or amortized. The Company’s property and equipment are depreciated using the following estimated useful lives.

C-28

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Buildings	40 years
Furniture and fixtures	5 years
Leasehold improvements	10 years, or the life of the lease, whichever is shorter
Equipment	3 years
Software	3 years

Reserves

The Company records as liabilities reserves to meet the Company’s future obligations under its variable annuity and fixed annuity products.

Future policy benefits and claims reserves include reserves for deferred annuities and immediate annuities with and without life contingent payouts.

Reserves for individual and group deferred annuity investment contracts and individual immediate annuities without life contingent payouts are equal to cumulative deposits, less charges and withdrawals, plus credited interest thereon, net of adjustments for investment experience that the Company is entitled to reflect in future credited interest. Credited interest rates vary by product and range from 0% to 7.8% for the years 2010, 2009, and 2008.  Reserves for group immediate annuities without life contingent payouts are equal to the discounted value of the payment at the implied break-even rate.

Reserves for individual immediate annuities with life contingent payout benefits are computed on the basis of assumed interest discount rates, mortality, and expenses, including a margin for adverse deviations.  Such assumptions generally vary by annuity type plan, year of issue, and policy duration.  For the years 2010, 2009, and 2008, reserve interest rates ranged from 4.5% to 6.0%.

The Company records reserves for product guarantees, which can be either assets or liabilities, for annuity contracts containing guaranteed credited rates.  The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is reported at fair value in accordance with the requirements of US GAAP guidance for insurance companies, derivatives, and fair value measurements.  The fair value of the obligation is calculated based on the income approach.  The income associated with the contracts is projected using relevant actuarial and capital market assumptions, 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 risk neutral scenarios and other best estimate assumptions.  Explicit risk margins in the actuarial assumptions underlying valuations are included, as well as an explicit recognition of all nonperformance risks beginning January 1, 2008 with the adoption of new US GAAP guidance on fair value measurements. Nonperformance risk for product guarantees contain adjustment to the fair value of these contract liabilities related to the current credit standing of ING and the Company based

C-29

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

on credit default swaps with similar term to maturity and priority of payment.  The ING credit default spread is applied to the discount factors for product guarantees in the Company’s valuation model in order to incorporate credit risk into the fair value of these product guarantees.

Unpaid claims and claim expenses for all lines of insurance include benefits for reported losses and estimates of benefits for losses incurred but not reported.

Certain variable annuities offer guaranteed minimum death benefits (“GMDB”). The GMDB is accrued in the event the contract owner account value at death is below the guaranteed value and is included in reserves.

The Company’s domestic individual life insurance business was disposed of on October 1, 1998 pursuant to an indemnity reinsurance agreement. The Company includes an amount in Reinsurance recoverable on the Consolidated Balance Sheets, which equals the Company’s total individual life reserves. Individual life reserves are included in Future policy benefits and claims reserves on the Consolidated Balance Sheets.

Revenue Recognition

For most annuity contracts, charges assessed against contract owner funds for the cost of insurance, surrenders, 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 premiums or revenue.  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 in both Premiums and Interest credited and other benefits to contract owners in the Consolidated Statements of Operations.

Premiums on the Consolidated Statements of Operations primarily represent amounts received for immediate annuities with life contingent payouts.

Separate Accounts

Separate account assets and liabilities generally represent funds maintained to meet specific investment objectives of contract owners 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 contract owners.  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.

Separate account assets supporting variable options under variable annuity contracts are invested, as designated by the contract owner or participant (who bears the investment risk subject, in limited cases, to minimum guaranteed rates) under a contract, in shares of

C-30

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

The Company reports separately, as assets and liabilities, investments held in the separate accounts and liabilities of separate accounts if:

§	such separate accounts are legally recognized;
§	assets supporting the contract liabilities are legally insulated from the Company’s general account liabilities;
§	investments are directed by the contractholder; and
§	all investment performance, net of contract fees and assessments, is passed through to the contractholder.

The Company reports separate account assets and liabilities that meet the above criteria at fair value based on the fair value of the underlying investments.  Investment income and net realized and unrealized capital gains (losses) of the separate accounts, however, are not reflected in the Consolidated Statements of Operations.  The Consolidated Statements of Cash Flows do not reflect investment activity of the separate accounts.

Reinsurance

The Company utilizes indemnity reinsurance agreements to reduce its exposure to losses from GMDBs in its annuity insurance business. 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. The Company evaluates the financial strength of potential reinsurers and continually monitors 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 Consolidated Balance Sheets.

The Company has a significant concentration of reinsurance arising from the disposition of its individual life insurance business. In 1998, the Company entered into an indemnity reinsurance agreement with a subsidiary of Lincoln National Corporation (“Lincoln”).  The Lincoln subsidiary established a trust to secure it obligations to the Company under the reinsurance transaction.  Of the Reinsurance recoverable on the Consolidated Balance Sheets, $2.3 billion and $2.4 billion at December 31, 2010 and 2009, respectively, is related to the reinsurance recoverable from the subsidiary of Lincoln under this reinsurance agreement.

Income Taxes

ILIAC files a consolidated federal income tax return with ING America Insurance Holdings, Inc. (“ING AIH”), an affiliate, and certain other subsidiaries of ING AIH. ILIAC is 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

C-31

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

2.Investments

Fixed Maturities and Equity Securities

Fixed maturities and equity securities were as follows as of December 31, 2010.

			Gross		Gross
			Unrealized		Unrealized
	Amortized		Capital		Capital				Fair
	Cost		Gains		Losses		OTTI(2)		Value
Fixed maturities:
U.S. Treasuries	$	717.0	$	4.7	$	7.3	$	-	$	714.4
U.S. government agencies and authorities	536.7		45.9		-		-		582.6
State, municipalities, and political subdivisions	145.9		5.0		10.2		-		140.7
U.S. corporate securities:
Public utilities	1,292.3		72.7		10.3		-		1,354.7
Other corporate securities	5,522.7		389.5		33.8		0.3		5,878.1
Total U.S. corporate securities	6,815.0		462.2		44.1		0.3		7,232.8
Foreign securities(1):
Government	446.3		39.6		5.0		-		480.9
Other	4,089.5		240.5		37.3		0.1		4,292.6
Total foreign securities	4,535.8		280.1		42.3		0.1		4,773.5
Residential mortgage-backed securities	2,116.0		296.9		28.7		28.8		2,355.4
Commercial mortgage-backed securities	1,005.6		54.2		15.7		14.5		1,029.6
Other asset-backed securities	615.3		16.2		27.0		15.7		588.8
Total fixed maturities, including securities pledged	16,487.3		1,165.2		175.3		59.4		17,417.8
Less: securities pledged	936.5		35.0		9.3		-		962.2
Total fixed maturities	15,550.8		1,130.2		166.0		59.4		16,455.6
Equity securities	186.7		24.3		-		-		211.0
Total investments	$	15,737.5	$	1,154.5	$	166.0	$	59.4	$	16,666.6

(1)	Primarily U.S. dollar denominated.
(2)	Represents other-than-temporary impairments reported as a component of Other comprehensive income (“noncredit impairments”).

C-32

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Fixed maturities and equity securities were as follows as of December 31, 2009.

			Gross		Gross
			Unrealized		Unrealized
	Amortized		Capital		Capital				Fair
	Cost		Gains		Losses		OTTI(2)		Value
Fixed maturities:
U.S. Treasuries	$	1,897.2	$	3.0	$	38.3	$	-	$	1,861.9
U.S. government agencies and authorities	632.5		41.1		-		-		673.6
State, municipalities, and political subdivisions	112.5		2.5		7.8		-		107.2
U.S. corporate securities:
Public utilities	1,138.7		40.8		14.3		-		1,165.2
Other corporate securities	4,366.5		267.4		63.2		0.6		4,570.1
Total U.S. corporate securities	5,505.2		308.2		77.5		0.6		5,735.3
Foreign securities(1):
Government	343.0		29.2		8.7		-		363.5
Other	2,922.5		129.0		56.6		0.1		2,994.8
Total foreign securities	3,265.5		158.2		65.3		0.1		3,358.3
Residential mortgage-backed securities	1,870.4		268.3		111.9		16.8		2,010.0
Commercial mortgage-backed securities	1,535.0		10.4		214.3		-		1,331.1
Other asset-backed securities	657.4		9.8		106.3		29.2		531.7
Total fixed maturities, including securities pledged	15,475.7		801.5		621.4		46.7		15,609.1
Less: securities pledged	483.7		4.3		18.2		-		469.8
Total fixed maturities	14,992.0		797.2		603.2		46.7		15,139.3
Equity securities	175.1		13.4		0.6		-		187.9
Total investments	$	15,167.1	$	810.6	$	603.8	$	46.7	$	15,327.2

(1)	Primarily U.S. dollar denominated.
(2)	Represents other-than-temporary impairments reported as a component of Other comprehensive income (“noncredit impairments”).

At December 31, 2010 and 2009, net unrealized gains were $954.8 and $146.2, respectively, on total fixed maturities, including securities pledged to creditors, and equity securities.

C-33

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The amortized cost and fair value of total fixed maturities, including securities pledged, as of December 31, 2010, 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	$	269.4	$	285.7
After one year through five years	4,316.0		4,606.4
After five years through ten years	4,376.8		4,635.0
After ten years	3,788.2		3,916.9
Mortgage-backed securities	3,121.6		3,385.0
Other asset-backed securities	615.3		588.8
Fixed maturities, including securities pledged	$	16,487.3	$	17,417.8

The Company did not have any investments in a single issuer, other than obligations of the U.S. government and government agencies and the Dutch State loan obligation, with a carrying value in excess of 10% of the Company’s Shareholder’s equity at December 31, 2010 and 2009.

At December 31, 2010 and 2009, fixed maturities with fair values of $13.4 and $12.9, respectively, were on deposit as required by regulatory authorities.

The Company invests in various categories of collateralized mortgage obligations (“CMOs”), including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and 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, 2010 and 2009, approximately 36.5% and 29.4%, 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.

Transfer of Alt-A RMBS Participation Interest

On January 26, 2009, ING  announced it reached an agreement, for itself and on behalf of certain ING affiliates including the Company, with the Dutch State on an Illiquid Assets Back-Up Facility (the “Back-Up Facility”) covering 80% of ING’s Alt-A residential mortgage-backed securities (“Alt-A RMBS”).  Under the terms of the Back-Up Facility, a full credit risk transfer to the Dutch State was realized on 80% of ING’s Alt-A RMBS owned by ING Bank, FSB and ING affiliates within ING Insurance US with a book value of $36.0 billion, including book value of $802.5 of the Alt-A RMBS portfolio owned by the Company (with respect to the Company’s portfolio, the “Designated Securities Portfolio”) (the “ING-Dutch State Transaction”).  As a result of the risk transfer, the

C-34

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Dutch State will participate in 80% of any results of the ING Alt-A RMBS portfolio.  The risk transfer to the Dutch State took place at a discount of approximately 10% of par value.  In addition, under the Back-Up Facility, other fees were paid both by the Company and the Dutch State.  Each ING company participating in the ING-Dutch State Transaction, including the Company remains the legal owner of 100% of its Alt-A RMBS portfolio and will remain exposed to 20% of any results on the portfolio.  The ING-Dutch State Transaction closed March 31, 2009, with the affiliate participation conveyance and risk transfer to the Dutch State described in the succeeding paragraph taking effect as of January 26, 2009.

In order to implement that portion of the ING-Dutch State Transaction related to the Company’s Designated Securities Portfolio, the Company entered into a participation agreement with its affiliates, ING Support Holding B.V. (“ING Support Holding”) and ING pursuant to which the Company conveyed to ING Support Holding an 80% participation interest in its Designated Securities Portfolio and will pay a periodic transaction fee, and received, as consideration for the participation, an assignment by ING Support Holding of its right to receive payments from the Dutch State under the Illiquid Assets Back-Up Facility related to the Company’s Designated Securities Portfolio among, ING, ING Support Holding and the Dutch State (the “Company Back-Up Facility”).  Under the Company Back-Up Facility, the Dutch State is obligated to pay certain periodic fees and make certain periodic payments with respect to the Company’s Designated Securities Portfolio, and ING Support Holding is obligated to pay a periodic guarantee fee and make periodic payments to the Dutch State equal to the distributions it receives with respect to the 80% participation interest in the Company’s Designated Securities Portfolio.  The Dutch State payment obligation to the Company under the Company Back-Up Facility is accounted for as a loan receivable for US GAAP and is reported in Loan - Dutch State obligation on the Consolidated Balance Sheets.

Upon the closing of the transaction on March 31, 2009, the Company recognized a gain of $206.2, which was reported in Net realized capital gains (losses) on the Consolidated Statements of Operations.

In a second transaction, known as the Step 1 Cash Transfer, a portion of the Company’s Alt-A RMBS which had a book value of $4.2 was sold for cash to an affiliate, Lion II Custom Investments LLC (“Lion II”).  Immediately thereafter, Lion II sold to ING Direct Bancorp the purchased securities (the “Step 2 Cash Transfer”). Contemporaneous with the Step 2 Cash Transfer, ING Direct Bancorp included such purchased securities as part of its Alt-A RMBS portfolio sale to the Dutch State.  The Step 1 Cash Transfer closed on March 31, 2009, and the Company recognized a gain of $0.3 contemporaneous with the closing of the ING-Dutch State Transaction, which was reported in Net realized capital gains (losses) on the Consolidated Statements of Operations.

As part of the final restructuring plan submitted to the European Commission (“EC”) in connection with its review of the Dutch state aid to ING (the “Restructuring Plan”), ING

C-35

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

has agreed to make additional payments to the Dutch State corresponding to an adjustment of fees for the Back-Up Facility. Under this new agreement, the terms of the ING-Dutch State Transaction which closed on March 31, 2009, including the transfer price of the Alt-A RMBS securities, will remain unaltered and the additional payments will not be borne by the Company or any other ING U.S. subsidiaries.

Variable Interest Entities

The Company holds certain VIEs for investment purposes.  VIEs may be in the form of private placement securities, structured securities, securitization transactions, or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company’s financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. Rather, the VIEs are accounted for using the cost or equity method of accounting. The Company provided no non-contractual financial support and its carrying value represents the Company’s exposure to loss. The carrying value of collateralized loan obligations (“CLOs”) of $0.6 and $0.1 at December 31, 2010 and 2009, respectively, is included in Limited partnerships/corporations on the Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income on the Consolidated Statements of Operations.

Unrealized Capital Losses

Unrealized capital losses (including non-credit impairments) in fixed maturities, including securities pledged to creditors, for Investment Grade (“IG”) and Below Investment Grade (“BIG”) securities by duration were as follows as of December 31, 2010 and 2009.

	2010						2009
			% of IG			% of IG			% of IG			% of IG
	IG		and BIG	BIG		and BIG	IG		and BIG	BIG		and BIG
Six months or less below amortized cost	$	72.4	30.8%	$	12.2	5.2%	$	105.5	15.7%	$	18.5	2.8%
More than six months and twelve months or less below amortized cost	1.8		0.8%	0.2		0.1%	44.0		6.6%	37.9		5.7%
More than twelve months below amortized cost	79.8		34.0%	68.3		29.1%	300.8		45.0%	161.4		24.2%
Total unrealized capital loss	$	154.0	65.6%	$	80.7	34.4%	$	450.3	67.3%	$	217.8	32.7%

C-36

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following table summarizes the unrealized capital losses (including non-credit impairments) by duration and reason, along with the fair value of fixed maturities, including securities pledged to creditors, in unrealized capital loss positions as of December 31, 2010 and 2009.

			More than
	Six Months		Six Months and
	or Less		Twelve Months		More than		Total
	Below		or Less Below		Twelve Months		Unrealized
	Amortized		Amortized		Below		Capital
2010	Cost		Cost		Cost		Losses
Interest rate or spread widening	$	76.0	$	2.0	$	26.3	$	104.3
Mortgage and other asset-backed securities	8.6		-		121.8		130.4
Total unrealized capital losses	$	84.6	$	2.0	$	148.1	$	234.7
Fair value	$	2,912.0	$	37.0	801.4		$	3,750.4
2009
Interest rate or spread widening	$	75.8	$	35.3	$	78.5	$	189.6
Mortgage and other asset-backed securities	48.2		46.6		383.7		478.5
Total unrealized capital losses	$	124.0	$	81.9	$	462.2	$	668.1
Fair value	$	2,896.6	$	212.6	$	2,122.0	$	5,231.2

C-37

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Unrealized capital losses (including non-credit impairments), along with the fair value of fixed maturities, including securities pledged to creditors, by market sector and duration were as follows as of December 31, 2010 and 2009.

					More Than Six
					Months and Twelve				More Than Twelve
	Six Months or Less				Months or Less				Months Below
	Below Amortized Cost				Below Amortized Cost				Amortized Cost				Total
			Unrealized				Unrealized				Unrealized				Unrealized
	Fair Value		Capital Loss		Fair Value		Capital Loss		Fair Value		Capital Loss		Fair Value		Capital Loss
2010
U.S. Treasuries	$	475.6	$	7.3	$	-	$	-	$	-	$	-	$	475.6	$	7.3
U.S. corporate, state, and municipalities	1,043.1		38.6		21.8		1.1		142.9		14.9		1,207.8		54.6
Foreign	866.3		30.1		14.9		0.9		101.7		11.4		982.9		42.4
Residential mortgage-backed	400.5		6.8		0.2		-		240.7		50.7		641.4		57.5
Commercial mortgage-backed	5.1		-		-		-		184.0		30.2		189.1		30.2
Other asset-backed	121.4		1.8		0.1		-		132.1		40.9		253.6		42.7
Total	$	2,912.0	$	84.6	$	37.0	$	2.0	$	801.4	$	148.1	$	3,750.4	$	234.7
2009
U.S. Treasuries	$	1,002.2	$	38.3	$	-	$	-	$	-	$	-	$	1,002.2	$	38.3
U.S. corporate, state, and municipalities	1,097.0		22.7		86.1		14.9		381.2		48.3		1,564.3		85.9
Foreign	528.6		14.8		40.0		20.4		301.8		30.2		870.4		65.4
Residential mortgage-backed	135.9		45.4		47.7		4.2		420.1		79.1		603.7		128.7
Commercial mortgage-backed	105.8		1.2		27.2		35.7		757.1		177.4		890.1		214.3
Other asset-backed	27.1		1.6		11.6		6.7		261.8		127.2		300.5		135.5
Total	$	2,896.6	$	124.0	$	212.6	$	81.9	$	2,122.0	$	462.2	$	5,231.2	$	668.1

Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities was 84.4% of the average book value as of December 31, 2010.

C-38

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Unrealized capital losses (including non-credit impairments) in fixed maturities, including securities pledged to creditors, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive periods as indicated in the tables below, were as follows for December 31, 2010 and 2009.

		Amortized Cost				Unrealized Capital Loss				Number of Securities
		< 20%		> 20%		< 20%		> 20%		< 20%	> 20%
2010
Six months or less below amortized cost	$		3,190.2	$	68.6	$	98.5	$	22.3	491	19
More than six months and twelve months or less below amortized cost		129.3		19.6		8.2		4.6		52	3
More than twelve months below amortized cost		353.5		223.9		23.2		77.9		87	69
Total	$		3,673.0	$	312.1	$	129.9	$	104.8	630	91
2009
Six months or less below amortized cost	$		3,646.9	$	184.9	$	168.0	$	60.7	377	98
More than six months and twelve months or less below amortized cost		734.5		247.0		40.2		124.3		120	48
More than twelve months below amortized cost		425.9		660.1		28.2		246.7		90	129
Total	$		4,807.3	$	1,092.0	$	236.4	$	431.7	587	275

C-39

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Unrealized capital losses (including non-credit impairments) in fixed maturities, including securities pledged to creditors, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive periods as indicated in the tables below, were as follows for December 31, 2010 and 2009.

	Amortized Cost					Unrealized Capital Loss				Number of Securities
		< 20%		> 20%		< 20%		> 20%		< 20%	> 20%
2010
U.S. Treasuries	$		482.9	$	-	$	7.3	$	-	3	-
U.S. corporate, state and municipalities		1,218.7		43.7		40.2		14.4		188	5
Foreign		1,013.7		11.6		39.6		2.8		137	4
Residential mortgage-backed		599.6		99.3		25.7		31.8		160	47
Commercial mortgage-backed		155.1		64.2		9.5		20.7		19	5
Other asset-backed		203.0		93.3		7.6		35.1		123	30
Total	$		3,673.0	$	312.1	$	129.9	$	104.8	630	91
2009
U.S. Treasuries	$		1,040.5	$	-	$	38.3	$	-	9	-
U.S. corporate, state and municipalities		1,532.2		118.0		53.5		32.4		256	23
Foreign		830.0		105.8		31.7		33.7		111	22
Residential mortgage-backed		511.7		220.7		55.1		73.6		115	109
Commercial mortgage-backed		732.4		372.0		49.3		165.0		59	39
Other asset-backed		160.5		275.5		8.5		127.0		37	82
Total	$		4,807.3	$	1,092.0	$	236.4	$	431.7	587	275

During the year ended December 31, 2010, unrealized capital losses on fixed maturities decreased by $433.4. Lower unrealized losses are due to declining yields and the overall tightening of credit spreads since the end of 2009, leading to the increased value of fixed maturities.

At December 31, 2010, the Company held 1 fixed maturity with an unrealized capital loss in excess of $10.0.  The unrealized capital loss on this fixed maturity equaled $10.0, or 4.3% of the total unrealized capital losses, as of December 31, 2010.  At December 31, 2009, the Company held 8 fixed maturities with unrealized capital losses in excess of $10.0.  The unrealized capital losses on these fixed maturities equaled $118.2, or 17.7% of the total unrealized capital losses, as of December 31, 2009.

All investments with fair values less than amortized cost are included in the Company’s other-than-temporary impairment analysis, and impairments were recognized as disclosed in “Other-Than-Temporary Impairments,” which follows this section. After detailed impairment analysis was completed, management determined that the remaining investments in an unrealized loss position were not other-than-temporarily impaired, and therefore no further other-than-temporary impairment was necessary.

C-40

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Other-Than-Temporary Impairments

The following tables identify the Company’s credit-related and intent-related impairments included in the Consolidated Statements of Operations, excluding noncredit impairments included in Accumulated other comprehensive income (loss), by type for the years ended December 31, 2010, 2009, and 2008.

	2010				2009			2008
				No. of			No. of			No. of
		Impairment		Securities	Impairment		Securities	Impairment		Securities
U.S. Treasuries	$		1.7	1	$	156.0	15	$	-	-
Public utilities		1.3		5	-		-	-		-
Other U.S. corporate		5.3		19	47.8		57	283.2		233
Foreign(1)		42.4		20	50.6		42	108.9		94
Residential mortgage-backed		14.8		53	31.6		69	349.3		194
Commercial mortgage-backed		20.5		8	17.7		11	220.8		29
Other asset-backed		58.5		42	43.4		32	24.8		35
Limited partnerships		1.6		4	17.6		17	6.6		6
Equity securities		-		1	19.5		9	55.1		17
Mortgage loans on real estate		1.0		1	10.3		4	3.8		1
Total	$		147.1	154	$	394.5	256	$	1,052.5	609
(1) Primarily U.S. dollar denominated.

The above tables include $48.4, $112.2, and $235.8 for the years ended December 31, 2010, 2009, and 2008, respectively, in other-than-temporary write-downs related to credit impairments, which are recognized in earnings. The remaining $98.7, $282.3, and $816.7, in write-downs for the years ended December 31, 2010, 2009, and 2008, respectively, are related to intent impairments.

The following tables summarize these intent impairments, which are also recognized in earnings, by type for the years ended December 31, 2010, 2009, and 2008.

	2010				2009			2008
				No. of			No. of			No. of
		Impairment		Securities	Impairment		Securities	Impairment		Securities
U.S. Treasuries	$		1.7	1	$	156.0	15	$	-	-
Public utilities			1.4	5		-	-		-	-
Other U.S. corporate			5.3	19		35.9	42		204.5	180
Foreign(1)			28.5	15		48.7	41		81.3	78
Residential mortgage-backed			8.6	18		2.4	1		291.8	128
Commercial mortgage-backed			16.2	6		17.7	11		220.8	29
Other asset-backed			37.0	26		21.6	10		18.3	14
Total	$		98.7	90	$	282.3	120	$	816.7	429

(1)Primarily U.S. dollar denominated.

C-41

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

The following tables identify the noncredit impairments recognized in Accumulated other comprehensive income (loss) by type for the years ended December 31, 2010 and 2009.

	2010				2009
				No. of			No. of
		Impairment		Securities	Impairment		Securities
Commercial mortgage-backed	$		14.9	2	$	-	-
Residential mortgage-backed		18.2		24	10.9		18
Other asset-backed		19.0		15	28.1		13
Total	$		52.1	41	$	39.0	31

(1)Primarily U.S. dollar denominated.

The fair value of fixed maturities with other-than-temporary impairments as of December 31, 2010, 2009, and 2008 was $2.0 billion, $3.0 billion, and $2.1 billion, respectively.

The following tables identify the amount of credit impairments on fixed maturities for the years ended December 31, 2010 and 2009, for which a portion of the OTTI was recognized in Accumulated other comprehensive income (loss), and the corresponding changes in such amounts.

		2010			2009
Balance at January 1	$	46.0		$	-
Implementation of OTTI guidance included in ASC Topic 320(1)		-			25.1
Additional credit impairments:
On securities not previously impaired		12.0			13.6
On securities previously impaired		8.7			8.8
Reductions:
Securities sold, matured, prepaid or paid down		(7.5	)		(1.5	)
Balance at December 31	$	59.2		$	46.0

(1)Represents credit losses remaining in Retained earnings related to the adoption of new guidance on OTTI, included in ASC Topic 320, on April 1, 2009.

C-42

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Net Investment Income

Sources of Net investment income were as follows for the years ended December 31, 2010, 2009, and 2008.

	2010		2009		2008
Fixed maturities	$	1,182.4	$	1,125.7	$	1,019.3
Equity securities, available-for-sale	15.3		15.4		(13.2)
Mortgage loans on real estate	104.0		113.4		116.1
Real estate	-		6.6		9.0
Policy loans	13.3		13.7		14.2
Short-term investments and cash equivalents	0.8		2.4		5.8
Other	68.0		4.7		(0.1)
Gross investment income	1,383.8		1,281.9		1,151.1
Less: investment expenses	41.5		39.8		80.1
Net investment income	$	1,342.3	$	1,242.1	$	1,071.0

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 credit-related and intent-related other-than-temporary impairment of investments and changes in fair value of fixed maturities accounted for using the fair value option and 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, 2010, 2009, and 2008.

	2010			2009			2008
Fixed maturities, available-for-sale, including net OTTI of $(144.5), $(347.1), and $(987.0) in 2010, 2009, and 2008, respectively	$	38.7		$	(15.1	)	$	(1,068.9	)
Fixed maturities, at fair value using the fair value option	(39.2		)	57.0			6.0
Equity securities, available-for-sale, including net OTTI of $0.0, $(19.5), and $(55.1) in 2010, 2009, and 2008, respectively	4.1			(2.9		)	(81.0		)
Derivatives	(36.6		)	(267.6		)	(105.0		)
Other investments, including net OTTI of $(2.6), $(27.9), and $(10.4) in 2010, 2009, and 2008, respectively	4.9			(16.9		)	(18.7		)
Net realized capital losses	$	(28.1	)	$	(245.5	)	$	(1,267.6	)
After-tax net realized capital gains (losses)	$	1.5		$	(67.4	)	$	(1,151.9	)

C-43

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Proceeds from the sale of fixed maturities and equity securities and the related gross realized gains and losses were as follows for the periods ended December 31, 2010, 2009, and 2008.

	2010		2009		2008
Proceeds on sales	$	5,312.9	$	4,674.6	$	8,426.5
Gross gains	213.6		228.5		120.0
Gross losses	27.8		87.4		234.4

3.Financial Instruments

The following tables present the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2010 and 2009.

	2010
	Level 1		Level 2		Level 3(1)		Total
Assets:
Fixed maturities including securities pledged:
U.S. Treasuries	$	646.1	$	68.3	$	-	$	714.4
U.S. government agencies and authorities	-		582.6		-		582.6
U.S. corporate, state and municipalities	-		7,362.3		11.2		7,373.5
Foreign	-		4,762.1		11.4		4,773.5
Residential mortgage-backed securities	-		2,102.9		252.5		2,355.4
Commercial mortgage-backed securities	-		1,029.6		-		1,029.6
Other asset-backed securities	-		341.1		247.7		588.8
Equity securities, available-for-sale	183.3		-		27.7		211.0
Derivatives:
Interest rate contracts	3.5		223.3		-		226.8
Foreign exchange contracts	-		0.7		-		0.7
Credit contracts	-		6.7		-		6.7
Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement	1,128.8		-		-		1,128.8
Assets held in separate accounts	42,337.4		4,129.4		22.3		46,489.1
Total	$	44,299.1	$	20,609.0	$	572.8	$	65,480.9
Liabilities:
Product guarantees	$	-	$	-	$	3.0	$	3.0
Fixed Indexed Annuities (“FIA”)	-		-		5.6		5.6
Derivatives:
Interest rate contracts	0.1		227.0		-		227.1
Foreign exchange contracts	-		38.5		-		38.5
Credit contracts	-		1.1		13.6		14.7
Total	$	0.1	$	266.6	$	22.2	$	288.9

(1)Level 3 net assets and liabilities accounted for 0.8% of total net 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 net assets and liabilities in relation to total net assets and liabilities measured at fair value on a recurring basis totaled 2.8%.

C-44

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

	2009
	Level 1		Level 2		Level 3(1)		Total
Assets:
Fixed maturities including securities pledged:
U.S. Treasuries	$	1,861.9	$	-	$	-	$	1,861.9
U.S. government agencies and authorities	-		673.6		-		673.6
U.S. corporate, state and municipalities	-		5,842.5		-		5,842.5
Foreign	-		3,358.3		-		3,358.3
Residential mortgage-backed securities	-		772.1		1,237.9		2,010.0
Commercial mortgage-backed securities	-		1,331.1		-		1,331.1
Other asset-backed securities	-		342.9		188.8		531.7
Equity securities, available-for-sale	148.1		-		39.8		187.9
Derivatives:
Interest rate contracts	-		175.0		-		175.0
Credit contracts	-		0.2		-		0.2
Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement	1,128.0		1.8		-		1,129.8
Assets held in separate accounts	38,052.5		3,261.0		56.3		41,369.8
Total	$	41,190.5	$	15,758.5	$	1,522.8	$	58,471.8
Liabilities:
Product guarantees	$	-	$	-	$	6.0	$	6.0
Derivatives:
Interest rate contracts	-		234.9		-		234.9
Foreign exchange contracts	-		43.3		-		43.3
Credit contracts	-		5.2		48.3		53.5
Total	$	-	$	283.4	$	54.3	$	337.7

(1)   Level 3 net assets and liabilities accounted for 2.5% of total net 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 net assets and liabilities in relation to total net assets and liabilities measured at fair value on a recurring basis totaled 8.4%.

Transfers in and out of Level 1 and 2

Certain U.S. Treasury securities valued by commercial pricing services where prices are derived using market observable inputs have been transferred from Level 1 to Level 2.  These securities for the year ended December 31, 2010, include U.S. Treasury strips of $60.6 in which prices are modeled incorporating a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data. The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

C-45

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Valuation of Financial Assets and Liabilities

As described below, certain assets and liabilities are measured at estimated fair value on the Company’s Consolidated Balance Sheets. In addition, further disclosure of estimated fair values is included in this Financial Instruments footnote. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement which is determined based on a hypothetical transaction at the measurement date, from a market participant’s perspective. The Company considers three broad valuation techniques when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available.

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third party commercial pricing services, brokers, and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from brokers and third party commercial pricing services are non-binding. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes.

All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during 2010, except for the Company’s use of commercial pricing services to value CMO-Bs which commenced in the first quarter of 2010. CMO-Bs were previously valued using an average of broker quotes when more than one broker quote is provided.

Level 3 Financial Instruments

The fair values of certain 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 (i.e., Level 3 as defined by ASC 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These

C-46

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair value of financial assets and liabilities classified as Level 3, additional information is presented below, with particular attention addressed to the reserves for product guarantees due to the impact on the Company’s results of operations.

C-47

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following table summarizes the changes in fair value of the Company’s Level 3 assets and liabilities for the year ended December 31, 2010.
	December 31, 2010
																Change in
	Fair Value		Total realized/unrealized					Purchases,		Transfers		Transfers		Fair Value		unrealized gains
	as of		gains (losses) included in:					issuances, and		in to		out of		as of		(losses) included
	January 1		Net income			OCI		settlements		Level 3(2)		Level 3(2)		December 31		in earnings(3)
Fixed maturities, including securities pledged:
U.S. corporate, state and municipalities	$	-	$	-		$	-	$	-	$	11.2	$	-	$	11.2	$	-
Foreign	-		0.1			0.6		2.7		8.0		-		11.4		-
Residential mortgage-backed securities	1,237.9		(23.6)			4.3		62.5		0.6		(1,029.2)		252.5		(26.3)
Other asset-backed securities	188.8		(59.4)			93.3		(20.2)		45.2		-		247.7		(59.3)
Total fixed maturities, including securities pledged	1,426.7		(82.9)			98.2		45.0		65.0		(1,029.2)		522.8		(85.6)
Equity securities, available for sale	39.8		(0.4)			0.6		13.8		-		(26.1)		27.7		-
Derivatives, net	(48.3)		0.3			-		34.4		-		-		(13.6)		1.8
Product guarantees	(6.0)		9.0		(1)	-		(6.0)		-		-		(3.0)		-
Fixed Indexed Annuities	-		0.3		(1)	-		(5.9)		-		-		(5.6)		-
Separate Accounts	56.3		5.8			-		(57.7)		17.9		-		22.3		1.0

(1)This amount is included in Interest credited and other benefits to contract owners on the  Consolidated 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.

(2)The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

(3)For financial instruments still held as of December 31. Amounts are included in Net investment income and Net realized capital losses on the  Consolidated Statements of Operations.

C-48

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following table summarizes the changes in fair value of the Company’s Level 3 assets and liabilities for the year ended December 31, 2009.
	December 31, 2009
																Change in
	Fair Value		Total realized/unrealized					Purchases,		Transfers		Transfers		Fair Value		unrealized gains
	as of		gains (losses) included in:					issuances, and		in to		out of		as of		(losses) included
	January 1		Net income			OCI		settlements		Level 3(2)		Level 3(2)		December 31		in earnings(3)
Fixed maturities, including securities pledged:
Residential mortgage-backed securities	$	1,942.6	$	36.9		$	149.6	$	(408.7)	$	-	$	(482.5)	$	1,237.9	$	(7.5)
Other asset-backed securities	225.3		(0.7)			(11.9)		(23.9)		-		-		188.8		(18.6)
Total fixed maturities, including securities pledged	2,167.9		36.2			137.7		(432.6)		-		(482.5)		1,426.7		(26.1)
Equity securities, available for sale	-		(11.0)			5.3		1.0		44.5		-		39.8		-
Derivatives, net	(65.8)		6.8			-		2.9		-		7.8		(48.3)		6.6
Product guarantees	(220.0)		219.4		(1)	-		(5.4)		-		-		(6.0)		-
Separate Accounts	141.4		3.1			-		(73.6)		11.1		(25.7)		56.3		0.8
(1)This amount is included in Interest credited and other benefits to contract owners on the  Consolidated 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.
(2)The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
(3)For financial instruments still held as of December 31. Amounts are included in Net investment income and Net realized capital losses on the  Consolidated Statements of Operations.

C-49

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The transfers out of Level 3 during the year ended December 31, 2010 in fixed maturities, including securities pledged, are primarily due to the Company’s use of commercial pricing services to value CMO-Bs. These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data and have been classified as Level 2. The CMO-Bs had previously been valued by using the average of broker quotes when more than one broker quote is provided.

The remaining transfers in and out of Level 3 for fixed maturities, equity securities and separate accounts during the year ended December 31, 2010 are due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers into Level 3, as these securities are generally less liquid with very limited trading activity or where less transparency exists corroborating the inputs to the valuation methodologies. When securities are valued using more widely available information, the securities are transferred out of Level 3 and into Level 1 or 2, as appropriate.

The carrying values and estimated fair values of certain of the Company’s financial instruments were as follows at December 31, 2010 and 2009.

	2010				2009
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Assets:
Fixed maturities, available-for-sale, including securities pledged	$	16,964.4	$	16,964.4	$	15,375.5	$	15,375.5
Fixed maturities, at fair value using the fair value option	453.4		453.4		233.6		233.6
Equity securities, available-for-sale	211.0		211.0		187.9		187.9
Mortgage loans on real estate	1,842.8		1,894.8		1,874.5		1,792.8
Loan-Dutch State obligation	539.4		518.7		674.1		645.5
Policy loans	253.0		253.0		254.7		254.7
Limited partnerships/corporations	463.5		463.5		426.2		426.2
Cash, cash equivalents, short-term investments, and short-term investments under securities loan agreement	1,128.8		1,128.8		1,129.8		1,129.8
Derivatives	234.2		234.2		175.2		175.2
Notes receivable from affiliates	175.0		177.0		175.0		169.6
Assets held in separate accounts	46,489.1		46,489.1		41,369.8		41,369.8
Liabilities:
Investment contract liabilities:
With a fixed maturity	1,313.2		1,311.5		1,359.0		1,450.4
Without a fixed maturity	16,902.6		16,971.6		16,441.2		17,688.4
Product guarantees	3.0		3.0		6.0		6.0
Fixed Indexed Annuities	5.6		5.6		-		-
Derivatives	280.3		280.3		331.7		331.7

C-50

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following disclosures are made in accordance with the requirements of ASC Topic 825 which 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.

ASC Topic 825 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 which are not carried at fair value on the Consolidated Balance Sheets, and therefore not categorized in the fair value hierarchy:

Limited partnerships/corporations: The fair value for these investments, primarily private equities and hedge funds, is estimated based on the Net Asset Value (“NAV”) as provided by the investee.

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.

Loan - Dutch State obligation: The fair value of the Dutch State loan obligation is estimated utilizing discounted cash flows from the Dutch Strip Yield Curve.

Policy loans: The fair value of policy loans is equal to the carrying, or cash surrender, value of the loans.  Policy loans are fully collateralized by the account value of the associated insurance contracts.

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

With a fixed maturity: Fair value is estimated by discounting cash flows, including associated expenses for maintaining the contracts, at rates, which are market risk-free rates augmented by credit spreads on current Company credit default swaps. The augmentation is present to account for non-performance risk. A margin for nonfinancial risks associated with the contracts is also included.

Without a fixed maturity: Fair value is estimated as the mean present value of stochastically modeled cash flows associated with the contract liabilities relevant to both the contractholder and to the Company. Here, the stochastic valuation scenario set is consistent with current market parameters, and discount is taken using stochastically evolving short risk-free rates in the scenarios augmented by credit spreads on current Company debt. The augmentation in the discount is present to account for non-performance risk. Margins for non-financial risks associated with the contract liabilities are also included.

C-51

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Notes receivable from affiliates: Estimated fair value of the Company’s notes receivable from affiliates is based upon discounted future cash flows using a discount rate approximating the current market rate.

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.

Mortgage Loans on Real Estate

The Company’s mortgage loans on real estate are summarized as follows at December 31, 2010 and 2009.

	2010		2009
	Carrying Value		Carrying Value
Total commercial mortgage loans	$	1,844.1	$	1,876.5
Collective valuation allowance	(1.3)		(2.0)
Total net commercial mortgage loans	$	1,842.8	$	1,874.5

As of December 31, 2010, all commercial mortgage loans are held-for-investment.  The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk.  The Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate.  All mortgage loans are evaluated by seasoned underwriters, including an appraisal of loan-specific credit quality, property characteristics, and market trends, and assigned a quality rating using the Company’s internally developed quality rating system. Loan performance is continuously monitored on a loan-specific basis through the review of borrower submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items.  This review ensures properties are performing at a consistent and acceptable level to secure the debt.

C-52

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The Company has established a collective valuation allowance for probable incurred, but not specifically identified, losses related to factors inherent in the lending process.  The changes in the valuation allowance were as follows for the years ended December 31, 2010 and 2009.

	2010			2009
	Carrying Value			Carrying Value
Collective valuation allowance for losses, beginning of year(1)	$		2.0	$		-
Addition to / (release of) allowance for losses	(0.7)			2.0
Collective valuation allowance for losses, end of year	$	1.3		$	2.0

(1) Allowance was not recorded prior to 2009.

As indicators of credit quality, the commercial mortgage loan portfolio is the recorded investment, excluding collective valuation allowances, by the indicated loan-to-value ratio and debt service coverage ratio, as reflected in the following tables at December 31, 2010 and 2009.

	2010(1)		2009(1)
Loan-to-Value Ratio:
0% - 50%	$	536.4	$	569.0
50% - 60%	564.6		562.9
60% - 70%	610.1		593.6
70% - 80%	113.9		130.4
80% - 90%	19.1		20.6
Total Commercial Mortgage Loans	$	1,844.1	$	1,876.5

(1) Balances do not include allowance for mortgage loan credit losses.

	2010(1)		2009(1)
Debt Service Coverage Ratio:
Greater than 1.5x	$	1,270.0	$	1,233.9
1.25x - 1.5x	182.1		229.6
1.0x - 1.25x	191.8		152.6
Less than 1.0x	137.4		195.4
Mortgages secured by loans on land or construction loans	62.8		65.0
Total Commercial Mortgage Loans	$	1,844.1	$	1,876.5

(1) Balances do not include allowance for mortgage loan credit losses.

The Company believes it has a high quality mortgage loan portfolio with 100% of commercial mortgages classified as performing.  The Company defines delinquent commercial mortgage loans consistent with industry practice as 60 days past due.  As of December 31, 2010, there were no commercial loans classified as delinquent.  The Company’s policy is to recognize interest income until a loan becomes 90 days delinquent or foreclosure proceedings are commenced, at which point interest accrual is discontinued. Interest accrual is not resumed until past due payments are brought current. At December 31, 2010, there were no commercial mortgage loans on nonaccrual status.

C-53

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

All commercial mortgages are rated for the purpose of quantifying the level of risk.  Those loans with higher risk are placed on a watch list and are closely monitored for collateral deficiency or other credit events that may lead to a potential loss of principal or interest.  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.

The carrying values and unpaid principal balances (prior to any charge-off) of impaired commercial mortgage loans were as follows for the years ended December 31, 2010 and 2009.

	2010		2009
	Carrying Value		Carrying Value
Impaired loans without valuation allowances	$	9.5	$	26.8
Unpaid principle balance of impaired loans	$	12.0	$	34.9

Derivative Financial Instruments

See the Organization and Significant Accounting Policies footnote for disclosure regarding the Company’s purpose for entering into derivatives and the policies on valuation and classification of derivatives. In addition, the Company’s derivatives are generally not accounted for using hedge accounting treatment under US GAAP, as the Company has not historically sought hedge accounting treatment. The Company enters into the following derivatives:

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 are used by the Company to hedge annuity products against rising interest rates.

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.

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.

C-54

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 par minus recovery value of the swap contract.

Forwards: Certain forwards are acquired to hedge the Company’s CMO-B portfolio against movements in interest rates, particularly mortgage rates. On the settlement date, the Company will either receive a payment (interest rate drops on owned forwards or interest rate rises on purchased forwards) or will be required to make a payment (interest rate rises on owned forwards or interest rate drops on purchased forwards).

Futures: Futures contracts are used to hedge against a decrease in certain equity indices. Such decreases 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.  A decrease in variable annuity account values would also result in lower fee income.  A decrease in equity markets may also negatively impact the Company’s investment in equity securities.  The futures income would serve to offset these effects. Futures contracts are also used to hedge against an increase in certain equity indices.  Such increases may result in increased payments to contract holders of fixed indexed annuity contracts, and the futures income would serve to offset this increased expense.

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.

Managed Custody Guarantees: The Company issued certain credited rate guarantees on externally managed variable bond funds that represent stand alone derivatives. The market value is partially determined by, among other things, levels of or changes in interest rates, prepayment rates, and credit ratings/spreads.

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-term or long-term), exchange rates, prepayment rates, equity rates, or credit ratings/spreads.

C-55

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The notional amounts and fair values of derivatives were as follows as of December 31, 2010 and 2009.

	2010					2009
	Notional	Asset		Liability		Notional	Asset		Liability
	Amount	Fair Value		Fair Value		Amount	Fair Value		Fair Value
Derivatives: Qualifying for hedge accounting (1)
Interest rate contracts	7.2	$	0.6	$	-	-	$	-	$	-
Foreign exchange contracts	7.2	-		0.1		-	-		-
Derivatives: Non-Qualifying for  hedge accounting (1)
Interest rate contracts	16,737.7	226.2		227.1		9,750.1	175.0		234.9
Foreign exchange contracts	233.0	0.7		38.4		199.5	-		43.3
Equity contracts	3.7	-		-		-	-		-
Credit contracts	641.4	6.7		14.7		243.9	0.2		53.5
Managed custody guarantees(2)	N/A	-		3.0		N/A	-		6.0
Embedded derivatives:
Within retail annuity products(2)	N/A	-		5.6		N/A	-		-
Total		$	234.2	$	288.9		$	175.2	$	337.7

N/A - Not applicable.

(1)The fair values are reported in Derivatives or Other liabilities on the  Consolidated Balance Sheets.

(2)The fair values are reported in Future policy benefits and claim reserves on the  Consolidated Balance Sheets.

Net realized gains (losses) on derivatives were as follows for the years ended December 31, 2010 and 2009.

	2010			2009
Derivatives: Non-Qualifying for hedge accounting (1)
Interest rate contracts	$	(53.4	)	$	(178.8	)
Foreign exchange contracts	7.4			(23.3		)
Equity contracts	0.5			(49.0		)
Credit contracts	8.9			(16.5		)
Managed custody guarantees(2)	4.1			34.0
Embedded derivatives:
Within retail annuity products(2)	5.2			185.4
Total	$	(27.3	)	$	(48.2	)

(1)Changes in value are included in Net realized capital losses on the  Consolidated Statements of Operations.

(2)Changes in value are included in Interest credited and other benefits to contract owners on the Consolidated

Statements of Operations.

Credit Default Swaps

The Company has entered into various credit default swaps. When credit default swaps are sold, the Company assumes credit exposure to certain assets that it does not own.

C-56

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Credit default swaps may also be purchased to reduce credit exposure in the Company’s portfolio. Credit default swaps involve a transfer of credit risk from one party to another in exchange for periodic payments. These instruments are typically written for a maturity period of five years and do not contain recourse provisions, which would enable the seller to recover from third parties. The Company has International Swaps and Derivatives Associations, Inc. (“ISDA”) agreements with each counterparty with which it conducts business and tracks the collateral positions for each counterparty. To the extent cash collateral is received, it is included in Payables under securities loan agreement, including collateral held, on the Consolidated Balance Sheets and is reinvested in short-term investments.  Collateral held is used in accordance with the Credit Support Annex (“CSA”) to satisfy any obligations. Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Consolidated Balance Sheets. 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 par minus recovery value of the swap contract. At December 31, 2010, the fair value of credit default swaps of $6.7 and $14.7 was included in Derivatives and Other liabilities, respectively, on the Consolidated Balance Sheets. At December 31, 2009, the fair value of credit default swaps of $0.2 and $53.5 was included in Derivatives and Other liabilities, respectively, on the Consolidated Balance Sheets. As of December 31, 2010 and 2009, the maximum potential future exposure to the Company on the sale of credit protection under credit default swaps was $625.6 and $84.4, respectively.

4.Deferred Policy Acquisition Costs and Value of Business Acquired

Activity within DAC was as follows for the years ended December 31, 2010, 2009, and 2008.

	2010			2009			2008
Balance at January 1	$	901.8		$	865.5		$	728.6
Deferrals of commissions and expenses	142.2			108.2			168.7
Amortization:
Amortization	(77.0		)	(39.3		)	(112.5		)
Interest accrued at 5.5% to 7%	64.6			58.0			50.6
Net amortization included in Consolidated Statements of Operations	(12.4		)	18.7			(61.9		)
Change in unrealized capital gains/losses on available-for-sale securities	(8.6		)	(90.6		)	30.1
Balance at December 31	$	1,023.0		$	901.8		$	865.5

The estimated amount of DAC amortization expense, net of interest, is $38.4, $57.8, $56.8, $55.5, and $55.3, for the years 2011, 2012, 2013, 2014, and 2015, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

C-57

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Activity within VOBA was as follows for the years ended December 31, 2010, 2009, and 2008.

	2010			2009			2008
Balance at January 1	$	991.5		$	1,832.5		$	1,253.2
Deferrals of commissions and expenses	23.6			40.4			33.3
Amortization:
Amortization	(8.7		)	(170.5		)	(144.2		)
Interest accrued at 5.5% to 7%	74.3			72.2			77.2
Net amortization included in Consolidated Statements of Operations	65.6			(98.3		)	(67.0		)
Change in unrealized capital gains/losses on available-for-sale securities	(364.3		)	(783.1		)	613.0
Balance at December 31	$	716.4		$	991.5		$	1,832.5

The estimated amount of VOBA amortization expense, net of interest, is $50.0, $72.3, $69.5, $64.2, and $61.2, for the years 2011, 2012, 2013, 2014, and 2015, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

5.Capital Contributions, Dividends and Statutory Information

ILIAC’s ability to pay dividends to its parent is subject to the prior approval of insurance regulatory authorities of the State of Connecticut 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 ILIAC’s earned statutory surplus at the prior year end or (2) ILIAC’s prior year statutory net gain from operations.

During the year ended December 31, 2010, ILIAC paid a $203.0 dividend on its common stock to its Parent.  During the years ended December 31, 2009 and 2008, ILIAC did not pay any dividends on its common stock to its Parent. On October 30, 2010, IFA paid a $60.0 dividend to ILIAC, its parent, which was eliminated in consolidation.

During the year ended December 31, 2010, ILIAC did not receive any capital contributions from its Parent. On November 12, 2008, ING issued to The State of the Netherlands (the “Dutch State”) non-voting Tier 1 securities for a total consideration of EUR 10 billion.  On February 24, 2009, $2.2 billion was contributed to direct and indirect insurance company subsidiaries of ING America Insurance Holdings, Inc. (“ING AIH”), of which $365.0 was contributed to the Company.  The contribution was comprised of the proceeds from the investment by the Dutch State and the redistribution of currently existing capital within ING.  During 2008, ILIAC did not receive any cash capital contributions from Lion.

C-58

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

On February 18, 2011, ILIAC received a $150.0 capital contribution from its Parent as part of the redistribution of currently existing capital within ING US Insurance Operations.

The State of Connecticut Insurance Department (the “Department”) recognizes as net income and capital and surplus those amounts determined in conformity with statutory accounting practices prescribed or permitted by the Department, which differ in certain respects from accounting principles generally accepted in the United States.  Statutory net income (loss) was $66.0, $271.6, and $(428.4), for the years ended December 31, 2010, 2009, and 2008, respectively.  Statutory capital and surplus was $1.7 billion and $1.8 billion as of December 31, 2010 and 2009, respectively.  As specifically prescribed by statutory accounting practices, statutory surplus as of December 31, 2010 included the impact of the $150.0 capital contribution received by ILIAC from its Parent on February 18, 2011.

Effective December 31, 2009, the Company adopted Actuarial Guideline 43 – Variable Annuity Commissioners Annuity Reserve Valuation Method (“AG43”) for its statutory basis of accounting.  The adoption of AG43 resulted in higher reserves than those calculated under previous standards by $97.9.  Where the application of AG43 produces higher reserves than the Company had otherwise established under previous standards, the Company may request permission from the Department to grade-in the impact of higher reserve over a three year period.  The Company elected this grade-in provision, as allowed under AG43 and as approved by the Department, which allows the Company to reflect the impact of adoption of $97.9 over a three year period.  The impact of the grade-in for the years ended December 31, 2010 and 2009 was a $23.0 and $32.6, respectively, increase in reserves and a corresponding decrease in statutory surplus.

Effective December 31, 2009, the Company adopted SSAP No. 10R, Income Taxes, for its statutory basis of accounting.  This statement requires the Company to calculate admitted deferred tax assets based upon what is expected to reverse within one year with a cap on the admitted portion of the deferred tax asset of 10% of capital and surplus for its most recently filed statement.  If the Company’s risk-based capital (“RBC”) levels, after reflecting the above limitation, exceeds 250% of the authorized control level, the statement increases the limitation on admitted deferred tax assets from what is expected to reverse in one year to what is expected to reverse over the next three years and increases the cap on the admitted portion of the deferred tax asset from 10% of capital and surplus for its most recently filed statement to 15%.  Other revisions in the statement include requiring the Company to reduce the gross deferred tax asset by a statutory valuation allowance adjustment if, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some portion of or all of the gross deferred tax assets will not be realized. To temper this positive RBC impact, and as a temporary measure at December 31, 2009 only, a 5% pre-tax RBC charge must be applied to the additional admitted deferred tax assets generated by SSAP 10R.  The adoption for 2009 had a December 31, 2009 sunset; however, during 2010, the 2009

C-59

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

adoption, including the 5% pre-tax RBC charge, was extended through December 31, 2011.  The effects on the Company’s statutory financial statements of adopting this change in accounting principle were increases to total assets and capital and surplus of $68.9 and $51.1 as of December 31, 2010 and 2009, respectively.  This adoption had no impact on total liabilities or net income.

6.Additional Insurance Benefits and Minimum Guarantees

The Company calculates an additional liability for certain GMDBs and other minimum guarantees in order to recognize the expected value of these benefits in excess of the projected account balance over the accumulation period based on total expected assessments.

The Company regularly evaluates estimates used to adjust the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised.

As of December 31, 2010, the separate account liability for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees were $6.1 billion and $4.4, respectively. As of December 31, 2009, the separate account liability for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees were $6.9 billion and $3.6, respectively.

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, 2010 and 2009, was $6.1 billion and $6.9 billion, respectively.

7.Income Taxes

Income taxes expense (benefit) consisted of the following for the years ended December 31, 2010, 2009, and 2008.

	2010		2009			2008
Current tax expense (benefit):
Federal	$	73.2	$	27.5		$	(121.8	)
State	-		(0.9		)	(18.1		)
Total current tax expense (benefit)	73.2		26.6			(139.9		)
Deferred tax expense:
Federal	67.6		23.0			31.6
Total deferred tax expense	67.6		23.0			31.6
Total income tax expense (benefit)	$	140.8	$	49.6		$	(108.3	)

C-60

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated 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, 2010, 2009, and 2008.

	2010			2009			2008
Income (loss) before income taxes	$	577.7		$	403.5		$	(1,138.5	)
Tax rate	35.0%			35.0%			35.0%
Income tax expense (benefit) at federal statutory rate	202.2			141.2			(398.5		)
Tax effect of:
Dividend received deduction	(23.3		)	(2.6		)	(15.5		)
IRS audit settlement	(26.8		)	(0.1		)	(10.1		)
State audit settlement	-			(1.2		)	(12.6		)
State tax expense	0.6			0.1			1.3
Tax valuation allowance	(13.7		)	(92.2		)	333.0
Other	1.8			4.4			(5.9		)
Income tax expense (benefit)	$	140.8		$	49.6		$	(108.3	)

Temporary Differences

The tax effects of temporary differences that give rise to Deferred tax assets and Deferred tax liabilities at December 31, 2010 and 2009, are presented below.

	2010			2009
Deferred tax assets:
Insurance reserves	$	187.1		$	140.7
Investments	112.5			286.7
Postemployment benefits	83.7			73.5
Compensation	45.9			46.3
Other	22.1			9.5
Total gross assets before valuation allowance	451.3			556.7
Less: valuation allowance	(120.1		)	(202.5		)
Assets, net of valuation allowance	331.2			354.2
Deferred tax liabilities:
Net unrealized gain	(71.9		)	(55.3		)
Value of business acquired	(410.5		)	(379.2		)
Deferred policy acquisition costs	(315.7		)	(270.9		)
Total gross liabilities	(798.1		)	(705.4		)
Net deferred income tax liability	$	(466.9	)	$	(351.2	)

Net unrealized capital gains and losses are presented as a component of other comprehensive income (loss) in Shareholder’s equity, net of deferred taxes.

Valuation allowances are provided when it is considered unlikely that deferred tax assets will be realized. At December 31, 2010 and 2009, the Company had a tax valuation allowance of $109.0 and $197.5, respectively, related to capital losses.  As of December 31, 2010 and 2009, the Company had full tax valuation allowances of $11.1

C-61

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

and $5.0, respectively, related to foreign tax credits, the benefit of which is uncertain.  The change in net unrealized capital gains (losses) includes an increase (decrease) in the tax valuation allowance of $(68.7), $(38.2), and $(6.4) for the years ended December 31, 2010, 2009, and 2008, respectively.

Tax Sharing Agreement

Under the intercompany tax sharing agreement, ILIAC has a payable to and a receivable from ING AIH of $49.3 and $23.9 for federal income taxes as of December 31, 2010 and 2009, respectively.

See Related Party Transactions footnote for more information.

Unrecognized Tax Benefits

Reconciliations of the change in the unrecognized income tax benefits for the periods ended December 31, 2010 and 2009 are as follows:

	2010			2009
Balance at beginning of period	$	12.8		$	22.1
Additions for tax positions related to current year	-			0.9
Additions for tax positions related to prior years	36.2			3.5
Reductions for tax positions related to prior years	(25.8		)	(13.3		)
Reductions for settlements with taxing authorities	(0.2		)	(0.4		)
Balance at end of period	$	23.0		$	12.8

The Company had $0.0 and $24.8 of unrecognized tax benefits as of December 31, 2010 and 2009, respectively, which 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 (benefit) on the Balance Sheet and the Statement of Operations, respectively. The Company had accrued interest of $0.0 and $3.3 as of December 31, 2010 and 2009, respectively. The decrease in accrued interest during the year ended December 31, 2010 is primarily related to the settlement of the 2004 through 2008 federal audits.

Tax Regulatory Matters

In September 2010, the Internal Revenue Service (“IRS”) completed its examination of the Company’s returns through tax year 2008.  The provision for the year ended December 31, 2010 reflected non-recurring favorable adjustments, resulting from a

C-62

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

The Company is currently under audit by the IRS and has agreed to participate in the Compliance Assurance Program (“CAP”) for tax years 2009 and 2010.  It is anticipated that the IRS audit of the 2009 tax year will be finalized within the next twelve months.  Upon finalization of the IRS examination, it is reasonably possible that the unrecognized tax benefits will decrease by up to $23.0.

8.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 other than Company agents. The Retirement Plan was amended and restated effective January 1, 2008. The Retirement Plan was amended on July 1, 2008, related to the admission of the employees from the acquisition of CitiStreet LLC (“CitiStreet”) by Lion, and ING North America filed a request for a determination letter on the qualified status of the Retirement Plan, but has not yet received a favorable determination letter. Additionally, effective January 1, 2009, the Retirement Plan was amended to provide that anyone hired or rehired by the Company on or after January 1, 2009, would not be eligible to participate in the Retirement Plan.

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 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 $27.2, $22.3, and $14.0 for the years ended December 31, 2010, 2009, and 2008, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

Defined Contribution Plan

ING North America sponsors the ING Americas Savings Plan and ESOP (the “Savings Plan”). Substantially all employees of ING North America and its affiliates (excluding certain employees, including but not limited to Career Agents) are eligible to participate, including the Company’s employees other than Company agents. Career Agents are certain, full-time insurance salespeople who have entered into a career agent agreement

C-63

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

with the Company and certain other individuals who meet specified eligibility criteria.  The Savings Plan is a tax-qualified defined contribution retirement plan, which includes an employee stock ownership plan (“ESOP”) component. The Savings Plan was amended and restated effective January 1, 2008 and subsequently amended on July 1, 2008, with respect to the admission of employees from the acquisition of CitiStreet by Lion. The Savings Plan was most recently amended effective January 1, 2011 to permit Roth 401(k) contributions to be made to the Plan. ING North America filed a request for a determination letter on the qualified status of the Plan and received a favorable determination letter dated May 19, 2009. 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. The cost allocated to the Company for the Savings Plan were $10.7, $8.9, and $10.3, for the years ended December 31, 2010, 2009, and 2008, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

Non-Qualified Retirement Plans

Through December 31, 2001, the Company, in conjunction with ING North America, offered certain eligible employees (other than Career Agents) a Supplemental Executive Retirement Plan and an Excess Plan (collectively, the “SERPs”). Benefit accruals under Aetna Financial Services SERPs ceased, effective as of December 31, 2001 and participants begin accruing benefits under ING North America SERPs.  Benefits under the SERPs are determined based on an eligible employee’s years of service and average annual compensation for the highest five years during the last ten years of employment.

The Company, in conjunction with ING North America, sponsors the Pension Plan for Certain Producers of ING Life Insurance and Annuity Company (formerly the Pension Plan for Certain Producers of Aetna Life Insurance and Annuity Company) (the “Agents Non-Qualified Plan”). This plan covers certain full-time insurance salespeople who have entered into a career agent agreement with the Company and certain other individuals who meet the eligibility criteria specified in the plan (“Career Agents”). The Agents Non-Qualified Plan was terminated effective January 1, 2002. In connection with the termination, all benefit accruals ceased and all accrued benefits were frozen.

The SERPs and Agents Non-Qualified Plan, are non-qualified defined benefit pension plans, which means all the SERPs benefits are payable from the general assets of the Company and Agents Non-Qualified Plan benefits are payable from the general assets of the Company and ING North America. These non-qualified defined benefit pension plans are not guaranteed by the PBGC.

C-64

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Obligations and Funded Status

The following table summarizes the benefit obligations, fair value of plan assets, and funded status, for the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2010 and 2009.

	2010		2009
Change in Projected Benefit Obligation:
Projected benefit obligation, January 1	$	90.2	$	94.9
Interest cost	5.1		5.3
Benefits paid	(10.1)		(13.4)
Actuarial gain on obligation	11.6		3.4
Projected benefit obligation, December 31	$	96.8	$	90.2
Fair Value of Plan Assets:
Fair value of plan assets, December 31	$	-	$	-

Amounts recognized in the Consolidated Balance Sheets consist of:

	2010		2009
Accrued benefit cost	$	(96.8)	$	(90.2)
Accumulated other comprehensive income	30.0		21.1
Net amount recognized	$	(66.8)	$	(69.1)

Assumptions

The weighted-average assumptions used in the measurement of the December 31, 2010 and 2009 benefit obligation for the SERPs and Agents Non-Qualified Plan, were as follows:

	2010	2009
Discount rate at end of period	5.50%	6.00%
Rate of compensation increase	3.00%	1.50%

In determining the discount rate assumption, the Company utilizes current market information provided by its plan actuaries (particularly the Citigroup Pension Discount Curve Liability Index), including a discounted cash flow analysis of the Company’s pension obligation and general movements in the current market environment. The discount rate modeling process involves selecting a portfolio of high quality, noncallable bonds that will match the cash flows of the Retirement Plan. Based upon all available information, it was determined that 5.5% was the appropriate discount rate as of December 31, 2010, to calculate the Company’s accrued benefit liability.

C-65

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The weighted-average assumptions used in calculating the net pension cost were as follows:

	2010	2009	2008
Discount rate	6.00%	6.00%	6.50%
Rate of increase in compensation levels	3.00%	1.50%	4.20%

Since the benefit plans of the Company are unfunded, an assumption for return on plan assets is not required.

Net Periodic Benefit Costs

Net periodic benefit costs for the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2010, 2009, and 2008, were as follows:

	2010		2009		2008
Interest cost	$	5.1	$	5.3	$	5.2
Net actuarial loss recognized in the year	2.6		2.1		-
Unrecognized past service cost recognized in the year	0.1		0.1		-
The effect of any curtailment or settlement	-		0.1		0.5
Net periodic benefit cost	$	7.8	$	7.6	$	5.7

Cash Flows

In 2011, the employer is expected to contribute $9.9 to the SERPs and Agents Non-Qualified Plan.  Future expected benefit payments related to the SERPs, and Agents Non-Qualified Plan, for the years ended December 31, 2011 through 2015, and thereafter through 2020, are estimated to be $9.9, $9.1, $7.9, $6.8, $5.5, and $28.4, respectively.

Stock Option and Share Plans

Through 2010, ING sponsored the ING Group Long-Term Equity Ownership Plan (“leo”), which provides employees of the Company who are selected by the ING Executive Board with 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

C-66

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated 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 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.

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 immediate vesting will 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 was allocated from ING compensation expense for the leo options and performance shares of $3.4, $3.7, and $4.1, for the years ended December 31, 2010, 2009, and 2008, respectively.

For leo, the Company recognized tax benefits of $0.7, $0.1, and $0.7, in 2010, 2009, and 2008, respectively.

Commencing in 2011, ING introduced a new long-term equity and deferred bonus plan, the Long-Term Sustainable Performance Plan (“LSPP”).  The terms applicable to an award under the LSPP will be set out in a grant agreement which is signed by the

C-67

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

participant when he or she accepts the award.  The LSPP will provide employees of the Company who are selected by the ING Executive Board with performance shares and will also require deferral of discretionary incentive bonus awards in excess of EU 100,000.  The performance shares awarded under the LSPP will be a contingent grant of ING ADR units and on settlement, the participant will have the right to either receive ING ADR units in kind or a cash amount equal to the closing price per ING share on the Euronent Amsterdam Stock Market on the settlement date times the number of vested ADR units, subject to achievement during the vesting period of performance targets based on return of equity and employee engagement. The excess bonus amount will be held in deferred ING ADR units or in a deferred cash account, or some combination thereof, depending on the total amount of the incentive bonus award, generally subject to vesting in three equal tranches over the three year period commencing on the date of incentive bonus payment.  Unlike the leo plan, no options on ING shares in the form of ADRs will be granted under the LSPP.  To vest in performance shares, deferred shares or deferred cash, an employee must generally be actively employed on the settlement date, although immediate full and partial vesting in the event of normal age or early retirement, death or disability, or termination due to redundancy or business divestiture will occur, similar to the vesting treatment in the leo plan.

In addition, the Company, in conjunction with ING North America, sponsors the following benefit plans:

§	The ING 401(k) Plan for ILIAC Agents, which allows participants to defer a specified percentage of eligible compensation on a pre-tax basis. Effective January 1, 2006, the Company match equals 60% of a participant’s pre-tax deferral contribution, with a maximum of 6% of the participant’s eligible pay. A request for a determination letter on the qualified status of the ING 401(k) Plan for ILIAC Agents was filed with the IRS on January 1, 2008. A favorable determination letter was received dated January 5, 2011.
§	The Producers’ Incentive Savings Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis. The Company matches such pre-tax contributions at specified amounts.
§	The Producers’ Deferred Compensation Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis.
§	Certain health care and life insurance benefits for retired employees and their eligible dependents. The post retirement health care plan is contributory, with retiree contribution levels adjusted annually and the Company subsidizes a portion of the monthly per-participant premium. Beginning August 1, 2009, the Company moved from self-insuring these costs and began to use a private-fee-for-service Medicare Advantage program for post-Medicare eligible retired participants. In addition, effective October 1, 2009, the Company no longer subsidizes medical premium costs for early retirees. This change does not impact any participant currently retired and receiving coverage under the plan or any employee who is eligible for coverage under the plan and whose employment ended before October

C-68

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

	1, 2009. The Company continues to offer access to medical coverage until retirees become eligible for Medicare. The life insurance plan provides a flat amount of noncontributory coverage and optional contributory coverage.
§	The ING Americas Supplemental Executive Retirement Plan, which is a non-qualified defined benefit restoration pension plan.
§	The ING Americas Deferred Compensation Savings Plan, which is a deferred compensation plan that includes a 401(k) excess component.

The benefit charges allocated to the Company related to these plans for the years ended December 31, 2010, 2009, and 2008, were $11.9, $12.1, and $13.9, respectively.

9.Related Party Transactions

Operating Agreements

ILIAC has certain agreements whereby it generates revenues and expenses with affiliated entities, as follows:

§	Investment Advisory agreement with ING Investment Management LLC (“IIM”), an affiliate, in which IIM provides asset management, administrative, and accounting services for ILIAC’s general account. ILIAC incurs a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred in the amounts of $23.7, $35.9, and $58.4, respectively.
§	Services agreement with ING North America for administrative, management, financial, and information technology services, dated January 1, 2001 and amended effective January 1, 2002. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred in the amounts of $209.7, $140.2, and $175.3, respectively.
§	Services agreement between ILIAC and its U.S. insurance company affiliates dated January 1, 2001, and amended effective January 1, 2002 and December 31, 2007. For the years ended December 31, 2010, 2009, and 2008, net expenses related to the agreement were incurred in the amount of $53.3, $26.3, and $19.6, respectively.
§	Service agreement with ING Institutional Plan Services, LLC (“IIPS”) effective November 30, 2008 pursuant to which IIPS provides recordkeeper services to certain benefit plan clients of ILIAC. For the years ended December 31, 2010 and 2009, net expenses related to the agreement were incurred in the amount of $6.4 and $4.9, respectively. An immaterial amount was incurred for the year ended December 31, 2008.
§	Intercompany agreement with IIM pursuant to which IIM agreed, effective January 1, 2010, to pay the Company, on a monthly basis, a portion of the revenues IIM earns as investment adviser to certain U.S. registered investment companies that are investment options under certain of the Company’s variable insurance products. For the year ended December 31, 2010, revenue under the IIM intercompany agreement was $24.1.

C-69

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.  Revenues and expenses recorded as a result of transactions and agreements with affiliates may not be the same as those incurred if the Company was not a wholly-owned subsidiary of its Parent.

DSL has certain agreements whereby it generates revenues and expenses with affiliated entities, as follows:

§	Underwriting and distribution agreements with ING USA Annuity and Life Insurance Company (“ING USA”) and ReliaStar Life Insurance Company of New York (“RLNY”), affiliated companies, whereby DSL serves as the principal underwriter for variable insurance products. In addition, DSL is authorized to enter into agreements with broker-dealers to distribute the variable insurance products and appoint representatives of the broker-dealers as agents. For the years ended December 31, 2010, 2009, and 2008, commissions were collected in the amount of $220.0, $275.3, and $622.5. Such commissions are, in turn, paid to broker-dealers.
§	Intercompany agreements with each of ING USA, IIPS, ReliaStar Life Insurance Company and Security Life of Denver Insurance Company (individually, the “Contracting Party”) pursuant to which DSL agreed, effective January 1, 2010, to pay the Contracting Party, on a monthly basis, a portion of the revenues DSL earns as investment adviser to certain U.S. registered investment companies that are either investment option under certain variable insurance products of the Contracting Party or are purchased for certain customers of the Contacting Party. For the year ended December 31, 2010, expenses were incurred under these intercompany agreements in the aggregate amount of $204.5.
§	Prior to January 1, 2010, DSL was a party to a service agreement with ING USA pursuant to which ING USA provided DSL with managerial and supervisory services in exchange for a fee. This service agreement was terminated as of January 1, 2010. For the years ended December 31, 2009 and 2008, expenses were incurred under this service agreement in the amount of $123.2 and $139.2, respectively.
§	Service agreement with RLNY whereby DSL receives managerial and supervisory services and incurs a fee. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred under this service agreement in the amount of $3.3, $1.2, and $1.2, respectively.
§	Administrative and advisory services agreements with ING Investment LLC and IIM, affiliated companies, in which DSL receives certain services for a fee. The fee for these services is calculated as a percentage of average assets of ING Investors Trust. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred in the amounts of $19.8, $12.5, and $14.9, respectively.

C-70

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Investment Advisory and Other Fees

Effective January 1, 2007, ILIAC’s investment advisory agreement to serve as investment advisor to certain variable funds offered in Company products (collectively, the “Company Funds”), was assigned to DSL. ILIAC is also compensated by the separate accounts for bearing mortality and expense risks pertaining to variable life and annuity contracts. Under the insurance and annuity contracts, the separate accounts pay ILIAC daily fees that, on an annual basis are, depending on the product, up to 3.4% of their average daily net assets. The total amount of compensation and fees received by the Company from the Company Funds and separate accounts totaled $246.1, $212.3, and $255.2, (excludes fees paid to ING Investment Management Co.) in 2010, 2009, and 2008, respectively.

DSL has been retained by ING Investors Trust (“IIT”), an affiliate, pursuant to a management agreement to provide advisory, management, administrative and other services to IIT. Under the management agreement, DSL provides or arranges for the provision of all services necessary for the ordinary operations of IIT. DSL earns a monthly fee based on a percentage of average daily net assets of IIT. DSL has entered into an administrative services subcontract with ING Fund Services, LLC, an affiliate, pursuant to which ING Fund Services, LLC, provides certain management, administrative and other services to IIT and is compensated a portion of the fees received by DSL under the management agreement. In addition to being the investment advisor of the Trust, DSL is the investment advisor of ING Partners, Inc. (the “Fund”), an affiliate. DSL and the Fund have an investment advisory agreement, whereby DSL has overall responsibility to provide portfolio management services for the Fund. The Fund pays DSL a monthly fee, net of sub advisory fees, which is based on a percentage of average daily net assets. For the years ended December 31, 2010, 2009, and 2008, revenue received by DSL under these agreements (exclusive of fees paid to affiliates) was $314.3, $270.0, and $323.8, respectively. At December 31, 2010 and 2009, DSL had $25.1 and $25.3, respectively, receivable from IIT under the management agreement.

Financing Agreements

Reciprocal Loan Agreement

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 June 2001 and expires on April 1, 2011, either party can borrow from the other up to 3% of the Company’s statutory admitted assets as of the preceding December 31.  Interest on any Company 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.

C-71

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Under this agreement, the Company incurred an immaterial amount of interest expense for the years ended December 31, 2010 and 2009, and $0.2 for the year ended December 31, 2008, and earned interest income of $0.9, $1.0 and $4.8, for the years ended December 31, 2010, 2009, and 2008, respectively. Interest expense and income are included in Interest expense and Net investment income, respectively, on the Consolidated Statements of Operations. At of December 31, 2010 and 2009, the Company had an outstanding receivable of $304.1 and $287.2, respectively, with ING AIH under the reciprocal loan agreement.

Note with Affiliate

On December 29, 2004, ING USA issued a surplus note in the principal amount of $175.0 (the “Note”) scheduled to mature on December 29, 2034, to ILIAC, in an offering that was exempt from the registration requirements of the Securities Act of 1933. ILIAC’s $175.0 Note from ING USA bears interest at a rate of 6.26% per year. 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 income was $11.1 for each of the years ended December 31, 2010, 2009, and 2008.

Property and Equipment Sale

During the second quarter of 2009, ING’s U.S. life insurance companies, including the Company, sold a portion of its property and equipment in a sale/leaseback transaction to an affiliate, ING North America.  The fixed assets involved in the sale were capitalized assets generally depreciated over the expected useful lives and software in development. Since the assets were being depreciated using expected useful lives, the current net book value reasonably approximated the current fair value of the assets being transferred. The fixed assets sold to ING North America by the Company totaled $17.4.

Transfer of Registered Representatives

On January 1, 2011, IFA transferred a group of registered representatives and their related customer accounts to its broker-dealer affiliate, ING Financial Partners, Inc. and received $5.0 as consideration for the transfer.  Effective January 1, 2011, IFA will operate exclusively as a wholesale broker-dealer.

10.Financing Agreements

Revolving Note Facility

ILIAC maintains a $50.0 uncommitted, perpetual revolving note facility with the Bank of New York (“BONY”).  Interest on any of ILIAC’s borrowing accrues at an annual rate equal to a rate quoted by BONY to ILIAC for the borrowing.  Under this agreement,

C-72

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

ILIAC incurred no interest expense for the years ended December 31, 2010, 2009, and 2008.  At December 31, 2010 and 2009, ILIAC had no amounts outstanding under the revolving note facility.

Windsor Property Loan

On June 16, 2007, the State of Connecticut acting by the Department of Economic and Community Development (“DECD”) loaned ILIAC $9.9 (the “DECD Loan”) in connection with the development of the corporate office facility located at One Orange Way, Windsor, Connecticut that serves as the principal executive offices of the Company (the “Windsor Property”). The loan has a term of twenty years and bears an annual interest rate of 1.00%. As long as no defaults have occurred under the loan, no payments of principal or interest are due for the initial ten years of the loan. For the second ten years of the DECD Loan term, ILIAC is obligated to make monthly payments of principal and interest.

The DECD Loan provided for loan forgiveness during the first five years of the term at varying amounts up to $5.0 if ILIAC and its affiliates met certain employment thresholds at the Windsor Property during that period.  On December 1, 2008, the DECD determined that the Company had met the employment thresholds for loan forgiveness and, accordingly, forgave $5.0 of the DECD Loan to ILIAC in accordance with the terms of the DECD Loan. The DECD Loan provides additional loan forgiveness at varying amounts up to $4.9 if ILIAC and its ING affiliates meet certain employment thresholds at the Windsor Property during years five through ten of the loan. ILIAC’s obligations under the DECD Loan are secured by an unlimited recourse guaranty from its affiliate, ING North America Insurance Corporation.

At both December 31, 2010 and 2009, the amount of the loan outstanding was $4.9 which was reflected in Notes payable on the Consolidated Balance Sheets.

Also see Financing Agreements in the Related Party Transactions footnote.

11.Reinsurance

At December 31, 2010, the Company had reinsurance treaties with 6 unaffiliated reinsurers covering a significant portion of the mortality risks and guaranteed death benefits under its variable contracts.  At December 31, 2010, the Company did not have any outstanding cessions under any reinsurance treaties with affiliated reinsurers.  The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements.

On October 1, 1998, the Company disposed of its individual life insurance business under an indemnity reinsurance arrangement with a subsidiary of Lincoln for $1.0 billion in cash.  Under the agreement, the Lincoln subsidiary contractually assumed from the

C-73

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Company certain policyholder liabilities and obligations, although the Company remains obligated to contract owners.  The Lincoln subsidiary established a trust to secure its obligations to the Company under the reinsurance transaction.

The Company assumed $25.0 of premium revenue from Aetna Life, for the purchase and administration of a life contingent single premium variable payout annuity contract. In addition, the Company is also responsible for administering fixed annuity payments that are made to annuitants receiving variable payments. Reserves of $11.5 and $11.6 were maintained for this contract as of December 31, 2010 and 2009, respectively.

Reinsurance ceded in force for life mortality risks were $17.4 billion and $18.6 billion at December 31, 2010 and 2009, respectively. At December 31, 2010 and 2009, net receivables were comprised of the following:

	2010		2009
Claims recoverable from reinsurers	$	2,356.0	$	2,431.0
Payable for reinsurance premiums	-		(0.7)
Reinsured amounts due to reinsurers	0.4		(0.7)
Other	(0.5)		0.3
Total	$	2,355.9	$	2,429.9

Premiums and Interest credited and other benefits to contract owners were reduced by the following amounts for reinsurance ceded for the years ended December 31, 2010, 2009, and 2008.

	2010		2009		2008
Deposits ceded under reinsurance	$	154.6	$	162.4	$	174.4
Premiums ceded under reinsurance	0.3		0.3		0.3
Reinsurance recoveries	390.4		339.8		309.0

12.Commitments and Contingent Liabilities

Leases

Prior to December 31, 2008, the Company leased certain office space and certain equipment under various operating leases and paid substantially all expenses associated with its leased and subleased office properties. Any expenses not paid directly by the Company were paid for by an affiliate and allocated back to the Company.  However, as of December 31, 2008, all of the Company’s expenses for leased and subleased office properties will be paid for by an affiliate and allocated back to the Company, as all operating leases were terminated or consolidated by ING AIH during the fourth quarter of 2008, which resulted in the Company no longer being party to any operating leases. For the years ended December 31, 2010, 2009, and 2008, rent expense for leases was $4.0, $5.1, and $6.1, respectively.

C-74

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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, 2010, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $336.3, of which $144.0 was with related parties.  At December 31, 2009, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $305.1, of which $218.5 was with related parties.  During 2010 and 2009, $69.1 and $46.8, respectively, was funded to related parties under these commitments.

Collateral

Under the terms of the Company’s Over-The-Counter Derivative ISDA 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 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, 2010, the Company held $4.7, of cash collateral, which was included in Payables under securities loan agreement, including collateral held, on the Consolidated Balance Sheets. As of December 31, 2009, the Company did not hold any cash collateral. In addition, as of December 31, 2010 and 2009, the Company delivered collateral of $93.8 and $130.3, respectively, in fixed maturities pledged under derivatives contracts, which was included in Securities pledged on the Consolidated Balance Sheets.

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.

C-75

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Regulatory Matters

As with many financial services companies, the Company and its affiliates periodically receive 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 Company or the financial services industry.  Some of these investigations and inquiries could result in regulatory action against the Company.  The potential outcome of such action is difficult to predict but could subject the Company or its affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, fines, and other financial liability.  It is not currently anticipated that the outcome of any such action will have a material adverse effect on ING or ING’s U.S.-based operations, including the Company.  It is the practice of the Company and its affiliates to cooperate fully in these matters.

13.Accumulated Other Comprehensive Income (Loss)

Shareholder’s equity included the following components of Accumulated other comprehensive income (loss) as of December 31, 2010, 2009, and 2008.

		2010			2009			2008
Net unrealized capital gains (losses):
Fixed maturities	$	930.5		$	133.4		$	(1,315.5	)
Equity securities, available-for-sale		24.3			12.8			(7.4	)
Derivatives		0.5			-			-
DAC/VOBA adjustment on available-for-sale securities		(461.7	)		(88.8	)		650.9
Sales inducements adjustment on available-for-sale securities		(0.3	)		0.2			2.4
Shadow premium deferral		(61.0	)		-			-
Other investments		0.1			-			(0.3	)
Unrealized capital gains (losses), before tax		432.4			57.6			(669.9	)
Deferred income tax asset (liability)		(114.4	)		(63.9	)		205.8
Net unrealized capital gains (losses)		318.0			(6.3	)		(464.1	)
Pension and other post-employment benefits liability, net of tax		(13.5	)		(8.7	)		(18.0	)
Accumulated other comprehensive income (loss)	$	304.5		$	(15.0	)	$	(482.1	)

C-76

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Changes in unrealized capital gains (losses) on securities, including securities pledged and noncredit impairments, reported net of DAC, VOBA, and income tax, were as follows for the years ended December 31, 2010, 2009, and 2008.

		2010			2009			2008
Fixed maturities	$	797.1		$	1,448.9		$	(1,267.4	)
Equity securities, available-for-sale		11.5			20.2			(13.7	)
Derivatives		0.5			-			-
DAC/VOBA adjustment on available-for-sale securities		(372.9	)		(739.7	)		643.1
Sales inducements adjustment on available-for-sale securities		(0.5	)		(2.2	)		2.2
Shadow premium deferral		(61.0	)		-			-
Other investments		0.1			0.3			0.4
Unrealized capital gains (losses), before tax		374.8			727.5			(635.4	)
Deferred income tax asset (liability)		(119.2	)		(230.7	)		193.7
Net change in unrealized capital gains (losses)	$	255.6		$	496.8		$	(441.7	)

Changes in unrealized capital gains on securities, including securities pledged and noncredit impairments, as recognized in Accumulated other comprehensive income (loss), reported net of DAC, VOBA, and income taxes, were as follows for the years ended December 31, 2010, 2009, and 2008.

		2010		2009		2008
Net unrealized capital holding gains arising during the period(1)	$	284.8	$	513.0	$	(1,192.0	)
Less: reclassification adjustment for gains and other items included in Net income (loss)(2)		29.2		16.2		(750.3	)
Net change in unrealized capital gains on securities	$	255.6	$	496.8	$	(441.7	)

(1) Pretax unrealized capital holding gains (losses) arising during the year were $417.6, $751.2, and $(1,714.8), for the years ended December 31, 2010, 2009, and 2008, respectively.

(2) Pretax reclassification adjustments for gains (losses) and other items included in Net income (loss) were $42.8, $23.7, and $(1,079.4), for the years ended December 31, 2010, 2009, and 2008, respectively.

The reclassification adjustments for gains (losses) and other items included in Net income (loss) in the above table are determined by specific identification of each security sold during the period.

C-77

QUARTERLY DATA (UNAUDITED)

(Dollar amounts in millions, unless otherwise stated)

2010		First			Second			Third			Fourth
Total revenue	$	520.6		$	542.4		$	549.5		$	613.5
Income before income taxes	104.9			78.4			127.2			267.2
Income tax expense (benefit)	14.0			34.7			(8.8		)	100.9
Net income	$	90.9		$	43.7		$	136.0		$	166.3
2009		First			Second			Third			Fourth
Total revenue	$	588.9		$	261.1		$	518.5		$	502.2
Income before income taxes	36.3			7.4			217.4			142.4
Income tax expense (benefit)	(4.0		)	(89.6		)	72.8			70.4
Net income	$	40.3		$	97.0		$	144.6		$	72.0

C-78

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	C-2
Consolidated Financial Statements:
Consolidated Statements of Operations for the years ended December 31, 2010, 2009, and 2008	C-3
Consolidated Balance Sheets as of December 31, 2010 and 2009	C-4
Consolidated Statements of Changes in Shareholder’s Equity for the years ended December 31, 2010, 2009, and 2008	C-6
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009, and 2008	C-8
Notes to Consolidated Financial Statements	C-10

C-1

Report of Independent Registered Public Accounting Firm

The Board of Directors

ING Life Insurance and Annuity Company

We have audited the accompanying consolidated balance sheets of ING Life Insurance and Annuity Company and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of operations, changes in shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2010.  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 consolidated financial position of ING Life Insurance and Annuity Company and subsidiaries at December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the financial statements, in 2009 the Company changed its method of accounting for the recognition and presentation of other-than-temporary impairments.

/s/    Ernst & Young LLP

Atlanta, Georgia

March 31, 2011

C-2

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Statements of Operations

(In millions)

	Years Ended December 31,
	2010			2009			2008
Revenues:
Net investment income	$	1,342.3		$	1,242.1		$	1,071.0
Fee income	589.7			533.8			612.9
Premiums	67.3			35.0			46.9
Broker-dealer commission revenue	220.0			275.3			622.5
Net realized capital gains (losses):
Total other-than-temporary impairment losses	(199.2		)	(433.5		)	(1,052.5		)
Portion of other-than-temporary impairment losses recognized in Other comprehensive income (loss)	52.1			39.0			-
Net other-than-temporary impairments recognized in earnings	(147.1		)	(394.5		)	(1,052.5		)
Other net realized capital gains	119.0			149.0			(215.1		)
Total net realized capital losses	(28.1		)	(245.5		)	(1,267.6		)
Other income	34.8			30.0			34.1
Total revenue	2,226.0			1,870.7			1,119.8
Benefits and expenses:
Interest credited and other benefits to contract owners	768.0			511.2			818.0
Operating expenses	710.6			597.6			687.5
Broker-dealer commission expense	220.0			275.3			622.5
Net amortization of deferred policy acquisition costs and value of business acquired	(53.2		)	79.6			128.9
Interest expense	2.9			3.5			1.4
Total benefits and expenses	1,648.3			1,467.2			2,258.3
Income (loss) before income taxes	577.7			403.5			(1,138.5		)
Income tax expense (benefit)	140.8			49.6			(108.3		)
Net income (loss)	$	436.9		$	353.9		$	(1,030.2	)

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

C-3

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Balance Sheets

(In millions, except share data)

	As of December 31,
	2010		2009
Assets
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $15,097.4 at 2010 and $14,758.4 at 2009)	$	16,002.2	$	14,905.7
Fixed maturities, at fair value using the fair value option	453.4		233.6
Equity securities, available-for-sale, at fair value (cost of $186.7 at 2010 and $175.1 at 2009)	211.0		187.9
Short-term investments	222.4		535.5
Mortgage loans on real estate	1,842.8		1,874.5
Loan - Dutch State obligation	539.4		674.1
Policy loans	253.0		254.7
Limited partnerships/corporations	463.5		426.2
Derivatives	234.2		175.2
Securities pledged (amortized cost of $936.5 at 2010 and $483.7 at 2009)	962.2		469.8
Total investments	21,184.1		19,737.2
Cash and cash equivalents	231.0		243.3
Short-term investments under securities loan agreement, including collateral delivered	675.4		351.0
Accrued investment income	240.5		217.2
Reinsurance recoverable	2,355.9		2,429.9
Deferred policy acquisition costs	1,023.0		901.8
Value of business acquired	716.4		991.5
Notes receivable from affiliate	175.0		175.0
Short-term loan to affiliate	304.1		287.2
Due from affiliates	48.3		49.1
Current income tax recoverable	-		23.9
Property and equipment	87.4		90.8
Other assets	133.8		103.9
Assets held in separate accounts	46,489.1		41,369.8
Total assets	$	73,664.0	$	66,971.6

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

C-4

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Balance Sheets

(In millions, except share data)

	As of December 31,
	2010			2009
Liabilities and Shareholder’s Equity
Future policy benefits and claims reserves	$	21,491.6		$	21,118.6
Payable for securities purchased	33.3			18.4
Payables under securities loan agreement, including collateral held	680.1			351.0
Borrowed money	214.7			0.1
Notes payable	4.9			4.9
Due to affiliates	121.2			159.9
Current income taxes	49.3			-
Deferred income taxes	466.9			351.2
Other liabilities	654.6			693.6
Liabilities related to separate accounts	46,489.1			41,369.8
Total liabilities	70,205.7			64,067.5
Shareholder’s equity:
Common stock (100,000 shares authorized, 55,000 issued and outstanding; $50 per share value)	2.8			2.8
Additional paid-in capital	4,326.0			4,528.2
Accumulated other comprehensive income (loss)	304.5			(15.0		)
Retained earnings (deficit)	(1,175.0		)	(1,611.9		)
Total shareholder’s equity	3,458.3			2,904.1
Total liabilities and shareholder’s equity	$	73,664.0		$	66,971.6

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

C-5

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated 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 January 1, 2008	$	2.8	$	4,159.3	$	(33.8	)	$	(1,087.3	)	$	3,041.0
Comprehensive loss:
Net loss	-		-		-			(1,030.2		)	(1,030.2		)
Other comprehensive loss, net of tax
Change in net unrealized capital gains (losses) on securities ($(635.4) pretax)	-		-		(435.3		)	-			(435.3		)
Pension and other post-employment benefits liability ($18.7 pretax)	-		-		(13.0		)	-			(13.0		)
Total comprehensive loss											(1,478.5		)
Employee share-based payments	-		2.0		-			-			2.0
Balance at December 31, 2008	2.8		4,161.3		(482.1		)	(2,117.5		)	1,564.5
Cumulative effect of change in accounting principle, net of deferred policy acquisition costs and tax	-		-		(151.7		)	151.7			-
Comprehensive income:
Net income	-		-		-			353.9			353.9
Other comprehensive income, net of tax
Change in net unrealized capital gains (losses) on securities ($832.3 pretax)	-		-		641.9			-			641.9
Change in other-than-temporary impairment losses recognized in other comprehensive income	-		-		(32.4		)	-			(32.4		)
Pension and other post-employment benefits liability ($14.3 pretax)	-		-		9.3			-			9.3
Total comprehensive income											972.7
Contribution of capital	-		365.0		-			-			365.0
Employee share-based payments	-		1.9		-			-			1.9
Balance at December 31, 2009	$	2.8	$	4,528.2	$	(15.0	)	$	(1,611.9	)	$	2,904.1

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

C-6

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated 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 January 1, 2010	$	2.8	$	4,528.2		$	(15.0	)	$	(1,611.9	)	$	2,904.1
Comprehensive income:
Net income	-		-			-			436.9			436.9
Other comprehensive income, net of tax
Change in net unrealized capital gains (losses) on securities ($387.5 pretax)	-		-			337.0			-			337.0
Change in other-than-temporary impairment losses recognized in other comprehensive income (loss)	-		-			(12.7		)	-			(12.7		)
Pension and other post-employment benefits liability ($(7.4) pretax)						(4.8		)				(4.8		)
Total comprehensive income												756.4
Dividends paid	-		(203.0		)	-			-			(203.0		)
Employee share-based payments	-		0.8			-			-			0.8
Balance at December 31, 2010	$	2.8	$	4,326.0		$	304.5		$	(1,175.0	)	$	3,458.3

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

C-7

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Statements of Cash Flows

(In millions)

		Years Ended December 31,
		2010			2009			2008
Cash Flows from Operating Activities:
Net income (loss)	$		436.9		$	353.9		$	(1,030.2	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Capitalization of deferred policy acquisition costs, value of business acquired, and sales inducements		(167.1		)	(152.8		)	(205.1		)
Net amortization of deferred policy acquisition costs, value of business acquired, and sales inducements		(48.9		)	83.3			128.3
Net accretion/decretion of discount/premium		44.3			45.4			87.1
Future policy benefits, claims reserves, and interest credited		599.5			386.9			682.3
Provision for deferred income taxes		65.3			36.7			25.3
Net realized capital losses		28.1			245.5			1,267.6
Depreciation		3.4			10.4			56.7
Change in:
Accrued investment income		(23.3		)	(11.4		)	(37.5		)
Reinsurance recoverable		74.0			79.3			88.8
Other receivable and assets accruals		(30.9		)	130.9			(115.3		)
Due to/from affiliates		(37.9		)	7.9			(17.2		)
Other payables and accruals		85.5			46.0			(120.3		)
Other, net		(42.0		)	(112.7		)	(44.0		)
Net cash provided by operating activities		986.9			1,149.3			766.5
Cash Flows from Investing Activities:
Proceeds from the sale, maturity, disposal or redemption of:
Fixed maturities		6,340.3			5,864.2			9,039.7
Equity securities, available-for-sale		12.9			99.4			135.0
Mortgage loans on real estate		179.2			308.7			146.5
Limited partnerships/corporations		87.2			116.2			510.1
Acquisition of:
Fixed maturities		(7,383.5		)	(6,215.4		)	(11,593.4		)
Equity securities, available-for-sale		(16.7		)	(25.2		)	(54.8		)
Mortgage loans on real estate		(147.2		)	(87.2		)	(168.0		)
Limited partnerships/corporations		(85.5		)	(49.3		)	(428.6		)
Derivatives, net		(147.3		)	(170.8		)	52.6
Policy loans, net		1.7			13.1			5.6
Short-term investments, net		313.1			(492.7		)	126.7
Loan-Dutch State obligation		134.7			124.8			-
Collateral received (delivered)		4.7			(4.4		)	23.2
Sales (purchases) of fixed assets, net		-			13.5			(24.0		)
Net cash used in investing activities		(706.4		)	(505.1		)	(2,229.4		)

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

C-8

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Consolidated Statements of Cash Flows

(In millions)

		Years Ended December 31,
		2010			2009			2008
Cash Flows from Financing Activities:
Deposits received for investment contracts	$		2,022.2		$	2,069.6		$	3,836.4
Maturities and withdrawals from investment contracts		(2,309.7		)	(2,123.6		)	(2,312.2		)
Short-term (repayment) loans to (from) affiliates		(16.9		)	(300.2		)	13.0
Short-term repayments of repurchase agreements, net		214.6			(615.2		)	(123.1		)
Dividends to parent		(203.0		)	-			-
Contribution of capital		-			365.0			-
Net cash provided by (used in) financing activities		(292.8		)	(604.4		)	1,414.1
Net increase (decrease) in cash and cash equivalents		(12.3		)	39.8			(48.8		)
Cash and cash equivalents, beginning of period		243.3			203.5			252.3
Cash and cash equivalents, end of period	$		231.0		$	243.3		$	203.5
Supplemental cash flow information:
Income taxes paid (received), net	$		0.6		$	13.7		$	(44.1	)
Interest paid	$		-		$	4.8		$	23.6
Non-cash transfer Loan-Dutch State obligation	$		-		$	798.9		$	-

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

C-9

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

1.Organization and Significant Accounting Policies

Basis of Presentation

ING Life Insurance and Annuity Company (“ILIAC”) is a stock life insurance company domiciled in the state of Connecticut. ILIAC and its wholly-owned subsidiaries (collectively, the “Company”) are providers of financial products and services in the United States.  ILIAC is authorized to conduct its insurance business in all states and the District of Columbia.

The consolidated financial statements for the year ended December 31, 2010, include ILIAC and its wholly-owned subsidiaries, ING Financial Advisers, LLC (“IFA”) and Directed Services LLC (“DSL”).  ILIAC 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.”

As part of a restructuring plan approved by the European Commission (“EC”), ING has agreed to separate its banking and insurance businesses by 2013. ING intends to achieve this separation by divestment of its insurance and investment management operations, including the Company. ING has announced that it will explore all options for implementing the separation including one or more initial public offerings, sales, or a combination thereof. On November 10, 2010, ING announced that while the option of one global initial public offering (“IPO”) remains open, ING and its U.S. insurance affiliates, including the Company, are going to prepare for a base case of two IPOs: one Europe-led IPO and one separate U.S.-focused IPO.

Description of Business

The Company offers qualified and nonqualified annuity contracts that include a variety of funding and payout options for individuals and employer-sponsored retirement plans qualified under Internal Revenue Code Sections 401, 403, 408, and 457, as well as nonqualified deferred compensation plans. The Company’s products are offered primarily to individuals, pension plans, small businesses, and employer-sponsored groups in the health care, government, and education markets (collectively “not-for-profit” organizations) and corporate markets. The Company’s products are generally distributed through pension professionals, independent agents and brokers, third party administrators, banks, dedicated career agents, and financial planners.

Products offered by the Company include deferred and immediate (payout annuities) annuity contracts.  Company products also include programs offered to qualified plans and nonqualified deferred compensation plans that package administrative and record-keeping services along with a variety of investment options, including affiliated and nonaffiliated mutual funds and variable and fixed investment options. In addition, the

C-10

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Company offers wrapper agreements entered into with retirement plans, which contain certain benefit responsive guarantees (i.e., liquidity guarantees of principal and previously accrued interest for benefits paid under the terms of the plan) with respect to portfolios of plan-owned assets not invested with the Company. The Company also offers pension and retirement savings plan administrative services.

The Company has one operating segment.

Recently Adopted Accounting Standards

Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses

In July 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-20, “Receivables (Accounting Standards CodificationTM (“ASC”) Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses” (“ASU 2010-20”), which requires certain existing disclosures to be disaggregated by class of financing receivable, including the rollforward of the allowance for credit losses, with the ending balance further disaggregated on the basis of impairment method.  For each disaggregated ending balance, an entity is required to also disclose the related recorded investment in financing receivables, the nonaccrual status of financing receivables, and impaired financing receivables.

ASU 2010-20 also requires new disclosures by class of financing receivable, including credit quality indicators, aging of past due amounts, the nature and extent of troubled debt restructurings and related defaults, and significant purchases and sales of financing receivables disaggregated by portfolio segment.

In January 2011, the FASB issued ASU 2011-01, which temporarily delays the effective date of the disclosures about troubled debt restructurings in ASU 2010-20.

The provisions of ASU 2010-20 were adopted by the Company on December 31, 2010, and are included in the Financial Instruments footnote to the consolidated financial statements, as well as the Reinsurance section below, except for the disclosures that include information for activity that occurs during a reporting period, which are effective for periods beginning after December 15, 2010, and the disclosures about troubled debt restructurings.  As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Company’s financial condition, results of operations, or cash flows.

Scope Exception Related to Embedded Credit Derivatives

In March 2010, the FASB issued ASU 2010-11, “Derivatives and Hedging (ASC Topic 815): Scope Exception Related to Embedded Credit Derivatives” (“ASU 2010-11”), which clarifies that the only type of embedded credit derivatives that are exempt from

C-11

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

bifurcation requirements are those that relate to the subordination of one financial instrument to another.

The provisions of ASU 2010-11 were adopted by the Company on July 1, 2010.  The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the guidance is consistent with that previously applied by the Company under ASC Topic 815.

Improving Disclosures about Fair Value Measurements

In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosure (ASC Topic 820): Improving Disclosures about Fair Value Measurements,” (“ASU 2010-06”), which requires several new disclosures, as well as clarification to existing disclosures, as follows:

§Significant transfers in and out of Level 1 and Level 2 fair value measurements and the reason for the transfers;

§       Purchases, sales, issuances, and settlement, in the Level 3 fair value measurements reconciliation on a gross basis;

§       Fair value measurement disclosures for each class of assets and liabilities (i.e., disaggregated); and

§       Valuation techniques and inputs for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 fair value measurements.

The provisions of ASU 2010-06 were adopted by the Company on January 1, 2010, and are included in the Financial Instruments footnote to the consolidated financial statements, except for the disclosures related to the Level 3 reconciliation, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Company’s financial condition, results of operations, or cash flows.

Accounting and Reporting for Decreases in Ownership of a Subsidiary

In January 2010, the FASB issued ASU 2010-02 “Consolidations (ASC Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification,” (“ASU 2010-02”), which clarifies that the scope of the decrease in ownership provisions applies to the following:

C-12

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

§A subsidiary or group of assets that is a business or nonprofit activity;

§A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture; and

§An exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture).

ASU 2010-02 also notes that the decrease in ownership guidance does not apply to sales of in substance real estate and expands disclosure requirements.

The provisions of ASU 2010-02 were adopted, retrospectively, by the Company on January 1, 2010.  The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows for the years ended December 31, 2010, 2009, or 2008, as there were no decreases in ownership of a subsidiary during those periods.

Improvements to Financial Reporting by Enterprises Involved in Variable Interest Entities

In December 2009, the FASB issued ASU 2009-17, “Consolidations (ASC Topic 810): Improvements to Financial Reporting by Enterprises Involved in Variable Interest Entities,” (“ASU 2009-17”), which eliminates the exemption for qualifying special-purpose entities (“QSPEs”), as well as amends the consolidation guidance for variable interest entities (“VIEs”), as follows:

§Removes the quantitative-based assessment for consolidation of VIEs and, instead, requires a qualitative assessment of whether an entity has the power to direct the VIE’s activities, and whether the entity has the obligation to absorb losses or the right to reserve benefits that could be significant to the VIE; and

§Requires an ongoing reassessment of whether an entity is the primary beneficiary of a VIE.

In addition, in February 2010, the FASB issued ASU 2010-10, “Consolidation (ASC Topic 810): Amendments for Certain Investment Funds” (ASU 2010-10), which primarily defers to ASU 2009-17 for an investment in an entity that is accounted for as an investment company.

The provisions of ASU 2009-17 and ASU 2010-10 were adopted on January 1, 2010. The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the consolidation conclusions were consistent with those under previous accounting principles generally accepted in the United States (“US GAAP”). The disclosure provisions required by ASU 2009-17 are presented in the Financial Instruments footnote to these consolidated financial statements.

C-13

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Accounting for Transfers of Financial Assets

In December 2009, the FASB issued ASU 2009-16 “Transfers and Servicing (ASC Topic 860): Accounting for Transfers of Financial Assets” (“ASU 2009-16”), which eliminates the QSPE concept and requires a transferor of financial assets to:

§Consider the transferor’s continuing involvement in assets, limiting the circumstances in which a financial asset should be derecognized when the transferor has not transferred the entire asset to an entity that is not consolidated;

§Account for the transfer as a sale only if an entity transfers an entire financial asset and surrenders control, unless the transfer meets the conditions for a participating interest; and

§Recognize and initially measure at fair value all assets obtained and liabilities incurred as a result of a transfer of financial assets accounted for as a sale.

The provisions of ASU 2009-16 were adopted on January 1, 2010. The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the Company did not have any QSPEs under previous US GAAP, and the requirements for sale accounting treatment are consistent with those previously applied by the Company under US GAAP.

Measuring the Fair Value of Certain Alternative Investments

In September 2009, the FASB issued ASU 2009-12, “Fair Value Measurements and Disclosures (ASC Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (“ASU 2009-12”), which allows the use of net asset value to estimate the fair value of certain alternative investments, such as interests in hedge funds, private equity funds, real estate funds, venture capital funds, offshore fund vehicles, and funds of funds.  In addition, ASU 2009-12 requires disclosures about the attributes of such investments.

The provisions of ASU 2009-12 were adopted by the Company on December 31, 2009.  The Company determined, however, that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as its guidance is consistent with that previously applied by the Company under US GAAP.  The disclosure provisions required by ASU 2009-12 are presented in the Investments footnote to these consolidated financial statements.

Subsequent Events

In May 2009, the FASB issued new guidance on subsequent events, included in ASC Topic 855, “Subsequent Events,” which establishes:

C-14

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

§	The period after the balance sheet date during which an entity should evaluate events or transactions for potential recognition or disclosure in the financial statements;
§	The circumstances under which an entity should recognize such events or transactions in its financial statements; and
§	Disclosures regarding such events or transactions and the date through which an entity has evaluated subsequent events.

These provisions, as included in ASC Topic 855, were adopted by the Company on June 30, 2009.  In addition, in February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements”, which clarifies that a Securities and Exchange Commission (“SEC”) filer should evaluate subsequent events through the date the financial statements are issued and eliminates the requirement for an SEC filer to disclose that date, effective upon issuance. The Company determined that there was no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as the guidance is consistent with that previously applied by the Company under U.S. auditing standards. The disclosure provisions included in ASC Topic 855, as amended, are presented in the Organization and Significant Accounting Policies footnote to these consolidated financial statements.

Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, the FASB issued new guidance on recognition and presentation of other-than-temporary impairments, included in ASC Topic 320, “Investments-Debt and Equity Securities,” which requires:

§	Noncredit related impairments to be recognized in other comprehensive income (loss), if management asserts that it does not have the intent to sell the security and that it is more likely than not that the entity will not have to sell the security before recovery of the amortized cost basis;
§	Total other-than-temporary impairments (“OTTI”) to be presented in the Statement of Operations with an offset recognized in Accumulated other comprehensive income (loss) for the noncredit related impairments;
§	A cumulative effect adjustment as of the beginning of the period of adoption to reclassify the noncredit component of a previously recognized other-than-temporary impairment from Retained earnings (deficit) to Accumulated other comprehensive income (loss); and
§	Additional interim disclosures for debt and equity securities regarding types of securities held, unrealized losses, and other-than-temporary impairments.

These provisions, as included in ASC Topic 320, were adopted by the Company on April 1, 2009.  As a result of implementation, the Company recognized a cumulative effect of change in accounting principle of $151.7 after considering the effects of

C-15

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

deferred policy acquisition costs (“DAC”) and income taxes of $(134.0) and $46.9, respectively, as an increase to April 1, 2009 Retained earnings (deficit) with a corresponding decrease to Accumulated other comprehensive income (loss).

In addition, the Company recognized an increase in amortized cost for previously impaired securities due to the recognition of the cumulative effect of change in accounting principle as of April 1, 2009, as follows:

	Change in
	Amortized Cost
Fixed maturities:
U.S. corporate, state and municipalities	$	47.0
Foreign	45.0
Residential mortgage-backed	14.3
Commercial mortgage-backed	88.5
Other asset-backed	44.0
Total investments, available-for-sale	$	238.8

The disclosure provisions, as included in ASC Topic 320, are presented in the Investments footnote to these consolidated financial statements.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued new guidance on disclosures about derivative instruments and hedging activities, included in ASC Topic 815, “Derivatives and Hedging,” 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 US GAAP for derivative and hedging activities; and
§	How derivative instruments and related hedged items affect an entity’s financial statements.

These provisions, as included in ASC Topic 815, were adopted by the Company on January 1, 2009 and are included in the Financial Instruments footnote to these consolidated financial statements.  As the pronouncement only pertains to additional disclosure, the adoption had no effect on the Company’s financial condition, results of operations, or cash flows.

C-16

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

New Accounting Pronouncements

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts

In October 2010, the FASB issued ASU 2010-26, “Financial Services - Insurance (ASC Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”), which clarifies what costs relating to the acquisition of new or renewal insurance contracts qualify for deferral.  Costs that should be capitalized include (1) incremental direct costs of successful contract acquisition and (2) certain costs related directly to successful acquisition activities (underwriting, policy issuance and processing, medical and inspection, and sales force contract selling) performed by the insurer for the contract. Advertising costs should be included in deferred acquisition costs only if the capitalization criteria in the US GAAP direct-response advertising guidance are met.  All other acquisition-related costs should be charged to expense as incurred.

The provisions of ASU 2010-26 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, and should be applied prospectively. Retrospective application is permitted, and early adoption is permitted at the beginning of an entity’s annual reporting period.  The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2010-26.

Consolidation Analysis of Investments Held through Separate Accounts

In April 2010, the FASB issued ASU 2010-15, “Financial Services - Insurance (ASC Topic 944): How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments” (“ASU 2010-15”), which clarifies that an insurance entity generally should not consider any separate account interests held for the benefit of policy holders in an investment to be the insurer’s interests, and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation.

The provisions of ASU 2010-15 are effective for fiscal years and interim periods beginning after December 15, 2010. The amendments are to be applied retrospectively to all prior periods as of the date of adoption.  The Company does not expect any effect on its financial condition, results of operations, or cash flows upon adoption, as the guidance is consistent with that previously applied by the Company under ASC Topic 944.

Accounting Policy Change

During the fourth quarter of 2010, the Company concluded that it should change its accounting for realized capital gains (losses) and unrealized capital gains (losses) on investments supporting experience-rated products.  The impact of this change in accounting policy on the Company’s financial statements is immaterial to all periods presented.  Therefore, this correction is reflected in the fourth quarter of 2010 (the period

C-17

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

in which the change was made).  Certain reclassifications, which increased (decreased) Realized gains (losses) and Interest credited and other benefits by $11.3 and $614.4 for the years ended December 31, 2009 and 2008, respectively, were made in connection with this change, and had no impact on net income.  This change in accounting policy has no impact on individual customer account values and no impact on credited rates for experience-rated products.

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 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, certain 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, except those accounted for using the fair value option, 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, if any, for related changes in DAC, value of business acquired (“VOBA”), and deferred income taxes.  Fixed maturities accounted for using the fair value option are reported at fair value with changes in fair value recognized in the Statement of Operations.

Other-Than-Temporary Impairments

The Company analyzes its general account investments to determine whether there has been an other-than-temporary decline in fair value below the amortized cost basis. Factors considered in this analysis include, but are not limited to, 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 changes in ratings of the security.

C-18

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

When assessing the Company’s intent to sell a security or if it is more likely than not it will be required to sell a security before recovery of its amortized cost basis, management evaluates facts and circumstances such as, but not limited to, decisions to rebalance the investment portfolio and sales of investments to meet cash flow needs.

When the Company has determined it has the intent to sell or if it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis and the fair value has declined below amortized cost (“intent impairment”) the individual security is written down from amortized cost to fair value and a corresponding charge is recorded in Net realized capital gains (losses) on the Consolidated Statements of Operations as an OTTI.  If the Company does not intend to sell the security nor is it more likely than not it will be required to sell the security before recovery of its amortized cost basis, but the Company has determined that there has been an other-than-temporary decline in fair value below the amortized cost basis, the OTTI is bifurcated into the amount representing the present value of the decrease in cash flows expected to be collected (“credit impairment”) and the amount related to other factors (“noncredit impairment”).  The credit impairment is recorded in Net realized capital gains (losses) on the Consolidated Statements of Operations. The noncredit impairment is recorded in Other comprehensive income (loss) on the Consolidated Balance Sheets.

In order to determine the amount of the OTTI that is considered a credit impairment, the Company utilizes the following methodology and significant inputs:

§	Recovery value is estimated by performing a discounted cash flow analysis based upon the best estimate of expected future cash flows, discounted at the effective interest rate implicit in the underlying debt security. The effective interest rate is the current yield prior to impairment for a fixed rate security or current coupon yield for a floating rate security.
§	Collectability and recoverability are estimated using the same considerations as the Company uses in its overall impairment analysis which includes, but is not limited to, 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 changes in ratings of the security.
§	Additional factors considered for structured securities such as RMBS, CMBS and other ABS include, but are not limited to, quality of underlying collateral, anticipated loss severities, collateral default rates, and other collateral characteristics such as vintage, repayment terms, and the geographical makeup of the collateral.

C-19

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 of Investments and Derivatives

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC Topic 820.  Valuations are obtained from third party commercial pricing services, brokers, and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from brokers and third-party commercial pricing services are non-binding. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes.

All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values.  There were no material changes to the valuation methods or assumptions used to determine fair values during 2010, except for the Company’s use of commercial pricing services to value certain collateralized mortgage obligations (“CMO-Bs”) which commenced in the first quarter of 2010. CMO-Bs were previously valued using an average of broker quotes when more than one broker quote is provided.

Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures,” 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.

C-20

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Financial assets and liabilities recorded at fair value on the Consolidated 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.  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 valuation methods and assumptions were used by the Company in estimating reported values for the investments and derivatives described below:

Fixed maturities: The fair values for the actively traded marketable bonds are determined based upon the quoted market prices and are classified as Level 1 assets.  Assets in this category would primarily include certain US Treasury securities.  The fair values for marketable bonds without an active market, excluding subprime residential mortgage-backed securities, are obtained through several commercial pricing services, which provide the estimated fair values, and are classified as Level 2 assets.  These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data.  This category includes US and foreign corporate bonds, Asset-backed Securities (“ABS”), US agency and government guaranteed securities, Commercial Mortgage-backed Securities (“CMBS”), and Residential Mortgage-backed Securities (“RMBS”), including CMO-Bs.

Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor, and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited.  Securities priced using independent broker quotes are classified as Level 3.

C-21

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Broker quotes and prices obtained from pricing services are reviewed and validated monthly through an internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes. At December 31, 2010, $73.3 and $13.2 billion of a total of $17.4 billion in fixed maturities were valued using unadjusted broker quotes and unadjusted prices obtained from pricing services, respectively, and verified through the review process. The remaining balance in fixed maturities consisted primarily of privately placed bonds valued using matrix-based pricing model.

All prices and broker quotes obtained go through the review process described above including valuations for which only one broker quote is obtained.  After review, for those instruments where the price is determined to be appropriate, the unadjusted price provided is used for financial statement valuation. If it is determined that the price is questionable, another price may be requested from a different vendor. The internal valuation committee then reviews all prices for the instrument again, along with information from the review, to determine which price best represents “exit price” for the instrument.

Fair values of privately placed bonds are determined using a matrix-based pricing model and are classified as Level 2 assets.  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 its 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.

Trading activity for the Company’s RMBS, particularly subprime and Alt-A RMBS, declined during 2008 as a result of the dislocation of the credit markets.  The Company continued to obtain pricing information from commercial pricing services and brokers. However, the pricing for subprime and Alt-A RMBS did not represent regularly occurring market transactions since the trading activity declined significantly in the second half of 2008.  As a result, the Company concluded in the second half of 2008 that the market for subprime and Alt-A RMBS was inactive and classified these securities as Level 3 assets. The Company did not change its valuation procedures, which are consistent with those used for Level 2 marketable bonds without an active market, as a result of determining that the market was inactive. Due to increased trade activity of Alt-A RMBS during the second half of 2009, the Company determined that the Alt-A RMBS should be transferred to Level 2 of the valuation hierarchy as its overall assessment of the market was that it was active. The market for subprime RMBS remains largely inactive, and as such these securities will remain in Level 3 of the valuation hierarchy.  The Company will continue to monitor market activity for RMBS to determine proper classification in the valuation hierarchy.

C-22

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Equity securities, available-for-sale: Fair values of publicly traded equity securities are based upon quoted market price and are classified as Level 1 assets. Other equity securities, typically private equities or equity securities not traded on an exchange, are valued by sources such as analytics or brokers and are classified as Level 3 assets.

Cash and cash equivalents, Short-term investments, 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. These assets are classified as Level 1. Other short-term investments are valued and classified in the fair value hierarchy consistent with the policies described herein, depending on investment type.

Derivatives: The carrying amounts for these financial instruments, which can be assets or liabilities, reflect the fair value of the assets and liabilities.  Derivatives are carried at fair value (on the Consolidated Balance Sheets), which is determined using the Company’s derivative accounting system in conjunction with observable key financial data from third party sources, such as yield curves, exchange rates, Standard & Poor’s (“S&P”) 500 Index prices, and London Inter Bank Offered Rates (“LIBOR”), or through values established by third party brokers. Counterparty credit risk is considered and incorporated in the Company’s valuation process through counterparty credit rating requirements and monitoring of overall exposure.  It is the Company’s policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company’s own credit risk is also considered and incorporated in the Company’s valuation process. Valuations for the Company’s futures contracts are based on unadjusted quoted prices from an active exchange and, therefore, are classified as Level 1. The Company also has certain credit default swaps that are priced using models that primarily use market observable inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. However, all other derivative instruments are valued based on market observable inputs and are classified as Level 2.

Product guarantees: The Company records product guarantees, which can be either assets or liabilities, for annuity contracts containing guaranteed credited rates in accordance with ASC 815.  The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value.  The fair value of the obligation is calculated based on the income approach as described in ASC 820.  The income associated with the contracts is projected using actuarial and capital market assumptions, 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 risk neutral scenarios and other best estimate assumptions.  These derivatives are classified as Level 3 liabilities or assets. Explicit risk margins in the actuarial assumptions underlying valuations are included, as well as an explicit recognition of all nonperformance risks as required by US GAAP.  Nonperformance risk for product guarantees contains adjustments to the fair values of these contract liabilities related to the current credit standing of ING and the

C-23

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Company based on credit default swaps with similar term to maturity and priority of payment.  The ING credit default spread is applied to the discount factors for product guarantees in the Company’s valuation model in order to incorporate credit risk into the fair values of these product guarantees.  As of December 31, 2010, the overall value of the derivative liability decreased.  This decrease was mainly due to an increase in interest rate levels, and also benefited from the change in credit spread of ING in relation to prior periods which decreased the derivative liability.

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.

The following investments are reported at values other than fair value on the Consolidated Balance Sheets, and therefore are not categorized in the fair value hierarchy:

Mortgage loans on real estate: Mortgage loans on real estate are reported at amortized cost, less impairment write-downs and allowance for losses. 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 lower of the present value of expected cash flows from the loan, discounted at the loan’s effective interest rate, or fair value of the collateral. For those mortgages that are determined to require foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure. The carrying value of the impaired loans is reduced by establishing a permanent write-down recorded in Net realized capital gains (losses).

Policy loans: The reported value of policy loans is equal to the carrying, or cash surrender, value of the loans. Policy loans are fully collateralized by the account value of the associated insurance contracts.

Loan - Dutch State obligation: The reported value of the State of the Netherlands (the “Dutch State”) loan obligation is based on the outstanding loan balance plus any unamortized premium.

Limited partnerships/corporations: The carrying value for these investments, primarily private equities and hedge funds, is determined based on the Company’s degree of influence over the investee’s operating and financial policies along with the percent of the investee that the Company owns. Those investments where the Company has determined it has significant influence are accounted for under the equity method, with the remainder accounted for under the cost method.

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

C-24

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

Repurchase Agreements

The Company engages in dollar repurchase agreements with mortgage-backed securities (“dollar rolls”) and repurchase agreements with other collateral types to increase its return on investments and improve liquidity. Such arrangements typically meet the requirements to be accounted for as financing arrangements. The Company enters into dollar roll transactions by selling existing mortgage-backed securities and concurrently entering into an agreement to repurchase similar securities within a short time frame in the future at a lower price. Under repurchase agreements, the Company borrows cash from a counterparty at an agreed upon interest rate for an agreed upon time frame and pledges collateral in the form of securities. At the end of the agreement, the counterparty returns the collateral to the Company and the Company, in turn, repays the loan amount along with the additional agreed upon interest. Company policy requires that at all times during the term of the dollar roll and repurchase agreements that cash or other collateral types obtained is sufficient to allow the Company to fund substantially all of the cost of purchasing replacement assets. Cash collateral received is invested in short-term investments, with the offsetting collateral liability included in Borrowed money on the Consolidated Balance Sheets.  At December 31, 2010, the carrying value of the securities pledged in dollar rolls and repurchase agreement transactions was $216.7. At December 31, 2009, there were no securities pledged in dollar rolls and repurchase agreement transactions.  The repurchase obligation related to dollar rolls and repurchase agreements, including accrued interest, totaled $214.7 and $0.1, respectively at December 31, 2010 and 2009, and is included in Borrowed money on the Consolidated Balance Sheets. In addition to the purchase obligation at December 31, 2010, the Company did not have any collateral posted by the counterparty in connection with the increase in the value of pledged securities that will be released upon settlement.

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 policy requires that, at all times during the term of the reverse repurchase agreements, cash or other collateral types provided is sufficient to allow the counterparty to fund substantially all of the cost of purchasing replacement assets. At December 31, 2010 and 2009, the Company did not have any securities pledged under reverse repurchase agreements.

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

C-25

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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, 2010.  The Company believes the counterparties to the dollar rolls, 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. At December 31, 2010 and 2009, the fair value of loaned securities was $651.7 and $339.5, respectively, and is included in Securities pledged on the Consolidated Balance Sheets.

Derivatives

The Company’s use of derivatives is limited mainly to economic hedging purposes to reduce the Company’s exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, and market risk.

The Company enters into interest rate, equity market, credit default, 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 Derivatives or Other liabilities, as appropriate, on the Consolidated Balance Sheets.  Changes in the fair value of such derivatives are recorded in Net realized capital gains (losses) in the Consolidated Statements of Operations.

If the Company’s current debt and claims paying ratings were downgraded in the future, the terms in the Company’s derivative agreements may be triggered, which could negatively impact overall liquidity.  For the majority of the Company’s counterparties, there is a termination event should the Company’s long-term debt ratings drop below BBB+/Baa1.

The Company also has investments in certain fixed maturity instruments, and has issued certain products with guarantees, that contain embedded derivatives whose market value is at least partially determined by, among other things, levels of or changes in domestic

C-26

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity markets, or credit ratings/spreads.

Embedded derivatives within retail annuity products are included in Future policy benefits and claims reserves on the Consolidated Balance Sheets, and changes in the fair value are recorded in Interest credited and benefits to contract owners in the Consolidated Statements of Operations.

DAC and VOBA

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 certain 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.

US GAAP guidance for universal life and investment-type products, such as fixed and variable deferred annuities, indicates 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.

Internal Replacements

Contract owners 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 US GAAP guidance for DAC related to modification or exchange of insurance contracts.

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.  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 Consolidated Statements of Operations.

C-27

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 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. 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 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 gross profits, lower the rate of amortization. Sustained decreases in investment, mortality, and expense margins, and thus estimated future gross profits, however, increase the rate of amortization.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation.  Expenditures for replacements and major improvements are capitalized; maintenance and repair expenditures are expensed as incurred.

At December 31, 2010 and 2009, total accumulated depreciation and amortization was $102.6 and $99.5, respectively. Depreciation on property and equipment is provided on a straight-line basis over the estimated useful lives of the assets with the exception of land and artwork, which are not depreciated or amortized. The Company’s property and equipment are depreciated using the following estimated useful lives.

C-28

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Buildings	40 years
Furniture and fixtures	5 years
Leasehold improvements	10 years, or the life of the lease, whichever is shorter
Equipment	3 years
Software	3 years

Reserves

The Company records as liabilities reserves to meet the Company’s future obligations under its variable annuity and fixed annuity products.

Future policy benefits and claims reserves include reserves for deferred annuities and immediate annuities with and without life contingent payouts.

Reserves for individual and group deferred annuity investment contracts and individual immediate annuities without life contingent payouts are equal to cumulative deposits, less charges and withdrawals, plus credited interest thereon, net of adjustments for investment experience that the Company is entitled to reflect in future credited interest. Credited interest rates vary by product and range from 0% to 7.8% for the years 2010, 2009, and 2008.  Reserves for group immediate annuities without life contingent payouts are equal to the discounted value of the payment at the implied break-even rate.

Reserves for individual immediate annuities with life contingent payout benefits are computed on the basis of assumed interest discount rates, mortality, and expenses, including a margin for adverse deviations.  Such assumptions generally vary by annuity type plan, year of issue, and policy duration.  For the years 2010, 2009, and 2008, reserve interest rates ranged from 4.5% to 6.0%.

The Company records reserves for product guarantees, which can be either assets or liabilities, for annuity contracts containing guaranteed credited rates.  The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is reported at fair value in accordance with the requirements of US GAAP guidance for insurance companies, derivatives, and fair value measurements.  The fair value of the obligation is calculated based on the income approach.  The income associated with the contracts is projected using relevant actuarial and capital market assumptions, 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 risk neutral scenarios and other best estimate assumptions.  Explicit risk margins in the actuarial assumptions underlying valuations are included, as well as an explicit recognition of all nonperformance risks beginning January 1, 2008 with the adoption of new US GAAP guidance on fair value measurements. Nonperformance risk for product guarantees contain adjustment to the fair value of these contract liabilities related to the current credit standing of ING and the Company based

C-29

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

on credit default swaps with similar term to maturity and priority of payment.  The ING credit default spread is applied to the discount factors for product guarantees in the Company’s valuation model in order to incorporate credit risk into the fair value of these product guarantees.

Unpaid claims and claim expenses for all lines of insurance include benefits for reported losses and estimates of benefits for losses incurred but not reported.

Certain variable annuities offer guaranteed minimum death benefits (“GMDB”). The GMDB is accrued in the event the contract owner account value at death is below the guaranteed value and is included in reserves.

The Company’s domestic individual life insurance business was disposed of on October 1, 1998 pursuant to an indemnity reinsurance agreement. The Company includes an amount in Reinsurance recoverable on the Consolidated Balance Sheets, which equals the Company’s total individual life reserves. Individual life reserves are included in Future policy benefits and claims reserves on the Consolidated Balance Sheets.

Revenue Recognition

For most annuity contracts, charges assessed against contract owner funds for the cost of insurance, surrenders, 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 premiums or revenue.  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 in both Premiums and Interest credited and other benefits to contract owners in the Consolidated Statements of Operations.

Premiums on the Consolidated Statements of Operations primarily represent amounts received for immediate annuities with life contingent payouts.

Separate Accounts

Separate account assets and liabilities generally represent funds maintained to meet specific investment objectives of contract owners 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 contract owners.  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.

Separate account assets supporting variable options under variable annuity contracts are invested, as designated by the contract owner or participant (who bears the investment risk subject, in limited cases, to minimum guaranteed rates) under a contract, in shares of

C-30

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

The Company reports separately, as assets and liabilities, investments held in the separate accounts and liabilities of separate accounts if:

§	such separate accounts are legally recognized;
§	assets supporting the contract liabilities are legally insulated from the Company’s general account liabilities;
§	investments are directed by the contractholder; and
§	all investment performance, net of contract fees and assessments, is passed through to the contractholder.

The Company reports separate account assets and liabilities that meet the above criteria at fair value based on the fair value of the underlying investments.  Investment income and net realized and unrealized capital gains (losses) of the separate accounts, however, are not reflected in the Consolidated Statements of Operations.  The Consolidated Statements of Cash Flows do not reflect investment activity of the separate accounts.

Reinsurance

The Company utilizes indemnity reinsurance agreements to reduce its exposure to losses from GMDBs in its annuity insurance business. 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. The Company evaluates the financial strength of potential reinsurers and continually monitors 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 Consolidated Balance Sheets.

The Company has a significant concentration of reinsurance arising from the disposition of its individual life insurance business. In 1998, the Company entered into an indemnity reinsurance agreement with a subsidiary of Lincoln National Corporation (“Lincoln”).  The Lincoln subsidiary established a trust to secure it obligations to the Company under the reinsurance transaction.  Of the Reinsurance recoverable on the Consolidated Balance Sheets, $2.3 billion and $2.4 billion at December 31, 2010 and 2009, respectively, is related to the reinsurance recoverable from the subsidiary of Lincoln under this reinsurance agreement.

Income Taxes

ILIAC files a consolidated federal income tax return with ING America Insurance Holdings, Inc. (“ING AIH”), an affiliate, and certain other subsidiaries of ING AIH. ILIAC is 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

C-31

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

2.Investments

Fixed Maturities and Equity Securities

Fixed maturities and equity securities were as follows as of December 31, 2010.

			Gross		Gross
			Unrealized		Unrealized
	Amortized		Capital		Capital				Fair
	Cost		Gains		Losses		OTTI(2)		Value
Fixed maturities:
U.S. Treasuries	$	717.0	$	4.7	$	7.3	$	-	$	714.4
U.S. government agencies and authorities	536.7		45.9		-		-		582.6
State, municipalities, and political subdivisions	145.9		5.0		10.2		-		140.7
U.S. corporate securities:
Public utilities	1,292.3		72.7		10.3		-		1,354.7
Other corporate securities	5,522.7		389.5		33.8		0.3		5,878.1
Total U.S. corporate securities	6,815.0		462.2		44.1		0.3		7,232.8
Foreign securities(1):
Government	446.3		39.6		5.0		-		480.9
Other	4,089.5		240.5		37.3		0.1		4,292.6
Total foreign securities	4,535.8		280.1		42.3		0.1		4,773.5
Residential mortgage-backed securities	2,116.0		296.9		28.7		28.8		2,355.4
Commercial mortgage-backed securities	1,005.6		54.2		15.7		14.5		1,029.6
Other asset-backed securities	615.3		16.2		27.0		15.7		588.8
Total fixed maturities, including securities pledged	16,487.3		1,165.2		175.3		59.4		17,417.8
Less: securities pledged	936.5		35.0		9.3		-		962.2
Total fixed maturities	15,550.8		1,130.2		166.0		59.4		16,455.6
Equity securities	186.7		24.3		-		-		211.0
Total investments	$	15,737.5	$	1,154.5	$	166.0	$	59.4	$	16,666.6

(1)	Primarily U.S. dollar denominated.
(2)	Represents other-than-temporary impairments reported as a component of Other comprehensive income (“noncredit impairments”).

C-32

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Fixed maturities and equity securities were as follows as of December 31, 2009.

			Gross		Gross
			Unrealized		Unrealized
	Amortized		Capital		Capital				Fair
	Cost		Gains		Losses		OTTI(2)		Value
Fixed maturities:
U.S. Treasuries	$	1,897.2	$	3.0	$	38.3	$	-	$	1,861.9
U.S. government agencies and authorities	632.5		41.1		-		-		673.6
State, municipalities, and political subdivisions	112.5		2.5		7.8		-		107.2
U.S. corporate securities:
Public utilities	1,138.7		40.8		14.3		-		1,165.2
Other corporate securities	4,366.5		267.4		63.2		0.6		4,570.1
Total U.S. corporate securities	5,505.2		308.2		77.5		0.6		5,735.3
Foreign securities(1):
Government	343.0		29.2		8.7		-		363.5
Other	2,922.5		129.0		56.6		0.1		2,994.8
Total foreign securities	3,265.5		158.2		65.3		0.1		3,358.3
Residential mortgage-backed securities	1,870.4		268.3		111.9		16.8		2,010.0
Commercial mortgage-backed securities	1,535.0		10.4		214.3		-		1,331.1
Other asset-backed securities	657.4		9.8		106.3		29.2		531.7
Total fixed maturities, including securities pledged	15,475.7		801.5		621.4		46.7		15,609.1
Less: securities pledged	483.7		4.3		18.2		-		469.8
Total fixed maturities	14,992.0		797.2		603.2		46.7		15,139.3
Equity securities	175.1		13.4		0.6		-		187.9
Total investments	$	15,167.1	$	810.6	$	603.8	$	46.7	$	15,327.2

(1)	Primarily U.S. dollar denominated.
(2)	Represents other-than-temporary impairments reported as a component of Other comprehensive income (“noncredit impairments”).

At December 31, 2010 and 2009, net unrealized gains were $954.8 and $146.2, respectively, on total fixed maturities, including securities pledged to creditors, and equity securities.

C-33

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The amortized cost and fair value of total fixed maturities, including securities pledged, as of December 31, 2010, 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	$	269.4	$	285.7
After one year through five years	4,316.0		4,606.4
After five years through ten years	4,376.8		4,635.0
After ten years	3,788.2		3,916.9
Mortgage-backed securities	3,121.6		3,385.0
Other asset-backed securities	615.3		588.8
Fixed maturities, including securities pledged	$	16,487.3	$	17,417.8

The Company did not have any investments in a single issuer, other than obligations of the U.S. government and government agencies and the Dutch State loan obligation, with a carrying value in excess of 10% of the Company’s Shareholder’s equity at December 31, 2010 and 2009.

At December 31, 2010 and 2009, fixed maturities with fair values of $13.4 and $12.9, respectively, were on deposit as required by regulatory authorities.

The Company invests in various categories of collateralized mortgage obligations (“CMOs”), including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and 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, 2010 and 2009, approximately 36.5% and 29.4%, 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.

Transfer of Alt-A RMBS Participation Interest

On January 26, 2009, ING  announced it reached an agreement, for itself and on behalf of certain ING affiliates including the Company, with the Dutch State on an Illiquid Assets Back-Up Facility (the “Back-Up Facility”) covering 80% of ING’s Alt-A residential mortgage-backed securities (“Alt-A RMBS”).  Under the terms of the Back-Up Facility, a full credit risk transfer to the Dutch State was realized on 80% of ING’s Alt-A RMBS owned by ING Bank, FSB and ING affiliates within ING Insurance US with a book value of $36.0 billion, including book value of $802.5 of the Alt-A RMBS portfolio owned by the Company (with respect to the Company’s portfolio, the “Designated Securities Portfolio”) (the “ING-Dutch State Transaction”).  As a result of the risk transfer, the

C-34

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Dutch State will participate in 80% of any results of the ING Alt-A RMBS portfolio.  The risk transfer to the Dutch State took place at a discount of approximately 10% of par value.  In addition, under the Back-Up Facility, other fees were paid both by the Company and the Dutch State.  Each ING company participating in the ING-Dutch State Transaction, including the Company remains the legal owner of 100% of its Alt-A RMBS portfolio and will remain exposed to 20% of any results on the portfolio.  The ING-Dutch State Transaction closed March 31, 2009, with the affiliate participation conveyance and risk transfer to the Dutch State described in the succeeding paragraph taking effect as of January 26, 2009.

In order to implement that portion of the ING-Dutch State Transaction related to the Company’s Designated Securities Portfolio, the Company entered into a participation agreement with its affiliates, ING Support Holding B.V. (“ING Support Holding”) and ING pursuant to which the Company conveyed to ING Support Holding an 80% participation interest in its Designated Securities Portfolio and will pay a periodic transaction fee, and received, as consideration for the participation, an assignment by ING Support Holding of its right to receive payments from the Dutch State under the Illiquid Assets Back-Up Facility related to the Company’s Designated Securities Portfolio among, ING, ING Support Holding and the Dutch State (the “Company Back-Up Facility”).  Under the Company Back-Up Facility, the Dutch State is obligated to pay certain periodic fees and make certain periodic payments with respect to the Company’s Designated Securities Portfolio, and ING Support Holding is obligated to pay a periodic guarantee fee and make periodic payments to the Dutch State equal to the distributions it receives with respect to the 80% participation interest in the Company’s Designated Securities Portfolio.  The Dutch State payment obligation to the Company under the Company Back-Up Facility is accounted for as a loan receivable for US GAAP and is reported in Loan - Dutch State obligation on the Consolidated Balance Sheets.

Upon the closing of the transaction on March 31, 2009, the Company recognized a gain of $206.2, which was reported in Net realized capital gains (losses) on the Consolidated Statements of Operations.

In a second transaction, known as the Step 1 Cash Transfer, a portion of the Company’s Alt-A RMBS which had a book value of $4.2 was sold for cash to an affiliate, Lion II Custom Investments LLC (“Lion II”).  Immediately thereafter, Lion II sold to ING Direct Bancorp the purchased securities (the “Step 2 Cash Transfer”). Contemporaneous with the Step 2 Cash Transfer, ING Direct Bancorp included such purchased securities as part of its Alt-A RMBS portfolio sale to the Dutch State.  The Step 1 Cash Transfer closed on March 31, 2009, and the Company recognized a gain of $0.3 contemporaneous with the closing of the ING-Dutch State Transaction, which was reported in Net realized capital gains (losses) on the Consolidated Statements of Operations.

As part of the final restructuring plan submitted to the European Commission (“EC”) in connection with its review of the Dutch state aid to ING (the “Restructuring Plan”), ING

C-35

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

has agreed to make additional payments to the Dutch State corresponding to an adjustment of fees for the Back-Up Facility. Under this new agreement, the terms of the ING-Dutch State Transaction which closed on March 31, 2009, including the transfer price of the Alt-A RMBS securities, will remain unaltered and the additional payments will not be borne by the Company or any other ING U.S. subsidiaries.

Variable Interest Entities

The Company holds certain VIEs for investment purposes.  VIEs may be in the form of private placement securities, structured securities, securitization transactions, or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company’s financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. Rather, the VIEs are accounted for using the cost or equity method of accounting. The Company provided no non-contractual financial support and its carrying value represents the Company’s exposure to loss. The carrying value of collateralized loan obligations (“CLOs”) of $0.6 and $0.1 at December 31, 2010 and 2009, respectively, is included in Limited partnerships/corporations on the Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income on the Consolidated Statements of Operations.

Unrealized Capital Losses

Unrealized capital losses (including non-credit impairments) in fixed maturities, including securities pledged to creditors, for Investment Grade (“IG”) and Below Investment Grade (“BIG”) securities by duration were as follows as of December 31, 2010 and 2009.

	2010						2009
			% of IG			% of IG			% of IG			% of IG
	IG		and BIG	BIG		and BIG	IG		and BIG	BIG		and BIG
Six months or less below amortized cost	$	72.4	30.8%	$	12.2	5.2%	$	105.5	15.7%	$	18.5	2.8%
More than six months and twelve months or less below amortized cost	1.8		0.8%	0.2		0.1%	44.0		6.6%	37.9		5.7%
More than twelve months below amortized cost	79.8		34.0%	68.3		29.1%	300.8		45.0%	161.4		24.2%
Total unrealized capital loss	$	154.0	65.6%	$	80.7	34.4%	$	450.3	67.3%	$	217.8	32.7%

C-36

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following table summarizes the unrealized capital losses (including non-credit impairments) by duration and reason, along with the fair value of fixed maturities, including securities pledged to creditors, in unrealized capital loss positions as of December 31, 2010 and 2009.

			More than
	Six Months		Six Months and
	or Less		Twelve Months		More than		Total
	Below		or Less Below		Twelve Months		Unrealized
	Amortized		Amortized		Below		Capital
2010	Cost		Cost		Cost		Losses
Interest rate or spread widening	$	76.0	$	2.0	$	26.3	$	104.3
Mortgage and other asset-backed securities	8.6		-		121.8		130.4
Total unrealized capital losses	$	84.6	$	2.0	$	148.1	$	234.7
Fair value	$	2,912.0	$	37.0	801.4		$	3,750.4
2009
Interest rate or spread widening	$	75.8	$	35.3	$	78.5	$	189.6
Mortgage and other asset-backed securities	48.2		46.6		383.7		478.5
Total unrealized capital losses	$	124.0	$	81.9	$	462.2	$	668.1
Fair value	$	2,896.6	$	212.6	$	2,122.0	$	5,231.2

C-37

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Unrealized capital losses (including non-credit impairments), along with the fair value of fixed maturities, including securities pledged to creditors, by market sector and duration were as follows as of December 31, 2010 and 2009.

					More Than Six
					Months and Twelve				More Than Twelve
	Six Months or Less				Months or Less				Months Below
	Below Amortized Cost				Below Amortized Cost				Amortized Cost				Total
			Unrealized				Unrealized				Unrealized				Unrealized
	Fair Value		Capital Loss		Fair Value		Capital Loss		Fair Value		Capital Loss		Fair Value		Capital Loss
2010
U.S. Treasuries	$	475.6	$	7.3	$	-	$	-	$	-	$	-	$	475.6	$	7.3
U.S. corporate, state, and municipalities	1,043.1		38.6		21.8		1.1		142.9		14.9		1,207.8		54.6
Foreign	866.3		30.1		14.9		0.9		101.7		11.4		982.9		42.4
Residential mortgage-backed	400.5		6.8		0.2		-		240.7		50.7		641.4		57.5
Commercial mortgage-backed	5.1		-		-		-		184.0		30.2		189.1		30.2
Other asset-backed	121.4		1.8		0.1		-		132.1		40.9		253.6		42.7
Total	$	2,912.0	$	84.6	$	37.0	$	2.0	$	801.4	$	148.1	$	3,750.4	$	234.7
2009
U.S. Treasuries	$	1,002.2	$	38.3	$	-	$	-	$	-	$	-	$	1,002.2	$	38.3
U.S. corporate, state, and municipalities	1,097.0		22.7		86.1		14.9		381.2		48.3		1,564.3		85.9
Foreign	528.6		14.8		40.0		20.4		301.8		30.2		870.4		65.4
Residential mortgage-backed	135.9		45.4		47.7		4.2		420.1		79.1		603.7		128.7
Commercial mortgage-backed	105.8		1.2		27.2		35.7		757.1		177.4		890.1		214.3
Other asset-backed	27.1		1.6		11.6		6.7		261.8		127.2		300.5		135.5
Total	$	2,896.6	$	124.0	$	212.6	$	81.9	$	2,122.0	$	462.2	$	5,231.2	$	668.1

Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities was 84.4% of the average book value as of December 31, 2010.

C-38

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Unrealized capital losses (including non-credit impairments) in fixed maturities, including securities pledged to creditors, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive periods as indicated in the tables below, were as follows for December 31, 2010 and 2009.

		Amortized Cost				Unrealized Capital Loss				Number of Securities
		< 20%		> 20%		< 20%		> 20%		< 20%	> 20%
2010
Six months or less below amortized cost	$		3,190.2	$	68.6	$	98.5	$	22.3	491	19
More than six months and twelve months or less below amortized cost		129.3		19.6		8.2		4.6		52	3
More than twelve months below amortized cost		353.5		223.9		23.2		77.9		87	69
Total	$		3,673.0	$	312.1	$	129.9	$	104.8	630	91
2009
Six months or less below amortized cost	$		3,646.9	$	184.9	$	168.0	$	60.7	377	98
More than six months and twelve months or less below amortized cost		734.5		247.0		40.2		124.3		120	48
More than twelve months below amortized cost		425.9		660.1		28.2		246.7		90	129
Total	$		4,807.3	$	1,092.0	$	236.4	$	431.7	587	275

C-39

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Unrealized capital losses (including non-credit impairments) in fixed maturities, including securities pledged to creditors, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive periods as indicated in the tables below, were as follows for December 31, 2010 and 2009.

	Amortized Cost					Unrealized Capital Loss				Number of Securities
		< 20%		> 20%		< 20%		> 20%		< 20%	> 20%
2010
U.S. Treasuries	$		482.9	$	-	$	7.3	$	-	3	-
U.S. corporate, state and municipalities		1,218.7		43.7		40.2		14.4		188	5
Foreign		1,013.7		11.6		39.6		2.8		137	4
Residential mortgage-backed		599.6		99.3		25.7		31.8		160	47
Commercial mortgage-backed		155.1		64.2		9.5		20.7		19	5
Other asset-backed		203.0		93.3		7.6		35.1		123	30
Total	$		3,673.0	$	312.1	$	129.9	$	104.8	630	91
2009
U.S. Treasuries	$		1,040.5	$	-	$	38.3	$	-	9	-
U.S. corporate, state and municipalities		1,532.2		118.0		53.5		32.4		256	23
Foreign		830.0		105.8		31.7		33.7		111	22
Residential mortgage-backed		511.7		220.7		55.1		73.6		115	109
Commercial mortgage-backed		732.4		372.0		49.3		165.0		59	39
Other asset-backed		160.5		275.5		8.5		127.0		37	82
Total	$		4,807.3	$	1,092.0	$	236.4	$	431.7	587	275

During the year ended December 31, 2010, unrealized capital losses on fixed maturities decreased by $433.4. Lower unrealized losses are due to declining yields and the overall tightening of credit spreads since the end of 2009, leading to the increased value of fixed maturities.

At December 31, 2010, the Company held 1 fixed maturity with an unrealized capital loss in excess of $10.0.  The unrealized capital loss on this fixed maturity equaled $10.0, or 4.3% of the total unrealized capital losses, as of December 31, 2010.  At December 31, 2009, the Company held 8 fixed maturities with unrealized capital losses in excess of $10.0.  The unrealized capital losses on these fixed maturities equaled $118.2, or 17.7% of the total unrealized capital losses, as of December 31, 2009.

All investments with fair values less than amortized cost are included in the Company’s other-than-temporary impairment analysis, and impairments were recognized as disclosed in “Other-Than-Temporary Impairments,” which follows this section. After detailed impairment analysis was completed, management determined that the remaining investments in an unrealized loss position were not other-than-temporarily impaired, and therefore no further other-than-temporary impairment was necessary.

C-40

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Other-Than-Temporary Impairments

The following tables identify the Company’s credit-related and intent-related impairments included in the Consolidated Statements of Operations, excluding noncredit impairments included in Accumulated other comprehensive income (loss), by type for the years ended December 31, 2010, 2009, and 2008.

	2010				2009			2008
				No. of			No. of			No. of
		Impairment		Securities	Impairment		Securities	Impairment		Securities
U.S. Treasuries	$		1.7	1	$	156.0	15	$	-	-
Public utilities		1.3		5	-		-	-		-
Other U.S. corporate		5.3		19	47.8		57	283.2		233
Foreign(1)		42.4		20	50.6		42	108.9		94
Residential mortgage-backed		14.8		53	31.6		69	349.3		194
Commercial mortgage-backed		20.5		8	17.7		11	220.8		29
Other asset-backed		58.5		42	43.4		32	24.8		35
Limited partnerships		1.6		4	17.6		17	6.6		6
Equity securities		-		1	19.5		9	55.1		17
Mortgage loans on real estate		1.0		1	10.3		4	3.8		1
Total	$		147.1	154	$	394.5	256	$	1,052.5	609
(1) Primarily U.S. dollar denominated.

The above tables include $48.4, $112.2, and $235.8 for the years ended December 31, 2010, 2009, and 2008, respectively, in other-than-temporary write-downs related to credit impairments, which are recognized in earnings. The remaining $98.7, $282.3, and $816.7, in write-downs for the years ended December 31, 2010, 2009, and 2008, respectively, are related to intent impairments.

The following tables summarize these intent impairments, which are also recognized in earnings, by type for the years ended December 31, 2010, 2009, and 2008.

	2010				2009			2008
				No. of			No. of			No. of
		Impairment		Securities	Impairment		Securities	Impairment		Securities
U.S. Treasuries	$		1.7	1	$	156.0	15	$	-	-
Public utilities			1.4	5		-	-		-	-
Other U.S. corporate			5.3	19		35.9	42		204.5	180
Foreign(1)			28.5	15		48.7	41		81.3	78
Residential mortgage-backed			8.6	18		2.4	1		291.8	128
Commercial mortgage-backed			16.2	6		17.7	11		220.8	29
Other asset-backed			37.0	26		21.6	10		18.3	14
Total	$		98.7	90	$	282.3	120	$	816.7	429

(1)Primarily U.S. dollar denominated.

C-41

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

The following tables identify the noncredit impairments recognized in Accumulated other comprehensive income (loss) by type for the years ended December 31, 2010 and 2009.

	2010				2009
				No. of			No. of
		Impairment		Securities	Impairment		Securities
Commercial mortgage-backed	$		14.9	2	$	-	-
Residential mortgage-backed		18.2		24	10.9		18
Other asset-backed		19.0		15	28.1		13
Total	$		52.1	41	$	39.0	31

(1)Primarily U.S. dollar denominated.

The fair value of fixed maturities with other-than-temporary impairments as of December 31, 2010, 2009, and 2008 was $2.0 billion, $3.0 billion, and $2.1 billion, respectively.

The following tables identify the amount of credit impairments on fixed maturities for the years ended December 31, 2010 and 2009, for which a portion of the OTTI was recognized in Accumulated other comprehensive income (loss), and the corresponding changes in such amounts.

		2010			2009
Balance at January 1	$	46.0		$	-
Implementation of OTTI guidance included in ASC Topic 320(1)		-			25.1
Additional credit impairments:
On securities not previously impaired		12.0			13.6
On securities previously impaired		8.7			8.8
Reductions:
Securities sold, matured, prepaid or paid down		(7.5	)		(1.5	)
Balance at December 31	$	59.2		$	46.0

(1)Represents credit losses remaining in Retained earnings related to the adoption of new guidance on OTTI, included in ASC Topic 320, on April 1, 2009.

C-42

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Net Investment Income

Sources of Net investment income were as follows for the years ended December 31, 2010, 2009, and 2008.

	2010		2009		2008
Fixed maturities	$	1,182.4	$	1,125.7	$	1,019.3
Equity securities, available-for-sale	15.3		15.4		(13.2)
Mortgage loans on real estate	104.0		113.4		116.1
Real estate	-		6.6		9.0
Policy loans	13.3		13.7		14.2
Short-term investments and cash equivalents	0.8		2.4		5.8
Other	68.0		4.7		(0.1)
Gross investment income	1,383.8		1,281.9		1,151.1
Less: investment expenses	41.5		39.8		80.1
Net investment income	$	1,342.3	$	1,242.1	$	1,071.0

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 credit-related and intent-related other-than-temporary impairment of investments and changes in fair value of fixed maturities accounted for using the fair value option and 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, 2010, 2009, and 2008.

	2010			2009			2008
Fixed maturities, available-for-sale, including net OTTI of $(144.5), $(347.1), and $(987.0) in 2010, 2009, and 2008, respectively	$	38.7		$	(15.1	)	$	(1,068.9	)
Fixed maturities, at fair value using the fair value option	(39.2		)	57.0			6.0
Equity securities, available-for-sale, including net OTTI of $0.0, $(19.5), and $(55.1) in 2010, 2009, and 2008, respectively	4.1			(2.9		)	(81.0		)
Derivatives	(36.6		)	(267.6		)	(105.0		)
Other investments, including net OTTI of $(2.6), $(27.9), and $(10.4) in 2010, 2009, and 2008, respectively	4.9			(16.9		)	(18.7		)
Net realized capital losses	$	(28.1	)	$	(245.5	)	$	(1,267.6	)
After-tax net realized capital gains (losses)	$	1.5		$	(67.4	)	$	(1,151.9	)

C-43

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Proceeds from the sale of fixed maturities and equity securities and the related gross realized gains and losses were as follows for the periods ended December 31, 2010, 2009, and 2008.

	2010		2009		2008
Proceeds on sales	$	5,312.9	$	4,674.6	$	8,426.5
Gross gains	213.6		228.5		120.0
Gross losses	27.8		87.4		234.4

3.Financial Instruments

The following tables present the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2010 and 2009.

	2010
	Level 1		Level 2		Level 3(1)		Total
Assets:
Fixed maturities including securities pledged:
U.S. Treasuries	$	646.1	$	68.3	$	-	$	714.4
U.S. government agencies and authorities	-		582.6		-		582.6
U.S. corporate, state and municipalities	-		7,362.3		11.2		7,373.5
Foreign	-		4,762.1		11.4		4,773.5
Residential mortgage-backed securities	-		2,102.9		252.5		2,355.4
Commercial mortgage-backed securities	-		1,029.6		-		1,029.6
Other asset-backed securities	-		341.1		247.7		588.8
Equity securities, available-for-sale	183.3		-		27.7		211.0
Derivatives:
Interest rate contracts	3.5		223.3		-		226.8
Foreign exchange contracts	-		0.7		-		0.7
Credit contracts	-		6.7		-		6.7
Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement	1,128.8		-		-		1,128.8
Assets held in separate accounts	42,337.4		4,129.4		22.3		46,489.1
Total	$	44,299.1	$	20,609.0	$	572.8	$	65,480.9
Liabilities:
Product guarantees	$	-	$	-	$	3.0	$	3.0
Fixed Indexed Annuities (“FIA”)	-		-		5.6		5.6
Derivatives:
Interest rate contracts	0.1		227.0		-		227.1
Foreign exchange contracts	-		38.5		-		38.5
Credit contracts	-		1.1		13.6		14.7
Total	$	0.1	$	266.6	$	22.2	$	288.9

(1)Level 3 net assets and liabilities accounted for 0.8% of total net 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 net assets and liabilities in relation to total net assets and liabilities measured at fair value on a recurring basis totaled 2.8%.

C-44

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

	2009
	Level 1		Level 2		Level 3(1)		Total
Assets:
Fixed maturities including securities pledged:
U.S. Treasuries	$	1,861.9	$	-	$	-	$	1,861.9
U.S. government agencies and authorities	-		673.6		-		673.6
U.S. corporate, state and municipalities	-		5,842.5		-		5,842.5
Foreign	-		3,358.3		-		3,358.3
Residential mortgage-backed securities	-		772.1		1,237.9		2,010.0
Commercial mortgage-backed securities	-		1,331.1		-		1,331.1
Other asset-backed securities	-		342.9		188.8		531.7
Equity securities, available-for-sale	148.1		-		39.8		187.9
Derivatives:
Interest rate contracts	-		175.0		-		175.0
Credit contracts	-		0.2		-		0.2
Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement	1,128.0		1.8		-		1,129.8
Assets held in separate accounts	38,052.5		3,261.0		56.3		41,369.8
Total	$	41,190.5	$	15,758.5	$	1,522.8	$	58,471.8
Liabilities:
Product guarantees	$	-	$	-	$	6.0	$	6.0
Derivatives:
Interest rate contracts	-		234.9		-		234.9
Foreign exchange contracts	-		43.3		-		43.3
Credit contracts	-		5.2		48.3		53.5
Total	$	-	$	283.4	$	54.3	$	337.7

(1)   Level 3 net assets and liabilities accounted for 2.5% of total net 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 net assets and liabilities in relation to total net assets and liabilities measured at fair value on a recurring basis totaled 8.4%.

Transfers in and out of Level 1 and 2

Certain U.S. Treasury securities valued by commercial pricing services where prices are derived using market observable inputs have been transferred from Level 1 to Level 2.  These securities for the year ended December 31, 2010, include U.S. Treasury strips of $60.6 in which prices are modeled incorporating a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data. The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

C-45

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Valuation of Financial Assets and Liabilities

As described below, certain assets and liabilities are measured at estimated fair value on the Company’s Consolidated Balance Sheets. In addition, further disclosure of estimated fair values is included in this Financial Instruments footnote. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement which is determined based on a hypothetical transaction at the measurement date, from a market participant’s perspective. The Company considers three broad valuation techniques when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation techniques and allows for the use of unobservable inputs to the extent that observable inputs are not available.

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third party commercial pricing services, brokers, and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from brokers and third party commercial pricing services are non-binding. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades, or monitoring of trading volumes.

All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during 2010, except for the Company’s use of commercial pricing services to value CMO-Bs which commenced in the first quarter of 2010. CMO-Bs were previously valued using an average of broker quotes when more than one broker quote is provided.

Level 3 Financial Instruments

The fair values of certain 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 (i.e., Level 3 as defined by ASC 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These

C-46

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair value of financial assets and liabilities classified as Level 3, additional information is presented below, with particular attention addressed to the reserves for product guarantees due to the impact on the Company’s results of operations.

C-47

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following table summarizes the changes in fair value of the Company’s Level 3 assets and liabilities for the year ended December 31, 2010.
	December 31, 2010
																Change in
	Fair Value		Total realized/unrealized					Purchases,		Transfers		Transfers		Fair Value		unrealized gains
	as of		gains (losses) included in:					issuances, and		in to		out of		as of		(losses) included
	January 1		Net income			OCI		settlements		Level 3(2)		Level 3(2)		December 31		in earnings(3)
Fixed maturities, including securities pledged:
U.S. corporate, state and municipalities	$	-	$	-		$	-	$	-	$	11.2	$	-	$	11.2	$	-
Foreign	-		0.1			0.6		2.7		8.0		-		11.4		-
Residential mortgage-backed securities	1,237.9		(23.6)			4.3		62.5		0.6		(1,029.2)		252.5		(26.3)
Other asset-backed securities	188.8		(59.4)			93.3		(20.2)		45.2		-		247.7		(59.3)
Total fixed maturities, including securities pledged	1,426.7		(82.9)			98.2		45.0		65.0		(1,029.2)		522.8		(85.6)
Equity securities, available for sale	39.8		(0.4)			0.6		13.8		-		(26.1)		27.7		-
Derivatives, net	(48.3)		0.3			-		34.4		-		-		(13.6)		1.8
Product guarantees	(6.0)		9.0		(1)	-		(6.0)		-		-		(3.0)		-
Fixed Indexed Annuities	-		0.3		(1)	-		(5.9)		-		-		(5.6)		-
Separate Accounts	56.3		5.8			-		(57.7)		17.9		-		22.3		1.0

(1)This amount is included in Interest credited and other benefits to contract owners on the  Consolidated 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.

(2)The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

(3)For financial instruments still held as of December 31. Amounts are included in Net investment income and Net realized capital losses on the  Consolidated Statements of Operations.

C-48

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following table summarizes the changes in fair value of the Company’s Level 3 assets and liabilities for the year ended December 31, 2009.
	December 31, 2009
																Change in
	Fair Value		Total realized/unrealized					Purchases,		Transfers		Transfers		Fair Value		unrealized gains
	as of		gains (losses) included in:					issuances, and		in to		out of		as of		(losses) included
	January 1		Net income			OCI		settlements		Level 3(2)		Level 3(2)		December 31		in earnings(3)
Fixed maturities, including securities pledged:
Residential mortgage-backed securities	$	1,942.6	$	36.9		$	149.6	$	(408.7)	$	-	$	(482.5)	$	1,237.9	$	(7.5)
Other asset-backed securities	225.3		(0.7)			(11.9)		(23.9)		-		-		188.8		(18.6)
Total fixed maturities, including securities pledged	2,167.9		36.2			137.7		(432.6)		-		(482.5)		1,426.7		(26.1)
Equity securities, available for sale	-		(11.0)			5.3		1.0		44.5		-		39.8		-
Derivatives, net	(65.8)		6.8			-		2.9		-		7.8		(48.3)		6.6
Product guarantees	(220.0)		219.4		(1)	-		(5.4)		-		-		(6.0)		-
Separate Accounts	141.4		3.1			-		(73.6)		11.1		(25.7)		56.3		0.8
(1)This amount is included in Interest credited and other benefits to contract owners on the  Consolidated 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.
(2)The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
(3)For financial instruments still held as of December 31. Amounts are included in Net investment income and Net realized capital losses on the  Consolidated Statements of Operations.

C-49

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The transfers out of Level 3 during the year ended December 31, 2010 in fixed maturities, including securities pledged, are primarily due to the Company’s use of commercial pricing services to value CMO-Bs. These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data and have been classified as Level 2. The CMO-Bs had previously been valued by using the average of broker quotes when more than one broker quote is provided.

The remaining transfers in and out of Level 3 for fixed maturities, equity securities and separate accounts during the year ended December 31, 2010 are due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers into Level 3, as these securities are generally less liquid with very limited trading activity or where less transparency exists corroborating the inputs to the valuation methodologies. When securities are valued using more widely available information, the securities are transferred out of Level 3 and into Level 1 or 2, as appropriate.

The carrying values and estimated fair values of certain of the Company’s financial instruments were as follows at December 31, 2010 and 2009.

	2010				2009
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Assets:
Fixed maturities, available-for-sale, including securities pledged	$	16,964.4	$	16,964.4	$	15,375.5	$	15,375.5
Fixed maturities, at fair value using the fair value option	453.4		453.4		233.6		233.6
Equity securities, available-for-sale	211.0		211.0		187.9		187.9
Mortgage loans on real estate	1,842.8		1,894.8		1,874.5		1,792.8
Loan-Dutch State obligation	539.4		518.7		674.1		645.5
Policy loans	253.0		253.0		254.7		254.7
Limited partnerships/corporations	463.5		463.5		426.2		426.2
Cash, cash equivalents, short-term investments, and short-term investments under securities loan agreement	1,128.8		1,128.8		1,129.8		1,129.8
Derivatives	234.2		234.2		175.2		175.2
Notes receivable from affiliates	175.0		177.0		175.0		169.6
Assets held in separate accounts	46,489.1		46,489.1		41,369.8		41,369.8
Liabilities:
Investment contract liabilities:
With a fixed maturity	1,313.2		1,311.5		1,359.0		1,450.4
Without a fixed maturity	16,902.6		16,971.6		16,441.2		17,688.4
Product guarantees	3.0		3.0		6.0		6.0
Fixed Indexed Annuities	5.6		5.6		-		-
Derivatives	280.3		280.3		331.7		331.7

C-50

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The following disclosures are made in accordance with the requirements of ASC Topic 825 which 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.

ASC Topic 825 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 which are not carried at fair value on the Consolidated Balance Sheets, and therefore not categorized in the fair value hierarchy:

Limited partnerships/corporations: The fair value for these investments, primarily private equities and hedge funds, is estimated based on the Net Asset Value (“NAV”) as provided by the investee.

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.

Loan - Dutch State obligation: The fair value of the Dutch State loan obligation is estimated utilizing discounted cash flows from the Dutch Strip Yield Curve.

Policy loans: The fair value of policy loans is equal to the carrying, or cash surrender, value of the loans.  Policy loans are fully collateralized by the account value of the associated insurance contracts.

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

With a fixed maturity: Fair value is estimated by discounting cash flows, including associated expenses for maintaining the contracts, at rates, which are market risk-free rates augmented by credit spreads on current Company credit default swaps. The augmentation is present to account for non-performance risk. A margin for nonfinancial risks associated with the contracts is also included.

Without a fixed maturity: Fair value is estimated as the mean present value of stochastically modeled cash flows associated with the contract liabilities relevant to both the contractholder and to the Company. Here, the stochastic valuation scenario set is consistent with current market parameters, and discount is taken using stochastically evolving short risk-free rates in the scenarios augmented by credit spreads on current Company debt. The augmentation in the discount is present to account for non-performance risk. Margins for non-financial risks associated with the contract liabilities are also included.

C-51

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Notes receivable from affiliates: Estimated fair value of the Company’s notes receivable from affiliates is based upon discounted future cash flows using a discount rate approximating the current market rate.

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.

Mortgage Loans on Real Estate

The Company’s mortgage loans on real estate are summarized as follows at December 31, 2010 and 2009.

	2010		2009
	Carrying Value		Carrying Value
Total commercial mortgage loans	$	1,844.1	$	1,876.5
Collective valuation allowance	(1.3)		(2.0)
Total net commercial mortgage loans	$	1,842.8	$	1,874.5

As of December 31, 2010, all commercial mortgage loans are held-for-investment.  The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk.  The Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate.  All mortgage loans are evaluated by seasoned underwriters, including an appraisal of loan-specific credit quality, property characteristics, and market trends, and assigned a quality rating using the Company’s internally developed quality rating system. Loan performance is continuously monitored on a loan-specific basis through the review of borrower submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items.  This review ensures properties are performing at a consistent and acceptable level to secure the debt.

C-52

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The Company has established a collective valuation allowance for probable incurred, but not specifically identified, losses related to factors inherent in the lending process.  The changes in the valuation allowance were as follows for the years ended December 31, 2010 and 2009.

	2010			2009
	Carrying Value			Carrying Value
Collective valuation allowance for losses, beginning of year(1)	$		2.0	$		-
Addition to / (release of) allowance for losses	(0.7)			2.0
Collective valuation allowance for losses, end of year	$	1.3		$	2.0

(1) Allowance was not recorded prior to 2009.

As indicators of credit quality, the commercial mortgage loan portfolio is the recorded investment, excluding collective valuation allowances, by the indicated loan-to-value ratio and debt service coverage ratio, as reflected in the following tables at December 31, 2010 and 2009.

	2010(1)		2009(1)
Loan-to-Value Ratio:
0% - 50%	$	536.4	$	569.0
50% - 60%	564.6		562.9
60% - 70%	610.1		593.6
70% - 80%	113.9		130.4
80% - 90%	19.1		20.6
Total Commercial Mortgage Loans	$	1,844.1	$	1,876.5

(1) Balances do not include allowance for mortgage loan credit losses.

	2010(1)		2009(1)
Debt Service Coverage Ratio:
Greater than 1.5x	$	1,270.0	$	1,233.9
1.25x - 1.5x	182.1		229.6
1.0x - 1.25x	191.8		152.6
Less than 1.0x	137.4		195.4
Mortgages secured by loans on land or construction loans	62.8		65.0
Total Commercial Mortgage Loans	$	1,844.1	$	1,876.5

(1) Balances do not include allowance for mortgage loan credit losses.

The Company believes it has a high quality mortgage loan portfolio with 100% of commercial mortgages classified as performing.  The Company defines delinquent commercial mortgage loans consistent with industry practice as 60 days past due.  As of December 31, 2010, there were no commercial loans classified as delinquent.  The Company’s policy is to recognize interest income until a loan becomes 90 days delinquent or foreclosure proceedings are commenced, at which point interest accrual is discontinued. Interest accrual is not resumed until past due payments are brought current. At December 31, 2010, there were no commercial mortgage loans on nonaccrual status.

C-53

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

All commercial mortgages are rated for the purpose of quantifying the level of risk.  Those loans with higher risk are placed on a watch list and are closely monitored for collateral deficiency or other credit events that may lead to a potential loss of principal or interest.  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.

The carrying values and unpaid principal balances (prior to any charge-off) of impaired commercial mortgage loans were as follows for the years ended December 31, 2010 and 2009.

	2010		2009
	Carrying Value		Carrying Value
Impaired loans without valuation allowances	$	9.5	$	26.8
Unpaid principle balance of impaired loans	$	12.0	$	34.9

Derivative Financial Instruments

See the Organization and Significant Accounting Policies footnote for disclosure regarding the Company’s purpose for entering into derivatives and the policies on valuation and classification of derivatives. In addition, the Company’s derivatives are generally not accounted for using hedge accounting treatment under US GAAP, as the Company has not historically sought hedge accounting treatment. The Company enters into the following derivatives:

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 are used by the Company to hedge annuity products against rising interest rates.

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.

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.

C-54

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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 par minus recovery value of the swap contract.

Forwards: Certain forwards are acquired to hedge the Company’s CMO-B portfolio against movements in interest rates, particularly mortgage rates. On the settlement date, the Company will either receive a payment (interest rate drops on owned forwards or interest rate rises on purchased forwards) or will be required to make a payment (interest rate rises on owned forwards or interest rate drops on purchased forwards).

Futures: Futures contracts are used to hedge against a decrease in certain equity indices. Such decreases 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.  A decrease in variable annuity account values would also result in lower fee income.  A decrease in equity markets may also negatively impact the Company’s investment in equity securities.  The futures income would serve to offset these effects. Futures contracts are also used to hedge against an increase in certain equity indices.  Such increases may result in increased payments to contract holders of fixed indexed annuity contracts, and the futures income would serve to offset this increased expense.

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.

Managed Custody Guarantees: The Company issued certain credited rate guarantees on externally managed variable bond funds that represent stand alone derivatives. The market value is partially determined by, among other things, levels of or changes in interest rates, prepayment rates, and credit ratings/spreads.

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-term or long-term), exchange rates, prepayment rates, equity rates, or credit ratings/spreads.

C-55

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The notional amounts and fair values of derivatives were as follows as of December 31, 2010 and 2009.

	2010					2009
	Notional	Asset		Liability		Notional	Asset		Liability
	Amount	Fair Value		Fair Value		Amount	Fair Value		Fair Value
Derivatives: Qualifying for hedge accounting (1)
Interest rate contracts	7.2	$	0.6	$	-	-	$	-	$	-
Foreign exchange contracts	7.2	-		0.1		-	-		-
Derivatives: Non-Qualifying for  hedge accounting (1)
Interest rate contracts	16,737.7	226.2		227.1		9,750.1	175.0		234.9
Foreign exchange contracts	233.0	0.7		38.4		199.5	-		43.3
Equity contracts	3.7	-		-		-	-		-
Credit contracts	641.4	6.7		14.7		243.9	0.2		53.5
Managed custody guarantees(2)	N/A	-		3.0		N/A	-		6.0
Embedded derivatives:
Within retail annuity products(2)	N/A	-		5.6		N/A	-		-
Total		$	234.2	$	288.9		$	175.2	$	337.7

N/A - Not applicable.

(1)The fair values are reported in Derivatives or Other liabilities on the  Consolidated Balance Sheets.

(2)The fair values are reported in Future policy benefits and claim reserves on the  Consolidated Balance Sheets.

Net realized gains (losses) on derivatives were as follows for the years ended December 31, 2010 and 2009.

	2010			2009
Derivatives: Non-Qualifying for hedge accounting (1)
Interest rate contracts	$	(53.4	)	$	(178.8	)
Foreign exchange contracts	7.4			(23.3		)
Equity contracts	0.5			(49.0		)
Credit contracts	8.9			(16.5		)
Managed custody guarantees(2)	4.1			34.0
Embedded derivatives:
Within retail annuity products(2)	5.2			185.4
Total	$	(27.3	)	$	(48.2	)

(1)Changes in value are included in Net realized capital losses on the  Consolidated Statements of Operations.

(2)Changes in value are included in Interest credited and other benefits to contract owners on the Consolidated

Statements of Operations.

Credit Default Swaps

The Company has entered into various credit default swaps. When credit default swaps are sold, the Company assumes credit exposure to certain assets that it does not own.

C-56

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Credit default swaps may also be purchased to reduce credit exposure in the Company’s portfolio. Credit default swaps involve a transfer of credit risk from one party to another in exchange for periodic payments. These instruments are typically written for a maturity period of five years and do not contain recourse provisions, which would enable the seller to recover from third parties. The Company has International Swaps and Derivatives Associations, Inc. (“ISDA”) agreements with each counterparty with which it conducts business and tracks the collateral positions for each counterparty. To the extent cash collateral is received, it is included in Payables under securities loan agreement, including collateral held, on the Consolidated Balance Sheets and is reinvested in short-term investments.  Collateral held is used in accordance with the Credit Support Annex (“CSA”) to satisfy any obligations. Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Consolidated Balance Sheets. 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 par minus recovery value of the swap contract. At December 31, 2010, the fair value of credit default swaps of $6.7 and $14.7 was included in Derivatives and Other liabilities, respectively, on the Consolidated Balance Sheets. At December 31, 2009, the fair value of credit default swaps of $0.2 and $53.5 was included in Derivatives and Other liabilities, respectively, on the Consolidated Balance Sheets. As of December 31, 2010 and 2009, the maximum potential future exposure to the Company on the sale of credit protection under credit default swaps was $625.6 and $84.4, respectively.

4.Deferred Policy Acquisition Costs and Value of Business Acquired

Activity within DAC was as follows for the years ended December 31, 2010, 2009, and 2008.

	2010			2009			2008
Balance at January 1	$	901.8		$	865.5		$	728.6
Deferrals of commissions and expenses	142.2			108.2			168.7
Amortization:
Amortization	(77.0		)	(39.3		)	(112.5		)
Interest accrued at 5.5% to 7%	64.6			58.0			50.6
Net amortization included in Consolidated Statements of Operations	(12.4		)	18.7			(61.9		)
Change in unrealized capital gains/losses on available-for-sale securities	(8.6		)	(90.6		)	30.1
Balance at December 31	$	1,023.0		$	901.8		$	865.5

The estimated amount of DAC amortization expense, net of interest, is $38.4, $57.8, $56.8, $55.5, and $55.3, for the years 2011, 2012, 2013, 2014, and 2015, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

C-57

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Activity within VOBA was as follows for the years ended December 31, 2010, 2009, and 2008.

	2010			2009			2008
Balance at January 1	$	991.5		$	1,832.5		$	1,253.2
Deferrals of commissions and expenses	23.6			40.4			33.3
Amortization:
Amortization	(8.7		)	(170.5		)	(144.2		)
Interest accrued at 5.5% to 7%	74.3			72.2			77.2
Net amortization included in Consolidated Statements of Operations	65.6			(98.3		)	(67.0		)
Change in unrealized capital gains/losses on available-for-sale securities	(364.3		)	(783.1		)	613.0
Balance at December 31	$	716.4		$	991.5		$	1,832.5

The estimated amount of VOBA amortization expense, net of interest, is $50.0, $72.3, $69.5, $64.2, and $61.2, for the years 2011, 2012, 2013, 2014, and 2015, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

5.Capital Contributions, Dividends and Statutory Information

ILIAC’s ability to pay dividends to its parent is subject to the prior approval of insurance regulatory authorities of the State of Connecticut 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 ILIAC’s earned statutory surplus at the prior year end or (2) ILIAC’s prior year statutory net gain from operations.

During the year ended December 31, 2010, ILIAC paid a $203.0 dividend on its common stock to its Parent.  During the years ended December 31, 2009 and 2008, ILIAC did not pay any dividends on its common stock to its Parent. On October 30, 2010, IFA paid a $60.0 dividend to ILIAC, its parent, which was eliminated in consolidation.

During the year ended December 31, 2010, ILIAC did not receive any capital contributions from its Parent. On November 12, 2008, ING issued to The State of the Netherlands (the “Dutch State”) non-voting Tier 1 securities for a total consideration of EUR 10 billion.  On February 24, 2009, $2.2 billion was contributed to direct and indirect insurance company subsidiaries of ING America Insurance Holdings, Inc. (“ING AIH”), of which $365.0 was contributed to the Company.  The contribution was comprised of the proceeds from the investment by the Dutch State and the redistribution of currently existing capital within ING.  During 2008, ILIAC did not receive any cash capital contributions from Lion.

C-58

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

On February 18, 2011, ILIAC received a $150.0 capital contribution from its Parent as part of the redistribution of currently existing capital within ING US Insurance Operations.

The State of Connecticut Insurance Department (the “Department”) recognizes as net income and capital and surplus those amounts determined in conformity with statutory accounting practices prescribed or permitted by the Department, which differ in certain respects from accounting principles generally accepted in the United States.  Statutory net income (loss) was $66.0, $271.6, and $(428.4), for the years ended December 31, 2010, 2009, and 2008, respectively.  Statutory capital and surplus was $1.7 billion and $1.8 billion as of December 31, 2010 and 2009, respectively.  As specifically prescribed by statutory accounting practices, statutory surplus as of December 31, 2010 included the impact of the $150.0 capital contribution received by ILIAC from its Parent on February 18, 2011.

Effective December 31, 2009, the Company adopted Actuarial Guideline 43 – Variable Annuity Commissioners Annuity Reserve Valuation Method (“AG43”) for its statutory basis of accounting.  The adoption of AG43 resulted in higher reserves than those calculated under previous standards by $97.9.  Where the application of AG43 produces higher reserves than the Company had otherwise established under previous standards, the Company may request permission from the Department to grade-in the impact of higher reserve over a three year period.  The Company elected this grade-in provision, as allowed under AG43 and as approved by the Department, which allows the Company to reflect the impact of adoption of $97.9 over a three year period.  The impact of the grade-in for the years ended December 31, 2010 and 2009 was a $23.0 and $32.6, respectively, increase in reserves and a corresponding decrease in statutory surplus.

Effective December 31, 2009, the Company adopted SSAP No. 10R, Income Taxes, for its statutory basis of accounting.  This statement requires the Company to calculate admitted deferred tax assets based upon what is expected to reverse within one year with a cap on the admitted portion of the deferred tax asset of 10% of capital and surplus for its most recently filed statement.  If the Company’s risk-based capital (“RBC”) levels, after reflecting the above limitation, exceeds 250% of the authorized control level, the statement increases the limitation on admitted deferred tax assets from what is expected to reverse in one year to what is expected to reverse over the next three years and increases the cap on the admitted portion of the deferred tax asset from 10% of capital and surplus for its most recently filed statement to 15%.  Other revisions in the statement include requiring the Company to reduce the gross deferred tax asset by a statutory valuation allowance adjustment if, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some portion of or all of the gross deferred tax assets will not be realized. To temper this positive RBC impact, and as a temporary measure at December 31, 2009 only, a 5% pre-tax RBC charge must be applied to the additional admitted deferred tax assets generated by SSAP 10R.  The adoption for 2009 had a December 31, 2009 sunset; however, during 2010, the 2009

C-59

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

adoption, including the 5% pre-tax RBC charge, was extended through December 31, 2011.  The effects on the Company’s statutory financial statements of adopting this change in accounting principle were increases to total assets and capital and surplus of $68.9 and $51.1 as of December 31, 2010 and 2009, respectively.  This adoption had no impact on total liabilities or net income.

6.Additional Insurance Benefits and Minimum Guarantees

The Company calculates an additional liability for certain GMDBs and other minimum guarantees in order to recognize the expected value of these benefits in excess of the projected account balance over the accumulation period based on total expected assessments.

The Company regularly evaluates estimates used to adjust the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised.

As of December 31, 2010, the separate account liability for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees were $6.1 billion and $4.4, respectively. As of December 31, 2009, the separate account liability for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees were $6.9 billion and $3.6, respectively.

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, 2010 and 2009, was $6.1 billion and $6.9 billion, respectively.

7.Income Taxes

Income taxes expense (benefit) consisted of the following for the years ended December 31, 2010, 2009, and 2008.

	2010		2009			2008
Current tax expense (benefit):
Federal	$	73.2	$	27.5		$	(121.8	)
State	-		(0.9		)	(18.1		)
Total current tax expense (benefit)	73.2		26.6			(139.9		)
Deferred tax expense:
Federal	67.6		23.0			31.6
Total deferred tax expense	67.6		23.0			31.6
Total income tax expense (benefit)	$	140.8	$	49.6		$	(108.3	)

C-60

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated 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, 2010, 2009, and 2008.

	2010			2009			2008
Income (loss) before income taxes	$	577.7		$	403.5		$	(1,138.5	)
Tax rate	35.0%			35.0%			35.0%
Income tax expense (benefit) at federal statutory rate	202.2			141.2			(398.5		)
Tax effect of:
Dividend received deduction	(23.3		)	(2.6		)	(15.5		)
IRS audit settlement	(26.8		)	(0.1		)	(10.1		)
State audit settlement	-			(1.2		)	(12.6		)
State tax expense	0.6			0.1			1.3
Tax valuation allowance	(13.7		)	(92.2		)	333.0
Other	1.8			4.4			(5.9		)
Income tax expense (benefit)	$	140.8		$	49.6		$	(108.3	)

Temporary Differences

The tax effects of temporary differences that give rise to Deferred tax assets and Deferred tax liabilities at December 31, 2010 and 2009, are presented below.

	2010			2009
Deferred tax assets:
Insurance reserves	$	187.1		$	140.7
Investments	112.5			286.7
Postemployment benefits	83.7			73.5
Compensation	45.9			46.3
Other	22.1			9.5
Total gross assets before valuation allowance	451.3			556.7
Less: valuation allowance	(120.1		)	(202.5		)
Assets, net of valuation allowance	331.2			354.2
Deferred tax liabilities:
Net unrealized gain	(71.9		)	(55.3		)
Value of business acquired	(410.5		)	(379.2		)
Deferred policy acquisition costs	(315.7		)	(270.9		)
Total gross liabilities	(798.1		)	(705.4		)
Net deferred income tax liability	$	(466.9	)	$	(351.2	)

Net unrealized capital gains and losses are presented as a component of other comprehensive income (loss) in Shareholder’s equity, net of deferred taxes.

Valuation allowances are provided when it is considered unlikely that deferred tax assets will be realized. At December 31, 2010 and 2009, the Company had a tax valuation allowance of $109.0 and $197.5, respectively, related to capital losses.  As of December 31, 2010 and 2009, the Company had full tax valuation allowances of $11.1

C-61

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

and $5.0, respectively, related to foreign tax credits, the benefit of which is uncertain.  The change in net unrealized capital gains (losses) includes an increase (decrease) in the tax valuation allowance of $(68.7), $(38.2), and $(6.4) for the years ended December 31, 2010, 2009, and 2008, respectively.

Tax Sharing Agreement

Under the intercompany tax sharing agreement, ILIAC has a payable to and a receivable from ING AIH of $49.3 and $23.9 for federal income taxes as of December 31, 2010 and 2009, respectively.

See Related Party Transactions footnote for more information.

Unrecognized Tax Benefits

Reconciliations of the change in the unrecognized income tax benefits for the periods ended December 31, 2010 and 2009 are as follows:

	2010			2009
Balance at beginning of period	$	12.8		$	22.1
Additions for tax positions related to current year	-			0.9
Additions for tax positions related to prior years	36.2			3.5
Reductions for tax positions related to prior years	(25.8		)	(13.3		)
Reductions for settlements with taxing authorities	(0.2		)	(0.4		)
Balance at end of period	$	23.0		$	12.8

The Company had $0.0 and $24.8 of unrecognized tax benefits as of December 31, 2010 and 2009, respectively, which 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 (benefit) on the Balance Sheet and the Statement of Operations, respectively. The Company had accrued interest of $0.0 and $3.3 as of December 31, 2010 and 2009, respectively. The decrease in accrued interest during the year ended December 31, 2010 is primarily related to the settlement of the 2004 through 2008 federal audits.

Tax Regulatory Matters

In September 2010, the Internal Revenue Service (“IRS”) completed its examination of the Company’s returns through tax year 2008.  The provision for the year ended December 31, 2010 reflected non-recurring favorable adjustments, resulting from a

C-62

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.

The Company is currently under audit by the IRS and has agreed to participate in the Compliance Assurance Program (“CAP”) for tax years 2009 and 2010.  It is anticipated that the IRS audit of the 2009 tax year will be finalized within the next twelve months.  Upon finalization of the IRS examination, it is reasonably possible that the unrecognized tax benefits will decrease by up to $23.0.

8.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 other than Company agents. The Retirement Plan was amended and restated effective January 1, 2008. The Retirement Plan was amended on July 1, 2008, related to the admission of the employees from the acquisition of CitiStreet LLC (“CitiStreet”) by Lion, and ING North America filed a request for a determination letter on the qualified status of the Retirement Plan, but has not yet received a favorable determination letter. Additionally, effective January 1, 2009, the Retirement Plan was amended to provide that anyone hired or rehired by the Company on or after January 1, 2009, would not be eligible to participate in the Retirement Plan.

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 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 $27.2, $22.3, and $14.0 for the years ended December 31, 2010, 2009, and 2008, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

Defined Contribution Plan

ING North America sponsors the ING Americas Savings Plan and ESOP (the “Savings Plan”). Substantially all employees of ING North America and its affiliates (excluding certain employees, including but not limited to Career Agents) are eligible to participate, including the Company’s employees other than Company agents. Career Agents are certain, full-time insurance salespeople who have entered into a career agent agreement

C-63

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

with the Company and certain other individuals who meet specified eligibility criteria.  The Savings Plan is a tax-qualified defined contribution retirement plan, which includes an employee stock ownership plan (“ESOP”) component. The Savings Plan was amended and restated effective January 1, 2008 and subsequently amended on July 1, 2008, with respect to the admission of employees from the acquisition of CitiStreet by Lion. The Savings Plan was most recently amended effective January 1, 2011 to permit Roth 401(k) contributions to be made to the Plan. ING North America filed a request for a determination letter on the qualified status of the Plan and received a favorable determination letter dated May 19, 2009. 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. The cost allocated to the Company for the Savings Plan were $10.7, $8.9, and $10.3, for the years ended December 31, 2010, 2009, and 2008, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

Non-Qualified Retirement Plans

Through December 31, 2001, the Company, in conjunction with ING North America, offered certain eligible employees (other than Career Agents) a Supplemental Executive Retirement Plan and an Excess Plan (collectively, the “SERPs”). Benefit accruals under Aetna Financial Services SERPs ceased, effective as of December 31, 2001 and participants begin accruing benefits under ING North America SERPs.  Benefits under the SERPs are determined based on an eligible employee’s years of service and average annual compensation for the highest five years during the last ten years of employment.

The Company, in conjunction with ING North America, sponsors the Pension Plan for Certain Producers of ING Life Insurance and Annuity Company (formerly the Pension Plan for Certain Producers of Aetna Life Insurance and Annuity Company) (the “Agents Non-Qualified Plan”). This plan covers certain full-time insurance salespeople who have entered into a career agent agreement with the Company and certain other individuals who meet the eligibility criteria specified in the plan (“Career Agents”). The Agents Non-Qualified Plan was terminated effective January 1, 2002. In connection with the termination, all benefit accruals ceased and all accrued benefits were frozen.

The SERPs and Agents Non-Qualified Plan, are non-qualified defined benefit pension plans, which means all the SERPs benefits are payable from the general assets of the Company and Agents Non-Qualified Plan benefits are payable from the general assets of the Company and ING North America. These non-qualified defined benefit pension plans are not guaranteed by the PBGC.

C-64

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Obligations and Funded Status

The following table summarizes the benefit obligations, fair value of plan assets, and funded status, for the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2010 and 2009.

	2010		2009
Change in Projected Benefit Obligation:
Projected benefit obligation, January 1	$	90.2	$	94.9
Interest cost	5.1		5.3
Benefits paid	(10.1)		(13.4)
Actuarial gain on obligation	11.6		3.4
Projected benefit obligation, December 31	$	96.8	$	90.2
Fair Value of Plan Assets:
Fair value of plan assets, December 31	$	-	$	-

Amounts recognized in the Consolidated Balance Sheets consist of:

	2010		2009
Accrued benefit cost	$	(96.8)	$	(90.2)
Accumulated other comprehensive income	30.0		21.1
Net amount recognized	$	(66.8)	$	(69.1)

Assumptions

The weighted-average assumptions used in the measurement of the December 31, 2010 and 2009 benefit obligation for the SERPs and Agents Non-Qualified Plan, were as follows:

	2010	2009
Discount rate at end of period	5.50%	6.00%
Rate of compensation increase	3.00%	1.50%

In determining the discount rate assumption, the Company utilizes current market information provided by its plan actuaries (particularly the Citigroup Pension Discount Curve Liability Index), including a discounted cash flow analysis of the Company’s pension obligation and general movements in the current market environment. The discount rate modeling process involves selecting a portfolio of high quality, noncallable bonds that will match the cash flows of the Retirement Plan. Based upon all available information, it was determined that 5.5% was the appropriate discount rate as of December 31, 2010, to calculate the Company’s accrued benefit liability.

C-65

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

The weighted-average assumptions used in calculating the net pension cost were as follows:

	2010	2009	2008
Discount rate	6.00%	6.00%	6.50%
Rate of increase in compensation levels	3.00%	1.50%	4.20%

Since the benefit plans of the Company are unfunded, an assumption for return on plan assets is not required.

Net Periodic Benefit Costs

Net periodic benefit costs for the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2010, 2009, and 2008, were as follows:

	2010		2009		2008
Interest cost	$	5.1	$	5.3	$	5.2
Net actuarial loss recognized in the year	2.6		2.1		-
Unrecognized past service cost recognized in the year	0.1		0.1		-
The effect of any curtailment or settlement	-		0.1		0.5
Net periodic benefit cost	$	7.8	$	7.6	$	5.7

Cash Flows

In 2011, the employer is expected to contribute $9.9 to the SERPs and Agents Non-Qualified Plan.  Future expected benefit payments related to the SERPs, and Agents Non-Qualified Plan, for the years ended December 31, 2011 through 2015, and thereafter through 2020, are estimated to be $9.9, $9.1, $7.9, $6.8, $5.5, and $28.4, respectively.

Stock Option and Share Plans

Through 2010, ING sponsored the ING Group Long-Term Equity Ownership Plan (“leo”), which provides employees of the Company who are selected by the ING Executive Board with 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

C-66

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated 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 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.

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 immediate vesting will 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 was allocated from ING compensation expense for the leo options and performance shares of $3.4, $3.7, and $4.1, for the years ended December 31, 2010, 2009, and 2008, respectively.

For leo, the Company recognized tax benefits of $0.7, $0.1, and $0.7, in 2010, 2009, and 2008, respectively.

Commencing in 2011, ING introduced a new long-term equity and deferred bonus plan, the Long-Term Sustainable Performance Plan (“LSPP”).  The terms applicable to an award under the LSPP will be set out in a grant agreement which is signed by the

C-67

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

participant when he or she accepts the award.  The LSPP will provide employees of the Company who are selected by the ING Executive Board with performance shares and will also require deferral of discretionary incentive bonus awards in excess of EU 100,000.  The performance shares awarded under the LSPP will be a contingent grant of ING ADR units and on settlement, the participant will have the right to either receive ING ADR units in kind or a cash amount equal to the closing price per ING share on the Euronent Amsterdam Stock Market on the settlement date times the number of vested ADR units, subject to achievement during the vesting period of performance targets based on return of equity and employee engagement. The excess bonus amount will be held in deferred ING ADR units or in a deferred cash account, or some combination thereof, depending on the total amount of the incentive bonus award, generally subject to vesting in three equal tranches over the three year period commencing on the date of incentive bonus payment.  Unlike the leo plan, no options on ING shares in the form of ADRs will be granted under the LSPP.  To vest in performance shares, deferred shares or deferred cash, an employee must generally be actively employed on the settlement date, although immediate full and partial vesting in the event of normal age or early retirement, death or disability, or termination due to redundancy or business divestiture will occur, similar to the vesting treatment in the leo plan.

In addition, the Company, in conjunction with ING North America, sponsors the following benefit plans:

§	The ING 401(k) Plan for ILIAC Agents, which allows participants to defer a specified percentage of eligible compensation on a pre-tax basis. Effective January 1, 2006, the Company match equals 60% of a participant’s pre-tax deferral contribution, with a maximum of 6% of the participant’s eligible pay. A request for a determination letter on the qualified status of the ING 401(k) Plan for ILIAC Agents was filed with the IRS on January 1, 2008. A favorable determination letter was received dated January 5, 2011.
§	The Producers’ Incentive Savings Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis. The Company matches such pre-tax contributions at specified amounts.
§	The Producers’ Deferred Compensation Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis.
§	Certain health care and life insurance benefits for retired employees and their eligible dependents. The post retirement health care plan is contributory, with retiree contribution levels adjusted annually and the Company subsidizes a portion of the monthly per-participant premium. Beginning August 1, 2009, the Company moved from self-insuring these costs and began to use a private-fee-for-service Medicare Advantage program for post-Medicare eligible retired participants. In addition, effective October 1, 2009, the Company no longer subsidizes medical premium costs for early retirees. This change does not impact any participant currently retired and receiving coverage under the plan or any employee who is eligible for coverage under the plan and whose employment ended before October

C-68

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

	1, 2009. The Company continues to offer access to medical coverage until retirees become eligible for Medicare. The life insurance plan provides a flat amount of noncontributory coverage and optional contributory coverage.
§	The ING Americas Supplemental Executive Retirement Plan, which is a non-qualified defined benefit restoration pension plan.
§	The ING Americas Deferred Compensation Savings Plan, which is a deferred compensation plan that includes a 401(k) excess component.

The benefit charges allocated to the Company related to these plans for the years ended December 31, 2010, 2009, and 2008, were $11.9, $12.1, and $13.9, respectively.

9.Related Party Transactions

Operating Agreements

ILIAC has certain agreements whereby it generates revenues and expenses with affiliated entities, as follows:

§	Investment Advisory agreement with ING Investment Management LLC (“IIM”), an affiliate, in which IIM provides asset management, administrative, and accounting services for ILIAC’s general account. ILIAC incurs a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred in the amounts of $23.7, $35.9, and $58.4, respectively.
§	Services agreement with ING North America for administrative, management, financial, and information technology services, dated January 1, 2001 and amended effective January 1, 2002. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred in the amounts of $209.7, $140.2, and $175.3, respectively.
§	Services agreement between ILIAC and its U.S. insurance company affiliates dated January 1, 2001, and amended effective January 1, 2002 and December 31, 2007. For the years ended December 31, 2010, 2009, and 2008, net expenses related to the agreement were incurred in the amount of $53.3, $26.3, and $19.6, respectively.
§	Service agreement with ING Institutional Plan Services, LLC (“IIPS”) effective November 30, 2008 pursuant to which IIPS provides recordkeeper services to certain benefit plan clients of ILIAC. For the years ended December 31, 2010 and 2009, net expenses related to the agreement were incurred in the amount of $6.4 and $4.9, respectively. An immaterial amount was incurred for the year ended December 31, 2008.
§	Intercompany agreement with IIM pursuant to which IIM agreed, effective January 1, 2010, to pay the Company, on a monthly basis, a portion of the revenues IIM earns as investment adviser to certain U.S. registered investment companies that are investment options under certain of the Company’s variable insurance products. For the year ended December 31, 2010, revenue under the IIM intercompany agreement was $24.1.

C-69

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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.  Revenues and expenses recorded as a result of transactions and agreements with affiliates may not be the same as those incurred if the Company was not a wholly-owned subsidiary of its Parent.

DSL has certain agreements whereby it generates revenues and expenses with affiliated entities, as follows:

§	Underwriting and distribution agreements with ING USA Annuity and Life Insurance Company (“ING USA”) and ReliaStar Life Insurance Company of New York (“RLNY”), affiliated companies, whereby DSL serves as the principal underwriter for variable insurance products. In addition, DSL is authorized to enter into agreements with broker-dealers to distribute the variable insurance products and appoint representatives of the broker-dealers as agents. For the years ended December 31, 2010, 2009, and 2008, commissions were collected in the amount of $220.0, $275.3, and $622.5. Such commissions are, in turn, paid to broker-dealers.
§	Intercompany agreements with each of ING USA, IIPS, ReliaStar Life Insurance Company and Security Life of Denver Insurance Company (individually, the “Contracting Party”) pursuant to which DSL agreed, effective January 1, 2010, to pay the Contracting Party, on a monthly basis, a portion of the revenues DSL earns as investment adviser to certain U.S. registered investment companies that are either investment option under certain variable insurance products of the Contracting Party or are purchased for certain customers of the Contacting Party. For the year ended December 31, 2010, expenses were incurred under these intercompany agreements in the aggregate amount of $204.5.
§	Prior to January 1, 2010, DSL was a party to a service agreement with ING USA pursuant to which ING USA provided DSL with managerial and supervisory services in exchange for a fee. This service agreement was terminated as of January 1, 2010. For the years ended December 31, 2009 and 2008, expenses were incurred under this service agreement in the amount of $123.2 and $139.2, respectively.
§	Service agreement with RLNY whereby DSL receives managerial and supervisory services and incurs a fee. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred under this service agreement in the amount of $3.3, $1.2, and $1.2, respectively.
§	Administrative and advisory services agreements with ING Investment LLC and IIM, affiliated companies, in which DSL receives certain services for a fee. The fee for these services is calculated as a percentage of average assets of ING Investors Trust. For the years ended December 31, 2010, 2009, and 2008, expenses were incurred in the amounts of $19.8, $12.5, and $14.9, respectively.

C-70

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Investment Advisory and Other Fees

Effective January 1, 2007, ILIAC’s investment advisory agreement to serve as investment advisor to certain variable funds offered in Company products (collectively, the “Company Funds”), was assigned to DSL. ILIAC is also compensated by the separate accounts for bearing mortality and expense risks pertaining to variable life and annuity contracts. Under the insurance and annuity contracts, the separate accounts pay ILIAC daily fees that, on an annual basis are, depending on the product, up to 3.4% of their average daily net assets. The total amount of compensation and fees received by the Company from the Company Funds and separate accounts totaled $246.1, $212.3, and $255.2, (excludes fees paid to ING Investment Management Co.) in 2010, 2009, and 2008, respectively.

DSL has been retained by ING Investors Trust (“IIT”), an affiliate, pursuant to a management agreement to provide advisory, management, administrative and other services to IIT. Under the management agreement, DSL provides or arranges for the provision of all services necessary for the ordinary operations of IIT. DSL earns a monthly fee based on a percentage of average daily net assets of IIT. DSL has entered into an administrative services subcontract with ING Fund Services, LLC, an affiliate, pursuant to which ING Fund Services, LLC, provides certain management, administrative and other services to IIT and is compensated a portion of the fees received by DSL under the management agreement. In addition to being the investment advisor of the Trust, DSL is the investment advisor of ING Partners, Inc. (the “Fund”), an affiliate. DSL and the Fund have an investment advisory agreement, whereby DSL has overall responsibility to provide portfolio management services for the Fund. The Fund pays DSL a monthly fee, net of sub advisory fees, which is based on a percentage of average daily net assets. For the years ended December 31, 2010, 2009, and 2008, revenue received by DSL under these agreements (exclusive of fees paid to affiliates) was $314.3, $270.0, and $323.8, respectively. At December 31, 2010 and 2009, DSL had $25.1 and $25.3, respectively, receivable from IIT under the management agreement.

Financing Agreements

Reciprocal Loan Agreement

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 June 2001 and expires on April 1, 2011, either party can borrow from the other up to 3% of the Company’s statutory admitted assets as of the preceding December 31.  Interest on any Company 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.

C-71

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Under this agreement, the Company incurred an immaterial amount of interest expense for the years ended December 31, 2010 and 2009, and $0.2 for the year ended December 31, 2008, and earned interest income of $0.9, $1.0 and $4.8, for the years ended December 31, 2010, 2009, and 2008, respectively. Interest expense and income are included in Interest expense and Net investment income, respectively, on the Consolidated Statements of Operations. At of December 31, 2010 and 2009, the Company had an outstanding receivable of $304.1 and $287.2, respectively, with ING AIH under the reciprocal loan agreement.

Note with Affiliate

On December 29, 2004, ING USA issued a surplus note in the principal amount of $175.0 (the “Note”) scheduled to mature on December 29, 2034, to ILIAC, in an offering that was exempt from the registration requirements of the Securities Act of 1933. ILIAC’s $175.0 Note from ING USA bears interest at a rate of 6.26% per year. 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 income was $11.1 for each of the years ended December 31, 2010, 2009, and 2008.

Property and Equipment Sale

During the second quarter of 2009, ING’s U.S. life insurance companies, including the Company, sold a portion of its property and equipment in a sale/leaseback transaction to an affiliate, ING North America.  The fixed assets involved in the sale were capitalized assets generally depreciated over the expected useful lives and software in development. Since the assets were being depreciated using expected useful lives, the current net book value reasonably approximated the current fair value of the assets being transferred. The fixed assets sold to ING North America by the Company totaled $17.4.

Transfer of Registered Representatives

On January 1, 2011, IFA transferred a group of registered representatives and their related customer accounts to its broker-dealer affiliate, ING Financial Partners, Inc. and received $5.0 as consideration for the transfer.  Effective January 1, 2011, IFA will operate exclusively as a wholesale broker-dealer.

10.Financing Agreements

Revolving Note Facility

ILIAC maintains a $50.0 uncommitted, perpetual revolving note facility with the Bank of New York (“BONY”).  Interest on any of ILIAC’s borrowing accrues at an annual rate equal to a rate quoted by BONY to ILIAC for the borrowing.  Under this agreement,

C-72

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

ILIAC incurred no interest expense for the years ended December 31, 2010, 2009, and 2008.  At December 31, 2010 and 2009, ILIAC had no amounts outstanding under the revolving note facility.

Windsor Property Loan

On June 16, 2007, the State of Connecticut acting by the Department of Economic and Community Development (“DECD”) loaned ILIAC $9.9 (the “DECD Loan”) in connection with the development of the corporate office facility located at One Orange Way, Windsor, Connecticut that serves as the principal executive offices of the Company (the “Windsor Property”). The loan has a term of twenty years and bears an annual interest rate of 1.00%. As long as no defaults have occurred under the loan, no payments of principal or interest are due for the initial ten years of the loan. For the second ten years of the DECD Loan term, ILIAC is obligated to make monthly payments of principal and interest.

The DECD Loan provided for loan forgiveness during the first five years of the term at varying amounts up to $5.0 if ILIAC and its affiliates met certain employment thresholds at the Windsor Property during that period.  On December 1, 2008, the DECD determined that the Company had met the employment thresholds for loan forgiveness and, accordingly, forgave $5.0 of the DECD Loan to ILIAC in accordance with the terms of the DECD Loan. The DECD Loan provides additional loan forgiveness at varying amounts up to $4.9 if ILIAC and its ING affiliates meet certain employment thresholds at the Windsor Property during years five through ten of the loan. ILIAC’s obligations under the DECD Loan are secured by an unlimited recourse guaranty from its affiliate, ING North America Insurance Corporation.

At both December 31, 2010 and 2009, the amount of the loan outstanding was $4.9 which was reflected in Notes payable on the Consolidated Balance Sheets.

Also see Financing Agreements in the Related Party Transactions footnote.

11.Reinsurance

At December 31, 2010, the Company had reinsurance treaties with 6 unaffiliated reinsurers covering a significant portion of the mortality risks and guaranteed death benefits under its variable contracts.  At December 31, 2010, the Company did not have any outstanding cessions under any reinsurance treaties with affiliated reinsurers.  The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements.

On October 1, 1998, the Company disposed of its individual life insurance business under an indemnity reinsurance arrangement with a subsidiary of Lincoln for $1.0 billion in cash.  Under the agreement, the Lincoln subsidiary contractually assumed from the

C-73

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Company certain policyholder liabilities and obligations, although the Company remains obligated to contract owners.  The Lincoln subsidiary established a trust to secure its obligations to the Company under the reinsurance transaction.

The Company assumed $25.0 of premium revenue from Aetna Life, for the purchase and administration of a life contingent single premium variable payout annuity contract. In addition, the Company is also responsible for administering fixed annuity payments that are made to annuitants receiving variable payments. Reserves of $11.5 and $11.6 were maintained for this contract as of December 31, 2010 and 2009, respectively.

Reinsurance ceded in force for life mortality risks were $17.4 billion and $18.6 billion at December 31, 2010 and 2009, respectively. At December 31, 2010 and 2009, net receivables were comprised of the following:

	2010		2009
Claims recoverable from reinsurers	$	2,356.0	$	2,431.0
Payable for reinsurance premiums	-		(0.7)
Reinsured amounts due to reinsurers	0.4		(0.7)
Other	(0.5)		0.3
Total	$	2,355.9	$	2,429.9

Premiums and Interest credited and other benefits to contract owners were reduced by the following amounts for reinsurance ceded for the years ended December 31, 2010, 2009, and 2008.

	2010		2009		2008
Deposits ceded under reinsurance	$	154.6	$	162.4	$	174.4
Premiums ceded under reinsurance	0.3		0.3		0.3
Reinsurance recoveries	390.4		339.8		309.0

12.Commitments and Contingent Liabilities

Leases

Prior to December 31, 2008, the Company leased certain office space and certain equipment under various operating leases and paid substantially all expenses associated with its leased and subleased office properties. Any expenses not paid directly by the Company were paid for by an affiliate and allocated back to the Company.  However, as of December 31, 2008, all of the Company’s expenses for leased and subleased office properties will be paid for by an affiliate and allocated back to the Company, as all operating leases were terminated or consolidated by ING AIH during the fourth quarter of 2008, which resulted in the Company no longer being party to any operating leases. For the years ended December 31, 2010, 2009, and 2008, rent expense for leases was $4.0, $5.1, and $6.1, respectively.

C-74

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

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, 2010, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $336.3, of which $144.0 was with related parties.  At December 31, 2009, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $305.1, of which $218.5 was with related parties.  During 2010 and 2009, $69.1 and $46.8, respectively, was funded to related parties under these commitments.

Collateral

Under the terms of the Company’s Over-The-Counter Derivative ISDA 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 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, 2010, the Company held $4.7, of cash collateral, which was included in Payables under securities loan agreement, including collateral held, on the Consolidated Balance Sheets. As of December 31, 2009, the Company did not hold any cash collateral. In addition, as of December 31, 2010 and 2009, the Company delivered collateral of $93.8 and $130.3, respectively, in fixed maturities pledged under derivatives contracts, which was included in Securities pledged on the Consolidated Balance Sheets.

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.

C-75

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Regulatory Matters

As with many financial services companies, the Company and its affiliates periodically receive 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 Company or the financial services industry.  Some of these investigations and inquiries could result in regulatory action against the Company.  The potential outcome of such action is difficult to predict but could subject the Company or its affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, fines, and other financial liability.  It is not currently anticipated that the outcome of any such action will have a material adverse effect on ING or ING’s U.S.-based operations, including the Company.  It is the practice of the Company and its affiliates to cooperate fully in these matters.

13.Accumulated Other Comprehensive Income (Loss)

Shareholder’s equity included the following components of Accumulated other comprehensive income (loss) as of December 31, 2010, 2009, and 2008.

		2010			2009			2008
Net unrealized capital gains (losses):
Fixed maturities	$	930.5		$	133.4		$	(1,315.5	)
Equity securities, available-for-sale		24.3			12.8			(7.4	)
Derivatives		0.5			-			-
DAC/VOBA adjustment on available-for-sale securities		(461.7	)		(88.8	)		650.9
Sales inducements adjustment on available-for-sale securities		(0.3	)		0.2			2.4
Shadow premium deferral		(61.0	)		-			-
Other investments		0.1			-			(0.3	)
Unrealized capital gains (losses), before tax		432.4			57.6			(669.9	)
Deferred income tax asset (liability)		(114.4	)		(63.9	)		205.8
Net unrealized capital gains (losses)		318.0			(6.3	)		(464.1	)
Pension and other post-employment benefits liability, net of tax		(13.5	)		(8.7	)		(18.0	)
Accumulated other comprehensive income (loss)	$	304.5		$	(15.0	)	$	(482.1	)

C-76

ING Life Insurance and Annuity Company and Subsidiaries

(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

Notes to Consolidated Financial Statements

(Dollar amounts in millions, unless otherwise stated)

Changes in unrealized capital gains (losses) on securities, including securities pledged and noncredit impairments, reported net of DAC, VOBA, and income tax, were as follows for the years ended December 31, 2010, 2009, and 2008.

		2010			2009			2008
Fixed maturities	$	797.1		$	1,448.9		$	(1,267.4	)
Equity securities, available-for-sale		11.5			20.2			(13.7	)
Derivatives		0.5			-			-
DAC/VOBA adjustment on available-for-sale securities		(372.9	)		(739.7	)		643.1
Sales inducements adjustment on available-for-sale securities		(0.5	)		(2.2	)		2.2
Shadow premium deferral		(61.0	)		-			-
Other investments		0.1			0.3			0.4
Unrealized capital gains (losses), before tax		374.8			727.5			(635.4	)
Deferred income tax asset (liability)		(119.2	)		(230.7	)		193.7
Net change in unrealized capital gains (losses)	$	255.6		$	496.8		$	(441.7	)

Changes in unrealized capital gains on securities, including securities pledged and noncredit impairments, as recognized in Accumulated other comprehensive income (loss), reported net of DAC, VOBA, and income taxes, were as follows for the years ended December 31, 2010, 2009, and 2008.

		2010		2009		2008
Net unrealized capital holding gains arising during the period(1)	$	284.8	$	513.0	$	(1,192.0	)
Less: reclassification adjustment for gains and other items included in Net income (loss)(2)		29.2		16.2		(750.3	)
Net change in unrealized capital gains on securities	$	255.6	$	496.8	$	(441.7	)

(1) Pretax unrealized capital holding gains (losses) arising during the year were $417.6, $751.2, and $(1,714.8), for the years ended December 31, 2010, 2009, and 2008, respectively.

(2) Pretax reclassification adjustments for gains (losses) and other items included in Net income (loss) were $42.8, $23.7, and $(1,079.4), for the years ended December 31, 2010, 2009, and 2008, respectively.

The reclassification adjustments for gains (losses) and other items included in Net income (loss) in the above table are determined by specific identification of each security sold during the period.

C-77

QUARTERLY DATA (UNAUDITED)

(Dollar amounts in millions, unless otherwise stated)

2010		First			Second			Third			Fourth
Total revenue	$	520.6		$	542.4		$	549.5		$	613.5
Income before income taxes	104.9			78.4			127.2			267.2
Income tax expense (benefit)	14.0			34.7			(8.8		)	100.9
Net income	$	90.9		$	43.7		$	136.0		$	166.3
2009		First			Second			Third			Fourth
Total revenue	$	588.9		$	261.1		$	518.5		$	502.2
Income before income taxes	36.3			7.4			217.4			142.4
Income tax expense (benefit)	(4.0		)	(89.6		)	72.8			70.4
Net income	$	40.3		$	97.0		$	144.6		$	72.0

C-78

Form No. SAI.75998-11                           ILIAC Ed. April 2011