Final Combined Supplement, Prospectus, and SAI for 75998

497 1 combined497c75998supprossai.htm FINAL SUPPLEMENT, PROSPECTUS & SAI FOR 75998 Final Combined Supplement, Prospectus, and SAI for 75998

ING Life Insurance and Annuity Company and its Variable Annuity Accounts B and C
and
ING Insurance Company of America and its Variable Annuity Account I

Supplement dated April 29, 2005

This supplement amends certain information contained in the most recent variable annuity contract prospectus and contract prospectus summary, as applicable. Please read it carefully and keep it with your variable annuity contract prospectus and contract prospectus summary, as applicable, for future reference.

______________________________________________________________________

The "Regulatory Matters" sub-section of the prospectus and prospectus summary, as applicable, is hereby deleted and replaced with the following:

Regulatory Matters

As with many financial services companies, the Company and its affiliates have received informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the financial services industry. In each case, the Company and its affiliates have been and are providing full cooperation.

Fund Regulatory Issues

Since 2002, there has been increased governmental and regulatory activity relating to mutual funds and variable insurance products. This activity has primarily focused on inappropriate trading of fund shares, revenue sharing and directed brokerage, compensation, sales practices and suitability, arrangements with service providers, pricing, compliance and controls, and adequacy of disclosure.

In addition to responding to governmental and regulatory requests on fund regulatory issues, ING management, on its own initiative, conducted, through special counsel and a national accounting firm, an extensive internal review of mutual fund trading in ING insurance, retirement, and mutual fund products. The goal of this review was to identify any instances of inappropriate trading in those products by third parties or by ING investment professionals and other ING personnel.

The internal review identified several isolated arrangements allowing third parties to engage in frequent trading of mutual funds within the variable insurance and mutual fund products of certain affiliates of the Company, and identified other circumstances where frequent trading occurred despite measures taken by ING intended to combat market timing. Each of the arrangements has been terminated and disclosed to regulators, to the independent trustees of ING Funds (U.S.) and in Company reports previously filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended.

An affiliate of the Company, ING Funds Distributors, LLC ("IFD") has received notice from the staff of the National Association of Securities Dealers ("NASD") that the staff has made a preliminary determination to recommend that disciplinary action be brought against IFD and one of its registered persons for violations of the NASD Conduct Rules and federal securities laws in connection with frequent trading arrangements.

Other regulators, including the Securities and Exchange Commission ("SEC") and the New York Attorney General, are also likely to take some action with respect to certain ING affiliates before concluding their investigation of ING relating to fund trading. The potential outcome of such action is difficult to predict but could subject certain affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It is not currently anticipated, however, that the actual outcome of such action will have a material adverse effect on ING or ING's U.S.-based operations, including the Company.

X.REGBCI-05
C05-0411-018R (04/2005)

Page 1 of 2

April 2005

ING has agreed to indemnify and hold harmless the ING Funds from all damages resulting from wrongful conduct by ING or its employees or from ING's internal investigation, any investigations conducted by any governmental or self-regulatory agencies, litigation or other formal proceedings, including any proceedings by the SEC. Management reported to the ING Funds Board that ING management believes that the total amount of any indemnification obligations will not be material to ING or ING's U.S.-based operations, including the Company.

Other Regulatory Matters

The New York Attorney General and other regulators are also conducting broad inquiries and investigations involving the insurance industry. These initiatives currently focus on, among other things, compensation and other sales incentives, potential conflicts of interest, potential anti-competitive activity, marketing practices, certain financial reinsurance arrangements, and disclosure. It is likely that the scope of these investigations will further broaden before the investigations are concluded. U.S. affiliates of ING have received formal and informal requests in connection with such investigations, and are cooperating fully with each request for information.

These initiatives may result in new legislation and regulation that could significantly affect the financial services industry, including businesses in which the Company is engaged.

In light of these and other developments, U.S. affiliates of ING, including the Company, periodically review whether modifications to their business practices are appropriate.


X.REGBCI-05 C05-0411-018R (04/2005)	Page 2 of 2	April 2005

CONTRACT PROSPECTUS - APRIL 29, 2005

The Contract. The contracts described in this prospectus are individual nonqualified deferred fixed and variable annuity contracts issued by ING Life Insurance and Annuity Company (the Company, we, us, our). They are intended to provide retirement benefits to individuals who either are not participating in a formal retirement plan or are participating in a formal retirement plan but want to supplement their benefits.		The Funds Fidelity^® VIP Contrafund^® Portfolio (Initial Class) Fidelity^® VIP Equity-Income Portfolio (Initial Class) Fidelity^® VIP Growth Portfolio (Initial Class) Fidelity^® VIP Overseas Portfolio (Initial Class) ING American Century Select Portfolio (Initial Class) ING JPMorgan Fleming International Portfolio (Initial Class) ING MFS Capital Opportunities Portfolio (Initial Class) ING Oppenheimer Global Portfolio (Initial Class) ING Oppenheimer Strategic Income Portfolio (Initial Class) ING Salomon Brothers Aggressive Growth Portfolio (Initial Class) ING T. Rowe Price Diversified Mid Cap Growth Portfolio (Initial Class) ING T. Rowe Price Growth Equity Portfolio (Initial Class) ING UBS U.S. Large Cap Equity Portfolio (Initial Class) ING Van Kampen Equity and Income Portfolio (Initial Class) ING VP Balanced Portfolio, Inc. (Class I) ING VP Global Science and Technology Portfolio (Class I) ING VP Growth and Income Portfolio (Class I) ING VP Intermediate Bond Portfolio (Class I)⁽¹⁾ ING VP Money Market Portfolio (Class I) ING VP Strategic Allocation Balanced Portfolio (Class I) ING VP Strategic Allocation Growth Portfolio (Class I) ING VP Strategic Allocation Income Portfolio (Class I) ^{(1) Formerly ING VP Bond Portfolio.}
Why Reading this Prospectus Is Important. This prospectus contains facts about the contracts and their investment options you should know before purchasing. This information will help you decide if the contracts are right for you. Please read this prospectus carefully and keep it for future reference. Table of Contents . . . page 3
Investment Options. The contracts offer variable investment options and a fixed interest option. When we establish your account, you instruct us to direct your account dollars to any of the available investment options.
Variable Investment 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 one of the mutual funds listed on this page. Earnings on amounts invested in a subaccount will vary depending upon the performance of its underlying mutual fund. You do not invest directly in or hold shares of the funds. *Fixed Interest Option.* Fixed Account Except as specifically mentioned, this prospectus describes only the variable investment options. However, we describe the Fixed Account in Appendix I of this prospectus. Risks Associated with Investing in the Funds. The funds in which the subaccounts invest have various risks. Information about the risks of investing in the funds is located in the "Investment Options" section on page 10, in Appendix II - Description of Underlying Funds, and in each fund prospectus. Read this prospectus in conjunction with the fund prospectuses, and retain the prospectuses for future reference. These contracts are not deposits with, obligations of or guaranteed or endorsed by any bank, nor are they insured by the FDIC. The contracts are subject to investment risk, including the possible loss of the principal amount invested.

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CONTRACT PROSPECTUS - APRIL 29, 2005 (CONTINUED)

Getting Additional Information. You may obtain the April 29, 2005 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 "Questions: Contacting the Company" section of this prospectus. You may also obtain 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, www.sec.gov. Copies of this information may also be obtained, after paying a duplicating fee, by contacting the SEC Public Reference Room. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-202-942-8090 or 1-800-SEC-0330, e-mailing publicinfo@sec.gov or by writing to SEC Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. The SAI table of contents is listed on page 41 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.

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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			10
Investment Options			10
Transfers Among Investment Options			11
Purchase and Rights			13
Right to Cancel			14
Fees			15
Your Account Value			20
Withdrawals			22
Systematic Distribution Options			23
Death Benefit			24
The Income Phase			26
Taxation			29
Contract Distribution			34
Other Topics			37
The Company -Variable Annuity Account B - Payment Delay or Suspension - Performance Reporting - Voting Rights - Contract Modification - Transfer of Ownership: Assignment - Legal Matters and Proceedings - Regulatory Matters
Contents of the Statement of Additional Information			41
Appendix I -	Fixed Account		42
Appendix II -	Description of Underlying Funds		43
Appendix III -	Condensed Financial Information	CFI - 1

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		CONTRACT OVERVIEW

Questions: Contacting the Company. To answer your questions, contact your local representative or write or call our Home Office: ING USFS Customer Service Defined Contribution Administration, TS21 151 Farmington Avenue Hartford, CT 06156-1277 1-800-262-3862 Sending Forms and Written Requests in Good Order. If you are writing to change your beneficiary, request a withdrawal, or for any other purpose, contact us or your local representative to learn what information is required for the request to be in "good order." Generally, a request is considered to be in "good order" when it is signed, dated and made with such clarity and completeness that we are not required to exercise any discretion in carrying it out. We can only act upon requests that are received in good order.		The following summarizes contract information. Read each section of this prospectus for additional information.
		Contract Design
		The contracts described in this prospectus are individual nonqualified fixed and variable annuity contracts. They are intended as a retirement savings vehicle that defers taxes on investment earnings and offers a variety of investment options to help meet long-term financial goals.
		Contract Facts
		Free Look/Right to Cancel: You may cancel your contract within ten days (some states may require more than ten days) of receipt. See "Right to Cancel." Death Benefit: Your beneficiary may receive a financial benefit in the event of your death during both the accumulation and income phases. The availability of a death benefit during the income phase depends on the income phase payment option selected. See "Death Benefit" and "The Income Phase." Withdrawals: During the accumulation phase you may withdraw all or part of your account value. Certain fees, taxes and early withdrawal penalties may apply. See "Withdrawals."
		Systematic Distribution Options: These are made available for you to receive periodic withdrawals from your account, while retaining the account in the accumulation phase. See "Systematic Distribution Options." Fees and Expenses: Certain fees and expenses are deducted from the value of your contract. See "Fee Table" and "Fees." 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 "Taxation."

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Contract Phases

I. The Accumulation Phase (accumulating dollars under your contract)

STEP 1: You provide us with your completed application and initial purchase payment. We establish an account for you and credit that account with your initial purchase payment. STEP 2: You direct us to invest your purchase payment in one or more of the following investment options: (a) Fixed Interest Option (b) Variable Investment Options. (The variable investment options are the subaccounts of Variable Annuity Account B. Each one invests in a specific mutual fund). STEP 3: Each subaccount you select purchases shares of its assigned fund.			Payments to Your Account
			Step 1 â
	ING Life Insurance and Annuity Company
	(a) â	Step 2			(b) â
	Fixed Interest Option		Variable Annuity Account B Variable Investment Options
			The Subaccounts
			A	B		Etc.
			â Step 3 â
			Mutual Fund A	Mutual Fund B

II. 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.

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	FEE TABLE

In This Section: Maximum Contract Holder Transaction Expenses Annual Maintenance Fee Maximum Separate Account Annual Expenses Total Annual Fund Operating Expenses Fund Expense Table Hypothetical Examples Also See "Fees" for: How, When and Why Fees are Deducted Reduction, Waiver and/or Elimination of Certain Fees Redemption Fees Premium and Other Taxes	The following tables describe the fees and expenses that you will pay when buying, owning, and withdrawing from your contract. The first table describes the fees and expenses that you will pay at the time that you buy the contract, withdraw from the contract, or transfer cash value between investment options. State premium taxes may also be deducted. See "The Income Phase" for fees that may apply after you begin receiving payments under the contract. Maximum Contract Holder Transaction Expenses
	Early Withdrawal Charge¹ (as a percentage of amount withdrawn)				5%
	^{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.}
	The next table describes the fees and expenses that you will pay periodically during the time that you own the contract, not including fund fees and expenses.
	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%
	^{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."}}

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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* (expenses that are deducted from fund assets, including management fees and other expenses)	Minimum 0.34%	Maximum 1.05%
* After taking into account any contractual fee waiver or expense reimbursement arrangements, the minimum and maximum total fund operating expenses would be the same as shown above.

Fees Deducted by the Funds

Using this Information. The following table shows the investment advisory 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 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. The fees and expense information shown in the following table was provided by the funds. The column labeled "Fees and Expenses Waived or Reimbursed" shows only contractual waivers or reimbursements that continue through at least May 1, 2006. Except as noted below, the following figures are a percentage of the average net assets of each fund, and are based on figures for the year ended December 31, 2004. There is no guarantee that actual expenses will be the same as those shown in the table.

Fund Expense Table⁽¹⁾⁽²⁾

Fund Name	Management (Advisory) Fees	12b-1 Fee	Other Expenses	Total Annual Fund Operating Expenses	Fees and Expenses Waived or Reimbursed	Net Annual Fund Operating Expenses
FidelityÒ VIP ContrafundÒ Portfolio (Initial Class)	0.57%	--	0.11%	0.68%	--	0.68%
FidelityÒ VIP Equity-Income Portfolio (Initial Class)	0.47%	--	0.11%	0.58%	--	0.58%
FidelityÒ VIP Growth Portfolio (Initial Class)	0.58%	--	0.10%	0.68%	--	0.68%
FidelityÒ VIP Overseas Portfolio (Initial Class)	0.72%	--	0.19%	0.91%	--	0.91%
ING American Century Select Portfolio (Initial Class)⁽³⁾	0.64%	--	0.02%	0.66%	--	0.66%
ING JPMorgan Fleming International Portfolio (Initial Class)	0.80%	--	0.20%	1.00%	--	1.00%
ING MFS Capital Opportunities Portfolio (Initial Class)	0.65%	--	0.25%	0.90%	--	0.90%
ING Oppenheimer Global Portfolio (Initial Class)⁽³⁾	0.60%	--	0.06%	0.66%	--	0.66%
ING Oppenheimer Strategic Income Portfolio (Initial Class)⁽⁴⁾	0.50%	--	0.04%	0.54%	--	0.54%
ING Salomon Brothers Aggressive Growth Portfolio (Initial Class)	0.69%	--	0.13%	0.82%	--	0.82%

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Fund Name	Management (Advisory) Fees	12b-1 Fee	Other Expenses	Total Annual Fund Operating Expenses	Fees and Expenses Waived or Reimbursed	Net Annual Fund Operating Expenses
ING T. Rowe Price Diversified Mid Cap Growth Portfolio (Initial Class)⁽³⁾	0.64%	--	0.02%	0.66%	--	0.66%
ING T. Rowe Price Growth Equity Portfolio (Initial Class)	0.60%	--	0.15%	0.75%	--	0.75%
ING UBS U.S. Large Cap Equity Portfolio (Initial Class)	0.70%	--	0.15%	0.85%	--	0.85%
ING Van Kampen Equity and Income Portfolio (Initial Class)⁽³⁾	0.55%	--	0.02%	0.57%	--	0.57%
ING VP Balanced Portfolio, Inc. (Class I)⁽⁵⁾	0.50%	--	0.09%	0.59%	--	0.59%
ING VP Global Science and Technology Portfolio (Class I)⁽⁵⁾⁽⁶⁾	0.95%	--	0.10%	1.05%	--	1.05%
ING VP Growth and Income Portfolio (Class I)⁽⁵⁾	0.50%	--	0.08%	0.58%	--	0.58%
ING VP Intermediate Bond Portfolio (Class I)⁽⁵⁾	0.40%	--	0.08%	0.48%	--	0.48%
ING VP Money Market Portfolio (Class I)⁽⁵⁾	0.25%	--	0.09%	0.34%	--	0.34%
ING VP Strategic Allocation Balanced Portfolio (Class I)⁽⁵⁾⁽⁶⁾	0.60%	--	0.10%	0.70%	--	0.70%
ING VP Strategic Allocation Growth Portfolio (Class I)⁽⁵⁾⁽⁶⁾	0.60%	--	0.10%	0.70%	--	0.70%
ING VP Strategic Allocation Income Portfolio (Class I)⁽⁵⁾⁽⁶⁾	0.60%	--	0.10%	0.70%	0.05%	0.65%

*Footnotes to "Fund Expense Table"*
(1)	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. 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 fees and expenses shown above. See "Fees - Fund Fees and Expenses" for additional information.
(2)	In the case of fund companies affiliated with the Company, where the Company or an 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. The investment management fee shown in the fee table is apportioned between the Company or other affiliated investment adviser and subadviser. This apportionment varies by subadviser, resulting in varying amounts of revenue retained by the investment adviser, including the Company. This apportionment of the investment advisory fee does not increase, directly or indirectly, the fees and expenses shown above. See "Fees - Fund Fees and Expenses" for additional information.
(3)	Effective December 1, 2004, Management (Advisory) Fees were restated to reflect a decrease as follows: from 0.80% to 0.64% for ING American Century Select Portfolio; from 0.85% to 0.64% for ING T. Rowe Price Diversified Mid Cap Growth Portfolio; and from 0.85% to 0.55% for ING Van Kampen Equity and Income Portfolio. Effective December 1, 2004, the administrative fees (included in Other Expenses) were restated to reflect a decrease as follows: from 0.20% to 0.02% for ING American Century Select Portfolio, ING T. Rowe Price Diversified Mid Cap Growth Portfolio and ING Van Kampen Equity and Income Portfolio; and from 0.60% to 0.06% for ING Oppenheimer Global Portfolio.
(4)	Based on estimated expenses for the current fiscal year.

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Footnotes to "Fund Expense Table" (Continued)

(5)

The amounts shown are estimated operating expenses for Class I shares of each Portfolio as a ratio of expenses to average daily net assets. These estimates are based on each Portfolio's actual operating expenses for its most recently completed fiscal year, adjusted for contractual changes, if any, and fee waivers to which ING Investments, LLC, the investment adviser to each Portfolio, has agreed for each Portfolio. ING Funds Services, LLC receives an annual administrative fee (included in Other Expenses) equal to 0.055% on the first $5 billion of daily net assets and 0.03% thereafter.

(6)

ING Investments, LLC, the investment adviser to each Portfolio, has entered into written expense limitation agreements with each Portfolio under which it will limit expenses of the Portfolios, excluding interest, brokerage and extraordinary expenses, subject to possible recoupment by ING Investments, LLC within three years. The amount of each Portfolio's expenses waived, reimbursed or recouped during the last fiscal year is shown under the heading Fees and Expenses Waived or Reimbursed. Recoupments are shown as negative numbers under Fees and Expenses Waived or Reimbursed. The expense limits will continue through at least May 1, 2006. For further information regarding the expense limitation agreements, see the Fund's prospectus.

*Hypothetical 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 0.039%), separate account annual expenses, and fund fees and expenses. Example 1: The following Example assumes that you invest $10,000 in the contract for the time periods indicated. The Example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the funds as listed in the "Total Annual Fund Operating Expenses" column in the Fund Expense Table above. 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 end of the applicable time period:**					(B) If you do not withdraw your entire account 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
$723		$1,289	$1,882	$2,924	$262	$805	$1,375	$2,924
Example 2: The following Example assumes that you invest $10,000 in the contract for the time periods indicated. The Example also assumes that your investment has a 5% return each year and assumes the minimum fees and expenses of any of the funds as listed in the "Total Annual Fund Operating Expenses" column in the Fund Expense Table above. 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 end of the applicable time period:**					(B) If you do not withdraw your entire account 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
$655		$1,084	$1,541	$2,200	$191	$591	$1,016	$2,200

*	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.

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CONDENSED FINANCIAL INFORMATION

Understanding Condensed Financial Information. In Appendix III of this prospectus, we provide condensed financial information about Variable Annuity Account B (the separate account) subaccounts you may invest in through the contract. The numbers show the year-end unit values of each subaccount from the time purchase payments were first received in the subaccounts under the contract.

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. Investment results of the funds are likely to differ significantly and there is no assurance that any of the funds will achieve their respective investment objectives. 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. Unless otherwise noted, all funds are diversified as defined under the Investment Company Act of 1940. Refer to the fund prospectuses for additional information. Fund prospectuses may be obtained, free of charge 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 Room.

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.

Selecting Investment Options

Choose options appropriate for you. Your local 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 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.

Be informed. Read this prospectus, the fund prospectuses and Fixed Account appendix (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.

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Limits Imposed by Underlying Funds. Orders for the purchase of fund shares may be subject to acceptance or rejection by the underlying fund. We reserve the right to reject, without prior notice, any allocation of a purchase payment to a subaccount if the subaccount's investment in its corresponding fund is not accepted by the fund for any reason.

Additional Risks of Investing in the Funds. (Mixed and Shared Funding)

"Mixed funding" occurs when shares of a fund, which the subaccounts buy for variable annuity contracts, is bought for variable life insurance contracts issued by us or other insurance companies.

"Shared funding" occurs when shares of a fund, which the subaccounts buy for variable annuity contracts, are also bought by other insurance companies for their variable annuity contracts.

Mixed - bought for annuities and life insurance

Shared - bought by more than one company

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 trading. Frequent trading can disrupt management of a fund and raise its expenses through: 1) increased trading and transaction costs; 2) forced and unplanned portfolio turnover; 3) lost opportunity costs; and 4) large asset swings that decrease the fund's ability to provide maximum investment return to all contract holders. This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use market-timing investment strategies and make frequent transfers should not purchase the contract.

We monitor transfer activity. With regard to frequent transfers, in the event that an individual's or organization's transfer activity:

1) exceeds our then-current monitoring standard for frequent trading;

2) is identified as problematic by an underlying fund even if the activity does not exceed our monitoring standard for frequent trading; or

3) if we determine in our sole discretion that such transfer activity may not be in the best interests of other contract holders,

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we will take the following actions to deter such transfer activity. Upon the first violation, we will send a one time warning letter. A second violation will result in the suspension of trading privileges via facsimile, telephone, email and Internet, and limit trading privileges to submission by regular U.S. mail for a period of six months. At the end of that period, trading privileges will be reinstated. If there is another violation after such rights are reinstated, we will suspend such privileges permanently. We will notify you in writing if we take any of these actions.

Additionally, if such transfer activity is initiated by a market-timing organization or individual or other party authorized to give transfer instructions on behalf of multiple contract owners, we will also take the following actions, without prior notice: (1) not accepting transfer instructions from an agent acting on behalf of more than one contract holder; and (2) not accepting preauthorized transfer forms from market timers or other entities acting on behalf of more than one contract holder at a time.

Our current definition of frequent trading is more than one purchase and sale of the same underlying fund within a 30-day period. We do not count transfers associated with scheduled dollar cost averaging or automatic rebalancing programs and transfers involving certain de minimis amounts when determining whether trading activity is excessive. We reserve the right to modify our general standard, or the standard as it may apply 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 holders and fund investors and/or state or federal regulatory requirements. If we modify such standard, it will be applied uniformly to all contract holders or, as applicable, to all contract holders investing in the underlying fund.

In addition, if, due to the excessive dollar amounts of trades, even though not within our then current definition of frequent trading, an individual's or organization's transfer activity is determined, in our sole discretion, to be disruptive, we will take the same actions as are described above to limit frequent transfers.

The Company does not allow waivers to the above policy. 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.

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 Home Office, 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.

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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."
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 for a single purchase payment contract is $5,000.
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, making 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. You should pay attention to the following issues, among others:
1.	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 59 1/2.
2.	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.

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3.	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.
4.	Exchanges - 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.
Other Products. We and our affiliates offer various other products with different features and terms than these contracts that 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 our Home Office 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, nor apply a market value adjustment to any amounts you contributed to the Guaranteed Accumulation Account. 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 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.

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FEES

The following repeats and adds to information provided under "Fee Table." Please review both sections for information on fees. Transaction Fees		Types of Fees There are five types of fees or deductions that may affect your account: Transaction Fees Early Withdrawal Charge Annual Maintenance Fee Redemption Fees Fees Deducted from Investments in the Separate Account Mortality and Expense Risk Charge Administrative Expense Charge Fund Fees and Expenses Premium and Other Taxes Charges for ING GET Fund *Terms to Understand* "Payment Period" (for installment purchase payment contracts) - The period of time it takes to complete the number of installment payments expected to be made to your account over a year. For example, if your payment frequency is monthly, a payment period is completed after 12 payments are made. If only 11 payments are made, the payment period is not completed until the twelfth payment is made. The number of payment periods completed cannot exceed the number of account years completed, regardless of the number of payments made. "Contract Year" (for single purchase payment contracts) -A 12 month period measured from the date we establish your account, or measured from any anniversary of that date.
*Early Withdrawal Charge* Withdrawals of all or a portion of your account value may be subject to a charge. In the case of a partial withdrawal where you request a specified dollar amount, the amount withdrawn from your account will be the amount you specified plus adjustment for any applicable early withdrawal charge.
Amount. The charge is a percentage of the amount that you withdraw. The percentage will be determined by the early withdrawal charge schedule that applies to your contract. The schedules are listed below and appear on your contract schedule page. The charge will never be more than 8.5% of your total payments to the contract.
Early Withdrawal Charge Schedules
Schedule A - Installment Purchase Payment Contracts
Completed Payment Periods Less than 5 5 or more but less than 7 7 or more but less than 9 9 or more but less than 10 10 or more	Early Withdrawal Charge 5% 4% 3% 2% 0%

Schedule B - Single Purchase Payment Contracts*
Completed Contract Years Less than 5 5 or more but less than 6 6 or more but less than 7 7 or more but less than 8 8 or more but less than 9 9 or more	Early Withdrawal Charge 5% 4% 3% 2% 1% 0%

* Schedule B also may apply to certain older contracts that accept more than one purchase payment. Check your contract to determine which early withdrawal charge schedule applies to you.
Purpose. This is a deferred sales charge. It reimburses us for some of the sales and administrative expenses associated with the contract. If our expenses are greater than the amount we collect for the early withdrawal charge, we may use any of our corporate assets, including potential profit that may arise from the mortality and expense risk charge, to make up any difference.

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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 59 1/2 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 our Home Office. This waiver does not apply to contracts issued in the state of Washington.

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.

Redemption Fees

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.

Fees Deducted From Investments in the Separate 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.

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Purpose. This charge compensates us for the mortality and expense risks we assume under the contracts.

The 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.

The 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 Expense Table which begins of on page 7 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 owner 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.

The Company or its U.S. affiliates receive varying levels of revenue from each of the funds available through the contract. In terms of total dollar amounts received, the greatest amount of revenue generally comes from assets allocated to funds managed by the Company or other Company affiliates (including but not limited to ING Investments, LLC and Directed Services, Inc.), which funds may or may not also be subadvised by a Company affiliate. Assets allocated to funds managed by the Company or a Company affiliate but subadvised by unaffiliated third parties generally generate the next greatest amount of revenue. Finally, assets allocated to unaffiliated funds generally generate the least amount of revenue.

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Types of Revenue Received from Affiliated Funds

Affiliated funds are (a) funds managed by the Company, ING Investments, LLC, Directed Services, Inc. or other Company affiliates, which may or may not also be subadvised by another Company affiliate; and (b) funds managed by the Company or a Company affiliate but which are subadvised by unaffiliated third parties.

Revenues received by the Company from affiliated funds include:

For those funds which the Company serves as investment adviser, a share of the management fee deducted from fund assets and included within the "Management (Advisory) Fees" column of the Fund Expense Table that begins on page 7 of this prospectus;

Service fees that are deducted from fund assets and included within the "Other Expenses" column of the Fund Expense Table; and

For certain share classes, the Company or its affiliates may also receive compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 Fees" column of the Fund Expense Table.

Additionally, the Company receives other revenues from affiliated funds which may be based either on an annual percentage of average net assets held in the fund by the Company or a percentage of the management fees shown in the Fund Expense Table. These revenues may be received as cash payments or according to a variety of financial accounting techniques which are used to allocate revenue and profits across the organization. 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.

Types of Revenue Received from Unaffiliated Funds

Revenues 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.

Revenues received by the Company or its affiliates from unaffiliated funds include:

For certain funds, compensation paid from 12b-1 fees or service fees that are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the Fund Expense Table; and

Additional payments for administrative, recordkeeping or other services which we provide to the funds or their affiliates or as an incentive for us to make the funds available through the contract. These additional payments are not disclosed in the Fund Expense Table and do not increase directly or indirectly the fees and expenses shown in the Fund Expense Table. 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.

If the revenues received from affiliated funds were taken into account, payments from ING Investments, LLC and other Company affiliates would be the greatest.

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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.

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 "Taxation."

Charges for ING GET Fund

Various series of ING GET Fund may be offered from time to time, and additional charges may apply if you elect to invest in one of these series. If a series is available, it will be described in a supplement to this prospectus at the time it is offered. The supplement will include fee table information about the option.

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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

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 from investments in the separate account, such as guarantee charges for ING GET Fund. See "Fees."

The net investment rate may be either positive or negative.

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Hypothetical 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 2:

A. You direct us to invest $3,000 in Fund A. The purchase payment purchases 300 accumulation units of Subaccount A ($3,000 divided by the current $10 AUV).

B. You direct us to invest $2,000 in Fund B. The purchase payment purchases 80 accumulation units of Subaccount B ($2,000 divided by the current $25 AUV).

Step 3: The separate account purchases shares of the applicable funds at the then current market value (net asset value or NAV).

Step 1 â

ING Life Insurance and Annuity Company

Step 2 â

Variable Annuity Account B

Subaccount A 300 accumulation units

Subaccount B 80 accumulation units

Etc.

â Step 3 â

Mutual Fund A

Mutual 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.

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	WITHDRAWALS

Taxes, Fees and Deductions Amounts withdrawn may be subject to one or more of the following: Early Withdrawal Charge (see "Fees - Early Withdrawal Charge") Annual Maintenance Fee (see "Fees - Annual Maintenance Fee") Redemption Fees (See "Fees -Redemption Fees") Tax Penalty (see "Taxation") Tax Withholding (see "Taxation") To determine which may apply to you, refer to the appropriate sections of this prospectus, contact your local representative or call us at the number listed in "Contract Overview - Questions: Contacting the Company."	You may withdraw all or a portion of your account value at any time during the accumulation phase.
	Steps for Making A Withdrawal.
	Select the withdrawal amount.
	1)	Full Withdrawal: You will receive, reduced by any required withholding tax, your account value minus any applicable early withdrawal charge and annual maintenance fee.
	2)	Partial Withdrawal (Percentage or Specified Dollar Amount): You will receive, reduced by any required withholding tax, the amount you specify, subject to the value available in your account. However, the amount actually withdrawn from your account will be adjusted by any applicable early withdrawal charge. See Appendix I for more information about withdrawals from the Fixed Account.
	Select investment options. If you do not specify this, we will withdraw dollars from each investment option in which you have account value in the same proportion as that value bears to your total account value.
	Properly complete a disbursement form and send it to our Home Office.
	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 our Home Office.
	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. If you withdraw amounts from a series of the ING GET Fund and then elect to reinvest them, we will reinvest them in a GET Fund series that is then accepting deposits, if one is available. If one is not available, we will reallocate your GET amounts among other investment options in which you invested, on a pro rata basis. The reinvestment privilege may be used only once. Seek competent advice regarding the tax consequences associated with reinvestment.

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SYSTEMATIC DISTRIBUTION OPTIONS

These options may be exercised at any time during the accumulation phase of the contract.		Features of a Systematic Distribution Option A systematic distribution option allows you to receive regular payments from your contract, without moving into the income phase. By remaining in the accumulation phase, you retain certain rights and investment flexibility not available during the income phase. Because the account remains in the accumulation phase, all accumulation phase charges continue to apply.
The following systematic distribution options may be available:
SWO - Systematic Withdrawal Option. SWO is a series of automatic partial withdrawals from your account based on a payment method you select. Consider this option if you would like a periodic income while retaining investment flexibility for amounts accumulated in the account. Other Systematic Distribution Options. We may add additional systematic distribution options from time to time. You may obtain additional information relating to any of the systematic distribution options from your local representative or by calling us at the number 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 - Question: Contacting the Company."
Terminating a Systematic Distribution Option. You may revoke a systematic distribution option at any time by submitting a written request to our Home Office. 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. If you are concerned about tax implications consult a tax adviser before electing an option.

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		DEATH BENEFIT

This section provides information about the death benefit during the accumulation phase. For death benefit information applicable to the income phase, see "The Income Phase."		During the Accumulation Phase
		Who Receives the Death Benefit? If you would like certain individuals or entities to receive a death benefit when it becomes payable, you may name them as your beneficiaries. If you die and no beneficiary exists, the death benefit will be paid in a lump sum to your estate.
		Designating Your Beneficiary. You may designate a beneficiary on your application or by contacting your local representative or us as indicated in "Contract Overview - Questions: Contacting the Company."
		When is a Death Benefit Payable? During the accumulation phase a death benefit is payable when you, the contract holder, die.
		Death Benefit Amount. The death benefit will equal your account value as of the next time we value your account after the date on which we receive proof of death and a payment request in a form acceptable to us. In addition to this amount, some states require we pay interest on fixed interest options, calculated from date of death at a rate specified by law.
		Death Benefit - Methods of Payment
		(For payment options during the income phase, see "The Income Phase.")
		If you die during the accumulation phase of your contract, the following payment options are available to your beneficiary, if allowed by the Tax Code:
		Lump-sum payment; or
		Payment in accordance with any of the available income phase payment plans. See "The Income Phase - Payment Plans." Unless the beneficiary elects otherwise, lump-sum payments will generally be made into an interest bearing account that is backed by our general account. This account can be accessed by the beneficiary through a checkbook feature. The beneficiary may access death benefit proceeds at any time through the checkbook without penalty. Interest credited under this account may be less than under other settlement options.
		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."

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Steps Required for Death Benefits to be Paid to Your Beneficiary:
1.	You must have designated a beneficiary(ies) for your contract;
2.	Your beneficiary or someone on their behalf must provide us with proof of your death acceptable to us; and
3.	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 "Taxation."

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		THE INCOME PHASE

We may have used the following terms in prior prospectuses: Annuity Phase - Income Phase Annuity Option - Income Phase Payment Option Annuity Payment - Income Phase Payment Annuitization - Initiating Income Phase Payments		During the income phase you stop contributing dollars to your account and start receiving payments from your accumulated account value.
		Initiating Payments. At least 30 days before the date you want to start receiving income phase payments, you must notify us in writing of all of the following:
		Payment start date;
		Income phase payment option (see the payment options table in this section);
		Payment frequency (i.e. monthly, quarterly, semi-annually or annually);
		Choice of fixed or variable payments or a combination of fix 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. Not all subaccounts available during the accumulation phase may be available during the income phase. Currently, ING VP Balanced Portfolio, Inc., ING VP Intermediate Bond Portfolio and ING VP 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 1/2%. 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.

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If you select a 3 1/2% 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 our Home Office. 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 account that is backed by our general account. This account can be accessed by the beneficiary through a checkbook feature. The beneficiary may access death benefit proceeds at any time through the checkbook without penalty. Interest credited under this account may be less than under other settlement options.

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. Whether the Tax Code considers such payments taxable as income phase payments or as withdrawals is currently unclear; 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.

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 "Taxation" for additional information.

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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.

Beneficiary(ies): The person(s) or entity(ies) entitled to receive a death benefit under the contract.

Lifetime Income Phase Payment Options
Life Income		Length of Payments: For as long as the annuitant lives. It is possible that only one payment will be made if the annuitant dies prior to the second payment's due date. Death Benefit - None: All payments end upon the annuitant's death.
Life Income - Guaranteed Payments*		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. Death Benefit - Payment to the Beneficiary: If the annuitant dies before we have made all the guaranteed payments, 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.
Life Income - Two Lives		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: (a) When you select this option you choose for 100%, 66 2/3% or 50% of the payment to continue to the surviving annuitant after the first death; or (b) 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.
Life Income - Two Lives with Guaranteed Payments*		Length of Payments: For as long as either annuitant lives, with payments guaranteed for a minimum of 120 months. Continuing Payments: 100% of the payment will continue to the surviving annuitant after the first death. Death Benefit - Payment to the Beneficiary: If both annuitants die before the guaranteed 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
Nonlifetime- Guaranteed Payments*		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) Death Benefit - Payment to the Beneficiary: If the annuitant dies before we make all the guaranteed payments, 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.
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 we will charge any 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 our Home Office.
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 1/2% 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.

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TAXATION
Introduction		In This Section: Introduction Contract Type Withdrawals and Other Distributions Taxation of Distributions 10% Penalty Tax Withholding for Federal Income Tax Liability Minimum Distribution of Death Benefit Proceeds Taxation of Nonqualified Contracts Possible Changes in Taxation Taxation of the Company
This section discusses our understanding of current federal income tax laws affecting the contract. You should keep the following in mind when reading it:
Your tax position (or the tax position of the designated beneficiary, as applicable) determines federal taxation of amounts held or paid out under the contract.
Tax laws change. It is possible that a change in the future could affect contracts issued in the past.
This section addresses federal income tax rules and does not discuss federal estate and gift tax implications, state and local taxes or any other tax provisions.
We do not make any guarantee about the tax treatment of the contract or any transaction involving the contract.
The term "payment" in this section refers to income phase payments.
We do not intend this information to be tax advice. For advice about the effect of federal income taxes or any other taxes on amounts held or paid out under the contract consult a tax adviser. No attempt is made to provide more than general information about the use of the contract with tax-qualified retirement arrangements.
Taxation of Gains Prior to Distribution. You will generally not pay taxes on any earnings from the annuity contract described in this prospectus until they are withdrawn (or otherwise made available to you or a designated beneficiary). Investor Control. The IRS has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the owner possesses incidents of investment control over the assets. In these circumstances, income and gains from the separate account assets would be includible in the variable contract owner's gross income. Future guidance regarding the extent to which 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. It is possible that the Treasury's position, when announced, may adversely affect the tax treatment of existing contracts. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent a contract holder from being considered the federal tax owner of a pro rata share of the assets of the separate account.
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 contracts to qualify as annuity contracts under federal tax law. The separate account, through the funds, intends to comply with the diversification requirements prescribed by the Treasury in Reg. Sec. 1.817-5, which affects how the funds' assets may be invested.

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Contract Type

The contracts are designed for use on a non-tax qualified basis as a nonqualified deferred annuity contract.

The Contract. You are responsible for determining that contributions, distributions, investments and other transactions satisfy applicable laws. Legal counsel and a tax adviser should be consulted regarding suitability of the contract.

Withdrawals and Other Distributions

Certain tax rules apply to distributions from the contract. A distribution is any amount taken from the contract including withdrawals, income phase payments, rollovers, exchanges and death benefit proceeds.

We report the taxable portion of all distributions to the Internal Revenue Service (IRS).

Taxation of Distributions

A full withdrawal of a nonqualified contract is taxable to the extent that the amount received exceeds the investment in the contract. A partial withdrawal is taxable to the extent that the account value immediately before the withdrawal exceeds the investment in the contract. In other words, a partial withdrawal is treated first as a withdrawal of taxable earnings.

For income phase payments, a portion of each payment which represents the investment in the contract is not taxable. An exclusion ratio is calculated to determine the nontaxable portion.

For fixed income phase payments, in general, there is no tax on the portion of each payment which represents the same ratio that the investment in the contract bears to the total dollar amount of the expected payments as defined in Tax Code section 72(c). The entire income phase payment will be taxable once the recipient has recovered the investment in the contract.

For variable income phase payments, an equation is used to establish a specific dollar amount of each payment that is not taxed. The dollar amount is determined by dividing the investment in the contract by the total number of expected periodic payments. The entire income phase payment will be taxable once the recipient has recovered the investment in the contract.

All deferred nonqualified annuity contracts that are issued by the Company (or its affiliates) to the same contract holder during any calendar year are 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.

Taxation of Death Benefit Proceeds. In general, payments received by your designated beneficiaries after your death are taxed in the same manner as if you had received those payments.

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10% Penalty Tax

Under certain circumstances, the Tax Code may impose a 10% penalty tax on the taxable portion of any distribution from a nonqualified contract unless one or more of the following have occurred:

You have attained age 59 1/2;

You have become disabled within the meaning of the Tax Code;

You have died;

The distribution is made in 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.

Withholding for Federal Income Tax Liability

Any taxable distributions under the contract are generally subject to withholding. Federal income tax liability rates vary according to the type of distribution and the recipient's tax status.

Generally, you or a designated beneficiary may elect not to have tax withheld from distributions.

Non-resident Aliens. 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.

Minimum Distribution of Death Benefit Proceeds

Death of Contract Holder. The following requirements apply to nonqualified contracts at your death. Different distribution requirements apply if your death occurs:

After you begin receiving income phase payments under the contract, or

Before you begin receiving such distributions.

If your death occurs after you begin receiving income phase 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 income phase payments, your entire balance must be distributed within five years after the date of your death. For example, if you die on September 1, 2005, your entire balance must be distributed by August 31, 2010. However, if the distribution begins within one year of your death, then payments may be made over one of the following time-frames:

Over the life of the designated beneficiary; or

Over a period not extending beyond the life expectancy of the designated beneficiary.

Spousal Designated Beneficiaries. If the designated beneficiary is your spouse, the contract may be continued with the surviving spouse as the new contract holder.

Death of the Annuitant. If the contract holder is a nonnatural person and the annuitant dies, the same rules apply as outlined above for death of a contract holder, with the annuitant treated as the holder of the contract. If there is a change in the annuitant, such change shall be treated as the death of the holder of the contract. If the contract holder is a natural person but not the annuitant and the annuitant dies, the designated beneficiary must elect an income phase payment option within 60 days of the date of death, or any gain under the contract will be includible in the designated beneficiary's income in the year the annuitant dies.

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Taxation of Nonqualified Contracts

In General. Tax Code section 72 governs taxation of annuities in general. A contract holder under a nonqualified contract who is a natural person generally is not taxed on increases in the account value until distribution occurs by withdrawing all or part of such account value. The taxable portion of a distribution is taxable as ordinary income.

Non-Natural Holders of a Nonqualified Contract. If the contract holder is not a natural person, a nonqualified contract generally is not treated as an annuity for income tax purposes and the income on the contract for the taxable year is currently taxable as ordinary income. Income on the contract is any increase over the year in the surrender value, adjusted for purchase payments made during the year, amounts previously distributed and amounts previously included in income. There are some exceptions to this rule and a non-natural person should consult a tax adviser prior to purchasing the contract. A non-natural person exempt from federal income taxes should consult a tax adviser regarding treatment of income on the contract for purposes of the unrelated business income tax. When the contract holder is not a natural person, a change in annuitant is treated as the death of the contract holder.

Transfers, Assignments or Exchanges of a Nonqualified Contract. A transfer of ownership of a nonqualified contract, the selection of certain income phase payment dates, or the exchange of a contract may result in certain tax consequences. 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 designation, transfer, assignment, selection, or exchange should contact a tax adviser regarding the potential tax effects of such a transaction.

Delayed Annuity Starting Date. If the Contract's annuity starting date occurs (or is scheduled to occur) at a time when the annuitant has reached an advanced age (e.g., age 85), it is possible that the Contract would not be treated as an annuity for federal income tax purposes. In that event, the income and gains under the Contract could be currently includible in your income.

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".

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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. However, the IRS has reserved the right to treat transactions it considers abusive as ineligible for favorable partial 1035 tax free exchange treatment. The IRS has not provided any additional guidance on what it considers abusive. It is not certain whether the IRS would treat an immediate withdrawal or annuitization after a partial exchange as abusive. In addition, it is unclear how the IRS will treat a partial exchange from a life insurance, endowment, or annuity contract directly into an immediate annuity. Currently, we will accept a partial 1035 exchange from a non-qualified annuity into a deferred annuity or an immediate annuity as a tax free transaction unless we believe that we would be expected to treat the transaction as abusive. 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 with your tax advisor prior to proceeding with the transaction.

Possible Changes in Taxation

Although the likelihood of legislative change 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 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 Separate 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 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.

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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 National Association of Securities Dealers, Inc. (NASD) and the Securities Investor Protection Corporation. ING Financial Advisers, LLC's principal office is located at 151 Farmington Avenue, Hartford, Connecticut 06156.
The contracts are offered to the public by individuals who are registered representatives of ING Financial Advisers, LLC or other broker-dealers which have or may enter into a selling arrangement with ING Financial Advisers, LLC. We refer to ING Financial Advisers, LLC and the other broker-dealers selling the contracts as "distributors."
All registered representatives selling the contracts must also be licensed as insurance agents for the Company.
Broker-dealers which have or may enter into selling agreements with ING Financial Advisers, LLC include the following broker-dealers which are affiliated with the Company:
Banknorth Investment Group, Inc. Baring Investment Services, Inc. Compulife Investor Services, Inc. Directed Services, Inc. Financial Network Investment Corporation Granite Investment Services, Inc. Guaranty Brokerage Services, Inc. ING America Equities, Inc.	ING Barings Corp. ING Direct Funds Limited ING DIRECT Securities, Inc. ING Financial Partners, Inc. ING Funds Distributor, LLC Multi-Financial Securities Corporation PrimeVest Financial Services, Inc. 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 owners or the separate account. We intend to recoup this compensation and other 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.

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Commission Payments. Persons 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 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 NASD 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 special compensation arrangements will not be offered to all distributors, and the terms of such arrangements may differ among distributors based on various factors. 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 NASD 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, distributors may also be paid additional compensation or reimbursement of expenses for their efforts in selling contracts to you and other customers. These amounts may include:

Wholesaling fees calculated as a percentage of the commissions paid to distributors or of purchase payments received under the contracts;

Marketing allowances;

Education and training allowances to facilitate our attendance at certain educational and training meetings to provide information and training about our products, including holding training programs at our expense;

Sponsorship payments to support attendance at meetings by registered representatives who sell our products;

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Reimbursement for the cost of attendance by registered representatives at conventions that we sponsor;

Loans or advances of commissions in anticipation of future receipt of premiums (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 contract sales.

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.

The following is a list of the top 25 selling firms that, during 2004, 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.

1) Lincoln Investment Planning Inc. 2) Symetra Investment Services, Inc. 3) SunAmerica Securities, Inc. 4) Securities America, Inc. 5) ING Financial Partners, Inc. 6) Financial Network Investment Corporation 7) Investacorp Inc. 8) Huckin Financial Group 9) National Planning Corporation 10) Walnut Street Securities, Inc. 11) NIA Securities, L.L.C. 12) MML Investors Services, Inc. 13) Cadaret, Grant & Co., Inc.	14) Proequities, Inc. 15) Investment Professionals, Inc. 16) Jefferson Pilot Securities Corporation 17) McGinn, Smith & Co., Inc. 18) Linsco/Private Ledger Corp. 19) Queens Road Securities 20) A.G. Edwards & Sons 21) Horan Securities, Inc. 22) Lincoln Financial Advisors Corporation 23) Securities Service Network, Inc. 24) Woodbury Financial Services, Inc. 25) M Holdings Securities, Inc.

If the amounts paid to ING Financial Advisers, LLC, were included, ING Financial Advisers, LLC would be at the top of 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 over those of another Company, and may also provide a financial incentive to promote one of our contracts over another.

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OTHER TOPICS

The Company

We issue the contracts described in this prospectus and are responsible for providing each contract's insurance and annuity benefits.

We are a stock life insurance company organized under the insurance laws of the State of Connecticut in 1976 and an indirect 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 May 1, 2002, the Company was known as Aetna Life Insurance and Annuity Company.

We are engaged in the business of issuing life insurance and annuities.

Our principal executive offices are located at:

151 Farmington Avenue
Hartford, Connecticut 06156

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." The subaccounts invest 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 the Company. All obligations arising under the contracts are obligations of the Company.

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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.

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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.

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 our Home Office. 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 our Home Office. 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.

We are, or may be in the future, a defendant in various legal proceedings in connection with the normal conduct of our insurance operations. Some of these cases may seek class action status and may include a demand for punitive damages as well as for compensatory damages. In the opinion of management, the ultimate resolution of any existing legal proceeding is not likely to have a material adverse effect on our ability to meet our obligations under the contract.

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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. Suits against the distributor sometimes include claims for substantial compensatory, consequential or punitive damages and other types of relief. In a number of pending cases, claims have been made that a former registered representative of the distributor converted client funds to the representatives' personal use. ING Financial Advisers, LLC is not involved in any legal proceeding which, in the opinion of management, is likely to have material adverse effect on its ability to distribute the contract.

Regulatory Matters

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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
Variable Annuity Account B
Offering and Purchase of Contract
Income Phase Payments
Sales Material and Advertising
Independent Registered Public Accounting Firm

Financial Statements of the Separate Account

Consolidated Financial Statements of ING Life Insurance and Annuity Company

You may request an SAI by calling the Home Office at the number listed in "Contract Overview - Questions: Contacting the Company."

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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 federal 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 the Home Office 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.

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Appendix II

Description of Underlying Funds

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," by accessing the SEC's web site or by contacting the SEC Public Reference Room.

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.

Fund Name	Investment Adviser/ Subadviser	Investment Objective(s)/Summary of Principal Investments
FidelityÒ Variable Insurance Products - FidelityÒ VIP ContrafundÒ Portfolio (Initial Class)	Fidelity Management & Research Company Subadvisers: Fidelity Management & Research (U.K.) Inc.; Fidelity Management & Research (Far East) Inc.; Fidelity Investments Japan Limited; FMR Co., Inc.	Seeks long-term capital appreciation. Normally invests primarily in common stocks of companies whose value the Portfolio's investment adviser believes is not fully recognized by the public.
FidelityÒ Variable Insurance Products - FidelityÒ VIP Equity-Income Portfolio (Initial Class)	Fidelity Management & Research Company Subadviser: FMR Co., Inc.	Seeks reasonable income. Also considers the potential for capital appreciation. Seeks to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor's 500^SM Index. Normally invests at least 80% of total assets in income-producing equity securities (which tends to lead to investments in large cap "value" stocks).
FidelityÒ Variable Insurance Products - FidelityÒ VIP Growth Portfolio (Initial Class)	Fidelity Management & Research Company Subadviser: FMR Co., Inc.	Seeks to achieve capital appreciation. Normally invests primarily in common stocks of companies the investment adviser believes have above-average growth potential (often called "growth" stocks).

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Fund Name	Investment Adviser/ Subadviser	Investment Objective(s)/Summary of Principal Investments
FidelityÒ Variable Insurance Products - FidelityÒ VIP Overseas Portfolio (Initial Class)	Fidelity Management & Research Company Subadvisers: Fidelity Management & Research (U.K.) Inc.; Fidelity Management & Research (Far East) Inc.; Fidelity International Investment Advisors (U.K.) Limited; Fidelity Investments Japan Limited; FMR Co., Inc.	Seeks long-term growth of capital. Normally invests at least 80% of assets in non-U.S. securities, primarily in common stocks.
ING Partners, Inc. - ING American Century Select Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: American Century Investment Management, Inc. (American Century)	Seeks long-term capital appreciation. Invests in securities of companies American Century believes will increase in value over time, using a growth investment strategy developed by American Century. Generally invests in larger companies, although may purchase securities of companies of any size. Can also invest in foreign companies.
ING Partners, Inc. - ING JPMorgan Fleming International Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: J.P. Morgan Fleming Asset Management (London) Ltd.	Seeks long-term growth of capital. Invests primarily (at least 65% of total assets) in the equity securities of foreign companies that the subadviser believes have higher growth potential and which are attractively valued. Will normally invest in a number of issuers in several countries other than the U.S. and will invest in securities in both developed and developing markets. May invest in debt securities issued by foreign and U.S. companies, including non-investment grade debt securities.
ING Partners, Inc. - ING MFS Capital Opportunities Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: Massachusetts Financial Services Company (MFS)	Seeks capital appreciation. Invests primarily (at least 65% of net assets) in common stocks and related securities, such as preferred stocks, convertible securities and depositary receipts focusing on companies that MFS believes have favorable growth prospects and attractive valuations based on current and expected earnings or cash flows. May invest in foreign securities (including emerging market securities).

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Fund Name	Investment Adviser/ Subadviser	Investment Objective(s)/Summary of Principal Investments
ING Partners, Inc. - ING Oppenheimer Global Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: OppenheimerFunds, Inc.	Seeks capital appreciation. Invests mainly in common stocks of companies in the U.S. and foreign countries. Can invest without limit in foreign securities in any country, including countries with emerging markets. Currently emphasizes investments in developed markets such as the United States, Western European countries and Japan. May invest in companies of any size, but currently focuses its investments in mid- and large-cap companies. Normally will invest in at least three countries (one of which may be the United States).
ING Partners, Inc. - ING Oppenheimer Strategic Income Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: OppenheimerFunds, Inc.	Seeks a high level of current income principally derived from interest on debt securities. Invests mainly in debt securities of issuers in three market sectors: foreign governments and companies; U.S. government securities; and lower-grade high-yield securities of U.S. and foreign companies. Debt securities typically include short, medium and long-term foreign government and U.S. government bonds and notes; collateralized mortgage obligations; other mortgage-related securities and asset-backed securities; participation interests in loans; "structured" notes; lower-grade, high-yield domestic and foreign corporate debt obligations; and "zero-coupon" or "stripped" securities.
ING Partners, Inc. - ING Salomon Brothers Aggressive Growth Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: Salomon Brothers Asset Management Inc	Seeks long-term growth of capital. Invests primarily (at least 80% of net assets under normal circumstances) in common stocks and related securities, such as preferred stock, convertible securities and depositary receipts, of emerging growth companies. May invest in foreign securities (including emerging market securities).
ING Partners, Inc. - ING T. Rowe Price Diversified Mid Cap Growth Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: T. Rowe Price Associates, Inc.	Seeks long-term capital appreciation. Normally invests at least 80% of total assets in equity securities of companies having a market capitalization within the range of companies in the Russell MidCap Growth Index or the Standard & Poor's MidCap 400 Index focusing on mid-size companies whose earnings are expected to grow at a rate faster than the average company.

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Fund Name	Investment Adviser/ Subadviser	Investment Objective(s)/Summary of Principal Investments
ING Partners, Inc. - ING T. Rowe Price Growth Equity Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: T. Rowe Price Associates, Inc.	Seeks long-term capital growth, and secondarily, increasing dividend income. Invests primarily (at least 80% of net assets under normal circumstances) in common stocks. Concentrates its investments in growth companies that have the ability to pay increasing dividends through strong cash flows and whose rates of earnings growth are considered above average. May also purchase foreign stocks, hybrid securities, futures and options. Investments in foreign securities are limited to 30% of total assets.
ING Partners, Inc. - ING UBS U.S. Large Cap Equity Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: UBS Global Asset Management (Americas) Inc.	Seeks long-term growth of capital and future income. Under normal circumstances, invests at least 80% of net assets (plus borrowings for investment purposes, if any) in equity securities of U.S. large capitalization companies. Investments in equity securities may include dividend-paying securities, common stock and preferred stock.
ING Partners, Inc. - ING Van Kampen Equity and Income Portfolio (Initial Class)	ING Life Insurance and Annuity Company Subadviser: Van Kampen* * Morgan Stanley Investment Management Inc. does business in certain instances (including in its role as subadviser to the Portfolio) under the name "Van Kampen"	Seeks total return, consisting of long-term capital appreciation and current income. Normally invests at least 80% of net assets (plus any borrowings for investment purposes) in equity and income securities at the time of investment. Normally invests at least 65% of assets in income producing equity instruments (including common stocks, preferred stocks and convertible securities) and investment grade quality debt securities. May invest up to 25% of total assets in securities of foreign issuers. May purchase and sell certain derivative instruments, such as options, futures contracts, and options on futures contracts, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks.
ING VP Balanced Portfolio, Inc. (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to maximize investment return, consistent with reasonable safety of principal, by investing in a diversified portfolio of one or more of the following asset classes: stocks, bonds and cash equivalents, based on the judgment of the Portfolio's management, of which of those sectors or mix thereof offers the best investment prospects. Typically maintains approximately 60% of total assets in equities and approximately 40% of total assets in debt (including money market instruments). The Portfolio may invest a portion of its total assets in high-yield instruments. May also invest in convertible securities, foreign debt securities and derivatives.

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Fund Name	Investment Adviser/ Subadviser	Investment Objective(s)/Summary of Principal Investments
ING Variable Portfolios, Inc. - ING VP Global Science and Technology Portfolio (Class I Shares)	ING Investments, LLC Subadviser: BlackRock Advisors, Inc.	Seeks long-term capital appreciation. Normally invests at least 80% of net assets in equity securities issued by science and technology companies in all market capitalization ranges. Will invest primarily in equity securities of U.S. and non-U.S. companies selected for their rapid and sustainable growth potential from the development, advancement and use of science and/or technology. May invest up to 25% of its net assets in stocks of issuers in emerging market countries. May also invest in preferred stock, initial public offerings, Rule 144A securities and derivative instruments including foreign currency contracts. May from time to time invest more than 25% of its assets in securities whose issuers are located in a single foreign country.
ING Variable Funds - ING VP Growth and Income Portfolio (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to maximize total return through investments in a diversified portfolio of common stocks and securities convertible into common stock. Under normal market conditions, invests at least 65% of total assets in common stocks that the subadviser believes have significant potential for capital appreciation or income growth or both. May invest up to 25% of its total assets in stocks of foreign issuers. May invest in derivatives.
ING VP Intermediate Bond Portfolio (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to maximize total return consistent with reasonable risk, through investment in a diversified portfolio consisting primarily of debt securities. It is anticipated that capital appreciation and investment income will both be major factors in achieving total return. Under normal market conditions, the Portfolio invests at least 80% of its assets in a portfolio of bonds, including but not limited to corporate, government and mortgage bonds, which, at the time of investment, are rated investment grade or have an equivalent rating by a nationally recognized statistical rating organization, or of comparable quality if unrated. May also invest in: preferred stocks; high quality money market instruments; municipal bonds; debt securities of foreign issuers; mortgage- and asset-backed securities; and options and futures contracts involving securities, securities indices and interest rates. Although the portfolio may invest in high yield debt securities rated below investment grade, it seeks to maintain a minimum average portfolio quality of at least investment grade.

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Fund Name	Investment Adviser/ Subadviser	Investment Objective(s)/Summary of Principal Investments
ING VP Money Market Portfolio (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to provide high current return, consistent with preservation of capital and liquidity, through investment in high-quality money market instruments. Invests in a diversified portfolio of high-quality fixed income securities denominated in U.S. dollars, with short remaining maturities. May invest in certain obligations of foreign banks. There is no guarantee that the ING VP Money Market Subaccount will have a positive or level return.
ING Strategic Allocation Portfolios, Inc. - ING VP Strategic Allocation Balanced Portfolio (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to provide total return (i.e., income and capital appreciation, both realized and unrealized). Managed for investors seeking a balance between income and capital appreciation who generally have an investment horizon exceeding 10 years and a moderate level of risk tolerance. Under normal market conditions, allocates assets among several classes of equities, fixed-income securities (including up to 15% of total assets in high-yield instruments) and money market instruments. The benchmark portfolio is 60% equities, 35% fixed income and 5% money market instruments under neutral market conditions.
ING Strategic Allocation Portfolios, Inc. - ING VP Strategic Allocation Growth Portfolio (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to provide capital appreciation. Managed for investors seeking capital appreciation who generally have an investment horizon exceeding 15 years and a high level of risk tolerance. Under normal market conditions, allocates assets among several classes of equities, fixed-income securities (including up to 15% of total assets in high-yield instruments) and money market instruments. The benchmark portfolio is 80% equities and 20% fixed income under neutral market conditions.
ING Strategic Allocation Portfolios, Inc. - ING VP Strategic Allocation Income Portfolio (Class I Shares)	ING Investments, LLC Subadviser: ING Investment Management Co.	Seeks to provide total return consistent with preservation of capital. Managed for investors primarily seeking total return consistent with capital preservation who generally have an investment horizon exceeding 5 years and a low level of risk tolerance. Under normal market conditions, allocates assets among several classes of equities, fixed-income securities (including up to 15% of total assets in high-yield instruments) and money market instruments. The benchmark portfolio is 35% equities, 55% fixed income and 10% money market instruments under neutral market conditions.

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APPENDIX III CONDENSED FINANCIAL INFORMATION

Except for subaccounts which did not commence operations as of December 31, 2004, 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, 2004 the "Value at beginning of period" shown is the value at first date of investment. For those subaccounts that ended operations during the period ended December 31, 2004 the "Value at end of period" shown is the value at the last date of investment.
TABLE I FOR CONTRACTS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.25% (Selected data for accumulation units outstanding throughout each period)

	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995
FIDELITY^® VIP CONTRAFUND^® PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$21.98	$17.33	$19.354	$22.333	$24.217	$19.735	$15.374	$12.540	$10.468	$10.000
Value at end of period	$25.07	$21.98	$17.33	$19.354	$22.333	$24.217	$19.735	$15.374	$12.540	$10.468
Number of accumulation units outstanding at end of period	578,222	459,840	368,356	350,846	365,499	449,134	488,102	465,699	273,189	379,862
FIDELITY^® VIP EQUITY-INCOME PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$19.39	$15.06	$18.363	$19.565	$18.272	$17.400	$15.784	$12.475	$11.054	$10.000
Value at end of period	$21.35	$19.39	$15.06	$18.363	$19.565	$18.272	$17.400	$15.784	$12.475	$11.054
Number of accumulation units outstanding at end of period	517,940	447,621	362,704	304,410	204,704	236,374	298,921	328,562	208,072	294,244
FIDELITY^® VIP GROWTH PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$16.83	$12.83	$18.588	$22.858	$25.999	$19.155	$13.904	$11.402	$10.066	$10.000
Value at end of period	$17.19	$16.83	$12.83	$18.588	$22.858	$25.999	$19.155	$13.904	$11.402	$10.066
Number of accumulation units outstanding at end of period	376,032	444,798	424,020	497,068	536,656	474,649	324,558	229,060	199,720	288,576

CFI - 1

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995
FIDELITY^® VIP OVERSEAS PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$13.46	$9.51	$12.077	$15.514	$19.419	$13.786	$12.381	$11.238	$10.052	$10.000
Value at end of period	$15.11	$13.46	$9.51	$12.077	$15.514	$19.419	$13.786	$12.381	$11.238	$10.052
Number of accumulation units outstanding at end of period	132,647	99,214	41,584	40,745	33,208	37,275	54,226	51,780	38,994	33,813
ING JPMORGAN FLEMING INTERNATIONAL PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$19.52	$15.27	$18.876	$26.160	$32.942	$21.057	$17.903	$17.682
Value at end of period	$22.92	$19.52	$15.27	$18.876	$26.160	$32.942	$21.057	$17.903
Number of accumulation units outstanding at end of period	209,092	202,506	216,775	254,404	286,301	316,726	360,392	411,600
ING MFS CAPITAL OPPORTUNITIES PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$23.69	$18.73	$27.159	$36.551	$39.254	$26.713	$21.343	$21.038
Value at end of period	$26.41	$23.69	$18.73	$27.159	$36.551	$39.254	$26.713	$21.343
Number of accumulation units outstanding at end of period	177,277	204,828	249,445	300,792	335,970	278,562	303,746	296,540
ING SALOMON BROTHERS AGGRESSIVE GROWTH PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$13.15	$9.64	$15.086	$20.426	$29.040	$19.489	$15.219	$15.411
Value at end of period	$14.25	$13.15	$9.64	$15.086	$20.426	$29.040	$19.489	$15.219
Number of accumulation units outstanding at end of period	327,368	365,960	353,915	420,422	455,264	485,026	695,813	742,913
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$18.80	$14.54	$19.189	$21.643	$21.922	$18.146	$14.400	$14.112
Value at end of period	$20.42	$18.80	$14.54	$19.189	$21.643	$21.922	$18.146	$14.400
Number of accumulation units outstanding at end of period	217,537	218,596	192,650	212,838	192,790	177,799	287,914	231,297
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$12.79	$10.37	$13.976	$17.889	$18.963	$15.481	$12.744	$12.995
Value at end of period	$14.50	$12.79	$10.37	$13.976	$17.889	$18.963	$15.481	$12.744
Number of accumulation units outstanding at end of period	261,134	279,653	300,021	351,117	395,373	408,870	605,271	664,979

CFI 2

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995
ING VP BALANCED PORTFOLIO, INC.
Value at beginning of period	$23.77	$20.25	$22.856	$24.163	$24.603	$21.929	$18.989	$15.698	$13.803	$10.971
Value at end of period	$25.68	$23.77	$20.25	$22.856	$24.163	$24.603	$21.929	$18.989	$15.698	$13.803
Number of accumulation units outstanding at end of period	1,342,969	1,352,428	1,483,863	1,725,814	2,014,690	2,278,136	2,929,720	3,174,738	3,885,730	6,430,772
ING VP GLOBAL SCIENCE AND TECHNOLOGY PORTFOLIO
(Funds were first received in this option during May 2000)
Value at beginning of period	$3.70	$2.57	$4.436	$5.831	$9.558
Value at end of period	$3.60	$3.70	$2.57	$4.436	$5.831
Number of accumulation units outstanding at end of period	238,094	325,256	240,058	172,469	127,430
ING VP GROWTH AND INCOME PORTFOLIO
Value at beginning of period	$18.87	$15.16	$20.465	$25.397	$28.883	$24.907	$22.028	$17.173	$13.972	$10.698
Value at end of period	$20.20	$18.87	$15.16	$20.465	$25.397	$28.883	$24.907	$22.028	$17.173	$13.972
Number of accumulation units outstanding at end of period	3,268,534	3,649,456	4,278,162	5,447,988	6,188,910	7,212,849	9,491,619	10,689,845	15,372,944	30,554,957
ING VP INTERMEDIATE BOND PORTFOLIO
Value at beginning of period	$18.27	$17.40	$16.266	$15.147	$13.988	$14.270	$13.361	$12.493	$12.212	$10.457
Value at end of period	$18.92	$18.27	$17.40	$16.266	$15.147	$13.988	$14.270	$13.361	$12.493	$12.212
Number of accumulation units outstanding at end of period	1,012,407	688,345	807,470	862,575	722,494	887,371	1,129,589	1,168,988	1,947,629	4,853,662
ING VP MONEY MARKET PORTFOLIO
Value at beginning of period	$13.91	$13.95	$13.905	$13.547	$12.894	$12.425	$11.930	$11.453	$11.007	$10.509
Value at end of period	$13.88	$13.91	$13.95	$13.905	$13.547	$12.894	$12.425	$11.930	$11.453	$11.007
Number of accumulation units outstanding at end of period	546,292	760,049	1,044,246	1,134,800	894,024	1,034,154	1,146,661	974,714	1,984,269	4,354,272
ING VP STRATEGIC ALLOCATION BALANCED PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$15.78	$13.37	$14.966	$16.295	$16.431	$15.095	$14.432	$12.430	$10.594	$10.000
Value at end of period	$17.17	$15.78	$13.37	$14.966	$16.295	$16.431	$15.095	$14.432	$12.430	$10.594
Number of accumulation units outstanding at end of period	63,295	77,501	89,224	99,986	99,845	115,324	218,649	175,559	74,128	16,953
ING VP STRATEGIC ALLOCATION GROWTH PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$16.05	$13.07	$15.344	$17.566	$17.905	$15.855	$15.392	$12.999	$10.652	$10.000
Value at end of period	$17.75	$16.05	$13.07	$15.344	$17.566	$17.905	$15.855	$15.392	$12.999	$10.652
Number of accumulation units outstanding at end of period	69,724	75,583	72,637	76,069	79,352	96,551	274,115	317,579	99,589	16,791

CFI - 3

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995
ING VP STRATEGIC ALLOCATION INCOME PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$15.74	$14.02	$14.844	$15.397	$14.875	$14.064	$13.317	$11.776	$10.443	$10.000
Value at end of period	$16.78	$15.74	$14.02	$14.844	$15.397	$14.875	$14.064	$13.317	$11.776	$10.443
Number of accumulation units outstanding at end of period	49,393	52,209	88,782	82,972	99,655	111,343	197,742	133,741	25,977	2,222
JANUS ASPEN BALANCED PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$23.53	$20.89	$22.613	$24.030	$24.886	$19.880	$14.990	$12.431	$10.835	$10.000
Value at end of period	$25.22	$23.53	$20.89	$22.613	$24.030	$24.886	$19.880	$14.990	$12.431	$10.835
Number of accumulation units outstanding at end of period	303,557	452,635	555,952	594,286	528,229	527,201	334,508	193,429	74,184	7,772
JANUS ASPEN FLEXIBLE BOND PORTFOLIO
(The initial accumulation unit value was established at $10.000 during October 1994, when the funds were first received in this option)
Value at beginning of period	$19.92	$18.96	$17.375	$16.331	$15.562	$15.509	$14.393	$13.040	$12.094	$9.886
Value at end of period	$20.45	$19.92	$18.96	$17.375	$16.331	$15.562	$15.509	$14.393	$13.040	$12.094
Number of accumulation units outstanding at end of period	81,302	119,900	171,616	114,775	62,404	73,596	85,517	109,812	96,128	84,048
JANUS ASPEN LARGE CAP GROWTH PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$17.39	$13.37	$18.419	$24.782	$29.366	$20.651	$15.414	$12.716	$10.870	$10.000
Value at end of period	$17.95	$17.39	$13.37	$18.419	$24.782	$29.366	$20.651	$15.414	$12.716	$10.870
Number of accumulation units outstanding at end of period	246,837	275,014	338,649	458,627	541,342	432,037	217,310	179,226	132,465	26,022
JANUS ASPEN MID-CAP GROWTH PORTFOLIO
(The initial accumulation unit value was established at $10.000 during October 1994, when the funds were first received in this option)
Value at beginning of period	$17.39	$13.03	$18.313	$30.628	$45.486	$20.433	$15.410	$13.850	$12.992	$10.319
Value at end of period	$20.74	$17.39	$13.03	$18.313	$30.628	$45.486	$20.433	$15.410	$13.850	$12.992
Number of accumulation units outstanding at end of period	438,674	516,538	566,618	759,840	986,825	828,592	512,154	469,230	590,904	723,839

CFI - 4

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997	1996	1995
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
(The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract)
Value at beginning of period	$19.90	$16.25	$22.088	$28.839	$34.626	$21.320	$16.745	$13.880	$10.893	$10.000
Value at end of period	$20.59	$19.90	$16.25	$22.088	$28.839	$34.626	$21.320	$16.745	$13.880	$10.893
Number of accumulation units outstanding at end of period	343,860	482,318	609,559	760,308	966,698	902,510	1,069,704	953,522	520,275	227,582

CFI - 5

CONDENSED FINANCIAL INFORMATION

TABLE II FOR CONTRACTS CONTAINING LIMITS ON FEES (Selected data for accumulation units outstanding throughout each period)




	2004	2003	2002	2001	2000	1999	1998	1997
FIDELITY^® VIP CONTRAFUND^® PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$21.98	$17.33	$19.354	$22.333	$24.217	$19.735	$15.374	$13.535
Value at end of period	$25.07	$21.98	$17.33	$19.354	$22.333	$24.217	$19.735	$15.374
Number of accumulation units outstanding at end of period	25,162	22,238	18,503	11,769	8,064	13,750	14,618	13,675
FIDELITY^® VIP EQUITY-INCOME PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$19.39	$15.06	$18.363	$19.565	$18.272	$17.400	$15.784	$14.017
Value at end of period	$21.35	$19.39	$15.06	$18.363	$19.565	$18.272	$17.400	$15.784
Number of accumulation units outstanding at end of period	34,515	16,683	28,494	5,108	7,656	11,370	13,539	35,342
FIDELITY^® VIP GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$16.83	$12.83	$18.588	$22.858	$25.999	$19.155	$13.904	$12.498
Value at end of period	$17.19	$16.83	$12.83	$18.588	$22.858	$25.999	$19.155	$13.904
Number of accumulation units outstanding at end of period	13,505	13,739	16,200	30,698	29,626	32,858	24,195	3,029
FIDELITY^® VIP OVERSEAS PORTFOLIO
(Funds were first received in this option during November 2003)
Value at beginning of period	$13.46	$12.60
Value at end of period	$15.11	$13.46
Number of accumulation units outstanding at end of period	2,467	680
ING JPMORGAN FLEMING INTERNATIONAL PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$19.52	$15.27	$18.876	$26.160	$32.942	$21.057	$17.903	$17.682
Value at end of period	$22.92	$19.52	$15.27	$18.876	$26.160	$32.942	$21.057	$17.903
Number of accumulation units outstanding at end of period	3,217	1,614	1,614	2,389	4,808	4,496	5,245	3,986
ING MFS CAPITAL OPPORTUNITIES PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$23.69	$18.73	$27.159	$36.551	$39.254	$26.713	$21.343	$21.038
Value at end of period	$26.41	$23.69	$18.73	$27.159	$36.551	$39.254	$26.713	$21.343
Number of accumulation units outstanding at end of period	5,194	5,195	9,460	9,287	11,362	9,451	9,947	8,563

CFI - 6

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997
ING SALOMON BROTHERS AGGRESSIVE GROWTH PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$13.15	$9.64	$15.086	$20.426	$29.040	$19.489	$15.219	$15.411
Value at end of period	$14.25	$13.15	$9.64	$15.086	$20.426	$29.040	$19.489	$15.219
Number of accumulation units outstanding at end of period	16,173	15,712	9,981	15,417	13,795	12,142	11,330	11,848
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$18.80	$14.54	$19.189	$21.643	$21.922	$18.146	$14.400	$14.112
Value at end of period	$20.42	$18.80	$14.54	$19.189	$21.643	$21.922	$18.146	$14.400
Number of accumulation units outstanding at end of period	10,065	9,380	6,422	6,688	4,920	4,491	4,730	3,310
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO
(Funds were first received in this option during November 1997)
Value at beginning of period	$12.79	$10.37	$13.976	$17.889	$18.963	$15.481	$12.744	$12.995
Value at end of period	$14.50	$12.79	$10.37	$13.976	$17.889	$18.963	$15.481	$12.744
Number of accumulation units outstanding at end of period	136,060	108,922	121,245	141,938	162,448	135,420	148,963	141,582
ING VP BALANCED PORTFOLIO, INC.
(Funds were first received in this option during June 1997)
Value at beginning of period	$24.16	$20.53	$23.119	$24.379	$24.762	$22.015	$19.016	$16.898
Value at end of period	$26.17	$24.16	$20.53	$23.119	$24.379	$24.762	$22.015	$19.016
Number of accumulation units outstanding at end of period	217,194	210,963	226,171	340,426	361,203	383,141	452,764	477,504
ING VP GLOBAL SCIENCE AND TECHNOLOGY PORTFOLIO
(Funds were first received in this option during August 2000)
Value at beginning of period	$3.73	$2.59	$4.454	$5.841	$9.564
Value at end of period	$3.65	$3.73	$2.59	$4.454	$5.841
Number of accumulation units outstanding at end of period	14,402	10,422	1,785	7,505	7,135
ING VP GROWTH AND INCOME PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$19.19	$15.37	$20.700	$25.624	$29.069	$25.005	$22.060	$19.527
Value at end of period	$20.59	$19.19	$15.37	$20.700	$25.624	$29.069	$25.005	$22.060
Number of accumulation units outstanding at end of period	1,401,295	1,674,699	1,943,271	2,540,138	2,862,933	3,297,663	3,821,349	4,106,796
ING VP INTERMEDIATE BOND PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$18.45	$17.55	$16.378	$15.229	$14.042	$14.304	$13.373	$12.747
Value at end of period	$19.14	$18.45	$17.55	$16.378	$15.229	$14.042	$14.304	$13.373
Number of accumulation units outstanding at end of period	237,188	248,725	332,174	362,413	364,573	387,135	452,992	489,431

CFI - 7

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997
ING VP MONEY MARKET PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$13.91	$13.95	$13.905	$13.547	$12.894	$12.425	$11.930	$11.654
Value at end of period	$13.88	$13.91	$13.95	$13.905	$13.547	$12.894	$12.425	$11.930
Number of accumulation units outstanding at end of period	182,060	236,795	340,943	362,580	424,946	457,619	505,775	580,412
ING VP STRATEGIC ALLOCATION BALANCED PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$16.14	$13.63	$15.207	$16.499	$16.579	$15.179	$14.461	$13.178
Value at end of period	$17.63	$16.14	$13.63	$15.207	$16.499	$16.579	$15.179	$14.461
Number of accumulation units outstanding at end of period	4,239	9,896	9,897	9,895	9,913	9,939	10,769	10,798
ING VP STRATEGIC ALLOCATION GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$16.42	$13.33	$15.591	$17.786	$18.066	$15.942	$15.422	$13.943
Value at end of period	$18.23	$16.42	$13.33	$15.591	$17.786	$18.066	$15.942	$15.422
Number of accumulation units outstanding at end of period	11,857	18,356	19,199	21,776	21,776	21,776	24,014	23,868
ING VP STRATEGIC ALLOCATION INCOME PORTFOLIO
(Funds were first received in this option during July 2002 and Funds were first received in this option during June 1997)
Value at beginning of period	$16.10	$14.30	$14.410			$14.141	$13.343	$12.335
Value at end of period	$17.24	$16.10	$14.30			$14.497	$14.141	$13.343
Number of accumulation units outstanding at end of period	23,796	20,520	22,791			0	1,958	2,254
JANUS ASPEN BALANCED PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$23.53	$20.89	$22.613	$24.030	$24.886	$19.880	$14.990	$13.554
Value at end of period	$25.22	$23.53	$20.89	$22.613	$24.030	$24.886	$19.880	$14.990
Number of accumulation units outstanding at end of period	12,240	12,261	23,295	30,038	16,214	12,101	6,712	2,819
JANUS ASPEN FLEXIBLE BOND PORTFOLIO
(Funds were first received in this option during February 1998)
Value at beginning of period	$19.92	$18.96	$17.375	$16.331	$15.562	$15.509	$14.630
Value at end of period	$20.45	$19.92	$18.96	$17.375	$16.331	$15.562	$15.509
Number of accumulation units outstanding at end of period	5,477	6,728	8,978	3,110	3,110	3,110	5,158
JANUS ASPEN LARGE CAP GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$17.39	$13.37	$18.419	$24.782	$29.366	$20.651	$15.414	$13.985
Value at end of period	$17.95	$17.39	$13.37	$18.419	$24.782	$29.366	$20.651	$15.414
Number of accumulation units outstanding at end of period	17,334	21,577	22,476	45,290	46,192	29,284	1,028	750

CFI - 8

Condensed Financial Information (continued)


	2004	2003	2002	2001	2000	1999	1998	1997
JANUS ASPEN MID CAP GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$17.39	$13.03	$18.313	$30.628	$45.486	$20.433	$15.410	$13.806
Value at end of period	$20.74	$17.39	$13.03	$18.313	$30.628	$45.486	$20.433	$15.410
Number of accumulation units outstanding at end of period	17,565	19,778	27,927	34,366	37,118	34,550	24,373	19,818
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$19.90	$16.25	$22.088	$28.839	$34.626	$21.320	$16.745	$15.851
Value at end of period	$20.59	$19.90	$16.25	$22.088	$28.839	$34.626	$21.320	$16.745
Number of accumulation units outstanding at end of period	17,546	20,915	26,439	36,002	42,596	44,861	45,971	44,433

CFI - 9

CONDENSED FINANCIAL INFORMATION

TABLE III FOR CONTRACTS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.95% (Selected data for accumulation units outstanding throughout each period)




	2004	2003	2002
FIDELITY^® VIP CONTRAFUND^® PORTFOLIO
(Funds were first received in this option during December 2002)
Value at beginning of period	$12.24	$17.33	$9.70
Value at end of period	$14.00	$12.24	$17.33
Number of accumulation units outstanding at end of period	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	$12.13	$8.78
Value at end of period	$13.40	$12.13
Number of accumulation units outstanding at end of period	11,244	5,511
FIDELITY^® VIP GROWTH PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.19	$8.80
Value at end of period	$12.49	$12.19
Number of accumulation units outstanding at end of period	4,116	5,490
FIDELITY^® VIP OVERSEAS PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.04	$8.09
Value at end of period	$13.56	$12.04
Number of accumulation units outstanding at end of period	6,279	1,756
ING JPMORGAN FLEMING INTERNATIONAL PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$11.27	$8.15
Value at end of period	$13.27	$11.27
Number of accumulation units outstanding at end of period	629	575
ING MFS CAPITAL OPPORTUNITIES PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$11.86	$8.79
Value at end of period	$13.26	$11.86
Number of accumulation units outstanding at end of period	287	287

CFI - 10

Condensed Financial Information (continued)


	2004	2003	2002
ING SALOMON BROTHERS AGGRESSIVE GROWTH PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.55	$8.77
Value at end of period	$13.63	$12.55
Number of accumulation units outstanding at end of period	1,505	5,591
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.68	$9.30
Value at end of period	$13.82	$12.68
Number of accumulation units outstanding at end of period	4,347	3,154
ING VP BALANCED PORTFOLIO, INC.
(Funds were first received in this option during February 2003)
Value at beginning of period	$11.54	$9.56
Value at end of period	$12.51	$11.54
Number of accumulation units outstanding at end of period	12	12
ING VP GLOBAL SCIENCE AND TECHNOLOGY PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.23	$8.44
Value at end of period	$11.96	$12.23
Number of accumulation units outstanding at end of period	223	223
ING VP GROWTH AND INCOME PORTFOLIO
(Funds were first received in this option during December 2002)
Value at beginning of period	$11.38	$15.16	$9.42
Value at end of period	$12.22	$11.38	$15.16
Number of accumulation units outstanding at end of period	49,972	69,060	94,985
ING VP INTERMEDIATE BOND PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$10.94	$10.51
Value at end of period	$11.37	$10.94
Number of accumulation units outstanding at end of period	6,479	4,656
ING VP MONEY MARKET PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$10.02	$10.02
Value at end of period	$10.02	$10.02
Number of accumulation units outstanding at end of period	0	3,292

CFI - 11

Condensed Financial Information (continued)


	2004	2003	2002
JANUS ASPEN BALANCED PORTFOLIO
(Funds were first received in this option during December 2002)
Value at beginning of period	$11.18	$20.89	$9.95
Value at end of period	$12.02	$11.18	$20.89
Number of accumulation units outstanding at end of period	10,602	29,882	3,375
JANUS ASPEN FLEXIBLE BOND PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$11.13	$10.66
Value at end of period	$11.46	$11.13
Number of accumulation units outstanding at end of period	1,109	1,301
JANUS ASPEN LARGE CAP GROWTH PORTFOLIO
(Funds were first received in this option during February 2003)
Value at beginning of period	$12.04	$8.72
Value at end of period	$12.47	$12.04
Number of accumulation units outstanding at end of period	3,134	3,769
JANUS ASPEN MID-CAP GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$12.78	$9.24
Value at end of period	$15.29	$12.78
Number of accumulation units outstanding at end of period	2,945	5,301
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
(Funds were first received in this option during June 1997)
Value at beginning of period	$11.12	$8.44
Value at end of period	$11.54	$11.12
Number of accumulation units outstanding at end of period	2,954	8,396

CFI - 12

FOR MASTER APPLICATIONS ONLY

I hereby acknowledge receipt of an Account B Individual Nonqualified Variable Annuity Prospectus dated April 29, 2005, as well as all current prospectuses pertaining to the variable investment options available under the contracts.

___ Please send an Account B Statement of Additional Information (Form No. SAI.75998-05) dated April 29, 2005.

CONTRACT HOLDER' S SIGNATURE

DATE

PRO.75998-05
VARIABLE ANNUITY ACCOUNT B

OF

ING LIFE INSURANCE AND ANNUITY COMPANY

Statement of Additional Information dated April 29, 2005

Individual 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, 2005.

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, TS21
151 Farmington Avenue
Hartford, CT 06156-1277
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	4
Sales Material and Advertising	5
Independent Registered Public Accounting Firm	6
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 May 1, 2002, the Company was known as Aetna Life Insurance and Annuity Company. The Company is an indirect subsidiary of ING Groep, N.V., a global financial institution active in the fields of insurance, banking and asset management. 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 engaged in the business of issuing life insurance policies and annuity contracts. Our Home Office is located at 151 Farmington Avenue, Hartford, Connecticut 06156.

As of December 31, 2004, the Company and its subsidiary life company had $53 billion invested through their products, including $34 billion in their separate accounts (of which the Company, or its management affiliates, ING Investment Management Co. and ING Investments, LLC manages or oversees the management of $19 billion). The Company is ranked based on assets among the top 5% of all life and health insurance companies rated by A.M. Best Company as of July 16, 2004.

In addition to serving as the depositor for the separate account, the Company is a registered investment adviser under the Investment Advisers Act of 1940. We provide investment advice to several of the registered management investment companies offered as variable investment options under the contracts funded by the separate account (see "Variable Annuity Account B" below).

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 listed below. 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.

The funds currently available under the contract are as follows:

Fidelity^® VIP Contrafund^® Portfolio (Initial Class)

Fidelity^® VIP Equity-Income Portfolio (Initial Class)

Fidelity^® VIP Growth Portfolio (Initial Class)

Fidelity^® VIP Overseas Portfolio (Initial Class)

ING American Century Select Portfolio (Initial Class)

ING JP Morgan Fleming International Portfolio (Initial Class)

ING MFS Capital Opportunities Portfolio (Initial Class)

ING Oppenheimer Global Portfolio (Initial Class)

ING Oppenheimer Strategic Income Portfolio (Initial Class)

ING Salomon Brothers Aggressive Growth Portfolio (Initial Class)

ING T. Rowe Price Diversified Mid Cap Growth Portfolio (Initial Class)

ING T. Rowe Price Growth Equity Portfolio (Initial Class)

ING UBS U.S. Large Cap Equity Portfolio (Initial Class)

ING Van Kampen Equity and Income Portfolio (Initial Class)

ING VP Balanced Portfolio, Inc. (Class I)

ING VP Global Science and Technology Portfolio (Class I)

ING VP Growth and Income Portfolio (Class I)

ING VP Intermediate Bond (Class I)⁽¹⁾

ING VP Money Market Portfolio (Class I)

ING VP Strategic Allocation Balanced Portfolio (Class I)

ING VP Strategic Allocation Growth Portfolio (Class I)

ING VP Strategic Allocation Income Portfolio (Class I)

(1) Formerly ING VP Bond Portfolio.

Complete descriptions 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.

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 National Association of Securities Dealers, Inc. and the Securities Investor Protection Corporation. ING Financial Advisers, LLC's principal office is located at 151 Farmington Avenue, Hartford, Connecticut 06156. 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, 2004, 2003 and 2002 amounted to $2,068,285.47, $2,770,934 and $3,193,869 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. 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.

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.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Ernst & Young LLP, 600 Peachtree Street, Suite 2800, Atlanta, GA 30308 is the independent registered public accounting firm for the separate account and for the Company. The services provided to the separate account include primarily the audit of the separate account's financial statements.

Financial Statements
ING Life Insurance and Annuity Company
Variable Annuity Account B
Year ended December 31, 2004
with Report of Independent Registered Public Accounting Firm

S-1

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ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Financial Statements
Year ended December 31, 2004

Contents

Report of Independent Registered Public Accounting Firm	1

Audited Financial Statements

Statements of Assets and Liabilities	4
Statements of Operations	30
Statements of Changes in Net Assets	57
Notes to Financial Statements	90

This page intentionally left blank.

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 ING Life Insurance and Annuity Company Variable Annuity Account B (the "Account") as of December 31, 2004, 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:

AIM Variable Insurance Funds:

AIM V.I. Capital Appreciation Fund - Series I Shares

AIM V.I. Core Equity Fund - Series I Shares

AIM V.I. Government Securities Fund - Series I Shares

AIM V.I. Growth Fund - Series I Shares

AIM V.I. Premier Equity Fund - Series I Shares

Alger American Funds:

Alger American Balanced Portfolio

Alger American Income & Growth Portfolio

Alger American Leveraged AllCap Portfolio

AllianceBernstein Variable Products Series Fund, Inc.:

AllianceBernstein VPSF Growth and Income - Class A

AllianceBernstein VPSF Premier Growth - Class A

AllianceBernstein VPSF Small Cap Growth - Class A

American Century® Investments:

American Century® VP Balanced Fund

American Century® VP International Fund

Calvert Social Balanced Portfolio

Federated Insurance Series:

Federated American Leaders Fund II

Federated Capital Income Fund II

Federated Equity Income Fund II

Federated Fund for U.S. Government Securities II

Federated High Income Bond Fund II

Federated International Equity Fund II

Federated Mid Cap Growth Strategies Fund II

Federated Prime Money Fund II

Fidelity® Variable Insurance Products Fund:

Fidelity® VIP Contrafund® Portfolio - Initial Class

Fidelity® VIP Equity-Income Portfolio - Initial Class

Fidelity® VIP Growth Portfolio - Initial Class

Fidelity® Variable Insurance Products Fund (continued):

Fidelity® VIP High Income Portfolio - Initial Class

Fidelity® VIP Asset Manager^SM Portfolio - Initial Class

Fidelity® VIP Investment Grade Bond Portfolio - Initial Class

Fidelity® VIP Index 500 Portfolio - Initial Class

Fidelity® VIP Overseas Portfolio - Initial Class

Franklin Templeton Variable Insurance Products Trust:

Franklin Small Cap Value Securities Fund - Class 2

ING GET Fund:

ING GET Fund - Series D

ING GET Fund - Series E

ING GET Fund - Series G

ING GET Fund - Series H

ING GET Fund - Series I

ING GET Fund - Series J

ING GET Fund - Series K

ING GET Fund - Series L

ING GET Fund - Series M

ING GET Fund - Series N

ING GET Fund - Series P

ING GET Fund - Series Q

ING GET Fund - Series R

ING GET Fund - Series S

ING GET Fund - Series T

ING GET Fund - Series U

ING GET Fund - Series V

ING Investors Trust:

ING American Funds Growth Portfolio

ING American Funds Growth-Income Portfolio

ING American Funds International Portfolio

ING Julius Baer Foreign Portfolio - Service Class

ING Legg Mason Value Portfolio - Institutional Class

ING MFS Total Return Portfolio - Service Class

ING T. Rowe Price Equity Income Portfolio - Service Class

ING Partners, Inc.:

ING Aeltus Enhanced Index Portfolio - Service Class

ING American Century Select Portfolio - Service Class

ING American Century Small Cap Value Portfolio - Service Class

ING Baron Small Cap Growth Portfolio - Service Class

ING Goldman Sachs® Capital Growth Portfolio - Service Class

ING JPMorgan International Portfolio - Initial Class

ING JPMorgan Mid Cap Value Portfolio - Service Class

ING MFS Capital Opportunities Portfolio - Initial Class

ING OpCap Balanced Value Portfolio - Service Class

ING Oppenheimer Global Portfolio - Service Class

ING PIMCO Total Return Portfolio - Service Class

ING Salomon Brothers Aggressive Growth Portfolio - Initial Class

ING Salomon Brothers Fundamental Value Portfolio - Service Class

ING Salomon Brothers Investors Value Portfolio - Service Class

ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class

ING T. Rowe Price Growth Equity 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 - Service Class

ING Strategic Allocation Portfolios, Inc.:

ING VP Strategic Allocation Balanced Portfolio - Class I

ING VP Strategic Allocation Growth Portfolio - Class I

ING VP Strategic Allocation Income Portfolio - Class I

ING Variable Funds:

ING VP Growth and Income Portfolio - Class I

ING Variable Insurance Trust:

ING GET U.S. Core Portfolio - Series 1

ING GET U.S. Core Portfolio - Series 2

ING GET U.S. Core Portfolio - Series 3

ING GET U.S. Core Portfolio - Series 4

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 Variable Portfolios, Inc.:

ING VP Global Science and Technology Portfolio - Class I

ING VP Growth Portfolio - Class I

ING VP Index Plus LargeCap Portfolio - Class I

ING VP Index Plus MidCap Portfolio - Class I

ING VP Index Plus SmallCap Portfolio - Class I

ING VP International Equity Portfolio - Class I

ING VP Small Company Portfolio - Class I

ING VP Value Opportunity Portfolio - Class I

ING Variable Products Trust:

ING VP Growth Opportunities Portfolio - Class I

ING VP Growth Opportunities Portfolio - Class S

ING VP International Value Portfolio - Class I

ING VP MagnaCap Portfolio - Class I

ING VP MagnaCap Portfolio - Class S

ING VP MidCap Opportunities Portfolio - Class I

ING VP MidCap Opportunities Portfolio - Class S

ING VP Real Estate Portfolio - Class I

ING VP SmallCap Opportunities Portfolio - Class I

ING VP SmallCap Opportunities Portfolio - Class S

ING VP Balanced Portfolio, Inc. - Class I

ING VP Emerging Markets Fund

ING VP Financial Services - Class I

ING VP Intermediate Bond Portfolio - Class I

ING VP Money Market Portfolio - Class I

ING VP Natural Resources Trust

Janus Aspen Series:

Janus Aspen Balanced Portfolio - Inst Shares

Janus Aspen Flexible Income Portfolio - Inst Shares

Janus Aspen Growth Portfolio - Inst Shares

Janus Aspen Mid Cap Growth Portfolio - Inst Shares

Janus Aspen Worldwide Growth Portfolio - Inst Shares

Lord Abbett Funds:

Lord Abbett Growth and Income Portfolio

Lord Abbett Mid-Cap Value Portfolio

MFS® Funds:

MFS® VIT Strategic Income Series

MFS® VIT Total Return Series - Initial Class

Oppenheimer Variable Account Funds:

Oppenheimer Aggressive Growth Fund/VA

Oppenheimer Global Securities Fund/VA

Oppenheimer Main Street® Fund/VA

Oppenheimer Strategic Bond Fund/VA

PIMCO VIT Real Return Portfolio - Admin Class

Pioneer Variable Contracts Trust:

Pioneer Equity Income VCT Portfolio - Class I

Pioneer Fund VCT Portfolio - Class I

Pioneer High Yield VCT Portfolio - Class I

Pioneer Mid Cap Value VCT Portfolio - Class I

Prudential Series Fund, Inc.:

Jennison Portfolio - Class II Shares

SP William Blair International Growth Portfolio - Class II Shares

UBS Series Trust:

UBS U.S. Allocation Portfolio - Class I

Wanger Advisors Trust:

Wanger Select

Wanger U.S. Smaller Companies

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 audit 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, as well as evaluating the overall financial statement presentation. Our procedures also included confirmation of securities owned as of December 31, 2004, by correspondence with the transfer agents. 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 Divisions comprising the ING Life Insurance and Annuity Company Variable Annuity Account B at December 31, 2004, and 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

March 15, 2005

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		AIM V.I.		AIM V.I.		AIM V.I.
		Capital	AIM V.I.	Government	AIM V.I.	Premier
		Appreciation	Core Equity	Securities	Growth	Equity
Assets
Investments in mutual funds
	at fair value	$ 15,172	$ 31,830	$ 14,556	$ 16,959	$ 36,351
Total assets		15,172	31,830	14,556	16,959	36,351
Net assets		$ 15,172	$ 31,830	$ 14,556	$ 16,959	$ 36,351

Net assets
Accumulation units		$ 14,226	$ 27,228	$ 14,556	$ 15,788	$ 34,142
Contracts in payout (annuitization)
	period	946	4,602	-	1,171	2,209
Total net assets		$ 15,172	$ 31,830	$ 14,556	$ 16,959	$ 36,351

Total number of shares		668,651	1,408,409	1,205,980	1,056,645	1,706,639

Cost of shares		$ 13,665	$ 28,329	$ 14,944	$ 15,807	$ 36,615

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

4

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

			Alger	Alger	Alliance	Alliance
		Alger	American	American	Bernstein	Bernstein
		American	Income &	Leveraged	VPSF Growth	VPSF Premier
		Balanced	Growth	AllCap	and Income	Growth
Assets
Investments in mutual funds
	at fair value	$ 1,926	$ 5,250	$ 5,104	$ 48,096	$ 7,542
Total assets		1,926	5,250	5,104	48,096	7,542
Net assets		$ 1,926	$ 5,250	$ 5,104	$ 48,096	$ 7,542

Net assets
Accumulation units		$ 1,926	$ 5,250	$ 5,104	$ 48,096	$ 7,542
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 1,926	$ 5,250	$ 5,104	$ 48,096	$ 7,542

Total number of shares		142,166	522,416	167,956	1,997,327	321,756

Cost of shares		$ 1,803	$ 5,190	$ 4,973	$ 42,812	$ 6,888

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

5

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

		Alliance
		Bernstein	American	American	Calvert	Federated
		VPSF Small	Century® VP	Century® VP	Social	American
		Cap Growth	Balanced	International	Balanced	Leaders
Assets
Investments in mutual funds
	at fair value	$ 5,141	$ 1,096	$ 1,196	$ 2,229	$ 42,192
Total assets		5,141	1,096	1,196	2,229	42,192
Net assets		$ 5,141	$ 1,096	$ 1,196	$ 2,229	$ 42,192

Net assets
Accumulation units		$ 5,141	$ 1,096	$ 1,196	$ 2,229	$ 42,103
Contracts in payout (annuitization)
	period	-	-	-	-	89
Total net assets		$ 5,141	$ 1,096	$ 1,196	$ 2,229	$ 42,192

Total number of shares		441,255	150,541	162,767	1,190,608	2,041,206

Cost of shares		$ 4,463	$ 956	$ 1,050	$ 2,018	$ 39,597

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

6

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

				Federated	Federated
		Federated	Federated	Fund for U.S.	High	Federated
		Capital	Equity	Government	Income	International
		Income	Income	Securities	Bond	Equity
Assets
Investments in mutual funds
	at fair value	$ 5,170	$ 9,093	$ 6,444	$ 11,845	$ 5,865
Total assets		5,170	9,093	6,444	11,845	5,865
Net assets		$ 5,170	$ 9,093	$ 6,444	$ 11,845	$ 5,865

Net assets
Accumulation units		$ 5,156	$ 8,977	$ 6,442	$ 11,789	$ 5,830
Contracts in payout (annuitization)
	period	14	116	2	56	35
Total net assets		$ 5,170	$ 9,093	$ 6,444	$ 11,845	$ 5,865

Total number of shares		582,819	677,542	555,555	1,444,529	443,619

Cost of shares		$ 5,855	$ 9,403	$ 6,361	$ 10,497	$ 8,876

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

7

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

		Federated
		Mid Cap	Federated		Fidelity®
		Growth	Prime	Fidelity® VIP	VIP Equity-	Fidelity®
		Strategies	Money	Contrafund®	Income	VIP Growth
Assets
Investments in mutual funds
	at fair value	$ 10,473	$ 3,326	$ 243,399	$ 218,459	$ 109,798
Total assets		10,473	3,326	243,399	218,459	109,798
Net assets		$ 10,473	$ 3,326	$ 243,399	$ 218,459	$ 109,798

Net assets
Accumulation units		$ 10,473	$ 3,326	$ 243,399	$ 218,459	$ 109,798
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 10,473	$ 3,326	$ 243,399	$ 218,459	$ 109,798

Total number of shares		498,220	3,325,705	9,143,477	8,610,906	3,430,109

Cost of shares		$ 13,804	$ 3,326	$ 192,805	$ 183,717	$ 107,533

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

8

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


			Fidelity®	Fidelity® VIP
		Fidelity® VIP	VIP Asset	Investment	Fidelity® VIP	Fidelity® VIP
		High Income	Manager^SM	Grade Bond	Index 500	Overseas
Assets
Investments in mutual funds
	at fair value	$ 47,964	$ 11,587	$ 1,958	$ 70,298	$ 15,669
Total assets		47,964	11,587	1,958	70,298	15,669
Net assets		$ 47,964	$ 11,587	$ 1,958	$ 70,298	$ 15,669

Net assets
Accumulation units		$ 45,288	$ 11,587	$ 1,958	$ 70,298	$ 15,669
Contracts in payout (annuitization)
	period	2,676	-	-	-	-
Total net assets		$ 47,964	$ 11,587	$ 1,958	$ 70,298	$ 15,669

Total number of shares		6,851,930	780,282	147,791	510,332	894,346

Cost of shares		$ 43,141	$ 10,638	$ 1,876	$ 62,020	$ 13,748

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

9

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

		Franklin
		Small	ING GET	ING GET	ING GET	ING GET
		Cap Value	Fund -	Fund -	Fund -	Fund -
		Securities	Series H	Series I	Series J	Series K
Assets
Investments in mutual funds
	at fair value	$ 4,384	$ 85,522	$ 60,675	$ 47,133	$ 55,421
Total assets		4,384	85,522	60,675	47,133	55,421
Net assets		$ 4,384	$ 85,522	$ 60,675	$ 47,133	$ 55,421

Net assets
Accumulation units		$ 4,384	$ 85,522	$ 60,675	$ 47,133	$ 55,421
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 4,384	$ 85,522	$ 60,675	$ 47,133	$ 55,421

Total number of shares		280,146	8,798,593	6,216,670	4,894,430	5,615,069

Cost of shares		$ 4,063	$ 88,312	$ 62,102	$ 48,360	$ 56,226

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

10

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		ING GET	ING GET	ING GET	ING GET	ING GET
		Fund -	Fund -	Fund -	Fund -	Fund -
		Series L	Series M	Series N	Series P	Series Q
Assets
Investments in mutual funds
	at fair value	$ 51,909	$ 76,815	$ 63,310	$ 47,889	$ 37,872
Total assets		51,909	76,815	63,310	47,889	37,872
Net assets		$ 51,909	$ 76,815	$ 63,310	$ 47,889	$ 37,872

Net assets
Accumulation units		$ 51,909	$ 76,815	$ 63,310	$ 47,889	$ 37,872
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 51,909	$ 76,815	$ 63,310	$ 47,889	$ 37,872

Total number of shares		5,329,505	7,830,255	6,274,491	4,755,572	3,652,026

Cost of shares		$ 52,526	$ 76,934	$ 63,922	$ 47,501	$ 36,522

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

11

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		ING GET	ING GET	ING GET	ING GET	ING GET
		Fund -	Fund -	Fund -	Fund -	Fund -
		Series R	Series S	Series T	Series U	Series V
Assets
Investments in mutual funds
	at fair value	$ 33,352	$ 36,434	$ 28,261	$ 27,273	$ 55,481
Total assets		33,352	36,434	28,261	27,273	55,481
Net assets		$ 33,352	$ 36,434	$ 28,261	$ 27,273	$ 55,481

Net assets
Accumulation units		$ 33,352	$ 36,434	$ 28,261	$ 27,273	$ 55,481
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 33,352	$ 36,434	$ 28,261	$ 27,273	$ 55,481

Total number of shares		3,131,678	3,479,826	2,696,685	2,617,329	5,553,615

Cost of shares		$ 31,419	$ 34,933	$ 27,064	$ 26,231	$ 55,596

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

12

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

			ING American
		ING American	Funds	ING American	ING	ING
		Funds	Growth-	Funds	Julius Baer	Legg Mason
		Growth	Income	International	Foreign	Value
Assets
Investments in mutual funds
	at fair value	$ 1,774	$ 2,347	$ 9,074	$ 242	$ 882
Total assets		1,774	2,347	9,074	242	882
Net assets		$ 1,774	$ 2,347	$ 9,074	$ 242	$ 882

Net assets
Accumulation units		$ 1,774	$ 2,152	$ 9,074	$ 242	$ 882
Contracts in payout (annuitization)
	period	-	195	-	-	-
Total net assets		$ 1,774	$ 2,347	$ 9,074	$ 242	$ 882

Total number of shares		34,858	63,558	566,061	19,773	87,905

Cost of shares		$ 1,726	$ 2,320	$ 8,910	$ 228	$ 858

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

13

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

						ING American
		ING MFS	ING T. Rowe	ING Aeltus	ING American	Century
		Total	Price Equity	Enhanced	Century	Small Cap
		Return	Income	Index	Select	Value
Assets
Investments in mutual funds
	at fair value	$ 1,922	$ 2,335	$ 79	$ 488	$ 1,034
Total assets		1,922	2,335	79	488	1,034
Net assets		$ 1,922	$ 2,335	$ 79	$ 488	$ 1,034

Net assets
Accumulation units		$ 1,922	$ 2,335	$ 79	$ 488	$ 1,034
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 1,922	$ 2,335	$ 79	$ 488	$ 1,034

Total number of shares		102,319	169,911	9,032	52,694	84,631

Cost of shares		$ 1,829	$ 2,076	$ 74	$ 446	$ 925

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

14

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

		ING	ING Goldman		ING
		Baron	Sachs®	ING	JPMorgan	ING MFS
		Small Cap	Capital	JPMorgan	Mid Cap	Capital
		Growth	Growth	International	Value	Opportunities
Assets
Investments in mutual funds
	at fair value	$ 2,941	$ 315	$ 44,030	$ 2,215	$ 38,224
Total assets		2,941	315	44,030	2,215	38,224
Net assets		$ 2,941	$ 315	$ 44,030	$ 2,215	$ 38,224

Net assets
Accumulation units		$ 2,941	$ 315	$ 41,341	$ 2,215	$ 35,211
Contracts in payout (annuitization)
	period	-	-	2,689	-	3,013
Total net assets		$ 2,941	$ 315	$ 44,030	$ 2,215	$ 38,224

Total number of shares		196,591	27,968	3,579,704	159,478	1,405,283

Cost of shares		$ 2,538	$ 281	$ 37,399	$ 1,980	$ 30,520

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

15

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

		ING		ING	ING Salomon	ING Salomon
		OpCap	ING	PIMCO	Brothers	Brothers
		Balanced	Oppenheimer	Total	Aggressive	Fundamental
		Value	Global	Return	Growth	Value
Assets
Investments in mutual funds
	at fair value	$ 2,126	$ 22	$ 3,885	$ 53,255	$ 1,483
Total assets		2,126	22	3,885	53,255	1,483
Net assets		$ 2,126	$ 22	$ 3,885	$ 53,255	$ 1,483

Net assets
Accumulation units		$ 2,126	$ 22	$ 3,885	$ 51,733	$ 1,483
Contracts in payout (annuitization)
	period	-	-	-	1,522	-
Total net assets		$ 2,126	$ 22	$ 3,885	$ 53,255	$ 1,483

Total number of shares		158,321	1,780	354,449	1,333,037	82,459

Cost of shares		$ 1,946	$ 22	$ 3,835	$ 45,634	$ 1,371

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

16

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

			ING T. Rowe
		ING Salomon	Price
		Brothers	Diversified	ING T. Rowe	ING UBS U.S.	ING Van
		Investors	Mid Cap	Price Growth	Large Cap	Kampen
		Value	Growth	Equity	Equity	Comstock
Assets
Investments in mutual funds
	at fair value	$ 387	$ 612	$ 73,921	$ 43,678	$ 3,726
Total assets		387	612	73,921	43,678	3,726
Net assets		$ 387	$ 612	$ 73,921	$ 43,678	$ 3,726

Net assets
Accumulation units		$ 387	$ 612	$ 67,195	$ 43,678	$ 3,726
Contracts in payout (annuitization)
	period	-	-	6,726	-	-
Total net assets		$ 387	$ 612	$ 73,921	$ 43,678	$ 3,726

Total number of shares		27,294	76,638	1,484,062	5,090,630	303,194

Cost of shares		$ 366	$ 575	$ 63,844	$ 40,443	$ 3,374

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

17

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

		ING	ING VP	ING VP	ING VP
		Van Kampen	Strategic	Strategic	Strategic	ING VP
		Equity and	Allocation	Allocation	Allocation	Growth and
		Income	Balanced	Growth	Income	Income
Assets
Investments in mutual funds
	at fair value	$ 137	$ 20,822	$ 15,631	$ 18,730	$ 423,357
Total assets		137	20,822	15,631	18,730	423,357
Net assets		$ 137	$ 20,822	$ 15,631	$ 18,730	$ 423,357

Net assets
Accumulation units		$ 137	$ 17,934	$ 13,548	$ 15,154	$ 326,371
Contracts in payout (annuitization)
	period	-	2,888	2,083	3,576	96,986
Total net assets		$ 137	$ 20,822	$ 15,631	$ 18,730	$ 423,357

Total number of shares		4,092	1,496,922	1,059,037	1,436,355	21,878,936

Cost of shares		$ 126	$ 18,835	$ 13,589	$ 17,369	$ 461,670

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

18

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		ING GET	ING GET	ING GET	ING GET	ING GET
		U.S. Core -	U.S. Core -	U.S. Core -	U.S. Core -	U.S. Core -
		Series 1	Series 2	Series 3	Series 4	Series 5
Assets
Investments in mutual funds
	at fair value	$ 23,042	$ 19,803	$ 54,614	$ 8,173	$ 4,428
Total assets		23,042	19,803	54,614	8,173	4,428
Net assets		$ 23,042	$ 19,803	$ 54,614	$ 8,173	$ 4,428

Net assets
Accumulation units		$ 23,042	$ 19,803	$ 54,614	$ 8,173	$ 4,428
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 23,042	$ 19,803	$ 54,614	$ 8,173	$ 4,428

Total number of shares		2,169,690	1,896,842	5,391,315	776,932	418,892

Cost of shares		$ 21,716	$ 18,979	$ 53,920	$ 7,775	$ 4,199

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

19

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

				ING VP
		ING GET	ING GET	Global		ING VP
		U.S. Core -	U.S. Core -	Science and	ING VP	Index Plus
		Series 6	Series 7	Technology	Growth	LargeCap
Assets
Investments in mutual funds
	at fair value	$ 88,090	$ 57,015	$ 10,373	$ 28,081	$ 182,362
Total assets		88,090	57,015	10,373	28,081	182,362
Net assets		$ 88,090	$ 57,015	$ 10,373	$ 28,081	$ 182,362

Net assets
Accumulation units		$ 88,090	$ 57,015	$ 10,373	$ 25,389	$ 138,246
Contracts in payout (annuitization)
	period	-	-	-	2,692	44,116
Total net assets		$ 88,090	$ 57,015	$ 10,373	$ 28,081	$ 182,362

Total number of shares		8,704,574	5,696,396	2,715,342	2,937,296	12,305,141

Cost of shares		$ 87,055	$ 56,970	$ 10,338	$ 25,718	$ 158,591

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

20

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		ING VP	ING VP	ING VP	ING VP	ING VP
		Index Plus	Index Plus	International	Small	Value
		MidCap	SmallCap	Equity	Company	Opportunity
Assets
Investments in mutual funds
	at fair value	$ 18,233	$ 8,963	$ 13,340	$ 82,870	$ 16,285
Total assets		18,233	8,963	13,340	82,870	16,285
Net assets		$ 18,233	$ 8,963	$ 13,340	$ 82,870	$ 16,285

Net assets
Accumulation units		$ 18,233	$ 8,963	$ 11,657	$ 74,744	$ 16,285
Contracts in payout (annuitization)
	period	-	-	1,683	8,126	-
Total net assets		$ 18,233	$ 8,963	$ 13,340	$ 82,870	$ 16,285

Total number of shares		1,004,006	546,874	1,526,296	4,155,956	1,234,626

Cost of shares		$ 13,694	$ 6,876	$ 11,261	$ 64,523	$ 15,461

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

21

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

					ING VP	ING VP
		ING VP	ING VP	ING VP	MidCap	MidCap
		International	MagnaCap	MagnaCap	Opportunities	Opportunities
		Value	- Class I	- Class S	- Class I	- Class S
Assets
Investments in mutual funds
	at fair value	$ 2,980	$ 125	$ 1,635	$ 340	$ 10,784
Total assets		2,980	125	1,635	340	10,784
Net assets		$ 2,980	$ 125	$ 1,635	$ 340	$ 10,784

Net assets
Accumulation units		$ 2,980	$ 125	$ 1,635	$ 340	$ 10,784
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 2,980	$ 125	$ 1,635	$ 340	$ 10,784

Total number of shares		233,504	13,199	171,365	49,615	1,588,235

Cost of shares		$ 2,491	$ 111	$ 1,431	$ 300	$ 9,263

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

22

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

			ING VP	ING VP
			SmallCap	SmallCap		ING VP
		ING VP	Opportunities	Opportunities	ING VP	Emerging
		Real Estate	- Class I	- Class S	Balanced	Markets
Assets
Investments in mutual funds
	at fair value	$ 1,193	$ 970	$ 5,342	$ 189,559	$ 770
Total assets		1,193	970	5,342	189,559	770
Net assets		$ 1,193	$ 970	$ 5,342	$ 189,559	$ 770

Net assets
Accumulation units		$ 1,193	$ 970	$ 5,342	$ 144,379	$ 770
Contracts in payout (annuitization)
	period	-	-	-	45,180	-
Total net assets		$ 1,193	$ 970	$ 5,342	$ 189,559	$ 770

Total number of shares		87,573	59,645	330,956	14,146,212	96,925

Cost of shares		$ 1,095	$ 931	$ 4,682	$ 173,163	$ 558

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

23

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		ING VP	ING VP	ING VP		Janus Aspen
		Intermediate	Money	Natural	Janus Aspen	Flexible
		Bond	Market	Resources	Balanced	Income
Assets
Investments in mutual funds
	at fair value	$ 137,880	$ 192,781	$ 1,861	$ 156,790	$ 15,748
Total assets		137,880	192,781	1,861	156,790	15,748
Net assets		$ 137,880	$ 192,781	$ 1,861	$ 156,790	$ 15,748

Net assets
Accumulation units		$ 125,417	$ 187,699	$ 1,861	$ 156,790	$ 15,748
Contracts in payout (annuitization)
	period	12,463	5,082	-	-	-
Total net assets		$ 137,880	$ 192,781	$ 1,861	$ 156,790	$ 15,748

Total number of shares		10,493,163	14,900,388	105,429	6,428,456	1,297,160

Cost of shares		$ 140,963	$ 192,039	$ 1,487	$ 145,813	$ 16,069

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

24

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


			Janus Aspen	Janus Aspen	Lord Abbett	Lord Abbett
		Janus Aspen	Mid Cap	Worldwide	Growth and	Mid-Cap
		Growth	Growth	Growth	Income	Value
Assets
Investments in mutual funds
	at fair value	$ 84,481	$ 94,264	$ 154,245	$ 6,773	$ 3,732
Total assets		84,481	94,264	154,245	6,773	3,732
Net assets		$ 84,481	$ 94,264	$ 154,245	$ 6,773	$ 3,732

Net assets
Accumulation units		$ 78,822	$ 94,264	$ 148,522	$ 6,773	$ 3,732
Contracts in payout (annuitization)
	period	5,659	-	5,723	-	-
Total net assets		$ 84,481	$ 94,264	$ 154,245	$ 6,773	$ 3,732

Total number of shares		4,209,326	3,648,004	5,759,719	249,179	179,520

Cost of shares		$ 80,578	$ 65,778	$ 148,011	$ 6,206	$ 3,179

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

25

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		MFS®	MFS®	Oppenheimer	Oppenheimer	Oppenheimer
		VIT Strategic	VIT Total	Aggressive	Global	Main
		Income	Return	Growth	Securities	Street®
Assets
Investments in mutual funds
	at fair value	$ 2,503	$ 142,497	$ 32,874	$ 43,720	$ 68,396
Total assets		2,503	142,497	32,874	43,720	68,396
Net assets		$ 2,503	$ 142,497	$ 32,874	$ 43,720	$ 68,396

Net assets
Accumulation units		$ 2,503	$ 142,497	$ 30,981	$ 43,720	$ 60,919
Contracts in payout (annuitization)
	period	-	-	1,893	-	7,477
Total net assets		$ 2,503	$ 142,497	$ 32,874	$ 43,720	$ 68,396

Total number of shares		222,477	6,649,417	747,640	1,481,540	3,281,957

Cost of shares		$ 2,356	$ 127,339	$ 27,019	$ 34,455	$ 60,795

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

26

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

				Pioneer
		Oppenheimer	PIMCO VIT	Equity	Pioneer	Pioneer
		Strategic	Real	Income	Fund	High Yield
		Bond	Return	VCT	VCT	VCT
Assets
Investments in mutual funds
	at fair value	$ 58,634	$ 522	$ 1,581	$ 52	$ 216
Total assets		58,634	522	1,581	52	216
Net assets		$ 58,634	$ 522	$ 1,581	$ 52	$ 216

Net assets
Accumulation units		$ 56,174	$ 522	$ 1,581	$ 52	$ 216
Contracts in payout (annuitization)
	period	2,460	-	-	-	-
Total net assets		$ 58,634	$ 522	$ 1,581	$ 52	$ 216

Total number of shares		11,254,177	40,409	76,829	2,548	18,493

Cost of shares		$ 53,032	$ 525	$ 1,443	$ 50	$ 214

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

27

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)

				SP William
		Pioneer Mid		Blair	UBS
		Cap Value		International	U. S.	Wanger
		VCT	Jennison	Growth	Allocation	Select
Assets
Investments in mutual funds
	at fair value	$ 3,193	$ 1,329	$ 6,154	$ 8,911	$ 249
Total assets		3,193	1,329	6,154	8,911	249
Net assets		$ 3,193	$ 1,329	$ 6,154	$ 8,911	$ 249

Net assets
Accumulation units		$ 3,193	$ 1,329	$ 6,154	$ 8,911	$ 249
Contracts in payout (annuitization)
	period	-	-	-	-	-
Total net assets		$ 3,193	$ 1,329	$ 6,154	$ 8,911	$ 249

Total number of shares		129,415	73,978	908,946	662,070	11,273

Cost of shares		$ 2,795	$ 1,170	$ 5,331	$ 8,042	$ 238

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

28

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Assets and Liabilities
December 31, 2004
(Dollars in thousands)


		Wanger U.S.
		Smaller
		Companies
Assets
Investments in mutual funds
	at fair value	$ 97
Total assets		97
Net assets		$ 97

Net assets
Accumulation units		$ 97
Contracts in payout (annuitization)
	period	-
Total net assets		$ 97

Total number of shares		3,108

Cost of shares		$ 84

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

29

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			AIM V.I.		AIM V.I.		AIM V.I.
			Capital	AIM V.I.	Government	AIM V.I.	Premier
			Appreciation	Core Equity	Securities	Growth	Equity
Net investment income (loss)
Income:
	Dividends		$ -	$ 303	$ 548	$ -	$ 166
Total investment income			-	303	548	-	166
Expenses:
	Mortality and expense risk and
		other charges	205	418	177	221	487
Total expenses			205	418	177	221	487
Net investment income (loss)			(205)	(115)	371	(221)	(321)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(18)	424	(58)	(115)	(740)
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		(18)	424	(58)	(115)	(740)
Net unrealized appreciation
	(depreciation) of investments		946	1,983	(147)	1,403	2,521
Net increase (decrease) in net assets
	resulting from operations		$ 723	$ 2,292	$ 166	$ 1,067	$ 1,460

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

30

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

				Alger	Alger	Alliance	Alliance
			Alger	American	American	Bernstein	Bernstein
			American	Income &	Leveraged	VPSF Growth	VPSF Premier
			Balanced	Growth	AllCap	and Income	Growth
Net investment income (loss)
Income:
	Dividends		$ 32	$ 32	$ -	$ 366	$ -
Total investment income			32	32	-	366	-
Expenses:
	Mortality and expense risk and
		other charges	30	81	79	523	95
Total expenses			30	81	79	523	95
Net investment income (loss)			2	(49)	(79)	(157)	(95)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			1	(120)	(103)	(43)	(118)
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		1	(120)	(103)	(43)	(118)
Net unrealized appreciation
	(depreciation) of investments		40	477	484	4,351	714
Net increase (decrease) in net assets
	resulting from operations		$ 43	$ 308	$ 302	$ 4,151	$ 501

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

31

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

			Alliance
			Bernstein	American	American	Calvert	Federated
			VPSF Small	Century® VP	Century® VP	Social	American
			Cap Growth	Balanced	International	Balanced	Leaders
Net investment income (loss)
Income:
	Dividends		$ -	$ 23	$ 7	$ 37	$ 685
Total investment income			-	23	7	37	685
Expenses:
	Mortality and expense risk and
		other charges	58	19	18	27	647
Total expenses			58	19	18	27	647
Net investment income (loss)			(58)	4	(11)	10	38

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			442	39	6	14	(902)
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		442	39	6	14	(902)
Net unrealized appreciation
	(depreciation) of investments		77	55	152	121	4,253
Net increase (decrease) in net assets
	resulting from operations		$ 461	$ 98	$ 147	$ 145	$ 3,389

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

32

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

					Federated	Federated
			Federated	Federated	Fund for U.S.	High	Federated
			Capital	Equity	Government	Income	International
			Income	Income	Securities	Bond	Equity
Net investment income (loss)
Income:
	Dividends		$ 267	$ 206	$ 409	$ 1,080	$ -
Total investment income			267	206	409	1,080	-
Expenses:
	Mortality and expense risk and
		other charges	80	140	115	190	86
Total expenses			80	140	115	190	86
Net investment income (loss)			187	66	294	890	(86)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(1,281)	(211)	109	(586)	(791)
Capital gains distributions			-	-	48	-	-
Total realized gain (loss) on investments
	and capital gains distributions		(1,281)	(211)	157	(586)	(791)
Net unrealized appreciation
	(depreciation) of investments		1,520	1,125	(285)	797	1,543
Net increase (decrease) in net assets
	resulting from operations		$ 426	$ 980	$ 166	$ 1,101	$ 666

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

33

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

			Federated
			Mid Cap	Federated		Fidelity®
			Growth	Prime	Fidelity® VIP	VIP Equity-	Fidelity®
			Strategies	Money	Contrafund®	Income	VIP Growth
Net investment income (loss)
Income:
	Dividends		$ -	$ 32	$ 662	$ 3,069	$ 330
Total investment income			-	32	662	3,069	330
Expenses:
	Mortality and expense risk and
		other charges	153	57	2,560	2,550	1,514
Total expenses			153	57	2,560	2,550	1,514
Net investment income (loss)			(153)	(25)	(1,898)	519	(1,184)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(425)	-	1,634	713	(1,400)
Capital gains distributions			-	-	-	733	-
Total realized gain (loss) on investments
	and capital gains distributions		(425)	-	1,634	1,446	(1,400)
Net unrealized appreciation
	(depreciation) of investments		1,905	-	28,725	17,751	4,239
Net increase (decrease) in net assets
	resulting from operations		$ 1,327	$ (25)	$ 28,461	$ 19,716	$ 1,655

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

34

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


				Fidelity®	Fidelity® VIP
			Fidelity® VIP	VIP Asset	Investment	Fidelity® VIP	Fidelity® VIP
			High Income	Manager^SM	Grade Bond	Index 500	Overseas
Net investment income (loss)
Income:
	Dividends		$ 4,591	$ 321	$ 92	$ 966	$ 174
Total investment income			4,591	321	92	966	174
Expenses:
	Mortality and expense risk and
		other charges	653	163	30	980	174
Total expenses			653	163	30	980	174
Net investment income (loss)			3,938	158	62	(14)	-

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			3,046	66	15	52	620
Capital gains distributions			-	-	66	-	-
Total realized gain (loss) on investments
	and capital gains distributions		3,046	66	81	52	620
Net unrealized appreciation
	(depreciation) of investments		(3,248)	221	(81)	5,896	885
Net increase (decrease) in net assets
	resulting from operations		$ 3,736	$ 445	$ 62	$ 5,934	$ 1,505

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

35

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

			Franklin
			Small	ING GET	ING GET	ING GET	ING GET
			Cap Value	Fund -	Fund -	Fund -	Fund -
			Securities	Series D	Series E	Series G	Series H
Net investment income (loss)
Income:
	Dividends		$ 1	$ 3,232	$ 15,508	$ 10,204	$ 4,356
Total investment income			1	3,232	15,508	10,204	4,356
Expenses:
	Mortality and expense risk and
		other charges	14	104	2,542	2,018	1,587
Total expenses			14	104	2,542	2,018	1,587
Net investment income (loss)			(13)	3,128	12,966	8,186	2,769

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			247	(8,794)	(19,910)	(11,127)	(389)
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		247	(8,794)	(19,910)	(11,127)	(389)
Net unrealized appreciation
	(depreciation) of investments		194	5,596	4,843	2,313	(2,504)
Net increase (decrease) in net assets
	resulting from operations		$ 428	$ (70)	$ (2,101)	$ (628)	$ (124)

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

36

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET	ING GET
			Fund -	Fund -	Fund -	Fund -	Fund -
			Series I	Series J	Series K	Series L	Series M
Net investment income (loss)
Income:
	Dividends		$ 2,785	$ 2,341	$ 2,268	$ 2,369	$ 3,723
Total investment income			2,785	2,341	2,268	2,369	3,723
Expenses:
	Mortality and expense risk and
		other charges	1,145	903	1,219	1,143	1,685
Total expenses			1,145	903	1,219	1,143	1,685
Net investment income (loss)			1,640	1,438	1,049	1,226	2,038

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(160)	(104)	18	277	406
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		(160)	(104)	18	277	406
Net unrealized appreciation
	(depreciation) of investments		(1,883)	(1,698)	(1,900)	(2,269)	(3,412)
Net increase (decrease) in net assets
	resulting from operations		$ (403)	$ (364)	$ (833)	$ (766)	$ (968)

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

37

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET	ING GET
			Fund -	Fund -	Fund -	Fund -	Fund -
			Series N	Series P	Series Q	Series R	Series S
Net investment income (loss)
Income:
	Dividends		$ 2,398	$ 1,925	$ 1,466	$ 1,150	$ 1,067
Total investment income			2,398	1,925	1,466	1,150	1,067
Expenses:
	Mortality and expense risk and
		other charges	1,378	1,053	813	699	777
Total expenses			1,378	1,053	813	699	777
Net investment income (loss)			1,020	872	653	451	290

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(57)	261	361	323	457
Capital gains distributions			-	-	-	-	615
Total realized gain (loss) on investments
	and capital gains distributions		(57)	261	361	323	1,072
Net unrealized appreciation
	(depreciation) of investments		(1,190)	(1,415)	(1,058)	(525)	(1,093)
Net increase (decrease) in net assets
	resulting from operations		$ (227)	$ (282)	$ (44)	$ 249	$ 269

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

38

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

							ING American
			ING GET	ING GET	ING GET	ING American	Funds
			Fund -	Fund -	Fund -	Funds	Growth-
			Series T	Series U	Series V	Growth	Income
Net investment income (loss)
Income:
	Dividends		$ 844	$ 547	$ 649	$ -	$ 2
Total investment income			844	547	649	-	2
Expenses:
	Mortality and expense risk and
		other charges	600	561	1,256	1	2
Total expenses			600	561	1,256	1	2
Net investment income (loss)			244	(14)	(607)	(1)	-

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			250	213	(96)	-	-
Capital gains distributions			498	1,191	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		748	1,404	(96)	-	-
Net unrealized appreciation
	(depreciation) of investments		(824)	(1,012)	971	48	27
Net increase (decrease) in net assets
	resulting from operations		$ 168	$ 378	$ 268	$ 47	$ 27

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

39

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			ING American	ING	ING	ING MFS	ING T. Rowe
			Funds	Julius Baer	Legg Mason	Total	Price Equity
			International	Foreign	Value	Return	Income
Net investment income (loss)
Income:
	Dividends		$ 1	$ -	$ 2	$ 32	$ 19
Total investment income			1	-	2	32	19
Expenses:
	Mortality and expense risk and
		other charges	3	-	-	10	13
Total expenses			3	-	-	10	13
Net investment income (loss)			(2)	-	2	22	6

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			-	2	-	19	32
Capital gains distributions			-	1	-	-	11
Total realized gain (loss) on investments
	and capital gains distributions		-	3	-	19	43
Net unrealized appreciation
	(depreciation) of investments		164	14	24	81	180
Net increase (decrease) in net assets
	resulting from operations		$ 162	$ 17	$ 26	$ 122	$ 229

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

40

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

					ING American	ING	ING Goldman
			ING Aeltus	ING American	Century	Baron	Sachs®
			Enhanced	Century	Small Cap	Small Cap	Capital
			Index	Select	Value	Growth	Growth
Net investment income (loss)
Income:
	Dividends		$ -	$ -	$ -	$ -	$ -
Total investment income			-	-	-	-	-
Expenses:
	Mortality and expense risk and
		other charges	1	4	7	18	1
Total expenses			1	4	7	18	1
Net investment income (loss)			(1)	(4)	(7)	(18)	(1)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			-	4	64	263	1
Capital gains distributions			-	-	63	-	-
Total realized gain (loss) on investments
	and capital gains distributions		-	4	127	263	1
Net unrealized appreciation
	(depreciation) of investments		5	9	28	244	31
Net increase (decrease) in net assets
	resulting from operations		$ 4	$ 9	$ 148	$ 489	$ 31

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

41

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

				ING		ING
			ING	JPMorgan	ING MFS	OpCap	ING
			JPMorgan	Mid Cap	Capital	Balanced	Oppenheimer
			International	Value	Opportunities	Value	Global
Net investment income (loss)
Income:
	Dividends		$ 449	$ 3	$ 164	$ 17	$ -
Total investment income			449	3	164	17	-
Expenses:
	Mortality and expense risk and
		other charges	465	10	462	17	-
Total expenses			465	10	462	17	-
Net investment income (loss)			(16)	(7)	(298)	-	-

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			3,477	37	(497)	56	4
Capital gains distributions			-	64	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		3,477	101	(497)	56	4
Net unrealized appreciation
	(depreciation) of investments		3,386	158	4,806	100	-
Net increase (decrease) in net assets
	resulting from operations		$ 6,847	$ 252	$ 4,011	$ 156	$ 4

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

42

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

							ING T. Rowe
			ING	ING Salomon	ING Salomon	ING Salomon	Price
			PIMCO	Brothers	Brothers	Brothers	Diversified
			Total	Aggressive	Fundamental	Investors	Mid Cap
			Return	Growth	Value	Value	Growth
Net investment income (loss)
Income:
	Dividends		$ -	$ -	$ -	$ 3	$ -
Total investment income			-	-	-	3	-
Expenses:
	Mortality and expense risk and
		other charges	29	725	13	4	8
Total expenses			29	725	13	4	8
Net investment income (loss)			(29)	(725)	(13)	(1)	(8)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			9	(84)	80	22	61
Capital gains distributions			34	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		43	(84)	80	22	61
Net unrealized appreciation
	(depreciation) of investments		89	4,983	27	3	(11)
Net increase (decrease) in net assets
	resulting from operations		$ 103	$ 4,174	$ 94	$ 24	$ 42

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

43

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

						ING	ING VP
			ING T. Rowe	ING UBS U.S.	ING Van	Van Kampen	Strategic
			Price Growth	Large Cap	Kampen	Equity and	Allocation
			Equity	Equity	Comstock	Income	Balanced
Net investment income (loss)
Income:
	Dividends		$ 113	$ 332	$ -	$ -	$ 246
Total investment income			113	332	-	-	246
Expenses:
	Mortality and expense risk and
		other charges	949	546	15	1	253
Total expenses			949	546	15	1	253
Net investment income (loss)			(836)	(214)	(15)	(1)	(7)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			541	(196)	63	2	112
Capital gains distributions			-	-	8	-	-
Total realized gain (loss) on investments
	and capital gains distributions		541	(196)	71	2	112
Net unrealized appreciation
	(depreciation) of investments		6,147	5,688	260	8	1,528
Net increase (decrease) in net assets
	resulting from operations		$ 5,852	$ 5,278	$ 316	$ 9	$ 1,633

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

44

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

			ING VP	ING VP
			Strategic	Strategic	ING VP	ING GET	ING GET
			Allocation	Allocation	Growth and	U.S. Core -	U.S. Core -
			Growth	Income	Income	Series 1	Series 2
Net investment income (loss)
Income:
	Dividends		$ 158	$ 348	$ 10,145	$ 166	$ 23
Total investment income			158	348	10,145	166	23
Expenses:
	Mortality and expense risk and
		other charges	184	246	4,736	464	420
Total expenses			184	246	4,736	464	420
Net investment income (loss)			(26)	102	5,409	(298)	(397)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			98	51	(37,452)	173	138
Capital gains distributions			-	-	-	26	-
Total realized gain (loss) on investments
	and capital gains distributions		98	51	(37,452)	199	138
Net unrealized appreciation
	(depreciation) of investments		1,429	1,020	60,752	465	642
Net increase (decrease) in net assets
	resulting from operations		$ 1,501	$ 1,173	$ 28,709	$ 366	$ 383

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

45

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET	ING GET
			U.S. Core -	U.S. Core -	U.S. Core -	U.S. Core -	U.S. Core -
			Series 3	Series 4	Series 5	Series 6	Series 7
Net investment income (loss)
Income:
	Dividends		$ 1	$ -	$ -	$ -	$ -
Total investment income			1	-	-	-	-
Expenses:
	Mortality and expense risk and
		other charges	907	91	33	360	35
Total expenses			907	91	33	360	35
Net investment income (loss)			(906)	(91)	(33)	(360)	(35)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(108)	12	36	39	3
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		(108)	12	36	39	3
Net unrealized appreciation
	(depreciation) of investments		694	398	229	1,035	45
Net increase (decrease) in net assets
	resulting from operations		$ (320)	$ 319	$ 232	$ 714	$ 13

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

46

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

			ING VP
			Global		ING VP	ING VP	ING VP
			Science and	ING VP	Index Plus	Index Plus	Index Plus
			Technology	Growth	LargeCap	MidCap	SmallCap
Net investment income (loss)
Income:
	Dividends		$ -	$ 37	$ 1,857	$ 66	$ 11
Total investment income			-	37	1,857	66	11
Expenses:
	Mortality and expense risk and
		other charges	134	337	2,240	136	61
Total expenses			134	337	2,240	136	61
Net investment income (loss)			(134)	(300)	(383)	(70)	(50)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			1,339	(336)	380	515	599
Capital gains distributions			-	-	-	-	38
Total realized gain (loss) on investments
	and capital gains distributions		1,339	(336)	380	515	637
Net unrealized appreciation
	(depreciation) of investments		(1,927)	2,144	15,721	1,945	912
Net increase (decrease) in net assets
	resulting from operations		$ (722)	$ 1,508	$ 15,718	$ 2,390	$ 1,499

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

47

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

						ING VP	ING VP
			ING VP	ING VP	ING VP	Growth	Growth
			International	Small	Value	Opportunities	Opportunities
			Equity	Company	Opportunity	- Class I	- Class S
Net investment income (loss)
Income:
	Dividends		$ 128	$ 228	$ 143	$ -	$ -
Total investment income			128	228	143	-	-
Expenses:
	Mortality and expense risk and
		other charges	133	984	205	-	3
Total expenses			133	984	205	-	3
Net investment income (loss)			(5)	(756)	(62)	-	(3)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			514	3,278	(370)	7	117
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		514	3,278	(370)	7	117
Net unrealized appreciation
	(depreciation) of investments		1,167	7,164	1,835	(4)	(79)
Net increase (decrease) in net assets
	resulting from operations		$ 1,676	$ 9,686	$ 1,403	$ 3	$ 35

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

48

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

						ING VP	ING VP
			ING VP	ING VP	ING VP	MidCap	MidCap
			International	MagnaCap	MagnaCap	Opportunities	Opportunities
			Value	- Class I	- Class S	- Class I	- Class S
Net investment income (loss)
Income:
	Dividends		$ 27	$ 2	$ 19	$ -	$ -
Total investment income			27	2	19	-	-
Expenses:
	Mortality and expense risk and
		other charges	18	1	16	5	119
Total expenses			18	1	16	5	119
Net investment income (loss)			9	1	3	(5)	(119)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			96	-	13	150	348
Capital gains distributions			-	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		96	-	13	150	348
Net unrealized appreciation
	(depreciation) of investments		272	7	98	(84)	564
Net increase (decrease) in net assets
	resulting from operations		$ 377	$ 8	$ 114	$ 61	$ 793

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

49

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

				ING VP	ING VP
				SmallCap	SmallCap		ING VP
			ING VP	Opportunities	Opportunities	ING VP	Emerging
			Real Estate	- Class I	- Class S	Balanced	Markets
Net investment income (loss)
Income:
	Dividends		$ 13	$ -	$ -	$ 3,621	$ 6
Total investment income			13	-	-	3,621	6
Expenses:
	Mortality and expense risk and
		other charges	2	3	62	2,155	11
Total expenses			2	3	62	2,155	11
Net investment income (loss)			11	(3)	(62)	1,466	(5)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			-	22	411	(3,158)	29
Capital gains distributions			13	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		13	22	411	(3,158)	29
Net unrealized appreciation
	(depreciation) of investments		98	50	33	15,759	109
Net increase (decrease) in net assets
	resulting from operations		$ 122	$ 69	$ 382	$ 14,067	$ 133

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

50

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


				ING VP	ING VP	ING VP
			ING VP	Intermediate	Money	Natural	Janus Aspen
			Financial	Bond	Market	Resources	Balanced
Net investment income (loss)
Income:
	Dividends		$ -	$ 11,204	$ 2,075	$ 17	$ 3,577
Total investment income			-	11,204	2,075	17	3,577
Expenses:
	Mortality and expense risk and
		other charges	-	1,673	2,185	20	2,080
Total expenses			-	1,673	2,185	20	2,080
Net investment income (loss)			-	9,531	(110)	(3)	1,497

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			(3)	1,747	(354)	53	764
Capital gains distributions			-	5,664	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		(3)	7,411	(354)	53	764
Net unrealized appreciation
	(depreciation) of investments		-	(12,159)	154	122	8,691
Net increase (decrease) in net assets
	resulting from operations		$ (3)	$ 4,783	$ (310)	$ 172	$ 10,952

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

51

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			Janus Aspen		Janus Aspen	Janus Aspen	Lord Abbett
			Flexible	Janus Aspen	Mid Cap	Worldwide	Growth and
			Income	Growth	Growth	Growth	Income
Net investment income (loss)
Income:
	Dividends		$ 980	$ 124	$ -	$ 1,617	$ 53
Total investment income			980	124	-	1,617	53
Expenses:
	Mortality and expense risk and
		other charges	234	1,137	1,031	2,094	47
Total expenses			234	1,137	1,031	2,094	47
Net investment income (loss)			746	(1,013)	(1,031)	(477)	6

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			415	(821)	2,091	(4,417)	276
Capital gains distributions			143	-	-	-	54
Total realized gain (loss) on investments
	and capital gains distributions		558	(821)	2,091	(4,417)	330
Net unrealized appreciation
	(depreciation) of investments		(857)	3,988	14,067	9,492	222
Net increase (decrease) in net assets
	resulting from operations		$ 447	$ 2,154	$ 15,127	$ 4,598	$ 558

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

52

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


			Lord Abbett	MFS®	MFS®	Oppenheimer	Oppenheimer
			Mid-Cap	VIT Strategic	VIT Total	Aggressive	Global
			Value	Income	Return	Growth	Securities
Net investment income (loss)
Income:
	Dividends		$ 10	$ 127	$ 1,923	$ -	$ 428
Total investment income			10	127	1,923	-	428
Expenses:
	Mortality and expense risk and
		other charges	18	34	1,561	391	430
Total expenses			18	34	1,561	391	430
Net investment income (loss)			(8)	93	362	(391)	(2)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			135	63	258	134	771
Capital gains distributions			50	-	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		185	63	258	134	771
Net unrealized appreciation
	(depreciation) of investments		356	(10)	11,330	5,377	5,617
Net increase (decrease) in net assets
	resulting from operations		$ 533	$ 146	$ 11,950	$ 5,120	$ 6,386

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

53

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

						Pioneer
			Oppenheimer	Oppenheimer	PIMCO VIT	Equity	Pioneer
			Main	Strategic	Real	Income	Fund
			Street®	Bond	Return	VCT	VCT
Net investment income (loss)
Income:
	Dividends		$ 565	$ 2,331	$ 1	$ 19	$ -
Total investment income			565	2,331	1	19	-
Expenses:
	Mortality and expense risk and
		other charges	884	602	1	6	-
Total expenses			884	602	1	6	-
Net investment income (loss)			(319)	1,729	-	13	-

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			79	826	-	25	-
Capital gains distributions			-	-	10	-	-
Total realized gain (loss) on investments
	and capital gains distributions		79	826	10	25	-
Net unrealized appreciation
	(depreciation) of investments		5,227	895	(3)	95	2
Net increase (decrease) in net assets
	resulting from operations		$ 4,987	$ 3,450	$ 7	$ 133	$ 2

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

54

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)

						SP William
			Pioneer	Pioneer Mid		Blair	UBS
			High Yield	Cap Value		International	U. S.
			VCT	VCT	Jennison	Growth	Allocation
Net investment income (loss)
Income:
	Dividends		$ 1	$ 6	$ 1	$ -	$ 79
Total investment income			1	6	1	-	79
Expenses:
	Mortality and expense risk and
		other charges	-	16	13	54	133
Total expenses			-	16	13	54	133
Net investment income (loss)			1	(10)	(12)	(54)	(54)

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			-	67	70	211	73
Capital gains distributions			-	15	-	-	-
Total realized gain (loss) on investments
	and capital gains distributions		-	82	70	211	73
Net unrealized appreciation
	(depreciation) of investments		2	342	32	540	787
Net increase (decrease) in net assets
	resulting from operations		$ 3	$ 414	$ 90	$ 697	$ 806

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

55

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Operations
For the year ended December 31, 2004
(Dollars in thousands)


				Wanger U.S.
			Wanger	Smaller
			Select	Companies
Net investment income (loss)
Income:
	Dividends		$ -	$ -
Total investment income			-	-
Expenses:
	Mortality and expense risk and
		other charges	-	-
Total expenses			-	-
Net investment income (loss)			-	-

Realized and unrealized gain (loss)
	on investments
Net realized gain (loss) on investments			-	-
Capital gains distributions			-	-
Total realized gain (loss) on investments
	and capital gains distributions		-	-
Net unrealized appreciation
	(depreciation) of investments		11	13
Net increase (decrease) in net assets
	resulting from operations		$ 11	$ 13

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

56

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			AIM V.I.		AIM V.I.
			Capital	AIM V.I.	Government	AIM V.I.
			Appreciation	Core Equity	Securities	Growth
Net assets at January 1, 2003			$ 14,832	$ 29,940	$ 25,997	$ 14,946

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(198)	(72)	83	(197)
	Net realized gain (loss) on investments
		and capital gains distributions	(625)	(546)	609	(678)
	Net unrealized appreciation (depreciation) of investments		4,685	7,126	(826)	4,981
Net increase (decrease) in net assets from operations			3,862	6,508	(134)	4,106
Changes from principal transactions:
	Total unit transactions		(1,194)	(1,540)	(10,837)	(985)
Increase (decrease) in assets derived from principal
	transactions		(1,194)	(1,540)	(10,837)	(985)
Total increase (decrease)			2,668	4,968	(10,971)	3,121
Net assets at December 31, 2003			17,500	34,908	15,026	18,067

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(205)	(115)	371	(221)
	Net realized gain (loss) on investments
		and capital gains distributions	(18)	424	(58)	(115)
	Net unrealized appreciation (depreciation) of investments		946	1,983	(147)	1,403
Net increase (decrease) in net assets from operations			723	2,292	166	1,067
Changes from principal transactions:
	Total unit transactions		(3,051)	(5,370)	(636)	(2,175)
Increase (decrease) in assets derived from principal
	transactions		(3,051)	(5,370)	(636)	(2,175)
Total increase (decrease)			(2,328)	(3,078)	(470)	(1,108)
Net assets at December 31, 2004			$ 15,172	$ 31,830	$ 14,556	$ 16,959

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

57

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

					Alger	Alger
			AIM V.I.	Alger	American	American
			Premier	American	Income &	Leveraged
			Equity	Balanced	Growth	AllCap
Net assets at January 1, 2003			$ 41,327	$ 2,576	$ 6,167	$ 5,724

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(395)	19	(68)	(86)
	Net realized gain (loss) on investments
		and capital gains distributions	(2,160)	(34)	(339)	(265)
	Net unrealized appreciation (depreciation) of investments		11,202	413	1,960	2,058
Net increase (decrease) in net assets from operations			8,647	398	1,553	1,707
Changes from principal transactions:
	Total unit transactions		(7,144)	(607)	(1,250)	(988)
Increase (decrease) in assets derived from principal
	transactions		(7,144)	(607)	(1,250)	(988)
Total increase (decrease)			1,503	(209)	303	719
Net assets at December 31, 2003			42,830	2,367	6,470	6,443

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(321)	2	(49)	(79)
	Net realized gain (loss) on investments
		and capital gains distributions	(740)	1	(120)	(103)
	Net unrealized appreciation (depreciation) of investments		2,521	40	477	484
Net increase (decrease) in net assets from operations			1,460	43	308	302
Changes from principal transactions:
	Total unit transactions		(7,939)	(484)	(1,528)	(1,641)
Increase (decrease) in assets derived from principal
	transactions		(7,939)	(484)	(1,528)	(1,641)
Total increase (decrease)			(6,479)	(441)	(1,220)	(1,339)
Net assets at December 31, 2004			$ 36,351	$ 1,926	$ 5,250	$ 5,104

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

58

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

			Alliance	Alliance	Alliance
			Bernstein	Bernstein	Bernstein	American
			VPSF Growth	VPSF Premier	VPSF Small	Century® VP
			and Income	Growth	Cap Growth	Balanced
Net assets at January 1, 2003			$ 22,169	$ 5,838	$ 684	$ 1,483

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(75)	(86)	(23)	19
	Net realized gain (loss) on investments
		and capital gains distributions	(917)	(358)	(125)	(7)
	Net unrealized appreciation (depreciation) of investments		8,091	1,693	864	227
Net increase (decrease) in net assets from operations			7,099	1,249	716	239
Changes from principal transactions:
	Total unit transactions		5,703	227	2,518	(302)
Increase (decrease) in assets derived from principal
	transactions		5,703	227	2,518	(302)
Total increase (decrease)			12,802	1,476	3,234	(63)
Net assets at December 31, 2003			34,971	7,314	3,918	1,420

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(157)	(95)	(58)	4
	Net realized gain (loss) on investments
		and capital gains distributions	(43)	(118)	442	39
	Net unrealized appreciation (depreciation) of investments		4,351	714	77	55
Net increase (decrease) in net assets from operations			4,151	501	461	98
Changes from principal transactions:
	Total unit transactions		8,974	(273)	762	(422)
Increase (decrease) in assets derived from principal
	transactions		8,974	(273)	762	(422)
Total increase (decrease)			13,125	228	1,223	(324)
Net assets at December 31, 2004			$ 48,096	$ 7,542	$ 5,141	$ 1,096

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

59

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			American	Calvert	Federated	Federated
			Century® VP	Social	American	Capital
			International	Balanced	Leaders	Income
Net assets at January 1, 2003			$ 1,539	$ 1,775	$ 50,539	$ 7,021

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(8)	16	94	350
	Net realized gain (loss) on investments
		and capital gains distributions	(99)	(37)	(2,953)	(1,548)
	Net unrealized appreciation (depreciation) of investments		372	343	13,953	2,295
Net increase (decrease) in net assets from operations			265	322	11,094	1,097
Changes from principal transactions:
	Total unit transactions		(458)	131	(9,916)	(1,658)
Increase (decrease) in assets derived from principal
	transactions		(458)	131	(9,916)	(1,658)
Total increase (decrease)			(193)	453	1,178	(561)
Net assets at December 31, 2003			1,346	2,228	51,717	6,460

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(11)	10	38	187
	Net realized gain (loss) on investments
		and capital gains distributions	6	14	(902)	(1,281)
	Net unrealized appreciation (depreciation) of investments		152	121	4,253	1,520
Net increase (decrease) in net assets from operations			147	145	3,389	426
Changes from principal transactions:
	Total unit transactions		(297)	(144)	(12,914)	(1,716)
Increase (decrease) in assets derived from principal
	transactions		(297)	(144)	(12,914)	(1,716)
Total increase (decrease)			(150)	1	(9,525)	(1,290)
Net assets at December 31, 2004			$ 1,196	$ 2,229	$ 42,192	$ 5,170

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

60

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				Federated	Federated
			Federated	Fund for U.S.	High	Federated
			Equity	Government	Income	International
			Income	Securities	Bond	Equity
Net assets at January 1, 2003			$ 10,264	$ 12,674	$ 16,683	$ 6,024

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		58	275	1,017	(83)
	Net realized gain (loss) on investments
		and capital gains distributions	(540)	427	(971)	(781)
	Net unrealized appreciation (depreciation) of investments		2,785	(608)	3,008	2,426
Net increase (decrease) in net assets from operations			2,303	94	3,054	1,562
Changes from principal transactions:
	Total unit transactions		(1,562)	(2,935)	(3,963)	(1,021)
Increase (decrease) in assets derived from principal
	transactions		(1,562)	(2,935)	(3,963)	(1,021)
Total increase (decrease)			741	(2,841)	(909)	541
Net assets at December 31, 2003			11,005	9,833	15,774	6,565

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		66	294	890	(86)
	Net realized gain (loss) on investments
		and capital gains distributions	(211)	157	(586)	(791)
	Net unrealized appreciation (depreciation) of investments		1,125	(285)	797	1,543
Net increase (decrease) in net assets from operations			980	166	1,101	666
Changes from principal transactions:
	Total unit transactions		(2,892)	(3,555)	(5,030)	(1,366)
Increase (decrease) in assets derived from principal
	transactions		(2,892)	(3,555)	(5,030)	(1,366)
Total increase (decrease)			(1,912)	(3,389)	(3,929)	(700)
Net assets at December 31, 2004			$ 9,093	$ 6,444	$ 11,845	$ 5,865

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

61

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

			Federated
			Mid Cap	Federated		Fidelity®
			Growth	Prime	Fidelity® VIP	VIP Equity-
			Strategies	Money	Contrafund®	Income
Net assets at January 1, 2003			$ 10,415	$ 7,387	$ 145,571	$ 146,420

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(148)	(44)	(1,258)	753
	Net realized gain (loss) on investments
		and capital gains distributions	(421)	-	(2,724)	(6,755)
	Net unrealized appreciation (depreciation) of investments		3,953	-	42,317	47,447
Net increase (decrease) in net assets from operations			3,384	(44)	38,335	41,445
Changes from principal transactions:
	Total unit transactions		(1,986)	(2,413)	4,149	4,284
Increase (decrease) in assets derived from principal
	transactions		(1,986)	(2,413)	4,149	4,284
Total increase (decrease)			1,398	(2,457)	42,484	45,729
Net assets at December 31, 2003			11,813	4,930	188,055	192,149

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(153)	(25)	(1,898)	519
	Net realized gain (loss) on investments
		and capital gains distributions	(425)	-	1,634	1,446
	Net unrealized appreciation (depreciation) of investments		1,905	-	28,725	17,751
Net increase (decrease) in net assets from operations			1,327	(25)	28,461	19,716
Changes from principal transactions:
	Total unit transactions		(2,667)	(1,579)	26,883	6,594
Increase (decrease) in assets derived from principal
	transactions		(2,667)	(1,579)	26,883	6,594
Total increase (decrease)			(1,340)	(1,604)	55,344	26,310
Net assets at December 31, 2004			$ 10,473	$ 3,326	$ 243,399	$ 218,459

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

62

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


					Fidelity®	Fidelity® VIP
			Fidelity®	Fidelity® VIP	VIP Asset	Investment
			VIP Growth	High Income	Manager^SM	Grade Bond
Net assets at January 1, 2003			$ 98,180	$ 36,456	$ 11,086	$ 2,890

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1,061)	2,326	250	76
	Net realized gain (loss) on investments
		and capital gains distributions	(3,844)	1,393	(99)	89
	Net unrealized appreciation (depreciation) of investments		34,021	6,885	1,563	(69)
Net increase (decrease) in net assets from operations			29,116	10,604	1,714	96
Changes from principal transactions:
	Total unit transactions		(1,432)	9,910	(766)	(742)
Increase (decrease) in assets derived from principal
	transactions		(1,432)	9,910	(766)	(742)
Total increase (decrease)			27,684	20,514	948	(646)
Net assets at December 31, 2003			125,864	56,970	12,034	2,244

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1,184)	3,938	158	62
	Net realized gain (loss) on investments
		and capital gains distributions	(1,400)	3,046	66	81
	Net unrealized appreciation (depreciation) of investments		4,239	(3,248)	221	(81)
Net increase (decrease) in net assets from operations			1,655	3,736	445	62
Changes from principal transactions:
	Total unit transactions		(17,721)	(12,742)	(892)	(348)
Increase (decrease) in assets derived from principal
	transactions		(17,721)	(12,742)	(892)	(348)
Total increase (decrease)			(16,066)	(9,006)	(447)	(286)
Net assets at December 31, 2004			$ 109,798	$ 47,964	$ 11,587	$ 1,958

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

63

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

					Franklin
					Small	ING GET
			Fidelity® VIP	Fidelity® VIP	Cap Value	Fund -
			Index 500	Overseas	Securities	Series D
Net assets at January 1, 2003			$ 64,190	$ 6,617	$ 365	$ 103,698

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		79	(39)	(3)	2,488
	Net realized gain (loss) on investments
		and capital gains distributions	(2,618)	1,142	18	(1,414)
	Net unrealized appreciation (depreciation) of investments		18,365	2,299	125	(988)
Net increase (decrease) in net assets from operations			15,826	3,402	140	86
Changes from principal transactions:
	Total unit transactions		(5,750)	3,885	157	(17,353)
Increase (decrease) in assets derived from principal
	transactions		(5,750)	3,885	157	(17,353)
Total increase (decrease)			10,076	7,287	297	(17,267)
Net assets at December 31, 2003			74,266	13,904	662	86,431

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(14)	-	(13)	3,128
	Net realized gain (loss) on investments
		and capital gains distributions	52	620	247	(8,794)
	Net unrealized appreciation (depreciation) of investments		5,896	885	194	5,596
Net increase (decrease) in net assets from operations			5,934	1,505	428	(70)
Changes from principal transactions:
	Total unit transactions		(9,902)	260	3,294	(86,361)
Increase (decrease) in assets derived from principal
	transactions		(9,902)	260	3,294	(86,361)
Total increase (decrease)			(3,968)	1,765	3,722	(86,431)
Net assets at December 31, 2004			$ 70,298	$ 15,669	$ 4,384	$ -

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

64

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET
			Fund -	Fund -	Fund -	Fund -
			Series E	Series G	Series H	Series I
Net assets at January 1, 2003			$ 276,397	$ 163,877	$ 121,603	$ 84,079

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		6,394	3,488	2,709	1,369
	Net realized gain (loss) on investments
		and capital gains distributions	(903)	(335)	(63)	100
	Net unrealized appreciation (depreciation) of investments		(2,753)	(2,355)	(1,049)	(373)
Net increase (decrease) in net assets from operations			2,738	798	1,597	1,096
Changes from principal transactions:
	Total unit transactions		(40,249)	(26,394)	(18,191)	(10,425)
Increase (decrease) in assets derived from principal
	transactions		(40,249)	(26,394)	(18,191)	(10,425)
Total increase (decrease)			(37,511)	(25,596)	(16,594)	(9,329)
Net assets at December 31, 2003			238,886	138,281	105,009	74,750

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		12,966	8,186	2,769	1,640
	Net realized gain (loss) on investments
		and capital gains distributions	(19,910)	(11,127)	(389)	(160)
	Net unrealized appreciation (depreciation) of investments		4,843	2,313	(2,504)	(1,883)
Net increase (decrease) in net assets from operations			(2,101)	(628)	(124)	(403)
Changes from principal transactions:
	Total unit transactions		(236,785)	(137,653)	(19,363)	(13,672)
Increase (decrease) in assets derived from principal
	transactions		(236,785)	(137,653)	(19,363)	(13,672)
Total increase (decrease)			(238,886)	(138,281)	(19,487)	(14,075)
Net assets at December 31, 2004			$ -	$ -	$ 85,522	$ 60,675

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

65

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET
			Fund -	Fund -	Fund -	Fund -
			Series J	Series K	Series L	Series M
Net assets at January 1, 2003			$ 71,844	$ 81,260	$ 75,255	$ 115,381

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		1,253	947	1,076	1,606
	Net realized gain (loss) on investments
		and capital gains distributions	148	303	343	1,021
	Net unrealized appreciation (depreciation) of investments		(799)	(922)	(356)	(674)
Net increase (decrease) in net assets from operations			602	328	1,063	1,953
Changes from principal transactions:
	Total unit transactions		(12,356)	(11,083)	(9,450)	(22,616)
Increase (decrease) in assets derived from principal
	transactions		(12,356)	(11,083)	(9,450)	(22,616)
Total increase (decrease)			(11,754)	(10,755)	(8,387)	(20,663)
Net assets at December 31, 2003			60,090	70,505	66,868	94,718

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		1,438	1,049	1,226	2,038
	Net realized gain (loss) on investments
		and capital gains distributions	(104)	18	277	406
	Net unrealized appreciation (depreciation) of investments		(1,698)	(1,900)	(2,269)	(3,412)
Net increase (decrease) in net assets from operations			(364)	(833)	(766)	(968)
Changes from principal transactions:
	Total unit transactions		(12,593)	(14,251)	(14,193)	(16,935)
Increase (decrease) in assets derived from principal
	transactions		(12,593)	(14,251)	(14,193)	(16,935)
Total increase (decrease)			(12,957)	(15,084)	(14,959)	(17,903)
Net assets at December 31, 2004			$ 47,133	$ 55,421	$ 51,909	$ 76,815

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

66

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET
			Fund -	Fund -	Fund -	Fund -
			Series N	Series P	Series Q	Series R
Net assets at January 1, 2003			$ 90,143	$ 76,334	$ 54,826	$ 43,556

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		537	346	(991)	(791)
	Net realized gain (loss) on investments
		and capital gains distributions	65	663	462	290
	Net unrealized appreciation (depreciation) of investments		1,328	303	2,082	2,111
Net increase (decrease) in net assets from operations			1,930	1,312	1,553	1,610
Changes from principal transactions:
	Total unit transactions		(15,288)	(19,643)	(12,043)	(6,991)
Increase (decrease) in assets derived from principal
	transactions		(15,288)	(19,643)	(12,043)	(6,991)
Total increase (decrease)			(13,358)	(18,331)	(10,490)	(5,381)
Net assets at December 31, 2003			76,785	58,003	44,336	38,175

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		1,020	872	653	451
	Net realized gain (loss) on investments
		and capital gains distributions	(57)	261	361	323
	Net unrealized appreciation (depreciation) of investments		(1,190)	(1,415)	(1,058)	(525)
Net increase (decrease) in net assets from operations			(227)	(282)	(44)	249
Changes from principal transactions:
	Total unit transactions		(13,248)	(9,832)	(6,420)	(5,072)
Increase (decrease) in assets derived from principal
	transactions		(13,248)	(9,832)	(6,420)	(5,072)
Total increase (decrease)			(13,475)	(10,114)	(6,464)	(4,823)
Net assets at December 31, 2004			$ 63,310	$ 47,889	$ 37,872	$ 33,352

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

67

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET
			Fund -	Fund -	Fund -	Fund -
			Series S	Series T	Series U	Series V
Net assets at January 1, 2003			$ 53,553	$ 39,378	$ 503	$ -

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(909)	(654)	(568)	(915)
	Net realized gain (loss) on investments
		and capital gains distributions	493	412	768	(307)
	Net unrealized appreciation (depreciation) of investments		2,330	1,635	2,053	(1,086)
Net increase (decrease) in net assets from operations			1,914	1,393	2,253	(2,308)
Changes from principal transactions:
	Total unit transactions		(11,327)	(8,751)	27,322	76,985
Increase (decrease) in assets derived from principal
	transactions		(11,327)	(8,751)	27,322	76,985
Total increase (decrease)			(9,413)	(7,358)	29,575	74,677
Net assets at December 31, 2003			44,140	32,020	30,078	74,677

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		290	244	(14)	(607)
	Net realized gain (loss) on investments
		and capital gains distributions	1,072	748	1,404	(96)
	Net unrealized appreciation (depreciation) of investments		(1,093)	(824)	(1,012)	971
Net increase (decrease) in net assets from operations			269	168	378	268
Changes from principal transactions:
	Total unit transactions		(7,975)	(3,927)	(3,183)	(19,464)
Increase (decrease) in assets derived from principal
	transactions		(7,975)	(3,927)	(3,183)	(19,464)
Total increase (decrease)			(7,706)	(3,759)	(2,805)	(19,196)
Net assets at December 31, 2004			$ 36,434	$ 28,261	$ 27,273	$ 55,481

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

68

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING American
			ING American	Funds	ING American	ING
			Funds	Growth-	Funds	Julius Baer
			Growth	Income	International	Foreign
Net assets at January 1, 2003			$ -	$ -	$ -	$ -

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	-	-	-
	Net realized gain (loss) on investments
		and capital gains distributions	-	-	-	-
	Net unrealized appreciation (depreciation) of investments		-	-	-	-
Net increase (decrease) in net assets from operations			-	-	-	-
Changes from principal transactions:
	Total unit transactions		-	-	-	-
Increase (decrease) in assets derived from principal
	transactions		-	-	-	-
Total increase (decrease)			-	-	-	-
Net assets at December 31, 2003			-	-	-	-

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1)	-	(2)	-
	Net realized gain (loss) on investments
		and capital gains distributions	-	-	-	3
	Net unrealized appreciation (depreciation) of investments		48	27	164	14
Net increase (decrease) in net assets from operations			47	27	162	17
Changes from principal transactions:
	Total unit transactions		1,727	2,320	8,912	225
Increase (decrease) in assets derived from principal
	transactions		1,727	2,320	8,912	225
Total increase (decrease)			1,774	2,347	9,074	242
Net assets at December 31, 2004			$ 1,774	$ 2,347	$ 9,074	$ 242

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

69

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING	ING MFS	ING T. Rowe	ING Aeltus
			Legg Mason	Total	Price Equity	Enhanced
			Value	Return	Income	Index
Net assets at January 1, 2003			$ -	$ -	$ -	$ -

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	2	-	-
	Net realized gain (loss) on investments
		and capital gains distributions	-	2	7	1
	Net unrealized appreciation (depreciation) of investments		-	12	79	-
Net increase (decrease) in net assets from operations			-	16	86	1
Changes from principal transactions:
	Total unit transactions		-	385	618	5
Increase (decrease) in assets derived from principal
	transactions		-	385	618	5
Total increase (decrease)			-	401	704	6
Net assets at December 31, 2003			-	401	704	6

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		2	22	6	(1)
	Net realized gain (loss) on investments
		and capital gains distributions	-	19	43	-
	Net unrealized appreciation (depreciation) of investments		24	81	180	5
Net increase (decrease) in net assets from operations			26	122	229	4
Changes from principal transactions:
	Total unit transactions		856	1,399	1,402	69
Increase (decrease) in assets derived from principal
	transactions		856	1,399	1,402	69
Total increase (decrease)			882	1,521	1,631	73
Net assets at December 31, 2004			$ 882	$ 1,922	$ 2,335	$ 79

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

70

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING American	ING	ING Goldman
			ING American	Century	Baron	Sachs®
			Century	Small Cap	Small Cap	Capital
			Select	Value	Growth	Growth
Net assets at January 1, 2003			$ 9	$ 173	$ 193	$ 18

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1)	(2)	(6)	-
	Net realized gain (loss) on investments
		and capital gains distributions	9	54	37	-
	Net unrealized appreciation (depreciation) of investments		34	74	159	4
Net increase (decrease) in net assets from operations			42	126	190	4
Changes from principal transactions:
	Total unit transactions		329	262	998	3
Increase (decrease) in assets derived from principal
	transactions		329	262	998	3
Total increase (decrease)			371	388	1,188	7
Net assets at December 31, 2003			380	561	1,381	25

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(4)	(7)	(18)	(1)
	Net realized gain (loss) on investments
		and capital gains distributions	4	127	263	1
	Net unrealized appreciation (depreciation) of investments		9	28	244	31
Net increase (decrease) in net assets from operations			9	148	489	31
Changes from principal transactions:
	Total unit transactions		99	325	1,071	259
Increase (decrease) in assets derived from principal
	transactions		99	325	1,071	259
Total increase (decrease)			108	473	1,560	290
Net assets at December 31, 2004			$ 488	$ 1,034	$ 2,941	$ 315

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

71

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING		ING
			ING	JPMorgan	ING MFS	OpCap
			JPMorgan	Mid Cap	Capital	Balanced
			International	Value	Opportunities	Value
Net assets at January 1, 2003			$ 24,044	$ 87	$ 35,741	$ 15

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(3)	(2)	(375)	7
	Net realized gain (loss) on investments
		and capital gains distributions	4,418	25	(7,641)	8
	Net unrealized appreciation (depreciation) of investments		3,476	79	16,575	80
Net increase (decrease) in net assets from operations			7,891	102	8,559	95
Changes from principal transactions:
	Total unit transactions		2,084	489	(5,013)	1,140
Increase (decrease) in assets derived from principal
	transactions		2,084	489	(5,013)	1,140
Total increase (decrease)			9,975	591	3,546	1,235
Net assets at December 31, 2003			34,019	678	39,287	1,250

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(16)	(7)	(298)	-
	Net realized gain (loss) on investments
		and capital gains distributions	3,477	101	(497)	56
	Net unrealized appreciation (depreciation) of investments		3,386	158	4,806	100
Net increase (decrease) in net assets from operations			6,847	252	4,011	156
Changes from principal transactions:
	Total unit transactions		3,164	1,285	(5,074)	720
Increase (decrease) in assets derived from principal
	transactions		3,164	1,285	(5,074)	720
Total increase (decrease)			10,011	1,537	(1,063)	876
Net assets at December 31, 2004			$ 44,030	$ 2,215	$ 38,224	$ 2,126

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

72

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING	ING Salomon	ING Salomon
			ING	PIMCO	Brothers	Brothers
			Oppenheimer	Total	Aggressive	Fundamental
			Global	Return	Growth	Value
Net assets at January 1, 2003			$ 1	$ 1,275	$ 47,008	$ 5

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	50	(674)	-
	Net realized gain (loss) on investments
		and capital gains distributions	3	68	(3,532)	103
	Net unrealized appreciation (depreciation) of investments		-	(57)	20,204	85
Net increase (decrease) in net assets from operations			3	61	15,998	188
Changes from principal transactions:
	Total unit transactions		1	1,277	(4,367)	1,022
Increase (decrease) in assets derived from principal
	transactions		1	1,277	(4,367)	1,022
Total increase (decrease)			4	1,338	11,631	1,210
Net assets at December 31, 2003			5	2,613	58,639	1,215

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	(29)	(725)	(13)
	Net realized gain (loss) on investments
		and capital gains distributions	4	43	(84)	80
	Net unrealized appreciation (depreciation) of investments		-	89	4,983	27
Net increase (decrease) in net assets from operations			4	103	4,174	94
Changes from principal transactions:
	Total unit transactions		13	1,169	(9,558)	174
Increase (decrease) in assets derived from principal
	transactions		13	1,169	(9,558)	174
Total increase (decrease)			17	1,272	(5,384)	268
Net assets at December 31, 2004			$ 22	$ 3,885	$ 53,255	$ 1,483

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

73

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING T. Rowe
			ING Salomon	Price
			Brothers	Diversified	ING T. Rowe	ING UBS U.S.
			Investors	Mid Cap	Price Growth	Large Cap
			Value	Growth	Equity	Equity
Net assets at January 1, 2003			$ 14	$ 179	$ 58,443	$ 40,669

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	(4)	(747)	(289)
	Net realized gain (loss) on investments
		and capital gains distributions	3	71	(2,008)	(1,984)
	Net unrealized appreciation (depreciation) of investments		20	59	19,241	10,721
Net increase (decrease) in net assets from operations			23	126	16,486	8,448
Changes from principal transactions:
	Total unit transactions		142	712	(42)	(6,177)
Increase (decrease) in assets derived from principal
	transactions		142	712	(42)	(6,177)
Total increase (decrease)			165	838	16,444	2,271
Net assets at December 31, 2003			179	1,017	74,887	42,940

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1)	(8)	(836)	(214)
	Net realized gain (loss) on investments
		and capital gains distributions	22	61	541	(196)
	Net unrealized appreciation (depreciation) of investments		3	(11)	6,147	5,688
Net increase (decrease) in net assets from operations			24	42	5,852	5,278
Changes from principal transactions:
	Total unit transactions		184	(447)	(6,818)	(4,540)
Increase (decrease) in assets derived from principal
	transactions		184	(447)	(6,818)	(4,540)
Total increase (decrease)			208	(405)	(966)	738
Net assets at December 31, 2004			$ 387	$ 612	$ 73,921	$ 43,678

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

74

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING	ING VP	ING VP
			ING Van	Van Kampen	Strategic	Strategic
			Kampen	Equity and	Allocation	Allocation
			Comstock	Income	Balanced	Growth
Net assets at January 1, 2003			$ 319	$ -	$ 14,344	$ 11,257

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	-	33	(41)
	Net realized gain (loss) on investments
		and capital gains distributions	45	1	(421)	(254)
	Net unrealized appreciation (depreciation) of investments		103	3	2,802	2,920
Net increase (decrease) in net assets from operations			148	4	2,414	2,625
Changes from principal transactions:
	Total unit transactions		432	49	179	926
Increase (decrease) in assets derived from principal
	transactions		432	49	179	926
Total increase (decrease)			580	53	2,593	3,551
Net assets at December 31, 2003			899	53	16,937	14,808

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(15)	(1)	(7)	(26)
	Net realized gain (loss) on investments
		and capital gains distributions	71	2	112	98
	Net unrealized appreciation (depreciation) of investments		260	8	1,528	1,429
Net increase (decrease) in net assets from operations			316	9	1,633	1,501
Changes from principal transactions:
	Total unit transactions		2,511	75	2,252	(678)
Increase (decrease) in assets derived from principal
	transactions		2,511	75	2,252	(678)
Total increase (decrease)			2,827	84	3,885	823
Net assets at December 31, 2004			$ 3,726	$ 137	$ 20,822	$ 15,631

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

75

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

			ING VP
			Strategic	ING VP	ING GET	ING GET
			Allocation	Growth and	U.S. Core -	U.S. Core -
			Income	Income	Series 1	Series 2
Net assets at January 1, 2003			$ 20,088	$ 415,966	$ -	$ -

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		201	(4,562)	(162)	(36)
	Net realized gain (loss) on investments
		and capital gains distributions	(299)	(65,679)	16	-
	Net unrealized appreciation (depreciation) of investments		2,310	163,033	861	182
Net increase (decrease) in net assets from operations			2,212	92,792	715	146
Changes from principal transactions:
	Total unit transactions		(2,878)	(53,397)	25,230	24,355
Increase (decrease) in assets derived from principal
	transactions		(2,878)	(53,397)	25,230	24,355
Total increase (decrease)			(666)	39,395	25,945	24,501
Net assets at December 31, 2003			19,422	455,361	25,945	24,501

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		102	5,409	(298)	(397)
	Net realized gain (loss) on investments
		and capital gains distributions	51	(37,452)	199	138
	Net unrealized appreciation (depreciation) of investments		1,020	60,752	465	642
Net increase (decrease) in net assets from operations			1,173	28,709	366	383
Changes from principal transactions:
	Total unit transactions		(1,865)	(60,713)	(3,269)	(5,081)
Increase (decrease) in assets derived from principal
	transactions		(1,865)	(60,713)	(3,269)	(5,081)
Total increase (decrease)			(692)	(32,004)	(2,903)	(4,698)
Net assets at December 31, 2004			$ 18,730	$ 423,357	$ 23,042	$ 19,803

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

76

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING GET	ING GET	ING GET	ING GET
			U.S. Core -	U.S. Core -	U.S. Core -	U.S. Core -
			Series 3	Series 4	Series 5	Series 6
Net assets at January 1, 2003			$ -	$ -	$ -	$ -

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1)	-	-	-
	Net realized gain (loss) on investments
		and capital gains distributions	-	-	-	-
	Net unrealized appreciation (depreciation) of investments		-	-	-	-
Net increase (decrease) in net assets from operations			(1)	-	-	-
Changes from principal transactions:
	Total unit transactions		1,966	-	-	-
Increase (decrease) in assets derived from principal
	transactions		1,966	-	-	-
Total increase (decrease)			1,965	-	-	-
Net assets at December 31, 2003			1,965	-	-	-

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(906)	(91)	(33)	(360)
	Net realized gain (loss) on investments
		and capital gains distributions	(108)	12	36	39
	Net unrealized appreciation (depreciation) of investments		694	398	229	1,035
Net increase (decrease) in net assets from operations			(320)	319	232	714
Changes from principal transactions:
	Total unit transactions		52,969	7,854	4,196	87,376
Increase (decrease) in assets derived from principal
	transactions		52,969	7,854	4,196	87,376
Total increase (decrease)			52,649	8,173	4,428	88,090
Net assets at December 31, 2004			$ 54,614	$ 8,173	$ 4,428	$ 88,090

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

77

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING VP
			ING GET	Global		ING VP
			U.S. Core -	Science and	ING VP	Index Plus
			Series 7	Technology	Growth	LargeCap
Net assets at January 1, 2003			$ -	$ 6,564	$ 28,286	$ 154,417

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	(105)	(341)	(240)
	Net realized gain (loss) on investments
		and capital gains distributions	-	(728)	(1,434)	(6,964)
	Net unrealized appreciation (depreciation) of investments		-	3,935	9,318	43,359
Net increase (decrease) in net assets from operations			-	3,102	7,543	36,155
Changes from principal transactions:
	Total unit transactions		-	3,706	(3,738)	(3,646)
Increase (decrease) in assets derived from principal
	transactions		-	3,706	(3,738)	(3,646)
Total increase (decrease)			-	6,808	3,805	32,509
Net assets at December 31, 2003			-	13,372	32,091	186,926

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(35)	(134)	(300)	(383)
	Net realized gain (loss) on investments
		and capital gains distributions	3	1,339	(336)	380
	Net unrealized appreciation (depreciation) of investments		45	(1,927)	2,144	15,721
Net increase (decrease) in net assets from operations			13	(722)	1,508	15,718
Changes from principal transactions:
	Total unit transactions		57,002	(2,277)	(5,518)	(20,282)
Increase (decrease) in assets derived from principal
	transactions		57,002	(2,277)	(5,518)	(20,282)
Total increase (decrease)			57,015	(2,999)	(4,010)	(4,564)
Net assets at December 31, 2004			$ 57,015	$ 10,373	$ 28,081	$ 182,362

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

78

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING VP	ING VP	ING VP	ING VP
			Index Plus	Index Plus	International	Small
			MidCap	SmallCap	Equity	Company
Net assets at January 1, 2003			$ 11,779	$ 4,275	$ 5,228	$ 52,158

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(47)	(31)	(9)	(591)
	Net realized gain (loss) on investments
		and capital gains distributions	(736)	(377)	842	(4,193)
	Net unrealized appreciation (depreciation) of investments		4,296	1,857	966	23,973
Net increase (decrease) in net assets from operations			3,513	1,449	1,799	19,189
Changes from principal transactions:
	Total unit transactions		(260)	988	1,897	9,111
Increase (decrease) in assets derived from principal
	transactions		(260)	988	1,897	9,111
Total increase (decrease)			3,253	2,437	3,696	28,300
Net assets at December 31, 2003			15,032	6,712	8,924	80,458

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(70)	(50)	(5)	(756)
	Net realized gain (loss) on investments
		and capital gains distributions	515	637	514	3,278
	Net unrealized appreciation (depreciation) of investments		1,945	912	1,167	7,164
Net increase (decrease) in net assets from operations			2,390	1,499	1,676	9,686
Changes from principal transactions:
	Total unit transactions		811	752	2,740	(7,274)
Increase (decrease) in assets derived from principal
	transactions		811	752	2,740	(7,274)
Total increase (decrease)			3,201	2,251	4,416	2,412
Net assets at December 31, 2004			$ 18,233	$ 8,963	$ 13,340	$ 82,870

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

79

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING VP	ING VP
			ING VP	Growth	Growth	ING VP
			Value	Opportunities	Opportunities	International
			Opportunity	- Class I	- Class S	Value
Net assets at January 1, 2003			$ 17,001	$ 384	$ 125	$ 404

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(77)	(2)	(4)	5
	Net realized gain (loss) on investments
		and capital gains distributions	(911)	(1)	4	12
	Net unrealized appreciation (depreciation) of investments		4,627	23	109	247
Net increase (decrease) in net assets from operations			3,639	20	109	264
Changes from principal transactions:
	Total unit transactions		(1,995)	(355)	619	531
Increase (decrease) in assets derived from principal
	transactions		(1,995)	(355)	619	531
Total increase (decrease)			1,644	(335)	728	795
Net assets at December 31, 2003			18,645	49	853	1,199

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(62)	-	(3)	9
	Net realized gain (loss) on investments
		and capital gains distributions	(370)	7	117	96
	Net unrealized appreciation (depreciation) of investments		1,835	(4)	(79)	272
Net increase (decrease) in net assets from operations			1,403	3	35	377
Changes from principal transactions:
	Total unit transactions		(3,763)	(52)	(888)	1,404
Increase (decrease) in assets derived from principal
	transactions		(3,763)	(52)	(888)	1,404
Total increase (decrease)			(2,360)	(49)	(853)	1,781
Net assets at December 31, 2004			$ 16,285	$ -	$ -	$ 2,980

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

80

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

					ING VP	ING VP
			ING VP	ING VP	MidCap	MidCap
			MagnaCap	MagnaCap	Opportunities	Opportunities
			- Class I	- Class S	- Class I	- Class S
Net assets at January 1, 2003			$ 27	$ 490	$ 76	$ 2,583

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	(2)	(7)	(52)
	Net realized gain (loss) on investments
		and capital gains distributions	(4)	(52)	182	(176)
	Net unrealized appreciation (depreciation) of investments		12	221	125	1,406
Net increase (decrease) in net assets from operations			8	167	300	1,178
Changes from principal transactions:
	Total unit transactions		7	271	529	3,057
Increase (decrease) in assets derived from principal
	transactions		7	271	529	3,057
Total increase (decrease)			15	438	829	4,235
Net assets at December 31, 2003			42	928	905	6,818

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		1	3	(5)	(119)
	Net realized gain (loss) on investments
		and capital gains distributions	-	13	150	348
	Net unrealized appreciation (depreciation) of investments		7	98	(84)	564
Net increase (decrease) in net assets from operations			8	114	61	793
Changes from principal transactions:
	Total unit transactions		75	593	(626)	3,173
Increase (decrease) in assets derived from principal
	transactions		75	593	(626)	3,173
Total increase (decrease)			83	707	(565)	3,966
Net assets at December 31, 2004			$ 125	$ 1,635	$ 340	$ 10,784

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

81

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

				ING VP	ING VP
				SmallCap	SmallCap
			ING VP	Opportunities	Opportunities	ING VP
			Real Estate	- Class I	- Class S	Balanced
Net assets at January 1, 2003			$ -	$ 58	$ 1,772	$ 148,868

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	(2)	(33)	1,276
	Net realized gain (loss) on investments
		and capital gains distributions	-	39	(426)	(6,377)
	Net unrealized appreciation (depreciation) of investments		-	(7)	1,223	30,184
Net increase (decrease) in net assets from operations			-	30	764	25,083
Changes from principal transactions:
	Total unit transactions		-	1,304	1,992	(1,133)
Increase (decrease) in assets derived from principal
	transactions		-	1,304	1,992	(1,133)
Total increase (decrease)			-	1,334	2,756	23,950
Net assets at December 31, 2003			-	1,392	4,528	172,818

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		11	(3)	(62)	1,466
	Net realized gain (loss) on investments
		and capital gains distributions	13	22	411	(3,158)
	Net unrealized appreciation (depreciation) of investments		98	50	33	15,759
Net increase (decrease) in net assets from operations			122	69	382	14,067
Changes from principal transactions:
	Total unit transactions		1,071	(491)	432	2,674
Increase (decrease) in assets derived from principal
	transactions		1,071	(491)	432	2,674
Total increase (decrease)			1,193	(422)	814	16,741
Net assets at December 31, 2004			$ 1,193	$ 970	$ 5,342	$ 189,559

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

82

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING VP		ING VP	ING VP
			Emerging	ING VP	Intermediate	Money
			Markets	Financial	Bond	Market
Net assets at January 1, 2003			$ 649	$ -	$ 164,563	$ 262,556

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(10)	-	820	1,300
	Net realized gain (loss) on investments
		and capital gains distributions	(21)	-	1,734	(1,414)
	Net unrealized appreciation (depreciation) of investments		287	-	5,194	(660)
Net increase (decrease) in net assets from operations			256	-	7,748	(774)
Changes from principal transactions:
	Total unit transactions		(96)	-	(28,876)	(87,888)
Increase (decrease) in assets derived from principal
	transactions		(96)	-	(28,876)	(87,888)
Total increase (decrease)			160	-	(21,128)	(88,662)
Net assets at December 31, 2003			809	-	143,435	173,894

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(5)	-	9,531	(110)
	Net realized gain (loss) on investments
		and capital gains distributions	29	(3)	7,411	(354)
	Net unrealized appreciation (depreciation) of investments		109	-	(12,159)	154
Net increase (decrease) in net assets from operations			133	(3)	4,783	(310)
Changes from principal transactions:
	Total unit transactions		(172)	3	(10,338)	19,197
Increase (decrease) in assets derived from principal
	transactions		(172)	3	(10,338)	19,197
Total increase (decrease)			(39)	-	(5,555)	18,887
Net assets at December 31, 2004			$ 770	$ -	$ 137,880	$ 192,781

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

83

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			ING VP		Janus Aspen
			Natural	Janus Aspen	Flexible	Janus Aspen
			Resources	Balanced	Income	Growth
Net assets at January 1, 2003			$ 1,567	$ 197,825	$ 28,392	$ 98,503

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(19)	1,782	840	(1,140)
	Net realized gain (loss) on investments
		and capital gains distributions	(20)	(2,339)	734	(4,646)
	Net unrealized appreciation (depreciation) of investments		435	23,364	(248)	32,018
Net increase (decrease) in net assets from operations			396	22,807	1,326	26,232
Changes from principal transactions:
	Total unit transactions		(231)	(34,101)	(7,560)	(19,409)
Increase (decrease) in assets derived from principal
	transactions		(231)	(34,101)	(7,560)	(19,409)
Total increase (decrease)			165	(11,294)	(6,234)	6,823
Net assets at December 31, 2003			1,732	186,531	22,158	105,326

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(3)	1,497	746	(1,013)
	Net realized gain (loss) on investments
		and capital gains distributions	53	764	558	(821)
	Net unrealized appreciation (depreciation) of investments		122	8,691	(857)	3,988
Net increase (decrease) in net assets from operations			172	10,952	447	2,154
Changes from principal transactions:
	Total unit transactions		(43)	(40,693)	(6,857)	(22,999)
Increase (decrease) in assets derived from principal
	transactions		(43)	(40,693)	(6,857)	(22,999)
Total increase (decrease)			129	(29,741)	(6,410)	(20,845)
Net assets at December 31, 2004			$ 1,861	$ 156,790	$ 15,748	$ 84,481

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

84

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			Janus Aspen	Janus Aspen	Lord Abbett	Lord Abbett
			Mid Cap	Worldwide	Growth and	Mid-Cap
			Growth	Growth	Income	Value
Net assets at January 1, 2003			$ 77,233	$ 198,280	$ 422	$ 474

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(963)	(283)	6	(1)
	Net realized gain (loss) on investments
		and capital gains distributions	(5,140)	(13,982)	7	-
	Net unrealized appreciation (depreciation) of investments		29,450	51,811	364	222
Net increase (decrease) in net assets from operations			23,347	37,546	377	221
Changes from principal transactions:
	Total unit transactions		(11,863)	(44,903)	2,311	522
Increase (decrease) in assets derived from principal
	transactions		(11,863)	(44,903)	2,311	522
Total increase (decrease)			11,484	(7,357)	2,688	743
Net assets at December 31, 2003			88,717	190,923	3,110	1,217

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(1,031)	(477)	6	(8)
	Net realized gain (loss) on investments
		and capital gains distributions	2,091	(4,417)	330	185
	Net unrealized appreciation (depreciation) of investments		14,067	9,492	222	356
Net increase (decrease) in net assets from operations			15,127	4,598	558	533
Changes from principal transactions:
	Total unit transactions		(9,580)	(41,276)	3,105	1,982
Increase (decrease) in assets derived from principal
	transactions		(9,580)	(41,276)	3,105	1,982
Total increase (decrease)			5,547	(36,678)	3,663	2,515
Net assets at December 31, 2004			$ 94,264	$ 154,245	$ 6,773	$ 3,732

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

85

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)


			MFS®	MFS® VIT	Oppenheimer	Oppenheimer
			VIT Strategic	VIT Total	Aggressive	Global
			Income	Return	Growth	Securities
Net assets at January 1, 2003			$ 2,720	$ 91,725	$ 23,930	$ 15,177

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		117	374	(335)	(100)
	Net realized gain (loss) on investments
		and capital gains distributions	67	(807)	(1,055)	(902)
	Net unrealized appreciation (depreciation) of investments		55	14,113	6,608	7,819
Net increase (decrease) in net assets from operations			239	13,680	5,218	6,817
Changes from principal transactions:
	Total unit transactions		(435)	5,000	(33)	7,545
Increase (decrease) in assets derived from principal
	transactions		(435)	5,000	(33)	7,545
Total increase (decrease)			(196)	18,680	5,185	14,362
Net assets at December 31, 2003			2,524	110,405	29,115	29,539

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		93	362	(391)	(2)
	Net realized gain (loss) on investments
		and capital gains distributions	63	258	134	771
	Net unrealized appreciation (depreciation) of investments		(10)	11,330	5,377	5,617
Net increase (decrease) in net assets from operations			146	11,950	5,120	6,386
Changes from principal transactions:
	Total unit transactions		(167)	20,142	(1,361)	7,795
Increase (decrease) in assets derived from principal
	transactions		(167)	20,142	(1,361)	7,795
Total increase (decrease)			(21)	32,092	3,759	14,181
Net assets at December 31, 2004			$ 2,503	$ 142,497	$ 32,874	$ 43,720

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

86

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

						Pioneer
			Oppenheimer	Oppenheimer		Equity
			Main	Strategic	PIMCO VIT	Income
			Street®	Bond	Real Return	VCT
Net assets at January 1, 2003			$ 48,801	$ 32,735	$ -	$ 153

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(224)	1,817	-	3
	Net realized gain (loss) on investments
		and capital gains distributions	(1,676)	661	-	(8)
	Net unrealized appreciation (depreciation) of investments		14,143	3,307	-	49
Net increase (decrease) in net assets from operations			12,243	5,785	-	44
Changes from principal transactions:
	Total unit transactions		4,077	3,980	-	56
Increase (decrease) in assets derived from principal
	transactions		4,077	3,980	-	56
Total increase (decrease)			16,320	9,765	-	100
Net assets at December 31, 2003			65,121	42,500	-	253

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(319)	1,729	-	13
	Net realized gain (loss) on investments
		and capital gains distributions	79	826	10	25
	Net unrealized appreciation (depreciation) of investments		5,227	895	(3)	95
Net increase (decrease) in net assets from operations			4,987	3,450	7	133
Changes from principal transactions:
	Total unit transactions		(1,712)	12,684	515	1,195
Increase (decrease) in assets derived from principal
	transactions		(1,712)	12,684	515	1,195
Total increase (decrease)			3,275	16,134	522	1,328
Net assets at December 31, 2004			$ 68,396	$ 58,634	$ 522	$ 1,581

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

87

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

					Pioneer
			Pioneer	Pioneer	Mid Cap
			Fund	High Yield	Value
			VCT	VCT	VCT	Jennison
Net assets at January 1, 2003			$ 1	$ -	$ 30	$ 427

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	-	(1)	(8)
	Net realized gain (loss) on investments
		and capital gains distributions	-	-	22	5
	Net unrealized appreciation (depreciation) of investments		-	-	56	156
Net increase (decrease) in net assets from operations			-	-	77	153
Changes from principal transactions:
	Total unit transactions		3	-	632	279
Increase (decrease) in assets derived from principal
	transactions		3	-	632	279
Total increase (decrease)			3	-	709	432
Net assets at December 31, 2003			4	-	739	859

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		-	1	(10)	(12)
	Net realized gain (loss) on investments
		and capital gains distributions	-	-	82	70
	Net unrealized appreciation (depreciation) of investments		2	2	342	32
Net increase (decrease) in net assets from operations			2	3	414	90
Changes from principal transactions:
	Total unit transactions		46	213	2,040	380
Increase (decrease) in assets derived from principal
	transactions		46	213	2,040	380
Total increase (decrease)			48	216	2,454	470
Net assets at December 31, 2004			$ 52	$ 216	$ 3,193	$ 1,329

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

88

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B
Statements of Changes in Net Assets
For the years ended December 31, 2004 and 2003
(Dollars in thousands)

			SP William
			Blair	UBS		Wanger U.S.
			International	U. S.	Wanger	Small
			Growth	Allocation	Select	Companies
Net assets at January 1, 2003			$ 214	$ 9,725	$ -	$ -

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(12)	(46)	-	-
	Net realized gain (loss) on investments
		and capital gains distributions	89	(189)	-	-
	Net unrealized appreciation (depreciation) of investments		289	2,649	-	-
Net increase (decrease) in net assets from operations			366	2,414	-	-
Changes from principal transactions:
	Total unit transactions		2,689	(431)	-	-
Increase (decrease) in assets derived from principal
	transactions		2,689	(431)	-	-
Total increase (decrease)			3,055	1,983	-	-
Net assets at December 31, 2003			3,269	11,708	-	-

Increase (decrease) in net assets
Operations:
	Net investment income (loss)		(54)	(54)	-	-
	Net realized gain (loss) on investments
		and capital gains distributions	211	73	-	-
	Net unrealized appreciation (depreciation) of investments		540	787	11	13
Net increase (decrease) in net assets from operations			697	806	11	13
Changes from principal transactions:
	Total unit transactions		2,188	(3,603)	238	84
Increase (decrease) in assets derived from principal
	transactions		2,188	(3,603)	238	84
Total increase (decrease)			2,885	(2,797)	249	97
Net assets at December 31, 2004			$ 6,154	$ 8,911	$ 249	$ 97

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

89

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Organization

ING Life Insurance and Annuity Company Variable Annuity Account B (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 a wholly owned subsidiary of ING Groep, N.V., a global financial services holding company based in The Netherlands.

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 sold exclusively for use with variable annuity 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. The assets and liabilities of the Account are clearly identified and distinguished from the other assets and liabilities of ILIAC.

At December 31, 2004, the Account had 126 investment divisions (the "Divisions"), 54 of which invest in independently managed mutual funds and 72 of which invest in mutual funds managed by affiliates, either ING Investments, LLC or ING Life Insurance and Annuity Company. The assets in each Division are invested in shares of a designated fund ("Fund") of various investment trusts (the "Trusts"). Investment Divisions at December 31, 2004 and related Trusts are as follows:

AIM Variable Insurance Funds:

AIM V.I. Capital Appreciation Fund - Series I Shares

AIM V.I. Core Equity Fund - Series I Shares

AIM V.I. Government Securities Fund - Series I Shares

AIM V.I. Growth Fund - Series I Shares

AIM V.I. Premier Equity Fund - Series I Shares

Alger American Funds:

Alger American Balanced Portfolio

Alger American Income & Growth Portfolio

Alger American Leveraged AllCap Portfolio

AllianceBernstein Variable Products Series Fund, Inc.:

AllianceBernstein VPSF Growth and Income - Class A

AllianceBernstein VPSF Premier Growth - Class A

AllianceBernstein VPSF Small Cap Growth - Class A

American Century® Investments:

American Century® VP Balanced Fund

American Century® VP International Fund

Calvert Social Balanced Portfolio

Federated Insurance Series:

Federated American Leaders Fund II

Federated Capital Income Fund II

Federated Equity Income Fund II

Federated Fund for U.S. Government Securities II

Federated High Income Bond Fund II

Federated International Equity Fund II

Federated Mid Cap Growth Strategies Fund II

Federated Prime Money Fund II

Fidelity® Variable Insurance Products Fund:

Fidelity® VIP Contrafund® Portfolio - Initial Class

Fidelity® VIP Equity-Income Portfolio - Initial Class

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Fidelity® Variable Insurance Products Fund (continued):

Fidelity® VIP Growth Portfolio - Initial Class

Fidelity® VIP High Income Portfolio - Initial Class

Fidelity® VIP Asset Manager^SM Portfolio - Initial Class

Fidelity® VIP Investment Grade Bond Portfolio - Initial Class

Fidelity® VIP Index 500 Portfolio - Initial Class

Fidelity® VIP Overseas Portfolio - Initial Class

Franklin Templeton Variable Insurance Products Trust:

Franklin Small Cap Value Securities Fund - Class 2

ING GET Fund:

ING GET Fund - Series H

ING GET Fund - Series I

ING GET Fund - Series J

ING GET Fund - Series K

ING GET Fund - Series L

ING GET Fund - Series M

ING GET Fund - Series N

ING GET Fund - Series P

ING GET Fund - Series Q

ING GET Fund - Series R

ING GET Fund - Series S

ING GET Fund - Series T

ING GET Fund - Series U

ING GET Fund - Series V*

ING Investors Trust:

ING American Funds Growth Portfolio**

ING American Funds Growth-Income Portfolio**

ING American Funds International Portfolio**

ING Julius Baer Foreign Portfolio - Service Class**

ING Legg Mason Value Portfolio - Institutional Class**

ING MFS Total Return Portfolio - Service Class*

ING T. Rowe Price Equity Income Portfolio - Service Class*

ING Partners, Inc.:

ING Aeltus Enhanced Index Portfolio - Service Class

ING American Century Select Portfolio - Service Class

ING American Century Small Cap Value Portfolio - Service Class

ING Baron Small Cap Growth Portfolio - Service Class

ING Goldman Sachs® Capital Growth Portfolio - Service Class

ING Partners, Inc. (continued):

ING JPMorgan International Portfolio - Initial Class

ING JPMorgan Mid Cap Value Portfolio - Service Class

ING MFS Capital Opportunities Portfolio - Initial Class

ING OpCap Balanced Value Portfolio - Service Class

ING Oppenheimer Global Portfolio - Service Class

ING PIMCO Total Return Portfolio - Service Class

ING Salomon Brothers Aggressive Growth Portfolio - Initial Class

ING Salomon Brothers Fundamental Value Portfolio - Service Class

ING Salomon Brothers Investors Value Portfolio - Service Class

ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class

ING T. Rowe Price Growth Equity 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 - Service Class

ING Strategic Allocation Portfolios, Inc.:

ING VP Strategic Allocation Balanced Portfolio - Class I

ING VP Strategic Allocation Growth Portfolio - Class I

ING VP Strategic Allocation Income Portfolio - Class I

ING Variable Funds:

ING VP Growth and Income Portfolio - Class I

ING Variable Insurance Trust:

ING GET U.S. Core Portfolio - Series 1*

ING GET U.S. Core Portfolio - Series 2*

ING GET U.S. Core Portfolio - Series 3*

ING GET U.S. Core Portfolio - Series 4**

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 Variable Portfolios, Inc.:

ING VP Global Science and Technology Portfolio - Class I

ING VP Growth Portfolio - Class I

ING VP Index Plus LargeCap Portfolio - Class I

ING VP Index Plus MidCap Portfolio - Class I

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

ING Variable Portfolios, Inc. (continued):

ING VP Index Plus SmallCap Portfolio - Class I

ING VP International Equity Portfolio - Class I

ING VP Small Company Portfolio - Class I

ING VP Value Opportunity Portfolio - Class I

ING Variable Products Trust:

ING VP International Value Portfolio - Class I

ING VP MagnaCap Portfolio - Class I

ING VP MagnaCap Portfolio - Class S

ING VP MidCap Opportunities Portfolio - Class I

ING VP MidCap Opportunities Portfolio - Class S

ING VP Real Estate Portfolio - Class I**

ING VP SmallCap Opportunities Portfolio - Class I

ING VP SmallCap Opportunities Portfolio - Class S

ING VP Balanced Portfolio, Inc. - Class I

ING VP Emerging Markets Fund

ING VP Intermediate Bond Portfolio - Class I

ING VP Money Market Portfolio - Class I

ING VP Natural Resources Trust

Janus Aspen Series:

Janus Aspen Balanced Portfolio - Inst Shares

Janus Aspen Flexible Income Portfolio - Inst Shares

Janus Aspen Growth Portfolio - Inst Shares

Janus Aspen Mid Cap Growth Portfolio - Inst Shares

Janus Aspen Worldwide Growth Portfolio - Inst Shares

Lord Abbett Funds:

Lord Abbett Growth and Income Portfolio

Lord Abbett Mid-Cap Value Portfolio

MFS® Funds:

MFS® VIT Strategic Income Series

MFS® VIT Total Return Series - Initial Class

Oppenheimer Variable Account Funds:

Oppenheimer Aggressive Growth Fund/VA

Oppenheimer Global Securities Fund/VA

Oppenheimer Main Street® Fund/VA

Oppenheimer Strategic Bond Fund/VA

PIMCO VIT Real Return Portfolio - Admin Class**

Pioneer Variable Contracts Trust:

Pioneer Equity Income VCT Portfolio - Class I

Pioneer Fund VCT Portfolio - Class I

Pioneer High Yield VCT Portfolio - Class I**

Pioneer Mid Cap Value VCT Portfolio - Class I

Prudential Series Fund, Inc.:

Jennison Portfolio - Class II Shares

SP William Blair International Growth Portfolio - Class II Shares

UBS Series Trust:

UBS U.S. Allocation Portfolio - Class I

Wanger Advisors Trust:

Wanger Select**

Wanger U.S. Smaller Companies**

* Investment Division added in 2003

** Investment Division added in 2004

The names of certain Divisions were changed during 2004. The following is a summary of current and former names for those Divisions:

Current Name

Former Name

AllianceBernstein Variable Products Series Fund, Inc.:

AllianceBernstein Variable Products Series Fund, Inc.:

AllianceBernstein VPSF Small Cap Growth - Class A

Alliance Bernstein VPSF Quasar - Class A

Federated Insurance Series:

Federated Insurance Series:

Federated Mid Cap Growth Strategies Fund II

Federated Growth Strategies Fund II

ING Partners, Inc.:

ING Partners, Inc.:

ING Aeltus Enhanced Index Portfolio - Service Class

ING DSI Enhanced Index Portfolio - Service Class

ING American Century Select Portfolio - Service Class

ING Alger Growth Portfolio - Service Class

ING JPMorgan International Portfolio - Initial Class

ING JPMorgan Fleming International Portfolio -

Initial Class

ING Oppenheimer Global Portfolio - Service Class

ING MFS Global Growth Portfolio - Service Class

ING T. Rowe Price Diversified Mid Cap Growth

ING Alger Aggressive Growth Portfolio - Service Class

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Current Name

Former Name

Portfolio - Service Class

ING UBS U.S. Large Cap Equity Portfolio - Initial Class

ING MFS Research Equity Portfolio - Initial Class

ING Van Kampen Equity and Income Portfolio -

ING UBS Tactical Asset Allocation Portfolio -

Service Class

Service Class

ING Strategic Allocation Portfolios, Inc.:

ING Generations Portfolio, Inc.:

ING VP Strategic Allocation Balanced Portfolio - Class I

ING VP Strategic Allocation Balanced Portfolio - Class R

ING VP Strategic Allocation Growth Portfolio - Class I

ING VP Strategic Allocation Growth Portfolio - Class R

ING VP Strategic Allocation Income Portfolio - Class I

ING VP Strategic Allocation Income Portfolio - Class R

ING Variable Funds:

ING Variable Funds:

ING VP Growth and Income Portfolio - Class I

ING VP Growth and Income Portfolio - Class R

ING Variable Portfolios, Inc.:

ING Variable Portfolios, Inc.:

ING VP Global Science and Technology Portfolio - Class I

ING VP Technology Portfolio - Class R

ING VP Growth Portfolio - Class I

ING VP Growth Portfolio - Class R

ING VP Index Plus LargeCap Portfolio - Class I

ING VP Index Plus LargeCap Portfolio - Class R

ING VP Index Plus MidCap Portfolio - Class I

ING VP Index Plus MidCap Portfolio - Class R

ING VP Index Plus SmallCap Portfolio - Class I

ING VP Index Plus SmallCap Portfolio - Class R

ING VP International Equity Portfolio - Class I

ING VP International Equity Portfolio - Class R

ING VP Small Company Portfolio - Class I

ING VP Small Company Portfolio - Class R

ING VP Value Opportunity Portfolio - Class I

ING VP Value Opportunity Portfolio - Class R

ING Variable Products Trust:

ING Variable Products Trust:

ING VP Growth Opportunities Portfolio - Class I

ING VP Growth Opportunities Portfolio - Class R

ING VP International Value Portfolio - Class I

ING VP International Value Portfolio - Class R

ING VP MagnaCap Portfolio - Class I

ING VP MagnaCap Portfolio - Class R

ING VP MidCap Opportunities Portfolio - Class I

ING VP MidCap Opportunities Portfolio - Class R

ING VP SmallCap Opportunities Portfolio - Class I

ING VP SmallCap Opportunities Portfolio - Class R

ING VP Balanced Portfolio, Inc. - Class I

ING VP Balanced Portfolio, Inc. - Class R

ING VP Intermediate Bond Portfolio - Class I

ING VP Bond Portfolio - Class R

ING VP Money Market Portfolio - Class I

ING VP Money Market Portfolio - Class R

MFS® Funds:

MFS® Funds:

MFS® VIT Strategic Income Series

MFS® Global Governments Series

MFS® VIT Total Return Series - Initial Class

MFS® Total Return Series - Initial Class

Prudential Series Fund, Inc.:

Prudential Series Fund, Inc.:

SP William Blair International Growth Portfolio -

SP Jennison International Growth Portfolio -

Class II Shares

Class II Shares

UBS Series Trust:

UBS Series Trust:

UBS U. S. Allocation Portfolio - Class I

UBS Tactical Allocation Portfolio - Class I

During 2004, the following Divisions were closed to Contractowners:

ING GET Fund - Series D

ING GET Fund - Series E

ING GET Fund - Series G

ING VP Growth Opportunities Portfolio - Class I

ING VP Growth Opportunities Portfolio - Class S

ING VP Financial Services - Class I

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Significant Accounting Policies

The following is a summary of the significant accounting policies of the Account:

Use of Estimates

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Investments

Investments are made in shares of a Fund and are recorded at fair value, determined by the net asset value per share of the respective Fund. Investment transactions in each Fund are recorded on the trade date. Distributions of net investment income and capital gains from each Fund are recognized on the ex-distribution date. Realized gains and losses on redemptions of the shares of the Fund are determined by specific identification. The difference between cost and current market value is recorded as unrealized appreciation or depreciation of investments.

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.

Annuity Reserves

Prior to the annuity date, the Contracts are redeemable for the net cash surrender value of the Contracts. The annuity reserves are recorded in the financial statements at the aggregate account values of the Contractholders invested in the Account Divisions. Annuity reserves held in the Account for currently payable contracts are computed according to the Progressive Annuity, a49, 1971 Individual Annuity Mortality, 1971 Group Annuity Mortality, 1983a, and 1983 Group Annuity Mortality tables using various assumed interest rates not to exceed seven percent. Mortality experience is monitored by the Company. Charges to annuity reserves for mortality experience are reimbursed to the Company if the reserves required are less than originally estimated. If additional reserves are required, the Company reimburses the Account. Conversely, if amounts allocated exceed amounts required, transfers may be made to ILIAC.

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

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 1.90% of the average daily net asset value of each Division of the Account to cover these risks, as specified in the Contract.

Administrative Charges

A daily charge at an annual rate of up to 0.50% of the assets attributable to the Contracts is deducted, as specified in the Contract.

Contract Maintenance Charges

An annual contract or certificate maintenance fee of up to $20 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 is imposed as a percentage that ranges up to 7% 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 4.0% of premiums.

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Related Party Transactions

During the year ended December 31, 2004, management fees were paid indirectly to ING Investments, LLC, an affiliate of the Company, in its capacity as investment adviser to the ING GET Fund, ING Balanced Portfolio, Inc., ING VP Emerging Markets Fund, ING VP Financial Services - Class I, ING VP Natural Resources Trust, ING VP Money Market Portfolio, ING Strategic Allocation Portfolios, Inc., ING Variable Funds, ING Variable Insurance Trust, ING VP Intermediate Bond Portfolio, ING Variable Portfolios, Inc., and ING Variable Products Trust. The annual fee rate ranged from 0.25% to 1.00% of the average net assets of each respective Fund or Fund of the Trust. In addition, management fees were paid to ILIAC, an affiliate, in its capacity as investment adviser to ING Partners, Inc. The annual fee rate ranged from 0.50% to 1.00% of the average net assets of each respective Fund of the Trust. Management fees were also paid indirectly to Directed Services, Inc., an affiliate of the Company, in its capacity as investment manager to ING Investors Trust. The Fund's advisory agreement provided for a fee at an annual rate ranging from 0.63% to 0.94% of the average net assets of each respective Portfolio excluding ING American Funds Growth Portfolio, ING American Funds Growth-Income Portfolio, and ING American Funds International Portfolio.

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Purchases and Sales of Investment Securities

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

Year ended December 31

2004

2003

Purchases

Sales

Purchases

Sales

(Dollars in Thousands)

AIM Variable Insurance Funds:

AIM V.I. Capital Appreciation

$           739

$        3,995

$        1,737

$        3,129

AIM V.I. Core Equity

           2,792

           8,277

           3,305

           4,917

AIM V.I. Government Securities

           4,900

           5,165

           6,524

         17,272

AIM V.I. Growth

           1,088

           3,484

           1,907

           3,089

AIM V.I. Premier Equity

              465

           8,725

           1,284

           8,823

Alger American Funds:

Alger American Balanced

              171

              653

              132

              720

Alger American Income & Growth

              125

           1,702

              168

           1,486

Alger American Leveraged AllCap

                43

           1,763

                  1

           1,075

AllianceBernstein Variable Products Series Fund, Inc.:

AllianceBernstein VPSF Growth and Income

         11,559

           2,742

           9,057

           3,429

AllianceBernstein VPSF Premier Growth

           1,267

           1,635

           1,645

           1,504

AllianceBernstein VPSF Small Cap Growth

           2,580

           1,876

           3,231

              736

American Century® Investments:

American Century® VP Balanced

                64

              482

                40

              323

American Century® VP International

                11

              319

                19

              485

Calvert Social Balanced

              314

              448

              559

              412

Federated Insurance Series:

Federated American Leaders

           1,373

         14,249

           1,301

         11,123

Federated Capital Income

              495

           2,024

              534

           1,842

Federated Equity Income

              428

           3,254

              627

           2,131

Federated Fund for U.S. Government Securities

           1,218

           4,431

           1,190

           3,794

Federated High Income Bond

           2,542

           6,682

           1,589

           4,535

Federated International Equity

              106

           1,558

              361

           1,465

Federated Mid Cap Growth Strategies

                79

           2,899

              475

           2,609

Federated Prime Money

           1,716

           3,320

           2,583

           5,040

Fidelity® Variable Insurance Products Fund:

Fidelity® VIP Contrafund®

         37,679

         12,694

         26,291

         23,400

Fidelity® VIP Equity-Income

         30,257

         22,411

         41,183

         36,146

Fidelity® VIP Growth

           6,891

         25,796

         10,899

         13,392

Fidelity® VIP High Income

         13,312

         22,116

         30,754

         18,518

Fidelity® VIP Asset Manager^SM

           1,351

           2,085

           1,642

           2,158

Fidelity® VIP Investment Grade Bond

              213

              433

              220

              846

Fidelity® VIP Index 500

           3,354

         13,270

           7,977

         13,648

Fidelity® VIP Overseas

           7,834

           7,574

         36,192

         32,346

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Year ended December 31

2004

2003

Purchases

Sales

Purchases

Sales

(Dollars in Thousands)

Franklin Templeton Variable Insurance Products Trust:

Franklin Small Cap Value Securities

$        4,385

$        1,104

$           433

$           279

ING GET Fund:

ING GET Fund - Series D

           3,233

         86,466

           4,052

         18,917

ING GET Fund - Series E

         15,758

       239,577

         10,996

         44,851

ING GET Fund - Series G

         10,351

       139,818

           6,153

         29,059

ING GET Fund - Series H

           4,438

         21,032

           4,789

         20,271

ING GET Fund - Series I

           2,796

         14,828

           3,353

         12,409

ING GET Fund - Series J

           2,510

         13,665

           2,456

         13,559

ING GET Fund - Series K

           2,415

         15,617

           2,775

         12,911

ING GET Fund - Series L

           2,474

         15,441

           3,093

         11,467

ING GET Fund - Series M

           3,742

         18,639

           4,217

         25,227

ING GET Fund - Series N

           3,220

         15,448

           2,265

         17,016

ING GET Fund - Series P

           1,932

         10,892

           1,839

         21,136

ING GET Fund - Series Q

           1,843

           7,610

              691

         13,725

ING GET Fund - Series R

           1,197

           5,818

              124

           7,906

ING GET Fund - Series S

           2,061

           9,131

                82

         12,318

ING GET Fund - Series T

           1,457

           4,642

              259

           9,664

ING GET Fund - Series U

           1,864

           3,870

         42,784

         16,030

ING GET Fund - Series V

              842

         20,913

         84,529

           8,459

ING Investors Trust:

ING American Funds Growth

           1,728

                  2

                   -

                   -

ING American Funds Growth - Income

           2,320

                   -

                   -

                   -

ING American Funds International

           8,911

                  1

                   -

                   -

ING Julius Baer Foreign

              245

                19

                   -

                   -

ING Legg Mason Value

              858

                   -

                   -

                   -

ING MFS Total Return

           1,733

              312

              443

                56

ING T. Rowe Price Equity Income

           1,601

              182

              702

                83

ING Partners, Inc.:

ING Aeltus Enhanced Index

              109

                41

                48

                43

ING American Century Select

              154

                59

           1,205

              877

ING American Century Small Cap Value

              604

              223

              490

              216

ING Baron Small Cap Growth

           2,155

           1,102

           1,230

              238

ING Goldman Sachs® Capital Growth

              261

                  3

                11

                  8

ING JPMorgan International

         23,692

         20,544

       163,765

       161,684

ING JPMorgan Mid Cap Value

           1,484

              142

              605

              113

ING MFS Capital Opportunities

           2,142

           7,514

         21,700

         27,088

ING OpCap Balanced Value

           1,170

              450

           1,204

                57

ING Oppenheimer Global

              229

              216

                25

                24

ING PIMCO Total Return

           1,760

              586

           2,644

           1,301

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Year ended December 31

2004

2003

Purchases

Sales

Purchases

Sales

(Dollars in Thousands)

ING Partners, Inc. (continued):

ING Salomon Brothers Aggressive Growth

$        4,089

$      14,372

$      10,004

$      15,045

ING Salomon Brothers Fundamental Value

              882

              721

         22,906

         21,884

ING Salomon Brothers Investors Value

              392

              209

              171

                29

ING T. Rowe Diversified Mid Cap Growth

              669

           1,124

           3,224

           2,516

ING T. Rowe Price Growth Equity

           6,117

         13,771

         12,358

         13,147

ING UBS U.S. Large Cap Equity

           3,764

           8,518

           1,157

           7,623

ING Van Kampen Comstock

           2,765

              261

              707

              262

ING Van Kampen Equity and Income

              103

                29

                82

                33

ING Strategic Allocation Portfolios, Inc.:

ING VP Strategic Allocation Balanced

           6,007

           3,762

           2,839

           2,627

ING VP Strategic Allocation Growth

           1,927

           2,631

           2,913

           2,028

ING VP Strategic Allocation Income

           2,593

           4,356

           2,116

           4,793

ING Variable Funds:

ING VP Growth and Income

         20,166

         75,470

         13,533

         71,492

ING Variable Insurance Trust:

ING GET U.S. Core - Series 1

              193

           3,734

         26,984

           1,916

ING GET U.S. Core - Series 2

                47

           5,525

         24,434

              115

ING GET U.S. Core - Series 3

         62,647

         10,584

           1,965

                   -

ING GET U.S. Core - Series 4

           8,661

              898

                   -

                   -

ING GET U.S. Core - Series 5

           5,152

              989

                   -

                   -

ING GET U.S. Core - Series 6

       113,987

         26,971

                   -

                   -

ING GET U.S. Core - Series 7

         65,706

           8,739

                   -

                   -

ING Variable Portfolios, Inc.:

ING VP Global Science and Technology

           8,353

         10,764

         10,849

           7,248

ING VP Growth

           1,349

           7,167

           2,962

           7,041

ING VP Index Plus LargeCap

         16,413

         37,078

         33,821

         37,707

ING VP Index Plus MidCap

           3,742

           3,001

           8,395

           8,702

ING VP Index Plus SmallCap

           3,206

           2,466

           3,097

           2,140

ING VP International Equity

           5,894

           3,159

         17,944

         16,056

ING VP Small Company

         17,304

         25,334

         39,143

         30,623

ING VP Value Opportunity

           1,693

           5,518

           1,688

           3,760

ING Variable Products Trust:

ING VP Growth Opportunities - Class I

                  5

                57

              205

              562

ING VP Growth Opportunities - Class S

              121

           1,012

              795

              180

ING VP International Value

           1,762

              349

              824

              288

ING VP MagnaCap - Class I

                77

                  1

                26

                19

ING VP MagnaCap - Class S

              886

              290

              446

              177

ING VP MidCap Opportunities - Class I

              600

           1,231

           3,751

           3,229

ING VP MidCap Opportunities - Class S

           5,053

           1,999

           3,992

              987

ING VP Real Estate

           1,097

                  2

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Year ended December 31

2004

2003

Purchases

Sales

Purchases

Sales

(Dollars in Thousands)

ING Variable Products Trust (continued):

ING VP SmallCap Opportunities - Class I

$        1,213

$        1,707

$        6,129

$        4,827

ING VP SmallCap Opportunities - Class S

           2,152

           1,782

           3,215

           1,256

ING VP Balanced

         23,869

         19,729

         19,176

         19,033

ING VP Emerging Markets

                  6

              183

                10

              116

ING VP Financial Services

              203

              200

                   -

                   -

ING VP Intermediate Bond

         43,023

         38,166

         18,786

         46,842

ING VP Money Market

       175,942

       156,855

       260,698

       347,286

ING VP Natural Resources

              329

              375

                30

              280

Janus Aspen Series:

Janus Aspen Balanced

           5,060

         44,256

           8,930

         41,249

Janus Aspen Flexible Income

           2,566

           8,534

           4,792

         11,512

Janus Aspen Growth

           1,915

         25,927

           2,952

         23,501

Janus Aspen Mid Cap Growth

           7,790

         18,401

         24,529

         37,355

Janus Aspen Worldwide Growth

           9,256

         51,009

         11,748

         56,934

Lord Abbett Series Fund, Inc.:

Lord Abbett Growth and Income

           5,029

           1,864

           2,511

              194

Lord Abbett Mid-Cap Value

           2,528

              504

              787

              254

MFS® Funds:

MFS® VIT Strategic Income Series

              648

              722

           1,124

           1,442

MFS® VIT Total Return

         28,482

           7,978

         13,814

           8,440

Oppenheimer Variable Account Funds:

Oppenheimer Aggressive Growth

           3,840

           5,592

           5,069

           5,437

Oppenheimer Global Securities

         14,799

           7,006

         13,931

           6,486

Oppenheimer Main Street®

           9,493

         11,524

         13,702

           9,849

Oppenheimer Strategic Bond

         22,123

           7,710

         15,898

         10,101

PIMCO VIT Real Return

              530

                  5

                   -

                   -

Pioneer Variable Contracts Trust:

Pioneer Equity Income VCT

           1,340

              132

              116

                57

Pioneer Fund VCT

                46

                   -

                  4

                  1

Pioneer High Yield VCT

              214

                   -

                   -

                   -

Pioneer Mid Cap Value VCT

           2,475

              430

              764

              133

Prudential Series Fund, Inc.:

Jennison

              710

              342

              646

              375

SP William Blair International Growth

           3,656

           1,522

           4,361

           1,684

UBS Series Trust:

UBS U.S. Allocation

              771

           4,428

              565

           1,042

Wanger Advisors Trust:

Wanger Select

              238

                   -

                   -

                   -

Wanger U.S. Smaller Companies

                95

                11

                   -

                   -

100

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Changes in Units

The changes in units outstanding were as follows:

Year ended December 31

2004

2003

Net Increase

Units

Units

Net Increase

(Decrease)

Issued

Redeemed

(Decrease)

AIM Variable Insurance Funds:

AIM V.I. Capital Appreciation

        (366,144)

          182,630

        (548,774)

        (215,223)

AIM V.I. Core Equity

        (457,609)

          457,989

        (915,598)

        (376,156)

AIM V.I. Government Securities

          (55,294)

          583,926

        (639,220)

        (899,844)

AIM V.I. Growth

        (321,157)

          403,166

        (724,323)

        (285,985)

AIM V.I. Premier Equity

        (955,218)

          211,103

     (1,166,321)

        (951,357)

Alger American Funds:

Alger American Balanced

          (19,851)

              8,456

          (28,307)

          (26,135)

Alger American Income & Growth

          (69,100)

              6,643

          (75,743)

          (64,405)

Alger American Leveraged AllCap

          (71,405)

              6,763

          (78,168)

          (49,907)

AllianceBernstein Variable Products Series Fund, Inc.:

AllianceBernstein VPSF Growth and Income

          862,429

       1,694,790

        (832,361)

          588,049

AllianceBernstein VPSF Premier Growth

          (49,650)

          334,436

        (384,086)

            35,073

AllianceBernstein VPSF Small Cap Growth

            82,791

          406,019

        (323,228)

          371,072

American Century® Investments:

American Century® VP Balanced

          (22,414)

              3,505

          (25,919)

          (17,978)

American Century® VP International

          (20,134)

              2,103

          (22,237)

          (37,686)

Calvert Social Balanced

          (12,086)

            28,706

          (40,792)

            11,388

Federated Insurance Series:

Federated American Leaders

        (546,038)

            62,399

        (608,437)

        (508,356)

Federated Capital Income

        (132,268)

            19,043

        (151,311)

        (147,192)

Federated Equity Income

        (230,475)

            30,814

        (261,289)

        (150,869)

Federated Fund for U.S. Government Securities

        (227,703)

            52,307

        (280,010)

        (191,021)

Federated High Income Bond

        (303,501)

          101,932

        (405,433)

        (266,792)

Federated International Equity

          (94,803)

            11,513

        (106,316)

          (88,913)

Federated Mid Cap Growth Strategies

        (138,677)

              8,898

        (147,575)

        (136,784)

Federated Prime Money

        (125,732)

          157,788

        (283,520)

        (190,956)

Fidelity® Variable Insurance Products Fund:

Fidelity® VIP Contrafund®

       2,210,505

       4,742,147

     (2,531,642)

          571,228

Fidelity® VIP Equity-Income

          950,623

       4,239,290

     (3,288,667)

          522,988

Fidelity® VIP Growth

     (1,205,246)

       1,796,952

     (3,002,198)

          215,167

Fidelity® VIP High Income

     (1,242,376)

       1,847,199

     (3,089,575)

       1,123,161

Fidelity® VIP Asset Manager^SM

          (49,981)

            82,616

        (132,597)

          (46,959)

Fidelity® VIP Investment Grade Bond

          (21,328)

              4,381

          (25,709)

          (46,941)

Fidelity® VIP Index 500

        (492,178)

          364,877

        (857,055)

        (363,659)

Fidelity® VIP Overseas

              6,966

          922,163

        (915,197)

          324,783

101

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Year ended December 31

2004

2003

Net Increase

Units

Units

Net Increase

(Decrease)

Issued

Redeemed

(Decrease)

Franklin Templeton Variable Insurance Products Trust:

Franklin Small Cap Value Securities

          239,477

          333,627

          (94,150)

            15,203

ING GET Fund:

ING GET Fund - Series D

     (8,494,083)

       2,780,551

   (11,274,634)

     (1,707,796)

ING GET Fund - Series E

   (23,038,215)

          959,375

   (23,997,590)

     (3,914,768)

ING GET Fund - Series G

   (13,524,039)

          255,391

   (13,779,430)

     (2,581,173)

ING GET Fund - Series H

     (1,865,169)

          228,480

     (2,093,649)

     (1,762,825)

ING GET Fund - Series I

     (1,335,909)

            68,488

     (1,404,397)

     (1,017,746)

ING GET Fund - Series J

     (1,242,981)

            88,834

     (1,331,815)

     (1,217,984)

ING GET Fund - Series K

     (1,415,104)

            89,698

     (1,504,802)

     (1,092,454)

ING GET Fund - Series L

     (1,398,676)

            54,643

     (1,453,319)

        (936,734)

ING GET Fund - Series M

     (1,673,473)

            88,235

     (1,761,708)

     (2,237,666)

ING GET Fund - Series N

     (1,293,371)

          183,830

     (1,477,201)

     (1,500,256)

ING GET Fund - Series P

        (971,579)

            53,040

     (1,024,619)

     (1,948,391)

ING GET Fund - Series Q

        (619,713)

            82,106

        (701,819)

     (1,178,495)

ING GET Fund - Series R

        (482,312)

            83,612

        (565,924)

        (678,100)

ING GET Fund - Series S

        (763,314)

            99,098

        (862,412)

     (1,098,481)

ING GET Fund - Series T

        (375,102)

            15,504

        (390,606)

        (845,512)

ING GET Fund - Series U

        (301,079)

            51,919

        (352,998)

       2,803,440

ING GET Fund - Series V

     (1,990,407)

          273,020

     (2,263,427)

       7,680,444

ING Investors Trust:

ING American Funds Growth

          168,962

          169,772

               (810)

                     -

ING American Funds Growth - Income

          207,578

          226,597

          (19,019)

                     -

ING American Funds International

          855,611

          860,280

            (4,669)

                     -

ING Julius Baer Foreign

            20,616

            37,805

          (17,189)

                     -

ING Legg Mason Value

            80,447

            80,758

               (311)

                     -

ING MFS Total Return

          118,817

          175,632

          (56,815)

            35,396

ING T. Rowe Price Equity Income

          110,340

          124,617

          (14,277)

            57,696

ING Partners, Inc.:

ING Aeltus Enhanced Index

              6,455

            10,370

            (3,915)

                 621

ING American Century Select

              9,355

            26,697

          (17,342)

            37,994

ING American Century Small Cap Value

            27,573

            49,433

          (21,860)

            29,741

ING Baron Small Cap Growth

            81,254

          182,296

        (101,042)

            97,665

ING Goldman Sachs® Capital Growth

            26,880

            27,139

               (259)

                 243

ING JPMorgan International

          271,411

       2,912,742

     (2,641,331)

          286,684

ING JPMorgan Mid Cap Value

            98,855

          113,896

          (15,041)

            45,969

ING MFS Capital Opportunities

        (439,084)

          392,044

        (831,128)

        (475,678)

ING OpCap Balanced Value

            64,341

          129,425

          (65,084)

          114,002

ING Oppenheimer Global

              1,359

            28,178

          (26,819)

                 276

102

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Year ended December 31

2004

2003

Net Increase

Units

Units

Net Increase

(Decrease)

Issued

Redeemed

(Decrease)

ING Partners, Inc. (continued):

ING PIMCO Total Return

          102,913

          188,796

          (85,883)

          117,809

ING Salomon Brothers Aggressive Growth

        (839,004)

          810,897

     (1,649,901)

        (471,812)

ING Salomon Brothers Fundamental Value

            15,465

            96,573

          (81,108)

          112,732

ING Salomon Brothers Investors Value

            17,323

            48,671

          (31,348)

            15,639

ING T. Rowe Price Diversified Mid Cap Growth

          (42,524)

            79,333

        (121,857)

            71,512

ING T. Rowe Price Growth Equity

        (321,793)

          597,538

        (919,331)

          (82,398)

ING UBS U.S. Large Cap Equity

        (357,731)

          626,743

        (984,474)

        (638,397)

ING Van Kampen Comstock

          215,202

          249,901

          (34,699)

            44,597

ING Van Kampen Equity and Income

              7,059

              9,990

            (2,931)

              5,211

ING Strategic Allocation Portfolios, Inc.:

ING VP Strategic Allocation Balanced

          117,296

          435,875

        (318,579)

          (29,336)

ING VP Strategic Allocation Growth

          (42,713)

          150,253

        (192,966)

          (21,901)

ING VP Strategic Allocation Income

        (105,446)

          185,392

        (290,838)

        (205,539)

ING Variable Funds:

ING VP Growth and Income

     (2,751,465)

       1,415,804

     (4,167,269)

     (3,322,672)

ING Variable Insurance Trust:

ING GET U.S. Core - Series 1

        (316,504)

              6,866

        (323,370)

       2,530,968

ING GET U.S. Core - Series 2

        (502,841)

            28,230

        (531,071)

       2,441,629

ING GET U.S. Core - Series 3

       5,294,482

       6,814,902

     (1,520,420)

          196,496

ING GET U.S. Core - Series 4

          787,589

          880,917

          (93,328)

                     -

ING GET U.S. Core - Series 5

          422,459

          692,012

        (269,553)

                     -

ING GET U.S. Core - Series 6

       8,739,581

     12,119,228

     (3,379,647)

                     -

ING GET U.S. Core - Series 7

       5,701,523

       6,713,701

     (1,012,178)

                     -

ING Variable Portfolios, Inc.:

ING VP Global Science and Technology

        (737,935)

       2,784,969

     (3,522,904)

       1,059,264

ING VP Growth

        (493,643)

          315,802

        (809,445)

        (329,681)

ING VP Index Plus LargeCap

     (1,338,813)

       2,319,971

     (3,658,784)

     (1,018,952)

ING VP Index Plus MidCap

            43,455

          362,950

        (319,495)

          (23,571)

ING VP Index Plus SmallCap

            54,413

          306,461

        (252,048)

            74,019

ING VP International Equity

          360,107

          937,259

        (577,152)

          156,583

ING VP Small Company

        (444,278)

       2,017,604

     (2,461,882)

          612,976

ING VP Value Opportunity

        (221,653)

          160,482

        (382,135)

        (141,302)

ING Variable Products Trust:

ING VP Growth Opportunities - Class I

            (5,668)

              3,482

            (9,150)

          (58,161)

ING VP Growth Opportunities - Class S

        (120,422)

            19,426

        (139,848)

            97,238

ING VP International Value

          132,178

          222,297

          (90,119)

            65,868

ING VP MagnaCap - Class I

              8,256

            15,372

            (7,116)

                 857

ING VP MagnaCap - Class S

            64,848

          103,553

          (38,705)

            32,197

103

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Year ended December 31

2004

2003

Net Increase

Units

Units

Net Increase

(Decrease)

Issued

Redeemed

(Decrease)

ING Variable Products Trust (continued):

ING VP MidCap Opportunities - Class I

          (63,756)

            73,952

        (137,708)

            85,049

ING VP MidCap Opportunities - Class S

          361,490

          777,947

        (416,457)

          400,115

ING VP Real Estate

            85,669

            85,715

                 (46)

                     -

ING VP SmallCap Opportunities - Class I

          (73,351)

          180,160

        (253,511)

          190,033

ING VP SmallCap Opportunities - Class S

            60,834

          447,989

        (387,155)

          327,810

ING VP Balanced

          556,640

       2,075,495

     (1,518,855)

          (83,996)

ING VP Emerging Markets

          (18,279)

              2,209

          (20,488)

          (14,583)

ING VP Financial Services

            20,398

          (20,398)

ING VP Intermediate Bond

        (578,190)

       2,522,350

     (3,100,540)

     (1,696,435)

ING VP Money Market

       2,217,160

     23,677,963

   (21,460,803)

     (6,789,055)

ING VP Natural Resources

            (5,042)

            21,362

          (26,404)

          (19,060)

Janus Aspen Series:

Janus Aspen Balanced

     (2,307,049)

          838,257

     (3,145,306)

     (2,223,852)

Janus Aspen Flexible Income

        (350,272)

          169,983

        (520,255)

        (394,174)

Janus Aspen Growth

     (1,826,595)

          627,645

     (2,454,240)

     (1,648,598)

Janus Aspen Mid Cap Growth

        (517,754)

       1,553,013

     (2,070,767)

     (1,191,018)

Janus Aspen Worldwide Growth

     (2,802,085)

       1,689,399

     (4,491,484)

     (3,435,063)

Lord Abbett Series Funds, Inc.:

Lord Abbett Growth and Income

          287,774

          574,778

        (287,004)

          249,236

Lord Abbett Mid-Cap Value

          175,099

          254,855

          (79,756)

            62,337

MFS® Funds:

MFS® VIT Strategic Income Series

          (12,985)

            50,404

          (63,389)

          (33,561)

MFS® VIT Total Return

       1,611,865

       3,528,710

     (1,916,845)

          441,718

Oppenheimer Variable Account Funds:

Oppenheimer Aggressive Growth

        (156,488)

          830,981

        (987,469)

        (134,199)

Oppenheimer Global Securities

          438,925

       1,117,531

        (678,606)

          459,397

Oppenheimer Main Street®

        (105,681)

       1,775,963

     (1,881,644)

          182,239

Oppenheimer Strategic Bond

          911,025

       2,163,745

     (1,252,720)

          289,876

PIMCO VIT Real Return

            48,252

            48,771

               (519)

                     -

Pioneer Variable Contracts Trust:

Pioneer Equity Income VCT

          113,990

          144,167

          (30,177)

              6,570

Pioneer Fund VCT

              4,646

              4,646

                     -

                 276

Pioneer High Yield VCT

            20,207

            20,203

                     4

                     -

Pioneer Mid Cap Value VCT

          158,287

          240,872

          (82,585)

            58,218

Prudential Series Fund, Inc.:

Jennison

            48,371

            95,947

          (47,576)

            40,553

SP William Blair International Growth

          266,346

          529,564

        (263,218)

          378,568

UBS Series Trust:

UBS U.S. Allocation

        (415,740)

          106,543

        (522,283)

          (61,001)

Wanger Advisors Trust

Wanger Select

            21,769

            21,777

                   (8)

                     -

Wanger U.S. Smaller Companies

              8,395

              9,709

            (1,314)

                     -

104

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Unit Summary

A summary of units outstanding at December 31, 2004 follows:

Division/Contract

Units

Unit Value

Extended Value

AIM V.I. Capital Appreciation

Currently payable annuity contracts:

$            946,010

Contracts in accumulation period:

Non-Qualified V

            4,777.356

$         9.22

                 44,047

Non-Qualified V (0.75)

          44,456.366

            9.49

               421,891

Non-Qualified XII

               998.426

            9.46

                   9,445

Non-Qualified XIII

        360,588.990

            9.99

            3,602,284

Non-Qualified XIV

        498,002.286

            9.80

            4,880,422

Non-Qualified XV

        253,032.623

            9.70

            2,454,416

Non-Qualified XVI

        162,108.604

            5.80

               940,230

Non-Qualified XVIII

        146,608.432

            5.69

               834,202

Non-Qualified XIX

        181,279.629

            5.73

            1,038,732

     1,651,852.712

$       15,171,679

AIM V.I. Core Equity

Currently payable annuity contracts:

$         4,601,788

Contracts in accumulation period:

Non-Qualified V

          47,386.185

$         8.31

               393,779

Non-Qualified V (0.75)

          70,643.921

            8.55

               604,006

Non-Qualified IX

               854.295

            8.19

                   6,997

Non-Qualified XII

            1,350.732

            8.52

                 11,508

Non-Qualified XIII

        707,925.921

          10.20

            7,220,844

Non-Qualified XIV

     1,122,563.215

          10.00

          11,225,632

Non-Qualified XV

        405,693.092

            9.91

            4,020,419

Non-Qualified XVI

        176,118.093

            6.84

            1,204,648

Non-Qualified XVIII

          86,754.287

            6.71

               582,121

Non-Qualified XIX

        288,654.300

            6.75

            1,948,417

Non-Qualified XX

               772.921

          12.80

                   9,893

     2,908,716.962

$       31,830,052

AIM V.I. Government Securities

Contracts in accumulation period:

Non-Qualified XIII

        351,284.673

$       12.57

$         4,415,648

Non-Qualified XIV

        405,962.802

          12.39

            5,029,879

Non-Qualified XV

        180,923.683

          12.30

            2,225,361

Non-Qualified XVI

        100,760.406

          11.85

            1,194,011

Non-Qualified XVIII

          54,060.080

          11.62

               628,178

Non-Qualified XIX

          90,863.230

          11.70

            1,063,100

     1,183,854.875

$       14,556,177

105

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

AIM V.I. Growth

Currently payable annuity contracts:

$         1,170,999

Contracts in accumulation period:

Non-Qualified V

            9,140.493

$         5.84

                 53,380

Non-Qualified V (0.75)

          69,428.787

            6.01

               417,267

Non-Qualified IX

            3,976.850

            5.76

                 22,907

Non-Qualified XII

            1,882.751

            5.99

                 11,278

Non-Qualified XIII

        596,276.594

            7.09

            4,227,601

Non-Qualified XIV

        920,754.794

            6.96

            6,408,453

Non-Qualified XV

        294,937.245

            6.89

            2,032,118

Non-Qualified XVI

        214,257.930

            4.65

               996,299

Non-Qualified XVIII

        116,047.854

            4.56

               529,178

Non-Qualified XIX

        234,518.791

            4.59

            1,076,441

Non-Qualified XX

            1,026.458

          12.89

                 13,231

     2,462,248.548

$       16,959,152

AIM V.I. Premier Equity

Currently payable annuity contracts:

$         2,209,312

Contracts in accumulation period:

Non-Qualified V

            4,628.049

$         7.44

                 34,433

Non-Qualified V (0.75)

          64,429.342

            7.66

               493,529

Non-Qualified XII

            1,438.345

            7.64

                 10,989

Non-Qualified XIII

        982,943.022

            8.97

            8,816,999

Non-Qualified XIV

     1,636,625.875

            8.79

          14,385,941

Non-Qualified XV

        624,438.286

            8.71

            5,438,857

Non-Qualified XVI

        244,781.303

            6.70

            1,640,035

Non-Qualified XVIII

        111,241.309

            6.57

               730,855

Non-Qualified XIX

        391,898.746

            6.61

            2,590,451

     4,062,424.277

$       36,351,401

Alger American Balanced

Contracts in accumulation period:

Non-Qualified VII

          74,405.311

$       25.89

$         1,926,353

          74,405.311

$         1,926,353

Alger American Income & Growth

Contracts in accumulation period:

Non-Qualified VII

        222,752.570

$       23.57

$         5,250,278

        222,752.570

$         5,250,278

106

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Alger American Leveraged AllCap

Contracts in accumulation period:

Non-Qualified VII

        205,959.632

$       24.78

$         5,103,680

Non-Qualified VIII

                 28.180

          18.30

                      516

        205,987.812

$         5,104,196

AllianceBernstein VPSF Growth and Income

Contracts in accumulation period:

Non-Qualified XIII

     1,340,371.004

$       11.26

$       15,092,578

Non-Qualified XIV

     1,421,682.947

          11.10

          15,780,681

Non-Qualified XV

        524,886.213

          11.03

            5,789,495

Non-Qualified XVI

        457,453.969

          11.32

            5,178,379

Non-Qualified XVIII

        149,226.329

          11.10

            1,656,412

Non-Qualified XIX

        411,646.408

          11.17

            4,598,090

     4,305,266.870

$       48,095,635

AllianceBernstein VPSF Premier Growth

Contracts in accumulation period:

Non-Qualified XIII

        367,754.946

$         5.66

$         2,081,493

Non-Qualified XIV

        336,525.293

            5.58

            1,877,811

Non-Qualified XV

        127,190.393

            5.54

               704,635

Non-Qualified XVI

        158,402.222

            5.96

               944,077

Non-Qualified XVIII

          69,584.558

            5.85

               407,070

Non-Qualified XIX

        259,232.332

            5.89

            1,526,878

     1,318,689.744

$         7,541,964

AllianceBernstein VPSF Small Cap Growth

Contracts in accumulation period:

Non-Qualified XIII

        166,824.831

$         9.29

$         1,549,803

Non-Qualified XIV

        164,698.544

            9.16

            1,508,639

Non-Qualified XV

          42,039.517

            9.10

               382,560

Non-Qualified XVI

          76,127.075

            8.23

               626,526

Non-Qualified XVIII

          76,398.805

            8.07

               616,538

Non-Qualified XIX

          56,226.418

            8.12

               456,559

        582,315.190

$         5,140,625

American Century® VP Balanced

Contracts in accumulation period:

Non-Qualified VII

          55,659.781

$       19.69

$         1,095,941

          55,659.781

$         1,095,941

107

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

American Century® VP International

Contracts in accumulation period:

Non-Qualified VII

          73,094.538

$       16.33

$         1,193,634

Non-Qualified VIII

               181.390

          14.91

                   2,705

          73,275.928

$         1,196,339

Calvert Social Balanced

Contracts in accumulation period:

Non-Qualified V

            7,769.057

$       21.74

$            168,899

Non-Qualified V (0.75)

          13,374.618

          22.73

               304,005

Non-Qualified VII

          73,314.482

          12.07

               884,906

Non-Qualified VIII

          71,381.996

          12.20

               870,860

Non-Qualified XX

                 11.985

          12.39

                      148

        165,852.137

$         2,228,818

Federated American Leaders

Currently payable annuity contracts:

$              88,992

Contracts in accumulation period:

Non-Qualified VII

     1,663,262.001

$       25.29

          42,063,896

Non-Qualified VIII

            2,122.775

          18.30

                 38,847

     1,665,384.776

$       42,191,735

Federated Capital Income

Currently payable annuity contracts:

$              13,894

Contracts in accumulation period:

Non-Qualified VII

        373,009.228

$       13.82

            5,154,988

Non-Qualified VIII

                 62.461

          11.56

                      722

        373,071.689

$         5,169,604

Federated Equity Income

Currently payable annuity contracts:

$            115,922

Contracts in accumulation period:

Non-Qualified VII

        653,801.141

$       13.73

            8,976,690

        653,801.141

$         9,092,612

Federated Fund for U.S. Gov't Securities

Currently payable annuity contracts:

$                2,348

Contracts in accumulation period:

Non-Qualified VII

        406,954.815

$       15.83

            6,442,095

        406,954.815

$         6,444,443

108

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Federated High Income Bond

Currently payable annuity contracts:

$              56,298

Contracts in accumulation period:

Non-Qualified VII

        665,992.911

$       17.70

          11,788,075

Non-Qualified VIII

                 50.338

          15.13

                      762

        666,043.249

$       11,845,135

Federated International Equity

Currently payable annuity contracts:

$              35,154

Contracts in accumulation period:

Non-Qualified VII

        367,215.587

$       15.87

            5,827,711

Non-Qualified VIII

               121.712

          14.71

                   1,790

        367,337.299

$         5,864,655

Federated Mid Cap Growth Strategies

Contracts in accumulation period:

Non-Qualified VII

        488,688.448

$       21.43

$       10,472,593

        488,688.448

$       10,472,593

Federated Prime Money

Contracts in accumulation period:

Non-Qualified VII

        265,843.750

$       12.51

$         3,325,705

        265,843.750

$         3,325,705

Fidelity® VIP Contrafund®

Contracts in accumulation period:

Non-Qualified V

        578,222.035

$       25.07

$       14,496,026

Non-Qualified V (0.75)

        940,536.451

          26.20

          24,642,055

Non-Qualified VII

     2,745,175.804

          27.52

          75,547,238

Non-Qualified VIII

        609,404.785

          22.21

          13,534,880

Non-Qualified IX

          27,014.237

          24.59

               664,280

Non-Qualified X

          25,162.384

          25.07

               630,821

Non-Qualified XII

          64,656.396

          14.60

               943,983

Non-Qualified XIII

     3,122,247.199

          13.62

          42,525,007

Non-Qualified XIV

     3,063,453.759

          13.36

          40,927,742

Non-Qualified XV

     1,108,634.390

          13.23

          14,667,233

Non-Qualified XVI

        569,499.362

          10.51

            5,985,438

Non-Qualified XVIII

        141,674.363

          10.30

            1,459,246

Non-Qualified XIX

        660,042.384

          10.37

            6,844,640

Non-Qualified XX

          37,912.019

          14.00

               530,768

   13,693,635.568

$     243,399,357

109

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Fidelity® VIP Equity-Income

Contracts in accumulation period:

Non-Qualified V

        517,939.664

$       21.35

$       11,058,012

Non-Qualified V (0.75)

        899,688.238

          22.32

          20,081,041

Non-Qualified VII

     3,222,464.292

          25.37

          81,753,919

Non-Qualified VIII

        751,001.056

          18.33

          13,765,849

Non-Qualified IX

          16,492.720

          20.94

               345,358

Non-Qualified X

          34,514.892

          21.35

               736,893

Non-Qualified XII

          11,078.188

          12.73

               141,025

Non-Qualified XIII

     2,406,797.137

          12.38

          29,796,149

Non-Qualified XIV

     2,738,587.558

          12.14

          33,246,453

Non-Qualified XV

        988,726.273

          12.02

          11,884,490

Non-Qualified XVI

        620,023.952

          11.53

            7,148,876

Non-Qualified XVIII

        145,500.704

          11.31

            1,645,613

Non-Qualified XIX

        589,133.970

          11.38

            6,704,345

Non-Qualified XX

          11,243.700

          13.40

               150,666

   12,953,192.346

$     218,458,689

Fidelity® VIP Growth

Contracts in accumulation period:

Non-Qualified V

        376,032.222

$       17.19

$         6,463,994

Non-Qualified V (0.75)

        609,242.033

          17.96

          10,941,987

Non-Qualified VII

     1,927,086.897

          23.41

          45,113,104

Non-Qualified VIII

        451,192.827

          15.62

            7,047,632

Non-Qualified IX

          11,460.252

          16.86

               193,220

Non-Qualified X

          13,505.482

          17.19

               232,159

Non-Qualified XII

          16,516.633

          10.83

               178,875

Non-Qualified XIII

     1,649,808.401

            8.49

          14,006,873

Non-Qualified XIV

     1,506,469.612

            8.34

          12,563,957

Non-Qualified XV

        449,121.990

            8.27

            3,714,239

Non-Qualified XVI

        727,963.192

            6.38

            4,644,405

Non-Qualified XVIII

        215,921.472

            6.25

            1,349,509

Non-Qualified XIX

        524,073.822

            6.29

            3,296,424

Non-Qualified XX

            4,116.402

          12.49

                 51,414

     8,482,511.237

$     109,797,792

110

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Fidelity® VIP High Income

Currently payable annuity contracts:

$         2,676,125

Contracts in accumulation period:

Non-Qualified VII

     1,196,221.904

$       12.92

          15,455,187

Non-Qualified VIII

        389,583.384

          11.68

            4,550,334

Non-Qualified XIII

        988,970.086

            9.02

            8,920,510

Non-Qualified XIV

     1,030,797.434

            8.85

            9,122,557

Non-Qualified XV

        357,741.753

            8.76

            3,133,818

Non-Qualified XVI

        197,484.522

          10.17

            2,008,418

Non-Qualified XVIII

          67,947.438

            9.98

               678,115

Non-Qualified XIX

        141,290.907

          10.04

            1,418,561

     4,370,037.430

$       47,963,625

Fidelity® VIP Asset Manager

Contracts in accumulation period:

Non-Qualified VII

        501,150.460

$       19.00

$         9,521,859

Non-Qualified VIII

        129,569.099

          15.94

            2,065,331

        630,719.559

$       11,587,190

Fidelity® VIP Investment Grade Bond

Contracts in accumulation period:

Non-Qualified VII

        118,046.684

$       16.55

$         1,953,673

Non-Qualified VIII

               280.757

          16.25

                   4,562

        118,327.440

$         1,958,235

Fidelity® VIP Index 500

Contracts in accumulation period:

Non-Qualified VII

     2,661,119.324

$       22.16

$       58,970,404

Non-Qualified VIII

        608,369.163

          18.62

          11,327,834

     3,269,488.487

$       70,298,238

Fidelity® VIP Overseas

Contracts in accumulation period:

Non-Qualified V

        132,647.290

$       15.11

$         2,004,301

Non-Qualified V (0.75)

        334,500.483

          15.79

            5,281,763

Non-Qualified VII

        442,931.136

          16.51

            7,312,793

Non-Qualified VIII

          65,358.143

          14.11

               922,203

Non-Qualified IX

            1,597.560

          14.82

                 23,676

Non-Qualified X

            2,466.855

          15.11

                 37,274

Non-Qualified XII

               161.441

          10.99

                   1,774

Non-Qualified XX

            6,279.490

          13.56

                 85,150

        985,942.399

$       15,668,934

111

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Franklin Small Cap Value Securities

Contracts in accumulation period:

Non-Qualified V

          54,597.128

$       14.71

$            803,124

Non-Qualified V (0.75)

        233,334.061

          14.96

            3,490,678

Non-Qualified IX

            2,286.911

          14.58

                 33,343

Non-Qualified XII

                 95.187

          14.94

                   1,422

Non-Qualified XX

            3,782.881

          14.73

                 55,722

        294,096.169

$         4,384,289

ING GET Fund - Series H

Contracts in accumulation period:

Non-Qualified V

          67,541.300

$       10.49

$            708,508

Non-Qualified V (0.75)

          45,587.065

          10.75

               490,061

Non-Qualified VII

        913,267.127

          10.27

            9,379,253

Non-Qualified VIII

          76,443.081

          10.35

               791,186

Non-Qualified IX

               356.553

          10.35

                   3,690

Non-Qualified XIII

     2,696,120.752

          10.51

          28,336,229

Non-Qualified XIV

     2,953,513.815

          10.35

          30,568,868

Non-Qualified XV

     1,484,375.059

          10.27

          15,244,532

     8,237,204.751

$       85,522,327

ING GET Fund - Series I

Contracts in accumulation period:

Non-Qualified VII

        185,605.239

$       10.14

$         1,882,037

Non-Qualified VIII

          13,210.136

          10.22

               135,008

Non-Qualified XIII

     1,961,474.309

          10.37

          20,340,489

Non-Qualified XIV

     2,236,446.267

          10.22

          22,856,481

Non-Qualified XV

     1,524,722.682

          10.14

          15,460,688

     5,921,458.633

$       60,674,703

ING GET Fund - Series J

Contracts in accumulation period:

Non-Qualified VII

        110,507.746

$       10.04

$         1,109,498

Non-Qualified VIII

          31,335.696

          10.11

               316,804

Non-Qualified XIII

     1,369,142.531

          10.25

          14,033,711

Non-Qualified XIV

     1,953,020.598

          10.11

          19,745,038

Non-Qualified XV

     1,188,078.672

          10.04

          11,928,310

     4,652,085.243

$       47,133,361

112

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET Fund - Series K

Contracts in accumulation period:

Non-Qualified VII

          36,609.989

$       10.04

$            367,564

Non-Qualified VIII

            4,910.792

          10.11

                 49,648

Non-Qualified XIII

     1,035,095.577

          10.24

          10,599,379

Non-Qualified XIV

     1,166,323.491

          10.11

          11,791,530

Non-Qualified XV

        653,734.960

          10.04

            6,563,499

Non-Qualified XVI

        996,110.292

            9.99

            9,951,142

Non-Qualified XVIII

        700,222.473

            9.80

            6,862,180

Non-Qualified XIX

        936,693.016

            9.86

            9,235,793

     5,529,700.591

$       55,420,735

ING GET Fund - Series L

Contracts in accumulation period:

Non-Qualified VII

          50,540.968

$       10.01

$            505,915

Non-Qualified VIII

          28,127.612

          10.07

               283,245

Non-Qualified XIII

        779,802.309

          10.20

            7,953,984

Non-Qualified XIV

        659,969.200

          10.07

            6,645,890

Non-Qualified XV

        526,247.352

          10.01

            5,267,736

Non-Qualified XVI

     1,378,623.332

            9.99

          13,772,447

Non-Qualified XVIII

        709,612.393

            9.80

            6,954,201

Non-Qualified XIX

     1,066,459.640

            9.87

          10,525,957

     5,199,382.806

$       51,909,375

ING GET Fund - Series M

Contracts in accumulation period:

Non-Qualified VII

        139,615.734

$       10.07

$         1,405,930

Non-Qualified VIII

            2,054.045

          10.13

                 20,807

Non-Qualified XIII

     1,153,320.460

          10.25

          11,821,535

Non-Qualified XIV

     1,065,649.839

          10.13

          10,795,033

Non-Qualified XV

        542,666.259

          10.07

            5,464,649

Non-Qualified XVI

     2,067,494.771

          10.05

          20,778,322

Non-Qualified XVIII

     1,176,204.849

            9.88

          11,620,904

Non-Qualified XIX

     1,499,760.470

            9.94

          14,907,619

     7,646,766.426

$       76,814,799

113

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET Fund - Series N

Contracts in accumulation period:

Non-Qualified VII

        194,406.537

$       10.25

$         1,992,667

Non-Qualified VIII

            2,232.224

          10.31

                 23,014

Non-Qualified XIII

        852,806.374

          10.42

            8,886,242

Non-Qualified XIV

        618,108.096

          10.31

            6,372,694

Non-Qualified XV

        359,984.576

          10.25

            3,689,842

Non-Qualified XVI

     2,139,941.936

          10.24

          21,913,005

Non-Qualified XVIII

        619,359.210

          10.07

            6,236,947

Non-Qualified XIX

     1,401,303.250

          10.13

          14,195,202

     6,188,142.201

$       63,309,613

ING GET Fund - Series P

Contracts in accumulation period:

Non-Qualified VII

        326,411.699

$       10.10

$         3,296,758

Non-Qualified VIII

          40,193.485

          10.15

               407,964

Non-Qualified XIII

        629,846.899

          10.25

            6,455,931

Non-Qualified XIV

        403,353.697

          10.15

            4,094,040

Non-Qualified XV

        258,151.521

          10.10

            2,607,330

Non-Qualified XVI

     1,177,856.676

          10.08

          11,872,795

Non-Qualified XVIII

        899,493.062

            9.93

            8,931,966

Non-Qualified XIX

     1,024,231.132

            9.98

          10,221,827

     4,759,538.172

$       47,888,611

ING GET Fund - Series Q

Contracts in accumulation period:

Non-Qualified VII

        100,162.724

$       10.37

$         1,038,687

Non-Qualified VIII

          22,844.644

          10.41

               237,813

Non-Qualified XIII

        590,828.312

          10.51

            6,209,606

Non-Qualified XIV

        401,231.112

          10.41

            4,176,816

Non-Qualified XV

          81,930.596

          10.37

               849,620

Non-Qualified XVI

     1,081,275.847

          10.35

          11,191,205

Non-Qualified XVIII

        405,653.589

          10.21

            4,141,723

Non-Qualified XIX

        978,150.211

          10.25

          10,026,040

     3,662,077.034

$       37,871,510

114

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET Fund - Series R

Contracts in accumulation period:

Non-Qualified VII

          86,125.429

$       10.60

$            912,930

Non-Qualified VIII

          25,963.079

          10.64

               276,247

Non-Qualified XIII

        634,318.832

          10.73

            6,806,241

Non-Qualified XIV

        289,900.343

          10.64

            3,084,540

Non-Qualified XV

          90,067.592

          10.60

               954,716

Non-Qualified XVI

        894,325.843

          10.58

            9,461,967

Non-Qualified XVIII

        264,174.321

          10.45

            2,760,622

Non-Qualified XIX

        867,026.244

          10.49

            9,095,105

     3,151,901.683

$       33,352,368

ING GET Fund - Series S

Contracts in accumulation period:

Non-Qualified V

          15,786.917

$       10.61

$            167,499

Non-Qualified V (0.75)

        163,909.487

          10.75

            1,762,027

Non-Qualified VII

        281,354.347

          10.51

            2,957,034

Non-Qualified VIII

          53,942.447

          10.55

               569,093

Non-Qualified XIII

        396,493.363

          10.63

            4,214,724

Non-Qualified XIV

        331,915.997

          10.55

            3,501,714

Non-Qualified XV

        107,787.124

          10.51

            1,132,843

Non-Qualified XVI

        770,727.012

          10.49

            8,084,926

Non-Qualified XVIII

        390,126.681

          10.37

            4,045,614

Non-Qualified XIX

        960,451.830

          10.41

            9,998,304

     3,472,495.203

$       36,433,778

ING GET Fund - Series T

Contracts in accumulation period:

Non-Qualified VII

        200,303.981

$       10.54

$         2,111,204

Non-Qualified VIII

          28,186.128

          10.57

               297,927

Non-Qualified XIII

        339,609.024

          10.65

            3,616,836

Non-Qualified XIV

        200,908.415

          10.57

            2,123,602

Non-Qualified XV

          91,165.697

          10.54

               960,886

Non-Qualified XVI

        804,753.084

          10.53

            8,474,050

Non-Qualified XVIII

        209,779.754

          10.42

            2,185,905

Non-Qualified XIX

        812,521.709

          10.45

            8,490,852

     2,687,227.792

$       28,261,262

115

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET Fund - Series U

Contracts in accumulation period:

Non-Qualified VII

          65,819.111

$       10.70

$            704,264

Non-Qualified VIII

            9,935.670

          10.73

               106,610

Non-Qualified XIII

        401,464.245

          10.80

            4,335,814

Non-Qualified XIV

        182,988.822

          10.73

            1,963,470

Non-Qualified XV

          61,556.532

          10.70

               658,655

Non-Qualified XVI

        922,251.061

          10.69

            9,858,864

Non-Qualified XVIII

        156,377.383

          10.59

            1,656,036

Non-Qualified XIX

        752,245.927

          10.62

            7,988,852

     2,552,638.750

$       27,272,565

ING GET Fund - Series V

Contracts in accumulation period:

Non-Qualified VII

        131,235.353

$         9.77

$         1,282,169

Non-Qualified VIII

        108,342.823

            9.80

            1,061,760

Non-Qualified XIII

        481,710.875

            9.85

            4,744,852

Non-Qualified XIV

        314,845.045

            9.80

            3,085,481

Non-Qualified XV

        115,521.829

            9.77

            1,128,648

Non-Qualified XVI

     2,389,684.474

            9.76

          23,323,320

Non-Qualified XVIII

        315,441.889

            9.68

            3,053,477

Non-Qualified XIX

     1,833,255.185

            9.71

          17,800,908

     5,690,037.473

$       55,480,615

ING American Funds Growth

Contracts in accumulation period:

Non-Qualified XIII

          64,969.632

$       10.50

$            682,181

Non-Qualified XIV

          52,636.321

          10.50

               552,681

Non-Qualified XV

            4,609.087

          10.49

                 48,349

Non-Qualified XVI

          37,154.887

          10.49

               389,755

Non-Qualified XVIII

               495.785

          10.49

                   5,201

Non-Qualified XIX

            9,096.432

          10.49

                 95,422

        168,962.144

$         1,773,589

ING American Funds Growth-Income

Currently payable annuity contracts:

$            195,193

Contracts in accumulation period:

Non-Qualified XIII

          77,766.002

$       10.37

               806,433

Non-Qualified XIV

          73,449.107

          10.37

               761,667

Non-Qualified XIX

          11,563.638

          10.36

               119,799

Non-Qualified XV

          34,305.837

          10.36

               355,408

Non-Qualified XVI

            7,195.969

          10.36

                 74,550

Non-Qualified XVIII

            3,297.439

          10.36

                 34,161

        207,577.992

$         2,347,211

116

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING American Funds International

Contracts in accumulation period:

Non-Qualified XIII

        458,581.695

$       10.61

$         4,865,552

Non-Qualified XIV

        128,125.693

          10.60

            1,358,132

Non-Qualified XV

        149,631.219

          10.60

            1,586,091

Non-Qualified XVI

        109,098.312

          10.60

            1,156,442

Non-Qualified XVIII

            2,432.049

          10.59

                 25,755

Non-Qualified XIX

            7,741.755

          10.59

                 81,985

        855,610.723

$         9,073,957

ING Julius Baer Foreign

Contracts in accumulation period:

Non-Qualified V (0.75)

          20,616.122

$       11.72

$            241,621

          20,616.122

$            241,621

ING Legg Mason Value

Contracts in accumulation period:

Non-Qualified XIII

          43,882.190

$       10.96

$            480,949

Non-Qualified XIV

          32,623.387

          10.96

               357,552

Non-Qualified XV

            2,325.615

          10.96

                 25,489

Non-Qualified XVI

               339.198

          10.96

                   3,718

Non-Qualified XVIII

               693.225

          10.95

                   7,591

Non-Qualified XIX

               583.397

          10.95

                   6,388

          80,447.012

$            881,687

ING MFS Total Return

Contracts in accumulation period:

Non-Qualified V

          46,457.410

$       12.39

$            575,607

Non-Qualified V (0.75)

          91,791.125

          12.49

            1,146,471

Non-Qualified X

            1,213.034

          12.39

                 15,029

Non-Qualified XII

            1,011.752

          12.48

                 12,627

Non-Qualified XX

          11,809.597

          12.45

               147,029

Non-Qualified IX

            1,929.185

          12.85

                 24,790

        154,212.102

$         1,921,553

ING T. Rowe Price Equity Income

Contracts in accumulation period:

Non-Qualified V

          55,087.140

$       13.81

$            760,753

Non-Qualified V (0.75)

        110,301.927

          13.93

            1,536,506

Non-Qualified IX

               779.150

          14.63

                 11,399

Non-Qualified XX

            1,867.106

          13.88

                 25,915

        168,035.323

$         2,334,573

117

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING Aeltus Enhanced Index

Contracts in accumulation period:

Non-Qualified V

            1,165.666

$       10.98

$              12,799

Non-Qualified V (0.75)

            5,910.203

          11.13

                 65,781

            7,075.868

$              78,580

ING American Century Select

Contracts in accumulation period:

Non-Qualified V

            6,768.077

$         9.93

$              67,207

Non-Qualified V (0.75)

          40,149.843

          10.06

               403,907

Non-Qualified XII

            1,727.587

          10.05

                 17,362

          48,645.507

$            488,476

ING American Century Small Cap Value

Contracts in accumulation period:

Non-Qualified V

          15,263.666

$       12.96

$            197,817

Non-Qualified V (0.75)

          48,611.446

          13.13

               638,268

Non-Qualified IX

                 77.695

          12.87

                   1,000

Non-Qualified XII

               336.239

          13.12

                   4,411

Non-Qualified XX

          12,845.926

          15.00

               192,689

          77,134.971

$         1,034,185

ING Baron Small Cap Growth

Contracts in accumulation period:

Non-Qualified V

          63,157.998

$       14.47

$            913,896

Non-Qualified V (0.75)

        123,221.405

          14.66

            1,806,426

Non-Qualified IX

            1,709.159

          14.37

                 24,561

Non-Qualified XII

               502.935

          14.64

                   7,363

Non-Qualified XX

          11,637.454

          16.22

               188,760

        200,228.950

$         2,941,006

ING Goldman Sachs® Capital Growth

Contracts in accumulation period:

Non-Qualified V

            3,290.441

$       10.55

$              34,714

Non-Qualified V (0.75)

          24,427.421

10.69

               261,129

Non-Qualified XII

               873.236

10.67

                   9,317

Non-Qualified XX

               774.193

12.61

                   9,763

          29,365.291

$            314,923

118

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING JPMorgan International

Currently payable annuity contracts:

$         2,689,027

Contracts in accumulation period:

Non-Qualified V

        209,092.011

$       22.92

            4,792,389

Non-Qualified V (0.75)

        243,086.212

          23.96

            5,824,346

Non-Qualified VII

        248,566.444

          12.55

            3,119,509

Non-Qualified VIII

          85,528.471

          12.69

            1,085,356

Non-Qualified IX

            4,981.858

          22.48

               111,992

Non-Qualified X

            3,217.308

          22.92

                 73,741

Non-Qualified XII

            3,896.660

          11.06

                 43,097

Non-Qualified XIII

        996,680.848

          10.25

          10,215,979

Non-Qualified XIV

        918,379.584

          10.05

            9,229,715

Non-Qualified XV

        322,703.366

            9.95

            3,210,898

Non-Qualified XVI

        207,690.373

            8.49

            1,763,291

Non-Qualified XVIII

          62,180.952

            8.33

               517,967

Non-Qualified XIX

        160,467.191

            8.38

            1,344,715

Non-Qualified XX

               628.700

          13.27

                   8,343

     3,467,099.976

$       44,030,365

ING JPMorgan Mid Cap Value

Contracts in accumulation period:

Non-Qualified V

          29,365.209

$       14.02

$            411,700

Non-Qualified V (0.75)

        106,478.599

          14.21

            1,513,061

Non-Qualified IX

            1,516.658

          13.93

                 21,127

Non-Qualified XX

          16,913.274

          15.92

               269,259

        154,273.739

$         2,215,147

ING MFS Capital Opportunities

Currently payable annuity contracts:

$         3,012,586

Contracts in accumulation period:

Non-Qualified V

        177,277.282

$       26.41

            4,681,893

Non-Qualified V (0.75)

        134,825.156

          27.61

            3,722,523

Non-Qualified VII

        591,044.239

          12.42

            7,340,769

Non-Qualified VIII

        170,464.753

          12.56

            2,141,037

Non-Qualified IX

            6,217.577

          25.90

               161,035

Non-Qualified X

            5,194.496

          26.41

               137,187

Non-Qualified XIII

        555,400.451

          10.26

            5,698,409

Non-Qualified XIV

        654,366.321

          10.06

            6,582,925

Non-Qualified XV

        166,305.777

            9.96

            1,656,406

Non-Qualified XVI

        239,846.526

            6.31

            1,513,432

Non-Qualified XVIII

          97,533.866

            6.18

               602,759

Non-Qualified XIX

        155,775.960

            6.22

               968,926

Non-Qualified XX

               287.279

          13.26

                   3,809

     2,954,539.683

$       38,223,696

119

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING OpCap Balanced Value

Contracts in accumulation period:

Non-Qualified V

          79,196.261

$       11.70

$            926,596

Non-Qualified V (0.75)

          90,164.841

          11.85

            1,068,453

Non-Qualified IX

            6,822.380

          11.13

                 75,933

Non-Qualified XX

            3,984.796

          13.87

                 55,269

        180,168.278

$         2,126,251

ING Oppenheimer Global

Contracts in accumulation period:

Non-Qualified V

               588.125

$       12.30

$                7,234

Non-Qualified V (0.75)

            1,215.370

          12.47

                 15,156

            1,803.495

$              22,390

ING PIMCO Total Return

Contracts in accumulation period:

Non-Qualified V

          63,478.176

$       11.35

$            720,477

Non-Qualified V (0.75)

        237,732.193

          11.50

            2,733,920

Non-Qualified IX

          25,605.361

          11.27

               288,572

Non-Qualified XX

          12,682.799

          11.18

               141,794

        339,498.529

$         3,884,763

ING Salomon Brothers Aggressive Growth

Currently payable annuity contracts:

$         1,521,742

Contracts in accumulation period:

Non-Qualified V

        327,368.492

$       14.25

            4,665,001

Non-Qualified V (0.75)

        258,443.178

          14.90

            3,850,803

Non-Qualified VII

     1,960,116.407

          13.62

          26,696,785

Non-Qualified VIII

        318,928.925

            9.33

            2,975,607

Non-Qualified IX

          12,319.500

          13.98

               172,227

Non-Qualified X

          16,173.306

          14.25

               230,470

Non-Qualified XII

            4,262.639

            8.14

                 34,698

Non-Qualified XIII

        556,577.509

            7.72

            4,296,778

Non-Qualified XIV

        656,230.280

            7.57

            4,967,663

Non-Qualified XV

        233,079.861

            7.50

            1,748,099

Non-Qualified XVI

        162,985.635

            5.27

               858,934

Non-Qualified XVIII

          96,803.142

            5.17

               500,472

Non-Qualified XIX

        137,503.346

            5.20

               715,017

Non-Qualified XX

            1,505.178

          13.63

                 20,516

     4,742,297.398

$       53,254,812

120

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING Salomon Brothers Fundamental Value

Contracts in accumulation period:

Non-Qualified V

          37,944.636

$       11.40

$            432,569

Non-Qualified V (0.75)

          86,617.340

          11.55

            1,000,430

Non-Qualified IX

            3,163.554

          11.05

                 34,957

Non-Qualified XX

            1,125.966

          13.75

                 15,482

        128,851.496

$         1,483,438

ING Salomon Brothers Investors Value

Contracts in accumulation period:

Non-Qualified V

          20,196.772

$       11.02

$            222,568

Non-Qualified V (0.75)

          14,067.335

11.17

               157,132

Non-Qualified XX

               532.809

13.23

                   7,049

          34,796.915

$            386,749

ING T. Rowe Price Diversified Mid Cap Growth

Contracts in accumulation period:

Non-Qualified V

          15,530.124

$       11.20

$            173,937

Non-Qualified V (0.75)

          32,163.821

          11.35

               365,059

Non-Qualified IX

            1,574.963

          10.90

                 17,167

Non-Qualified XII

               315.152

          11.33

                   3,571

Non-Qualified XX

            3,746.698

          14.04

                 52,604

          53,330.758

$            612,338

ING T. Rowe Price Growth Equity

Currently payable annuity contracts:

$         6,726,345

Contracts in accumulation period:

Non-Qualified V

        217,537.390

$       20.42

            4,442,114

Non-Qualified V (0.75)

        413,855.475

          21.35

            8,835,814

Non-Qualified VII

     1,898,218.540

          25.72

          48,822,181

Non-Qualified VIII

        244,111.377

          18.76

            4,579,529

Non-Qualified IX

          11,357.968

          20.03

               227,500

Non-Qualified X

          10,065.144

          20.42

               205,530

Non-Qualified XII

            1,744.951

          12.62

                 22,021

Non-Qualified XX

            4,347.277

          13.82

                 60,079

     2,801,238.122

$       73,921,113

121

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING UBS U.S. Large Cap Equity

Contracts in accumulation period:

Non-Qualified V

        261,133.863

$       14.50

$         3,786,441

Non-Qualified V (0.75)

        202,035.759

          15.16

            3,062,862

Non-Qualified VI

          18,709.954

          12.29

               229,945

Non-Qualified VII

     1,400,306.790

          14.22

          19,912,363

Non-Qualified VIII

        273,287.807

            9.86

            2,694,618

Non-Qualified IX

            6,637.062

          14.22

                 94,379

Non-Qualified X

        136,060.306

          14.50

            1,972,874

Non-Qualified XI

            8,356.733

          12.29

               102,704

Non-Qualified XIII

        341,549.440

            9.64

            3,292,537

Non-Qualified XIV

        503,214.629

            9.45

            4,755,378

Non-Qualified XV

        182,701.292

            9.36

            1,710,084

Non-Qualified XVI

        138,043.732

            7.01

               967,687

Non-Qualified XVIII

          37,967.721

            6.88

               261,218

Non-Qualified XIX

        120,594.309

            6.92

               834,513

     3,630,599.396

$       43,677,603

ING Van Kampen Comstock

Contracts in accumulation period:

Non-Qualified V

          50,627.599

$       12.26

$            620,694

Non-Qualified V (0.75)

        228,373.167

          12.43

            2,838,678

Non-Qualified IX

               571.570

          12.18

                   6,962

Non-Qualified XII

            2,753.062

          12.41

                 34,166

Non-Qualified XX

          15,764.911

          14.32

               225,754

        298,090.309

$         3,726,254

ING Van Kampen Equity and Income

Contracts in accumulation period:

Non-Qualified V

            3,087.856

$       10.98

$              33,905

Non-Qualified V (0.75)

            9,072.582

          11.13

               100,978

Non-Qualified IX

               162.188

          10.36

                   1,680

          12,322.626

$            136,563

ING VP Strategic Allocation Balanced

Currently payable annuity contracts:

$         2,888,023

Contracts in accumulation period:

Non-Qualified V

          63,295.330

$       17.17

            1,086,781

Non-Qualified V (0.75)

        101,617.519

          17.95

            1,824,034

Non-Qualified VII

        755,251.393

          16.92

          12,778,854

Non-Qualified VIII

        139,920.313

          15.45

            2,161,769

Non-Qualified IX

               474.508

          16.84

                   7,991

Non-Qualified X

            4,238.994

          17.63

                 74,733

     1,064,798.058

$       20,822,185

122

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP Strategic Allocation Growth

Currently payable annuity contracts:

$         2,083,387

Contracts in accumulation period:

Non-Qualified V

          69,723.542

$       17.75

            1,237,593

Non-Qualified V (0.75)

        167,874.904

          18.56

            3,115,758

Non-Qualified VII

        441,999.428

          17.49

            7,730,570

Non-Qualified VIII

          76,407.357

          15.68

            1,198,067

Non-Qualified IX

            2,864.545

          17.41

                 49,872

Non-Qualified X

          11,856.558

          18.23

               216,145

        770,726.333

$       15,631,392

ING VP Strategic Allocation Income

Currently payable annuity contracts:

$         3,576,463

Contracts in accumulation period:

Non-Qualified V

          49,393.099

$       16.78

               828,816

Non-Qualified V (0.75)

          39,677.304

          17.54

               695,940

Non-Qualified VII

        584,968.242

          16.54

            9,675,375

Non-Qualified VIII

        226,963.262

          15.55

            3,529,279

Non-Qualified IX

               847.971

          16.46

                 13,958

Non-Qualified X

          23,795.635

          17.24

               410,237

        925,645.513

$       18,730,068

ING VP Growth and Income

Currently payable annuity contracts:

$       96,985,864

Contracts in accumulation period:

Non-Qualified 1964

               958.678

$     216.86

               207,899

Non-Qualified V

     3,268,534.038

          20.20

          66,024,388

Non-Qualified V (0.75)

     5,523,034.839

          21.12

        116,646,496

Non-Qualified VI

        955,485.793

          18.99

          18,144,675

Non-Qualified VII

     3,054,426.694

          19.96

          60,966,357

Non-Qualified VIII

        672,513.018

          13.46

            9,052,025

Non-Qualified IX

          48,536.358

          19.82

               961,991

Non-Qualified X

     1,401,295.006

          20.59

          28,852,664

Non-Qualified XI

          23,823.864

          19.35

               460,992

Non-Qualified XII

          36,332.653

            8.50

               308,828

Non-Qualified XIII

     1,061,351.422

            8.16

            8,660,628

Non-Qualified XIV

     1,142,343.424

            8.00

            9,138,747

Non-Qualified XV

        388,591.091

            7.93

            3,081,527

Non-Qualified XVI

        224,659.164

            7.08

            1,590,587

Non-Qualified XVIII

          86,309.022

            6.94

               598,985

Non-Qualified XIX

        152,210.147

            6.99

            1,063,949

Non-Qualified XX

          49,972.311

          12.22

               610,662

   18,090,377.521

$     423,357,264

123

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET U.S. Core - Series 1

Contracts in accumulation period:

Non-Qualified VII

          67,853.261

$       10.41

$            706,352

Non-Qualified VIII

          25,406.738

          10.43

               264,992

Non-Qualified XIII

        539,936.925

          10.48

            5,658,539

Non-Qualified XIV

        212,597.585

          10.43

            2,217,393

Non-Qualified XV

          14,354.551

          10.41

               149,431

Non-Qualified XVI

        628,884.672

          10.40

            6,540,401

Non-Qualified XVIII

        106,535.292

          10.32

            1,099,444

Non-Qualified XIX

        618,894.358

          10.35

            6,405,557

     2,214,463.383

$       23,042,109

ING GET U.S. Core - Series 2

Contracts in accumulation period:

Non-Qualified VII

        121,675.337

$       10.21

$         1,242,305

Non-Qualified VIII

          40,825.189

          10.23

               417,642

Non-Qualified XIII

        442,613.409

          10.27

            4,545,640

Non-Qualified XIV

        354,366.915

          10.23

            3,625,174

Non-Qualified XV

          79,260.253

          10.21

               809,247

Non-Qualified XVI

        501,366.663

          10.20

            5,113,940

Non-Qualified XVIII

          75,607.469

          10.14

               766,660

Non-Qualified XIX

        323,073.279

          10.16

            3,282,425

     1,938,788.514

$       19,803,033

ING GET U.S. Core - Series 3

Contracts in accumulation period:

Non-Qualified VII

     1,371,223.983

$         9.94

$       13,629,966

Non-Qualified VIII

        685,663.474

            9.96

            6,829,208

Non-Qualified XIII

     1,017,358.830

            9.99

          10,163,415

Non-Qualified XIV

        659,441.327

            9.96

            6,568,036

Non-Qualified XV

        288,867.649

            9.94

            2,871,344

Non-Qualified XVI

        530,341.249

            9.93

            5,266,289

Non-Qualified XVIII

        124,668.947

            9.89

            1,232,976

Non-Qualified XIX

        813,413.002

            9.90

            8,052,789

     5,490,978.460

$       54,614,023

124

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET U.S. Core - Series 4

Contracts in accumulation period:

Non-Qualified VII

          55,350.795

$       10.37

$            573,988

Non-Qualified VIII

          11,072.267

          10.39

               115,041

Non-Qualified XIII

        200,119.233

          10.41

            2,083,241

Non-Qualified XIV

        145,744.408

          10.39

            1,514,284

Non-Qualified XV

          47,789.603

          10.37

               495,578

Non-Qualified XVI

        162,517.855

          10.37

            1,685,310

Non-Qualified XVIII

          15,848.954

          10.33

               163,720

Non-Qualified XIX

        149,145.760

          10.34

            1,542,167

        787,588.874

$         8,173,329

ING GET U.S. Core - Series 5

Contracts in accumulation period:

Non-Qualified VII

          26,471.768

$       10.47

$            277,159

Non-Qualified VIII

          21,298.617

          10.48

               223,210

Non-Qualified XIII

        167,666.632

          10.50

            1,760,500

Non-Qualified XIV

          32,995.601

          10.48

               345,794

Non-Qualified XV

          34,183.739

          10.47

               357,904

Non-Qualified XVI

          94,001.789

          10.47

               984,199

Non-Qualified XVIII

          10,903.412

          10.44

               113,832

Non-Qualified XIX

          34,937.327

          10.45

               365,095

        422,458.885

$         4,427,693

ING GET U.S. Core - Series 6

Contracts in accumulation period:

Non-Qualified VII

     1,006,500.128

$       10.07

$       10,135,456

Non-Qualified VIII

        136,215.985

          10.08

            1,373,057

Non-Qualified XIII

     2,749,880.961

          10.09

          27,746,299

Non-Qualified XIV

     2,752,856.551

          10.08

          27,748,794

Non-Qualified XV

     1,821,453.506

          10.07

          18,342,037

Non-Qualified XVI

        154,287.101

          10.07

            1,553,671

Non-Qualified XVIII

            7,176.233

          10.06

                 72,193

Non-Qualified XIX

        111,210.513

          10.06

            1,118,778

     8,739,580.979

$       88,090,285

125

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING GET U.S. Core - Series 7

Contracts in accumulation period:

Non-Qualified VII

        887,189.220

$       10.00

$         8,871,892

Non-Qualified VIII

          90,036.970

          10.00

               900,370

Non-Qualified XIII

     1,474,440.651

          10.00

          14,744,407

Non-Qualified XIV

     1,993,287.507

          10.00

          19,932,875

Non-Qualified XV

     1,243,708.522

          10.00

          12,437,085

Non-Qualified XVI

            8,296.068

          10.00

                 82,961

Non-Qualified XVIII

            4,563.610

          10.00

                 45,636

     5,701,522.548

$       57,015,226

ING VP Global Science and Technology

Contracts in accumulation period:

Non-Qualified V

        238,094.069

$         3.60

$            857,139

Non-Qualified V (0.75)

        572,201.585

            3.69

            2,111,424

Non-Qualified VII

        707,920.613

            3.58

            2,534,356

Non-Qualified VIII

          79,278.288

            3.60

               285,402

Non-Qualified IX

          24,497.489

            3.56

                 87,211

Non-Qualified X

          14,401.611

            3.65

                 52,566

Non-Qualified XII

            3,645.165

            3.68

                 13,414

Non-Qualified XIII

        466,052.674

            3.65

            1,701,092

Non-Qualified XIV

        439,023.168

            3.60

            1,580,483

Non-Qualified XV

          62,318.927

            3.58

               223,102

Non-Qualified XVI

        139,144.166

            3.73

               519,008

Non-Qualified XVIII

          29,625.846

            3.66

               108,431

Non-Qualified XIX

          80,521.064

            3.68

               296,318

Non-Qualified XX

               222.556

          11.96

                   2,662

     2,856,947.221

$       10,372,608

ING VP Growth

Currently payable annuity contracts:

$         2,692,068

Contracts in accumulation period:

Non-Qualified V

          48,730.321

$       14.30

               696,844

Non-Qualified V (0.75)

        351,384.521

14.86

            5,221,574

Non-Qualified VII

        399,687.310

14.13

            5,647,582

Non-Qualified VIII

        181,830.624

14.29

            2,598,360

Non-Qualified IX

            1,392.490

14.03

                 19,537

Non-Qualified XII

               329.799

9.25

                   3,051

Non-Qualified XIII

        554,358.579

8.52

            4,723,135

Non-Qualified XIV

        539,251.173

8.36

            4,508,140

Non-Qualified XV

        111,972.355

8.28

               927,131

Non-Qualified XVI

        115,521.339

5.48

               633,057

Non-Qualified XVIII

          12,606.150

5.38

                 67,821

Non-Qualified XIX

          62,734.392

5.41

               339,393

Non-Qualified XX

               227.784

12.62

                   2,875

     2,380,026.839

$       28,080,568

126

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP Index Plus LargeCap

Currently payable annuity contracts:

$       44,116,055

Contracts in accumulation period:

Non-Qualified V

        306,915.964

$       18.54

            5,690,222

Non-Qualified V (0.75)

     1,062,734.535

          19.33

          20,542,659

Non-Qualified VII

     1,398,953.392

          18.30

          25,600,847

Non-Qualified VIII

        539,378.244

          18.21

            9,822,078

Non-Qualified IX

          18,218.003

          18.19

               331,385

Non-Qualified XII

          19,914.467

          11.25

               224,038

Non-Qualified XIII

     2,759,569.441

          10.77

          29,720,563

Non-Qualified XIV

     2,357,139.132

          10.57

          24,914,961

Non-Qualified XV

     1,023,640.904

          10.46

          10,707,284

Non-Qualified XVI

        691,020.652

            8.03

            5,548,896

Non-Qualified XVIII

        174,584.744

            7.87

            1,373,982

Non-Qualified XIX

        473,789.616

            7.92

            3,752,414

Non-Qualified XX

            1,294.203

          12.99

                 16,812

   10,827,153.298

$     182,362,196

ING VP Index Plus MidCap

Contracts in accumulation period:

Non-Qualified V

        133,131.477

$       18.79

$         2,501,540

Non-Qualified V (0.75)

        762,456.234

          19.43

          14,814,525

Non-Qualified IX

          12,293.442

          18.48

               227,183

Non-Qualified XII

          27,766.332

          20.23

               561,713

Non-Qualified XX

            8,759.085

          14.59

               127,795

        944,406.571

$       18,232,756

ING VP Index Plus SmallCap

Contracts in accumulation period:

Non-Qualified V

          93,290.456

$       14.70

$         1,371,370

Non-Qualified V (0.75)

        472,530.398

15.2

            7,182,462

Non-Qualified IX

            9,103.073

14.45

               131,539

Non-Qualified XII

          14,220.587

16.34

               232,364

Non-Qualified XX

            2,974.116

15.31

                 45,534

        592,118.629

$         8,963,269

127

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP International Equity

Currently payable annuity contracts:

$         1,683,470

Contracts in accumulation period:

Non-Qualified V

            5,471.836

$         9.43

                 51,599

Non-Qualified V (0.75)

          56,078.938

            9.75

               546,770

Non-Qualified VII

        163,801.293

            9.33

            1,528,266

Non-Qualified VIII

          47,160.238

            9.43

               444,721

Non-Qualified XIII

        355,722.316

            9.00

            3,201,501

Non-Qualified XIV

        309,683.989

            8.82

            2,731,413

Non-Qualified XV

        128,679.636

            8.74

            1,124,660

Non-Qualified XVI

        184,925.296

            7.12

            1,316,668

Non-Qualified XVIII

          23,033.780

            6.98

               160,776

Non-Qualified XIX

          78,253.994

            7.03

               550,126

     1,352,811.317

$       13,339,970

ING VP Small Company

Currently payable annuity contracts:

$         8,125,753

Contracts in accumulation period:

Non-Qualified V

          52,193.997

$       22.17

            1,157,141

Non-Qualified V (0.75)

        306,182.287

          23.05

            7,057,502

Non-Qualified VII

        912,240.803

          21.90

          19,978,074

Non-Qualified VIII

        272,889.538

          22.16

            6,047,232

Non-Qualified IX

            4,684.470

          21.75

               101,887

Non-Qualified XII

          23,142.633

          15.90

               367,968

Non-Qualified XIII

     1,151,774.779

          15.49

          17,840,991

Non-Qualified XIV

        743,437.677

          15.19

          11,292,818

Non-Qualified XV

        229,225.655

          15.04

            3,447,554

Non-Qualified XVI

        387,298.226

          10.93

            4,233,170

Non-Qualified XVIII

          60,874.696

          10.72

               652,577

Non-Qualified XIX

        236,666.145

          10.79

            2,553,628

Non-Qualified XX

               954.607

          14.10

                 13,460

     4,381,565.513

$       82,869,755

ING VP Value Opportunity

Contracts in accumulation period:

Non-Qualified V

          41,857.754

$       18.00

$            753,440

Non-Qualified V (0.75)

        193,402.832

          18.71

            3,618,567

Non-Qualified VII

        533,299.566

          17.77

            9,476,733

Non-Qualified VIII

        121,623.422

          17.99

            2,188,005

Non-Qualified IX

            1,276.388

          17.65

                 22,528

Non-Qualified XII

          16,995.065

          12.65

               214,988

Non-Qualified XX

               854.765

          12.23

                 10,454

        909,309.791

$       16,284,715

128

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP International Value

Contracts in accumulation period:

Non-Qualified V

          49,802.193

$       11.87

$            591,152

Non-Qualified V (0.75)

        168,355.691

          12.07

            2,032,053

Non-Qualified IX

            6,238.164

          11.76

                 73,361

Non-Qualified XII

          18,767.857

          12.05

               226,153

Non-Qualified XX

            4,296.240

          13.22

                 56,796

        247,460.144

$         2,979,515

ING VP MagnaCap - Class I

Contracts in accumulation period:

Non-Qualified V

            2,634.377

$         9.52

$              25,079

Non-Qualified V (0.75)

          10,391.646

            9.64

               100,175

          13,026.023

$            125,254

ING VP MagnaCap - Class S

Contracts in accumulation period:

Non-Qualified XIII

          60,268.762

$         9.95

$            599,674

Non-Qualified XIV

          58,843.233

            9.84

               579,017

Non-Qualified XV

          12,048.359

            9.78

               117,833

Non-Qualified XVI

          12,903.304

            9.76

               125,936

Non-Qualified XVIII

            4,527.444

            9.60

                 43,463

Non-Qualified XIX

          17,501.983

            9.65

               168,894

        166,093.085

$         1,634,817

ING VP MidCap Opportunities - Class I

Contracts in accumulation period:

Non-Qualified V

            4,829.301

$       10.28

$              49,645

Non-Qualified V (0.75)

          22,194.413

          10.46

               232,154

Non-Qualified XII

            3,912.247

          10.44

                 40,844

Non-Qualified XX

            1,280.133

          13.84

                 17,717

          32,216.095

$            340,360

ING VP MidCap Opportunities - Class S

Contracts in accumulation period:

Non-Qualified XIII

        349,195.276

$         9.26

$         3,233,548

Non-Qualified XIV

        347,514.608

            9.16

            3,183,234

Non-Qualified XV

          94,476.123

            9.11

               860,677

Non-Qualified XVI

        154,308.181

            9.09

            1,402,661

Non-Qualified XVIII

          42,360.448

            8.94

               378,702

Non-Qualified XIX

        191,912.015

            8.99

            1,725,289

     1,179,766.650

$       10,784,111

129

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP Real Estate

Contracts in accumulation period:

Non-Qualified V

          12,589.389

$       13.88

$            174,741

Non-Qualified V (0.75)

          58,651.330

          13.93

               817,013

Non-Qualified XII

          14,428.668

          13.93

               200,991

          85,669.387

$         1,192,745

ING VP SmallCap Opportunities - Class I

Contracts in accumulation period:

Non-Qualified V

            5,867.007

$         7.42

$              43,533

Non-Qualified V (0.75)

        122,292.668

            7.55

               923,310

Non-Qualified XX

               233.976

          12.78

                   2,990

        128,393.652

$            969,833

ING VP SmallCap Opportunities - Class S

Contracts in accumulation period:

Non-Qualified XIII

        228,383.394

$         7.07

$         1,614,671

Non-Qualified XIV

        249,195.161

6.99

            1,741,874

Non-Qualified XIX

          79,772.011

6.86

               547,236

Non-Qualified XV

          78,291.385

6.95

               544,125

Non-Qualified XVI

          90,620.915

6.94

               628,909

Non-Qualified XVIII

          38,830.004

6.82

               264,821

        765,092.870

$         5,341,636

ING VP Balanced

Currently payable annuity contracts:

$       45,180,069

Contracts in accumulation period:

Non-Qualified V

     1,342,969.084

$       25.68

          34,487,446

Non-Qualified V (0.75)

        929,064.374

          26.84

          24,936,088

Non-Qualified VI

          41,006.995

          21.68

               889,032

Non-Qualified VII

     1,301,153.739

          24.95

          32,463,786

Non-Qualified VIII

        379,563.335

          17.81

            6,760,023

Non-Qualified IX

          10,164.223

          25.19

               256,037

Non-Qualified X

        217,194.289

          26.17

            5,683,975

Non-Qualified XI

            2,019.340

          22.09

                 44,607

Non-Qualified XII

          12,328.826

          12.71

               156,699

Non-Qualified XIII

     1,305,748.947

          12.32

          16,086,827

Non-Qualified XIV

        964,065.113

          12.08

          11,645,907

Non-Qualified XV

        429,399.131

          11.97

            5,139,908

Non-Qualified XVI

        312,115.322

          10.05

            3,136,759

Non-Qualified XVIII

          71,463.408

            9.85

               703,915

Non-Qualified XIX

        200,404.859

            9.92

            1,988,016

Non-Qualified XX

                 12.098

          12.51

                      151

     7,518,673.083

$     189,559,245

130

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP Emerging Markets

Contracts in accumulation period:

Non-Qualified VII

          69,835.325

$       11.02

$            769,585

          69,835.325

$            769,585

ING VP Intermediate Bond

Currently payable annuity contracts:

$       12,463,268

Contracts in accumulation period:

Non-Qualified V

     1,012,406.746

$       18.92

          19,154,736

Non-Qualified V (0.75)

     1,071,475.144

          19.78

          21,193,778

Non-Qualified VI

          27,972.524

          17.36

               485,603

Non-Qualified VII

     1,440,152.769

          18.38

          26,470,008

Non-Qualified VIII

        421,916.782

          15.79

            6,662,066

Non-Qualified IX

            8,892.198

          18.56

               165,039

Non-Qualified X

        237,188.220

          19.14

            4,539,783

Non-Qualified XI

            1,200.432

          17.55

                 21,068

Non-Qualified XII

            1,181.572

          14.14

                 16,707

Non-Qualified XIII

     1,069,558.214

          13.93

          14,898,946

Non-Qualified XIV

     1,246,911.896

          13.66

          17,032,816

Non-Qualified XV

        438,603.327

          13.52

            5,929,917

Non-Qualified XVI

        380,270.840

          12.97

            4,932,113

Non-Qualified XVIII

          65,243.314

          12.72

               829,895

Non-Qualified XIX

        235,214.819

          12.80

            3,010,750

Non-Qualified XX

            6,478.684

          11.37

                 73,663

     7,664,667.482

$     137,880,156

ING VP Money Market

Currently payable annuity contracts:

$         5,081,623

Contracts in accumulation period:

Non-Qualified V

        546,291.829

$       13.88

            7,582,531

Non-Qualified V (0.75)

     1,029,618.505

14.51

          14,939,765

Non-Qualified VI

          11,852.443

13.60

               161,193

Non-Qualified VII

     3,544,102.686

13.63

          48,306,120

Non-Qualified VIII

        657,977.858

12.44

            8,185,245

Non-Qualified IX

            1,714.625

13.61

                 23,336

Non-Qualified X

        182,060.409

13.88

            2,526,998

Non-Qualified XII

            4,344.698

11.75

                 51,050

Non-Qualified XIII

     2,815,300.710

11.60

          32,657,488

Non-Qualified XIV

     3,781,977.346

11.37

          43,001,082

Non-Qualified XV

     1,683,216.447

11.26

          18,953,017

Non-Qualified XVI

        447,162.532

10.30

            4,605,774

Non-Qualified XVIII

        234,869.855

10.10

            2,372,186

Non-Qualified XIX

        426,126.420

10.17

            4,333,706

   15,366,616.362

$     192,781,114

131

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

ING VP Natural Resources

Contracts in accumulation period:

Non-Qualified V

          33,814.847

$       16.73

$            565,722

Non-Qualified V (0.75)

          30,688.249

17.48

               536,431

Non-Qualified VII

          45,273.969

16.42

               743,399

Non-Qualified IX

                 31.296

16.41

                      514

Non-Qualified X

               881.859

16.73

                 14,754

        110,690.221

$         1,860,820

Janus Aspen Balanced

Contracts in accumulation period:

Non-Qualified V

        303,557.215

$       25.22

$         7,655,713

Non-Qualified V (0.75)

        376,517.988

          26.36

            9,925,014

Non-Qualified VII

     1,451,761.281

          27.77

          40,315,411

Non-Qualified VIII

        483,378.788

          22.28

          10,769,679

Non-Qualified IX

            3,111.139

          24.74

                 76,970

Non-Qualified X

          12,240.485

          25.22

               308,705

Non-Qualified XII

            4,924.728

          15.01

                 73,920

Non-Qualified XIII

     2,345,079.071

          14.13

          33,135,967

Non-Qualified XIV

     2,462,713.831

          13.86

          34,133,214

Non-Qualified XV

        832,253.390

          13.73

          11,426,839

Non-Qualified XVI

        447,567.108

          10.14

            4,538,330

Non-Qualified XVIII

        109,433.382

            9.95

            1,088,862

Non-Qualified XX

          10,602.388

          12.02

               127,441

Non-Qualified XIX

        321,077.514

          10.01

            3,213,986

     9,164,218.308

$     156,790,051

Janus Aspen Flexible Income

Contracts in accumulation period:

Non-Qualified V

          81,302.241

$       20.45

$         1,662,631

Non-Qualified V (0.75)

        122,926.910

          21.38

            2,628,177

Non-Qualified VII

        455,683.539

          20.12

            9,168,353

Non-Qualified VIII

        125,500.266

          16.97

            2,129,740

Non-Qualified IX

            1,624.092

          20.06

                 32,579

Non-Qualified X

            5,477.176

          20.45

               112,008

Non-Qualified XII

                 95.320

          13.98

                   1,333

Non-Qualified XX

            1,108.570

          11.46

                 12,704

        793,718.112

$       15,747,525

132

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Janus Aspen Growth

Currently payable annuity contracts:

$         5,658,526

Contracts in accumulation period:

Non-Qualified V

        246,837.155

$       17.95

            4,430,727

Non-Qualified V (0.75)

        269,491.218

          18.76

            5,055,655

Non-Qualified VII

        992,984.736

          21.12

          20,971,838

Non-Qualified VIII

        204,808.959

          15.17

            3,106,952

Non-Qualified IX

            5,215.269

          17.61

                 91,841

Non-Qualified X

          17,334.475

          17.95

               311,154

Non-Qualified XII

            4,686.574

          10.20

                 47,803

Non-Qualified XIII

     1,452,287.020

            9.68

          14,058,138

Non-Qualified XIV

     2,147,879.640

            9.49

          20,383,378

Non-Qualified XV

        719,343.866

            9.40

            6,761,832

Non-Qualified XVI

        240,635.371

            5.97

            1,436,593

Non-Qualified XVIII

        107,667.659

            5.85

               629,856

Non-Qualified XX

            3,133.792

          12.47

                 39,078

Non-Qualified XIX

        254,253.944

            5.89

            1,497,556

     6,666,559.679

$       84,480,927

Janus Aspen Mid Cap Growth

Contracts in accumulation period:

Non-Qualified V

        438,673.952

$       20.74

$         9,098,098

Non-Qualified V (0.75)

        508,474.084

          21.68

          11,023,718

Non-Qualified VII

     1,096,702.771

          20.52

          22,504,341

Non-Qualified VIII

        269,336.595

          14.37

            3,870,367

Non-Qualified IX

          18,452.132

          20.34

               375,316

Non-Qualified X

          17,565.138

          20.74

               364,301

Non-Qualified XII

            2,107.192

          12.16

                 25,623

Non-Qualified XIII

     1,735,478.017

          11.41

          19,801,804

Non-Qualified XIV

     1,362,611.170

          11.19

          15,247,619

Non-Qualified XV

        566,326.585

          11.08

            6,274,899

Non-Qualified XVI

        676,302.394

            4.68

            3,165,095

Non-Qualified XVIII

        245,789.412

            4.59

            1,128,173

Non-Qualified XX

            2,944.777

          15.29

                 45,026

Non-Qualified XIX

        290,051.459

            4.62

            1,340,038

     7,230,815.679

$       94,264,418

133

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Janus Aspen Worldwide Growth

Currently payable annuity contracts:

$         5,722,940

Contracts in accumulation period:

Non-Qualified V

        343,860.428

$       20.59

            7,080,086

Non-Qualified V (0.75)

        636,923.946

          21.52

          13,706,603

Non-Qualified VII

     2,546,336.205

          23.00

          58,565,733

Non-Qualified VIII

        511,984.097

          16.76

            8,580,853

Non-Qualified IX

          17,076.083

          20.20

               344,937

Non-Qualified X

          17,546.416

          20.59

               361,281

Non-Qualified XII

          14,506.278

          10.10

               146,513

Non-Qualified XIII

     2,517,662.085

            9.41

          23,691,200

Non-Qualified XIV

     2,413,517.634

            9.23

          22,276,768

Non-Qualified XV

        713,488.202

            9.14

            6,521,282

Non-Qualified XVI

        530,921.410

            6.07

            3,222,693

Non-Qualified XVIII

        171,278.711

            5.95

            1,019,108

Non-Qualified XIX

        496,022.579

            5.99

            2,971,175

Non-Qualified XX

            2,953.931

          11.54

                 34,088

   10,934,078.005

$     154,245,260

Lord Abbett Growth and Income

Contracts in accumulation period:

Non-Qualified V

        147,017.583

$       11.31

$         1,662,769

Non-Qualified V (0.75)

        431,107.585

          11.50

            4,957,737

Non-Qualified IX

            6,483.392

          11.21

                 72,679

Non-Qualified XII

               808.845

          11.48

                   9,286

Non-Qualified XX

            5,129.807

          13.69

                 70,227

        590,547.211

$         6,772,698

Lord Abbett Mid-Cap Value

Contracts in accumulation period:

Non-Qualified V

          56,029.603

$       12.56

$            703,732

Non-Qualified V (0.75)

        226,937.205

          12.78

            2,900,257

Non-Qualified IX

            2,673.368

          12.45

                 33,283

Non-Qualified XII

            1,002.084

          12.76

                 12,787

Non-Qualified XX

            5,484.847

          14.98

                 82,163

        292,127.107

$         3,732,222

MFS® VIT Strategic Income

Contracts in accumulation period:

Non-Qualified VII

        156,244.603

$       13.78

$         2,153,051

Non-Qualified VIII

          25,058.591

          13.96

               349,818

        181,303.194

$         2,502,869

134

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

MFS® VIT Total Return

Contracts in accumulation period:

Non-Qualified VII

     1,808,989.599

$       19.52

$       35,311,477

Non-Qualified VIII

        488,231.994

          19.78

            9,657,229

Non-Qualified XIII

     2,060,200.461

          14.14

          29,131,235

Non-Qualified XIV

     2,749,759.330

          13.87

          38,139,162

Non-Qualified XV

        788,222.026

          13.73

          10,822,288

Non-Qualified XVI

        845,250.848

          12.50

          10,565,636

Non-Qualified XVIII

        143,628.216

          12.25

            1,759,446

Non-Qualified XIX

        576,686.392

          12.33

            7,110,543

     9,460,968.866

$     142,497,016

Oppenheimer Aggressive Growth

Currently payable annuity contracts:

$         1,893,483

Contracts in accumulation period:

Non-Qualified VII

        532,594.088

$       15.12

            8,052,823

Non-Qualified VIII

        203,858.861

          15.29

            3,117,002

Non-Qualified XIII

        535,637.326

          10.76

            5,763,458

Non-Qualified XIV

        699,812.911

          10.55

            7,383,026

Non-Qualified XV

        180,374.612

          10.45

            1,884,915

Non-Qualified XVI

        400,630.820

            4.81

            1,927,034

Non-Qualified XVIII

        315,521.710

            4.71

            1,486,107

Non-Qualified XIX

        287,607.459

            4.75

            1,366,135

     3,156,037.787

$       32,873,983

Oppenheimer Global Securities

Contracts in accumulation period:

Non-Qualified V

        172,903.559

$       18.07

$         3,124,367

Non-Qualified V (0.75)

        695,649.807

          18.68

          12,994,738

Non-Qualified VII

        937,941.585

          23.19

          21,750,865

Non-Qualified VIII

        203,637.044

          23.47

            4,779,361

Non-Qualified IX

          19,356.940

          17.77

               343,973

Non-Qualified XII

          20,498.568

          18.73

               383,938

Non-Qualified XX

          22,821.577

          15.03

               343,008

     2,072,809.080

$       43,720,250

135

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Oppenheimer Main Street®

Currently payable annuity contracts:

$         7,476,625

Contracts in accumulation period:

Non-Qualified VII

     1,348,464.491

$       13.63

          18,379,571

Non-Qualified VIII

        490,727.201

          13.79

            6,767,128

Non-Qualified XIII

     1,000,860.074

            9.63

            9,638,283

Non-Qualified XIV

     1,555,331.181

            9.45

          14,697,880

Non-Qualified XV

        584,608.723

            9.35

            5,466,092

Non-Qualified XVI

        316,825.028

            8.43

            2,670,835

Non-Qualified XVIII

          80,516.748

            8.27

               665,874

Non-Qualified XIX

        316,171.377

            8.33

            2,633,708

     5,693,504.823

$       68,395,996

Oppenheimer Strategic Bond

Currently payable annuity contracts:

$         2,460,441

Contracts in accumulation period:

Non-Qualified V

          82,690.603

$       14.00

            1,157,668

Non-Qualified V (0.75)

        201,561.708

          14.48

            2,918,614

Non-Qualified VII

        803,237.777

          15.31

          12,297,570

Non-Qualified VIII

        166,334.302

          15.49

            2,576,518

Non-Qualified IX

            1,194.439

          13.77

                 16,447

Non-Qualified XIII

        821,225.322

          14.15

          11,620,338

Non-Qualified XIV

     1,013,637.885

          13.88

          14,069,294

Non-Qualified XV

        381,380.848

          13.74

            5,240,173

Non-Qualified XVI

        255,301.822

          13.55

            3,459,340

Non-Qualified XVIII

          58,215.833

          13.29

               773,688

Non-Qualified XX

          16,350.973

          13.17

               215,342

Non-Qualified XIX

        136,683.746

          13.38

            1,828,829

     3,937,815.261

$       58,634,262

PIMCO VIT Real Return

Contracts in accumulation period:

Non-Qualified V (0.75)

          48,251.584

$       10.82

$            522,082

          48,251.584

$            522,082

136

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

Pioneer Equity Income VCT

Contracts in accumulation period:

Non-Qualified V

          40,647.955

$       11.12

$            452,005

Non-Qualified V (0.75)

          84,426.843

          11.31

               954,868

Non-Qualified IX

            3,372.388

          11.02

                 37,164

Non-Qualified XII

            6,299.000

          11.29

                 71,116

Non-Qualified XX

            4,954.310

          13.32

                 65,991

        139,700.496

$         1,581,144

Pioneer Fund VCT

Contracts in accumulation period:

Non-Qualified V

                 60.856

$       10.12

$                   616

Non-Qualified V (0.75)

            5,033.296

          10.29

                 51,793

            5,094.152

$              52,409

Pioneer High Yield VCT

Contracts in accumulation period:

Non-Qualified V (0.75)

          20,206.918

$       10.68

$            215,810

          20,206.918

$            215,810

Pioneer Mid Cap Value VCT

Contracts in accumulation period:

Non-Qualified V

          33,380.458

$       14.30

$            477,341

Non-Qualified V (0.75)

        173,075.973

          14.55

            2,518,255

Non-Qualified IX

            2,457.910

          14.18

                 34,853

Non-Qualified XII

            9,989.956

          14.53

               145,154

Non-Qualified XX

            1,071.113

          15.93

                 17,063

        219,975.409

$         3,192,666

Jennison

Contracts in accumulation period:

Non-Qualified XIII

          31,153.813

$         8.43

$            262,627

Non-Qualified XIV

          63,454.234

            8.34

               529,208

Non-Qualified XIX

            6,285.956

            8.18

                 51,419

Non-Qualified XV

          42,622.109

            8.29

               353,337

Non-Qualified XVI

          14,825.289

            8.27

               122,605

Non-Qualified XVIII

            1,252.663

            8.14

                 10,197

        159,594.065

$         1,329,393

137

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Division/Contract

Units

Unit Value

Extended Value

SP William Blair International Growth

Contracts in accumulation period:

Non-Qualified XIII

        179,351.021

$         9.13

$         1,637,475

Non-Qualified XIV

        261,860.021

            9.03

            2,364,596

Non-Qualified XIX

          73,520.261

            8.86

               651,390

Non-Qualified XV

          48,005.834

            8.98

               431,092

Non-Qualified XVI

        105,258.550

            8.96

               943,117

Non-Qualified XVIII

          14,290.240

            8.81

               125,897

        682,285.927

$         6,153,567

UBS U.S. Allocation

Contracts in accumulation period:

Non-Qualified XIII

        105,312.240

$         9.41

$            990,988

Non-Qualified XIV

        613,897.727

            9.25

            5,678,554

Non-Qualified XV

          72,367.544

            9.17

               663,610

Non-Qualified XVI

        107,027.964

            8.55

               915,089

Non-Qualified XVIII

          15,588.862

            8.38

               130,635

Non-Qualified XIX

          63,102.438

            8.44

               532,585

        977,296.775

$         8,911,461

Wanger Select

Contracts in accumulation period:

Non-Qualified V (0.75)

          21,768.701

$       11.45

$            249,252

          21,768.701

$            249,252

Wanger U.S. Smaller Companies

Contracts in accumulation period:

Non-Qualified V (0.75)

            8,396.540

$       11.61

$              97,484

            8,396.540

$              97,484

138

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

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.

139

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

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 XVII

Group AetnaPlus contracts issued in connection with deferred compensation plans having Contract modifications effective September 1, 1999.

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.

140

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Financial Highlights

A summary of unit values and units outstanding for variable annuity Contracts, expense ratios, excluding expenses of underlying Funds, investment income ratios, and total return for the years ended December 31, 2004, 2003, 2002 and 2001, along with units outstanding and unit values for the year ended December 31, 2000, follows:

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

AIM V.I. Capital Appreciation

2004

      1,652

$5.69 to $9.99

$     15,172

-

%

0.75% to 1.90%

4.60% to 5.80%

2003

      2,018

$5.44 to $9.46

        17,500

-

0.75% to 1.90%

27.10% to 28.59%

2002

      2,233

$4.28 to $7.37

        14,832

-

0.45% to 1.90%

-25.80% to -0.04%

2001

      2,600

$5.77 to $9.84

        23,509

        7.71

0.45% to 2.25%

-24.75% to -23.82%

2000

      2,085

$7.67 to $12.95

        25,987

(a)

(a)

(a)

AIM V.I. Core Equity

2004

      2,909

$6.71 to $12.80

        31,830

        0.91

0.75% to 2.25%

6.85% to 8.23%

2003

      3,366

$6.28 to $11.86

        34,908

        0.97

0.75% to 2.25%

22.18% to 23.44%

2002

      3,742

$5.14 to $7.67

        29,940

        0.30

0.75% to 2.25%

-17.19% to -16.21%

2001

      4,491

$6.21 to $9.17

        42,858

        0.05

0.45% to 2.25%

-24.31% to -16.23%

2000

      4,034

$8.20 to $12.00

        49,823

(a)

(a)

(a)

AIM V.I. Government Securities

2004

      1,184

$11.62 to $12.57

        14,556

        3.70

0.95% to 1.90%

0.61% to 1.62%

2003

      1,239

$11.55 to $12.37

        15,026

        1.78

0.95% to 1.90%

-0.86% to 0.08%

2002

      2,139

$11.65 to $12.36

        25,997

        2.67

0.95% to 1.90%

0.07% to 8.01%

2001

         819

$10.83 to $11.38

          9,149

        5.55

0.50% to 1.90%

4.38% to 5.40%

2000

           28

$10.38 to $10.80

             295

(a)

(a)

(a)

AIM V.I. Growth

2004

      2,462

$4.56 to $12.89

        16,959

-

0.75% to 1.90%

6.05% to 7.35%

2003

      2,783

$4.30 to $6.62

        18,067

-

0.75% to 1.90%

28.74% to 30.23%

2002

      3,069

$3.34 to $5.09

        14,946

-

0.75% to 1.90%

-32.29% to -31.49%

2001

      3,912

$4.93 to $7.44

        27,757

        0.20

0.45% to 2.25%

-35.18% to -34.38%

2000

      3,321

$7.60 to $11.37

        37,257

(a)

(a)

(a)

141

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

AIM V.I. Premier Equity

2004

      4,062

$6.57 to $8.97

$     36,351

        0.42

%

0.75% to 1.90%

3.79% to 5.08%

2003

      5,018

$6.33 to $8.56

        42,830

        0.28

0.75% to 1.90%

22.67% to 24.23%

2002

      5,969

$5.16 to $6.91

        41,327

        0.29

0.45% to 1.90%

-31.59% to -30.57%

2001

      7,410

$7.54 to $10.00

        74,008

        2.16

0.45% to 2.25%

-14.24% to -9.62%

2000

      6,222

$8.79 to $11.55

        73,350

(a)

(a)

(a)

Alger American Balanced

2004

           74

$25.89

          1,926

        1.49

1.40%

3.11%

2003

           94

$25.11

          2,367

        2.17

1.40%

17.34%

2002

         120

$21.40

          2,576

        1.69

1.40%

-13.52%

2001

         152

$24.74

          3,765

        3.07

0.85% to 1.40%

-3.31%

2000

         191

$25.59

          4,888

(a)

(a)

(a)

Alger American Income & Growth

2004

         223

$23.57

          5,250

        0.55

1.40%

6.31%

2003

         292

$22.17

          6,470

        0.32

1.40%

28.08%

2002

         356

$17.31

          6,167

        0.64

1.40%

-32.07%

2001

         443

$25.49

        11,279

        6.98

0.85% to 1.40%

-15.53%

2000

         550

$30.17

        16,586

(a)

(a)

(a)

Alger American Leveraged AllCap

2004

         206

$18.30 to $24.78

          5,104

-

1.25% to 1.40%

6.67% to 6.83%

2003

         277

$17.13 to $23.23

          6,443

-

1.25% to 1.40%

32.82% to 33.10%

2002

         327

$12.87 to $17.49

          5,724

        0.01

1.25% to 1.40%

-34.84% to -34.74%

2001

         388

$19.73 to $26.84

        10,424

        3.28

0.85% to 1.40%

-17.11% to -16.99%

2000

         481

$23.77 to $32.38

        15,563

(a)

(a)

(a)

AllianceBernstein VPSF Growth and Income

2004

      4,305

$11.03 to $11.32

        48,096

        0.88

0.95% to 1.90%

9.36% to 10.39%

2003

      3,443

$10.03 to $10.30

        34,971

        0.90

0.95% to 1.90%

29.96% to 31.27%

2002

      2,855

$7.68 to $7.89

        22,169

        0.80

0.95% to 1.90%

-23.53% to -22.79%

2001

      2,791

$9.99 to $10.27

        28,177

        4.75

0.50% to 1.90%

-1.56% to -0.60%

2000

           88

$10.10 to $10.39

             898

(a)

(a)

(a)

142

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

AllianceBernstein VPSF Premier Growth

2004

      1,319

$5.54 to $5.96

$       7,542

-

%

0.95% to 1.90%

6.56% to 7.60%

2003

      1,368

$5.17 to $5.57

          7,314

-

0.95% to 1.90%

21.46% to 22.61%

2002

      1,333

$4.24 to $4.57

          5,838

-

0.95% to 1.90%

-31.96% to -31.30%

2001

      1,331

$6.20 to $6.69

          8,532

        6.31

0.50% to 1.90%

-18.80% to -17.99%

2000

         341

$7.60 to $8.20

          2,687

(a)

(a)

(a)

AllianceBernstein VPSF Small Cap Growth

2004

         582

$8.07 to $9.29

          5,141

-

0.95% to 1.90%

12.40% to 13.43%

2003

         500

$7.18 to $8.19

          3,918

-

0.95% to 1.90%

46.23% to 47.57%

2002

         128

$4.91 to $5.55

             684

-

0.95% to 1.90%

-33.07% to -32.42%

2001

         116

$7.34 to $8.22

             910

        3.62

0.50% to 1.90%

-14.43% to -13.59%

2000

             9

$8.58 to $9.51

               82

(a)

(a)

(a)

American Century® VP Balanced

2004

           56

$19.69

          1,096

        1.83

1.40%

8.25%

2003

           78

$18.19

          1,420

        2.75

1.40%

17.81%

2002

           96

$15.44

          1,483

        2.84

1.40%

-10.82%

2001

         118

$17.32

          2,043

        6.22

0.85% to 1.40%

-4.90%

2000

         147

$18.21

          2,684

(a)

(a)

(a)

American Century® VP International

2004

           73

$14.91 to $16.33

          1,196

        0.55

1.25% to 1.40%

13.32% to 13.56%

2003

           93

$13.13 to $14.41

          1,346

        0.75

1.25% to 1.40%

22.74% to 22.94%

2002

         131

$10.68 to $11.74

          1,539

        0.83

1.25% to 1.40%

-21.49% to -21.37%

2001

         185

$13.59 to $14.95

          2,759

      10.20

0.85% to 1.40%

-30.17% to -30.06%

2000

         229

$19.43 to $21.41

          4,905

(a)

(a)

(a)

Calvert Social Balanced

2004

         166

$12.07 to $22.73

          2,229

        1.66

0.75% to 1.40%

6.81% to 7.47%

2003

         178

$11.30 to $21.15

          2,228

        1.98

0.75% to 1.40%

17.59% to 18.42%

2002

         167

$9.61 to $17.86

          1,775

        2.79

0.75% to 1.40%

-13.38% to -12.81%

2001

         158

$11.09 to $20.48

          1,959

        4.91

0.45% to 1.50%

-8.25% to -7.64%

2000

         175

$12.09 to $22.18

          2,514

(a)

(a)

(a)

143

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Federated American Leaders

2004

      1,665

$18.30 to $25.29

$     42,192

        1.46

%

1.25% to 1.40%

8.22% to 8.41%

2003

      2,211

$16.88 to $23.37

        51,717

        1.51

1.25% to 1.40%

25.92% to 26.06%

2002

      2,720

$13.39 to $18.56

        50,539

        1.17

1.25% to 1.40%

-21.33% to -21.21%

2001

      3,522

$16.99 to $23.59

        83,193

        2.06

0.85% to 1.40%

-5.56% to -5.42%

2000

      4,105

$17.97 to $24.98

      102,586

(a)

(a)

(a)

Federated Capital Income

2004

         373

$11.56 to $13.82

          5,170

        4.59

1.25% to 1.40%

8.39% to 8.54%

2003

         505

$10.65 to $12.75

          6,460

        6.55

1.25% to 1.40%

18.94% to 19.13%

2002

         653

$8.94 to $10.72

          7,021

        5.71

1.25% to 1.40%

-25.01% to -24.90%

2001

         923

$11.90 to $14.29

        13,230

        3.57

0.85% to 1.40%

-14.94% to -14.81%

2000

      1,149

$13.97 to $16.80

        19,351

(a)

(a)

(a)

Federated Equity Income

2004

         654

$13.73

          9,093

        2.05

1.25% to 1.40%

11.26%

2003

         884

$12.34

        11,005

        1.89

1.25% to 1.40%

25.53%

2002

      1,035

$9.83

        10,264

        2.11

1.25% to 1.40%

-21.85%

2001

      1,384

$12.58

        17,476

        1.97

0.75% to 1.40%

-12.24%

2000

      1,690

$14.33

        24,264

(a)

(a)

(a)

Federated Fund for U.S. Government Securities

2004

         407

$15.83

          6,444

        5.03

1.25% to 1.40%

2.19%

2003

         635

$15.49

          9,833

        3.85

1.25% to 1.40%

0.91%

2002

         826

$15.35

        12,674

        3.65

1.40%

0.0752

2001

         820

$14.28

        11,702

        3.90

0.85% to 1.40%

5.53%

2000

         823

$13.53

        11,133

(a)

(a)

(a)

Federated High Income Bond

2004

         666

$15.13 to $17.70

        11,845

        7.82

1.25% to 1.40%

8.92% to 9.08%

2003

         970

$13.87 to $16.25

        15,774

        7.68

1.25% to 1.40%

20.55% to 20.71%

2002

      1,236

$11.49 to $13.48

        16,683

      10.52

1.25% to 1.40%

-0.03% to 0.12%

2001

      1,548

$11.48 to $13.49

        20,899

      11.00

0.85% to 1.40%

-0.04% to 0.10%

2000

      1,959

$11.46 to $13.49

        26,446

(a)

(a)

(a)

144

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Federated International Equity

2004

         367

$14.71 to $15.87

$       5,865

-

%

1.25% to 1.40%

12.47% to 12.63%

2003

         462

$13.06 to $14.11

          6,565

-

1.25% to 1.40%

30.05% to 30.21%

2002

         551

$10.03 to $10.85

          6,024

-

1.25% to 1.40%

-23.84% to -23.73%

2001

         767

$13.15 to $14.25

        10,976

      12.94

0.85% to 1.40%

-30.42% to -30.31%

2000

         978

$18.87 to $20.48

        20,057

(a)

(a)

(a)

Federated Mid Cap Growth Strategies

2004

         489

$21.43

        10,473

-

1.40%

13.81%

2003

         627

$18.83

        11,813

-

1.40%

38.15%

2002

         764

$13.63

        10,415

-

1.40%

-27.38%

2001

      1,117

$18.77

        20,974

        1.68

0.85% to 1.40%

-23.48%

2000

      1,378

$24.53

        33,809

(a)

(a)

(a)

Federated Prime Money

2004

         266

$12.51

          3,326

        0.78

1.40%

-0.64%

2003

         392

$12.59

          4,930

        0.71

1.40%

-0.71%

2002

         583

$12.68

          7,387

        1.37

1.40%

0%

2001

         695

$12.68

          8,812

        3.44

0.85% to 1.40%

2.28%

2000

         702

$12.40

          8,703

(a)

(a)

(a)

Fidelity® VIP Contrafund®

2004

    13,694

$10.30 to $27.52

      243,399

        0.31

0.75% to 1.90%

13.19% to 14.61%

2003

    11,483

$9.10 to $24.17

      188,055

        0.43

0.75% to 1.90%

-29.37% to 27.50%

2002

    10,912

$7.22 to $19.81

      145,571

        0.86

0.45% to 1.90%

-11.07% to 78.65%

2001

    11,618

$8.12 to $21.96

      173,999

        3.56

0.45% to 1.90%

-13.93% to -3.25%

2000

    12,102

$9.43 to $24.67

      216,963

(a)

(a)

(a)

Fidelity® VIP Equity-Income

2004

    12,953

$11.31 to $25.37

      218,459

        1.49

0.75% to 1.90%

9.49% to 10.71%

2003

    12,003

$10.33 to $23.07

      192,149

        1.64

0.75% to 1.90%

27.85% to 29.33%

2002

    11,480

$8.08 to $17.95

      146,420

        1.78

0.75% to 1.90%

-18.53% to -17.57%

2001

    12,170

$9.92 to $21.92

      193,019

        6.26

0.45% to 1.90%

-6.77% to -5.67%

2000

    10,395

$10.64 to $23.40

      188,025

(a)

(a)

(a)

145

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Fidelity® VIP Growth

2004

      8,483

$6.25 to $23.41

$   109,798

        0.28

%

0.75% to 1.90%

1.30% to 2.57%

2003

      9,688

$6.17 to $22.97

      125,864

        0.26

0.75% to 1.90%

30.44% to 31.85%

2002

      9,473

$4.73 to $17.54

        98,180

        0.26

0.45% to 1.90%

-31.44% to -30.42%

2001

    10,633

$6.90 to 25.45

      167,319

        7.26

0.45% to 1.90%

-19.23% to -18.23%

2000

      9,467

$8.54 to $31.34

      209,610

(a)

(a)

(a)

Fidelity® VIP High Income

2004

      4,370

$8.76 to $12.92

        47,964

        8.75

0.80% to 2.25%

7.54% to 8.54%

2003

      5,612

$8.11 to $11.96

        56,970

        6.32

0.95% to 2.25%

24.90% to 26.10%

2002

      4,489

$6.46 to $9.53

        36,456

      10.78

0.95% to 2.25%

1.48% to 2.46%

2001

      4,973

$6.34 to $9.34

        39,385

      13.71

0.50% to 2.25%

-13.42% to -12.58%

2000

      4,980

$7.28 to $10.74

        45,512

(a)

(a)

(a)

Fidelity® VIP Asset Manager^SM

2004

         631

$15.94 to $19.00

        11,587

        2.72

1.25% to 1.40%

4.00% to 4.18%

2003

         681

$15.30 to $18.27

        12,034

        3.51

1.25% to 1.40%

16.30% to 16.53%

2002

         728

$13.13 to $15.71

        11,086

        4.06

1.25% to 1.40%

-10.01% to -9.87%

2001

         831

$14.57 to $17.45

        14,094

        6.08

0.85% to 1.40%

-5.44% to -5.30%

2000

         993

$15.39 to $18.46

        17,821

(a)

(a)

(a)

Fidelity® VIP Investment Grade Bond

2004

         118

$16.25 to $16.55

          1,958

        4.38

1.25% to 1.40%

2.99% to 3.11%

2003

         140

$15.76 to $16.07

          2,244

        4.39

1.25% to 1.40%

3.74% to 3.89%

2002

         187

$15.17 to $15.49

          2,890

        4.05

1.25% to 1.40%

8.80% to 8.96%

2001

         217

$13.92 to $14.24

          3,084

        5.86

0.85% to 1.40%

6.94% to 7.10%

2000

         278

$13.00 to $13.32

          3,700

(a)

(a)

(a)

Fidelity® VIP Index 500

2004

      3,269

$18.62 to $22.16

        70,298

        1.34

1.25% to 1.40%

9.11% to 9.21%

2003

      3,762

$17.05 to $20.31

        74,266

        1.44

1.25% to 1.40%

26.62% to 26.86%

2002

      4,125

$13.44 to $16.04

        64,190

        1.38

1.25% to 1.40%

-23.34% to -23.22%

2001

      4,961

$17.51 to $20.93

      100,783

        1.20

0.85% to 1.40%

-13.34% to -13.21%

2000

      5,672

$20.17 to $24.15

      133,049

(a)

(a)

(a)

146

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Fidelity® VIP Overseas

2004

         986

$10.99 to $16.51

$     15,669

        1.18

%

0.75% to 1.50%

11.93% to 12.79%

2003

         979

$9.75 to $14.74

        13,904

        0.58

0.75% to 1.50%

41.30% to 42.34%

2002

         654

$6.85 to $10.42

          6,617

        0.85

0.75% to 1.50%

-21.47% to -20.88%

2001

         770

$8.67 to $13.26

          9,914

      13.97

0.45% to 1.50%

-22.35% to -21.76%

2000

         872

$11.08 to $17.06

        14,451

(a)

(a)

(a)

Franklin Small Cap Value Securities

2004

         294

$14.58 to $14.96

          4,384

        0.04

0.75% to 1.50%

22.18% to 22.82%

2003

           55

$12.02 to $12.18

             662

        0.19

0.75% to 1.25%

30.59% to 31.11%

2002

           39

$9.22 to $9.29

             365

(c)

0.75% to 1.25%

-21.04% to -19.73%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING GET Fund - Series H

2004

      8,237

$10.27 to $10.75

        85,522

        4.57

1.00% to 1.90%

-0.29% to 0.56%

2003

    10,102

$10.30 to $10.69

      105,009

        4.11

1.00% to 1.90%

1.18% to 2.20%

2002

    11,865

$10.18 to $10.46

      121,603

        3.59

1.00% to 1.90%

2.78% to 3.72%

2001

    13,233

$9.91 to $10.01

      131,686

        0.47

1.00% to 2.40%

-1.24% to -0.33%

2000

    14,101

$10.03 to $10.12

      141,764

(a)

(a)

(a)

ING GET Fund - Series I

2004

      5,921

$10.14 to $10.37

        60,675

        4.11

1.45% to 1.90%

-0.78% to -0.29%

2003

      7,257

$10.22 to $10.40

        74,750

        3.44

1.45% to 1.90%

1.19% to 1.66%

2002

      8,275

$10.10 to $10.23

        84,079

3.54

1.45% to 1.90%

3.35% to 3.82%

2001

      8,909

$9.78 to $9.86

        87,402

0.25

1.35% to 2.40%

-0.76% to -0.30%

2000

      9,419

$9.85 to $9.89

        92,929

(a)

(a)

(a)

ING GET Fund - Series J

2004

      4,652

$10.04 to $10.25

        47,133

4.37

1.45% to 1.90%

-0.79% to -0.39%

2003

      5,895

$10.12 to $10.29

        60,090

3.65

1.45% to 1.90%

0.70% to 1.18%

2002

      7,113

$10.05 to $10.17

        71,844

3.49

1.45% to 1.90%

4.05% to 4.53%

2001

      7,719

$9.66 to $9.73

        74,801

0.18

1.35% to 2.40%

-0.63% to -0.16%

2000

      8,207

$9.72 to $9.75

        79,872

(a)

(a)

(a)

147

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING GET Fund - Series K

2004

      5,530

$9.80 to $10.24

$     55,421

        3.60

%

1.45% to 2.40%

-1.80% to -0.87%

2003

      6,945

$9.98 to $10.33

        70,505

        3.20

1.45% to 2.40%

-0.10% to 0.88%

2002

      8,037

$9.99 to $10.24

        81,260

        2.68

1.45% to 2.40%

3.20% to 4.20%

2001

      9,082

$9.68 to $9.82

        88,558

-

1.35% to 2.40%

-3.19% to -2.24%

2000

      9,357

$10.00 to $10.05

        93,790

(a)

(a)

(a)

ING GET Fund - Series L

2004

      5,199

$9.80 to $10.20

        51,909

        3.99

1.45% to 2.40%

-1.90% to -0.87%

2003

      6,598

$9.99 to $10.29

        66,868

        3.48

1.45% to 2.40%

1.01% to 1.98%

2002

      7,535

$9.89 to $10.09

        75,255

        0.05

1.45% to 2.40%

0.22% to 1.20%

2001

      8,101

$9.87 to $9.97

        80,345

        4.63

1.35% to 2.40%

-1.53% to -0.46%

2000

           58

$10.01 to $10.02

             585

(a)

(a)

(a)

ING GET Fund - Series M

2004

      7,647

$9.88 to $10.25

        76,815

        4.34

1.45% to 2.40%

-1.59% to -0.68%

2003

      9,320

$10.04 to $10.32

        94,718

        3.54

1.45% to 2.40%

1.31% to 2.38%

2002

    11,558

$9.91 to $10.08

      115,381

        0.03

1.45% to 2.40%

1.12% to 2.10%

2001

    12,531

$9.80 to $9.87

      123,165

(b)

1.45% to 2.40%

(b)

2000

(b)

(b)

(b)

(b)

(b)

(b)

ING GET Fund - Series N

2004

      6,188

$10.07 to $10.42

        63,310

        3.42

1.45% to 2.40%

-0.79% to 0.19%

2003

      7,482

$10.15 to $10.40

        76,785

        2.65

1.45% to 2.40%

1.81% to 2.77%

2002

      8,982

$9.97 to $10.12

        90,143

        0.02

1.45% to 2.40%

-2.77% to -1.82%

2001

    10,181

$10.25 to $10.31

      104,606

(b)

(b)

(b)

2000

(b)

(b)

(b)

(b)

(b)

(b)

ING GET Fund - Series P

2004

      4,760

$9.93 to $10.25

        47,889

        3.64

1.45% to 2.40%

-1.00% to 0.00%

2003

      5,731

$10.03 to $10.25

        58,003

        2.56

1.45% to 2.40%

1.42% to 2.40%

2002

      7,680

$9.89 to $10.01

        76,334

        0.04

1.45% to 2.40%

-1.16% to -0.20%

2001

      8,288

$10.00 to $10.03

        83,012

(b)

(b)

(b)

2000

(b)

(b)

(b)

(b)

(b)

(b)

148

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING GET Fund - Series Q

2004

      3,662

$10.21 to $10.51

$     37,872

        3.57

%

1.45% to 2.40%

-0.49% to 0.38%

2003

      4,282

$10.26 to $10.47

        44,336

-

1.45% to 2.40%

2.60% to 3.66%

2002

      5,460

$10.00 to $10.10

        54,826

        3.81

1.45% to 2.40%

0.00% to 0.97%

2001

         162

$10.00

          1,620

(b)

(b)

(b)

2000

(b)

(b)

(b)

(b)

(b)

(b)

ING GET Fund - Series R

2004

      3,152

$10.45 to $10.73

        33,352

        3.22

1.45% to 2.40%

0.29% to 1.23%

2003

      3,634

$10.42 to $10.60

        38,175

        0.01

1.45% to 2.40%

3.58% to 4.54%

2002

      4,312

$10.06 to $10.14

        43,556

(c)

1.45% to 2.40%

0.65% to 1.42%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING GET Fund - Series S

2004

      3,472

$10.37 to $10.75

        36,434

        2.65

1.00% to 2.40%

0.19% to 1.70%

2003

      4,236

$10.35 to $10.57

        44,140

        0.10

1.00% to 2.40%

3.40% to 4.86%

2002

      5,334

$10.01 to $10.08

        53,553

(c)

1.00% to 2.40%

0.14% to 0.87%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING GET Fund - Series T

2004

      2,687

$10.42 to $10.65

        28,261

        2.80

1.45% to 2.40%

0.19% to 1.14%

2003

      3,062

$10.40 to $10.53

        32,020

        0.14

1.45% to 2.40%

3.38% to 4.36%

2002

      3,908

$10.06 to $10.09

        39,378

(c)

1.45% to 2.40%

0.88% to 0.93%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING GET Fund - Series U

2004

      2,553

$10.59 to $10.80

        27,273

        1.91

1.45% to 2.40%

0.95% to 1.89%

2003

      2,854

$10.49 to $10.60

        30,078

-

1.45% to 2.40%

5.21% to 6.00%

2002

           50

$9.99 to $10.00

             503

(c)

0.95% to 1.75%

-0.05% to 0.00%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

149

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

150

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING Legg Mason Value

2004

           80

$10.95 to $10.96

$          882

(e)

%

0.95% to 1.90%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

ING MFS Total Return

2004

         154

$12.39 to $12.85

          1,922

        2.76

0.75% to 1.50%

9.74% to 10.24%

2003

           35

$11.29 to $11.33

             401

(d)

0.75% to 1.25%

(d)

2002

(d)

(d)

(d)

(d)

(d)

(d)

2001

(d)

(d)

(d)

(d)

(d)

(d)

2000

(d)

(d)

(d)

(d)

(d)

(d)

ING T. Rowe Price Equity Income

2004

         168

$13.81 to $14.63

          2,335

        1.25

0.75% to 1.50%

13.48% to 13.99%

2003

           58

$12.17 to $12.22

             704

(d)

0.75% to 1.25%

(d)

2002

(d)

(d)

(d)

(d)

(d)

(d)

2001

(d)

(d)

(d)

(d)

(d)

(d)

2000

(d)

(d)

(d)

(d)

(d)

(d)

ING Aeltus Enhanced Index

2004

             7

$10.98 to $11.13

               79

-

0.75% to 1.25%

9.12%

2003

             1

$10.20

                 6

-

0.75%

(d)

2002

(d)

(d)

(d)

(d)

(d)

(d)

2001

(d)

(d)

(d)

(d)

(d)

(d)

2000

(d)

(d)

(d)

(d)

(d)

(d)

ING American Century Select

2004

           49

$9.93 to $10.06

             488

-

0.75% to 1.25%

3.44% to 3.93%

2003

           39

$9.60 to $9.68

             380

-

0.75% to 1.25%

32.60% to 33.33%

2002

             1

$7.24 to $7.26

                 9

(c)

0.75% to 1.25%

-23.21% to -6.63%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

151

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING American Century Small Cap Value

2004

           77

$12.87 to $15.00

$       1,034

-

%

0.75% to 1.50%

19.89% to 20.35%

2003

           50

$10.81 to $12.48

             561

        0.16

0.75% to 1.25%

16.24% to 34.53%

2002

           20

$8.11 to $9.30

             173

(c)

0.75% to 1.25%

-19.84% to -1.82%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING Baron Small Cap Growth

2004

         200

$14.37 to $16.22

          2,941

-

0.75% to 1.50%

26.05% to 27.04%

2003

         119

$11.40 to $12.79

          1,381

-

0.75% to 1.50%

18.29% to 32.34%

2002

           21

$8.72 to $9.68

             193

(c)

0.75% to 1.25%

-12.61% to -1.83%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING Goldman Sachs® Capital Growth

2004

           29

$10.55 to $12.61

             315

-

0.75% to 1.25%

7.43% to 7.98%

2003

             2

$9.82 to $11.70

               25

-

0.75% to 1.25%

0.2268

2002

             2

$8.07

               18

(c)

0.75% to 0.80%

-3.04% to -0.05%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING JPMorgan International

2004

      3,467

$8.33 to $23.96

        44,030

        1.15

0.75% to 1.90%

16.67% to 18.03%

2003

      3,196

$7.14 to $20.30

        34,019

        1.05

0.75% to 1.90%

27.05% to 28.48%

2002

      2,909

$5.62 to $15.80

        24,044

        0.62

0.75% to 1.90%

-19.64% to -18.69%

2001

      2,892

$7.00 to $19.44

        30,449

      25.04

0.45% to 2.25%

-28.33% to -27.48%

2000

      2,451

$9.76 to $26.80

        38,280

(a)

(a)

(a)

ING JPMorgan Mid Cap Value

2004

         154

$13.93 to $15.92

          2,215

        0.21

0.75% to 1.50%

18.76% to 19.71%

2003

           55

$11.73 to $13.32

             678

        0.48

0.75% to 1.50%

28.46% to 29.02%

2002

             9

$9.17 to $9.20

               87

(c)

0.75% to 1.25%

-8.51% to 0.47%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

152

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING MFS Capital Opportunities

2004

      2,955

$6.18 to $27.61

$     38,224

        0.42

%

0.75% to 1.90%

10.75% to 12.05%

2003

      3,394

$5.58 to $24.64

        39,287

        0.20

0.75% to 1.90%

25.68% to 27.14%

2002

      3,869

$4.44 to $20.94

        35,741

-

0.45% to 1.90%

-31.49% to -30.48%

2001

      4,710

$6.49 to $30.11

        62,832

      19.25

0.45% to 2.25%

-26.19% to -25.29%

2000

      4,048

$8.79 to $40.30

        78,233

(a)

(a)

(a)

ING OpCap Balanced Value

2004

         180

$11.13 to $13.87

          2,126

        1.01

0.75% to 1.50%

8.69% to 9.42%

2003

         116

$10.24 to $12.69

          1,250

        1.66

0.75% to 1.50%

28.66%

2002

             2

$8.34 to $8.37

               15

(c)

0.80% to 1.25%

-0.14% to 5.35%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING Oppenheimer Global

2004

             2

$12.30 to $12.47

               22

-

0.75% to 1.25%

13.57% to 14.19%

2003

             -

$10.83 to $10.92

                 5

-

0.75% to 1.25%

30.17% to 30.78%

2002

             -

$8.32 to $8.35

                 1

(c)

0.75% to 1.25%

-10.41% to -0.17%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING PIMCO Total Return

2004

         339

$11.18 to $11.50

          3,885

-

0.75% to 1.50%

2.73% to 3.60%

2003

         237

$10.82 to $11.10

          2,613

        3.68

0.75% to 1.50%

0.93% to 3.26%

2002

         119

$10.70 to $10.75

          1,275

(c)

0.75% to 1.50%

3.07% to 7.55%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING Salomon Brothers Aggressive Growth

2004

      4,742

$5.17 to $14.90

        53,255

-

0.75% to 1.90%

7.71% to 8.92%

2003

      5,581

$4.80 to $13.68

        58,639

-

0.75% to 1.90%

35.59% to 37.25%

2002

      6,053

$3.54 to $9.97

        47,008

-

0.45% to 1.90%

-36.54% to -35.60%

2001

      7,478

$ 5.58 to $15.53

        91,535

        6.31

0.45% to 2.25%

-26.64% to -25.74%

2000

      8,010

$7.60 to $20.93

      136,685

(a)

(a)

(a)

153

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING Salomon Brothers Fundamental Value

2004

         129

$11.05 to $13.75

$       1,483

-

%

0.75% to 1.50%

6.87% to 7.64%

2003

         113

$10.34 to $12.80

          1,215

        0.75

0.75% to 1.50%

0.3953

2002

             1

7.69

                 5

(c)

0.75%

0.67%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING Salomon Brothers Investors Value

2004

           35

$11.02 to $13.23

             387

        1.06

0.75% to 1.25%

8.68% to 9.19%

2003

           17

$10.14 to $12.14

             179

        0.65

0.75% to 1.25%

29.67%

2002

             2

7.82

               14

(c)

1.25%

-21.97%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING T. Rowe Price Diversified Mid Cap Growth

2004

           53

$10.90 to $14.04

             612

-

0.75% to 1.50%

6.86% to 7.79%

2003

           96

$10.20 to $13.05

          1,017

-

0.75% to 1.50%

42.82% to 43.46%

2002

           24

$7.31 to $7.34

             179

(c)

0.75% to 1.25%

-8.53% to -0.37%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING T. Rowe Price Growth Equity

2004

      2,801

$12.62 to $25.72

        73,921

        0.15

0.75% to 1.50%

8.39% to 9.21%

2003

      3,123

$11.57 to $23.71

        74,887

        0.15

0.75% to 1.50%

28.96% to 30.00%

2002

      3,205

$8.90 to $18.37

        58,443

        0.19

0.45% to 1.50%

-24.44% to -23.64%

2001

      3,768

$ 11.70 to $24.29

        89,395

      15.41

0.45% to 2.25%

-11.56% to -10.85%

2000

      4,250

$13.14 to $27.44

      113,230

(a)

(a)

(a)

ING UBS U.S. Large Cap Equity

2004

      3,631

$6.88 to $15.16

        43,678

        0.77

0.75% to 1.90%

12.60% to 13.90%

2003

      3,988

$6.11 to $13.31

        42,940

        0.57

0.75% to 1.90%

22.69% to 24.04%

2002

      4,627

$4.98 to $10.73

        40,669

        0.20

0.75% to 1.90%

-26.32% to -25.45%

2001

      5,830

$6.77 to $14.39

        69,394

      20.49

0.45% to 1.90%

-22.40% to -21.48%

2000

      6,216

$8.71 to $18.33

        97,910

(a)

(a)

(a)

154

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING Van Kampen Comstock

2004

         298

$12.18 to $14.32

$       3,726

-

%

0.75% to 1.50%

15.23% to 15.84%

2003

           83

$10.64 to $12.38

             899

        0.77

0.75% to 1.25%

28.04% to 28.69%

2002

           38

$8.31 to $8.34

             319

(c)

0.75% to 1.25%

-18.72% to -2.95%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING Van Kampen Equity and Income

2004

           12

$10.36 to $11.13

             137

-

0.75% to 1.50%

8.94% to 9.76%

2003

             5

$9.51 to $10.14

               53

        0.01

0.75% to 1.50%

25.47%

2002

-

8.01

             428

(c)

1.25%

0.33%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING VP Strategic Allocation Balanced

2004

      1,065

$15.45 to $17.95

        20,822

        1.30

0.75% to 2.25%

8.74% to 9.38%

2003

         948

$14.19 to $16.41

        16,937

        1.41

0.75% to 2.25%

17.79% to 18.57%

2002

         977

$12.03 to $13.84

        14,344

        2.50

0.45% to 1.40%

-10.81% to -9.94%

2001

      1,082

$13.47 to $15.41

        17,390

        2.50

0.45% to 2.25%

-8.30% to -7.65%

2000

      1,232

$14.66 to $16.69

        21,090

(a)

(a)

(a)

ING VP Strategic Allocation Growth

2004

         771

$15.68 to $18.56

        15,631

        1.04

0.75% to 2.25%

10.33% to 11.20%

2003

         813

$14.18 to $16.69

        14,808

        0.87

0.75% to 2.25%

22.52% to 23.45%

2002

         835

$11.55 to $13.52

        11,257

        1.75

0.75% to 2.25%

-15.04% to -14.40%

2001

         898

$13.56 to $15.80

        13,876

        1.59

0.45% to 2.25%

-12.87% to -12.21%

2000

      1,013

$15.52 to $18.00

        17,520

(a)

(a)

(a)

ING VP Strategic Allocation Income

2004

         926

$15.55 to $17.54

        18,730

        1.82

0.75% to 1.50%

6.50% to 7.15%

2003

      1,031

$14.58 to $16.37

        19,422

        2.31

0.75% to 1.40%

12.05% to 12.82%

2002

      1,237

$12.99 to $14.51

        20,088

        3.32

0.75% to 1.40%

-5.69% to -0.78%

2001

      1,380

$10.79 to $15.29

        23,347

        4.36

0.45% to 2.25%

-3.75% to -3.11%

2000

      1,518

$11.13 to $15.77

        26,191

(a)

(a)

(a)

155

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING VP Growth and Income

2004

    18,090

$6.94 to $216.86

$   423,357

        2.31

%

0.75% to 2.25%

6.28% to 7.59%

2003

    20,842

$6.53 to $202.58

      455,361

-

0.75% to 2.25%

-24.93% to 25.16%

2002

    24,165

$5.28 to $162.71

      415,966

        0.84

0.45% to 1.90%

-26.42% to 60.86%

2001

    29,079

$7.17 to $219.66

      663,646

        0.60

0.45% to 2.25%

-19.96% to -18.98%

2000

    32,914

$8.96 to $272.61

      928,210

(a)

(a)

(a)

ING GET U.S. Core - Series 1

2004

      2,214

$10.32 to $10.48

        23,042

        0.68

1.45% to 2.40%

0.98% to 1.95%

2003

      2,531

$10.22 to $10.28

        25,945

(d)

1.45% to 2.40%

(d)

2002

(d)

(d)

(d)

(d)

(d)

(d)

2001

(d)

(d)

(d)

(d)

(d)

(d)

2000

(d)

(d)

(d)

(d)

(d)

(d)

ING GET U.S. Core - Series 2

2004

      1,939

$10.14 to $10.27

        19,803

        0.10

1.45% to 2.40%

1.20% to 2.19%

2003

      2,442

$10.02 to $10.05

        24,501

(d)

1.45% to 2.40%

(d)

2002

(d)

(d)

(d)

(d)

(d)

(d)

2001

(d)

(d)

(d)

(d)

(d)

(d)

2000

(d)

(d)

(d)

(d)

(d)

(d)

ING GET U.S. Core - Series 3

2004

      5,491

$9.89 to $9.99

        54,614

        0.00

1.45% to 2.40%

-1.00% to -0.10%

2003

         196

$10.00

          1,965

(d)

0.95% to 1.75%

(d)

2002

(d)

(d)

(d)

(d)

(d)

(d)

2001

(d)

(d)

(d)

(d)

(d)

(d)

2000

(d)

(d)

(d)

(d)

(d)

(d)

ING GET U.S. Core - Series 4

2004

         788

$10.33 to $10.41

          8,173

(e)

1.45% to 2.40%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

156

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING GET U.S. Core - Series 5

2004

         422

$10.44 to $10.50

$       4,428

(e)

%

1.45% to 2.40%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

ING GET U.S. Core - Series 6

2004

      8,740

$10.06 to $10.09

        88,090

(e)

1.45% to 2.40%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

ING GET U.S. Core - Series 7

2004

      5,702

$10.00

        57,015

(e)

0.95% to 1.90%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

ING VP Global Science and Technology

2004

      2,857

$3.56 to $11.96

        10,373

-

0.75% to 1.90%

-3.17% to -1.86%

2003

      3,595

$3.66 to $12.23

        13,372

-

0.75% to 1.90%

42.64% to 44.62%

2002

      2,536

$2.55 to $2.67

          6,564

-

0.75% to 1.90%

-42.40% to -41.72%

2001

      2,631

$4.42 to $4.62

        11,745

-

0.45% to 1.90%

-24.42 to -23.54%

2000

      1,680

$5.82 to $6.09

          9,833

(a)

(a)

(a)

ING VP Growth

2004

      2,380

$5.38 to $14.86

        28,081

        0.12

0.75% to 1.90%

5.25% to 6.37%

2003

      2,874

$5.11 to $13.97

        32,091

-

0.75% to 1.90%

27.75% to 29.46%

2002

      3,203

$4.00 to $10.80

        28,286

-

0.75% to 1.90%

-30.30% to -29.47%

2001

      4,148

$5.73 to $15.31

        52,088

      12.13

0.45% to 2.25%

-28.45% to -27.61%

2000

      4,705

$8.02 to $21.15

        85,002

(a)

(a)

(a)

157

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING VP Index Plus LargeCap

2004

    10,827

$7.87 to $19.33

$   182,362

        1.01

%

0.75% to 2.25%

8.40% to 9.77%

2003

    12,166

$7.26 to $17.61

      186,926

        1.03

0.75% to 2.25%

23.89% to 25.16%

2002

    13,185

$5.86 to $14.07

      154,417

        0.24

0.45% to 2.25%

-23.02% to -21.88

2001

    15,160

$7.62 to $18.06

      224,762

        4.07

0.45% to 2.25%

-15.27% to -5.62%

2000

    14,826

$8.99 to $21.06

      261,795

(a)

(a)

(a)

ING VP Index Plus MidCap

2004

         944

$14.59 to $20.23

        18,233

        0.40

0.75% to 1.50%

14.85% to 15.72%

2003

         901

$12.63 to $17.49

        15,032

        0.44

0.75% to 1.50%

30.49% to 31.40%

2002

         925

$12.33 to $13.31

        11,779

        0.50

0.45% to 1.50%

-13.40% to -12.49%

2001

         631

$14.24 to $15.26

          9,214

        6.54

0.45% to 1.50%

-2.80% to 12.09%

2000

         452

$14.50 to $15.59

          6,733

(a)

(a)

(a)

ING VP Index Plus SmallCap

2004

         592

$14.45 to $16.34

          8,963

        0.14

0.75% to 1.50%

20.22% to 21.21%

2003

         538

$12.02 to $13.49

          6,712

        0.16

0.75% to 1.50%

34.15% to 35.13%

2002

         464

$8.96 to $9.99

          4,275

        0.19

0.75% to 1.50%

-14.50% to -13.86%

2001

         225

$10.48 to $11.60

          2,411

        3.71

0.45% to 1.50%

0.87% to 1.64%

2000

         104

$10.39 to $11.42

          1,098

(a)

(a)

(a)

ING VP International Equity

2004

      1,353

$6.98 to $9.75

        13,340

        1.15

0.75% to 1.90%

14.99% to 16.21%

2003

         993

$6.07 to $8.39

          8,924

        0.89

0.75% to 1.90%

29.42% to 31.09%

2002

         836

$4.69 to $6.40

          5,228

        0.22

0.75% to 1.90%

-28.07% to -27.23%

2001

         954

$6.51 to $8.79

          7,991

        0.12

0.45% to 2.25%

-25.34% to -24.45%

2000

         863

$8.73 to $11.64

          9,708

(a)

(a)

(a)

ING VP Small Company

2004

      4,382

$10.72 to $23.05

        82,870

        0.28

0.75% to 1.90%

12.13% to 13.55%

2003

      4,826

$9.56 to $20.30

        80,458

        0.24

0.75% to 1.90%

34.84% to 36.42%

2002

      4,213

$7.09 to $14.88

        52,158

        0.52

0.45% to 1.90%

-24.69% to -23.57%

2001

      3,814

$9.41 to $19.53

        62,576

        3.89

0.45% to 2.25%

0.50% to 3.22%

2000

      2,815

$9.22 to $18.92

        47,270

(a)

(a)

(a)

158

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING VP Value Opportunity

2004

         909

$12.23 to $18.71

$     16,285

        0.82

%

0.75% to 1.50%

8.48% to 9.35%

2003

      1,131

$11.21 to $17.11

        18,645

        0.76

0.75% to 1.50%

22.79% to 23.63%

2002

      1,272

$9.36 to $13.84

        17,001

        0.44

0.45% to 1.50%

-27.07% to -26.30%

2001

      1,441

$12.75 to $18.83

        26,362

        5.21

0.45% to 1.50%

-10.97% to 0.58%

2000

         963

$14.22 to $20.99

        19,710

(a)

(a)

(a)

ING VP International Value

2004

         247

$11.76 to $13.22

          2,980

        1.29

0.75% to 1.50%

15.63% to 16.51%

2003

         115

$10.17 to $11.37

          1,199

        1.60

0.75% to 1.50%

15.86% to 29.02%

2002

           49

$7.95 to $8.83

             404

(c)

0.75% to 1.50%

-19.18% to -1.19%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING VP MagnaCap - Class I

2004

           13

$9.52 to $9.64

             125

        2.40

0.75% to 1.25%

7.81% to 8.19%

2003

             5

$8.83 to $8.91

               42

        1.03

0.75% to 1.25%

30.07%

2002

             4

$6.85

               27

(c)

0.75%

-21.38%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING VP MagnaCap - Class S

2004

         166

$9.60 to $9.95

          1,635

        1.48

0.95% to 1.90%

6.90% to 7.92%

2003

         101

$8.98 to $9.22

             928

        0.71

0.95% to 1.90%

28.10% to 29.49%

2002

           69

$7.01 to $7.12

             490

        0.95

0.95% to 1.90%

-25.77% to -23.73%

2001

           46

$9.28 to $9.34

             431

(b)

0.95% to 1.90%

-5.87% to 0.00%

2000

(b)

(b)

(b)

(b)

(b)

(b)

ING VP MidCap Opportunities - Class I

2004

           32

$10.28 to $13.84

             340

-

0.75% to 1.25%

10.18% to 10.69%

2003

           96

$9.33 to $9.45

             905

-

0.75% to 1.25%

34.83% to 35.58%

2002

           11

$6.89 to $6.97

               76

(c)

0.75% to 1.50%

-20.85% to -9.47%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

159

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING VP MidCap Opportunities - Class S

2004

      1,180

$8.94 to $9.26

$     10,784

-

%

0.95% to 1.90%

9.02% to 10.11%

2003

         818

$8.20 to $8.41

          6,818

-

0.95% to 1.90%

34.21% to 35.43%

2002

         418

$6.11 to $6.21

          2,583

-

0.95% to 1.90%

-27.40% to -26.70%

2001

         102

$8.42 to $8.48

             865

(b)

0.95% to 1.90%

-16.75% to -10.14%

2000

(b)

(b)

(b)

(b)

(b)

(b)

ING VP Real Estate

2004

           86

$13.88 to $13.93

          1,193

(e)

0.75% to 1.25%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

ING VP SmallCap Opportunities - Class I

2004

         128

$7.42 to $12.78

             970

-

0.75% to 1.25%

8.80% to 9.42%

2003

         202

$6.78 to $11.71

          1,392

-

0.75% to 1.50%

36.95% to 37.45%

2002

           12

$4.98 to $5.02

               58

(c)

0.75% to 1.25%

-33.20% to -9.70%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

ING VP SmallCap Opportunities - Class S

2004

         765

$6.82 to $7.07

          5,342

-

0.95% to 1.90%

7.91% to 8.94%

2003

         704

$6.32 to $6.49

          4,528

-

0.95% to 1.90%

35.62% to 37.21%

2002

         376

$4.66 to $4.73

          1,772

-

0.95% to 1.90%

-44.82% to -44.28%

2001

         151

$8.44 to $8.50

          1,280

(b)

0.95% to 1.90%

-24.98% to -12.33%

2000

(b)

(b)

(b)

(b)

(b)

(b)

ING VP Balanced

2004

      7,519

$9.85 to $26.84

      189,559

        2.00

0.75% to 2.25%

7.30% to 8.58%

2003

      6,962

$9.18 to $24.72

      172,818

        1.94

0.75% to 2.25%

16.65% to 18.00%

2002

      7,046

$7.87 to $26.80

      148,868

        1.07

0.45% to 2.25%

-12.01% to -10.71%

2001

      8,277

$8.94 to $30.01

      189,948

        5.84

0.45% to 2.25%

-6.04% to 0.46%

2000

      8,309

$9.52 to $24.76

      199,768

(a)

(a)

(a)

160

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

ING VP Emerging Markets

2004

           70

$11.02

$          770

        0.76

%

1.40%

20.04%

2003

           88

$9.18

             809

-

1.40%

45.25%

2002

         103

$6.32

             649

-

1.40%

-10.60%

2001

         129

$7.08

             912

      19.78

0.85% to 1.40%

-11.68%

2000

         157

$8.01

          1,255

(a)

(a)

(a)

ING VP Intermediate Bond

2004

      7,665

$11.37 to $19.78

      137,880

        7.97

0.75% to 2.25%

2.91% to 4.11%

2003

      8,243

$10.94 to $19.00

      143,435

        1.80

0.75% to 2.25%

4.22% to 5.51%

2002

      9,939

$11.86 to $18.01

      164,563

        3.25

0.75% to 2.25%

6.28% to 7.53%

2001

      9,525

$11.16 to $16.75

      144,459

        6.51

0.45% to 2.25%

6.67% to 7.93%

2000

      6,869

$10.46 to $15.52

        99,490

(a)

(a)

(a)

ING VP Money Market

2004

    15,367

$10.10 to $14.51

      192,781

        1.13

0.75% to 2.25%

-0.88% to 0.35%

2003

    13,149

$10.02 to $14.46

      173,894

        1.89

0.75% to 2.25%

-1.07% to 0.14%

2002

    19,939

$10.30 to $14.44

      262,556

        3.85

0.75% to 2.25%

-0.31% to 0.86%

2001

    22,423

$10.33 to $48.45

      293,027

        4.69

0.45% to 2.25%

1.33% to 3.16%

2000

    16,310

$10.13 to $13.88

      211,809

(a)

(a)

(a)

ING VP Natural Resources

2004

         111

$16.41 to $17.48

          1,861

        0.95

0.75% to 1.50%

11.03% to 11.76%

2003

         116

$14.78 to $15.64

          1,732

-

0.75% to 1.50%

28.52% to 29.58%

2002

         135

$11.48 to $12.07

          1,567

        0.19

0.75% to 1.50%

-3.56% to -2.83%

2001

         166

$11.90 to $12.42

          2,003

-

0.45% to 1.50%

-17.19% to -16.57%

2000

         193

$14.35 to $14.87

          2,801

(a)

(a)

(a)

Janus Aspen Balanced

2004

      9,164

$9.95 to $27.77

      156,790

        2.08

0.75% to 1.90%

6.53% to 7.72%

2003

    11,471

$9.34 to $25.95

      186,531

        2.17

0.75% to 1.90%

-46.48% to 13.18%

2002

    13,695

$8.35 to $23.08

      197,825

        2.41

0.45% to 1.90%

-8.22% to 109.99%

2001

    15,239

$9.10 to $25.02

      240,241

        2.63

0.45% to 1.90%

-6.53% to -5.42%

2000

    13,985

$9.73 to $26.63

      244,144

(a)

(a)

(a)

161

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Janus Aspen Flexible Income

2004

         794

$11.46 to $21.38

$     15,748

        5.17

%

0.75% to 1.50%

2.40% to 3.19%

2003

      1,144

$11.13 to $20.72

        22,158

        4.66

0.75% to 1.50%

4.82% to 5.61%

2002

      1,538

$12.85 to $19.62

        28,392

        4.45

0.45% to 1.50%

8.83% to 9.98%

2001

      1,415

$11.72 to $17.89

        23,940

        5.95

0.45% to 1.50%

-0.78% to 6.93%

2000

      1,182

$10.97 to $16.73

        18,730

(a)

(a)

(a)

Janus Aspen Growth

2004

      6,667

$5.85 to $21.12

        84,481

        0.13

0.75% to 1.90%

2.45% to 3.70%

2003

      8,493

$5.71 to $20.49

      105,326

        0.08

0.75% to 1.90%

29.19% to 30.80%

2002

    10,142

$4.42 to $15.78

        98,503

-

0.45% to 1.90%

-27.91% to -26.84%

2001

    13,150

$6.13 to $21.78

      176,779

        0.26

0.45% to 2.25%

-26.17% to -25.27%

2000

    14,324

$8.30 to $29.34

      267,653

(a)

(a)

(a)

Janus Aspen Mid Cap Growth

2004

      7,231

$4.59 to $21.68

        94,264

-

0.75% to 1.90%

18.30% to 19.85%

2003

      7,749

$3.88 to $18.09

        88,717

-

0.75% to 1.90%

32.77% to 34.10%

2002

      8,940

$2.92 to $15.64

        77,233

-

0.45% to 1.90%

-29.31% to -28.26%

2001

    11,480

$4.14 to $21.80

      141,806

-

0.45% to 1.90%

-40.61% to -39.88%

2000

    12,172

$6.97 to $36.27

      274,462

(a)

(a)

(a)

Janus Aspen Worldwide Growth

2004

    10,934

$5.95 to $23.00

      154,245

        0.94

0.75% to 1.90%

2.76% to 3.96%

2003

    13,736

$5.79 to $22.26

      190,923

        1.05

0.75% to 1.90%

21.64% to 23.07%

2002

    17,171

$4.76 to $18.46

      198,280

        0.84

0.45% to 1.90%

-26.92% to -25.84%

2001

    20,979

$6.51 to $24.89

      331,396

        0.44

0.45% to 2.25%

-23.92% to -22.98%

2000

    21,842

$8.56 to $32.41

      483,863

(a)

(a)

(a)

Lord Abbett Growth and Income

2004

         591

$11.21 to $13.69

          6,773

        1.07

0.75% to 1.50%

10.99% to 11.78%

2003

         303

$10.10 to $12.27

          3,110

        1.02

0.75% to 1.50%

29.43% to 30.09%

2002

           54

$7.85 to $7.91

             422

(c)

0.75% to 1.25%

-17.45% to -15.55%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

162

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Lord Abbett Mid-Cap Value

2004

         292

$12.45 to $14.98

$       3,732

        0.40

%

0.75% to 1.50%

22.18% to 23.12%

2003

         117

$10.19 to $12.20

          1,217

        0.66

0.75% to 1.50%

3.85% to 23.87%

2002

           55

$8.38 to $9.87

             474

(c)

0.75% to 1.25%

-13.36% to 1.56%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

MFS® VIT Strategic Income

2004

         181

$13.78 to $13.96

          2,503

        5.05

1.25% to 1.40%

6.25% to 6.32%

2003

         194

$12.97 to $13.13

          2,524

        5.90

1.25% to 1.40%

8.81% to 9.05%

2002

         228

$11.92 to $12.04

          2,720

        2.91

1.25% to 1.40%

6.89% to 7.05%

2001

         156

$11.15 to $11.25

          1,742

        3.89

0.85% to 1.40%

3.28% to 3.44%

2000

         142

$10.80 to $10.87

          1,537

(a)

(a)

(a)

MFS® VIT Total Return

2004

      9,461

$12.25 to $19.78

      142,497

        1.52

0.95% to 1.90%

9.18% to 10.30%

2003

      7,849

$11.22 to $18.00

      110,405

        1.64

0.95% to 1.90%

14.14% to 15.18%

2002

      7,407

$9.83 to $15.67

        91,725

        1.74

0.95% to 1.90%

-6.97% to -6.07%

2001

      7,002

$10.57 to $16.73

        93,910

        5.19

0.50% to 1.90%

-1.67% to -0.70%

2000

      4,368

$10.75 to $16.90

        63,398

(a)

(a)

(a)

Oppenheimer Aggressive Growth

2004

      3,156

$4.71 to $15.29

        32,874

-

0.95% to 1.90%

17.46% to 18.63%

2003

      3,313

$4.01 to $12.93

        29,115

-

0.95% to 1.90%

23.01% to 24.42%

2002

      3,447

$3.26 to $10.43

        23,930

        0.67

0.95% to 1.90%

-29.17% to -28.48%

2001

      4,063

$4.60 to $14.62

        40,449

      15.39

0.50% to 2.25%

-32.58% to -31.92%

2000

      3,454

$6.82 to $21.54

        57,052

(a)

(a)

(a)

Oppenheimer Global Securities

2004

      2,073

$15.03 to $23.47

        43,720

        1.17

0.75% to 1.50%

17.37% to 18.23%

2003

      1,634

$12.73 to $19.94

        29,539

        0.55

0.75% to 1.50%

40.97% to 41.96%

2002

      1,174

$10.74 to $14.12

        15,177

        0.57

0.75% to 1.50%

-23.30% to -22.72%

2001

         977

$14.01 to $18.36

        16,403

      12.79

0.75% to 1.50%

-13.36% to -12.70%

2000

         881

$16.17 to $21.14

        17,260

(a)

(a)

(a)

163

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Oppenheimer Main Street®

2004

      5,694

$8.27 to $13.79

$     68,396

        0.85

%

0.80% to 2.25%

7.40% to 8.45%

2003

      5,799

$7.70 to $12.76

        65,121

        0.86

0.95% to 2.25%

24.19% to 25.42%

2002

      5,617

$6.20 to $10.19

        48,801

        0.77

0.95% to 2.25%

-20.34% to -19.57%

2001

      6,141

$7.78 to $12.71

        65,709

        0.53

0.50% to 2.25%

-11.87% to -11.02%

2000

      5,613

$8.83 to $14.33

        67,652

(a)

(a)

(a)

Oppenheimer Strategic Bond

2004

      3,938

$13.17 to $15.49

        58,634

        4.61

0.75% to 2.25%

6.66% to 7.90%

2003

      3,027

$12.23 to $14.43

        42,500

        6.13

0.75% to 2.25%

15.80% to 17.10%

2002

      2,737

$10.76 to $12.38

        32,735

        7.25

0.75% to 2.25%

5.40% to 6.64%

2001

      2,585

$10.21 to $11.67

        28,892

        6.16

0.50% to 2.25%

2.84% to 4.06%

2000

      2,144

$9.93 to $11.27

        23,335

(a)

(a)

(a)

PIMCO VIT Real Return

2004

           48

$10.82

             522

(e)

0.75%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

Pioneer Equity Income VCT

2004

         140

$11.02 to $13.32

          1,581

        2.07

0.75% to 1.50%

14.67% to 15.53%

2003

           26

$9.61 to $11.55

             253

        2.46

0.75% to 1.50%

21.03% to 21.61%

2002

           19

$7.99 to $8.05

             153

(c)

0.75% to 1.25%

-17.35% to -16.32%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

Pioneer Fund VCT

2004

             5

$10.12 to $10.29

               52

-

0.75% to 1.25%

9.88% to 10.41%

2003

             -

$9.21 to $9.32

                 4

        0.58

0.75% to 1.25%

22.79%

2002

             -

$7.59

                 1

(c)

0.75%

0.06%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

164

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Pioneer High Yield VCT

2004

           20

$10.68

$          216

(e)

%

0.75%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

Pioneer Mid Cap Value VCT

2004

         220

$14.18 to $15.93

          3,193

        0.31

0.75% to 1.50%

20.27% to 21.25%

2003

           62

$11.79 to $13.17

             739

        0.14

0.75% to 1.50%

35.85% to 36.36%

2002

             3

$8.73 to $8.80

               30

(c)

0.75% to 1.25%

-17.31% to -16.24%

2001

(c)

(c)

(c)

(c)

(c)

(c)

2000

(c)

(c)

(c)

(c)

(c)

(c)

Jennison

2004

         160

$8.14 to $8.43

          1,329

        0.09

0.95% to 1.90%

7.25% to 8.22%

2003

         111

$7.59 to $7.79

             859

-

0.95% to 1.90%

27.14% to 28.34%

2002

           71

$5.97 to $6.07

             427

-

0.95% to 1.90%

-32.48% to -31.82%

2001

           81

$8.84 to $8.90

             724

-

0.95% to 1.90%

-3.52% to 9.12%

2000

(b)

(b)

(b)

(b)

(b)

(b)

SP William Blair International Growth

2004

         682

$8.81 to $9.13

          6,154

-

0.95% to 1.90%

13.82% to 14.99%

2003

         416

$7.74 to $7.94

          3,269

-

0.95% to 1.90%

36.51% to 37.85%

2002

           37

$5.67 to $5.76

             214

-

0.95% to 1.90%

-24.30% to -21.53%

2001

             8

$ 7.49 to $7.52

               59

-

0.95% to 1.90%

-19.54% to 4.42%

2000

(b)

(b)

(b)

(b)

(b)

(b)

UBS U.S. Allocation

2004

         977

$8.38 to $9.41

          8,911

        0.77

0.95% to 1.90%

8.27% to 9.29%

2003

      1,393

$7.74 to $8.61

        11,708

        0.80

0.95% to 1.90%

25.04% to 26.06%

2002

      1,454

$6.19 to $6.83

          9,725

        0.55

0.95% to 1.90%

-24.42% to -23.69%

2001

      1,635

$8.20 to $8.94

        14,334

        7.95

0.50% to 1.90%

-14.22% to -13.38%

2000

      1,218

$9.56 to $10.33

        12,509

(a)

(a)

(a)

165

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT B

Notes to Financial Statements

Investment

Units

Unit Fair Value

Net Assets

Income

Expense Ratio^B

Total Return^C

Division

(000's)

(lowest to highest)

(000's)

Ratio^A

(lowest to highest)

(lowest to highest)

Wanger Select

2004

           22

$11.45

$          249

(e)

%

0.75%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

Wanger U.S. Smaller Companies

2004

             8

$11.61

               97

(e)

0.75%

(e)

2003

(e)

(e)

(e)

(e)

(e)

(e)

2002

(e)

(e)

(e)

(e)

(e)

(e)

2001

(e)

(e)

(e)

(e)

(e)

(e)

2000

(e)

(e)

(e)

(e)

(e)

(e)

(a)

Not provided for 2000.

(b)

As investment Division was not available until 2001, this data is not meaningful and is therefore not presented.

(c)

As investment Division was not available until 2002, this data is not meaningful and is therefore not presented.

(d)

As investment Division was not available until 2003, this data is not meaningful and is therefore not presented.

(e)

As investment Division was not available until 2004, 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 risk charge, as defined in Note 3. 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.

166

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, 2004, 2003 and 2002	C-3

	Consolidated Balance Sheets as of
		December 31, 2004 and 2003	C-4

	Consolidated Statements of Changes in Shareholder's Equity for the years ended
		December 31, 2004, 2003 and 2002	C-5

	Consolidated Statements of Cash Flows for the years ended
		December 31, 2004, 2003 (Restated) and 2002 (Restated)	C-6

Notes to Consolidated Financial Statements			C-7

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 as of December 31, 2004 and 2003, 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, 2004. 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 audit 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 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 as of December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the financial statements, the Company changed the accounting principle for goodwill and other intangible assets effective January 1, 2002. As discussed in Note 14 to the financial statements, the Company restated certain amounts presented in the statements of cash flows related to its payables for securities purchased, short-term borrowings, and investment contracts for the years ended December 31, 2003 and 2002.

/s/ Ernst & Young LLP

Atlanta, Georgia

March 31, 2005

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)

			Year ended December 31,
			2004	2003	2002
Revenues:
	Net investment income		$ 983.1	$ 919.1	$ 959.5
	Fee income		455.7	395.8	423.9
	Premiums		38.5	50.1	53.9
	Net realized capital gains (losses)		25.2	64.5	(101.0)
Total revenue			1,502.5	1,429.5	1,336.3
Benefits and expenses:
	Interest credited and other benefits
		to contractowners	739.4	723.4	707.3
	Operating expenses		394.0	383.9	361.4
	Amortization of deferred policy acquisition costs
		and value of business acquired	127.4	106.5	181.5
Total benefits and expenses			1,260.8	1,213.8	1,250.2
Income before income taxes and cumulative effect of
	change in accounting principle		241.7	215.7	86.1
Income tax expense			42.4	61.1	18.6
Income before cumulative effect of change
	in accounting principle		199.3	154.6	67.5
Cumulative effect of change in accounting principle,
	net of tax		-	-	(2,412.1)
Net income (loss)			$ 199.3	$ 154.6	$ (2,344.6)

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)

				December 31,
				2004	2003
Assets:
	Investments:
		Fixed maturities, available-for-sale, at fair value
			(amortized cost of $16,684.7 at 2004 and $15,455.0 at 2003)	$ 17,151.3	$ 16,049.7
		Equity securities, available-for-sale, at fair value
			(cost of $153.9 at 2004 and $146.5 at 2003)	162.6	161.9
		Mortgage loans on real estate		1,090.2	754.5
		Policy loans		262.7	270.3
		Other investments		57.0	53.6
		Securities pledged (amortized cost of $1,258.8 at 2004 and $1,624.4 at 2003)		1,274.3	1,644.8
	Total investments			19,998.1	18,934.8
	Cash and cash equivalents			187.3	57.8
	Short-term investments under securities loan agreement			219.5	123.9
	Accrued investment income			181.7	169.6
	Notes receivable from affiliate			175.0	-
	Reinsurance recoverable			2,902.7	2,953.2
	Deferred policy acquisition costs			414.5	307.9
	Value of business acquired			1,365.2	1,415.4
	Due from affiliates			25.9	41.5
	Other assets			59.6	206.2
	Assets held in separate accounts			33,310.5	33,014.7
Total assets				$ 58,840.0	$ 57,225.0

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)

			December 31,
			2004	2003
Liabilities and Shareholder's Equity
Future policy benefits and claims reserves			$ 20,886.4	$ 19,276.6
Due to affiliates			49.4	92.4
Payables for securities purchased			25.1	5.4
Payables under securities loan agreement			219.5	123.9
Borrowed money			1,057.4	1,519.3
Current income taxes			82.6	85.6
Deferred income taxes			209.3	184.7
Other liabilities			275.6	276.5
Liabilities related to separate accounts			33,310.5	33,014.7
Total liabilities			56,115.8	54,579.1

Shareholder's equity:
	Common stock (100,000 shares authorized; 55,000
		shares issued and outstanding, $50.0 per share value)	2.8	2.8
	Additional paid-in capital		4,576.5	4,646.5
	Accumulated other comprehensive income		67.1	116.0
	Retained earnings (deficit)		(1,922.2)	(2,119.4)
Total shareholder's equity			2,724.2	2,645.9
Total liabilities and shareholder's equity			$ 58,840.0	$ 57,225.0

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	(Deficit)	Equity

Balance at December 31, 2001						$ 2.8	$ 4,292.4	$ 55.8	$ 103.3	$ 4,454.3
	Comprehensive loss:
		Net loss				-	-	-	(2,344.6)	(2,344.6)
		Other comprehensive income,
			net of tax:
				Net unrealized gain on
					securities ($94.9 pretax)	-	-	61.7	-	61.7
	Comprehensive loss									(2,282.9)
	Distribution of IA Holdco					-	(27.4)	-	(32.7)	(60.1)
	Capital contributions					-	164.3	-	-	164.3
	SERP - transfer					-	(15.1)	-	-	(15.1)
	Other changes					-	2.3	-	-	2.3
Balance at December 31, 2002						2.8	4,416.5	117.5	(2,274.0)	2,262.8
	Comprehensive income:
		Net income				-	-	-	154.6	154.6
		Other comprehensive loss,
			net of tax:
				Net unrealized loss on
					securities (($2.4) pretax)	-	-	(1.5)	-	(1.5)
	Comprehensive income									153.1
	Capital contributions					-	230.0	-	-	230.0
Balance at December 31, 2003						2.8	4,646.5	116.0	(2,119.4)	2,645.9
	Comprehensive income:
		Net income				-	-	-	199.3	199.3
		Other comprehensive loss,
			net of tax:
				Net unrealized loss on
					securities (($49.5) pretax)	-	-	(32.2)	-	(32.2)
				Minimum pension liability		-	-	(16.7)	-	(16.7)
	Comprehensive income					-	-	-	-	150.4
	Dividends paid					-	(70.0)	-	-	(70.0)
	Other					-	-	-	(2.1)	(2.1)
Balance at December 31, 2004						$ 2.8	$ 4,576.5	$ 67.1	$ (1,922.2)	$ 2,724.2

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 Cash Flows

(In millions)

					Year ended December 31,
						2003	2002
					2004	(Restated)	(Restated)
Cash Flows from Operating Activities:
	Net income (loss)				$ 199.3	$ 154.6	$ (2,344.6)
	Adjustments to reconcile net income (loss) to net cash
		provided by operating activities:
			Capitalization of deferred policy acquisition costs		(168.0)	(159.7)	(127.6)
			Amortization of deferred policy acquisition costs and
				value of business acquired	134.3	106.5	158.5
			Net accretion/decretion of discount/premium		155.9	198.9	115.5
			Future policy benefits, claims reserves,
				and interest credited	620.4	705.9	953.7
			Impairment of goodwill		-	-	2,412.1
			Provision for deferred income taxes		41.0	22.1	23.6
			Net realized capital (gains) losses		(25.1)	(64.5)	101.0
			Depreciation		12.4	23.3	20.9
			Change in:
				Accrued investment income	(2.3)	1.3	(10.0)
				Reinsurance recoverable	50.5	33.3	172.7
				Accounts receivable and assets accruals	18.2	(25.2)	(5.8)
				Due to/from affiliates	(32.8)	47.4	8.1
				Other payables and accruals	17.9	14.4	(82.8)
Net cash provided by operating activities					1,021.7	1,058.3	1,395.3
Cash Flows from Investing Activities:
	Proceeds from the sale, maturity, or redemption of:
		Fixed maturities, available-for-sale			26,791.8	29,977.9	26,315.3
		Equity securities, available-for-sale			85.7	130.2	57.2
		Mortgage loans on real estate			71.0	16.3	2.0
	Acquisition of:
		Fixed maturities, available-for-sale			(26,809.0)	(31,951.6)	(28,272.8)
		Equity securities, available-for-sale			(81.6)	(34.8)	(81.8)
		Mortgage loans on real estate			(406.7)	(194.2)	(343.7)
	Increase in policy loans				7.6	26.0	32.7
	Purchases/sales of property and equipment, net				(11.7)	(5.2)	(5.8)
	Change in other investments				(15.3)	(8.1)	(22.4)
	Loans to affiliates				(175.0)	-	-
Net cash used in investing activities					(543.2)	(2,043.5)	(2,319.3)

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)

		Year ended December 31,
			2003	2002
		2004	(Restated)	(Restated)
Cash Flows from Financing Activities:
	Deposits for investment contracts	$ 2,089.9	$ 2,296.6	$ 1,349.1
	Maturities and withdrawals from investment contracts	(1,910.4)	(1,745.5)	(741.4)
	Short-term borrowings, net	(458.5)	196.5	299.7
	Dividends paid to Parent	(70.0)	-	-
	Capital contributions	-	230.0	-
Net cash provided by (used in) financing activities		(349.0)	977.6	907.4
Net increase (decrease) in cash and cash equivalents		129.5	(7.6)	(16.6)
Cash and cash equivalents, beginning of year		57.8	65.4	82.0
Cash and cash equivalents, end of year		$ 187.3	$ 57.8	$ 65.4
Supplemental cash flow information:
	Income taxes paid, net	$ 3.2	$ 29.8	$ 6.7
	Interest paid	$ 22.8	$ 32.6	$ 20.6

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.)
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"), a stock life insurance company domiciled in the state of Connecticut, and its wholly-owned subsidiaries (collectively, the "Company") are providers of financial products and services in the United States. These consolidated financial statements include ILIAC and its wholly-owned subsidiaries, ING Insurance Company of America ("IICA"), ING Financial Advisers, LLC ("IFA") and, through February 28, 2002, ING Investment Adviser Holding, Inc. ("IA Holdco"). Until March 30, 2003, ILIAC was a wholly-owned subsidiary of ING Retirement Holdings, Inc. ("HOLDCO"), which was a wholly-owned subsidiary of ING Retirement Services, Inc. ("IRSI"). Until March 30, 2003, IRSI was a wholly-owned subsidiary of Lion Connecticut Holdings Inc. ("Lion"), which in turn was ultimately owned by ING Groep N.V. ("ING"). On March 30, 2003, a series of mergers occurred in the following order: IRSI merged into Lion and HOLDCO merged into Lion. As a result, ILIAC is now a direct, wholly-owned subsidiary of Lion, which in turn is an indirect, wholly-owned subsidiary of ING. ING is a global financial services company based in The Netherlands, with American Depository Shares listed on the New York Stock Exchange under the symbol "ING."

Description of Business

The Company offers 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, education (collectively "not-for-profit" organizations), and corporate markets. The Company's products generally are distributed through pension professionals, independent agents and brokers, third party administrators, banks, dedicated career agents, and financial planners.

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

C-9

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Recently Adopted Accounting Standards

Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts

The Company adopted Statement of Position ("SOP") 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts," on January 1, 2004. SOP 03-1 establishes several new accounting and disclosure requirements for certain nontraditional long-duration contracts and for separate accounts including, among other things, a requirement that assets and liabilities of separate account arrangements that do not meet certain criteria be accounted for as general account assets and liabilities, and that revenues and expenses related to such arrangements, be consolidated with the respective lines in the Consolidated Statements of Operations. In addition, the SOP requires that additional liabilities be established for certain guaranteed death and other benefits and for products with certain patterns of cost of insurance charges. In addition, sales inducements provided to contractowners must be recognized on the Consolidated Balance Sheets separately from deferred acquisition costs and amortized as a component of benefits expense using methodology and assumptions consistent with those used for amortization of deferred policy acquisition costs ("DAC").

The Company evaluated all requirements of SOP 03-1 which resulted in the consolidation of the Separate Account supporting the guarantee option into the General Account. Requirements to establish additional liabilities for minimum guarantee benefits are applicable to the Company; however, the Company's policies on contract liabilities have historically been, and continue to be, in conformity with the newly established requirements. Requirements for recognition of additional liabilities for products with certain patterns of cost of insurance charges are not applicable to the Company. The adoption of SOP 03-1 had no significant effect on the Company's financial position, results of operations, or cash flows.

In the fourth quarter of 2004, the Company implemented Technical Practice Aid 6300.05 - 6300.08, "Q&As Related to the Implementation of SOP 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts" (the "TPA").

The TPA, which was approved in September 2004, provides additional guidance regarding certain implicit assessments that may be used in testing of the base mortality function on contracts, which is performed to determine whether additional liabilities are required in conjunction with SOP 03-1. In addition, the TPA provides additional guidance surrounding the allowed level of aggregation of additional liabilities determined under SOP 03-1. The adoption of the TPA did not have an impact on the Company's financial position, results of operations, or cash flows.

C-10

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

The implementation of SOP 03-1 also raised questions regarding the interpretation of the requirements of Statement of Financial Accounting Standards ("FAS") No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments," concerning when it is appropriate to record an unearned revenue liability related to the insurance benefit function. To clarify its position, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. FAS 97-1 ("FSP FAS 97-1"), "Situations in Which Paragraphs 17(b) and 20 of FASB Statement No. 97 Permit or Require Accrual of an Unearned Revenue Liability," effective for fiscal periods beginning subsequent to the date the guidance was issued, June 18, 2004. The Company adopted FSP FAS 97-1 on July 1, 2004 which did not have an impact on the Company's financial position, results of operations, or cash flows.

The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments

In March 2004, the Emerging Issues Task Force ("EITF") reached a final consensus on EITF Issue No. 03-1 ("EITF-03-1"), "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments," requiring that a three-step impairment model be applied to securities within its scope. The three-step model is applied on a security-by-security basis as follows:

Step 1: Determine whether an investment is impaired. An investment is impaired if the fair value of the investment is less than its cost basis.

Step 2: Evaluate whether an impairment is other-than-temporary.

Step 3: If the impairment is other-than-temporary, recognize an impairment loss equal to the difference between the investment's cost and its fair value.

On September 30, 2004, the FASB issued FASB Staff Position No. EITF Issue 03-1-1 ("FSP EITF 03-1-1"), "Effective Date of Paragraphs 10-20 of EITF Issue No. 03-1, 'The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,'" which delayed the EITF Issue No. 03-1 original effective date of July 1, 2004 related to steps two and three of the impairment model introduced. The delay is in effect until a final consensus can be reached on such guidance. Despite the delay of the implementation of steps two and three, other-than-temporary impairments are still to be recognized as required by existing guidance.

Earlier consensus reached by the EITF on this issue required that certain quantitative and qualitative disclosures be made for unrealized losses on debt and equity securities that have not been recognized as other-than-temporary impairments. These disclosures were adopted by the Company, effective December 31, 2003, and are included in the Investments footnote.

C-11

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Accounting for Derivative Instruments and Hedging Activities

The Derivative Implementation Group ("DIG"), responsible for issuing guidance on behalf of the FASB for implementation of FAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," issued Statement No. 133 Implementation Issue No. B36, "Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Credit Worthiness of the Obligor under Those Instruments" ("DIG B36"). Under this interpretation, modified coinsurance and coinsurance with funds withheld reinsurance agreements as well as other types of receivables and payables where interest is determined by reference to a pool of fixed maturity assets or a total return debt index may be determined to contain embedded derivatives that are required to be bifurcated from the host instrument. The required date of adoption of DIG B36 for the Company was October 1, 2003. The adoption did not have an impact on the Company's financial position, results of operations, or cash flows.

Variable Interest Entities

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"). In December 2003, the FASB modified FIN 46 to make certain technical revisions and address certain implementation issues that had arisen. FIN 46 provides a new framework for identifying variable interest entities ("VIEs") and determining when a company should include the assets, liabilities, noncontrolling interests and results of activities of a VIE in its consolidated financial statements.

In general, a VIE is a corporation, partnership, limited-liability corporation, trust, or any other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations.

FIN 46 requires a VIE to be consolidated if a party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) is obligated to absorb a majority of the risk of loss from the VIE's activities, is entitled to receive a majority of the VIE's residual returns (if no party absorbs a majority of the VIE's losses), or both. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE's assets, liabilities, and noncontrolling interests at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. FIN 46 also requires

C-12

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

disclosures about VIEs that the variable interest holder is required to consolidate and those VIEs it is not required to consolidate but in which it has a significant variable interest.

The Company holds investments in VIEs in the form of private placement securities, structured securities, securitization transactions, and limited partnerships with an aggregate fair value of $8,489.3 as of December 31, 2004. These VIEs are held by the Company for investment purposes. Consolidation of these investments in the Company's financial statements is not required as the Company is not the primary beneficiary for any of these VIEs. Book value as of December 31, 2004 of $8,396.1 represents the maximum exposure to loss except for those structures for which the Company also receives asset management fees.

Guarantees

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"), to clarify accounting and disclosure requirements relating to a guarantor's issuance of certain types of guarantees, or groups of similar guarantees, even if the likelihood of the guarantor's having to make any payments under the guarantee is remote. The disclosure provisions are effective for financial statements for fiscal years ended after December 15, 2002. For certain guarantees, the interpretation also requires that guarantors recognize a liability equal to the fair value of the guarantee upon its issuance. This initial recognition and measurement provision is to be applied only on a prospective basis to guarantees issued or modified after December 31, 2002. The Company has performed an assessment of its guarantees and believes that all of its guarantees are excluded from the scope of this interpretation.

Goodwill Impairment

During 2002, the Company adopted FAS No. 142, "Goodwill and Other Intangible Assets." The adoption of this standard resulted in the recognition of an impairment loss of $2,412.1, net of taxes of $1,298.8, related to prior acquisitions, recorded retroactive to the first quarter of 2002. Prior quarters of 2002 were restated accordingly. This impairment loss represented the entire carrying amount of goodwill, net of accumulated amortization. This impairment charge is shown as a change in accounting principle on the December 31, 2002 Consolidated Statement of Operations.

New Accounting Pronouncements

In December 2004, the FASB issued FAS No. 123 (revised 2004), "Share-Based Payment" ("FAS 123R"), which requires all share-based payments be recognized in the

C-13

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

financial statements based upon the fair value. FAS 123R is effective at the beginning of the first interim or annual period beginning after June 15, 2005. Earlier adoption is encouraged. FAS 123R provides two transition methods, modified-prospective and modified-retrospective.

The modified-prospective method recognizes the grant-date fair value of compensation for new and unvested awards beginning in the fiscal period in which the recognition provisions are first applied. Prior periods are not restated. The modified-retrospective method, entities are allowed to restate prior periods by recognizing the compensation cost in the amount previously reported in the pro forma footnote disclosures as required under FAS No. 123, "Accounting for Stock-Based Compensation."

The Company intends to early adopt the provisions of FAS 123R on January 1, 2005 using the modified-prospective method. The adoption of FAS 123R is not expected to have a material impact on the Company's financial position, results of operations or cash flows. Prior to January 2005, the Company applied the intrinsic value-based provisions set forth in APB Opinion No. 25, "Accounting for Stock Issued to Employees". Under the intrinsic value method, compensation expense is determined on the measurement date, which is the first date on which both the number of shares the employee is entitled to receive and the exercise price are known. Compensation expense, if any, is measured based on the award's intrinsic value, which is the excess of the market price of the stock over the exercise price on the measurement date.

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.

Reclassifications

Certain reclassifications have been made to prior years financial information to conform to the current year presentation, including a reclassification in the amount of $9.2, net of tax, from retained earnings to accumulated other comprehensive income as of December 31, 2001 (see footnote 14).

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity of 90 days or less when purchased.

C-14

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Investments

All of the Company's fixed maturity and equity securities are currently designated as available-for-sale. Available-for-sale securities are reported at fair value and unrealized gains and losses on these securities are included directly in shareholder's equity, after adjustment for related changes in deferred policy acquisition costs ("DAC"), value of business acquired ("VOBA"), and deferred income taxes.

Other-Than-Temporary Impairments

The Company analyzes the General Account investments to determine whether there has been an other-than-temporary decline in fair value below the amortized cost basis in accordance with FAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Management considers the length of time and the extent to which fair value has been less than amortized cost; the financial condition and near-term prospects of the issuer; future economic conditions and market forecasts; and the Company's intent and ability to retain the investment in the issuer for a period of time sufficient to allow for recovery in fair value. If it is probable that all amounts due according to the contractual terms of a debt security will not be collected, an other-than-temporary impairment is considered to have occurred.

In addition, the Company invests in structured securities that meet the criteria of EITF Issue No. 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." Under Issue No. EITF 99-20, a determination of the required impairment is based on credit risk and the possibility of significant prepayment risk that restricts the Company's ability to recover the investment. An impairment is recognized if the fair value of the security is less than amortized cost and there has been an adverse change in cash flow since the last remeasurement date.

When a decline in fair value is determined to be other-than-temporary, the individual security is written down to fair value and the loss is accounted for as a realized loss.

Experience-Rated Products

Included in available-for-sale securities are investments that support experience-rated products. Experience-rated products are products where the customer, not the Company, assumes investment (including realized capital gains and losses) and other risks, subject to, among other things, minimum principal and interest guarantees. Unamortized realized gains and losses on the sale of and unrealized capital gains and losses on investments supporting these products are included in future policy benefits and claims reserves on the Consolidated Balance Sheets. Realized capital gains and losses on all other investments are reflected in the Consolidated Statements of Operations. Unrealized

C-15

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

capital gains and losses on all other investments are reflected in shareholder's equity, net of related income taxes.

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

Fair values for fixed maturities are obtained from independent pricing services or broker/dealer quotations. Fair values for privately placed bonds are determined using a matrix-based model. The matrix-based model considers the level of risk-free interest rates, current corporate spreads, the credit quality of the issuer, and cash flow characteristics of the security. The fair values for actively traded equity securities are based on quoted market prices. For equity securities not actively traded, estimated fair values are based upon values of issues of comparable yield and quality or conversion value where applicable.

Mortgage loans on real estate are reported at amortized cost less impairment writedowns. If the value of any mortgage loan is determined to be impaired (i.e., when it is probable 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 the present value of expected cash flows from the loan, discounted at the loan's effective interest rate, or to the loan's observable market price, or the fair value of the collateral. If the loan is in foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell. The carrying value of the impaired loans is reduced by establishing a permanent writedown charged to realized loss.

Policy loans are carried at unpaid principal balances.

Short-term investments, consisting primarily of money market instruments and other fixed maturities issues purchased with an original maturity of 91 days to one year, are considered available-for-sale and are carried at fair value, which approximates amortized cost.

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

C-16

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

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.

Repurchase Agreements

The Company engages in dollar repurchase agreements ("dollar rolls") and repurchase agreements to increase the return on investments and improve liquidity. These transactions involve a sale of securities and an agreement to repurchase substantially the same securities as those sold. Company policies require a minimum of 95% of the fair value of securities pledged under dollar rolls and repurchase agreement transactions to be maintained as collateral. Cash collateral received is invested in fixed maturities and the offsetting collateral liability is included in borrowed money on the Consolidated Balance Sheets.

Derivatives

The Company's use of derivatives is limited mainly to hedging purposes. However, these derivatives are not accounted for using hedge accounting treatment under FAS No. 133 and the Company does not seek hedge accounting treatment. The Company enters into interest rate, equity market, and currency contracts, including swaps, caps, and floors to reduce and manage risks associated with changes in value, yield, price or cash flow or exchange rates of assets or liabilities held or intended to be held. Changes in the fair value of open derivative contracts are recorded in net realized capital gains and losses. Derivatives are included in other investments on the Consolidated Balance Sheets.

The Company also has investments in certain fixed maturity instruments and has retail annuity products that contain embedded derivatives, including those whose market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short- or long-term), exchange rates, prepayment rates, equity markets, or credit ratings/spreads. Changes in the fair value of embedded derivatives are recorded in net realized capital gains (losses) in the Consolidated Statements of Operations. Embedded derivatives are included in fixed maturities.

Deferred Policy Acquisition Costs and Value of Business Acquired

DAC represents policy acquisition costs that have been capitalized and are subject to amortization. Such costs consist principally of certain commissions, underwriting, contract issuance, and certain agency expenses, related to the production of new and renewal business.

C-17

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

VOBA represents the outstanding value of in force business capitalized and is subject to amortization in purchase accounting when the Company was acquired. The value is based on the present value of estimated net cash flows embedded in the Company's contracts.

The amortization methodology used for DAC and VOBA varies by product type. FAS No. 60, "Accounting and Reporting by Insurance Enterprises," applies to traditional life insurance products, primarily whole life and term life insurance contracts. Under FAS No. 60, DAC and VOBA are amortized over the premium payment period, in proportion to the premium revenue recognized.

FAS No. 97 applies to universal life and investment-type products, such as fixed and variable deferred annuities. Under FAS No. 97, DAC and VOBA are amortized, with interest, over the life of the related contracts (usually 25 years) in relation to the present value of estimated future gross profits from investment, mortality, and expense margins; asset-based fees, policy administration, and surrender charges; less policy maintenance fees and non-capitalized commissions, as well as realized gains and losses on investments.

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 a quarterly and annual analysis of DAC and VOBA for the annuity and life businesses, respectively. The DAC and VOBA balances are evaluated for recoverability and are reduced to the extent that estimated future gross profits are inadequate to recover the asset.

At each evaluation date, actual historical gross profits are reflected, and estimated future gross profits and related assumptions are evaluated for continued reasonableness. Any adjustment in estimated profit requires that the amortization rate be revised ("unlocking"), retroactively to the date of the policy or contract issuance. The cumulative prior period adjustment is recognized as a component of current period

C-18

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

amortization. In general, increases in investment, mortality, and expense margins, and thus estimated future profits, lower the rate of amortization. However, decreases in investment, mortality, and expense margins, and thus estimated future profits, increase the rate of amortization.

Reserves

The Company establishes and carries actuarially determined reserve liabilities which are calculated to meet its future obligations. Changes in or deviations from the assumptions used can significantly affect the Company's reserve levels and related future operations.

Reserves for deferred annuity investment contracts and immediate annuities without life contingent benefits are equal to cumulative deposits less charges and withdrawals plus credited interest thereon (rates range from 1.5% to 11.9% for all years presented) net of adjustments for investment experience that the Company is entitled to reflect in future credited interest. These reserves also include unrealized gains/losses related to investments and unamortized realized gains/losses on investments for experience-rated contracts. Reserves on experience-rated contracts reflect the rights of contractholders, plan participants, and the Company.

Reserves for immediate annuities with life contingent 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 plan, year of issue and policy duration. Reserve interest rates range from 4.9% to 9.5% for all years presented.

Because the sale of the domestic individual life insurance business on October 1, 1998 was substantially in the form of an indemnity reinsurance agreement, the Company includes an amount in reinsurance recoverable on the Consolidated Balance Sheet, which approximates the Company's total individual life reserves. See Note 11 to the Consolidated Balance Sheets.

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.

C-19

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Sales Inducements

Sales inducements represent benefits paid to contractowners that are incremental to the amounts the Company credits on similar contracts and are higher than the contract's expected ongoing crediting rates for periods after the inducement. As of January 1, 2004, such amounts are reported separately and included in Other Assets on the Consolidated Balance Sheet in accordance with SOP 03-1. Prior to 2004, sales inducements were recorded as a component of DAC on the Consolidated Balance Sheet. Beginning in 2004, sales inducements are amortized as a component of interest credited and other benefits to contractowners using methodologies and assumptions consistent with those used for amortization of DAC.

Revenue Recognition

For most annuity contracts, fee income for the cost of insurance, surrenders, expenses, and other fees are recorded as revenue as charges are assessed against contractowners. Other amounts received for these contracts are reflected as deposits and are not recorded as premiums or revenue. Related policy benefits are recorded in relation to the associated premiums or gross profit so that profits are recognized over the expected lives of the contracts. When annuity payments with life contingencies begin under contracts that were initially investment contracts, the accumulated balance in the account is treated as a single premium for the purchase of an annuity and reflected as an offsetting amount in both premiums and current and future benefits on the Consolidated Statements of Operations. Premiums on the Consolidated Statements of Operations primarily represent amounts received for immediate annuities with life contingencies.

Separate Accounts

Separate Account assets and liabilities generally represent funds maintained to meet specific investment objectives of contractowners who bear the investment risk, subject, in limited cases, to certain minimum guaranteed rates. Investment income and investment gains and losses generally accrue directly to such contractowners. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company or its affiliates.

Separate Account assets supporting variable options under annuity contracts are invested, as designated by the contractowner or participant (who bears the investment risk subject, in limited cases, to minimum guaranteed rates) under a contract in shares of mutual funds which are managed by the Company or its affiliates, or other selected mutual funds not managed by the Company or its affiliates.

Separate Account assets and liabilities are carried at fair value and shown as separate captions in the Consolidated Balance Sheets. Deposits, investment income and net

C-20

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

realized and unrealized capital gains and losses of the Separate Accounts are not reflected in the Consolidated Financial Statements (with the exception of realized and unrealized capital gains and losses on the assets supporting the guaranteed interest option). The Consolidated Statements of Cash Flows do not reflect investment activity of the Separate Accounts.

Assets and liabilities of separate account arrangements that do not meet the criteria in SOP 03-1 for presentation in the separate caption in the Consolidated Balance Sheets (primarily guaranteed interest options), and revenue and expenses related to such arrangements, are consolidated in the financial statements with the general account. At December 31, 2004 and 2003, unrealized gains of $7.3 and $55.7, respectively, on assets supporting a guaranteed interest option are reflected in shareholder's equity.

Reinsurance

The Company utilizes indemnity reinsurance agreements to reduce its exposure to large losses in all aspects of its insurance business. Such reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge the primary liability of the Company as direct insurer of the risks reinsured. The Company evaluates the financial strength of potential reinsurers and continually monitors the financial condition of reinsurers. Only those reinsurance recoverable balances deemed probable of recovery are reflected as assets on the Consolidated Balance Sheets. Of the reinsurance recoverable on the Consolidated Balance Sheets, $2.9 billion and $3.0 billion at December 31, 2004 and 2003, respectively, is related to the reinsurance recoverable from Lincoln National Corporation ("Lincoln") arising from the sale of the Company's domestic life insurance business in 1998 (See Note 11).

Income Taxes

The Company is taxed at regular corporate rates after adjusting income reported for financial statement purposes for certain items. Deferred income tax expenses/benefits result from changes during the year in cumulative temporary differences between the tax basis and book basis of assets and liabilities.

C-21

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Investments

Fixed maturities and equity securities available-for-sale as of December 31, 2004, were as follows:

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

Losses

Value

Fixed maturities:

U.S. government and government

agencies and authorities

$          197.3

$              0.9

$              0.9

$          197.3

States, municipalities and political

subdivisions

               32.1

                 0.2

                 0.9

               31.4

U.S. corporate securities:

Public utilities

          1,207.6

               50.0

                 5.0

          1,252.6

Other corporate securities

          5,846.5

             275.0

               25.4

          6,096.1

Total U.S. corporate securities

          7,054.1

             325.0

               30.4

          7,348.7

Foreign securities:

Government

             660.2

               33.9

                 3.1

             691.0

Other

          1,656.4

               78.4

                 6.1

          1,728.7

Total foreign securities

          2,316.6

             112.3

                 9.2

          2,419.7

Residential mortgage-backed securities

          5,497.6

               65.6

               58.2

          5,505.0

Commercial mortgage-backed securities

          1,491.2

               73.2

                 4.4

          1,560.0

Other asset-backed securities

          1,354.6

               22.6

               13.7

          1,363.5

Total fixed maturities, including

fixed maturities pledged

        17,943.5

             599.8

             117.7

        18,425.6

Less: fixed maturities pledged to creditors

          1,258.8

               18.0

                 2.5

          1,274.3

Fixed maturities

        16,684.7

             581.8

             115.2

        17,151.3

Equity securities

             153.9

                 9.2

                 0.5

             162.6

Total investments available-for-sale

$     16,838.6

$          591.0

$          115.7

$     17,313.9

C-22

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Fixed maturities and equity securities available-for-sale as of December 31, 2003, were as follows:

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

Losses

Value

Fixed maturities:

U.S. government and government

agencies and authorities

$          350.0

$              1.7

$              0.3

$          351.4

States, municipalities and political

subdivisions

                 2.1

                 0.1

                    -

                 2.2

U.S. corporate securities:

Public utilities

             970.7

               48.9

               11.4

          1,008.2

Other corporate securities

          5,568.1

             327.9

               29.1

          5,866.9

Total U.S. corporate securities

          6,538.8

             376.8

               40.5

          6,875.1

Foreign securities:

Government

             605.2

               33.7

                 2.8

             636.1

Other

          1,364.7

               74.5

               11.0

          1,428.2

Total foreign securities

          1,969.9

             108.2

               13.8

          2,064.3

Residential mortgage-backed securities

          5,903.7

               91.8

               35.1

          5,960.4

Commercial mortgage-backed securities

          1,278.5

             105.0

                 3.3

          1,380.2

Other asset-backed securities

          1,036.4

               34.0

                 9.5

          1,060.9

Total fixed maturities, including

fixed maturities pledged to creditors

        17,079.4

             717.6

             102.5

        17,694.5

Less: fixed maturities pledged to creditors

          1,624.4

               23.8

                 3.4

          1,644.8

Fixed maturities

        15,455.0

             693.8

               99.1

        16,049.7

Equity securities

             146.5

               15.5

                 0.1

             161.9

Total investments available-for-sale

$     15,601.5

$          709.3

$            99.2

$     16,211.6

At December 31, 2004 and 2003, net unrealized appreciation of $490.8 and $630.5, respectively, on total fixed maturities, including fixed maturities pledged to creditors, and equity securities, included $357.5 and $491.5, respectively, related to experience-rated contracts, which were not reflected in shareholder's equity but in future policy benefits and claim reserves.

C-23

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

The aggregate unrealized losses and related fair values of investments with unrealized losses as of December 31, 2004, are shown below by duration:

Unrealized

Fair

Loss

Value

Duration category:

Less than six months below amortized cost

$                 37.7

$            3,319.0

More than six months and less than twelve months below cost

                    34.9

               1,795.0

More than twelve months below amortized cost

                    45.6

                  960.5

Total investments available-for-sale

$               118.2

$            6,074.5

Of the unrealized losses, less than 6 months in duration of $37.7, there were $9.5 in unrealized losses that are primarily related to interest rate movement or spread widening for other than credit-related reasons. The remaining unrealized losses of $28.2, as of December 31, 2004, related to securities reviewed for impairment under the guidance proscribed by EITF Issue No. 99-20. This category includes U.S. government-backed securities, principal protected securities, and structured securities which did not have an adverse change in cash flows for which the carrying amount was $1,746.2.

Of the unrealized losses, more than 6 months and less than 12 months in duration, of $34.9, there were $16.4 in unrealized losses that are primarily related to interest rate movement or spread widening for other than credit-related reasons. The remaining unrealized losses of $18.5, as of December 31, 2004, related to securities reviewed for impairment under the guidance proscribed by EITF Issue No. 99-20. This category includes U.S. government-backed securities, principal protected securities, and structured securities which did not have an adverse change in cash flows for which the carrying amount was $829.2.

An analysis of the unrealized losses, more than 12 months in duration, of $45.6 follows. There were $15.9 in unrealized losses that are primarily related to interest rate movement or spread widening for other than credit-related reasons. The remaining unrealized losses of $29.7, as of December 31, 2004, related to securities reviewed for impairment under the guidance proscribed by EITF Issue No. 99-20. This category includes U.S. government-backed securities, principal protected securities, and structured securities which did not have an adverse change in cash flows for which the carrying amount was $505.6.

C-24

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

The amortized cost and fair value of total fixed maturities for the year ended December 31, 2004 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called, or prepaid.

Amortized

Fair

Cost

Value

Due to mature:

One year or less

$            395.8

$            400.0

After one year through five years

            3,650.0

            3,727.4

After five years through ten years

            3,128.8

            3,256.4

After ten years

            2,425.5

            2,613.3

Mortgage-backed securities

            6,988.8

            7,065.0

Other asset-backed securities

            1,354.6

            1,363.5

Less: fixed maturities pledged to creditors

            1,258.8

            1,274.3

Fixed maturities

$       16,684.7

$       17,151.3

At December 31, 2004 and 2003, fixed maturities with carrying values of $10.9 and $11.2, respectively, were on deposit as required by regulatory authorities.

The Company did not have any investments in a single issuer, other than obligations of the U.S. government, with a carrying value in excess of 10% of the Company's shareholder's equity at December 31, 2004 or 2003.

The Company has various categories of CMOs that are subject to different degrees of risk from changes in interest rates and, for CMOs that are not agency-backed, defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to dramatic decreases and increases in interest rates resulting in the repayment of principal from the underlying mortgages either earlier or later than originally anticipated. At December 31, 2004 and 2003, approximately 4.1% and 2.8%, respectively, of the Company's CMO holdings were invested in types of CMOs which are subject to more prepayment and extension risk than traditional CMOs (such as interest-only or principal-only strips).

The Company enters into dollar repurchase agreements ("dollar rolls") and repurchase agreements to increase its return on investments and improve liquidity. At December 31, 2004 and 2003, the carrying value of the securities pledged in dollar rolls and repurchase agreements was $1,274.3 and $1,644.8, respectively. The carrying value of the securities pledged in dollar rolls and repurchase agreements is included in pledged securities on the Balance Sheets. The repurchase obligation related to dollar rolls and repurchase agreements totaled $1,057.4 and $1,519.3 at December 31, 2004 and 2003, respectively. The repurchase obligation related to dollar rolls and repurchase agreements is included in borrowed money on the Consolidated Balance Sheets.

C-25

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Impairments

The following table identifies the Company's other-than-temporary impairments by type as of December 31:

2004

2003

2002

No. of

No. of

No. of

Impairment

Securities

Impairment

Securities

Impairment

Securities

U.S. Corporate

$              -

                -

$            6.2

               4

$            0.1

               2

Residential mortgage-backed

             13.5

             53

             88.2

             83

             40.0

             33

Limited partnership

                 -

                -

               2.0

               1

Equities

                 -

                -

                 -

               2

               0.1

               2

Total

$          13.5

             53

$          96.4

             90

$          40.2

             37

The remaining fair value of the fixed maturities with other-than-temporary impairments at December 31, 2004 and 2003 is $125.0 and $123.1, respectively.

Net Investment Income

Sources of net investment income were as follows:

Year ended December 31,

2004

2003

2002

Fixed maturities

$               980.5

$               946.2

$               964.1

Preferred stock

                        -

                      9.9

                      3.9

Mortgage loans on real estate

                    56.0

                    42.7

                    23.3

Policy loans

                      8.1

                      9.0

                      8.7

Cash equivalents

                      2.4

                      1.7

                      1.7

Other

                    (2.1)

                    (1.0)

                    23.4

Gross investment income

               1,044.9

               1,008.5

               1,025.1

Less: investment expenses

                    61.8

                    89.4

                    65.6

Net investment income

$               983.1

$               919.1

$               959.5

C-26

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Net Realized Capital Gains and Losses

Net realized capital gains (losses) are comprised of the difference between the carrying value of investments and proceeds from sale, maturity, and redemption, as well as losses incurred due to impairment of investments. Net realized capital gains (losses) on investments were as follows:

Year ended December 31,

2004

2003

2002

Fixed maturities

$                 24.7

$                 63.9

$               (97.5)

Equity securities

                      0.5

                      0.6

                    (3.5)

Pretax net realized capital gains (losses)

$                 25.2

$                 64.5

$             (101.0)

After-tax net realized capital gains (losses)

$                 16.4

$                 41.9

$                 65.7

Net realized capital gains allocated to experience-rated contracts of $42.0, $43.9, and $63.6 for the years ended December 31, 2004, 2003 and 2002, respectively, were deducted from net realized capital gains and an offsetting amount was reflected in future policy benefits and claim reserves on the Consolidated Balance Sheets. Net unamortized realized gains (losses) allocated to experienced-rated contractholders were $233.4, $213.7, and $199.3 at December 31, 2004, 2003 and 2002, respectively.

Proceeds from the sale of fixed maturities and equity securities and the related gross gains and losses, excluding those related to experience-related contractholders, were as follows:

Year ended December 31,

2004

2003

2002

Proceeds on sales

$          10,236.3

$          12,812.5

$          13,265.2

Gross gains

                  146.9

                  291.9

                  276.7

Gross losses

                    70.9

                  228.0

                  374.2

C-27

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Changes in shareholder's equity related to changes in accumulated other comprehensive income (net unrealized capital gains and losses on securities, including securities pledged excluding those related to experience-rated contractholders) were as follows:

Year ended December 31,

2004

2003

2002

Fixed maturities

$                 16.1

$               (54.3)

$               104.8

Equity securities

                    (5.7)

                    17.9

                    (1.6)

Sales inducements

                    (0.1)

                        -

                        -

Other

                  (59.8)

                    34.0

                    (8.3)

Subtotal

                  (49.5)

                    (2.4)

                    94.9

Less: (Increase) decrease in deferred income taxes

                  (17.3)

                    (0.9)

                    33.2

Net increase (decrease) in accumulated other

comprehensive (loss) income

$               (32.2)

$                 (1.5)

$                 61.7

2.	Financial Instruments

Estimated Fair Value

The following disclosures are made in accordance with the requirements of FAS No. 107, "Disclosures about Fair Value of Financial Instruments." FAS No. 107 requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates, in many cases, could not be realized in immediate settlement of the instrument.

FAS No. 107 excludes certain financial instruments, including insurance contracts, and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

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

Fixed maturities: The fair values for the actively traded marketable bonds are determined based upon the quoted market prices. The fair values for marketable bonds without an active market are obtained through several commercial pricing services which provide the estimated fair values. Fair values of privately placed bonds are determined using a matrix-based pricing model. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer, and cash flow characteristics of the security. Also considered are factors such as the net worth of the

C-28

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees, and the Company's evaluation of the borrower's ability to compete in their relevant market. Using this data, the model generates estimated market values which the Company considers reflective of the fair value of each privately placed bond.

Equity securities: Fair values of these securities are based upon quoted market price.

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.

Cash and cash equivalents, short-term investments and policy loans: The carrying amounts for these assets approximate the assets' fair values.

Assets held in separate accounts: Assets held in separate accounts are reported at the quoted fair values of the individual securities in the separate accounts.

Investment contract liabilities (included in future policy benefits and claim reserves):

With a fixed maturity: Fair value is estimated by discounting cash flows at interest rates currently being offered by, or available to, the Company for similar contracts.

Without a fixed maturity: Fair value is estimated as the amount payable to the contractowners upon demand. However, the Company has the right under such contracts to delay payment of withdrawals which may ultimately result in paying an amount different than that determined to be payable on demand.

Liabilities related to separate accounts: The carrying amounts for these liabilities approximate their fair value.

C-29

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

The carrying values and estimated fair values of certain of the Company's financial instruments at December 31, 2004 and 2003 were as follows:

2004

2003

Carrying

Fair

Carrying

Fair

Value

Value

Value

Value

Assets:

Fixed maturity securities, including

securities pledged

$    18,425.6

$    18,425.6

$    17,694.5

$    17,694.5

Equity securities

            162.6

            162.6

            161.9

            161.9

Mortgage loans on real estate

         1,090.2

         1,119.8

            754.5

            798.5

Policy loans

            262.7

            262.7

            270.3

            270.3

Cash and cash equivalents

            187.3

            187.3

              57.8

              57.8

Assets held in Separate Accounts

       33,310.5

       33,310.5

       33,014.7

       33,014.7

Liabilities:

Investment contract liabilities:

With a fixed maturity

         2,106.0

         2,028.2

         2,282.9

         2,259.4

Without a fixed maturity

       13,884.9

       13,845.6

       12,936.9

       12,892.0

Liabilities related to Separate Accounts

       33,310.5

       33,310.5

       33,014.7

       33,014.7

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 gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the 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.

Derivative Financial Instruments

Interest Rate Floors

Interest rate floors are used to manage the interest rate risk in the Company's bond portfolio. Interest rate floors are purchased contracts that provide the Company with an annuity in a declining interest rate environment. The Company had no open interest rate floors at December 31, 2004 or 2003.

C-30

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Interest Rate Caps

Interest rate caps are used to manage the interest rate risk in the Company's bond portfolio. Interest rate caps are purchased contracts that provide the Company with an annuity in an increasing interest rate environment. The notional amount, carrying value and estimated fair value of the Company's open interest rate caps as of December 31, 2004 were $527.8, $5.9, and $5.9, respectively. The notional amount, carrying value and estimated fair value of the Company's open interest rate caps as of December 31, 2003 were $739.6, $8.2, and $8.2, respectively.

Interest Rate Swaps

Interest rate swaps are used to manage the interest rate risk in the Company's bond portfolio and 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. The notional amount, carrying value and estimated fair value of the Company's open interest rate swaps as of December 31, 2004 were $1,766.0, $2.1, and $2.1, respectively. The notional amount, carrying value and estimated fair value of the Company's open interest rate swaps as of December 31, 2003 were $950.0, $(14.4), and $(14.4), respectively.

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 US dollar cash flows at regular interim periods, typically quarterly or semi-annually. The notional amount, carrying value, and estimated fair value of the Company's open foreign exchange rate swaps as of December 31, 2004 were $126.5, $(28.4), and $(28.4), respectively. The notional amount, carrying value and estimated fair value of the Company's open foreign exchange rate swaps as of December 31, 2003 were $78.1, $(12.8), and $(12.8), respectively.

C-31

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

3.	Deferred Policy Acquisition Costs and Value of Business Acquired

Activity for the year-ended December 31, 2004, 2003 and 2002 within VOBA was as follows:

Balance at December 31, 2001

$         1,601.8

   Adjustment for unrealized gain (loss)

                (21.9)

   Additions

                 25.0

   Interest accrued at 7%

                 86.8

   Amortization

              (253.3)

Balance at December 31, 2002

            1,438.4

   Adjustment for unrealized gain (loss)

                   6.2

   Additions

                 59.1

   Interest accrued at 7%

                 92.2

   Amortization

              (180.5)

Balance at December 31, 2003

            1,415.4

   Adjustment for unrealized gain (loss)

                   7.9

   Additions

                 50.1

   Interest accrued at 6%

                 92.3

   Amortization

              (200.5)

Balance at December 31, 2004

$         1,365.2

The estimated amount of VOBA to be amortized, net of interest, over the next five years is $112.2, $105.8, $97.4, $92.4, and $90.6 for the years 2005, 2006, 2007, 2008 and 2009, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

During 2004, VOBA amortization increased principally due to higher actual gross profits, as a result of the margins earned on higher fixed and variable assets and fewer other-than-temporary impairments. Also, surrenders increased, which resulted in higher amortization for certain business.

During 2003 the Company reset long-term assumptions for the Separate Account returns from 9.0% to 8.5% (gross before fund management fees and mortality, expense, and other policy charges), reflecting a blended return of equity and other sub-accounts. The 2003 unlocking adjustment was primarily driven by improved market performance compared to expected during 2003. For the year ended December 31, 2003, the Company recorded a deceleration of DAC/VOBA amortization totaling $3.7 before tax, or $2.4, net of $1.3 of federal income tax expense.

C-32

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

As part of the regular analysis of DAC/VOBA, at the end of third quarter of 2002, the Company unlocked its long-term rate of return assumptions. The Company reset long-term return assumptions for the Separate Account returns to 9.0% (gross before fund management fees and mortality, expense, and other policy charges), as of December 31, 2002, reflecting a blended return of equity and other sub-accounts. The unlocking adjustment in 2002 was primarily driven by the sustained downturn in the equity markets and revised expectations for future returns. During 2002, the Company recorded an acceleration of DAC/VOBA amortization totaling $45.6 before tax, or $29.7, net of $15.9 of federal income tax benefit.

4.	Dividend Restrictions and Shareholder's Equity

The Company'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 12 months, exceeds the greater of (1) 10% of statutory surplus at prior year end or (2) ILIAC's prior year statutory net gain from operations.

ILIAC paid a cash dividend of $70.0 to Lion in 2004 and did not pay cash dividends to Lion in 2003 or 2002. However, on February 28, 2002, ILIAC contributed 100% of the stock of IA Holdco to HOLDCO in the form of a $60.1 dividend distribution. ILIAC did not receive capital contributions from its parent in 2004 and received $230.0 and $164.3 in capital contributions during 2003 and 2002, respectively.

The Insurance Department of the State of Connecticut (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 $217.2, $67.5, and $148.8 for the years ended December 31, 2004, 2003, and 2002, respectively. Statutory capital and surplus was $1,344.5 and $1,230.7 as of December 31, 2004 and 2003, respectively.

As of December 31, 2004, the Company did not utilize any statutory accounting practices, which are not prescribed by state regulatory authorities that, individually or in the aggregate, materially affect statutory capital and surplus.

5.	Additional Insurance Benefits and Minimum Guarantees

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

C-33

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

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, 2004, the Separate Account liability subject to SOP 03-1 for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees was $4,396.0 and $0.7, 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, 2004 was $4,396.0.

6.	Income Taxes

ILIAC files a consolidated federal income tax return with its subsidiary, IICA. ILIAC has a federal tax allocation agreement with IICA whereby ILIAC charges its subsidiary for federal taxes it would have incurred were it not a member of the consolidated group and credits IICA for losses at the statutory federal tax rate.

Income taxes (benefits) from continuing operations consist of the following:

Year ended December 31,

2004

2003

2002

Current tax expense (benefit):

Federal

$                 (3.8)

$                 37.9

$                 40.4

State

                        -

                      1.1

                      1.8

Total current tax expense (benefit)

                    (3.8)

                    39.0

                    42.2

Deferred tax expense (benefit):

Federal

                    46.2

                    22.1

                  (23.6)

Total deferred tax expense (benefit)

                    46.2

                    22.1

                  (23.6)

Total income tax expense (benefit)

$                 42.4

$                 61.1

$                 18.6

C-34

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

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

Year ended December 31,

2004

2003

2002

Income before income taxes and cumulative

effect of change in accounting principle

$               241.7

$               215.7

$                 86.1

Tax rate

35%

35%

35%

Income tax at federal statutory rate

                    84.6

                    75.5

                    30.1

Tax effect of:

State income tax, net of federal benefit

                        -

                      0.7

                      1.2

Dividends received deduction

                    (9.6)

                  (14.0)

                    (5.3)

IRS audit settlement

                  (33.0)

Transfer of mutual fund shares

                        -

                        -

                    (6.7)

Other, net

                      0.4

                    (1.1)

                    (0.7)

Income tax expense

$                 42.4

$                 61.1

$                 18.6

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, are presented below:

2004

2003

Deferred tax assets:

Insurance reserves

$               286.4

$               263.7

Unrealized gains allocable to experience-rated contracts

                  125.1

                  172.0

Investments

                        -

                    69.7

Postemployment benefits

                    60.5

                    30.2

Compensation

                    35.5

                    56.0

Other, net

                    23.4

                    19.7

Total gross assets

                  530.9

                  611.3

Deferred tax liabilities:

Value of business acquired

                  477.8

                  495.4

Net unrealized capital gains

                  161.3

                  236.4

Deferred policy acquisition costs

                    91.3

                    59.2

Other, net

                      9.8

                      5.0

Total gross liabilities

                  740.2

                  796.0

Net deferred tax liability

$               209.3

$               184.7

Net unrealized capital gains and losses are presented as a component of Other Comprehensive Income in shareholder's equity, net of deferred taxes.

Under prior law, the Company was allowed to defer from taxation a portion of income. The deferred income was accumulated in the Policyholders' Surplus Account and only becomes taxable under certain conditions, which management believes to be remote.

C-35

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Furthermore, the American Jobs Creation Act of 2004 allows certain tax-free distributions from the Policyholders' Surplus Account during 2005 and 2006. Therefore, based on currently available information, no federal income taxes have been provided on the Policyholders' Surplus Account accumulated balance of $17.2 million.

Valuation allowances are provided when it is considered more likely than not that deferred tax assets will not be realized. No valuation allowance has been established at this time, as management believes the above conditions presently do not exist.

The Company establishes reserves for probable proposed adjustments by various taxing authorities. Management believes there are sufficient reserves provided for, or adequate defenses against any such adjustments. The Internal Revenue Service (the "Service") has completed examinations of the federal income tax returns of the Company for all years through the December 13, 2000 short period. The tax benefit associated with the settlement of the most recent audit is included in the 2004 financial statements. The Service has commenced its examination for the tax years ended December 31, 2000 and 2001. Additionally, various state tax audits are in process.

7.	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 subsidiaries and affiliates (excluding certain employees) are eligible to participate, including the Company's employees other than Company agents.

The Retirement Plan is a tax-qualified defined benefit plan, the benefits of which are guaranteed (within certain specified legal limits) by the Pension Benefit Guaranty Corporation ("PBGC"). As of January 1, 2002, each participant in the Retirement Plan (except for certain specified employees) earns a benefit under a final average compensation formula. Subsequent to December 31, 2001, ING North America is responsible for all Retirement Plan liabilities. The costs allocated to the Company for its employees' participation in the Retirement Plan were $19.0 for 2004, $15.1 for 2003, and $6.4 for 2002, respectively.

Defined Contribution Plan

ING North America sponsors the ING Savings Plan and ESOP (the "Savings Plan"). Substantially all employees of ING North America and its subsidiaries and 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

C-36

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Agents are certain, full-time insurance salesmen who have entered into a career agent agreement with the Company and certain other individuals who meet specified eligibility criteria. The Savings Plan is a tax-qualified profit sharing and stock bonus plan, which includes an employee stock ownership plan ("ESOP") component. Savings Plan benefits are not guaranteed by the PBGC. The Savings Plan allows eligible participants to defer into the Savings Plan a specified percentage of eligible compensation on a pre-tax basis. ING North America matches such pre-tax contributions, up to a maximum of 6% of eligible compensation. All matching contributions are subject to a 4-year graded vesting schedule (although certain specified participants are subject to a 5-year graded vesting schedule). All contributions made to the Savings Plan are subject to certain limits imposed by applicable law. Pre-tax charges of operations of the Company for the Savings Plan were $8.0, $7.1 and $7.1 in 2004, 2003, and 2002, respectively.

Other Benefit Plans

The Company also sponsors a tax-qualified profit sharing plan for Career Agents that is intended to satisfy the requirements of Code Section 401(K).

In addition to providing retirement plan benefits, the Company, in conjunction with ING North America, provides certain supplemental retirement benefits to eligible employees; defined benefit pension plans for insurance salesmen who have entered into a career agent agreement and certain other individuals; and health care and life insurance benefits to retired employees and their eligible dependents. The supplemental retirement plan and defined benefit pension plan are non-qualified defined benefit pension plans, which means all benefits are payable from the general assets of the Company. The post-retirement health care plan is contributory, with retiree contribution levels adjusted annually. The defined benefit plan for salesmen was terminated effective January 1, 2002, and all benefit accruals ceased. The life insurance plan provides a flat amount of noncontributory coverage and optional contributory coverage. The benefit charges allocated to the Company related to all of these plans for the years ended December 31, 2004, 2003, and 2002, were not significant.

8.	Related Party Transactions

Operating Agreements

ILIAC has certain agreements whereby it incurs expenses with affiliated entities. The agreements are as follows:

Investment advisory agreement with ING Investment Management LLC ("IIM"), in which IIM provides asset management and accounting services. The Company records a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2004, 2003, and 2002, expenses were incurred in the amounts of $58.8, $53.8, and $46.5, respectively.

C-37

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Services agreement between the Company and its affiliates effective January 2001, and amended effective January 1, 2002. For the years ended December 31, 2004, 2003, and 2002, net expenses related to the agreement where incurred in the amount of $8.6, $19.2, and $13.4, respectively.

Expense sharing agreement with ING North America Insurance Corporation, Inc., dated as of January 1, 2001, as amended effective January 1, 2002, for administrative, management, financial, and information technology services. For the years ended December 31, 2004, 2003, and 2002, expenses were incurred in the amounts of $132.9, $136.4, and $126.0, respectively.

Management and service contracts and all cost sharing arrangements with other affiliated companies are allocated in accordance with the Company's expense and cost allocation methods.

Investment Advisory and Other Fees

ILIAC serves as investment advisor to certain variable funds used in Company products (collectively, the "Company Funds"). The Company Funds pay ILIAC, as investment advisor, a daily fee which, on an annual basis, ranged, depending on the Fund, from 0.5% to 1.0% of their average daily net assets. Each of the Company Funds managed by ILIAC are subadvised by investment advisors, in which case ILIAC pays a subadvisory fee to the investment advisors, which may include affiliates. 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 a daily fee, which, on an annual basis is, depending on the product, up to 3.4% of their average daily net assets. The amount of compensation and fees received from affiliated mutual funds and separate accounts, amounted to $209.2, $201.4 (excludes fees paid to Aeltus Investment Management, Inc., now known as ING Investment Management LLP ("Aeltus")), and $391.8 (includes fees paid to Aeltus through February 28, 2002, when IA Holdco, Aeltus' parent, ceased to be a subsidiary of ILIAC) in 2004, 2003, and 2002, respectively.

Reciprocal Loan Agreement

ILIAC maintains a reciprocal loan agreement with ING AIH, an indirect wholly-owned subsidiary of ING and affiliate to ILIAC, to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Under this agreement, which became effective in June 2001 and expires on April 1, 2011, ILIAC and ING AIH can borrow up to 3% of ILIAC's statutory admitted assets as of the preceding December 31 from one another. Interest on any ILIAC borrowings is charged at the rate of ING AIH's cost of funds for the interest period plus 0.15%. Interest on any ING AIH borrowings is charged at a rate based on the prevailing interest rate of U.S. commercial paper available for purchase with a similar duration. Under this agreement, ILIAC incurred interest expense

C-38

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

of $0.2, $0.1, and $0.1, for the years ended December 31, 2004, 2003, and 2002, respectively, and earned interest income of $1.3, $0.9, and $2.1 for the years ended December 31, 2004, 2003, and 2002, respectively. At December 31, 2004 and 2003, respectively, ILIAC had a $25.0 and $41.4 receivable from ING AIH under this agreement.

Notes from Affiliate

On December 29, 2004, ING USA Annuity and Life Insurance Company ("ING USA") issued surplus notes in the aggregate principal amount of $400.0 (the "Notes") scheduled to mature on December 29, 2034, to its affiliates, ILIAC, ReliaStar Life Insurance Company ("ReliaStar Life"), and Security Life of Denver International Limited ("SLDI"), in an offering that was exempt from the registration requirements of the Securities Act of 1933. The Company's $175.0 Notes Receivable from ING USA bears interest at a rate of 6.257% per year. Any payment of principal and/or interest is subject to the prior approval of the Insurance Commissioner of the state of Iowa. Interest is scheduled to be paid semi-annually in arrears on June 29 and December 29 of each year, commencing on June 29, 2005.

Tax Sharing Agreements

ILIAC has a federal tax sharing agreement with IICA, whereby ILIAC charges its subsidiary for federal taxes it would have incurred were it not a member of the consolidated group and credits the member for losses at the statutory federal tax rate.

ILIAC has also entered into a state tax sharing agreement with ING AIH and each of the specific subsidiaries that are parties to the agreement. The state tax agreement applies to situations in which ING AIH and all or some of the subsidiaries join in the filing of a state or local franchise, income tax, or other tax return on a consolidated, combined, or unitary basis.

Capital Transactions and Dividends

In 2004, ILIAC did not receive any capital contributions. In 2003, ILIAC received $230.0 in cash capital contributions from Lion. In 2002, ILIAC received capital contributions in the form of investments in affiliated mutual funds of $164.3 from HOLDCO.

ILIAC paid a cash dividend of $70.0 to Lion in 2004 and did not pay any cash dividends to Lion in 2003 or 2002. However, on February 28, 2002, ILIAC contributed 100% of the stock of IA Holdco to HOLDCO in the form of a $60.1 dividend distribution.

C-39

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

9.	Financing Agreements

The Company maintains a revolving loan agreement with SunTrust Bank, Atlanta (the "Bank"). Under this agreement, which is due on demand, the Company can borrow up to $125.0 from the Bank. Interest on any borrowing accrues at an annual rate equal to (1) the cost of funds for the Bank for the period applicable for the advance plus .225% or (2) a rate quoted by the Bank to the Company for the borrowing. Under the agreement, the Company incurred minimal interest expense for the years ended December 31, 2004, 2003, and 2002, respectively. At December 31, 2004 and 2003, the Company did not have any balances payable to the Bank.

The Company also maintains a perpetual revolving loan agreement with Bank of New York ("BONY"). Under this agreement, the Company can borrow up to $100.0 from BONY. Interest on any of the Company borrowing accrues at an annual rate equal to (1) the cost of funds for BONY for the period applicable for the advance plus .35% or (2) a rate quoted by BONY to the Company for the borrowing. Under this agreement, the Company incurred minimal interest expense for the years ended December 31, 2004, 2003, and 2002. At December 31, 2004 and 2003, the Company did not have any balances payable to BONY.

Also see Reciprocal Loan Agreement in Note 9.

10.

Reinsurance

At December 31, 2004, the Company had reinsurance treaties with six unaffiliated reinsurers and one affiliated reinsurer covering a significant portion of the mortality risks and guaranteed death and living benefits under its variable contracts. The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements.

On October 1, 1998, the Company sold its domestic individual life insurance business to Lincoln for $1.0 billion in cash. The transaction is generally in the form of an indemnity reinsurance arrangement, under which Lincoln contractually assumed from the Company certain policyholder liabilities and obligations, although the Company remains directly obligated to contractowners.

Effective January 1, 1998, 90% of the mortality risk on substantially all individual universal life product business written from June 1, 1991 through October 31, 1997 was reinsured externally. Beginning November 1, 1997, 90% of new business written on these products was reinsured externally. Effective October 1, 1998 this agreement was assigned from the third party reinsurer to Lincoln.

C-40

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Effective December 31, 1988, the Company entered into a modified coinsurance reinsurance agreement ("MODCO") with Aetna Life Insurance Company ("Aetna Life"), (formerly an affiliate of the Company), in which substantially all of the nonparticipating individual life and annuity business written by Aetna Life prior to 1981 was assumed by the Company. Effective January 1, 1997, this agreement was amended to transition (based on underlying investment rollover in Aetna Life) from a modified coinsurance arrangement to a coinsurance agreement. As a result of this change, reserves were ceded to the Company from Aetna Life as investment rollover occurred. Effective October 1, 1998, this agreement was fully transitioned to a coinsurance arrangement and this business along with the Company's direct individual life insurance business, with the exception of certain supplemental contracts with reserves of $61.1 and $63.8 as of December 31, 2004 and 2003, respectively, was sold to Lincoln.

On December 16, 1988, 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 $19.3 and $20.4 were maintained for this contract as of December 31, 2004 and 2003, respectively.

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

Year ended December 31,

2004

2003

2002

Direct premiums

$                 39.0

$                 51.1

$                 55.9

Reinsurance assumed

                        -

                      0.1

                        -

Reinsurance ceded

                    (0.5)

                    (1.1)

                    (2.0)

Net premiums

$                 38.5

$                 50.1

$                 53.9

11.

Commitments and Contingent Liabilities

Leases

The Company leases its office space and certain other equipment under operating leases that expire through 2009.

For the years ended December 31, 2004, 2003, and 2002, rent expense for leases was $18.1, $20.8 and $18.1, respectively. The future net minimum payments under noncancelable leases for the years ended December 31, 2005 through 2009 are estimated to be $16.7, $15.4, $14.0, $1.3, and $0.5, respectively, and $0.1 thereafter. The Company pays substantially all expenses associated with its leased and subleased office properties. Expenses not paid directly by the Company are paid for by an affiliate and allocated back to the Company.

C-41

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

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, 2004, the Company had off-balance sheet commitments to purchase investments of $778.2 with an estimated fair value of $778.2.

Litigation

The Company is a party to threatened or pending lawsuits/arbitrations arising from the normal conduct of business. Due to the climate in insurance and business litigation/arbitration, suits against the Company sometimes include claims for substantial compensatory, consequential or punitive damages and other types of relief. Moreover, certain claims are asserted as class actions, purporting to represent a group of similarly situated individuals. While it is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance and established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a materially adverse effect on the Company's operations or financial position.

Regulatory Matters

Fund Regulatory Issues

C-42

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

The internal review identified several isolated arrangements allowing third parties to engage in frequent trading of mutual funds within the variable insurance and mutual fund products of certain affiliates of the Company, and identified other circumstances where frequent trading occurred despite measures taken by ING intended to combat market timing. Each of the arrangements has been terminated and disclosed to regulators, to the independent trustees of ING Funds (U.S.) and in Company reports previously filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended.

Other regulators, including the SEC and the New York Attorney General, are also likely to take some action with respect to certain ING affiliates before concluding their investigation of ING relating to fund trading. The potential outcome of such action is difficult to predict but could subject certain affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It is not currently anticipated, however, that the actual outcome of such action will have a material adverse effect on ING or ING's U.S.-based operations, including the Company.

Other Regulatory Matters

C-43

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

These initiatives may result in new legislation and regulation that could significantly affect the financial services industry, including businesses in which the Company is engaged.

In light of these and other developments, U.S. affiliates of ING, including the Company, periodically review whether modifications to their business practices are appropriate.

12.

Other Comprehensive Income

The components of other comprehensive income for the years ended December 31, 2004 and 2003 were as follows:

		As of December 31,
		2004	2003
Net unrealized capital gains (losses):
	Fixed maturities	$ 124.6	$ 108.5
	Equity securities	8.7	14.4
	Sales inducements	(0.1)	-
	Other	(8.2)	51.6
Subtotal		125.0	174.5
Less: Deferred income taxes		41.2	58.5
Net unrealized capital gains		83.8	116.0
Minimum pension liability		(16.7)	-
Net accumulated other comprehensive income		$ 67.1	$ 116.0

Net unrealized capital gains allocated to experience-rated contracts of $357.5 and $491.5 at December 31, 2004 and 2003, respectively, are reflected on the Consolidated Balance Sheets in future policy benefits and claims reserves and are not included in shareholder's equity.

C-44

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Changes in accumulated other comprehensive income related to changes in net unrealized gains (losses) on securities, including securities pledged, excluding those related to experience-rated contractholders, were as follows:

Year ended December 31,

2004

2003

2002

Unrealized holding (losses) gains arising

during the year ⁽¹⁾

$                 18.6

$               (48.1)

$               127.4

Less: reclassification adjustment for gains

(losses) and other items included in

net income⁽²⁾

                    50.8

                  (46.6)

                    65.7

Net unrealized (losses) gains on securities

$               (32.2)

$                 (1.5)

$                 61.7

(1) Pretax net unrealized holding gains (losses) were $28.6, $(74.0), and $196.0, for the years ended December 31, 2004, 2003, and 2002, respectively.

(2) Pretax reclassification adjustments for gains (losses) and other items included in net income were $78.1, $(71.6), and $101.1, for the years ended December 31, 2004, 2003, and 2002, respectively.

13.

Reclassifications and Changes to Prior Year Presentation

During 2004, certain changes were made to the 2003 and 2002 Statements of Operations to reflect the correct balances, as follows:

Certain changes were made to the classification of reinsurance ceded related to certain products, which were included as a reduction to premiums.

Certain changes were made to the classification of certain annuity and other products, which were included in premium income.

Certain changes were made to the classification of certain benefits to contractowners, which were included as a reduction to premiums.

In addition, certain reclassifications have been made to conform to the current year presentation.

C-45

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

These changes had no impact on net income or shareholder's equity of the Company. We deemed these changes to the Statement of Operations as immaterial, and, as such, have not labeled the Statement of Operations as restated. The following summarizes the corrections to each financial statement line item:

Previously

Revised

Year ended 12/31/2003

Reported 2003

Adjustment

2003

Fee income

$               384.3

$              11.5

$            395.8

Premiums

                    95.8

                (45.7)

                 50.1

Total revenue

               1,463.7

                (34.2)

            1,429.5

Interest credited and other benefits to contractowners

                  757.6

                (34.2)

               723.4

Total expense

               1,248.0

                (34.2)

            1,213.8

Previously

Revised

Year ended 12/31/2002

Reported 2002

Adjustment

2002

Fee income

$               418.2

$                5.7

$            423.9

Premiums

                    98.7

                (44.8)

                 53.9

Total revenue

               1,375.4

                (39.1)

            1,336.3

Interest credited and other benefits to contractowners

                  746.4

                (39.1)

               707.3

Total expense

               1,289.3

                (39.1)

            1,250.2

C-46

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)
Notes to Consolidated Financial Statements

Also, during 2004, certain changes were made to the 2003 and 2002 Statements of Cash Flows to reflect the correct balances, primarily related to payables for securities purchased, short-term borrowings, and investment contracts. As a result of these adjustments, we have labeled the Statements of Cash Flows for 2003 and 2002 as restated. The following summarizes the adjustments:

Previously

Reported

Adjustment

Restated

Year ended 12/31/2003

Net cash provided by (used for) operating activities

$         1,254.8

$           (196.5)

$         1,058.3

Net cash provided by (used for) financing activities

               781.1

               196.5

               977.6

Year ended 12/31/2002

Net cash provided by (used for) operating activities

$         1,527.7

$           (132.4)

$         1,395.3

Net cash used for investing activities

           (2,152.0)

              (167.3)

          (2,319.3)

Net cash provided by (used for) financing activities

               607.7

               299.7

               907.4

C-47

ING LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly-owned subsidiary of Lion Connecticut Holdings Inc.)

QUARTERLY DATA (UNAUDITED)

Restatement of Financial Information: During the quarterly period ended June 30, 2003, the Company incorrectly recorded investment income and realized capital gains related to Separate Accounts. The Company noted the effect of this error during the compilation of the December 31, 2003 consolidated financial statements and made the appropriate changes to the quarterly periods ended June 30, 2003 and September 30, 2003.

The following tables show the previously reported and restated amounts for each of the periods affected in 2003.

As Restated
2004	(In millions)	First	Second	Third	Fourth
Total revenue		$ 384.5	$ 362.1	$ 376.7	$ 379.2
Income (loss) before income taxes		64.4	54.7	61.3	61.3
Income tax expense (benefit)		20.4	17.0	(14.3)	19.3
Net income		$ 44.0	$ 37.7	$ 75.6	$ 42.0

As Reported
2004	(In millions)	First	Second	Third
Total revenue		$ 387.3	$ 364.4	$ 379.0
Income (loss) before income taxes		64.4	54.7	61.3
Income tax expense (benefit)		20.4	17.0	(14.3)
Net income		$ 44.0	$ 37.7	$ 75.6

As Restated
2003	(In millions)	First	Second*	Third*	Fourth
Total revenue		$ 351.6	$ 374.5	$ 353.9	$ 349.5
Income before income taxes		17.5	109.2	25.5	63.5
Income tax expense		5.1	35.4	0.6	20.0
Net income		$ 12.4	$ 73.8	$ 24.9	$ 43.5

As Reported
2003	(In millions)	First	Second*	Third*	Fourth
Total revenue		$ 359.2	$ 381.3	$ 354.7	$ 368.5
Income before income taxes		17.5	109.2	25.5	63.5
Income tax expense		5.1	35.4	0.6	20.0
Net income		$ 12.4	$ 73.8	$ 24.9	$ 43.5

* Restated

C-48

Form No. SAI.75998-05

ILIAC Ed. April 2005

Current Name		Former Name
AllianceBernstein Variable Products Series Fund, Inc.:		AllianceBernstein Variable Products Series Fund, Inc.:
	AllianceBernstein VPSF Small Cap Growth - Class A		Alliance Bernstein VPSF Quasar - Class A
Federated Insurance Series:		Federated Insurance Series:
	Federated Mid Cap Growth Strategies Fund II		Federated Growth Strategies Fund II
ING Partners, Inc.:		ING Partners, Inc.:
	ING Aeltus Enhanced Index Portfolio - Service Class		ING DSI Enhanced Index Portfolio - Service Class
	ING American Century Select Portfolio - Service Class		ING Alger Growth Portfolio - Service Class
	ING JPMorgan International Portfolio - Initial Class		ING JPMorgan Fleming International Portfolio -
				Initial Class
	ING Oppenheimer Global Portfolio - Service Class		ING MFS Global Growth Portfolio - Service Class
	ING T. Rowe Price Diversified Mid Cap Growth		ING Alger Aggressive Growth Portfolio - Service Class

Current Name				Former Name
			Portfolio - Service Class
	ING UBS U.S. Large Cap Equity Portfolio - Initial Class				ING MFS Research Equity Portfolio - Initial Class
	ING Van Kampen Equity and Income Portfolio -				ING UBS Tactical Asset Allocation Portfolio -
			Service Class					Service Class
ING Strategic Allocation Portfolios, Inc.:				ING Generations Portfolio, Inc.:
	ING VP Strategic Allocation Balanced Portfolio - Class I				ING VP Strategic Allocation Balanced Portfolio - Class R
	ING VP Strategic Allocation Growth Portfolio - Class I				ING VP Strategic Allocation Growth Portfolio - Class R
	ING VP Strategic Allocation Income Portfolio - Class I				ING VP Strategic Allocation Income Portfolio - Class R
ING Variable Funds:				ING Variable Funds:
	ING VP Growth and Income Portfolio - Class I					ING VP Growth and Income Portfolio - Class R
ING Variable Portfolios, Inc.:				ING Variable Portfolios, Inc.:
	ING VP Global Science and Technology Portfolio - Class I					ING VP Technology Portfolio - Class R
	ING VP Growth Portfolio - Class I					ING VP Growth Portfolio - Class R
	ING VP Index Plus LargeCap Portfolio - Class I					ING VP Index Plus LargeCap Portfolio - Class R
	ING VP Index Plus MidCap Portfolio - Class I					ING VP Index Plus MidCap Portfolio - Class R
	ING VP Index Plus SmallCap Portfolio - Class I					ING VP Index Plus SmallCap Portfolio - Class R
	ING VP International Equity Portfolio - Class I					ING VP International Equity Portfolio - Class R
	ING VP Small Company Portfolio - Class I					ING VP Small Company Portfolio - Class R
	ING VP Value Opportunity Portfolio - Class I					ING VP Value Opportunity Portfolio - Class R
ING Variable Products Trust:				ING Variable Products Trust:
	ING VP Growth Opportunities Portfolio - Class I					ING VP Growth Opportunities Portfolio - Class R
	ING VP International Value Portfolio - Class I					ING VP International Value Portfolio - Class R
	ING VP MagnaCap Portfolio - Class I					ING VP MagnaCap Portfolio - Class R
	ING VP MidCap Opportunities Portfolio - Class I					ING VP MidCap Opportunities Portfolio - Class R
	ING VP SmallCap Opportunities Portfolio - Class I					ING VP SmallCap Opportunities Portfolio - Class R
ING VP Balanced Portfolio, Inc. - Class I				ING VP Balanced Portfolio, Inc. - Class R
ING VP Intermediate Bond Portfolio - Class I				ING VP Bond Portfolio - Class R
ING VP Money Market Portfolio - Class I				ING VP Money Market Portfolio - Class R
MFS® Funds:				MFS® Funds:
	MFS® VIT Strategic Income Series					MFS® Global Governments Series
	MFS® VIT Total Return Series - Initial Class					MFS® Total Return Series - Initial Class
Prudential Series Fund, Inc.:				Prudential Series Fund, Inc.:
	SP William Blair International Growth Portfolio -					SP Jennison International Growth Portfolio -
		Class II Shares					Class II Shares
UBS Series Trust:				UBS Series Trust:
	UBS U. S. Allocation Portfolio - Class I					UBS Tactical Allocation Portfolio - Class I

		Year ended December 31
		2004		2003
		Purchases	Sales	Purchases	Sales
		(Dollars in Thousands)
AIM Variable Insurance Funds:
	AIM V.I. Capital Appreciation	$ 739	$ 3,995	$ 1,737	$ 3,129
	AIM V.I. Core Equity	2,792	8,277	3,305	4,917
	AIM V.I. Government Securities	4,900	5,165	6,524	17,272
	AIM V.I. Growth	1,088	3,484	1,907	3,089
	AIM V.I. Premier Equity	465	8,725	1,284	8,823
Alger American Funds:
	Alger American Balanced	171	653	132	720
	Alger American Income & Growth	125	1,702	168	1,486
	Alger American Leveraged AllCap	43	1,763	1	1,075
AllianceBernstein Variable Products Series Fund, Inc.:
	AllianceBernstein VPSF Growth and Income	11,559	2,742	9,057	3,429
	AllianceBernstein VPSF Premier Growth	1,267	1,635	1,645	1,504
	AllianceBernstein VPSF Small Cap Growth	2,580	1,876	3,231	736
American Century® Investments:
	American Century® VP Balanced	64	482	40	323
	American Century® VP International	11	319	19	485
Calvert Social Balanced		314	448	559	412
Federated Insurance Series:
	Federated American Leaders	1,373	14,249	1,301	11,123
	Federated Capital Income	495	2,024	534	1,842
	Federated Equity Income	428	3,254	627	2,131
	Federated Fund for U.S. Government Securities	1,218	4,431	1,190	3,794
	Federated High Income Bond	2,542	6,682	1,589	4,535
	Federated International Equity	106	1,558	361	1,465
	Federated Mid Cap Growth Strategies	79	2,899	475	2,609
	Federated Prime Money	1,716	3,320	2,583	5,040
Fidelity® Variable Insurance Products Fund:
	Fidelity® VIP Contrafund®	37,679	12,694	26,291	23,400
	Fidelity® VIP Equity-Income	30,257	22,411	41,183	36,146
	Fidelity® VIP Growth	6,891	25,796	10,899	13,392
	Fidelity® VIP High Income	13,312	22,116	30,754	18,518
	Fidelity® VIP Asset Manager^SM	1,351	2,085	1,642	2,158
	Fidelity® VIP Investment Grade Bond	213	433	220	846
	Fidelity® VIP Index 500	3,354	13,270	7,977	13,648
	Fidelity® VIP Overseas	7,834	7,574	36,192	32,346

Division/Contract	Units	Unit Value	Extended Value
AIM V.I. Capital Appreciation
Currently payable annuity contracts:			$ 946,010
Contracts in accumulation period:
Non-Qualified V	4,777.356	$ 9.22	44,047
Non-Qualified V (0.75)	44,456.366	9.49	421,891
Non-Qualified XII	998.426	9.46	9,445
Non-Qualified XIII	360,588.990	9.99	3,602,284
Non-Qualified XIV	498,002.286	9.80	4,880,422
Non-Qualified XV	253,032.623	9.70	2,454,416
Non-Qualified XVI	162,108.604	5.80	940,230
Non-Qualified XVIII	146,608.432	5.69	834,202
Non-Qualified XIX	181,279.629	5.73	1,038,732
	1,651,852.712		$ 15,171,679

AIM V.I. Core Equity
Currently payable annuity contracts:			$ 4,601,788
Contracts in accumulation period:
Non-Qualified V	47,386.185	$ 8.31	393,779
Non-Qualified V (0.75)	70,643.921	8.55	604,006
Non-Qualified IX	854.295	8.19	6,997
Non-Qualified XII	1,350.732	8.52	11,508
Non-Qualified XIII	707,925.921	10.20	7,220,844
Non-Qualified XIV	1,122,563.215	10.00	11,225,632
Non-Qualified XV	405,693.092	9.91	4,020,419
Non-Qualified XVI	176,118.093	6.84	1,204,648
Non-Qualified XVIII	86,754.287	6.71	582,121
Non-Qualified XIX	288,654.300	6.75	1,948,417
Non-Qualified XX	772.921	12.80	9,893
	2,908,716.962		$ 31,830,052

AIM V.I. Government Securities
Contracts in accumulation period:
Non-Qualified XIII	351,284.673	$ 12.57	$ 4,415,648
Non-Qualified XIV	405,962.802	12.39	5,029,879
Non-Qualified XV	180,923.683	12.30	2,225,361
Non-Qualified XVI	100,760.406	11.85	1,194,011
Non-Qualified XVIII	54,060.080	11.62	628,178
Non-Qualified XIX	90,863.230	11.70	1,063,100
	1,183,854.875		$ 14,556,177

					Investment
		Units	Unit Fair Value	Net Assets	Income		Expense Ratio^B	Total Return^C
Division		(000's)	(lowest to highest)	(000's)	Ratio^A		(lowest to highest)	(lowest to highest)
AIM V.I. Capital Appreciation
	2004	1,652	$5.69 to $9.99	$ 15,172	-	%	0.75% to 1.90%	4.60% to 5.80%
	2003	2,018	$5.44 to $9.46	17,500	-		0.75% to 1.90%	27.10% to 28.59%
	2002	2,233	$4.28 to $7.37	14,832	-		0.45% to 1.90%	-25.80% to -0.04%
	2001	2,600	$5.77 to $9.84	23,509	7.71		0.45% to 2.25%	-24.75% to -23.82%
	2000	2,085	$7.67 to $12.95	25,987	(a)		(a)	(a)
AIM V.I. Core Equity
	2004	2,909	$6.71 to $12.80	31,830	0.91		0.75% to 2.25%	6.85% to 8.23%
	2003	3,366	$6.28 to $11.86	34,908	0.97		0.75% to 2.25%	22.18% to 23.44%
	2002	3,742	$5.14 to $7.67	29,940	0.30		0.75% to 2.25%	-17.19% to -16.21%
	2001	4,491	$6.21 to $9.17	42,858	0.05		0.45% to 2.25%	-24.31% to -16.23%
	2000	4,034	$8.20 to $12.00	49,823	(a)		(a)	(a)
AIM V.I. Government Securities
	2004	1,184	$11.62 to $12.57	14,556	3.70		0.95% to 1.90%	0.61% to 1.62%
	2003	1,239	$11.55 to $12.37	15,026	1.78		0.95% to 1.90%	-0.86% to 0.08%
	2002	2,139	$11.65 to $12.36	25,997	2.67		0.95% to 1.90%	0.07% to 8.01%
	2001	819	$10.83 to $11.38	9,149	5.55		0.50% to 1.90%	4.38% to 5.40%
	2000	28	$10.38 to $10.80	295	(a)		(a)	(a)
AIM V.I. Growth
	2004	2,462	$4.56 to $12.89	16,959	-		0.75% to 1.90%	6.05% to 7.35%
	2003	2,783	$4.30 to $6.62	18,067	-		0.75% to 1.90%	28.74% to 30.23%
	2002	3,069	$3.34 to $5.09	14,946	-		0.75% to 1.90%	-32.29% to -31.49%
	2001	3,912	$4.93 to $7.44	27,757	0.20		0.45% to 2.25%	-35.18% to -34.38%
	2000	3,321	$7.60 to $11.37	37,257	(a)		(a)	(a)

			Gross	Gross
		Amortized	Unrealized	Unrealized	Fair
		Cost	Gains	Losses	Value
Fixed maturities:
U.S. government and government
	agencies and authorities	$ 197.3	$ 0.9	$ 0.9	$ 197.3
States, municipalities and political
	subdivisions	32.1	0.2	0.9	31.4
U.S. corporate securities:
	Public utilities	1,207.6	50.0	5.0	1,252.6
	Other corporate securities	5,846.5	275.0	25.4	6,096.1
Total U.S. corporate securities		7,054.1	325.0	30.4	7,348.7
Foreign securities:
	Government	660.2	33.9	3.1	691.0
	Other	1,656.4	78.4	6.1	1,728.7
Total foreign securities		2,316.6	112.3	9.2	2,419.7
Residential mortgage-backed securities		5,497.6	65.6	58.2	5,505.0
Commercial mortgage-backed securities		1,491.2	73.2	4.4	1,560.0
Other asset-backed securities		1,354.6	22.6	13.7	1,363.5
Total fixed maturities, including
	fixed maturities pledged	17,943.5	599.8	117.7	18,425.6
Less: fixed maturities pledged to creditors		1,258.8	18.0	2.5	1,274.3
Fixed maturities		16,684.7	581.8	115.2	17,151.3
Equity securities		153.9	9.2	0.5	162.6
Total investments available-for-sale		$ 16,838.6	$ 591.0	$ 115.7	$ 17,313.9

		Unrealized	Fair
		Loss	Value
Duration category:
	Less than six months below amortized cost	$ 37.7	$ 3,319.0
	More than six months and less than twelve months below cost	34.9	1,795.0
	More than twelve months below amortized cost	45.6	960.5
Total investments available-for-sale		$ 118.2	$ 6,074.5

			2004		2003
			Carrying	Fair	Carrying	Fair
			Value	Value	Value	Value
Assets:
	Fixed maturity securities, including
		securities pledged	$ 18,425.6	$ 18,425.6	$ 17,694.5	$ 17,694.5
	Equity securities		162.6	162.6	161.9	161.9
	Mortgage loans on real estate		1,090.2	1,119.8	754.5	798.5
	Policy loans		262.7	262.7	270.3	270.3
	Cash and cash equivalents		187.3	187.3	57.8	57.8
	Assets held in Separate Accounts		33,310.5	33,310.5	33,014.7	33,014.7
Liabilities:
	Investment contract liabilities:
		With a fixed maturity	2,106.0	2,028.2	2,282.9	2,259.4
		Without a fixed maturity	13,884.9	13,845.6	12,936.9	12,892.0
	Liabilities related to Separate Accounts		33,310.5	33,310.5	33,014.7	33,014.7

Balance at December 31, 2001										$ 1,601.8
Adjustment for unrealized gain (loss)										(21.9)
Additions										25.0
Interest accrued at 7%										86.8
Amortization										(253.3)

Balance at December 31, 2002										1,438.4
Adjustment for unrealized gain (loss)										6.2
Additions										59.1
Interest accrued at 7%										92.2
Amortization										(180.5)

Balance at December 31, 2003										1,415.4
Adjustment for unrealized gain (loss)										7.9
Additions										50.1
Interest accrued at 6%										92.3
Amortization										(200.5)

Balance at December 31, 2004										$ 1,365.2

			2004	2003
Deferred tax assets:
	Insurance reserves		$ 286.4	$ 263.7
	Unrealized gains allocable to experience-rated contracts		125.1	172.0
	Investments		-	69.7
	Postemployment benefits		60.5	30.2
	Compensation		35.5	56.0
	Other, net		23.4	19.7
		Total gross assets	530.9	611.3
Deferred tax liabilities:
	Value of business acquired		477.8	495.4
	Net unrealized capital gains		161.3	236.4
	Deferred policy acquisition costs		91.3	59.2
	Other, net		9.8	5.0
		Total gross liabilities	740.2	796.0
Net deferred tax liability			$ 209.3	$ 184.7

		Previously		Revised
Year ended 12/31/2003		Reported 2003	Adjustment	2003

Fee income		$ 384.3	$ 11.5	$ 395.8
Premiums		95.8	(45.7)	50.1
	Total revenue	1,463.7	(34.2)	1,429.5
Interest credited and other benefits to contractowners		757.6	(34.2)	723.4
	Total expense	1,248.0	(34.2)	1,213.8

		Previously		Revised
Year ended 12/31/2002		Reported 2002	Adjustment	2002

Fee income		$ 418.2	$ 5.7	$ 423.9
Premiums		98.7	(44.8)	53.9
	Total revenue	1,375.4	(39.1)	1,336.3
Interest credited and other benefits to contractowners		746.4	(39.1)	707.3
	Total expense	1,289.3	(39.1)	1,250.2

		Previously
		Reported	Adjustment	Restated
Year ended 12/31/2003
	Net cash provided by (used for) operating activities	$ 1,254.8	$ (196.5)	$ 1,058.3
	Net cash provided by (used for) financing activities	781.1	196.5	977.6

Year ended 12/31/2002
	Net cash provided by (used for) operating activities	$ 1,527.7	$ (132.4)	$ 1,395.3
	Net cash used for investing activities	(2,152.0)	(167.3)	(2,319.3)
	Net cash provided by (used for) financing activities	607.7	299.7	907.4