485BPOS 1 pea54nysut485b75962.htm PEA 54 NYSUT 485B 033-75962 pea54nysut485b75962.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing
As filed with the Securities and Exchange                                                          Registration No. 033-75962*
Commission on April 9, 2009                                                                           Registration No. 811-02513
                                                                                                                                         
                                                                 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

                                                                        
Post-Effective Amendment No. 54 To
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

and Amendment to

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

                                                                                    
Variable Annuity Account C of

ING Life Insurance and Annuity Company

One Orange Way, Windsor, Connecticut 06095-4774

Depositor’s Telephone Number, including Area Code: (860) 580-2831

Michael A. Pignatella, Counsel
ING US Legal Services
One Orange Way, C1S, Windsor, Connecticut 06095-4774
(Name and Address of Agent for Service)
                                            
It is proposed that this filing will become effective:

  		           immediately upon filing pursuant to paragraph (b) of Rule 485
  X    on May 1, 2009 pursuant to paragraph (b) of Rule 485

If appropriate, check the following box:

  		    this post-effective amendment designates a new effective date for a previously
             filed post-effective amendment.

Title of Securities Being Registered: Group Deferred Variable and Fixed Annuity Contracts

*Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has included a combined
prospectus under this Registration Statement which includes all the information which would
currently be required in a prospectus relating to the securities covered by the following earlier
Registration Statement: 033-75978.

                                                                         PART A

ING Life Insurance and Annuity Company
and its Variable Annuity Account C
 
Opportunity Plus Multiple Option Group Variable Annuity Contracts
 
Supplement dated May 1, 2009 to the Contract Prospectus, Contract Prospectus Summary and
Statement of Additional Information, each dated May 1, 2009

The following information updates and amends certain information contained in your variable annuity Contract
Prospectus, Contract Prospectus Summary and Statement of Additional Information (“SAI”). Please read it carefully
and keep it with your current Contract Prospectus, Contract Prospectus Summary and SAI for future reference.

1.   Effective in July and August certain funds offered through your contract will be reorganized into other funds as
follows:
 
  Effective after the close of business on July 17, 2009, the following Disappearing Portfolio will reorganize into
and become part of the following Surviving Portfolio:
 
    Disappearing Portfolio Surviving Portfolio
ING Van Kampen Capital Growth Portfolio ING RussellTM Large Cap Growth Index Portfolio

     Accordingly, effective after the close of business on July 17, 2009 investments in the Disappearing Portfolio will
     automatically become investments in the Surviving Portfolio, as follows:

  • Class I of the ING RussellTM Large Cap Growth Index Portfolio will automatically be added to your contract
    and all existing account balances invested in the ING Van Kampen Capital Growth Portfolio (Class I) will
    automatically become investments in the ING RussellTM Large Cap Growth Index Portfolio (Class I).

     As a result of the reorganization, effective after the close of business on July 17, 2009 all references to the
     Disappearing Portfolio in the Contract Prospectus, Contract Prospectus Summary and SAI are hereby deleted.

     Effective after the close of business on August 7, 2009, the following Disappearing Portfolios will reorganize
     into and become part of the following Surviving Portfolios:

    Disappearing Portfolios Surviving Portfolios
ING Opportunistic LargeCap Growth Portfolio ING Opportunistic LargeCap Portfolio
             ING Index Plus International Equity Portfolio             ING International Index Portfolio

     Accordingly, effective after the close of business on August 7, 2009 investments in the Disappearing Portfolios
     will automatically become investments in the Surviving Portfolios, as follows:

  • All existing account balances invested in the ING Opportunistic LargeCap Growth Portfolio (Class I) will
    automatically become investments in the ING Opportunistic LargeCap Portfolio (Class I).
  • Class I of the ING International Index Portfolio will automatically be added to your contract and all existing
    account balances invested in the ING Index Plus International Equity Portfolio (Class I) will automatically
    become investments in the ING International Index Portfolio (Class I).

     As a result of the reorganizations, effective after the close of business on August 7, 2009 all references to the
     Disappearing Portfolios in the Contract Prospectus, Contract Prospectus Summary and SAI are hereby deleted.

X.75962-09 1 of 2 May 2009

   Unless you provide us with alternative allocation instructions, all future allocations directed to the Disappearing
    Portfolios after the date of the reorganization will be automatically allocated to the Surviving Portfolios. You may
    give us alternative allocation instructions at any time by contacting our Customer Service Center through:
 
                                                For all regular mail, please use:
                                                Opportunity Plus Service Center
                                                ING National Trust
                                                P.O. Box 9810
                                                Providence, RI 02940-8010
 
                                                For overnight mail, please use:
                                                Opportunity Plus Service Center
                                                ING National Trust
                                                101 Sabin Street
                                                Pawtucket, RI 02860
 
                                                1-800-OPP-INFO
                                                1-800-677-4636
 
   See also the Transfers section of your Contract Prospectus or Investment Options section of your Contract
   Prospectus Summary for further information about making fund allocation changes. More information
   about the funds available through your contract, including information about the risks associated with investing in
   these funds, can be found in the current prospectus and SAI for that fund. You may obtain these documents by
   contacting us at our Customer Service Center noted above.
 
2. Effective after the close of business on July 17, 2009 or August 7, 2009, as applicable, the following information
   regarding the new funds made available in July and August as noted above is added to Appendix III–Fund
   Descriptions.

  Fund Name   Investment
  Adviser/Subadviser		   Investment Objective(s)
  ING Variable Portfolios, Inc. –   ING Investments, LLC   Seeks investment results (before
   ING RussellTM Large Cap     fees and expenses) that correspond
   Growth Index Portfolio   Subadviser: ING Investment   to the total return of the Russell
    Management Co.   Top 200® Growth Index.
  ING Variable Portfolios, Inc. –   ING Investments, LLC   Seeks investment (before fees and
   ING International Index     expenses) results that correspond to
   Portfolio   Subadviser: ING Investment   the total return of a widely accepted
    Management Co.   International Index.

3. The minimum and maximum Total Annual Fund Operating Expenses shown in the Contract Prospectus will not
   change as a result of the reorganization. Therefore, there will be no change to the hypothetical examples shown in
   the Contract Prospectus.
 
 
 
 
   Insurance products issued by ING Life Insurance and Annuity Company. Securities offered through ING Financial Advisers,
   LLC (Member SIPC), One Orange Way, Windsor, CT 06095-4774, or through other Broker-Dealers with which it has a selling
   agreement. These companies are wholly owned, indirect subsidiaries of ING Groep N.V. Insurance obligations are the
   responsibility of each individual company.
 
 
 
X.75962-09 2 of 2 May 2009

ING LIFE INSURANCE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT C
OPPORTUNITY PLUS
CONTRACT PROSPECTUS – May 1, 2009
 
  The Contracts. The contracts described in this prospectus are group deferred variable and fixed annuity contracts
issued by ING Life Insurance and Annuity Company (the Company, we, us). The contracts may be single purchase
payment contracts, which allow for lump-sum payments, or installment purchase payment contracts, which are
designed for installment payments but which also accept lump sum payments. They are intended to be used as
funding vehicles for certain types of supplemental retirement programs, including those that qualify for beneficial
tax treatment and/or to provide current income reduction under certain sections of the Internal Revenue Code of
1986, as amended (Tax Code).
 
  Why Reading this Prospectus is Important. Before you participate in the contract through a supplemental
retirement program, you should read this prospectus. It provides facts about the contract and its investment options.
Prospective contract holders (generally a school district or a public university or college in the State of New York to
which we issue a master contract) should read this prospectus to help determine if the contract is appropriate for
those employees eligible to participate. Keep this document for future reference.

Table of Contents . . .  page 3
 
  You may participate in this contract if you are an eligible employee of a school board or public university in the
State of New York.
   
  Investment Options. The contracts offer variable investment options and fixed interest options. When we establish
your account, you instruct us to direct account dollars to any of the available options.
   
  The Funds
  AIM Mid Cap Core Equity Fund (Class A)(1)(2)   ING JPMorgan Emerging Markets Equity Portfolio (Class I)
  AIM V.I. Capital Appreciation Fund (Series I)   ING Legg Mason Partners Aggressive Growth Portfolio (I Class)
  AIM V.I. Core Equity Fund (Series I)   ING Marsico Growth Portfolio (Class I)
  Alger Green Fund (Class A)(1)(2)   ING MFS Total Return Portfolio (Class I)
  Amana Growth Fund(1)(2)   ING Money Market Portfolio (Class I)(3)
  Amana Income Fund(1)(2)   ING Oppenheimer Global Portfolio (I Class)
  American Century® Income & Growth Fund (A Class)(1)   ING Oppenheimer Strategic Income Portfolio (I Class)
  American Century® Inflation-Adjusted Bond Fund (Investor Class)(1)(2)   ING Opportunistic LargeCap Growth Portfolio (Class I)
  BlackRock Mid Cap Value Opportunities Fund (Class A)(1)(2)   ING Opportunistic LargeCap Portfolio (Class I)(3)
  Calvert Social Balanced Portfolio   ING PIMCO High Yield Portfolio (Class I)
  EuroPacific Growth Fund® (Class R-4)(1)   ING PIMCO Total Return Portfolio (S Class)
  Evergreen Special Values Fund (Class A)(1)   ING Pioneer Equity Income Portfolio (Class I)
  Fidelity® VIP Asset ManagerSM Portfolio (Initial Class)   ING Pioneer Mid Cap Value Portfolio (Class I)
  Fidelity® VIP Contrafund® Portfolio (Initial Class)   ING Small Company Portfolio (Class I)(3)
  Fidelity® VIP Equity-Income Portfolio (Initial Class)   ING Strategic Allocation Conservative Portfolio (Class I)(3)(5)
  Fidelity® VIP High Income Portfolio (Initial Class)   ING Strategic Allocation Growth Portfolio (Class I)(3)(5)
  Fidelity® VIP Index 500 Portfolio (Initial Class)   ING Strategic Allocation Moderate Portfolio (Class I)(3)(5)
  Fidelity® VIP Overseas Portfolio (Initial Class)   ING T. Rowe Price Diversified Mid Cap Growth Portfolio (I Class)
  Franklin Small Cap Value Securities Fund (Class 2)   ING T. Rowe Price Growth Equity Portfolio (I Class)
  ING Balanced Portfolio, Inc. (Class I)(3)   ING Templeton Foreign Equity Portfolio (I Class)
  ING Baron Small Cap Growth Portfolio (S Class)   ING Thornburg Value Portfolio (I Class)
  ING BlackRock Large Cap Growth Portfolio (Class I)   ING UBS U.S. Large Cap Equity Portfolio (I Class)
  ING BlackRock Science and Technology Opportunities Portfolio   ING Van Kampen Capital Growth Portfolio (Class I)
     (Class I)(3)   ING Van Kampen Comstock Portfolio (S Class)
  ING Clarion Global Real Estate Portfolio (Class I)(3)   ING Van Kampen Equity and Income Portfolio (I Class)
  ING GET U.S. Core Portfolio(4)   ING Wells Fargo Small Cap Disciplined Portfolio (Class S)
  ING Global Resources Portfolio (Class S)   Lord Abbett Series Fund - Mid-Cap Value Portfolio (Class VC)
  ING Growth and Income Portfolio (Class I)(3)   New Perspective Fund® (Class R-4)(1)
  ING Index Plus International Equity Portfolio (Class I)(3)   Oppenheimer Developing Markets Fund (Class A)(1)
  ING Index Plus LargeCap Portfolio (Class I)(3)   Pax World Balanced Fund (Individual Investor Class)(1)
  ING Index Plus MidCap Portfolio (Class I)(3)   The Growth Fund of America® (Class R-4)(1)
  ING Index Plus SmallCap Portfolio (Class I)(3)   Washington Mutual Investors FundSM (Class R-4)(1)
  ING Intermediate Bond Portfolio (Class I)(3)    
   
  (1)   This fund is available to the general public. See “Investment Options–Additional Risks of Investing in the Funds.”
  (2)   This fund is scheduled to be available on May 11, 2009.
  (3) This fund has changed its name to the name listed above. See Appendix III–Fund Descriptions for a complete list of former and current fund
names.
  (4)   The ING GET U.S. Core Portfolio is not currently available for investment.
  (5) These portfolios are structured as fund of funds that invest directly in shares of underlying funds. See “Fees–Funds Fees and Expenses”
for additional information.
   
   
  PRO.75962-09

 
CONTRACT PROSPECTUS - May 1, 2009 (CONTINUED)
 
Variable Investment Options. These options are called subaccounts. The subaccounts are within Variable Annuity
Account C (the separate account). Each subaccount invests in one of the mutual funds (funds) listed on the previous
page. Earnings on amounts invested in a subaccount will vary depending upon the performance of its underlying
fund. You do not invest directly in or hold shares of the funds.
 
Risks Associated with Investing in the Funds. Information about the risks of investing in the funds is located in the
“Investment Options” section in this prospectus on page 11 and in each fund prospectus. Read this prospectus in
conjunction with the fund prospectuses, and retain the fund prospectuses for future reference.
 
Fixed Interest Options.
 
▷    Guaranteed Accumulation Account
▷    Fixed Account
 
Except as specifically mentioned, this prospectus describes only the variable investment options. However, we
describe the fixed interest options in the appendices to this prospectus. There is also a separate prospectus for the
Guaranteed Accumulation Account.
 
Compensation. We pay compensation to broker-dealers whose registered representatives sell the contracts. See
“Contract Distribution” for further information about the amount of compensation we pay.
 
Getting Additional Information. You may obtain the May 1, 2009 Statement of Additional Information (SAI) free
of charge by indicating your request on your enrollment materials, by calling the Opportunity Plus Service Center at
1-800-677-4636 or by writing to us at the address listed in “Contract Overview–Questions: Contacting the
Company.” You may also obtain an SAI for any of the funds, or a Guaranteed Accumulation Account prospectus, by
calling that number. This prospectus, the Guaranteed Accumulation Account prospectus, the SAI and other
information about the separate account may be obtained by accessing the Securities and Exchange Commission’s
(SEC) website, http://www.sec.gov. Copies of this information may also be obtained, after paying a duplicating fee,
by contacting the SEC Public Reference Branch. Information on the operation of the SEC Public Reference Branch
may be obtained by calling 1-202-551-8090 or 1-800-SEC-0330, e-mailing publicinfo@sec.gov, or by writing to
SEC Public Reference Branch, 100 F Street, NE, Room 1580, Washington, D.C. 20549. When looking for
information regarding the contracts offered through this prospectus, you may find it useful to use the number
assigned to the registration statement under the Securities Act of 1933. This number is 033-75962. The number
assigned to the registration statement for the Guaranteed Accumulation Account is 333-158492. The SAI table of
contents is listed on page 51 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. This prospectus is valid only when accompanied by current
prospectuses of the funds. 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 than that contained in this prospectus.
 
 
 
 
PRO.75962-09   2

  TABLE OF CONTENTS
 
   
  Contract Overview   4
Who’s Who
The Contract and Your Supplemental Retirement Program
Contract Rights
Contract Facts
Questions: Contacting the Company (sidebar)
Sending Forms and Written Requests in Good Order (sidebar)
Contract Phases: Accumulation Phase, The Income Phase
   
  Fee Table   6
  Condensed Financial Information   9
  Variable Annuity Account C   9
  The Company   9
  Investment Options       11
  Transfers   13
  Contract Purchase or Participation   16
  Contract Ownership and Rights   18
  Right to Cancel   18
  Fees   19
  Optional Minimum Guaranteed Withdrawal Benefit Rider   24
  Your Account Value   31
  Withdrawals   33
  Loans   34
  Systematic Distribution Options   34
  Death Benefit   35
  The Income Phase   37
  Contract Distribution   40
  Taxation   43
  Other Topics   49
  Opportunity Plus Service Center - Performance Reporting - Voting Rights - Contract Modification - Legal Matters
and Proceedings - Payment Delay or Suspension - Intent to Confirm Quarterly
 
  Contents of the Statement of Additional Information   51
  Appendix I   -   Guaranteed Accumulation Account   52
  Appendix II   -   Fixed Account   55
  Appendix III   -   Fund Descriptions   56
  Appendix IV   -   MGWB Rider Partial Withdrawal Examples   64
  Appendix V   -   Examples of MGWB Rebalancing   66
  Appendix VI   -   Condensed Financial Information   CFI-I
   
   
   
   
  PRO.75962-09   3    

CONTRACT OVERVIEW  
 
Questions: Contacting the
Company: To answer your
questions, contact your local
representative or write or call
the Company through:

For all regular mail, please use:

Opportunity Plus Service Center
ING National Trust
P.O. Box 9810
Providence, RI 02940-8010

For overnight delivery, please
use:

Opportunity Plus Service Center
ING National Trust
101 Sabin Street
Pawtucket, RI 02860

1-800-OPP-INFO
(1-800-677-4636)

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 your local
representative or the Company
through the Opportunity Plus
Service Center to learn what
information is required in order
for the request to be in “good
order.” By contacting us, we can
provide you with the appropriate
administrative form for your
requested transaction.

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 written
requests that are received in
good order. 		The following is a summary. Please read each section of this prospectus for
additional information.
   
  Who’s Who
 
You (the participant): The individual participating in a supplemental
retirement program, where the program uses the contract as a funding option.
 
Plan Sponsor: The sponsor of your supplemental retirement program.
Generally, your employer.
   
Contract Holder: The person or entity to whom we issue the contract. The
contract holder is generally a school district or a public university or college in
the State of New York to which we have issued the master contract. We may
also refer to the contract holder as the contract owner.
 
We, us, our (the Company): ING Life Insurance and Annuity Company. We
issue the contract.
   
  The Contract and Your Supplemental Retirement Program
 
Supplemental Retirement Program (plan): A plan sponsor has established a
supplemental retirement program for you. The term “contract(s)” in this
prospectus refers to the group deferred variable annuity contract offered as a
funding option for that plan.
   
Plan Type: We refer to the supplemental retirement program in this prospectus
as a 403(b) or Roth 403(b) plan. For a description, see “Taxation.”
   
Use of an Annuity Contract in your Plan: Under the federal tax laws,
earnings on amounts held in annuity contracts are generally not taxed until they
are withdrawn. However, in the case of a qualified retirement account (such as
a 403(b) or Roth 403(b) plan), an annuity contract is not necessary to obtain
this favorable tax treatment and does not provide any tax benefits beyond the
deferral already available to the tax qualified account itself. Annuities do
provide other features and benefits (such as the guaranteed death benefit and
the option of lifetime income phase options at established rates) that may be
valuable to you. You should discuss your alternatives with your local
representative taking into account the additional fees and expenses you may
incur in an annuity. See “Contract Purchase or Participation.”
   
  Contract Rights
 
You generally hold all rights under the contract and may make elections for
your accounts. However, pursuant to Treasury Department regulations that
were generally effective on January 1, 2009, the exercise of certain of these
rights may require the consent and approval of the contract holder or its
delegate. See “Taxation–Section 403(b) Tax-Deferred Annuities.”
 
    Contract Facts
   
Free Look/Right to Cancel: Contract holders and participants may cancel
their purchase no later than ten days after they receive the contract (or other
document evidencing their interest). See “Right to Cancel.”
 
 
 
 
PRO.75962-09   4

Death Benefit: A beneficiary may receive a 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 upon the income phase payment
option selected. See “Death Benefit” and “The Income Phase.”

Withdrawals: During the accumulation phase, you may, subject to the limits in the contract and your plan,
withdraw all or a part of your account value. Certain fees and taxes may apply. See “Withdrawals” and “Taxation.”
Amounts withdrawn from the Guaranteed Accumulation Account may be subject to a market value adjustment. See
Appendix I.

Systematic Distribution Options: You may elect to receive regular payments from your account, while retaining
the account in the accumulation phase. See “Systematic Distribution Options.”

Fees: Certain fees are deducted from your account value. See “Fee Table” and “Fees.”

Taxation: Amounts you receive as a distribution will generally be included in your gross income and will be subject
to taxation. Tax penalties may apply in some circumstances. See “Taxation.”

Contract Phases
 
I. The Accumulation Phase (accumulating retirement benefits)
STEP 1: You provide ING Life Insurance and Annuity
Company with your completed enrollment materials and we
may set up one or more accounts for you. We may set up
account(s) for employer contributions and/or contributions
from your salary.		     Payments to
Your Account		  
    Step 1 ||  
ING Life Insurance and Annuity Company
  (a) ||   Step 2   (b) ||
STEP 2: You direct us to invest your account dollars in any
of the following investment options:		 Fixed
Interest
Options		 Variable Annuity
Account C

Variable Investment
Options
     
(a)   Fixed Interest Options; or
(b) Variable Investment Options. (The variable investment
options are the subaccounts of Variable Annuity
Account C. Each one invests in a specific mutual fund.)
The subaccount(s) selected purchases shares of its
corresponding fund.
      The Subaccounts
      A B Etc.
        || Step 2(b) ||  
  Mutual
  Fund A		  Mutual
 Fund B
II. The Income Phase (receiving income phase payments from your contract)

If you wish to begin receiving payments from your contract, you may select from the options available. The contract
offers several income phase payment options, if you wish to select one (see “The Income Phase”). In general, you
may:

▷    Receive income phase payments over a lifetime or for a specified period;
▷    Receive income phase payments monthly, quarterly, semi-annually or annually;
▷    Select an income phase payment option that provides a death benefit to your beneficiary(ies); and
▷    Select fixed income phase payments, variable income phase payments (that vary based on the performance of
the variable investment options you select), or a combination of fixed and variable income phase payments.

PRO.75962-09                                                                  5

 
    FEE TABLE
In This Section:

▷ Maximum Contract Holder
    Transaction Expenses

▷ Separate Account Annual
    Expenses

▷ Optional Rider Charges

▷ Total Annual Fund
    Operating Expenses

▷ Hypothetical Examples

▷ Fees Deducted by the Funds

Also See the “Fees” Section
for:

▷ Early Withdrawal Charge
    Schedules

▷ How, When and Why Fees
    are Deducted

▷ Redemption Fees

▷ Premium and Other Taxes

▷ ING GET Fund Guarantee
    Charge

See “The Income Phase” for:

▷ Fees During the Income
    Phase

 

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, take a loan 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)

 

 

 

 

 

5.0%
1

This is a deferred sales charge. For single purchase payment contracts, there is no
withdrawal charge. For installment purchase payment contracts, the early withdrawal
charge applies to account values in the Fixed Account and to account values in the
subaccounts and the Guaranteed Accumulation Account that were attributable to
amounts held in the Fixed Account at any time. The early withdrawal charge reduces
over time and may be calculated differently where both a Roth 403(b) account and
traditional 403(b) account are available. 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.
Separate Account Annual Expenses
(as a percentage of average account value) Maximum
Charges 		Current
Charges
Mortality and Expense Risk Charge2   1.00%   1.00%
 
    Administrative Expense Charge3   0.25%   0.00%
 
    ING GET Fund Guarantee Charge4   0.25%   0.25%
        (Only applicable to amounts invested in the        
        ING GET fund)        
    Total Separate Account Annual Expenses   1.50%   1.25%
 
2 The mortality and expense risk charge for the ING Money Market Portfolio
subaccount is 0.35% on an annual basis.
3 We do not currently impose an administrative expense charge. However, we reserve
the right to deduct a daily charge of not more than 0.25% on an annual basis from the
subaccounts.
4 The ING GET Fund Guarantee Charge is deducted daily during the guarantee period
only from amounts allocated to the ING GET U.S. Core Portfolio investment option.
See “Investment Options–ING GET U.S. Core Portfolio” and “Fees–ING GET U.S.
Core Portfolio Guarantee Charge” for a description of the ING GET Fund Guarantee
Charge. No series of the ING GET U.S. Core Portfolio is currently available for
investment under the contract.
 
*    State premium taxes (which currently range from 0.0% to 4.0% of premium payments) may apply, but are not reflected in the
      fee tables or examples. See “Premium and Other Taxes.”
 
 
 
 
PRO.75962-09       6        

 
Optional Rider Charges (Applicable only if you have elected the Optional
Minimum Guaranteed Withdrawal Benefit Rider)
 
Minimum Guaranteed Withdrawal Benefit Rider Charge (“MGWB Rider
Charge”)(as a percentage of the MGWB Base)5
 
Maximum Annual Charge
(charge deducted quarterly):		 1.20%
Current Annual Charge
(charge deducted quarterly):		 0.40%
5 We deduct the MGWB Rider Charge from the subaccounts in which you are invested
on each quarterly rider anniversary. In addition, a pro rata portion of the quarterly
charge will be deducted upon a full surrender of the eligible account value, upon
cancellation of the rider, and upon the application of the eligible account value to an
income phase option. See “MGWB Rider Charge” and “Calculating the Minimum
Guaranteed Withdrawal Benefit Base,” for further information on this charge and on
the Minimum Guaranteed Withdrawal Benefit Base (“MGWB Base”).
 
Separate Account Charge Table
 
The following table shows the total annual charges you could pay, based upon the amounts you have invested in the
subaccounts (unless otherwise indicated), if you elect the MGWB rider, based on maximum or current charges under
the contract. The MGWB rider is not available if you are invested in any series of the ING GET U.S. Core Portfolio,
and therefore charges for the ING GET U.S. Core Portfolio are not included. For purposes of these tables, we have
assumed that the value of the amounts invested in the subaccounts is the same as the MGWB Base.

    Maximum Charges:
   
     
  Maximum Mortality & Expense Risk Charge
Maximum Administrative Expense Charge
Maximum MGWB Rider Charge (as percent of MGWB Base)
Total 		  1.00%
  0.25%
  1.20%
  2.45%

    Current Charges:
 
     
 Maximum Mortality & Expense Risk Charge
 Current Administrative Expense Charge
 Current MGWB Rider Charge (as percent of MGWB Base)
 Total
  		  1.00%
  0.00%
  0.40%
  1.40%
   

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.
 
Minimum     Maximum
Total Annual Fund Operating Expenses
(expenses that are deducted from fund assets, including management fees,
distribution (12b-1) and/or service fees, and other expenses)		 0.10%  1.38%
 
 
 
 
PRO.75962-09   7    

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, the
maximum separate account annual expenses applicable to the particular fund, and fund fees and expenses.
The examples also assume you elect the MGWB rider with the maximum annual charge of 1.20% of the
MGWB Base (deducted quarterly).
 
Example 1: The following Examples assume that you invest $10,000 in the contract for the time periods indicated.
The Examples also assume that your investment has a 5.0% return each year and assume the maximum fees and
expenses of any of the funds. Although your actual costs may be higher or lower, based on these assumptions, your
costs would be:
 
(A) If you withdraw your entire account value at the
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
$891   $1,687   $2,502   $4,062   $385   $1,169   $1,972   $4,062
 
Example 2: The following Examples assume that you invest $10,000 in the contract for the time periods indicated.
The Examples also assume that your investment has a 5.0% return each year and assume the minimum fees and
expenses of any of the funds. Although your actual costs may be higher or lower, based on these assumptions, your
costs would be:
 
(A) If you withdraw your entire account value at the
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
$770   $1,331   $1,920   $2,885   $258   $794   $1,355   $2,885
* 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 5.0% charge would apply. At the end of the tenth account 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 if during the income phase a nonlifetime payment option with variable payments is selected and
a lump-sum withdrawal is requested within 3 years after payments start. In this case, 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.
 
Fees Deducted by the Funds
 
Fund Fee Information. The fund prospectuses show the investment advisory fees, 12b-1 fees and other expenses
including service fees (if applicable) charged annually by each fund. See the “Fees” section of this prospectus, and
the fund prospectuses, for further information. Fund fees are one factor that impact the value of a fund share. To
learn about additional factors, refer to the fund prospectuses.
 
The Company may receive compensation from each of the funds or the funds’ affiliates based on an annual
percentage of the average net assets held in that fund by the Company. The percentage paid may vary from one fund
company to another. For certain funds, some of this compensation may be paid out of 12b-1 fees or service fees that
are deducted from fund assets. Any such fees deducted from fund assets are disclosed in the fund prospectuses. The
Company may also receive additional compensation from certain funds for administrative, recordkeeping or other
services provided by the Company to the funds or the funds’ affiliates. These additional payments may also be used
by the Company to finance distribution. These additional payments are made by the funds or the funds’ affiliates to
the Company and do not increase, directly or indirectly, the fund fees and expenses. See “Fees–Fund Fees and
Expenses” for additional information.
 
 
 
 
PRO.75962-09           8  

In the case of fund companies affiliated with the Company, where 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.

Investment management fees are apportioned between the affiliated investment adviser and the subadviser. This
apportionment varies by subadviser, resulting in varying amounts of revenue retained by the investment adviser.
This apportionment of the investment advisory fee does not increase, directly or indirectly, fund fees and expenses.
See “Fees–Fund Fees and Expenses” for additional information.

How Fees are Deducted. Fees are deducted from the value of the fund shares on a daily basis, which in turn affects
the value of each subaccount that purchases fund shares.

 CONDENSED FINANCIAL INFORMATION                                                    

Understanding Condensed Financial Information. In Appendix VI, we provide condensed financial information
about the Variable Annuity Account C subaccounts available under the contracts. The tables show the value of the
subaccounts over the past 10 years. For subaccounts that were not available 10 years ago, we give a history from the
date of first availability.

Financial Statements. The statements of assets and liabilities, the statements of operations, the statements of
changes in net assets and the related notes to financial statements for Variable Annuity Account C and the
consolidated financial statements and the related notes to financial statements for ING Life Insurance and Annuity
Company are located in the Statement of Additional Information.

 VARIABLE ANNUITY ACCOUNT C                                                              

We established Variable Annuity Account C (the separate account) in 1976 as a continuation of the separate account
of Aetna Variable Annuity Life Insurance Company established in 1974 under Arkansas law. The separate account
was established as a segregated asset account to fund variable annuity contracts. The separate account is registered
as a unit investment trust under the Investment Company Act of 1940 (the “40 Act”). It also meets the definition of
“separate account” under the federal securities laws.

The separate account is divided into “subaccounts.” Each subaccount invests directly in shares of a pre-assigned
fund.

Although we hold title to the assets of the separate account, such assets are not chargeable with the liabilities of any
other business that we conduct. Income, gains or losses of the separate account are credited to or charged against the
assets of the separate account without regard to other income, gains or losses of ING Life Insurance and Annuity
Company. All obligations arising under the contracts are obligations of ING Life Insurance and Annuity Company.

 THE COMPANY                                                                                               

ING Life Insurance and Annuity Company (the Company, we, us, our) issues the contracts described in this
prospectus and is responsible for providing each contract’s insurance and annuity benefits. We are a direct, wholly
owned subsidiary of Lion Connecticut Holdings Inc.

We are a stock life insurance company organized under the insurance laws of the State of Connecticut in 1976 and
an indirect wholly owned subsidiary of ING Groep N.V. (“ING”), a global financial institution active in the fields of
insurance, banking and asset management. Through a merger, our operations include the business of Aetna Variable
Annuity Life Insurance Company (formerly known as Participating Annuity Life Insurance Company, an Arkansas
life insurance company organized in 1954). Prior to January 1, 2002, the Company was known as Aetna Life
Insurance and Annuity Company.

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

Our principal executive offices are located at:

                               One Orange Way
                               Windsor, Connecticut 06095-4774

PRO.75962-09                                                                                 9

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

Insurance and Retirement Plan Products and Other Regulatory Matters. Federal and state regulators and self-
regulatory agencies are conducting broad inquiries and investigations involving the insurance and retirement
industries. These initiatives currently focus on, among other things, compensation, revenue sharing, and other sales
incentives; potential conflicts of interest; sales and marketing practices (including sales to seniors); specific product
types (including group annuities and indexed annuities); and disclosure. The Company and certain of its U.S.
affiliates have received formal and informal requests in connection with such investigations, and have cooperated
and are cooperating fully with each request for information. Some of these matters could result in regulatory action
involving the Company.

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

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

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

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

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.

Action has been or may be taken by regulators with respect to certain ING affiliates before investigations relating to
fund trading are completed. The potential outcome of such action is difficult to predict but could subject certain
affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, and other financial
liability. It is not currently anticipated, however, that the actual outcome of any such action will have a material
adverse effect on ING or ING’s U.S. based operations, including the Company.

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

Product Regulation. Our products are subject to a complex and extensive array of state and federal tax, securities
and insurance laws, and regulations, which are administered and enforced by a number of governmental and self-
regulatory authorities. In addition, state and federal securities and insurance laws impose requirements relating to
insurance and annuity product design, offering and distribution, and administration. Failure to meet any of these
complex tax, securities, or insurance requirements could subject the Company to administrative penalties,
unanticipated remediation, or other claims and costs.

PRO.75962-09                                                            10

 INVESTMENT OPTIONS                                                                                 

The contract offers variable investment options and fixed interest options. When we establish your account(s), you
instruct us to direct account dollars to any of the available options.

Variable Investment Options. These options are called subaccounts. The subaccounts are within Variable Annuity
Account C (the separate account), a separate account of the Company. Each subaccount invests in a specific mutual
fund. Earnings on amounts invested in a subaccount will vary depending upon the performance and fees of its
underlying fund. You do not invest directly in or hold shares of the funds.

▷    Fund Descriptions. We provide brief descriptions of the funds in Appendix III. Please refer to the fund
prospectuses for additional information. Fund prospectuses may be obtained, free of charge, from the
Opportunity Plus Service Center at the address and telephone number listed under “Contract Overview–
Questions: Contacting the Company,” by accessing the SEC’s website or by contacting the SEC Public
Reference Branch.

Fixed Interest Options. For descriptions of the fixed interest options, see Appendix I and II and the Guaranteed
Accumulation Account prospectus. The Guaranteed Accumulation Account prospectus may be obtained free of
charge from the Opportunity Plus Service Center at the address and telephone number listed in “Contract Overview–
Questions: Contacting the Company,” by accessing the SEC’s website or by contacting the SEC Public Reference
Branch.

ING GET U.S. Core Portfolio. An ING GET U.S. Core Portfolio (“ING GET Fund”) series may be available
during the accumulation phase of the contract. We make a guarantee, as described below, when you allocate money
into an ING GET Fund series. Each ING GET Fund series has an offering period of three months or longer, which
precedes the guarantee period. The ING GET Fund investment option may not be available under your contract,
under your plan, or in your state.

Various series of the ING GET Fund may be offered from time to time and additional charges will apply if you elect
to invest in one of these series. We are not currently offering any series of the ING GET Fund for investment. The
Company makes a guarantee when you direct money into an ING GET Fund series. We guarantee that the value of
an accumulation unit of the ING GET Fund subaccount for that series under the Contract on the maturity date will
not be less than its value as determined after the close of business on the last day of the offering period for that ING
GET Fund series. If the value on the maturity date is lower than it was on the last day of the offering period, we will
add funds to the ING GET Fund subaccount for that series to make up the difference. This means that if you remain
invested in the ING GET Fund series until the maturity date, at the maturity date, you will receive no less than the
value of your separate account investment directed to the ING GET Fund series as of the last day of the offering
period, less charges not reflected in the accumulation unit value such as the maintenance fee and less any amounts
you transfer or withdraw from the ING GET Fund subaccount for that series.

The value of dividends and distributions made by the ING GET Fund series throughout the guarantee period is taken
into account in determining whether, for purposes of the guarantee, the value of your ING GET Fund investment on
the maturity date is no less than its value as of the last day of the offering period. If you withdraw or transfer funds
from an ING GET Fund series prior to the maturity date, we will process the transactions at the actual unit value
next determined after we receive your request. The ING GET Fund subaccount is not available for dollar cost
averaging, automatic rebalancing, income phase payments, or for use with the MGWB rider.

Before the maturity date, we will send a notice to each participant who has allocated amounts to the ING GET Fund
series. This notice will remind you that the maturity date is approaching and that you must choose other investment
options for your ING GET Fund series amounts. If you do not make a choice, on the maturity date we will transfer
your ING GET Fund series amounts to another available series of the ING GET Fund that is then accepting deposits
under your contract or plan. If no ING GET Fund is then available under your contract or plan, we will transfer your
ING GET Fund series amounts to a balanced fund advised by ING Investments, LLC (or another adviser affiliated
with the Company) available under the contract that has the best 5-year standardized performance. If there are no
such balanced funds available under the contract, we will transfer your ING GET Fund series amounts to a core U.S.
equity fund advised by ING Investments, LLC (or another adviser affiliated with the Company) available under the
contract that has the best 5-year standardized performance. All amounts not transferred to a new ING GET Fund
series, as outlined above, will be subject to market risk including the possible loss of principal.

Please see the ING GET U.S. Core Portfolio prospectus for a complete description of the ING GET Fund investment
option, including charges and expenses.

PRO.75962-09                                                                       11

 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 a value that rises and falls more
rapidly and to a greater degree than other funds. For example, funds investing in foreign or international
securities are subject to additional risks not associated with domestic investments, and their 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, fixed interest option appendices, and the Guaranteed  
Accumulation Account prospectus.

Limits on Option Availability. We may add, withdraw or substitute funds, subject to the conditions in the 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 Number of Options Selected. No more than 18 investment options may be selected for your account at
any one time during the accumulation phase. If you have an outstanding loan, you may currently make a total of 18
cumulative selections over the life of your account. Each subaccount, the Fixed Account, and each classification of
the Guaranteed Accumulation Account counts as one option. Thus, if you have a loan on the account, each
investment option in which you have invested counts toward the limit, even after the full value is transferred to other
investment options.

Additional Risks of Investing in the Funds

Insurance-Dedicated Funds (Mixed and Shared Funding) Many of the funds described in this prospectus are
available only to insurance companies for their variable contracts (or directly to certain retirement plans, as allowed
by the Tax Code). Such funds are often referred to as “insurance-dedicated funds,” and are used for “mixed” and
“shared” funding.

“Mixed funding” occurs when shares of a fund, which the subaccount buys for variable annuity contracts, are bought
for variable life insurance contracts issued by us or other insurance companies.

“Shared funding” occurs when shares of a fund, which the subaccount buys for variable annuity contracts, are also
bought by other insurance companies for their variable annuity contracts.

▷    Mixed-bought for annuities and life insurance.
▷    Shared-bought by more than one company.

Public Funds. The following funds, which the subaccounts buy for variable annuity contracts, are also available to
the general public:

▷    AIM Mid Cap Core Equity Fund
▷    Alger Green Fund
▷    Amana Growth Fund
▷    Amana Income Fund
▷    American Century® Income & Growth Fund
▷    American Century® Inflation-Adjusted Bond Fund
▷    BlackRock Mid Cap Value Opportunities Fund
▷    EuroPacific Growth Fund®
▷    Evergreen Special Values Fund
▷    New Perspective Fund®
▷    Oppenheimer Developing Markets Fund
▷    Pax World Balanced Fund
▷    The Growth Fund of America®
▷    Washington Mutual Investors FundSM

See “Taxation–Section 403(b) Tax Deferred Annuities” for information about investing in one of the public funds
under a 403(b) or Roth 403(b) annuity contract.

PRO.75962-09                                                        12

Possible Conflicts of Interest. With respect to the insurance-dedicated funds and the public funds, it is possible that
a conflict of interest may arise due to mixed and shared funding, a change in law affecting the operations of variable
annuity separate accounts, differences in the voting instructions of the contract holder and others maintaining a
voting interest in the funds, or some other reason. Such a conflict 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 insurance-
dedicated fund’s board of directors or trustees will monitor events in order to identify any material irreconcilable
conflicts which may arise and to determine what action, if any, should be taken to address such conflicts. With
respect to both the public funds and the insurance-dedicated funds, in the event of a conflict, the Company will take
any steps necessary to protect contract holders and annuitants maintaining a voting interest in the funds, including
the withdrawal of Variable Annuity Account C from participation in the funds that are involved in the conflict.

 TRANSFERS                                                                                                     

Transfers Among Investment Options. During the accumulation phase and the income phase, you may transfer
among investment options. During the income phase you may make up to twelve transfers per calendar year among
available investment options. You may make a request in writing, by telephone or electronically. Transfers must be
made in accordance with the terms of the contract and your plan. Transfers to an ING GET Fund series may only be
made during the offering period for that ING GET Fund series. Transfers from fixed interest options are restricted as
outlined in Appendices I and II.

Value of Transferred Dollars. The value of amounts transferred into or out of the subaccounts will be based on the
subaccount unit values next determined after we receive your request in good order at the Opportunity Plus Service
Center, or if you are participating in the Dollar Cost Averaging Program, after your scheduled transfer. See
“Contract Overview–Questions: Contacting the Company.”

Telephone and Electronic Transfers: 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 telephone or electronic instructions we
believe to be genuine. If a loss occurs when we rely on such instructions, you will bear the loss.

Limits on Frequent or Disruptive Transfers

The contract is not designed to serve as a vehicle for frequent transfers. Frequent transfer activity can disrupt
management of a fund and raise its expenses through:

  • Increased trading and transaction costs;
  • Forced and unplanned portfolio turnover;
  • Lost opportunity costs; and
  • Large asset swings that decrease the fund’s ability to provide maximum investment return to all contract owners
    and participants.

This in turn can have an adverse effect on fund performance. Accordingly, individuals or organizations that use
market-timing investment strategies or make frequent transfers should not purchase or participate in the
contract.

Excessive Trading Policy. We and the other members of the ING family of companies that provide multi-fund
variable insurance and retirement products have adopted a common Excessive Trading Policy to respond to the
demands of the various fund families that make their funds available through our products to restrict excessive fund
trading activity and to ensure compliance with Rule 22c-2 of the 1940 Act.

PRO.75962-09                                                                        13

We actively monitor fund transfer and reallocation activity within our variable insurance products to identify
violations of our Excessive Trading Policy. Our Excessive Trading Policy is violated if fund transfer and
reallocation activity:

  • Meets or exceeds our current definition of Excessive Trading, as defined below; or
  • Is determined, in our sole discretion, to be disruptive or not in the best interests of other owners of our variable
    insurance and retirement products, or participants in such products.

We currently define “Excessive Trading” as:

  • More than one purchase and sale of the same fund (including money market funds) within a 60 calendar day
    period (hereinafter, a purchase and sale of the same fund is referred to as a “round-trip”). This means two or
    more round-trips involving the same fund within a 60 calendar day period would meet our definition of
    Excessive Trading; or
  • Six round-trips involving the same fund within a rolling twelve month period.

The following transactions are excluded when determining whether trading activity is excessive:

  • Purchases or sales of shares related to non-fund transfers (for example, new purchase payments, withdrawals
    and loans);
  • Transfers associated with scheduled dollar cost averaging, scheduled rebalancing, or scheduled asset allocation
    programs;
  • Purchases and sales of fund shares in the amount of $5,000 or less;
  • Purchases and sales of funds that affirmatively permit short-term trading in their fund shares, and movement
    between such funds and a money market fund; and
  • Transactions initiated by us, another member of the ING family of companies, or a fund.

If we determine that an individual or entity has made a purchase of a fund within 60 days of a prior round-trip
involving the same fund, we will send them a letter (once per year) warning that another sale of that same fund
within 60 days of the beginning of the prior round-trip will be deemed to be Excessive Trading and result in a six
month suspension of their ability to initiate fund transfers or reallocations through the Internet, facsimile, Voice
Response Unit (VRU), telephone calls to the ING Customer Service Center, or other electronic trading medium that
we may make available from time to time (“Electronic Trading Privileges”). Likewise, if we determine that an
individual or entity has made five round-trips involving the same fund within a rolling twelve month period, we will
send them a letter warning that another purchase and sale of that same fund within twelve months of the initial
purchase in the first round-trip will be deemed to be Excessive Trading and result in a suspension of their Electronic
Trading Privileges. According to the needs of the various business units, a copy of any warning letters may also be
sent, as applicable, to the person(s) or entity authorized to initiate fund transfers or reallocations, the agent/registered
representative, or the investment adviser for that individual or entity. A copy of the warning letters and details of
the individual’s or entity’s trading activity may also be sent to the fund whose shares were involved in the trading
activity.

If we determine that an individual or entity has violated our Excessive Trading Policy, we will send them a letter
stating that their Electronic Trading Privileges have been suspended for a period of six months. Consequently, all
fund transfers or reallocations, not just those that involve the fund whose shares were involved in the activity that
violated our Excessive Trading Policy, will then have to be initiated by providing written instructions to us via
regular U.S. mail. Suspension of Electronic Trading Privileges may also extend to products other than the product
through which the Excessive Trading activity occurred. During the six month suspension period, electronic “inquiry
only” privileges will be permitted where and when possible. A copy of the letter restricting future transfer and
reallocation activity to regular U.S. mail and details of the individual’s or entity’s trading activity may also be sent,
as applicable, to the person(s) or entity authorized to initiate fund transfers or reallocations, the agent/registered
representative or investment adviser for that individual or entity, and the fund whose shares were involved in the
activity that violated our Excessive Trading Policy.

Following the six month suspension period during which no additional violations of our Excessive Trading Policy
are identified, Electronic Trading Privileges may again be restored. We will continue to monitor the fund transfer
and reallocation activity, and any future violations of our Excessive Trading Policy will result in an indefinite
suspension of Electronic Trading Privileges. A violation of our Excessive Trading Policy during the six month
suspension period will also result in an indefinite suspension of Electronic Trading Privileges.

PRO.75962-09                                                                    14

We reserve the right to suspend Electronic Trading Privileges with respect to any individual or entity, with or
without prior notice, if we determine, in our sole discretion, that the individual’s or entity’s trading activity is
disruptive or not in the best interests of other owners of our variable insurance and retirement products, or
participants in such products, regardless of whether the individual’s or entity’s trading activity falls within the
definition of Excessive Trading set forth above.

Our failure to send or an individual’s or entity’s failure to receive any warning letter or other notice contemplated
under our Excessive Trading Policy will not prevent us from suspending that individual’s or entity’s Electronic
Trading Privileges or taking any other action provided for in our Excessive Trading Policy.

The Company does not allow exceptions to our Excessive Trading Policy. We reserve the right to modify our
Excessive Trading Policy, or the policy as it relates to a particular fund, at any time without prior notice, depending
on, among other factors, the needs of the underlying fund(s), the best interests of contract owners, participants, and
fund investors, and/or state or federal regulatory requirements. If we modify our policy, it will be applied uniformly
to all contract owners and participants or, as applicable, to all contract owners and participants investing in the
underlying fund.

Our Excessive Trading Policy may not be completely successful in preventing market-timing or excessive trading
activity. If it is not completely successful, fund performance and management may be adversely affected, as noted
above.

Limits Imposed by the Funds. Each underlying fund available through the variable insurance and retirement
products offered by us and/or the other members of the ING family of companies, either by prospectus or stated
policy, has adopted or may adopt its own excessive/frequent trading policy, and orders for the purchase of fund
shares are subject to acceptance or rejection by the underlying fund. We reserve the right, without prior notice, to
implement fund purchase restrictions and/or limitations on an individual or entity that the fund has identified as
violating its excessive/frequent trading policy and to reject any allocation or transfer request to a subaccount if the
corresponding fund will not accept the allocation or transfer for any reason. All such restrictions and/or limitations
(which may include, but are not limited to, suspension of Electronic Trading Privileges and/or blocking of future
purchases of a fund or all funds within a fund family) will be done in accordance with the directions we receive from
the fund.

Agreements to Share Information with Fund Companies. As required by Rule 22c-2 under the 1940 Act, we
have entered into information sharing agreements with each of the fund companies whose funds are offered through
the contract. Contract owner and participant trading information is shared under these agreements as necessary for
the fund companies to monitor fund trading and our implementation of our Excessive Trading Policy. Under these
agreements, the Company is required to share information regarding contract owner and participant transactions,
including but not limited to information regarding fund transfers initiated by you. In addition to information about
contract owner and participant transactions, this information may include personal contract owner and participant
information, including names and social security numbers or other tax identification numbers.

As a result of this information sharing, a fund company may direct us to restrict a contract owner or participant’s
transactions if the fund determines that the contract owner or participant has violated the fund’s excessive/frequent
trading policy. This could include the fund directing us to reject any allocations of purchase payments or account
value to the fund or all funds within the fund family.

The Dollar Cost Averaging Program. The contracts allow you to participate in our dollar cost averaging program.
There is no additional charge for this program. Dollar cost averaging is a system for investing that buys fixed dollar
amounts of an investment at regular intervals, regardless of price. Our program transfers, at regular intervals, a fixed
dollar amount from the ING Money Market Portfolio to the Fixed Account, Guaranteed Accumulation Account, or
one or more subaccounts that you select. Allocations to the Fixed Account may limit your ability to execute
subsequent transfers out of this fixed option. Amounts transferred to or from the Fixed Account and subsequently
withdrawn from the contract during the accumulation phase may be subject to early withdrawal charge. See “Fees.”
Amounts transferred from the Guaranteed Accumulation Account before the end of a guaranteed term may be
subject to a market value adjustment. See Appendix I and the Guaranteed Accumulation Account prospectus.

PRO.75962-09                                                                       15


Dollar cost averaging is not permitted into an ING GET Fund subaccount. 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. For additional information about this program, contact your local
representative or the Opportunity Plus Service Center at the number listed in “Contract Overview–Questions:
Contacting the Company.” This program is not available to the participants in the Asset Rebalancing Program.

The Asset Rebalancing Program. This program allows you to have your account value automatically reallocated to
specified percentages on a scheduled basis. If elected, only account values invested in the variable investment
options (excluding the ING GET Fund subaccount) are eligible to be rebalanced. Account values invested in the
Guaranteed Accumulation Account and the Fixed Account are not eligible to be rebalanced. To elect to participate
in Asset Rebalancing, you should contact the Opportunity Plus Service Center at the number listed in “Contract
Overview–Questions: Contacting the Company.” This program is not available to participants in the Dollar Cost
Averaging Program.

 CONTRACT PURCHASE OR PARTICIPATION                                             


Contracts Available for Purchase. The contracts available for purchase are deferred variable annuity contracts that
the Company offers in connection with supplemental retirement programs under Tax Code section 403(b), including
Roth 403(b). The plans are established by school boards and public universities and colleges in the state of New
York, for their participants.

There are two group deferred variable annuity contracts:

(1)        Single purchase payment contracts issued for lump-sum transfers to us of amounts accumulated under a pre-
existing plan; and
(2) Installment purchase payment contracts established to accept continuing periodic payments, but which may also
accept lump-sum transfers.

We reserve the right to set a minimum purchase payment on single purchase payment contracts. Lump-sum transfers
below this minimum will be applied to an installment purchase payment contract.

When considering whether to purchase or participate in the contract, you should consult with your financial
representative about your financial goals, investment time horizon and risk tolerance.

Types of Accounts. There are three types of accounts that may be available under your contract:

a)       An employer pre-tax account that will be credited with employer contributions (if any) and any portion of any
transfer or rollover contributions attributable to such amounts.
   
b) An employee pre-tax account that will be credited with employee salary reduction contributions (if any) and the
portion of any transfer or rollover contributions attributable to such amounts.
  
c) An employee Roth 403(b) account that will be credited with employee after-tax salary contributions to the Roth
403(b) account (if any) and the portion of any transfer or rollover contribution attributable to such amounts.

Use of an Annuity Contract in your Plan. Under the federal tax laws, earnings on amounts held in annuity
contracts are generally not taxed until they are withdrawn. However, in the case of a qualified retirement account
(such as a 403(b) or Roth 403(b) retirement plan), an annuity contract is not necessary to obtain this favorable tax
treatment and does not provide any tax benefits beyond the deferral already available to the tax qualified account
itself. Annuities do provide other features and benefits (such as the guaranteed death benefit or the option of lifetime
income phase options at established rates) that may be valuable to you. You should discuss your alternatives with
your local representative taking into account the additional fees and expenses you may incur in an annuity.

Purchasing the Contract. The contract holder completes the required forms and the local representative submits
them to the Company. We approve the forms and issue a contract to the contract holder.

PRO.75962-09                                                            16

Participating in the Contract. To participate in the contract, your local representative will assist you in completing
an enrollment form and submitting it to the Opportunity Plus Service Center. See “Contract Overview–Questions:
Contacting the Company.” If your enrollment is accepted, we establish one or more accounts for you under the
contract(s). We may establish an employee account for contributions from your salary or rollover amount, an
employer account for employer contributions, and a Roth 403(b) account for employee contributions from your
salary or rollover amount. Your account includes amounts held under both the installment purchase payment
contract and the single purchase payment contract.

Acceptance or Rejection of Application or Enrollment Forms. We must accept or reject an application or your
enrollment materials within two business days of receipt. If the forms are incomplete, we may hold any forms and
accompanying payments for five days, unless you consent to our holding them longer. Under limited circumstances,
we may also agree, for a particular plan, to hold payments for longer periods with the permission of the contract
holder. If we agree to this, we will deposit the payments in the ING Money Market Portfolio subaccount until the
forms are completed (for a maximum of 105 days). If we reject the application or enrollment forms, we will return
the forms and any payments.

Allocating Purchase Payments to the Investment Options. You direct us to allocate initial purchase payments to
the investment options available under the plan. Generally you will specify this information on your enrollment
materials. After your enrollment, changes to allocations for future purchase payments or transfer of existing balances
among investment options may be requested in writing and by telephone or electronically.

Allocations must be in whole percentages and there may be limitations on the number of investment options that can
be selected at any one time. See “Investment Options” and “Transfers.”

Tax Code Restriction. The Tax Code places some limitations on contributions to your account. See “Taxation.”

Factors to Consider in the Purchase Decision. The decision to purchase or participate in the contract should be
discussed with your local representative. Make sure that you understand the investment options it provides, its other
features, the risks and potential benefits you will face, and the fees and expenses you will incur when, together with
your financial representative, you consider an investment in the contract. You should pay attention to the following
issues, among others:

(1)      Long-Term Investment - This contract is a long-term investment, and is typically most useful as part of a
personal retirement program. Early withdrawals may be restricted by the Tax Code or your plan or may
expose you to early withdrawal charges or tax penalties. The value of deferred taxation on earnings grows
with the amount of time funds are left in the contract. You should not participate in this contract if you are
looking for a short-term investment or expect to need to make withdrawals before you are 59½.
 
(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.
 
(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 - Replacing an existing insurance contract with this contract may not be beneficial to you. If
this contract will be a replacement for another annuity contract or mutual fund option under the plan, you
should compare the two options carefully, compare the costs associated with each, and identify additional
benefits available under this contract. If you are exchanging from another annuity contract, New York state
law requires completion of replacement forms, which will assist you in this comparison. 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 local representative
or tax adviser to make sure that the exchange will be handled so that it is tax free.
 

PRO.75962-09                                                                     17

Other Products. We and our affiliates offer various other products with different features and terms than these
contracts, which may offer some or all of the same funds. These products have different benefits, fees and charges,
and may offer different share classes of the funds offered in this contract that are less expensive. These other
products may or may not better match your needs. You should be aware that there are alternative options available,
and, if you are interested in learning more about these other products, contact your registered representative. These
alternative options may not be available under your plan.

 CONTRACT OWNERSHIP AND RIGHTS                                                       

Who Owns the Contract? The contract holder. The contract holder is the school district or a public university or
college to which we have issued the master contract.

Who Owns Money Accumulated Under the Contract? We establish one or more accounts for you under the
contracts. Generally, we establish an employee account to receive salary reduction and rollover amounts, an
employer account to receive employer contributions, and a Roth 403(b) account to receive employee after-tax salary
reduction and rollover amounts. You have the right to the value of your employee account and any employer
account, to the extent you are vested as interpreted by the contract holder.

What Rights Do I Have Under the Contract? You generally hold all rights under the contract and may make all
elections for your accounts, subject to the consent and approval of the contract holder or its delegate in connection
with certain distributions and other transactions related to your account. See “Contract Overview–Contract Rights”
and “Taxation–403(b) Tax-Deferred Annuities.”

 RIGHT TO CANCEL                                                                                         

When and How to Cancel. You or the contract holder may cancel your purchase within ten days after receiving the
contract (or other document evidencing your interest) by returning it to the Opportunity Plus Service Center or your
local representative along with a written notice of cancellation.

Refunds. We will produce a refund to you or the contract holder not later than seven days after we receive the
contract or other document evidencing your interest and the written notice of cancellation at the Opportunity Plus
Service Center. The refund will equal the dollars contributed to the contract plus any earnings or less any losses
attributable to the purchase payments allocated to the variable investment options. Any mortality and expense risk
charges, administrative expense charges (if any), or optional rider charges (if any) deducted during the period you
held the contract will not be returned. We will not deduct an early withdrawal charge. We will not apply a market
value adjustment to any amounts you contributed to the Guaranteed Accumulation Account.

PRO.75962-09                                                                    18

FEES    
 
The following repeats and adds to information provided in the “Fee Table”
section. Please review both this section and the Fee Table for information on
fees.		 Types of Fees
Your account may incur the
following types of fees:

Maximum Transaction Fees
▷ Transaction Fees
     • Early Withdrawal Charge
     • Redemption Fees
▷ Fees Deducted from
     Investments in the
     Subaccounts
     • Mortality and Expense
        Risk Charge
     • Administrative Expense
        Charge
     • MGWB Rider Charge
▷ Fund Fees and Expenses
▷ ING GET Fund Guarantee
    Charge

Terms to Understand in the
Schedules
 
Early Withdrawal Charge
 
Under installment purchase payment contracts, withdrawals of all or a
portion of your Fixed Account value, or of account values held in the
subaccounts or the Guaranteed Accumulation Account that were attributable
to amounts held in the Fixed Account at any time, 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.
There is no early withdrawal charge under installment purchase payment
contracts of amounts distributed under the terms of a settlement agreement
with the New York Attorney General dated October 10, 2006, nor on any
earnings attributable to such distributed amounts. In addition, there is no
early withdrawal charge for any amounts withdrawn under single purchase
payment contracts.

Amount. The charge is a percentage of the amount withdrawn. The
percentage will be determined by the early withdrawal charge schedule that
applies to your account. The charge will never be more than 8.5% of total
payments to your account.		 ▷ Account Year-a 12-month
    period measured from the
    date we establish your
    account, or measured from
    any anniversary of that date.
 
Purpose. This is a deferred sales charge. This charge may be referred to as a
surrender charge in your contract or certificate. The charge 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.		 ▷ Purchase 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 bi-weekly, a
    payment period is completed
    after 26 payments are made.
    If only 25 payments are
    made, the payment period is
    not completed until the
    twenty-sixth payment is
    made. At any given time, the
    number of payment periods
    completed can not exceed the
    number of account years
    completed, regardless of the
    number of payments made.
 
The early withdrawal charge applies to:
• Amounts deposited in the Fixed Account and any earnings on such
amounts;
   
• Amounts that came from a subaccount or the Guaranteed Accumulation
Account but were then transferred to the Fixed Account (and any
earnings on such amounts); or
   
• Amounts that came from the Fixed Account but were then transferred to
a subaccount or the Guaranteed Accumulation Account (and any
earnings on such amounts).
 
 
 
 
PRO.75962-09   19    

Early Withdrawal Charge Schedules:
 
Withdrawals from the Fixed Account and Variable Investment Options*
Purchase Payment Periods Completed Early Withdrawal Charge
Fewer than 5 5.0%
5 or more but fewer than 7 4.0%
7 or more but fewer than 9 3.0%
9 or 10 2.0%
More than 10 0.0%

Early Withdrawal Charge Schedule For the Guaranteed Accumulation Account For Certain New York Contracts

The following schedule applies to withdrawals from the Guaranteed Accumulation Account under installment
purchase payment master contracts issued after July 29, 1993 in the State of New York. This schedule is based on
the number of completed account years. For all other contracts, the applicable early withdrawal charge schedule for
withdrawals from the Guaranteed Accumulation Account under installment purchase payment contracts is the same
schedule that applies to withdrawals from the Fixed Account and Variable Investment Options above.

Withdrawals from the Guaranteed Accumulation Account
for Certain Installment Purchase Payment Contracts*
Account Years Completed Early Withdrawal Charge
Fewer than 3 5.0%
3 or more but fewer than 4 4.0%
4 or more but fewer than 5 3.0%
5 or more but fewer than 6 2.0%
6 or more but fewer than 7 1.0%
7 or more 0.0%

*        The early withdrawal charge applies to account values in the variable investment options and the Guaranteed
Accumulation Account only if they were attributable to amounts held in the Fixed Account at any time.

Early Withdrawal Charge Schedule When Two or More Accounts are Available. There is no early withdrawal
charge for single purchase payment contracts. For installment purchase payment contracts, for the purposes of
calculating early withdrawal charges, the number of purchase payment periods will be calculated in the following
manner:

a)      The employer pre-tax account, if any, will at all times be credited with the same number of purchase
payment periods as the employee account (either employee pre-tax or employee Roth 403(b)) with the
greatest number of purchase payment periods completed.
 
b)      If an employee Roth 403(b) account or employee pre-tax account is established and the other type of
employee account was already in existence, the new employee account will initially be credited with the
same number of purchase payments as were made, if any, to the existing employee account. After the new
employee account is established, the number of additional purchase payment periods credited from that
point forward to either employee account will be based solely on the number of subsequent purchase
payments, if any, made to that particular employee account. This may result in a different number of
purchase payment periods completed for the employee pre-tax account and the employee Roth 403(b)
account.


For example, if a Roth 403(b) installment account is established for a participant who at that time has made 23
installment payments to her pre-tax 403(b) employee installment account, at the time the participant’s Roth 403(b)
installment account is initially established we will credit it with the same number of installment payments as were
made to the existing account (23). Thereafter, any future payments the participant makes to her pre-tax account will
be credited toward the number of payment periods completed for that account only, while any future payments the
participant makes to her Roth 403(b) account will be credited toward the number of payment periods completed only
for the Roth 403(b) account.

PRO.75962-09                                                                 20

Waiver. The early withdrawal charge is waived for portions of a withdrawal that are:

▷    Used to provide payments to you during the income phase;
▷    Paid because of your death before income phase payments begin;
▷    Paid where your account value is $2,500 or less and no part of the account has been taken as a withdrawal or a
loan or used to provide income phase payments within the prior 12 months;
▷    Withdrawn because of the election of a systematic distribution option (See “Systematic Distribution Options”);
▷    Withdrawn when you are 59½ or older, have an installment purchase payment account and have completed at
least nine purchase payment periods;
▷    Withdrawn due to disability as specified in the Tax Code;
▷    Withdrawn on or after the tenth anniversary of the effective date of the account;
▷    Withdrawn due to a financial hardship as defined in the Tax Code; or
▷    Withdrawn due to your separation from service with your current employer, while meeting the age and service
requirements to receive benefits under the New York State Teachers’ or Employee’s Retirement Systems (even
if you are not a member of either system).

Severance from Employment. Although the Tax Code permits distributions upon a participant’s severance from
employment, the contracts do not provide for a waiver of early withdrawal charges unless the severance from
employment would have otherwise qualified as a separation from service prior to the Economic Growth and Tax
Relief Reconciliation Act of 2001, and you meet the other requirements set forth in the contract.

Free Withdrawals. If you are between the ages of 59½ and 70½, you may withdraw up to 10% of your account
value during each calendar year without being charged a withdrawal fee. The free withdrawal only applies to the
first partial withdrawal you make in each calendar year. The 10% amount will be based on your account value
calculated on the valuation date next following our receipt of your request for withdrawal. Outstanding contract
loans are excluded from the account value when calculating the 10% free withdrawal amount.

The free withdrawal will not apply:

▷    To a full withdrawal of your account; or
▷    To partial withdrawals due to a default on a contract loan.

Redemption Fees

Certain funds may deduct redemption fees as a result of withdrawals, transfers, or other fund transactions you
initiate. If applicable, we may deduct the amount of any redemption fees imposed by the underlying mutual funds as
a result of withdrawals, transfers or other fund transactions you initiate. Redemption fees, if any, are separate and
distinct from any transaction charges or other charges deducted from your account value. For a more complete
description of the funds’ fees and expenses, review each fund’s prospectus.

Fees Deducted From Investments in the Subaccounts

Mortality and Expense Risk Charge

Amount. During the accumulation phase the mortality and expense risk charge is 1.00% annually of your account
value invested in the subaccounts, except amounts invested in the ING Money Market Portfolio subaccount, for
which the mortality and expense risk charge is 0.35% annually. See “The Income Phase–Charges Deducted” for fees
deducted during the income phase.

When/How. We deduct this fee daily from the subaccounts corresponding to the funds you select. We do not deduct
this fee from any fixed interest option.

Purpose. The fee compensates us for the mortality and expense risks we assume under the contracts.

▷    The mortality risks are those risks associated with our promise to make lifetime payments based on annuity
rates specified in the contracts and our funding of the death benefit and other payments we make to owners or
beneficiaries of the accounts.
▷    The expense risk is the risk that the actual expenses we incur under the contracts will exceed the maximum
costs that we can charge.

PRO.75962-09                                                                   21

If the amount we deduct for this fee 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 fee.

Administrative Expense Charge

Maximum Amount. 0.25% . We currently do not impose this fee. We reserve the right, however, to charge up to
0.25% on an annual basis from your account value invested in the funds.

When/How. If imposed, we will deduct this fee daily from your account value held in the subaccounts
corresponding to the funds you select. This fee may be assessed during the accumulation phase and/or the income
phase. If we are imposing this fee under the contract when you enter the income phase, the fee will apply to you
during the entire income phase.

Purpose. This fee helps defray our administrative expenses that cannot be covered by the mortality and expense risk
charge described above. The fee is not intended to exceed the average expected cost of administering the contracts.
We do not expect to make a profit from this fee.

MGWB Rider Charge:

Maximum Amount. We charge this fee only if you have elected the MGWB Rider. The maximum annual charge
for the MGWB rider is 1.20% of the MGWB Base, deducted as a quarterly charge of 0.30% . The current annual
charge for the MGWB rider is 0.40% of the MGWB Base, deducted as a quarterly charge of 0.10% .

Please see “Calculating the Minimum Guaranteed Withdrawal Benefit Base” in the “Optional Minimum Guaranteed
Withdrawal Benefit Rider” section for how and when the MGWB Base is calculated.

When/How. We deduct this fee on each quarterly rider anniversary date from the portion of the eligible account
value invested in the subaccounts, in the same proportion that this amount bears to the total eligible account value
invested in all subaccounts. While we do not deduct this charge from amounts invested in any fixed interest option,
the charge is calculated as a percentage of the MGWB Base, which includes amounts you have invested in the fixed
interest options. If the amount invested in the subaccounts is insufficient to satisfy any portion of the MGWB Rider
Charge on a quarterly rider anniversary date, we reserve the right to deduct any remaining MGWB Rider Charge on
the next business day in which you have amounts invested in the subaccounts sufficient to satisfy the remaining
charge.

A “quarterly rider anniversary date” is the date three months from the date the rider becomes effective (the “rider
date”) that falls on the same date of the month as the rider date. For example, if the rider date is February 12, the
quarterly rider anniversary date is May 12. If there is no corresponding date in the month, the quarterly rider
anniversary date will be the last date of such month. If the quarterly rider anniversary date falls on a weekend or
holiday, we will use the value as of the subsequent business day. A “rider anniversary” is the date one calendar year
from the rider date, and each date thereafter that is the same date and month as the rider date. We call the
consecutive one year period starting on the rider date and each rider anniversary and ending on the date before the
next rider anniversary a “rider year.”

In addition, a pro rata portion of the quarterly charge will be deducted upon a full surrender of the eligible account
value, upon cancellation of the rider, and upon the application of the eligible account value to an income phase
option.

Purpose. The fee compensates us for the insurance risks we take in providing the guaranteed withdrawals available
under the MGWB rider. If the amount we deduct for this fee is not enough to cover the costs of these risks, we will
bear the loss, while if the amount we deduct for this fee exceeds such risks, we will make a profit from this fee. We
do not expect to make a profit from this fee.

PRO.75962-09                                                                  22

Fund Fees and Expenses

As shown in the fund prospectuses and described in the “Fees Deducted by the Funds” section of this prospectus,
each fund deducts management fees from the amounts allocated to the fund. In addition, each fund deducts other
expenses, which may include service fees that may be used to compensate service providers, including the Company
and its affiliates, for administrative and contract holder services provided on behalf of the fund. Furthermore, certain
funds deduct a distribution or 12b-1 fee, which is used to finance any activity that is primarily intended to result in
the sale of fund shares. For a more complete description of the funds’ fees and expenses, review each fund’s
prospectus.

The Company or its U.S. affiliates receive substantial revenue from each of the funds or the funds’ affiliates,
although the amount and types of revenue vary with respect to each of the funds offered through the contract. This
revenue is one of several factors we consider when determining contract fees and charges and whether to offer a
fund through our contracts. Fund revenue is important to the Company’s profitability, and it is generally more
profitable for us to offer affiliated funds than to offer unaffiliated funds.

In terms of total dollar amounts received, the greatest amount of revenue generally comes from assets allocated to
funds managed by Directed Services LLC or other Company affiliates, which funds may or may not also be
subadvised by a Company affiliate. Assets allocated to funds managed by a Company affiliate but subadvised by
unaffiliated third parties generally generate the next greatest amount of revenue. Finally, assets allocated to
unaffiliated funds generate the least amount of revenue. The Company expects to make a profit from this revenue to
the extent it exceeds the Company’s expenses, including the payment of sales compensation to our distributors.

Types of Revenue Received from Affiliated Funds

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

Revenues received by the Company from affiliated funds may include:

  • A share of the management fee deducted from fund assets;
  • Service fees that are deducted from fund assets;
  • 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
  • Other revenues that may be based either on an annual percentage of average net assets held in the fund by the
    Company or a percentage of the fund’s management fees.

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

Revenue received from each of the unaffiliated funds or their affiliates is based on an annual percentage of the
average net assets held in that fund by the Company. Some unaffiliated funds or their affiliates pay us more than
others and some of the amounts we receive may be significant.

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; and
  • Additional payments for administrative, recordkeeping or other services that we provide to the funds or their
    affiliates, such as processing purchase and redemption requests, and mailing fund prospectuses, periodic reports
    and proxy materials. These additional payments do not increase directly or indirectly the fees and expenses
    shown in each fund prospectus. These additional payments may be used by us to finance distribution of the
    contract.

PRO.75962-09                                                                     23


These revenues are received as cash payments, and if the unaffiliated fund families currently offered through the
contract were individually ranked according to the total amount they paid to the Company or its affiliates in 2008, in
connection with the registered variable annuity contracts issued by the Company, that ranking would be as follows:

1.   Fidelity Investments   8.   AIM Investments
2.   American Funds   9.   Calvert Funds
3.   Franklin Templeton Investments   10.   American Century Investments
4.   Oppenheimer Funds   11.   Amana Funds
5.   Lord Abbett Funds   12.   Alger Funds
6.   Evergreen Investments   13.   BlackRock, Inc.
7.   Pax World Funds        

Some of the fund families listed above may not have paid any such amounts in 2008. If the revenues received from
affiliated funds were included in the table above, payments from Directed Services LLC and other Company
affiliates would be first on the list.

In addition to the types of revenue received from affiliated and unaffiliated funds described above, affiliated and
unaffiliated funds and their investment advisers, subadvisers or affiliates may participate at their own expense in
Company sales conferences or educational and training meetings. In relation to such participation, a fund’s
investment adviser, subadviser or affiliate may help offset the cost of the meetings or sponsor events associated with
the meetings. In exchange for these expense offset or sponsorship arrangements, the investment adviser, subadviser
or affiliate may receive certain benefits and access opportunities to Company sales representatives and wholesalers
rather than monetary benefits. These benefits and opportunities include, but are not limited to co-branded marketing
materials; targeted marketing sales opportunities; training opportunities at meetings; training modules for sales
personnel; and opportunities to host due diligence meetings for representatives and wholesalers.

Please note certain management personnel and other employees of the Company or its affiliates may receive a
portion of their total employment compensation based on the amount of net assets allocated to affiliated funds. See
“Contract Distribution.”

Premium and Other Taxes. Currently, there is no premium tax on annuities under New York regulations. If the
state does impose a premium tax, it would be deducted from the amount applied to an income phase payment option.
We reserve the right to deduct a charge for state premium tax at any time from the purchase payment(s) or from the
account value at any time, but no earlier than when we have a tax liability under state law.

Certain funds may be structured as “fund of funds” (including the ING Strategic Allocation portfolios). These funds
may have higher fees and expenses than a fund that invests directly in debt and equity securities because they also
incur the fees and expenses of the underlying funds in which they invest. These funds are affiliated funds, and the
underlying funds in which they invest may be affiliated as well. The fund prospectuses disclose the aggregate annual
operating expenses of each portfolio and its corresponding underlying fund of funds. These funds are identified in
the investment option list on the front of this prospectus.

In addition, the Company reserves the right to assess a charge for any federal taxes due against the separate account.
See “Taxation.”

ING GET Fund Guarantee Charge

Various series of the 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. The ING GET Fund guarantee charge is deducted each business day during the
guarantee period if you elect to invest in the ING GET Fund. The amount of the ING GET Fund guarantee charge is
0.25% and is deducted from amounts allocated to the ING GET Fund investment option. This charge compensates
us for the cost of providing a guarantee of accumulation unit values of the ING GET Fund subaccount. See
“Investment Options–ING GET U.S. Core Portfolio.”

OPTIONAL MINIMUM GUARANTEED WITHDRAWAL BENEFIT RIDER

General. You may elect to purchase an optional Minimum Guaranteed Withdrawal Benefit rider (“MGWB rider”).
The MGWB rider generally guarantees that you may withdraw specified amounts from your account each calendar
year. Depending upon the option you select, these withdrawals may be guaranteed for a defined period or for your
life. The rider may also provide for guaranteed payments in the event your eligible account value is reduced to zero,
subject to the terms, conditions and limitations noted below. You may wish to purchase this rider if you want future
income. Two optional forms of the rider are available.

PRO.75962-09                                                           24

Any date required by this rider that falls on a date when the New York Stock Exchange is closed for trading will be
applied as of the next date the New York Stock Exchange is open.

The MGWB rider may not be available for all investors. In order to be eligible for a withdrawal, you must
otherwise qualify for withdrawals under the terms of the Internal Revenue Code of 1986, as amended (“Tax
Code”) and your retirement plan. You should analyze the MGWB rider thoroughly and understand it
completely before you elect to purchase it. The MGWB rider guarantees withdrawals up to a specified
amount each calendar year. It does not guarantee any return of principal or premium payments, nor does it
guarantee performance of any specific fund under the contract. The MGWB rider has no cash surrender
value. You should consult a qualified financial or tax advisor when evaluating the MGWB rider.

Availability. The MGWB rider may be purchased provided all of the following conditions are met:

1)       Your eligible account value is equal to or greater than the required minimum initial MGWB Base
(see “Calculating the Minimum Guaranteed Withdrawal Benefit Base,” below);
2) None of your eligible account value is invested in a Restricted Investment Option on the rider date
(see “Investment Restrictions,” below);
3) You do not have an outstanding loan on the rider date;
4) Your election of the MGWB rider is received in good order at the Opportunity Plus Service Center
(see “Contract Overview–Questions: Contacting the Company”); and
5) We are currently making the MGWB rider available for election by participants.


The MGWB rider is not available in connection with Roth 403(b) accounts. Amounts in a Roth 403(b) account are
not used to determine the MGWB Base, and any purchase payments contributed as Roth 403(b) after-tax salary
reductions are not included as eligible purchase payments for purposes of the rider. In addition, withdrawals from
Roth 403(b) accounts are disregarded for purposes of the MGWB rider. The MGWB rider is not applicable to
amounts invested in or contributed to the ING 403(b)(7) mutual fund program that may be offered under your plan.
Any transfers from investment options offered under the Opportunity Plus 403(b)(1) annuity to any investment
option offered under the ING 403(b)(7) mutual fund program will be treated as a withdrawal and will cause the
MGWB rider to enter into the Withdrawal Phase. Once the MGWB rider has entered the Withdrawal Phase, any
such transfer from investment options offered under the Opportunity Plus 403(b)(1) annuity to any investment
option offered under the ING 403(b)(7) mutual fund program will also be treated as a withdrawal, as described in
“Impact of Withdrawals on the MGWB Remaining Guaranteed Balance and MGWB Base,” below.

Charges for the MGWB Rider. The maximum annual charge for the MGWB rider is 1.20% of the MGWB Base,
deducted as a quarterly charge of 0.30% . The current annual charge for the MGWB rider is 0.40% of the MGWB
Base, deducted as a quarterly charge of 0.10% . See “Fees–MGWB Rider Charge.”

Overview of the MGWB Rider. The MGWB rider has two phases. The first phase, called the Growth Phase,
begins on the rider date and ends as of the business day before the first partial withdrawal is taken. The second phase
is called the Withdrawal Phase. This phase begins as of the date you take the first partial withdrawal of any kind
under the contract, while the MGWB rider is in effect. During the accumulation phase under the contract, the
MGWB rider may be in either the Growth Phase or the Withdrawal Phase. During both the Withdrawal Phase and
the Growth Phase, we require that your eligible account value be allocated in accordance with certain limitations
(see “Investment Option Restrictions,” below).

At the time you decide to take your first partial withdrawal from the contract (thereby triggering the Withdrawal
Phase), you must elect one of two rider withdrawal options. These options determine the benefits you may receive
under the MGWB rider, and are in part restricted based upon your age on the date the Withdrawal Phase begins, as
follows:

1)          If you are between age 50 and 54 on the date the Withdrawal Phase begins: You may only elect rider
withdrawal option A.
 
2) If you are age 55 or over on the date the Withdrawal Phase begins: You may select between rider
withdrawal option A and rider withdrawal option B.
 

Once a rider withdrawal option is selected, it may not be changed. We describe rider withdrawal options A and B in
“Rider Withdrawal Options,” below.

PRO.75962-09                                                                25

Rider Withdrawal Options. Before entering the Withdrawal Phase by taking a partial withdrawal, you must
elect a rider withdrawal option. If you purchase the MGWB rider at a time when you have elected a systematic
distribution option under the contract (see “Systematic Distribution Options”), and you do not terminate the
systematic distribution option at the time the rider is elected, the Withdrawal Phase will begin with your next
scheduled systematic distribution, and you therefore must elect a rider withdrawal option. You should carefully
consider the impact an existing systematic distribution option will have on the MGWB rider withdrawal options
before electing the MGWB rider. Election of the rider withdrawal option must be received in good order and must
accompany your partial withdrawal request, as permitted by your plan.

When electing a rider withdrawal option, you should compare the benefits available under each option with those
otherwise available through the income phase payment options available under your contract. Once a rider
withdrawal option has been elected, it cannot be changed.

The available rider withdrawal options are as follows:

    Rider Withdrawal
Option 		Age on the date Withdrawal
Phase begins 		Maximum Annual
Withdrawal Percentage
 
  A (Non Life) 50+                          7%
B (Life) 55-64                          4%
65+                          5%

Under rider withdrawal option A, the Maximum Annual Withdrawal Percentage (“MAW Percentage”) is 7% (see
“Calculating the Maximum Annual Withdrawal,” below), and in the event the MGWB rider enters Automatic
Periodic Benefit Status, MGWB Periodic Payments will continue only until the MGWB Remaining Guaranteed
Balance is reduced to zero, at which point all benefits under the MGWB rider will end. See “Automatic Periodic
Benefit Status” and “MGWB Periodic Payments,” below.

Under rider withdrawal option B, the MAW Percentage is 4% if you are between age 55 and 64 on the date the
Withdrawal Phase begins, and 5% if you are age 65 or older on the date the Withdrawal Phase begins (see
“Calculating the Maximum Annual Withdrawal,” below); however, in the event the MGWB rider enters Automatic
Periodic Benefit Status, MGWB Periodic Payments will continue for your lifetime, even if the MGWB Remaining
Guaranteed Balance is reduced to zero. See “Automatic Periodic Benefit Status” and “MGWB Periodic Payments,”
below.

Calculating the Minimum Guaranteed Withdrawal Benefit Base. In order to determine the amount you may
withdraw under the rider (see “Calculating the Maximum Annual Withdrawal” below), we first determine the
Minimum Guaranteed Withdrawal Benefit Base (“MGWB Base”). The initial MGWB Base is equal to your eligible
account value, on the rider date. During the Growth Phase, the MGWB Base is recalculated on each 12 month
anniversary of the rider date (the “rider date anniversary”), for a maximum of 10 years following the rider date. For
example, if the rider date is March 1, 2009, the MGWB Base will be recalculated on March 1, 2010, and on each
March 1 up to and including March 1, 2019. We call the date that the MGWB Base is recalculated the “ratchet
date.” The minimum initial MGWB Base is $25,000; the maximum MGWB Base is $1,000,000 (or such greater
amount as we may otherwise allow), including any transfer or rollover amounts we receive within 12 months of the
rider date. The subsequent maximum MGWB Base on any ratchet date is limited to $5,000,000. We call the amount
in excess of these limits “ineligible purchase payments.” For purposes of this calculation, we call any salary deferral
amounts received during the Growth Phase and any transfer/rollover amounts received within the first 12 months
from the rider date (during the Growth Phase) as “eligible purchase payments.”

As of each ratchet date, the MGWB Base equals the greater of:

1)         The current MGWB Base; or
2) Your current eligible account value, less any ineligible purchase payments.

On any other date, the MGWB Base equals:

1)      The MGWB Base on the previous ratchet date; plus
2)      Any eligible purchase payments applied since the previous ratchet date.
 

PRO.75962-09                                                               26

For purposes of calculating the MGWB Base on or prior to the first ratchet date, the rider date will be treated as the
previous ratchet date for this calculation.

During the Withdrawal Phase, the MGWB Base is recalculated to reflect any election to exercise the MGWB Reset
Option and to reflect any adjustments for partial withdrawals that cause the Maximum Annual Withdrawal to be
exceeded. See “Impact of Withdrawals on the MGWB Remaining Guaranteed Balance and MGWB Base,” below.

Calculating the Maximum Annual Withdrawal. The Maximum Annual Withdrawal (“MAW”) is the
maximum amount that may be withdrawn from your eligible account value in any calendar year that the MGWB
rider is in effect, without reducing the rider benefit guarantee in future years. The MAW is generally determined by
multiplying the MAW Percentage (see “Rider Withdrawal Options,” above) by the MGWB Base as of the date the
MAW is determined.

The initial MAW is determined on the last day of the Growth Phase, by multiplying:

(1)        The applicable MAW Percentage, based upon your age and the rider withdrawal option you select (see
“Rider Withdrawal Options,” above), by
(2) The MGWB Base as of that date.

Once determined, neither the rider withdrawal option nor the MAW Percentage may be changed.

Thereafter, the MAW will be recalculated each time the MGWB Base is increased or decreased (see “Calculating
the Minimum Guaranteed Withdrawal Benefit Base,” above and “MGWB Reset Option,” below), so as to equal the
MAW Percentage multiplied by the newly recalculated MGWB Base.

Calculating the MGWB Remaining Guaranteed Balance. The MGWB Remaining Guaranteed Balance is the
amount guaranteed to be available for withdrawal from your eligible account value over time, while the rider is in
effect.

During the Growth Phase, the MGWB Remaining Guaranteed Balance is equal to the MGWB Base.

During the Withdrawal Phase, the MGWB Remaining Guaranteed Balance will be recalculated at the time of each
withdrawal, at the time the MGWB Reset Option is exercised, and at the time any rider benefits are paid. See
“Impact of Withdrawals on the MGWB Remaining Guaranteed Balance and MGWB Base,” “MGWB Periodic
Payments,” and “MGWB Reset Option,” below.

In the event you have elected rider withdrawal option A (non life), and the MGWB Remaining Guaranteed Balance
is reduced to zero, the MGWB rider will terminate and no additional rider benefits will be paid.

Impact of Withdrawals on the MGWB Remaining Guaranteed Balance and MGWB Base. Depending upon
the amount of the withdrawal, a partial withdrawal can impact the value of the MGWB Remaining Guaranteed
Balance and the MGWB Base. All amounts withdrawn, with the exception of any amounts withdrawn from a Roth
403(b) account, will be considered in determining the impact of the withdrawal on the MGWB Remaining
Guaranteed Balance and the MGWB Base. Note that amounts that may have been classified as ineligible purchase
payments will also be considered in determining the impact of the withdrawal on the MGWB Remaining
Guaranteed Balance and the MGWB Base,

Withdrawals during each calendar year that cumulatively do not exceed the then-applicable MAW will decrease the
MGWB Remaining Guaranteed Balance by the amount of each withdrawal, but do not result in a recalculation of the
MGWB Base. See Appendix IV–Example 1.

Any withdrawal that causes the cumulative withdrawals for the current calendar year to exceed the MAW will
immediately reduce the MGWB Remaining Guaranteed Balance and the MGWB Base to the lesser of:

1)        The MGWB Remaining Guaranteed Balance immediately prior to the withdrawal minus the amount of
the withdrawal; or
2) Your eligible account value immediately after the withdrawal.

See Appendix IV–Example 2.

PRO.75962-09                                                       27


For purposes of (a) determining whether the MAW has been exceeded, and (b) determining the value the MGWB
Remaining Guaranteed Balance in 1) above, the amount of any withdrawal from the Guaranteed Accumulation
Account will be the withdrawal amount reduced by any negative MVA, but not increased by any positive MVA. See
Appendix IV, Example 3. See also “Withdrawals from the Guaranteed Accumulation Account,” below; Appendix I–
Guaranteed Accumulation Account; and the Guaranteed Accumulation Account Prospectus.

Similarly, for purposes of (a) determining whether the MAW has been exceeded, and (b) determining the value the
MGWB Remaining Guaranteed Balance in 1) above, the amount of any withdrawal will be the amount after
deduction of any early withdrawal charge. See Appendix IV, Example 3. See also “Early Withdrawal Charges,”
below.

Withdrawals will be taken on a pro rata basis from each variable and fixed investment option unless you direct
otherwise. Withdrawals not taken on a pro rata basis as well as any withdrawal from a Fixed Allocation Investment
Option, whether or not taken on a pro rata basis, may result in MGWB Rebalancing (see “Investment Option
Restrictions” below).

Early Withdrawal Charges. Amounts withdrawn up to the MAW are not subject to early withdrawal charges.
Amounts withdrawn in excess of the MAW are subject to any applicable early withdrawal charges.

Withdrawals from the Guaranteed Accumulation Account. Amounts withdrawn from the Guaranteed
Accumulation Account are subject to any applicable market value adjustment (“MVA”). See Appendix I–
Guaranteed Accumulation Account and the Guaranteed Accumulation Account prospectus.

Required Minimum Distributions. To the extent a withdrawal is taken to satisfy the Required Minimum
Distribution (“RMD”) rules of the Tax Code applicable to your account, and such withdrawal exceeds the MAW for
a specific calendar year, the withdrawal will not cause a recalculation of the MGWB Remaining Guaranteed Balance
or the MGWB Base, subject to the following rules:

1)       If, on the first business day of any calendar year, a participant’s RMD for that calendar year, applicable to
that participant’s eligible account value, is greater than the MAW on that date, an Additional Withdrawal
Amount will be set on that date to be equal to that portion of the RMD that exceeds the MAW. Otherwise,
the Additional Withdrawal Amount will be set to zero.
2) Any withdrawals taken in a calendar year will count first against the MAW for that calendar year.
3) Once the MAW for the then-current calendar year has been taken, additional amounts withdrawn in excess
of the MAW will count against and reduce any Additional Withdrawal Amount and are not considered
withdrawals that exceed the MAW.
4) Withdrawals that exceed the Additional Withdrawal Amount will reduce the MGWB Base and MGWB
Remaining Guaranteed Balance, as described in “Impact of Withdrawals on the MGWB Remaining
Guaranteed Balance and MGWB Base,” above. This will cause a recalculation of the MAW as described in
“Calculating the Maximum Annual Withdrawal,” above.
5) The Additional Withdrawal Amount is set to zero at the end of each calendar year, and remains at zero until
it is recalculated the following calendar year. The Additional Withdrawal Amount, when recalculated, will
not include your RMD for a calendar year, or any portion thereof, which may otherwise be taken after the
calendar year’s end. Therefore, the timing of taking your RMD is important in preserving the
maximum benefit of the MGWB rider.

See Appendix IV–Example 4.

Special rules may apply to withdrawals from certain investment options. See “Investment Option Restrictions,”
below.

Automatic Periodic Benefit Status. As indicated in the Rider Withdrawal Options section above, if your
eligible account value is reduced to zero (other than by a withdrawal that exceeds the MAW) while the MGWB rider
is in effect, the rider will enter Automatic Periodic Benefit Status and MGWB Periodic Payments will be paid in
accordance with the rider withdrawal option you have elected (see “MGWB Periodic Payments,” below).

PRO.75962-09                                                       28

If your eligible account value is reduced to zero by a withdrawal that exceeds the MAW, your account and the rider
will terminate. In addition, all provisions of the contract will terminate with the exception of any provisions relating
to a Roth 403(b) account. Such provisions will continue to apply with respect to the Roth 403(b) account value only.

When the MGWB rider enters Automatic Periodic Benefit Status, the impacted participant account is modified as
follows:

1)        Except for provisions relating to a Roth 403(b) account, no other benefits under the contract apply, other
than as provided under the MGWB rider;
2)      No additional purchase payments will be accepted, except purchase payments made to a Roth 403(b)
account;
3)      Any other riders will terminate unless otherwise specified under the applicable rider or except to the extent
that the rider is applicable to the value in a Roth 403(b) account; and
4)      The impacted participant account (other than a Roth 403(b) account) and the MGWB rider will terminate at
the earliest of:
 
  (a)      Under rider withdrawal option A (non life), payment of the final MGWB Periodic Payment; or
  (b)      Payment of the MGWB Death Benefit (see “MGWB Death Benefit,” below).


If a participant is not receiving payments under a systematic distribution option at the time the MGWB rider enters
Automatic Periodic Benefit Status, and the MAW exceeds the partial withdrawals for that rider year (including the
partial withdrawal that caused the MGWB rider to enter Automatic Periodic Benefit Status), the excess of the MAW
over such partial withdrawals will be paid immediately to the participant.

MGWB Periodic Payments. Upon entering Automatic Periodic Benefit Status, you will begin to receive
MGWB Periodic Payments equal to the MAW on the date the MGWB rider enters such status. Unless you are
receiving periodic payments under a systematic distribution option at the time Automatic Periodic Benefit Status
begins, you will receive MGWB Periodic Payments annually. If you are receiving periodic payments under a
systematic distribution option, MGWB Periodic Payments will begin with the next scheduled payment under this
option, and will be made at the same frequency in equal amounts such that the sum of all payments in each calendar
year will equal the annual MGWB Periodic Payment.

Once you have entered Automatic Periodic Benefit Status, MGWB Periodic Payments will continue in accordance
with the rider withdrawal option you have selected (see “Rider Withdrawal Options,” above). In the event you
elected rider withdrawal option A (non life), and the MGWB Remaining Guaranteed Balance is less than or equal to
the MAW at the time an MGWB Periodic Payment is due, that payment will equal the MGWB Remaining
Guaranteed Balance, and will be the final MGWB Periodic Payment.

MGWB Death Benefit. If you die while the MGWB rider is in Automatic Periodic Benefit Status, MGWB
Periodic Payments will end, and to the extent an MGWB Remaining Guaranteed Balance remains under the rider, it
will be payable as the MGWB Death Benefit. The MGWB Death Benefit will be payable in one lump sum to the
person or persons entitled to death benefit proceeds under the contract.

MGWB Reset Option. While the MGWB rider is in the Withdrawal Phase, you may elect to reset the MGWB
Base and the MGWB Remaining Guaranteed Balance to your eligible account value on the date we receive the reset
request in good order. Any additional MAW amount resulting from the reset may be withdrawn during the
remainder of that calendar year.

The MGWB Reset Option is subject to the following requirements:

1)      We must receive your reset request in good order at our Opportunity Plus Service Center on or prior to an
applicable reset option date;
2)      A reset may only be elected on a reset option date stated in your rider schedule;
3)      Your eligible account value must be greater than the MGWB Base; and
4)      Your eligible account value must not have reached the maximum MGWB Base.

Currently, the reset option date is the first rider date anniversary following the first day the MGWB rider enters the
Withdrawal Phase, and occurring every twelve months thereafter.

PRO.75962-09                                                                      29

If the MGWB Reset Option is exercised we may, at our discretion, increase or decrease the MGWB Rider Charge at
the time of such exercise; however, it will never exceed the maximum MGWB Rider Charge shown in “MGWB
Rider Charge,” above. If we are issuing the MGWB rider in this form as of the reset option date, the MGWB Rider
Charge at time of reset will not exceed the charge then in effect for new MGWB riders issued as of the current
MGWB rider’s reset option date. In addition, upon reset, the MGWB rider will become subject to any investment
option restrictions then in effect for new MGWB riders being issued at the time of reset.

Investment Option Restrictions. In order to mitigate the insurance risk inherent in our guarantee to provide you
with guaranteed withdrawals (subject to the terms and conditions described in this prospectus), we require that your
eligible account value be allocated in accordance with certain limitations. In general, to the extent you choose not to
invest in Accepted Investment Options, we require that at least 25% of your eligible account value not so invested
be invested in the Fixed Allocation Investment Options. We will require this allocation regardless of your
investment instructions to the contrary, as described below.

While the MGWB rider is in effect, eligible account value allocated to investment options other than Accepted
Investment Options will be rebalanced so as to maintain at least 25% of such eligible account value in the Fixed
Allocation Investment Options. See “MGWB Rebalancing,” below.

Accepted Investment Options. Currently, the only Accepted Investment Option is the ING MFS Total Return
Portfolio. We may designate newly available investment options as Accepted Investment Options or reclassify any
existing investment options as Accepted Investment Options.

Conditional Investment Options. Conditional Investment Options consist of the following three categories:

1)      Fixed Allocation Investment Options: Currently, the Fixed Allocation Investment Options are the ING
Fixed Account, the ING Intermediate Bond Portfolio, and the Guaranteed Accumulation Account. We
may add newly-available investment options as Fixed Allocation Investment Options.
2)      Restricted Investment Options: Currently, the ING GET U.S. Core Portfolio is designated as a
Restricted Investment Option. Transfers or deposits into Restricted Investment Options are not permitted
while the MGWB rider is in effect. We may in the future designate newly-available investment options
as Restricted Investment Options.
3)      Other Investment Options: We call any investment not designated as a Fixed Allocation Investment
Option, Restricted Investment Option, or Accepted Investment Option an “Other Investment Option.”
Other Investment Options are subject to restrictions as to the amount of eligible account value that may
be invested or transferred into such investment options.

Fixed Rebalancing Investment Option. The ING Intermediate Bond Portfolio is designated as the Fixed
Rebalancing Investment Option.

MGWB Rebalancing. If, on any MGWB Rebalancing Date (defined below), your eligible account value
invested in the Fixed Allocation Investment Options is less than 25% of your eligible account value invested in the
Conditional Investment Options, we will automatically rebalance your eligible account value allocated to the
Conditional Investment Options so that 25% of this amount is allocated to the Fixed Allocation Investment Options.
Any amount so rebalanced will be allocated to the Fixed Rebalancing Investment Option. Accepted Investment
Options are excluded from MGWB Rebalancing. MGWB Rebalancing is done on a pro rata basis from the Other
Investment Options to the Fixed Rebalancing Investment Option, and will be the last transaction processed on that
date.

The MGWB Rebalancing Dates are as follows:

1)      The rider date and any rider anniversary;
2)      Any day on which you withdraw amounts from the Fixed Allocation Investment Options;
3)      Any day on which you transfer or reallocate amounts from the Fixed Allocation Investment Options,
whether such transfer or reallocation is automatic or directed by you; and
4)      Any day on which we receive transfer/rollover amounts that are considered eligible purchase payments
under the MGWB rider.

See “Appendix V–Examples of MGWB Rebalancing.”

PRO.75962-09                                                                       30

MGWB Rebalancing will not occur on an MGWB Rebalancing Date if you are entirely invested in Accepted
Investment Options, or if at least 25% of your eligible account value invested in the Conditional Investment Options
is allocated to the Fixed Allocation Investment Options.

MGWB Rebalancing is separate from any other automatic rebalancing under the contract. However, if another
automatic rebalancing option under the contract causes your allocations to be out of compliance with the investment
option restrictions noted above, MGWB Rebalancing will occur immediately after the automatic rebalancing to
restore the required allocations.

In certain circumstances MGWB Rebalancing may result in a reallocation into the Fixed Rebalancing Investment
Option even if you have not previously been invested in it. See “Appendix V–Examples of MGWB Rebalancing.”
By electing to purchase the MGWB rider, you are providing the Company with direction and authorization
to process these transactions, including reallocations into the Fixed Rebalancing Investment Option. You
should not purchase the MGWB rider if you do not wish to have your eligible account value reallocated in
this manner.

Cancellation of the MGWB Rider. You may cancel the MGWB rider on the 5th rider anniversary, on the 10th rider
anniversary, or on any rider anniversary thereafter, by providing us written notice in good order at the Opportunity
Plus Service Center on or prior to the applicable rider anniversary.

Other than as provided under “Automatic Periodic Benefit Status,” above, the MGWB rider will automatically
terminate on the next valuation following the occurrence of the following:

1)      The MGWB Guaranteed Remaining Balance is reduced to zero (if a non life rider withdrawal option was
elected);
2)      The contract is terminated accordance with contractual provisions;
3)      You initiate a loan;
4)      You initiate income phase payments; or
5)      You die.

The MGWB rider has no cash surrender value or other non-forfeiture benefits upon termination.

Federal Tax Considerations. We currently treat any amounts paid to you under the MGWB rider while in
Automatic Periodic Benefit Status as income phase payments rather than withdrawals.

 YOUR ACCOUNT VALUE                                                                         

During the accumulation phase, your account value at any given time equals:

▷    Account dollars directed to the fixed interest options, including interest earnings to date; less
▷    Deductions, if any, from the fixed interest options (e.g. withdrawals, fees); plus
▷    The current dollar value of amounts held in the subaccounts, which takes into account investment performance
and fees deducted from the subaccounts.

Subaccount Accumulation Units. When a fund is selected as an investment option, your account dollars invest in
“accumulation units” of the Variable Annuity Account C subaccount corresponding to that fund. The subaccount
invests directly in the fund shares. The value of your interests 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
charge (if any). We discuss these deductions in more detail in “Fee Table” and “Fees.”

PRO.75962-09                                                                   31

Valuation. We determine the AUV every 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 units at the preceding valuation; minus
▷    A daily deduction for the mortality and expense risk charge and administrative expense charge, if any, and any
other fees, such as guarantee charges for the ING GET Fund, deducted daily from investments in the separate
account.

The net investment rate may be either positive or negative.

Hypothetical Illustration. As a hypothetical illustration, assume that an investor contributes $5,000 to his account
and directs us to invest $3,000 in Fund A and $2,000 in Fund B. After receiving the contribution and following the
next close of business of the New York Stock Exchange (normally at 4:00 p.m. Eastern Time), the applicable
AUV’s are $10 for Subaccount A, and $25 for Subaccount B. The investor’s account is credited with 300
accumulation units of Subaccount A and 80 accumulation units of Subaccount B.

$5,000 contribution   Step 1: You make an initial contribution of
Step 1 ||   $5,000.
 
ING Life Insurance and Annuity Company   Step 2:
  A. You direct us to invest $3,000 in Fund A.
  Step 2 ||          The purchase payment purchases 300
Variable Annuity Account C        accumulation units of Subaccount A
Subaccount A
300
accumulation
units		 Subaccount B
80
accumulation
units		 Etc.        ($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
          ||          Step 3          ||          ($2,000 divided by the current $25 AUV).
Fund A Fund B Step 3: The separate account then purchases
shares of the applicable funds at the then
current market value (net asset value or NAV).
   
   

The 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 initial purchase payments are directed to the
subaccounts, they will purchase subaccount accumulation units at the AUV next computed after our acceptance of
the applicable application or enrollment forms. Any subsequent purchase payments or transfers directed to the
subaccounts that we receive by the close of business of the New York Stock Exchange will purchase subaccount
accumulation units at the AUV computed after the close of the New York Stock Exchange (normally at 4:00 p.m.
Eastern Time) on that day. The value of subaccounts may vary day to day.

PRO.75962-09                                                               32

WITHDRAWALS    
        Taxes, Fees and Deductions
Making a Withdrawal. Subject to the Tax Code withdrawal restrictions   Amounts withdrawn may be
described below and the rules of your plan, you may withdraw all or a   subject to one or more of the
portion of your account value at any time during the accumulation phase.   following:
Withdrawals may be subject to approval by the contract holder or the    
contract holder’s delegate. See “Contract Overview–Contract Rights” and   ▷ Early Withdrawal Charge
“Taxation–403(b) Tax-Deferred Annuities.”      (see “Fees–Early Withdrawal
           Charge”)
Steps for Making a Withdrawal. You must:   ▷ Optional Minimum
           Guaranteed Withdrawal
▷    Select the Withdrawal Amount.      Benefit Rider Charge (see
           “Fees–MGWB Rider Charge”)
(1)   Full Withdrawal: You will receive, reduced by any required withholding   ▷ Redemption Fees (see “Fees–
    tax, tax penalties, redemption fees (if applicable), and MGWB rider      Redemption Fees”)
    charges (if applicable), your account value allocated to the subaccounts,   ▷ Market Value Adjustment
    the Guaranteed Accumulation Account (plus or minus any applicable      (see Appendix I)
    market value adjustment) and the Fixed Account, minus any applicable   ▷ Tax Penalty (see “Taxation”)
    early withdrawal charge.   ▷ Tax Withholding (see
           “Taxation”)
(2)   Partial Withdrawal (Percentage or Specified Dollar Amount): You will    
    receive, reduced by any required withholding tax, tax penalties, and   To determine which may apply,
        refer to the appropriate sections
    redemption fees (if applicable), the amount you specify, subject to the   of this prospectus, contact your
    value available in your account. However, the amount actually   local representative or call the
    withdrawn from your account will be the amount you specified plus   Company at the number listed in
    adjustment for any applicable early withdrawal charge, and any positive   “Contract Overview–Questions:
    or negative market value adjustment for amounts withdrawn from the   Contacting the Company.”
    Guaranteed Accumulation Account.    

▷    Select Investment Options. If not specified, we will withdraw dollars in the same proportion as the values you
hold in the various investment options, from each investment option in which you have an account value.
▷    Properly complete a disbursement form and submit it to the Opportunity Plus Service Center.

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 either:

(1)      As of the next valuation after we receive a request for withdrawal in good order at the Opportunity Plus Service
Center; or
(2)      On such later date as specified on the disbursement form (as allowed under our administrative procedures).

Delivery of Payment. Payments for withdrawal requests will be made in accordance with SEC requirements.
Normally, the payment will be sent not later than seven calendar days following our receipt of the disbursement
form in good order at the Opportunity Plus Service Center.

Withdrawal Restrictions from 403(b) Plans. Section 403(b)(11) of the Tax Code generally prohibits withdrawal
under 403(b) contracts prior to your death, disability, attainment of age 59½, severance from employment or
financial hardship, of the following:

(1)      Salary reduction contributions made after December 31, 1988;
(2)      Earnings on those contributions, and;
(3)      Earnings during such period on amounts held as of December 31, 1988.

Income attributable to salary reduction contributions and credited on or after January 1, 1989, may not be distributed
in the case of hardship. Other withdrawals may be allowed as provided for under the Tax Code or regulations.

Effective January 1, 2009, the new 403(b) regulations impose restrictions on the distribution of 403(b) employer
contributions under certain contracts. See “Taxation of Qualified Contracts–Distributions.”

PRO.75962-09                                                           33

Reinvestment Privilege. The contract allows one-time use of a reinvestment privilege. 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 proceeds. We must
receive reinvested amounts within 60 days of the withdrawal. We will credit the account for the amount reinvested
based on 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 early withdrawal charges imposed at the time of
withdrawal. Any MGWB rider that was in effect at the time of the full withdrawal will not be reinstated. 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 an ING 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 are invested, on a pro rata basis. Special rules apply to reinvestments
of amounts withdrawn from the Guaranteed Accumulation Account (see Appendix I). Seek competent advice
regarding the tax consequences associated with reinvestment.

 LOANS                                                                                                                    
     
Availability. You may take a loan from your account value during the accumulation phase if permitted by your
plan. Loans are only allowed from amounts allocated to certain subaccounts and fixed interest options. Loans are not
available under contracts issued as a Roth 403(b) annuity or from Roth 403(b) accounts. Additional restrictions may
apply under the Tax Code, your plan, or due to our administrative practices or those of a third party administrator
selected by your plan sponsor, and loans may be subject to approval by the plan sponsor or its delegate. We reserve
the right not to grant a loan request if the participant has an outstanding loan in default.
 
Requests. If you are eligible to obtain a loan, you may request one by properly completing the loan request form
and submitting it to the Opportunity Plus Service Center. Read the terms of the loan agreement before submitting
any request.

    SYSTEMATIC DISTRIBUTION OPTIONS
 
Features of a Systematic
Distribution Option

If available under your plan, a
systematic distribution option
allows you to receive regular
payments from your account
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   		Availability of Systematic Distribution Options. These options may be
exercised at any time during the accumulation phase of the contract. To
exercise one of these options the account value must meet any minimum dollar
amount and age criteria applicable to that option. To determine which
systematic distribution options are available, call the Opportunity Plus Service
Center at 1-800-677-4636.
   
  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 the payment method
      selected. It is designed for those who want a periodic income while  
      retaining investment flexibility for amounts accumulated under the contract.
      You may not elect this option if you have an outstanding contract loan.
   
  ▷ LEO-Life Expectancy Option. This option provides for annual payments
        for a number of years equal to your life expectancy or the life expectancy of
        you and a designated beneficiary. It is designed to meet the substantially
        equal periodic payment exception to the 10% premature distribution penalty
        under Tax Code section 72. See “Taxation.”
 
    ▷ ECO-Estate Conservation Option. ECO offers the same investment
        flexibility as SWO, but is designed for those who want to receive only the
        minimum distribution that the Tax Code requires each year. Under ECO,
        we calculate the minimum distribution amount required by law at the later
        of age 70½ or retirement and pay you that amount once a year.
 
 
 
 
 PRO.75962-09     34

Availability of Systematic Distribution Options. The Company may offer additional systematic distribution
options or discontinue the availability of one or all of the systematic distribution options at any time, and/or change
the terms of future elections.

Terminating a Systematic Distribution Option. Once a systematic distribution option is elected, you may revoke
it at any time by submitting a written request to the Opportunity Plus Service Center. Any revocation will apply only
to the amount not yet paid. Once an option is revoked for an account, it may not be elected again until the next
calendar year, nor may any other systematic distribution option be elected unless the Tax Code permits it.

Taxation. Withdrawals received through these options and revocations of elections may have tax consequences. See
“Taxation.”

DEATH BENEFIT    
 
The contract provides a death benefit in the event of your death, which is
payable to the beneficiary you name for your account. The designated
beneficiary may be changed at any time. Such change will not become
effective until written notice of the change is received by the Company. In the
event there is no beneficiary designated on your account, the death benefit
will be payable to your estate.		 During the Income Phase
This section provides information
about the accumulation phase. For
death benefit information
applicable to the income phase,
see “Income Phase.”
 
During the Accumulation Phase    
 
Payment Process    

1.      Following your death, your beneficiary must provide the Company with
proof of death acceptable to us and a payment request in good order.
2.      The payment request should include selection of a benefit payment
option.
3.      Within seven calendar days after we receive proof of death acceptable to
us and a payment request in good order at the Opportunity Plus Service
Center, we will mail payment, unless otherwise requested.

Until a payment option is selected, account dollars will remain invested as at
the time of your death, and no distribution will be made.

If you die during the accumulation phase of your account, the following
payment options are available to your beneficiary, if allowed by the Tax
Code:

▷    Lump-sum payment;
▷    Payment in accordance with any of the available income phase payment
options (see “The Income Phase–Payment Options”); or
▷    Payment in accordance with an available systematic distribution option
(subject to certain limitations) (see “Systematic Distribution Options”).

The beneficiary may also leave the account value invested in the contract,
subject to Tax Code limits on the length of time amounts may remain
invested.

Guaranteed Death Benefit. Effective December 31, 2006, a guaranteed death benefit was made available under the
contract, which generally guarantees that the death benefit payable under the contract will never be less than the
amount of adjusted purchase payments made to your account (as defined below), less a proportional adjustment for
amounts withdrawn or borrowed from your account. The guaranteed death benefit applies to all death benefits
payable on or after December 31, 2006. There is no additional charge for the guaranteed death benefit.

PRO.75962-09                                                                         35

Calculating the Value of the Death Benefit. The death benefit is guaranteed to be the greater of (a) or (b) as
calculated as of the next valuation following our receipt of proof of death and a payment request in good order at the
Opportunity Plus Service Center where:

(a)      is the adjusted purchase payment total, which is the sum of all purchase payment(s) to your account, minus a
proportional adjustment for withdrawals and amounts taken as a loan, which amount will never be less than
zero; or
 
(b)      is the current account value, excluding amounts taken as a loan, plus any positive aggregate market value
adjustment (MVA), as applicable.


If the amount of the death benefit in (a) is greater than the amount in (b), the Company will deposit the difference in
your account. The amount, if any, will be credited to the ING Money Market Portfolio and deposited as of the
second valuation (the date of the second close of the New York Stock Exchange) following our receipt of proof of
death acceptable to us and a payment request in good order at the Opportunity Plus Service Center.

If the beneficiary in that situation requests an immediate payment or begins income phase payments, the amount
paid will be the current account value, excluding any amounts taken as a loan, plus any positive MVA, as of the
third valuation (the date of the third close of the New York Stock Exchange) following our receipt of proof of death
acceptable to us and a payment request in good order at the Opportunity Plus Service Center.

If the amount of the death benefit in (a) is less than the amount in (b), and the beneficiary requests an immediate
payment or begins income phase payments, the amount paid will be the current account value, excluding any
amounts taken as a loan, as of the second valuation (the date of the second close of the New York Stock Exchange)
following our receipt of proof of death acceptable to us and a payment request in good order at the Opportunity Plus
Service Center.

In the event a beneficiary elects to defer distribution of the death benefit, the amount paid to the beneficiary when
the beneficiary elects to begin distribution of the death benefit will equal the current account value, excluding any
amounts taken as a loan, as of the next valuation (the date of the next close of the New York Stock Exchange)
following our receipt of the distribution request. The amount paid may be more or less than the amount of the death
benefit determined above on the date notice of death and an election to defer payment was received. No additional
death benefit is payable upon the beneficiary’s death.

Calculating Adjusted Purchase Payments. For accounts established on or after December 31, 2006, the adjusted
purchase payment total above is initially equal to the first purchase payment. For accounts established before
December 31, 2006, the adjusted purchase payment total is initially equal to the current account value, excluding
any amounts taken as a loan, as of the close of the New York Stock Exchange (NYSE) on the last business day in
December 2006 on which the NYSE was open (December 29, 2006). For all accounts, the adjusted purchase
payment total is then adjusted for each subsequent purchase payment, loan repayment, or partial withdrawal. The
adjustment for subsequent purchase payments and loan repayments will be dollar for dollar. The adjustment for
partial withdrawals will be proportionate, reducing the adjusted purchase payment total in the same proportion that
the current account value, excluding any amounts taken as loans, was reduced on the date of the partial withdrawal.
The proportionate adjustment of the adjusted purchase payment total for each partial withdrawal is defined as the
adjusted purchase payment total at that time, multiplied by the fraction A divided by B (A/B), where:

(a) A is the current account value, excluding amounts taken as a loan, immediately after the partial withdrawal;
and
 
(b)      B is the current account value, excluding amounts taken as a loan, before the partial withdrawal.

Tax Code Requirements. The Tax Code requires distribution of death benefit proceeds within a certain period of
time. Failure to begin receiving death benefit payments within those time periods can result in tax penalties.
Regardless of the method of payment, death benefit proceeds will generally be taxed to the beneficiary in the same
manner as if you had received those payments. See “Taxation” for additional information.

PRO.75962-09                                                                       36

THE INCOME PHASE    
  We may have used the following
terms in prior prospectuses:

Annuity Phase – Income Phase

Annuity Option – 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 prior to the date you want to start
receiving income phase payments, you must notify us in writing of the
following:
▷ Payment start date;
▷ Income phase payment option (see the income phase payment options table
   in this section);
▷ Payment frequency (i.e., monthly, quarterly, semi-annually or annually);
▷ Choice of fixed, variable or a combination of both fixed and variable
   payments; and    
▷ Selection of an assumed net investment rate (only if variable payments are    
   elected).    

Your account will continue in the accumulation phase until you properly
initiate payments. Once a payment option is selected, it may not be changed;
however, certain options allow you to withdraw a lump sum.

What Affects Income Phase Payment Amounts? Some of the factors that
may affect the amount of your income phase payment include: your age, your
account value, the income phase payment option selected, number of
guaranteed payments (if any) selected, whether fixed, variable or a combination
of both fixed and variable payments are selected 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 payment amounts do
not vary over time.

Variable Payments. Amounts funding your variable income phase payments
will be held in the subaccount(s) selected. The contracts may restrict the
subaccounts available during the income phase. You may make up to twelve
transfers per calendar year among available investment options. For variable
payments, an assumed net investment rate must be selected.

Assumed Net Investment Rate. If you select variable income phase payments,
you must also select an assumed net investment rate of either 5.0% or 3.5% . If
you select a 5.0% rate, your first income phase payment will be higher, but
subsequent payments will increase only if the investment performance of the
subaccounts selected is greater than 5.0% annually, after deduction of fees.
Payment amounts will decline if the investment performance is less than 5.0%,
after deduction of fees.

If you select a 3.5% rate, your first income phase payment will be lower and
subsequent payments will increase more rapidly or decline more slowly
depending upon the investment performance of the subaccounts selected. For
more information about selecting an assumed net investment rate, request a
copy of the Statement of Additional Information by calling the Opportunity
Plus Service Center. See “Contract Overview–Questions: Contacting the
Company”.

PRO.75962-09                                        37

Minimum Payment Amounts. The income phase payment option selected must result in one or both of the
following:

▷    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 must elect a lump-sum payment.

Charges Deducted. When you select an income payment phase option (one of the options listed in the tables on the
next page), 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. We may
also deduct a daily administrative charge from amounts held in the subaccounts. For variable options under which
we do not assume a mortality risk, we may make a larger profit than under other options. See “Fees.”

Death Benefit During the Income Phase. The death benefits that may be available to a beneficiary are outlined in
the following 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 payment request in good order at
the following address:

                                                   ING
                                                   USFS Customer Service Defined Contribution Administration
                                                   P.O. Box 990063
                                                   Hartford, CT 06199-0063


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, and the Company seeks to make a profit
on these accounts.

Taxation. To avoid certain tax penalties, you and any beneficiary must meet the distribution rules imposed by the
Tax Code. See “Taxation.”

Income Phase Payment Options

The following tables list the income phase payment options and accompanying death benefits that may be available
under the contracts. Some contracts restrict the options and the terms available. Check with your contract holder for
details. We may offer additional income phase payment options under the contract from time to time.

PRO.75962-09                                                            38

Terms used in the Tables:

Annuitant: The person(s) on whose life expectancy the income phase payments are calculated.

Beneficiary: The person designated to receive the death benefit payable under the contract.

Lifetime Income Phase Payment Options
  Length of Payments: For as long as the annuitant lives. It is possible that only one payment
Life Income will be made should the annuitant die prior to the second payment’s due date.
     Death Benefit-None: All payments end upon the annuitant’s death.
  Length of Payments: For as long as the annuitant lives, with the option of having payments
     guaranteed for a choice of 5-30 years or as otherwise specified in the contract.
Life Income-  Death Benefit-Payment to the Beneficiary: If the annuitant dies before we have made all
Guaranteed the guaranteed payments, we will continue to pay the beneficiary the remaining payments.
Payments*   Unless prohibited by a prior election of the contractholder, the beneficiary may elect to
  receive a lump-sum payment equal to the present value of the remaining guaranteed
  payments.
  Length of Payments: For as long as either annuitant lives. It is possible that only one
  payment will be made should both annuitants die before the second payment’s due date.
Life Income-Two Continuing Payments:
Lives (a) This option allows a choice of 100%, 66T% 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 to continue to the second annuitant on the annuitant’s death.
   Death Benefit-None: Payments end after the deaths of both annuitants.
  Length of Payments: For as long as either annuitant lives, with payments guaranteed for a
  minimum of 60 months and a maximum of 360 months, or as otherwise specified in the
Life Income - contract.
Two Lives - Continuing Payments: 100% of the payment to continue to the surviving annuitant after the
Guaranteed first death.
Payments* 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
  payments. Unless prohibited by a prior election of the contractholder, the beneficiary may
  elect to receive a lump-sum payment equal to the present value of the remaining guaranteed
      payments.
Life Income - Length of Payments: For as long as either annuitant lives.
Refund Option - Death Benefit-Payment to the Beneficiary: Following the annuitant’s death, we will pay a
fixed payment lump-sum payment equal to the amount originally applied to the payment option (less any
only premium tax) and less the total amount of fixed income payments paid.
Life Income - Length of Payments: For as long as the annuitant lives.
Two Lives-Cash Continuing Payment: 100% of the payment to continue after the first death.
Refund Option - Death Benefit-Payment to the Beneficiary: When both annuitants die, we will pay a lump-
fixed payment sum payment equal to the amount applied to the income phase payment option (less any
only premium tax) and less the total amount of fixed income phase payments paid.
Nonlifetime Income Phase Payment Options
  Length of Payments: Payments generally may be fixed or variable and may be made for 3-
  30 years. In certain cases a lump-sum payment may be requested at any time (see below).
Nonlifetime- Death Benefit-Payment to the Beneficiary: If the annuitant dies before we make all the
Guaranteed guaranteed payments, we will continue to pay the beneficiary the remaining payments.
Payments* Unless prohibited by a prior election of the contractholder, the beneficiary may receive a
  lump-sum payment equal to the present value of the remaining guaranteed payments, and we
  will not impose any early withdrawal charge.

*Guaranteed period payments may not extend beyond the shorter of your life expectancy or until your age 95.

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 sum. A
lump sum elected before three years of payments have been completed will be treated as a withdrawal during the
accumulation phase and we will charge any applicable early withdrawal charge.

PRO.75962-09                                                             39

If the early withdrawal charge is based on completed purchase payment periods, each year that passes after income
payments begin will be treated as a completed purchase payment period, even if no additional payments are made.
See “Fees–Early Withdrawal Charge.” Lump-sum payments will be sent within seven calendar days after we receive
the request for payment in good order at the Opportunity Plus Service Center.

Calculation of Lump-Sum Payments: If a lump-sum payment is available to a beneficiary or to you in the options
above, the rate we use to calculate the present value of the remaining guaranteed payments is the same rate we use to
calculate the income phase payments (i.e., the actual fixed rate used for fixed payments, or the 3.5% or 5.0%
assumed net investment rate for variable payments).

 CONTRACT DISTRIBUTION                                                                             

General. The Company’s subsidiary, ING Financial Advisers, LLC serves as the principal underwriter for the
contracts. ING Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-dealer with
the SEC. ING Financial Advisers, LLC is also a member of the Financial Industry Regulatory Authority (“FINRA”)
and the Securities Investor Protection Corporation. ING Financial Advisers, LLC’s principal office is located at One
Orange Way, Windsor, CT 06095-4774.

The contracts are offered to the public by individuals who are registered representatives of ING Financial Advisers,
LLC or other broker dealers that have entered 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.

The following is a list of broker-dealers that are affiliated with the Company:

  • Bancnorth Investment Group, Inc.
  • Directed Services LLC
  • Financial Network Investment Corporation
  • Guaranty Brokerage Services, Inc.
  • ING America Equities, Inc.
  • ING DIRECT Funds Limited
  • ING Financial Advisers, LLC
  • ING Financial Markets LLC
  • ING Financial Partners, Inc.
  • ING Funds Distributor, LLC
  • ING Investment Advisors, LLC
  • ING Investment Management Services LLC
  • Multi-Financial Securities Corporation
  • PrimeVest Financial Services, Inc.
  • ShareBuilder Securities Corporation
  • Systematized Benefits Administrators, Inc.


Registered representatives of distributors who solicit sales of the contracts typically receive a portion of the
compensation paid to the distributor in the form of commissions or other compensation, depending upon the
agreement between the distributor and the registered representative. This compensation, as well as other incentives
or payments, is not paid directly by contract holders or the separate account. We intend to recoup this compensation
and other sales expenses paid to distributors through fees and charges imposed under the contracts.

Commission Payments. Persons who offer and sell the contracts may be paid a commission. The commissions paid
on transferred assets and recurring payments made during the first year of the participant account range from 1.0%
to 4.0% . After the first year of the participant account, renewal commissions up to 0.75% may be paid on recurring
payments up to the amount of the previous year’s payments, and commissions of up to 4.0% may be paid on
recurring payments in excess of this amount. In addition, the Company may pay an asset based commission ranging
up to 0.20%, and may also pay asset based compensation equal to 0.10% of systematic distribution option payments,
including payments under the MGWB rider. See “Systematic Distribution Options” and “Optional Minimum
Guaranteed Withdrawal Benefit Rider.”

We may also 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
4.0% of total premium payments. To the extent permitted by SEC and FINRA rules and other applicable laws and
regulations, we may also pay or allow other promotional incentives or payments in the form of cash payments or
other compensation to distributors, which may require the registered representative to attain a certain threshold of
sales of Company products. Under one such program, we may pay additional amounts to distributors in connection
with a participant’s increased or re-started contributions and/or the number of participant enrollments completed by
a registered representative during a specified time period. These other promotional incentives or payments may not
be offered to all distributors, and may be limited only to ING Financial Advisers, LLC and other distributors
affiliated with the Company.

PRO.75962-09                                                                       40

We may also enter into special compensation arrangements with certain selling firms based on those firms’
aggregate or anticipated sales of the contracts or other criteria. These arrangements may include commission
specials, in which additional commissions may be paid in connection with premium payments received for a limited
time period, within the maximum commission rates noted above. These special compensation arrangements will not
be offered to all selling firms, and the terms of such arrangements may differ among selling firms based on various
factors. These special compensation arrangements may also be limited only to ING Financial Advisers, LLC and
other distributors affiliated with the Company. Any such compensation payable to a selling firm will not result in
any additional direct charge to you by us.

Some sales personnel may receive various types of non-cash compensation as special sales incentives, including
trips, and we may also pay for some sales personnel to attend educational and/or business seminars. Any such
compensation will be paid in accordance with SEC and FINRA rules. Management personnel of the Company, and
of its affiliated broker-dealers, may receive additional compensation if the overall amount of investments in funds
advised by the Company or its affiliates meets certain target levels or increases over time. Compensation for certain
management personnel, including sales management personnel, may be enhanced if the overall amount of
investments in the contracts and other products issued or advised by the Company or its affiliates increases over
time. Certain sales management personnel may also receive compensation that is a specific percentage of the
commissions paid to distributors or of purchase payments received under the contracts.

In addition to direct cash compensation for sales of contracts described above, ING Financial Advisers, LLC may
also pay distributors additional compensation or reimbursement of expenses for their efforts in selling contracts to
you and other customers. These amounts may include:

  • Marketing/distribution allowances that may be based on the percentages of purchase payments received, the
    aggregate commissions paid and/or the aggregate assets held in relation to certain types of designated insurance
    products issued by the Company and/or its affiliates during the year;
  • Loans or advances of commissions in anticipation of future receipt of purchase payments (a form of lending to
    registered representatives). These loans may have advantageous terms, such as reduction or elimination of the
    interest charged on the loan and/or forgiveness of the principal amount of the loan, which may be conditioned
    on sales;
  • Education and training allowances to facilitate our attendance at certain educational and training meetings to
    provide information and training about our products. We also hold training programs from time to time at our
    own expense;
  • Sponsorship payments or reimbursements for distributors to use in sales contests and/or meetings for their
    registered representatives who sell our products. We do not hold contests based solely on sales of this product;
  • Certain overrides and other benefits that may include cash compensation based on the amount of earned
    commissions, representative recruiting or other activities that promote the sale of contracts; and
  • Additional cash or noncash compensation and reimbursements permissible under existing law. This may
    include, but is not limited to, cash incentives, merchandise, trips, occasional entertainment, meals and tickets to
    sporting events, client appreciation events, business and educational enhancement items, payment for travel
    expenses (including meals and lodging) to pre-approved training and education seminars, and payment for
    advertising and sales campaigns.

We pay dealer concessions, wholesaling fees, overrides, bonuses, other allowances and benefits and the costs of all
other incentives or training programs from our resources, which include the fees and charges imposed under the
contracts.

PRO.75962-09                                                                41


The following is a list of the top 25 selling firms that, during 2008, 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)      SagePoint Financial, Inc.
2)      Symetra Investment Services, Inc.
3)      Huckin Financial Group, Inc.
4)      LPL Financial Corporation
5)      Walnut Street Securities, Inc.®
6)      ING Financial Partners, Inc.
7)      NFP Securities, Inc.
8)      Valor Insurance Agency, Inc.
9)      Lincoln Financial Advisors Corp.
10)      Financial Network Investment Corporation
11)      NRP Financial, Inc.
12)      National Planning Corporation
13)      Multi-Financial Securities Corporation
14)      Mutual Service Corporation
15)      Waterstone Financial Group
16)      Northwestern Mutual Investment Services, LLC
17)      Lincoln Investment Planning, Inc.
18)      Cadaret, Grant & Co., Inc.
19)      Securities America, Inc.
20)      Edward D. Jones & Co., L.P.
21)      American Portfolios Financial Services, Inc.
22)      Ameritas Investment Corp.
23)      First Heartland® Capital, Inc.
24)      Lincoln Financial Advisors Corporation
25)      Morgan Keegan and Company, Inc.


If the amounts paid to ING Financial Advisers, LLC were included, ING Financial Advisers, LLC would be first on
the list.

This is a general discussion of the types and levels of compensation paid by us for the sale of our variable annuity
contracts. It is important for you to know that the payment of volume or sales-based compensation to a distributor or
registered representative may provide that registered representative a financial incentive to promote our contracts
over those of another Company, and may also provide a financial incentive to promote one of our contracts over
another.

The names of the distributor and the registered representative responsible for your account are stated in your
enrollment materials.

Third Party Compensation Arrangements.

▷    The Company may seek to promote itself and the contracts by sponsoring or contributing to events sponsored
by various associations, professional organizations and labor organizations.
▷    The Company may make payments to associations and organizations, including labor organizations, which
endorse or otherwise recommend the contracts to their membership. If an endorsement is a factor in your
contract purchasing decision, more information on the payment arrangement, if any, is available upon your
request.
▷    At the direction of the contract holder, we may make payments to the contract holder, its representatives or third
party service providers intended to defray or cover the costs of plan or program related administration.

PRO.75962-09                                                                                        42

TAXATION    
  In this Section

I. Introduction

II. Taxation of Qualified
Contracts

III.  Possible Changes in
Taxation

IV. Taxation of the Company

When consulting a tax adviser,
be certain that he or she has
expertise in the Tax Code
sections applicable to your tax
concerns.
I. Introduction
 
This section discusses our understanding of current federal income tax laws
affecting the contracts. Federal income tax treatment of the contracts is complex
and sometimes uncertain. 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
   contracts;
 
▷ Tax laws change. It is possible that a change in the future could affect
   contracts issued in the past;
 
▷ This section addresses some, but not all, applicable federal income tax rules
   and does not discuss federal estate and gift tax implications, state and local
   taxes or any other tax provisions; and    
 
▷ We do not make any guarantee about the tax treatment of the contract or any    
   transaction involving the contracts.

    
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
contracts, consult a tax adviser. No attempt is made to provide more than general
information about the use of the contracts with tax-qualified retirement
arrangements.

For more comprehensive information contact the Internal Revenue Service (IRS).

Qualified Contracts
The contracts may be purchased on a tax-qualified basis (qualified contracts).

Qualified contracts are designed for use by individuals and/or employers whose premium payments are comprised
solely of proceeds from and/or contributions under retirement plans or programs intended to qualify for special
income tax treatment under the Tax Code.

II. Taxation of Qualified Contracts

General
The contracts are primarily designed for use with Tax Code section 403(b) and Roth 403(b) plans. (We refer to these
as “qualified plans”). The tax rules applicable to participants in these qualified plans vary according to the type of
plan and the terms and conditions of the plan itself. The ultimate effect of federal income taxes on the amounts held
under a contract, or on income phase payments, depends on the type of retirement plan or program, the tax and
employment status of the individual concerned, and on your tax status. Special favorable tax treatment may be
available for certain types of contributions and distributions. In addition, certain requirements must be satisfied in
purchasing a qualified contract with proceeds from a tax-qualified plan or program in order to continue receiving
favorable tax treatment.

Adverse tax consequences may result from: contributions in excess of specified limits, distributions before age 59½
(subject to certain exceptions), distributions that do not conform to specified commencement and minimum
distribution rules, and in other specified circumstances. Some qualified plans are subject to additional distribution or
other requirements that may not be incorporated into our contract. No attempt is made to provide more than general
information about the use of the contracts with qualified plans. Contract holders, participants, annuitants, and
beneficiaries are cautioned that the rights of any person to any benefit under these qualified plans may be subject to
the terms and conditions of the plan themselves, regardless of the terms and conditions of the contract. The
Company is not bound by the terms and conditions of such plans to the extent such terms contradict the contract,
unless we consent.

PRO.75962-09                                                                   43

Generally, contract holders, participants, and beneficiaries are responsible for determining that contributions,
distributions and other transactions with respect to the contract comply with applicable law. Therefore, you should
seek competent legal and tax advice regarding the suitability of a contract for your particular situation. The
following discussion assumes that qualified contracts are purchased with proceeds from and/or contributions under
retirement plans or programs that qualify for the intended special federal tax treatment.

Tax Deferral
Under the federal tax laws, earnings on amounts held in annuity contracts are generally not taxed until they are
withdrawn. However, in the case of a qualified plan, such as a 403(b) or Roth 403(b) plan, an annuity contract is not
necessary to obtain this favorable tax treatment and does not provide any tax benefits beyond the deferral already
available to the qualified plan itself. Annuities do provide other features and benefits (such as the guaranteed death
benefit and the option of lifetime income phase options at established rates) that may be valuable to you. You should
discuss your alternatives with your financial representative taking into account the additional fees and expenses you
may incur in an annuity.

Section 403(b) Tax-Deferred Annuities. The contracts are available as Tax Code section 403(b) tax-deferred
annuities. Section 403(b) of the Tax Code allows employees of certain Tax Code section 501(c)(3) organizations and
public schools to exclude from their gross income the premium payments made, within certain limits, to a contract
that will provide an annuity for the employee’s retirement.

The contracts may also be available as a Roth 403(b), as described in Tax Code section 402A, and we may set up
accounts for you under the contract for Roth 403(b) contributions. Tax Code section 402A allows employees of
public schools and certain Tax Code section 501(c)(3) organizations to contribute after-tax salary contributions to a
Roth 403(b), which provides for tax-free distributions, subject to certain restrictions.

In July 2007, the Treasury Department issued final regulations that were generally effective January 1, 2009. The
final regulations include: (a) a written plan requirement; (b) the ability to terminate a 403(b) plan, which would
entitle a participant to a distribution; (c) the replacement of IRS Revenue Ruling 90-24 with new exchange rules
effective September 25, 2007 and requiring information sharing between the 403(b) plan sponsor and/or its delegate
and, the product provider as well as new plan-to-plan transfer rules (under these new exchange and transfer rules,
the 403(b) plan sponsor can elect not to permit exchanges or transfers); and (d) new distribution rules for 403(b)(1)
annuities that would impose withdrawal restrictions on non-salary reduction contribution amounts in addition to
salary reduction contribution amounts, as well as other changes.

In addition to being offered as an investment option under the contract, shares of certain funds are also offered for
sale directly to the general public. A list of these funds is provided in the “Investment Options” section of this
prospectus under the heading “Additional Risks of Investing in the Funds–Public Funds.” In order to qualify for
favorable tax treatment under Tax Code section 403(b), a contract must be considered an “annuity.” In Revenue
Procedure 99-44, the IRS concluded that it will treat a contract as an annuity for tax purposes under Tax Code
section 403(b), notwithstanding that contract premiums are invested at the contract holder’s direction in publicly
available securities. This treatment will be available provided no additional tax liability would have been incurred if
the contribution was paid into a trust or a custodial account in an arrangement that satisfied the requirements of Tax
Code section 401(a) or 403(b)(7)(A). We believe that the contracts satisfy the requirements set forth in Revenue
Procedure 99-44 and will therefore be treated as an annuity for tax purposes, notwithstanding the fact that
investments may be made in publicly available securities. However, the exact nature of the requirements of Revenue
Procedure 99-44 is unclear, and you should consider consulting with a tax adviser before electing to invest in a fund
that is offered for sale to the general public.

PRO.75962-09                                                                          44

Revenue Procedure 99-44 does not specifically address the use of publicly available securities in annuity contracts
designed for use as a Roth 403(b). However, we believe that under this analysis such investment should not impact
the treatment of such contracts as annuity contracts for purposes of Tax Code section 403(b). You should consider
consulting with a tax adviser before electing to invest in a fund that is offered for sale to the general public through
one of these contracts.

Contributions
In order to be excludable from gross income for federal income tax purposes, total annual contributions to certain
qualified plans are limited by the Tax Code. We provide general information on these requirements for certain plans
below. You should consult with your tax adviser in connection with contributions to a qualified contract.

403(b) and Roth 403(b) Plans. Total annual contributions (including pre-tax and Roth 403(b) after-tax
contributions) by you and your employer cannot exceed, generally, the lesser of 100% of your compensation or
$49,000 (as indexed for 2009). Compensation means your compensation for the year from the employer sponsoring
the plan and, for years beginning after December 31, 1997, includes any elective deferrals under Tax Code section
402(g) and any amounts not includible in gross income under Tax Code sections 125 or 457.

This limit applies to your contributions as well as to any contributions made by your employer on your behalf. An
additional requirement limits your salary reduction contributions to a 403(b) or Roth 403(b) plan to generally no
more than $16,500. Contribution limits are subject to annual adjustments for cost-of-living increases. Your own
limit may be higher or lower, depending upon certain conditions.

With the exception of Roth 403(b) contributions, purchase payments to your account(s) will generally be excluded
from your gross income only if the plan meets certain nondiscrimination requirements, as applicable. Roth 403(b)
salary reduction contributions are made on an after-tax basis.

Catch-up Contributions. Notwithstanding the contribution limits noted above, a participant in a 403(b) or
Roth 403(b) plan who is at least age 50 by the end of the plan year may contribute an additional amount not to
exceed the lesser of:

(a)       $5,500; or
(b)      The participant’s compensation for the year reduced by any other elective deferrals of the participant for the
year.

Additional catch-up provisions may be available. For advice on using a catch-up provision, please consult with your
tax adviser.

Distributions - General
Certain tax rules apply to distributions from the contracts. A distribution is any amount taken from a contract
including withdrawals, income phase payments, rollovers, exchanges and death benefit proceeds. We report the
taxable portion of all distributions to the IRS.

403(b) Plans. All distributions from these plans are taxed as received unless one of the following is true:

▷    The distribution is an eligible rollover distribution and is rolled over to another plan eligible to receive rollovers
or to a traditional or Roth IRA in accordance with the Tax Code;
▷    You made after-tax contributions to the plan. In this case, depending upon the type of distribution, the amount
will be taxed according to the rules detailed in the Tax Code; or
▷    The distribution is a qualified health insurance premium of a retired public safety officer as defined in the
Pension Protection Act of 2006.

A payment is an eligible rollover distribution unless it is:

  • part of a series of substantially equal periodic payments (at least one per year) made over the life expectancy of
    the participant or the joint life expectancy of the participant and his designated beneficiary or for a specified
    period of 10 years or more;
  • a required minimum distribution under Tax Code section 401(a)(9);
  • a hardship withdrawal;
  • otherwise excludable from income; or
  • not recognized under applicable regulations as eligible for rollover.

PRO.75962-09                                                                                 45


The Tax Code imposes a 10% penalty tax on the taxable portion of any distribution from a contract used with a
403(b) plan unless certain exceptions, including one or more of the following, have occurred:

a)      You have attained age 59½;
b)      You have become disabled, as defined in the Tax Code;
c)      You have died and the distribution is to your beneficiary;
d)      You have separated from service with the sponsor at or after age 55;
e)      The distribution amount is rolled over into another eligible retirement plan or to an IRA or Roth IRA in
accordance with the terms of the Tax Code;
f)      You have separated from service with the plan sponsor and the distribution amount is made in substantially
equal periodic payments (at least annually) over your life or the life expectancy or the joint lives or joint
life expectancies of you and your designated beneficiary;
g)      The distribution is made due to an IRS levy upon your plan;
h)      The withdrawal amount is paid to an alternate payee under a Qualified Domestic Relations Order (QDRO);
or
i)      The distribution is a qualified reservist distribution as defined under the Pension Protection Act of 2006.

In addition, the 10% penalty tax does not apply to the amount of a distribution equal to unreimbursed medical
expenses incurred by you during the taxable year that qualify for deduction as specified in the Tax Code. The Tax
Code may provide other exceptions or impose other penalty taxes in other circumstances.

403(b) Plans. Distribution of amounts restricted under Tax Code section 403(b)(11) may only occur upon your
death, attainment of age 59½, severance from employment, disability or financial hardship, or under other
exceptions as provided for by the Tax Code or regulations. (See “Withdrawals–Withdrawal Restrictions from 403(b)
Plans.”) Such distributions remain subject to other applicable restrictions under the Tax Code.

Effective January 1, 2009 and for any contracts or participant accounts established on or after that date, the new
403(b) regulations prohibit the distribution of amounts attributable to employer contributions before the earlier of
your severance from employment or prior to the occurrence of some event as provided under your employer’s plan,
such as after a fixed number of years, the attainment of a stated age, or a disability.

If the Company agrees to accept amounts exchanged from a Tax Code section 403(b)(7) custodial account, such
amounts will be subject to the withdrawal restrictions set forth in Tax Code section 403(b)(7)(A)(ii).

Roth 403(b) Plans. You may take partial or full withdrawals of purchase payments made by salary reduction
and earnings credited on those purchase payments from a Roth 403(b) account only if you have:

a)      Attained age 59½;
b)      Experienced a severance from employment;
c)      Become disabled as defined in the Tax Code;
d)      Died;
e)      Experienced financial hardship as defined by the Tax Code; or
f)      Met other circumstances as allowed by federal law, regulations or rulings.

Other exceptions may be provided for by the Tax Code or regulations.

The amount available for financial hardship is limited to the lesser of the amount necessary to satisfy the financial
hardship or the amount attributable to salary reduction contributions (excluding earnings on such contributions).

A partial or full withdrawal of purchase payments made by salary reduction to a Roth 403(b) account and earnings
credited on those purchase payments will be excludable from income if it is a qualified distribution. A qualified
distribution from a Roth 403(b) account is one that meets the following requirements.

1.      The withdrawal occurs after the 5-year taxable period measured from the earlier of:
 
  a)      the first taxable year you made a designated Roth 403(b) contribution to any designated Roth 403(b)
  account established for you under the same applicable retirement plan as defined in Tax Code section
402A; or
 
  b)      if a rollover contribution was made from a designated Roth 403(b) account previously established for
  you under another applicable retirement plan, the first taxable year for which you made a designated Roth
403(b) contribution to such previously established account; and
 

PRO.75962-09                                                                                  46

2.      The withdrawal occurs after you attain age 59½, die with payment being made to your beneficiary, or
become disabled as defined in the Tax Code.


Lifetime Required Minimum Distributions (403(b) and Roth 403(b) Plans)
To avoid certain tax penalties, you and any designated beneficiary must meet the required minimum distribution
requirements imposed by the Tax Code. These rules dictate the following:

▷    Start date for distributions;
▷    The time period in which all amounts in your contract(s) must be distributed; and
▷    Distribution amounts.

Start Date. Generally, you must begin receiving distributions by April 1 of the calendar year following the
calendar year in which you attain age 70½ or retire, whichever occurs later, unless the Company maintains separate
records of amounts held as of December 31, 1986. In this case distribution of these amounts generally must begin by
the end of the calendar year in which you attain age 75 or retire, if later. However, if you take any distributions in
excess of the minimum required amount, then special rules require that the excess be distributed from the December
31, 1986 balance.

Time Period. We must pay out distributions from the contract over a period not extending beyond one of the
following time periods:

▷    Over your life or the joint lives of you and your designated beneficiary; or
▷    Over a period not greater than your life expectancy or the joint life expectancies of you and your designated
beneficiary.

Distribution Amounts. The amount of each required minimum distribution must be calculated in accordance
with Tax Code section 401(a)(9). The entire interest in the account includes the amount of any outstanding rollover,
transfer, recharacterization, if applicable, and the actuarial present value of other benefits provided under the
account, such as guaranteed death benefits.

50% Excise Tax. If you fail to receive the required minimum distribution for any tax year, a 50% excise tax
may be imposed on the required amount that was not distributed.

Required Minimum Distribution Relief for 2009. The Worker, Retiree and Employer Recovery Act of 2008
(“WRERA 2008”) suspends the minimum distribution requirement for most employer sponsored defined
contribution plans for the 2009 tax year. The relief extends to 403(b) and Roth 403(b) plans.

Further information regarding required minimum distributions may be found in your contract or certificate.

Required Distributions Upon Death (403(b) and Roth 403(b) Plans)
Different distribution requirements apply after your death, depending upon if you have begun receiving required
minimum distributions. Further information regarding required distributions upon death may be found in your
contract or certificate.

If your death occurs on or after you begin receiving minimum distributions under the contract, distributions
generally must be made at least as rapidly as under the method in effect at the time of your death. Tax Code section
401(a)(9) provides specific rules for calculating the minimum required distributions at your death.

If your death occurs before you begin receiving minimum distributions under the contract, your entire balance must
be distributed by December 31 of the calendar year containing the fifth anniversary of the date of your death. For
example, if you died on September 1, 2009, your entire balance must be distributed to the designated beneficiary by
December 31, 2014. However, if distributions begin by December 31 of the calendar year following the calendar
year of your death, then payments may be made within one of the following timeframes:

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

Start Dates for Spousal Beneficiaries. If the designated beneficiary is your spouse, distributions must begin on or
before the later of the following:

▷    December 31 of the calendar year following the calendar year of your death; or
▷    December 31 of the calendar year in which you would have attained age 70½.

PRO.75962-09                                                                         47

No Designated Beneficiary. If there is no designated beneficiary, the entire interest generally must be
distributed by the end of the calendar year containing the fifth anniversary of the contract holder’s death.

Required Minimum Distribution Relief for 2009. Under WRERA 2008, the five year rule discussed above is
determined without regard to 2009.

Withholding
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.

403(b) and Roth 403(b) Plans. Generally, distributions from these plans are subject to a mandatory 20%
federal income tax withholding. However, mandatory withholding will not be required if you elect a direct rollover
of the distributions to an eligible retirement plan or in the case of certain distributions described in the Tax Code.

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,
and we may require additional documentation prior to processing any requested distribution.

Assignment and Other Transfers
403(b) and Roth 403(b) Plans. Adverse tax consequences to the plan and/or to you may result if your
beneficial interest in the contract is assigned or transferred to persons other than:

  • A plan participant as a means to provide benefit payments;
  • An alternate payee under a qualified domestic relations order in accordance with Tax Code section 414(p); or
  • The Company as collateral for a loan.

III. Possible Changes in Taxation

Although the likelihood of legislative change and tax reform 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.

IV. Taxation of the Company

We are taxed as a life insurance company under the Tax Code. Variable Annuity Account C 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.

PRO.75962-09                                                            48

 OTHER TOPICS                                                                                               

Opportunity Plus Service Center

We established the Opportunity Plus Service Center to provide administrative support to you and other participants
of the Opportunity Plus Program. This office handles enrollment, billing, transfers, redemptions and inquiries. Send
forms and correspondence to:

                 For all regular mail, please use:

                 Opportunity Plus Service Center
                 ING National Trust
                 P.O. Box 9810
                 Providence, RI 02940-8010

                 For overnight delivery, please use:

                 Opportunity Plus Service Center
                 ING National Trust
                 101 Sabin Street
                 Pawtucket, RI 02860

                 Telephone Number: 1-800-OPP-INFO (1-800-677-4636)

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 subaccount
over the most recent month end, one, five and 10-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 the deduction of all recurring charges during each period (e.g.,
mortality and expense risk charges, administrative expense charges (if any), ING GET Fund guarantee 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. If we reflected these charges in the calculation, they would decrease the level of
performance reflected by the calculation. Non-standardized returns may also include performance from the fund’s
inception date, if that date is earlier than the one we use for standardized returns.

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. Under the contracts described in this prospectus, you have a fully vested
interest in the value of your account. Therefore, under the plan you generally have the right to instruct the contract
holder how to direct us to vote shares attributable to your account. Currently, for group contracts used with section
403(b) and Roth 403(b) plans, we obtain participant voting instructions directly from participants, subject to receipt
of authorization from the contract holder to accept such instructions. We will vote shares for which instructions have
not been received in the same proportion as those for which we received instructions. Each person who has a voting
interest in the separate account will receive periodic reports relating to the funds in which he or she has 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.

PRO.75962-09                                                               49

The number of votes (including fractional votes) any person is entitled to direct will be determined as of the record
date set by any fund in which that person invests through the subaccounts.

▷    During the accumulation phase the number of votes is equal to the portion of the 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, including any future changes necessary to maintain
the contract or account as a designated Roth 403(b) annuity contract or account under the Tax Code, regulations,
IRS rulings or requirements. In addition, we may, upon 30 days’ written notice to the contract holder, make other
changes to group contracts that would apply only to individuals who become participants under that contract after
the effective date of such changes. If the group contract holder does not agree to a change, we reserve the right to
refuse to establish new accounts under the contract. Certain changes will require the approval of appropriate state or
federal regulatory authorities.

Legal Matters and Proceedings

We are not aware of any pending legal proceedings which involve the separate account as a party.

The Company is involved in threatened or pending lawsuits/arbitrations arising from the normal conduct of
business. Due to the climate in insurance and business litigation/arbitrations, suits against the Company sometimes
include claims for substantial compensatory, consequential, or punitive damages and other types of relief. Moreover,
certain claims are asserted as class actions, purporting to represent a group of similarly situated individuals. While it
is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance, and
established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a
materially adverse effect on the Company’s operations or financial position.

ING Financial Advisers, LLC, the principal underwriter and distributor of the contract (the “distributor”), is a party
to threatened or pending lawsuits/arbitration that generally arise from the normal conduct of business. Some of these
suits may seek class action status and sometimes include claims for substantial compensatory, consequential or
punitive damages and other types of relief. ING Financial Advisers, LLC is not involved in any legal proceeding
which, in the opinion of management, is likely to have a material adverse effect on its ability to distribute the
contract.

Payment Delay or Suspension

We reserve the right to suspend or postpone the date of any payment of benefits or values under the following
circumstances: (a) on any valuation date when the New York Stock Exchange is closed (except customary weekend
and holidays) when trading on the New York Stock Exchange is restricted; (b) 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; (c) 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.

Intent to Confirm Quarterly

We will provide confirmation of scheduled transactions quarterly rather than immediately to the participant.

PRO.75962-09                                                             50

 CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION         

The Statement of Additional Information contains more specific information on the separate account and the
contract, as well as the financial statements of the separate account and the Company. A list of the contents of the
SAI is set forth below:

General Information and History
Variable Annuity Account C
Offering and Purchase of Contracts
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 Opportunity Plus Service Center at the number listed in “Contract
Overview–Questions: Contacting the Company.”




PRO.75962-09                                                  51

APPENDIX I
GUARANTEED ACCUMULATION ACCOUNT

The Guaranteed Accumulation Account is a fixed interest option that may be available during the accumulation
phase under the contracts. This Appendix is only a summary of certain facts about the Guaranteed Accumulation
Account. Please read the Guaranteed Accumulation Account prospectus before investing in this option. You may
obtain a copy of the Guaranteed Accumulation Account prospectus by contacting us at the Opportunity Plus Service
Center at the address or telephone number listed in “Contract Overview–Questions: Contacting the Company.”

General Disclosure. Amounts that you invest in the Guaranteed Accumulation Account will earn a guaranteed
interest rate if amounts are left in the Guaranteed Accumulation Account for the specified period of time. If you
withdraw or transfer those amounts before the specified period of time has elapsed, we may apply a “market value
adjustment,” which may be positive or negative.

When you decide to invest money in the Guaranteed Accumulation Account, you will want to contact your local
representative or the Company to learn:

▷    The interest rate we will apply to the amounts that you invest in the Guaranteed Accumulation Account. We
change this rate periodically, so be certain you know what rate we guarantee on the day your account dollars are
invested into the Guaranteed Accumulation Account.
▷    The period of time your account dollars need to remain in the Guaranteed Accumulation Account in order to
earn that rate. You are required to leave your account dollars in the Guaranteed Accumulation Account for a
specified period of time (guaranteed term), in order to earn the guaranteed interest rate.

Deposit Periods. A deposit period is the time during which we offer a specific interest rate if you deposit dollars for
a certain guaranteed term. For a particular interest rate and guaranteed term to apply to your account dollars, you
must invest them during the deposit period during which that rate and term are offered.

Interest Rates. We guarantee different interest rates, depending upon when account dollars are invested in the
Guaranteed Accumulation Account. The interest rate we guarantee is an annual effective yield; that means that the
rate reflects a full year’s interest. We credit interest daily at a rate that will provide the guaranteed annual effective
yield over one year. The guaranteed interest rate will never be less than the rate stated in the contract.

Our guaranteed interest rates are influenced by, but do not necessarily correspond to, interest rates available on fixed
income investments we may buy using deposits directed to the Guaranteed Accumulation Account. We consider
other factors when determining guaranteed interest rates including regulatory and tax requirements, sales
commissions and administrative expenses borne by the Company, general economic trends, competitive factors, and
whether an interest rate lock is being offered for that guaranteed term under certain contracts. We make the final
determination regarding guaranteed interest rates. We cannot predict the level of future guaranteed interest
rates.

Interest Rate Lock. Certain contracts may provide a 45 day interest rate lock in connection with external transfers
into Guaranteed Accumulation Account, which you must elect at the time you initiate the external transfer. Under
this rate lock provision, we will deposit external transfers to the deposit period offering the greater of (a) and (b)
where:

a)      is the guaranteed interest rate for the deposit period in effect at the time we receive the rate lock election; and
b)      is the guaranteed interest rate for the deposit period in effect at the time we receive an external transfer from
your prior provider.

This rate lock will be available to all external transfers received for 45 days from the date we receive a rate lock
election. In the event we receive an external transfer after this 45 day time period, it will be deposited to the deposit
period in effect at the time we receive the external transfer, and will earn the guaranteed interest rate for that
guaranteed term. Only one rate lock may be in effect at one time per contract -- once a rate lock has been elected,
that rate lock will apply to all external transfers received during that 45 day period, and you may not elect to begin a
new rate lock period during that 45 day period.

PRO.75962-09                                                              52

Amounts subject to the rate lock will not be deposited until the external transfer has been received, and will not be
credited interest until deposited. This could result in the deposit being credited interest for a shorter term than if a
rate lock had not been elected. The cost of providing a rate lock may be a factor we consider when determining the
guaranteed interest rate for a deposit period, which impacts the guaranteed interest rate for all investors in that
guaranteed term.

Fees and Other Deductions. If all or a portion of your account value in the Guaranteed Accumulation Account is
withdrawn, you may incur the following:

▷    Market Value Adjustment (MVA) - as described in this appendix and in the Guaranteed Accumulation Account
prospectus;
▷    Tax Penalties and/or Tax withholding - see “Taxation”; or
▷    Early Withdrawal Charge - see “Fees.”

We do not make deductions from amounts in the Guaranteed Accumulation Account to cover mortality and expense
risks. Rather, we consider these risks when determining the credited rate.

Market Value Adjustment (MVA).
If you withdraw or transfer your account value from the Guaranteed Accumulation Account before the guaranteed
term is completed, an MVA may apply. The MVA reflects the change in the value of the investment due to changes
in interest rates since the date of deposit. The MVA may be positive or negative. If you have elected ECO as
described in “Systematic Distribution Options,” no MVA applies to amounts withdrawn from the Guaranteed
Accumulation Account.

▷    If interest rates at the time of withdrawal have increased since the date of deposit, the value of the investment
decreases and the MVA will be negative. This could result in your receiving less than the amount you paid into
the Guaranteed Accumulation Account.
▷    If interest rates at the time of withdrawal have decreased since the date of deposit, the value of the investment
increases and the MVA will be positive.

Guaranteed Terms. The guaranteed term is the period of time account dollars must be left in the Guaranteed
Accumulation Account in order to earn the guaranteed interest rate specified for that guaranteed term. We offer
different guaranteed terms at different times. Check with your representative or the Company to learn the details
about the guaranteed term(s) currently being offered.

In general we offer the following guaranteed terms:

▷    Short-term-three years or fewer; and
▷    Long-term-ten years or less, but greater than three years.

At the end of a guaranteed term, you may:

▷    Transfer dollars to a new guaranteed term;
▷    Transfer dollars to other available investment options; or
▷    Withdraw dollars.

Deductions may apply to withdrawals. See “Fees and Other Deductions” in this section.

Transfer of Account Dollars. Generally, account dollars invested in the Guaranteed Accumulation Account may be
transferred among guaranteed terms offered through the Guaranteed Accumulation Account, and/or to other
investment options offered through the contract. However, transfers may not be made during the deposit period in
which your account dollars are invested in the Guaranteed Accumulation Account or for 90 days after the close of
that deposit period. We will apply an MVA to transfers made before the end of a guaranteed term.

PRO.75962-09                                                                   53

Income Phase. The Guaranteed Accumulation Account can not be used as an investment option during the income
phase. However, you may notify us at least 30 days in advance to elect a variable payment option and to transfer
your Guaranteed Accumulation Account dollars to any of the subaccounts available during the income phase.

Borrowing Against Amounts held in the Guaranteed Accumulation Account. You cannot take a loan from your
account value in the Guaranteed Accumulation Account. However, we include your account value in the Guaranteed
Accumulation Account when determining the amount of your account value we will distribute as a loan.

MGWB Rider. For information regarding investing in the Guaranteed Accumulation Account while the MGWB
Rider is in effect, please see “Optional Minimum Guaranteed Withdrawal Benefit Rider.”

Reinvesting Amounts Withdrawn from the Guaranteed Accumulation Account. If amounts are withdrawn from
the Guaranteed Accumulation Account and then reinvested in the Guaranteed Accumulation Account, we will apply
the reinvested amount to the current deposit period. This means that the guaranteed annual interest rate, and
guaranteed terms available on the date of reinvestment, will apply. Amounts will be reinvested proportionately in
the same way as they were allocated before withdrawal.

We will not credit your account for market value adjustments that were deducted at the time of withdrawal or refund
any taxes that were withheld, unless required by law.

PRO.75962-09                                                          54

APPENDIX II
FIXED ACCOUNT

The Fixed Account is an investment option available during the accumulation phase under the contracts. Amounts
allocated to the Fixed Account are held in the Company’s general account which supports insurance and annuity
obligations. The Fixed Account is only available under installment purchase payment contracts.

Additional information about this option may be found in the contract.

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 about 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. Disclosure in this Appendix regarding the Fixed Account has not been reviewed by
the SEC.

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. Among other factors, the safety of the interest rate
guarantees are based on the claims-paying ability of the Company. 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 reflect a compound
interest rate as credited by us. The rate we quote is an annual effective yield. There may be multiple interest rates in
effect under the contract at any given time.

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.

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–Early Withdrawal Charge.”

Transfers. During the accumulation phase, you may transfer account dollars from the Fixed Account to any other
available investment option. There is no limit on the number of transfers that you can make out of the Fixed Account
in a calendar year. However, we only allow you to transfer amounts that equal your account value in the Fixed
Account multiplied by the current maximum percentage of the transfer allowed (the “window”) minus any previous
transfers you made from this option during the calendar year. We will waive the transfer limit when your account
value in the Fixed Account is $1,000 or less.

Income Phase. By notifying the Opportunity Plus Service Center at least 30 days before income phase payments
begin, you may elect to have amounts transferred to one or more of the subaccounts available during the income
phase to provide variable payments.

Contract Loans. Contract loans may be made from pre-tax account values held in the Fixed Account.

PRO.75962-09                                                         55 

APPENDIX III
FUND DESCRIPTIONS
 
List of Fund Name Changes
 
Current Fund Name Former Fund Name
ING Balanced Portfolio, Inc. ING VP Balanced Portfolio, Inc.
ING BlackRock Science and Technology Opportunities ING BlackRock Global Science and Technology
Portfolio Portfolio
ING Clarion Global Real Estate Portfolio ING Global Real Estate Portfolio
ING Growth and Income Portfolio ING VP Growth and Income Portfolio
ING Index Plus International Equity Portfolio ING VP Index Plus International Equity Portfolio
ING Index Plus LargeCap Portfolio ING VP Index Plus LargeCap Portfolio
ING Index Plus MidCap Portfolio ING VP Index Plus MidCap Portfolio
ING Index Plus SmallCap Portfolio ING VP Index Plus SmallCap Portfolio
ING Intermediate Bond Portfolio ING VP Intermediate Bond Portfolio
ING Money Market Portfolio ING VP Money Market Portfolio
ING Opportunistic LargeCap Portfolio ING Opportunistic LargeCap Value Portfolio
ING Small Company Portfolio ING VP Small Company Portfolio
ING Strategic Allocation Conservative Portfolio ING VP Strategic Allocation Conservative Portfolio
ING Strategic Allocation Growth Portfolio ING VP Strategic Allocation Growth Portfolio
ING Strategic Allocation Moderate Portfolio ING VP Strategic Allocation Moderate Portfolio

The investment results of the mutual funds (funds) are likely to differ significantly and there is no assurance
that any of the funds will achieve their respective investment objectives. You should consider the investment
objectives, risks and charges, and expenses of the funds carefully before investing. Please refer to the fund
prospectuses for additional information. Shares of the funds will rise and fall in value and you could lose
money by investing in the funds. Shares of the funds are not bank deposits and are not guaranteed, endorsed
or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government
agency. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940.
Fund prospectuses may be obtained free of charge at the address and telephone number listed in “Contract
Overview–Questions: Contacting the Company,” by accessing the SEC’s website or by contacting the SEC
Public Reference Branch.

Certain funds offered under the contracts have investment objectives and policies similar to other funds
managed by the fund’s investment adviser. The investment results of a fund may be higher or lower than
those of other funds managed by the same adviser. There is no assurance and no representation is made that
the investment results of any fund will be comparable to those of another fund managed by the same
investment adviser.

For the share class of each fund offered through your contract, please see the cover page.

Investment Adviser/
Fund Name   Subadviser   Investment Objective(s)
AIM Growth Series – AIM Mid Cap   Invesco Aim Advisors,   Seeks long-term growth of capital.
   Core Equity Fund   Inc.    
 
    Subadviser: Advisory    
entities affiliated with
    Invesco Aim Advisors,    
    Inc.    

PRO.75962-09                                                             56

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
AIM Variable Insurance Funds –   Invesco Aim Advisors,   Seeks growth of capital.
   AIM V.I. Capital Appreciation   Inc.    
   Fund        
    Subadviser: Advisory    
    entities affiliated with    
    Invesco Aim Advisors,    
    Inc.    
AIM Variable Insurance Funds –   Invesco Aim Advisors,   Seeks growth of capital.
   AIM V.I. Core Equity Fund   Inc.    
The Alger Funds II – Alger Green   Fred Alger   Seeks long-term capital appreciation.
   Fund   Management, Inc.    
Amana Mutual Funds Trust –   Saturna Capital   Seeks long-term capital growth.
   Amana Growth Fund   Corporation    
Amana Mutual Funds Trust –   Saturna Capital   Seeks current income and preservation of
   Amana Income Fund   Corporation   capital.
American Century® Income &   American Century   Seeks long-term capital growth. Income is a
   Growth Fund   Investment   secondary objective.
    Management, Inc.    
American Century® Inflation-   American Century   Seeks to provide total return and inflation
   Adjusted Bond Fund   Investment   protection consistent with investments in
    Management, Inc.   inflation-indexed securities.
BlackRock Mid Cap Value   BlackRock Advisors,   Seeks capital appreciation and, secondarily,
   Opportunities Series, Inc. –   LLC   income.
   BlackRock Mid Cap Value        
   Opportunities Fund   Subadviser:    
    BlackRock Investment    
    Management, LLC    
Calvert Variable Series, Inc. –   Calvert Asset   A non-diversified portfolio that seeks to
   Calvert Social Balanced Portfolio   Management Company,   achieve a competitive total return through an
    Inc.   actively managed portfolio of stocks, bonds and
        money market instruments which offer income
    Subadvisers: (equity   and capital growth opportunity and which
    portion of Portfolio);   satisfy the investment and social criteria.
    New Amsterdam    
    Partners LLC and SsgA    
    Funds Management,    
    Inc.    
 
    Calvert Asset    
    Management Company,    
    Inc. manages fixed-    
    income portion of    
    Portfolio and handles    
    allocation of assets and    
    Portfolio Managers for    
    the Portfolio.    
EuroPacific Growth Fund®   Capital Research and   Seeks to provide long-term growth of capital by
    Management Company   investing in companies based outside the
        United States.
Evergreen Equity Trust –   Evergreen Investment   Seeks to produce growth of capital.
   Evergreen Special Values Fund   Management Company,    
    LLC    

PRO.75962-09                                                                     57

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
Fidelity® Variable Insurance   Fidelity Management &   Seeks to obtain high total return with reduced
   Products – Fidelity® VIP Asset   Research Company   risk over the long term by allocating its assets
   ManagerSM Portfolio       among stocks, bonds and short-term
    Subadvisers:   instruments.
    FMR Co., Inc.; Fidelity    
    Management &    
    Research (U.K.) Inc.;    
    Fidelity Research &    
    Analysis Company;    
    Fidelity Investments    
    Money Management,    
    Inc.; Fidelity    
    Investments Japan    
    Limited Fidelity    
    International    
    Investment Advisors;    
    Fidelity International    
    Investment Advisors    
    (U.K.) Limited    
Fidelity® Variable Insurance   Fidelity Management &   Seeks long-term capital appreciation.
   Products – Fidelity® VIP   Research Company    
   Contrafund® Portfolio        
    Subadvisers:    
    FMR Co., Inc.; Fidelity    
    Management &    
    Research (U.K.) Inc.;    
    Fidelity Research &    
    Analysis Company;    
    Fidelity Investments    
    Japan Limited; Fidelity    
    International    
    Investment Advisors;    
    Fidelity International    
    Investment Advisors    
    (U.K.) Limited;    
Fidelity® Variable Insurance   Fidelity Management &   Seeks reasonable income. Also considers the
   Products – Fidelity® VIP Equity-   Research Company   potential for capital appreciation. Seeks to
   Income Portfolio       achieve a yield which exceeds the composite
    Subadvisers: FMR   yield on the securities comprising the Standard
    Co., Inc.; Fidelity   & Poor’s 500SM Index (S&P 500® ).
    Management &    
    Research (U.K.) Inc.;    
    Fidelity Research &    
    Analysis Company;    
    Fidelity Investments    
    Japan Limited; Fidelity    
    International    
    Investment Advisors;    
    Fidelity International    
    Investment Advisors    
    (U.K.) Limited    
 
 
 
 
PRO.75962-09                                              58    

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
Fidelity® Variable Insurance   Fidelity Management &   Seeks a high level of current income, while also
   Products – Fidelity® VIP High   Research Company   considering growth of capital.
   Income Portfolio        
    Subadvisers:    
    FMR Co., Inc.; Fidelity    
    Research & Analysis    
    Company; Fidelity    
    Investments Japan    
    Limited; Fidelity    
    International    
    Investment Advisors;    
    Fidelity International    
    Investment Advisors    
    (U.K.) Limited    
Fidelity® Variable Insurance   Fidelity Management &   Seeks investment results that correspond to the
   Products – Fidelity® VIP Index   Research Company   total return of common stocks publicly traded
   500 Portfolio       in the United States, as represented by the S&P
    Subadvisers: FMR   500® .
    Co., Inc.; Geode Capital    
    Management, LLC    
Fidelity® Variable Insurance   Fidelity Management &   Seeks long-term growth of capital.
   Products – Fidelity® VIP Overseas   Research Company    
   Portfolio        
    Subadvisers: FMR    
    Co., Inc.; Fidelity    
    Management &    
    Research (U.K.) Inc.;    
    Fidelity Research &    
    Analysis Company;    
    Fidelity International    
    Investment Advisors;    
    Fidelity International    
    Investment Advisors    
    (U.K.) Limited; Fidelity    
    Investments Japan    
    Limited    
Franklin Templeton Variable   Franklin Advisory   Seeks long-term total return.
   Insurance Products Trust –   Services, LLC    
   Franklin Small Cap Value        
   Securities Fund        
ING Balanced Portfolio, Inc.   ING Investments, LLC   Seeks to maximize investment return,
        consistent with reasonable safety of principal,
    Subadviser: ING   by investing in a diversified portfolio of one or
    Investment   more of the following asset classes: stocks,
    Management Co.   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.
ING Partners, Inc. – ING Baron   Directed Services LLC   Seeks capital appreciation.
   Small Cap Growth Portfolio        
    Subadviser: BAMCO,    
    Inc. (BAMCO)    
 
 
 
 
PRO.75962-09                                              59    

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
ING Investors Trust – ING   Directed Services LLC   Seeks long-term growth of capital.
   BlackRock Large Cap Growth        
   Portfolio   Subadviser:    
    BlackRock Investment    
    Management, LLC    
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks long-term capital appreciation.
   BlackRock Science and        
   Technology Opportunities   Subadviser:    
   Portfolio   BlackRock Advisors,    
    LLC    
ING Investors Trust – ING Clarion   ING Investments,   A non-diversified Portfolio that seeks total
   Global Real Estate Portfolio   LLC   return.
 
    Subadviser: ING    
    Clarion Real Estate    
    Securities L.P.    
ING Variable Insurance Trust –   ING Investments, LLC   Seeks to achieve maximum total return and
   ING GET U.S. Core Portfolio       minimal exposure of the Series’ assets to a
    Subadviser: ING   market value loss by participating, to the extent
    Investment   possible, in favorable equity market
    Management Co. (ING   performance during the guarantee period.
    IM)    
ING Investors Trust – ING Global   Directed Services LLC   A non-diversified Portfolio that seeks long-term
   Resources Portfolio       capital appreciation.
    Subadviser: ING    
    Investment    
    Management Co.    
ING Variable Funds – ING Growth   ING Investments, LLC   Seeks to maximize total return through
   and Income Portfolio       investments in a diversified portfolio of
    Subadviser: ING   common stocks and securities convertible into
    Investment   common stock.
    Management Co.    
ING Investors Trust – ING Index   Directed Services LLC   Seeks to outperform the total return
   Plus International Equity       performance of the Morgan Stanley Capital
   Portfolio   Subadviser: ING   International Europe Australasia and Far East®
    Investment   Index (“MSCI EAFE® Index”), while
    Management Advisors,   maintaining a market level of risk.
    B.V.    
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks to outperform the total return
   Index Plus LargeCap Portfolio       performance of the Standard & Poor’s 500
    Subadviser: ING   Composite Stock Price Index (S&P 500 Index),
    Investment   while maintaining a market level of risk.
    Management Co.    
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks to outperform the total return
   Index Plus MidCap Portfolio       performance of the Standard & Poor’s MidCap
    Subadviser: ING   400 Index (S&P MidCap 400 Index), while
    Investment   maintaining a market level of risk.
    Management Co.    
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks to outperform the total return
   Index Plus SmallCap Portfolio       performance of the Standard & Poor’s
    Subadviser: ING   SmallCap 600 Index (S&P SmallCap 600
    Investment   Index), while maintaining a market level of
    Management Co.   risk.
 
 
 
 
PRO.75962-09                                                60    

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
ING Intermediate Bond Portfolio   ING Investments, LLC   Seeks to maximize total return consistent with
        reasonable risk.
    Subadviser: ING    
    Investment    
    Management Co.    
ING Investors Trust – ING   Directed Services LLC   Seeks capital appreciation.
   JPMorgan Emerging Markets        
   Equity Portfolio   Subadviser: J.P.    
    Morgan Investment    
    Management Inc.    
ING Partners Inc. – ING Legg   Directed Services LLC   Seeks long-term growth of capital.
   Mason Partners Aggressive        
   Growth Portfolio   Subadviser:    
    ClearBridge Advisors,    
    LLC (ClearBridge)    
ING Investors Trust – ING Marsico   Directed Services LLC   Seeks capital appreciation.
   Growth Portfolio        
    Subadviser: Marsico    
    Capital Management,    
    LLC    
ING Investors Trust – ING MFS   Directed Services LLC   Seeks above-average income (compared to a
   Total Return Portfolio       portfolio entirely invested in equity securities)
    Subadviser:   consistent with the prudent employment of
    Massachusetts   capital. Secondarily seeks reasonable
    Financial Services   opportunity for growth of capital and income.
    Company    
ING Money Market Portfolio   ING Investments, LLC   Seeks to provide high current return, consistent
        with preservation of capital and liquidity,
    Subadviser: ING   through investment in high-quality money
    Investment   market instruments while maintaining a stable
    Management Co.   share price of $1.00. There is no guarantee
        that the ING Money Market Subaccount will
        have a positive or level return.
ING Partners, Inc. – ING   Directed Services LLC   Seeks capital appreciation.
   Oppenheimer Global Portfolio        
    Subadviser:    
    OppenheimerFunds,    
    Inc. (Oppenheimer)    
ING Partners, Inc. – ING   Directed Services LLC   Seeks a high level of current income principally
   Oppenheimer Strategic Income       derived from interest on debt securities.
   Portfolio   Subadviser:    
    OppenheimerFunds,    
    Inc. (Oppenheimer)    
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks growth of capital through investment in a
   Opportunistic LargeCap Growth       diversified portfolio consisting primarily of
   Portfolio   Subadviser: ING   common stocks and securities convertible into
    Investment   common stocks believed to offer growth
    Management Co.   potential.
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks growth of capital primarily through
   Opportunistic LargeCap Portfolio       investment in a diversified portfolio of common
    Subadviser: ING   stocks.
    Investment    
    Management Co.    
 
 
 
 
PRO.75962-09                                              61    

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
ING Investors Trust – ING PIMCO   Directed Services LLC   Seeks maximum total return, consistent with
   High Yield Portfolio       preservation of capital and prudent investment
    Subadviser: Pacific   management.
    Investment    
    Management Company    
    LLC    
ING Partners, Inc. – ING PIMCO   Directed Services LLC   Seeks maximum total return, consistent with
   Total Return Portfolio       capital preservation and prudent investment
    Subadviser: Pacific   management.
    Investment    
    Management Company    
    LLC (PIMCO)    
ING Investors Trust – ING Pioneer   Directed Services LLC   Seeks current income and long-term growth of
   Equity Income Portfolio       capital from a portfolio consisting primarily of
    Subadviser: Pioneer   equity securities of U.S. corporations that are
    Investment   expected to produce income.
    Management, Inc.    
ING Investors Trust – ING Pioneer   Directed Services LLC   Seeks capital appreciation.
   Mid Cap Value Portfolio        
    Subadviser: Pioneer    
    Investment    
    Management, Inc.    
ING Variable Portfolios, Inc. – ING   ING Investments, LLC   Seeks growth of capital primarily through
   Small Company Portfolio       investment in a diversified portfolio of common
    Subadviser: ING   stocks of companies with smaller market
    Investment   capitalizations.
    Management Co.    
ING Strategic Allocation Portfolios,   ING Investments, LLC   Seeks to provide total return (i.e., income and
   Inc. – ING Strategic Allocation       capital growth, both realized and unrealized)
   Conservative Portfolio   Subadviser: ING   consistent with preservation of capital.
    Investment    
    Management Co.    
ING Strategic Allocation Portfolios,   ING Investments, LLC   Seeks to provide capital appreciation.
   Inc. – ING Strategic Allocation        
   Growth Portfolio   Subadviser: ING    
    Investment    
    Management Co.    
ING Strategic Allocation Portfolios,   ING Investments, LLC   Seeks to provide total return (i.e., income and
   Inc. – ING Strategic Allocation       capital appreciation, both realized and
   Moderate Portfolio   Subadviser: ING   unrealized).
    Investment    
    Management Co.    
ING Partners, Inc. – ING T. Rowe   Directed Services LLC   Seeks long-term capital appreciation.
   Price Diversified Mid Cap        
   Growth Portfolio   Subadviser: T. Rowe    
    Price Associates, Inc.    
    (T. Rowe Price)    
ING Partners, Inc. – ING T. Rowe   Directed Services LLC   Seeks long-term capital growth, and
   Price Growth Equity Portfolio       secondarily, increasing dividend income.
    Subadviser: T. Rowe    
    Price Associates, Inc.    
    (T. Rowe Price)    
 
 
 
 
PRO.75962-09                                              62    

    Investment Adviser/    
Fund Name   Subadviser   Investment Objective(s)
ING Partners, Inc. – ING   Directed Services LLC   Seeks long-term capital growth.
   Templeton Foreign Equity        
   Portfolio   Subadviser: Templeton    
    Investment Counsel,    
    LLC (Templeton)    
ING Partners, Inc. – ING   Directed Services LLC   Seeks capital appreciation.
   Thornburg Value Portfolio        
    Subadviser: Thornburg    
    Investment    
    Management    
    (Thornburg)    
ING Partners, Inc. – ING UBS U.S.   Directed Services LLC   Seeks long-term growth of capital and future
   Large Cap Equity Portfolio       income.
    Subadviser: UBS    
    Global Asset    
    Management    
    (Americas) Inc. (UBS    
    Global AM)    
ING Investors Trust – ING Van   Directed Services LLC   Seeks long-term capital appreciation.
     Kampen Capital Growth        
     Portfolio   Subadviser: Van    
    Kampen    
ING Partners, Inc. – ING Van   Directed Services LLC   Seeks capital growth and income.
     Kampen Comstock Portfolio        
    Subadviser: Van    
    Kampen    
ING Partners, Inc. – ING Van   Directed Services LLC   Seeks total return, consisting of long-term
   Kampen Equity and Income       capital appreciation and current income.
   Portfolio   Subadviser: Van    
    Kampen    
ING Investors Trust – ING Wells   Directed Services LLC   Seeks long-term capital appreciation.
   Fargo Small Cap Disciplined        
   Portfolio   Subadviser: Wells    
    Capital Management,    
    Inc.    
Lord Abbett Series Fund, Inc. –   Lord, Abbett & Co.   Seeks capital appreciation through investments,
     Mid-Cap Value Portfolio   LLC (Lord Abbett)   primarily in equity securities, which are
        believed to be undervalued in the marketplace.
New Perspective Fund®   Capital Research and   Seeks to provide long-term growth of capital
    Management Company   through investments all over the world,
        including the United States.
Oppenheimer Developing Markets   OppenheimerFunds,   Aggressively seeks capital appreciation.
     Fund   Inc.    
Pax World Balanced Fund   Pax World   Seeks income and conservation of principal and
    Management Corp.   secondarily possible long-term growth of
        capital.
The Growth Fund of America®   Capital Research and   Seeks to provide long-term growth of capital
    Management Company   through a diversified portfolio of common
        stocks.
Washington Mutual Investors   Capital Research and   Seeks to provide current income and the
     FundSM   Management Company   opportunity for growth of principal consistent
        with sound common stock investing.
 
 
 
 
PRO.75962-09                                              63    

APPENDIX IV
MGWB RIDER PARTIAL WITHDRAWAL EXAMPLES

For the purposes of these examples, eligible account value means your account value excluding any amount
invested in an employee Roth 403(b) account.

Example 1: Adjustment to the MGWB Remaining Guaranteed Balance for a withdrawal that does not exceed
the Maximum Annual Withdrawal.

Assume the Maximum Annual Withdrawal is $5,000, and a net withdrawal of $5,000 (with $0 early withdrawal
charges and/or MVA) is taken.

            MGWB Remaining
    Eligible Account Value   MGWB Base   Guaranteed Balance
Values just prior to the withdrawal   $100,000   $100,000   $100,000
Values after the withdrawal   $95,000   $100,000   $95,000

MGWB Remaining Guaranteed Balance is reduced dollar for dollar for withdrawals that do not exceed the
Maximum Annual Withdrawal.

Example 2: Adjustment to the MGWB Remaining Guaranteed Balance and the MGWB Base for a
withdrawal in excess of the Maximum Annual Withdrawal.

Assume (a) the Maximum Annual Withdrawal is $5,000; (b) the MAW Percentage is 5%; (c) a net withdrawal of
$2,000 (with $0 early withdrawal charges and/or MVA) is taken; (d) cumulative net withdrawals previously taken
during the calendar year totaled $4,000; and (e) eligible account value has decreased to $90,000 prior to this
withdrawal.

    Eligible           Maximum
    Account       MGWB Remaining   Annual
    Value   MGWB Base   Guaranteed Balance   Withdrawal
Values just prior to the withdrawal   $90,000   $100,000   $96,000   $5,000
Values after the withdrawal   $88,000   $88,000   $88,000   $4,400

The net withdrawal of $2,000 has caused the cumulative net withdrawals taken during the calendar year to equal
$6,000 ($4,000 + $2,000), which exceeds the Maximum Annual Withdrawal of $5,000. As a result, the MGWB
Base and the MGWB Remaining Guaranteed Balance are reduced to the lesser of the MGWB Remaining
Guaranteed Balance less the net withdrawal, $94,000 ($96,000 - $2,000), or the eligible account value immediately
after the withdrawal, $88,000 ($90,000 - $2,000). The Maximum Annual Withdrawal is now reduced to $4,400
($88,000 x 5%).

Example 3: Adjustment to the MGWB Remaining Guaranteed Balance and the MGWB Base for a
withdrawal in excess of the Maximum Annual Withdrawal, including early withdrawal charges and/or
negative MVA.

Assume the Maximum Annual Withdrawal is $5,000, the MAW Percentage is 5%, and a net withdrawal of $5,500
(with early withdrawal charges or negative MVA of $500) is taken.

    Eligible           Maximum
    Account       MGWB Remaining   Annual
    Value   MGWB Base   Guaranteed Balance   Withdrawal
Values just prior to the withdrawal   $100,000   $100,000   $100,000   $5,000
Values after the withdrawal   $94,000   $94,000   $94,000   $4,700

PRO.75962-09                                                                                64

The gross withdrawal of $6,000 ($5,500 + $500) reduces eligible account value. The net withdrawal of $5,500
exceeds the Maximum Annual Withdrawal of $5,000. As a result, the MGWB Base and the MGWB Remaining
Guaranteed Balance are reduced to the lesser of the MGWB Remaining Guaranteed Balance less the net withdrawal,
$94,500 (100,000 - $5,500) or the eligible account value immediately after the withdrawal, $94,000 ($100,000 -
$6,000). The Maximum Annual Withdrawal is now reduced to $4,700 ($94,000 x 5%).

Example 4: A withdrawal exceeds the Maximum Annual Withdrawal but does not exceed the Additional
Withdrawal Amount.

Assume the Maximum Annual Withdrawal is $5,000. On the first day of the calendar year, the Required Minimum
Distribution for the current calendar year applicable to this contract is determined to be $6,000. The Additional
Withdrawal Amount is set to equal the excess of this amount above the Maximum Annual Withdrawal, $1,000
($6,000 - $5,000).

Also assume a net withdrawal of $2,000 (with $0 early withdrawal charges and/or MVA) is taken and cumulative
net withdrawals previously taken during the calendar year totaled $4,000.

    Eligible           Maximum
    Account       MGWB Remaining   Annual
    Value   MGWB Base   Guaranteed Balance   Withdrawal
Values just prior to the withdrawal   $96,000   $100,000   $96,000   $5,000
Values after the withdrawal   $94,000   $100,000   $94,000   $5,000

Total net withdrawals taken, $6,000 ($4,000 + $2,000), exceed the Maximum Annual Withdrawal, $5,000. However
the MGWB Base and the MGWB Remaining Guaranteed Balance are not adjusted as described in Example 2 above
because the total net withdrawals taken ($6,000) did not exceed the sum of the Maximum Annual Withdrawal and
the Additional Withdrawal Amount of $6,000 ($5,000 + 1,000). Instead, only the MGWB Remaining Guaranteed
Balance is reduced dollar for dollar for the amount of the withdrawal to $94,000 ($96,000 - $2,000). If the total net
withdrawals taken had exceeded the sum of the Maximum Annual Withdrawal and the Additional Withdrawal
Amount, the MGWB Base and the MGWB Remaining Guaranteed Balance would be adjusted as described in
Example 2, above.

Example 5: The Reset Option is utilized.

Assume the Maximum Annual Withdrawal is $5,000, the MAW Percentage is 5%, and the eligible account value
has increased above the MGWB Base.

    Eligible           Maximum
    Account       MGWB Remaining   Annual
    Value   MGWB Base   Guaranteed Balance   Withdrawal
Values just prior to reset   $110,000   $100,000   $90,000   $5,000
Values after the reset   $110,000   $110,000   $110,000   $5,500

Upon reset, the MGWB Base and the MGWB Remaining Guaranteed Balance are increased to the eligible account
value. The Maximum Annual Withdrawal is now $5,500 ($110,000 x 5%).

PRO.75962-09                                                                         65

APPENDIX V
EXAMPLES OF MGWB REBALANCING

The following examples are designed to assist you in understanding how MGWB Rebalancing works. The examples
assume that there are no investment earnings or losses.  
 
I. Subsequent Payments
 
A. Assume that on Day 1, you purchase the MGWB rider and your eligible account value (i.e., your account value
excluding any amounts invested in an employee Roth 403(b) account) is $100,000, which is allocated 100% to
Accepted Investment Options. No MGWB Rebalancing would occur, because this allocation meets the required
investment option allocation.
 
B. Assume that on Day 2, you invest an additional purchase payment of $500,000, bringing your total eligible
account value to $600,000, and you allocate this purchase payment 100% to Other Investment Options. Because the
percentage allocated to the Fixed Allocation Investment Options (0%) is less than 25% of the total amount allocated
to the Fixed Allocation Investment Options and the Other Investment Options, we will automatically reallocate
$125,000 from the amount allocated to the Other Investment Options (25% of the $500,000 allocated to the Other
Investment Options) to the Fixed Rebalancing Investment Option. Your ending allocations will be $100,000 to
Accepted Investment Options, $125,000 to the Fixed Rebalancing Investment Option, and $375,000 to the Other
Investment Options.
 
II. Partial Withdrawals
 
A. Assume that on Day 1, you purchase the MGWB rider and your eligible account value is $100,000, which is
allocated 70% to Accepted Investment Options ($70,000), 25% to the Fixed Allocation Investment Options
($25,000), and 5% to Other Investment Options ($5,000). No MGWB Rebalancing would occur, because this
allocation meets the required investment option allocation.
 
B. Assume that on Day 2, you request a partial withdrawal of $24,000 from the Fixed Allocation Investment
Options. Because the remaining amount allocated to the Fixed Allocation Investment Options ($1,000) is less than
25% of the total amount allocated to the Fixed Allocation Investment Options and the Other Investment Options, we
will automatically reallocate $500 from the Other Investment Options to the Fixed Rebalancing Investment Option,
so that the amount allocated to the Fixed Allocation Investment Options ($1,500) is 25% of the total amount
allocated to the Fixed Allocation Investment Options and Other Investment Options ($6,000).
 
 
 
 
PRO.75962-09 66

APPENDIX IV
CONDENSED FINANCIAL INFORMATION
Except for subaccounts which did not commence operations as of December 31, 2008, the following table gives (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 C available under the contracts for the indicated periods. For those subaccounts that commenced operations during the
period ended December 31, 2008, the "Value at beginning of period" shown is the value at first date of investment.

FOR CONTRACTS WITH TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES OF
0.35% FOR ING MONEY MARKET PORTFOLIO AND 1.00% FOR ALL OTHER SUBACCOUNTS
(Selected data for accumulation units outstanding throughout each period)
 
    2008   2007   2006   2005   2004   2003   2002   2001   2000   1999
AIM V.I. CAPITAL APPRECIATION FUND                                        
(Funds were first received in this option during September 2000)                                        
Value at beginning of period   $7.26   $6.54   $6.22   $5.77   $5.47   $4.26   $5.693   $7.50   $9.838    
Value at end of period   $4.13   $7.26   $6.54   $6.22   $5.77   $5.47   $4.26   $5.693   $7.50    
Number of accumulation units outstanding at end of period   302,166   305,162   323,718   189,954   214,416   213,322   175,779   134,976   69,307    
AIM V.I. CORE EQUITY FUND                                        
(Funds were first received in this option during September 2000)                                        
Value at beginning of period   $8.58   $8.01   $6.93   $6.65   $6.16   $5.00   $5.988   $7.842   $9.776    
Value at end of period   $5.93   $8.58   $8.01   $6.93   $6.65   $6.16   $5.00   $5.988   $7.842    
Number of accumulation units outstanding at end of period   535,571   421,088   404,385   254,967   341,503   378,274   375,191   309,796   380,759    
AMERICAN CENTURY® INCOME & GROWTH FUND                                        
(Funds were first received in this option during February 2001)                                        
Value at beginning of period   $11.83   $12.01   $10.38   $10.03   $8.99   $7.02   $8.823   $9.317        
Value at end of period   $7.64   $11.83   $12.01   $10.38   $10.03   $8.99   $7.02   $8.823        
Number of accumulation units outstanding at end of period   484,138   470,664   493,914   537,573   430,969   270,116   157,164   57,413        
CALVERT SOCIAL BALANCED PORTFOLIO (CVS)                                        
Value at beginning of period   $33.54   $32.97   $30.61   $29.27   $27.31   $23.11   $26.578   $28.864   $30.131   $27.186
Value at end of period   $22.80   $33.54   $32.97   $30.61   $29.27   $27.31   $23.11   $26.578   $28.864   $30.131
Number of accumulation units outstanding at end of period   403,349   448,638   486,325   530,186   578,904   618,903   627,715   679,480   708,861   880,319
EUROPACIFIC GROWTH FUND®                                        
(Funds were first received in this option during May 2005)                                        
Value at beginning of period   $17.16   $14.58   $12.09   $9.87                        
Value at end of period   $10.10   $17.16   $14.58   $12.09                        
Number of accumulation units outstanding at end of period   2,180,852   1,751,756   1,126,138   298,219                        
EVERGREEN SPECIAL VALUES FUND                                        
Value at beginning of period   $21.79   $23.95   $19.92   $18.22   $15.33   $11.44   $12.433   $11.026        
Value at end of period   $14.72   $21.79   $23.95   $19.92   $18.22   $15.33   $11.44   $12.433        
Number of accumulation units outstanding at end of period   2,033,090   2,126,628   2,175,935   2,031,497   1,643,534   1,093,807   795,240   300,428        
FIDELITY® VIP ASSET MANAGERSM PORTFOLIO                                        
Value at beginning of period   $22.81   $19.95   $18.77   $18.23   $17.45   $14.94   $16.538   $17.427   $18.343   $16.719
Value at end of period   $16.10   $22.81   $19.95   $18.77   $18.23   $17.45   $14.94   $16.538   $17.427   $18.343
Number of accumulation units outstanding at end of period   773,804   766,297   815,717   903,477   1,017,631   1,144,415   1,128,596   1,202,498   1,239,976   1,511,789
FIDELITY® VIP CONTRAFUND® PORTFOLIO                                        
Value at beginning of period   $42.45   $36.46   $32.97   $28.47   $24.91   $19.58   $21.82   $25.13   $27.214   $22.177
Value at end of period   $24.16   $42.45   $36.46   $32.97   $28.47   $24.91   $19.58   $21.82   $25.13   $27.214
Number of accumulation units outstanding at end of period   4,704,381   4,815,027   4,854,925   4,554,960   3,987,863   3,526,154   3,283,776   3,132,236   3,098,835   3,780,287
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                                        
Value at beginning of period   $28.43   $28.29   $23.77   $22.68   $20.54   $15.92   $19.36   $20.588   $19.201   $18.285
Value at end of period   $16.14   $28.43   $28.29   $23.77   $22.68   $20.54   $15.92   $19.36   $20.588   $19.201
Number of accumulation units outstanding at end of period   1,985,243   2,278,217   2,330,504   2,306,989   2,369,317   2,209,984   1,950,075   1,746,306   1,521,271   2,271,494
 
 
 
 
CFI 1

Condensed Financial Information (continued)
 
 
 
    2008   2007   2006   2005   2004   2003   2002   2001   2000   1999
FIDELITY® VIP HIGH INCOME PORTFOLIO                                        
Value at beginning of period   $10.30   $10.12   $9.19   $9.03   $8.33   $6.61   $6.453   $7.389   $9.638   $9.023
Value at end of period   $7.65   $10.30   $10.12   $9.19   $9.03   $8.33   $6.61   $6.453   $7.389   $9.638
Number of accumulation units outstanding at end of period   491,879   548,816   571,769   484,034   424,740   481,946   283,022   227,668   159,263   194,440
FIDELITY® VIP INDEX 500 PORTFOLIO                                        
Value at beginning of period   $29.21   $27.98   $24.42   $23.53   $21.49   $16.90   $21.956   $25.246   $28.147   $23.65
Value at end of period   $18.22   $29.21   $27.98   $24.42   $23.53   $21.49   $16.90   $21.956   $25.246   $28.147
Number of accumulation units outstanding at end of period   3,816,430   3,989,637   4,183,212   4,282,810   4,392,230   4,214,321   3,848,604   3,861,877   3,615,259   4,354,723
FIDELITY® VIP OVERSEAS PORTFOLIO                                        
(Funds were first received in this option during September 2000)                                        
Value at beginning of period   $13.33   $11.47   $9.82   $8.33   $7.40   $5.21   $6.608   $8.471   $9.535    
Value at end of period   $7.41   $13.33   $11.47   $9.82   $8.33   $7.40   $5.21   $6.608   $8.471    
Number of accumulation units outstanding at end of period   396,703   428,820   369,267   303,048   289,347   245,549   349,672   28,690   5,930    
FRANKLIN SMALL CAP VALUE SECURITIES FUND                                        
(Funds were first received in this option during June 2003)                                        
Value at beginning of period   $19.69   $20.37   $17.59   $16.33   $13.33   $10.95                
Value at end of period   $13.05   $19.69   $20.37   $17.59   $16.33   $13.33                
Number of accumulation units outstanding at end of period   379,037   354,211   360,740   298,925   212,288   20,815                
ING BARON SMALL CAP GROWTH PORTFOLIO                                        
(Funds were first received in this option during May 2003)                                        
Value at beginning of period   $21.03   $20.02   $17.55   $16.51   $13.03   $10.39                
Value at end of period   $12.23   $21.03   $20.02   $17.55   $16.51   $13.03                
Number of accumulation units outstanding at end of period   575,621   569,083   536,101   490,493   391,073   121,637                
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO                                        
(Funds were first received in this option during April 2007)                                        
Value at beginning of period   $10.42   $10.67                                
Value at end of period   $6.30   $10.42                                
Number of accumulation units outstanding at end of period   1,802,754   1,965,894                                
ING GLOBAL REAL ESTATE PORTFOLIO                                        
(Funds were first received in this option during September 2008)                                        
Value at beginning of period   $9.74                                    
Value at end of period   $6.71                                    
Number of accumulation units outstanding at end of period   914,997                                    
ING GLOBAL RESOURCES PORTFOLIO                                        
(Funds were first received in this option during January 2007)                                        
Value at beginning of period   $13.59   $9.75                                
Value at end of period   $7.94   $13.59                                
Number of accumulation units outstanding at end of period   1,593,082   1,391,650                                
ING JPMORGAN EMERGING MARKETS EQUITY PORTFOLIO                                        
(Funds were first received in this option during November 2005)                                        
Value at beginning of period   $21.10   $15.35   $11.39   $10.54                        
Value at end of period   $10.20   $21.10   $15.35   $11.39                        
Number of accumulation units outstanding at end of period   981,394   1,087,498   979,897   821,241                        
ING LEGG MASON PARTNERS AGGRESSIVE GROWTH PORTFOLIO                                        
Value at beginning of period   $16.71   $17.16   $15.71   $14.24   $13.11   $9.58   $14.963   $20.22   $28.71   $19.268
Value at end of period   $10.06   $16.71   $17.16   $15.71   $14.24   $13.11   $9.58   $14.963   $20.22   $28.71
Number of accumulation units outstanding at end of period   1,106,994   1,182,269   1,364,568   1,479,955   1,787,806   2,191,575   2,103,643   2,375,971   2,380,370   3,024,975
ING MARSICO GROWTH PORTFOLIO                                        
(Funds were first received in this option during April 2008)                                        
Value at beginning of period   $10.03                                    
Value at end of period   $6.45                                    
Number of accumulation units outstanding at end of period   222,270                                    

CFI 2

Condensed Financial Information (continued)
 
 
 
    2008   2007   2006   2005   2004   2003   2002   2001   2000   1999
ING MFS TOTAL RETURN PORTFOLIO                                        
(Funds were first received in this option during May 2006)                                        
Value at beginning of period   $11.13   $10.78   $9.79                            
Value at end of period   $8.57   $11.13   $10.78                            
Number of accumulation units outstanding at end of period   3,186,934   3,775,909   13,850                            
ING OPPENHEIMER GLOBAL PORTFOLIO                                        
(Funds were first received in this option during April 2005)                                        
Value at beginning of period   $14.37   $13.62   $11.66   $9.71                        
Value at end of period   $8.49   $14.37   $13.62   $11.66                        
Number of accumulation units outstanding at end of period   7,651,915   8,717,736   9,479,603   9,918,176                        
ING OPPENHEIMER STRATEGIC INCOME PORTFOLIO                                        
(Funds were first received in this option during April 2005)                                        
Value at beginning of period   $11.73   $10.89   $10.15   $10.01                        
Value at end of period   $9.81   $11.73   $10.89   $10.15                        
Number of accumulation units outstanding at end of period   1,042,676   855,228   685,845   644,905                        
ING OPPORTUNISTIC LARGE CAP GROWTH PORTFOLIO                                        
(Funds were first received in this option during September 2000)                                        
Value at beginning of period   $6.89   $5.91   $5.81   $5.37   $5.06   $3.92   $5.57   $7.718   $9.343    
Value at end of period   $3.82   $6.89   $5.91   $5.81   $5.37   $5.06   $3.92   $5.57   $7.718    
Number of accumulation units outstanding at end of period   253,012   263,281   224,525   224,789   241,500   222,350   147,672   108,472   87,757    
ING OPPORTUNISTIC LARGE CAP VALUE PORTFOLIO                                        
Value at beginning of period   $17.03   $16.70   $14.53   $13.72   $12.58   $10.20   $13.911   $15.556   $14.274   $12.088
Value at end of period   $10.85   $17.03   $16.70   $14.53   $13.72   $12.58   $10.20   $13.911   $15.556   $14.274
Number of accumulation units outstanding at end of period   459,721   522,783   578,588   611,768   817,817   921,089   941,931   698,722   227,331   74,768
ING PIMCO HIGH YIELD PORTFOLIO                                        
(Funds were first received in this option during May 2006)                                        
Value at beginning of period   $10.80   $10.58   $9.94                            
Value at end of period   $8.30   $10.80   $10.58                            
Number of accumulation units outstanding at end of period   59,568   37,526   18,758                            
ING PIMCO TOTAL RETURN PORTFOLIO                                        
(Funds were first received in this option during May 2003)                                        
Value at beginning of period   $11.80   $10.89   $10.58   $10.47   $10.13   $10.05                
Value at end of period   $11.66   $11.80   $10.89   $10.58   $10.47   $10.13                
Number of accumulation units outstanding at end of period   1,322,612   760,653   600,663   663,553   542,483   189,541                
ING PIONEER EQUITY INCOME PORTFOLIO                                        
(Funds were first received in this option during May 2007)                                        
Value at beginning of period   $9.15   $10.06                                
Value at end of period   $6.33   $9.15                                
Number of accumulation units outstanding at end of period   3,054,174   2,942,653                                
ING PIONEER MID CAP VALUE PORTFOLIO                                        
(Funds were first received in this option during May 2006)                                        
Value at beginning of period   $11.03   $10.54   $9.51                            
Value at end of period   $7.33   $11.03   $10.54                            
Number of accumulation units outstanding at end of period   1,146,541   1,021,942   7,611                            
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH PORTFOLIO                                    
Value at beginning of period   $13.57   $12.09   $11.19   $9.55                        
Value at end of period   $7.64   $13.57   $12.09   $11.19                        
Number of accumulation units outstanding at end of period   4,008,265   3,997,571   4,225,986   4,553,354                        
ING T. ROWE PRICE GROWTH EQUITY PORTFOLIO                                        
Value at beginning of period   $30.54   $28.07   $25.03   $23.81   $21.86   $16.86   $22.204   $24.994   $25.283   $20.929
Value at end of period   $17.48   $30.54   $28.07   $25.03   $23.81   $21.86   $16.86   $22.204   $24.994   $25.283
Number of accumulation units outstanding at end of period   1,193,388   1,294,160   1,417,850   1,611,950   1,771,556   1,670,473   1,456,936   1,470,698   1,359,111   1,549,310

CFI 3

Condensed Financial Information (continued)
 
 
 
    2008   2007   2006   2005   2004   2003   2002   2001   2000   1999
ING TEMPLETON FOREIGN EQUITY PORTFOLIO                                        
(Funds were first received in this option during April 2008)                                        
Value at beginning of period   $10.12                                    
Value at end of period   $6.25                                    
Number of accumulation units outstanding at end of period   3,048,127                                    
ING THORNBURG VALUE PORTFOLIO                                        
Value at beginning of period   $36.21   $34.10   $29.48   $29.32   $26.23   $20.69   $29.926   $40.196   $43.112   $29.339
Value at end of period   $21.60   $36.21   $34.10   $29.48   $29.32   $26.23   $20.69   $29.926   $40.196   $43.112
Number of accumulation units outstanding at end of period   905,419   988,543   1,062,400   1,226,375   1,485,047   1,836,502   1,909,558   2,239,840   2,301,513   2,448,587
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                                        
Value at beginning of period   $18.50   $18.47   $16.29   $15.04   $13.24   $10.70   $14.393   $18.387   $17.796   $14.528
Value at end of period   $11.03   $18.50   $18.47   $16.29   $15.04   $13.24   $10.70   $14.393   $18.387   $17.796
Number of accumulation units outstanding at end of period   737,124   801,536   754,938   788,992   811,334   858,894   866,515   955,110   999,127   194,296
ING VAN KAMPEN CAPITAL GROWTH PORTFOLIO                                        
(Funds were first received in this option during April 2008)                                        
Value at beginning of period   $10.10                                    
Value at end of period   $5.36                                    
Number of accumulation units outstanding at end of period   14,708                                    
ING VAN KAMPEN COMSTOCK PORTFOLIO                                        
(Funds were first received in this option during May 2003)                                        
Value at beginning of period   $16.39   $16.94   $14.77   $14.42   $12.47   $10.15                
Value at end of period   $10.31   $16.39   $16.94   $14.77   $14.42   $12.47                
Number of accumulation units outstanding at end of period   824,062   985,817   1,075,448   1,142,127   777,786   302,672                
ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO                                        
(Funds were first received in this option during April 2005)                                        
Value at beginning of period   $12.27   $11.97   $10.73   $9.83                        
Value at end of period   $9.31   $12.27   $11.97   $10.73                        
Number of accumulation units outstanding at end of period   1,423,377   1,689,827   1,816,696   1,132,003                        
ING VP BALANCED PORTFOLIO                                        
Value at beginning of period   $39.66   $37.95   $34.85   $33.76   $31.17   $26.48   $29.827   $31.47   $32.002   $28.524
Value at end of period   $28.23   $39.66   $37.95   $34.85   $33.76   $31.17   $26.48   $29.827   $31.47   $32.002
Number of accumulation units outstanding at end of period   826,873   907,786   992,419   1,083,124   1,212,176   1,296,685   1,335,579   1,490,555   1,630,256   2,155,445
ING VP BLACKROCK GLOBAL SCIENCE AND TECHNOLOGY PORTFOLIO                                        
(Funds were first received in this option during September 2000)                                        
Value at beginning of period   $4.93   $4.19   $3.94   $3.56   $3.64   $2.53   $4.352   $5.71   $9.391    
Value at end of period   $2.94   $4.93   $4.19   $3.94   $3.56   $3.64   $2.53   $4.352   $5.71    
Number of accumulation units outstanding at end of period   998,012   1,051,767   914,446   1,082,710   864,758   915,253   428,288   342,338   138,503    
ING VP GROWTH AND INCOME PORTFOLIO                                        
Value at beginning of period   $259.35   $243.92   $215.73   $201.50   $187.76   $150.43   $202.587   $250.928   $284.994   $245.765
Value at end of period   $160.14   $259.35   $243.92   $215.73   $201.50   $187.76   $150.43   $202.587   $250.928   $284.994
Number of accumulation units outstanding at end of period   491,621   546,591   618,831   675,776   784,200   907,962   985,007   1,137,553   1,257,857   1,555,542
ING VP INDEX PLUS INTERNATIONAL EQUITY PORTFOLIO                                        
(Funds were first received in this option during November 2007)                                        
Value at beginning of period   $9.48   $9.63                                
Value at end of period   $5.28   $9.48                                
Number of accumulation units outstanding at end of period   296,630   394,245                                
ING VP INDEX PLUS LARGECAP PORTFOLIO                                        
Value at beginning of period   $23.06   $22.18   $19.55   $18.74   $17.12   $13.71   $17.645   $20.645   $23.044   $18.772
Value at end of period   $14.34   $23.06   $22.18   $19.55   $18.74   $17.12   $13.71   $17.645   $20.645   $23.044
Number of accumulation units outstanding at end of period   1,573,667   1,839,370   2,024,733   2,140,821   2,392,049   2,418,495   2,268,115   2,246,477   2,198,550   2,748,955
ING VP INDEX PLUS MIDCAP PORTFOLIO                                        
Value at beginning of period   $24.63   $23.58   $21.76   $19.78   $17.13   $13.07   $15.014   $15.377   $12.967   $11.338
Value at end of period   $15.22   $24.63   $23.58   $21.76   $19.78   $17.13   $13.07   $15.014   $15.377   $12.967
Number of accumulation units outstanding at end of period   1,759,943   1,859,167   1,947,854   1,856,102   1,675,767   1,232,142   916,636   517,509   344,475   73,984

CFI 4

Condensed Financial Information (continued)
 
 
 
    2008   2007   2006   2005   2004   2003   2002   2001   2000   1999
ING VP INDEX PLUS SMALLCAP PORTFOLIO                                        
Value at beginning of period   $17.20   $18.53   $16.44   $15.43   $12.77   $9.47   $11.025   $10.881   $10.019   $9.157
Value at end of period   $11.31   $17.20   $18.53   $16.44   $15.43   $12.77   $9.47   $11.025   $10.881   $10.019
Number of accumulation units outstanding at end of period   1,120,220   1,243,903   1,363,094   1,316,513   1,155,531   810,650   562,448   292,147   185,350   118,433
ING VP INTERMEDIATE BOND PORTFOLIO                                        
Value at beginning of period   $81.14   $77.30   $75.03   $73.47   $70.76   $67.24   $62.692   $58.266   $53.738   $54.819
Value at end of period   $73.52   $81.14   $77.30   $75.03   $73.47   $70.76   $67.24   $62.692   $58.266   $53.738
Number of accumulation units outstanding at end of period   576,494   703,379   685,422   673,418   623,553   672,361   774,013   697,898   603,259   867,416
ING VP MONEY MARKET PORTFOLIO                                        
Value at beginning of period   $56.29   $53.71   $51.39   $50.07   $49.72   $49.45   $48.828   $47.123   $44.501   $42.883
Value at end of period   $57.58   $56.29   $53.71   $51.39   $50.07   $49.72   $49.45   $48.828   $47.123   $44.501
Number of accumulation units outstanding at end of period   1,255,219   2,844,911   2,061,958   367,555   384,115   456,502   804,354   764,353   685,272   845,679
ING VP SMALL COMPANY PORTFOLIO                                        
(Funds were first received in this option during September 2000)                                        
Value at beginning of period   $14.59   $13.92   $12.03   $11.02   $9.73   $7.15   $9.41   $9.145   $10.292    
Value at end of period   $9.96   $14.59   $13.92   $12.03   $11.02   $9.73   $7.15   $9.41   $9.145    
Number of accumulation units outstanding at end of period   568,936   433,813   450,154   435,923   519,294   585,454   541,321   361,370   136,234    
ING VP STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO                                        
Value at beginning of period   $19.86   $18.96   $17.67   $17.19   $16.08   $14.29   $15.088   $15.62   $15.07   $14.248
Value at end of period   $15.03   $19.86   $18.96   $17.67   $17.19   $16.08   $14.29   $15.088   $15.62   $15.07
Number of accumulation units outstanding at end of period   89,653   117,069   97,184   105,629   103,950   49,925   53,498   51,196   44,930   46,462
ING VP STRATEGIC ALLOCATION GROWTH PORTFOLIO                                        
Value at beginning of period   $22.03   $21.18   $18.90   $17.98   $16.21   $13.17   $15.425   $17.624   $17.94   $15.886
Value at end of period   $13.95   $22.03   $21.18   $18.90   $17.98   $16.21   $13.17   $15.425   $17.624   $17.94
Number of accumulation units outstanding at end of period   141,655   152,950   136,097   104,165   89,601   54,494   37,872   33,425   28,874   33,852
ING VP STRATEGIC ALLOCATION MODERATE PORTFOLIO                                        
Value at beginning of period   $20.72   $19.84   $18.02   $17.39   $15.93   $13.47   $15.04   $16.343   $16.458   $15.12
Value at end of period   $14.26   $20.72   $19.84   $18.02   $17.39   $15.93   $13.47   $15.04   $16.343   $16.458
Number of accumulation units outstanding at end of period   111,966   119,845   129,552   115,515   95,249   49,780   34,761   43,445   36,196   30,738
ING WELLS FARGO SMALL CAP DISCIPLINED PORTFOLIO                                        
(Funds were first received in this option during May 2006)                                        
Value at beginning of period   $9.94   $10.42   $10.10                            
Value at end of period   $6.62   $9.94   $10.42                            
Number of accumulation units outstanding at end of period   49,158   44,849   39,943                            
LORD ABBETT SERIES FUND - MID-CAP VALUE PORTFOLIO                                        
(Funds were first received in this option during May 2003)                                        
Value at beginning of period   $18.59   $18.67   $16.80   $15.68   $12.77   $10.11                
Value at end of period   $11.16   $18.59   $18.67   $16.80   $15.68   $12.77                
Number of accumulation units outstanding at end of period   918,372   1,010,326   961,268   886,813   500,249   92,123                
NEW PERSPECTIVE FUND®                                        
(Funds were first received in this option during May 2005)                                        
Value at beginning of period   $15.58   $13.57   $11.44   $10.02                        
Value at end of period   $9.58   $15.58   $13.57   $11.44                        
Number of accumulation units outstanding at end of period   532,037   261,372   138,930   29,909                        
OPPENHEIMER DEVELOPING MARKETS FUND                                        
(Funds were first received in this option during February 2001)                                        
Value at beginning of period   $44.08   $33.26   $26.84   $19.19   $14.57   $8.91   $9.145   $10.467        
Value at end of period   $22.68   $44.08   $33.26   $26.84   $19.19   $14.57   $8.91   $9.145        
Number of accumulation units outstanding at end of period   1,124,499   1,218,832   1,173,367   1,122,704   757,938   428,805   145,247   24,356        
PAX WORLD BALANCED FUND                                        
(Funds were first received in this option during February 2001)                                        
Value at beginning of period   $13.27   $12.24   $11.17   $10.70   $9.54   $8.21   $9.102   $9.85        
Value at end of period   $9.10   $13.27   $12.24   $11.17   $10.70   $9.54   $8.21   $9.102        
Number of accumulation units outstanding at end of period   1,062,501   943,515   790,821   712,293   518,200   353,096   188,163   253,700        

CFI 5

Condensed Financial Information (continued)
 
 
 
    2008   2007   2006   2005   2004   2003   2002   2001   2000   1999
THE GROWTH FUND OF AMERICA®                                        
(Funds were first received in this option during May 2005)                                        
Value at beginning of period   $14.16   $12.90   $11.74   $9.96                        
Value at end of period   $8.54   $14.16   $12.90   $11.74                        
Number of accumulation units outstanding at end of period   1,992,111   1,451,445   1,088,939   510,995                        
WASHINGTON MUTUAL INVESTORS FUNDSM                                        
(Funds were first received in this option during May 2005)                                        
Value at beginning of period   $12.73   $12.38   $10.60   $10.09                        
Value at end of period   $8.43   $12.73   $12.38   $10.60                        
Number of accumulation units outstanding at end of period   1,016,205   742,033   521,512   271,058                        

CFI 6

FOR MASTER APPLICATIONS ONLY

  I hereby acknowledge receipt of Variable Annuity Account C Opportunity Plus group deferred variable annuity
  prospectus dated May 1, 2009 as well as all current prospectuses pertaining to the variable investment options
  available under the contracts.

  _____ Please send a Variable Annuity Account C Statement of Additional Information (Form No. SAI.75962-09)
  dated May 1, 2009.

  _____ Please send the most recent annual and/or quarterly report of ING Life Insurance and Annuity Company.
 
                                                                                                                                                                               
CONTRACT HOLDER’S SIGNATURE
 
                                                                                                                                                                               
DATE
 
 
 
 






PRO.75962-09

                                                                             PART B

VARIABLE ANNUITY ACCOUNT C
OF
ING LIFE INSURANCE AND ANNUITY COMPANY

Statement of Additional Information dated May 1, 2009
For
OPPORTUNITY PLUS
 
Multiple Option Group 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 C (the “Separate Account”) dated May 1, 2009 relating
to the Opportunity Plus Multiple Option Group Variable Annuity Contracts issued by Variable Annuity
Account C (the “Separate Account”) and ILIAC (the “Company”).

A free prospectus is available upon request from the local ING Life Insurance and Annuity Company
office or by writing to or calling:

For regular mail, please use:
 
Opportunity Plus Service Center
ING National Trust
P.O. Box 9810
Providence, RI 02940-8010
 
For overnight delivery, please use:
 
Opportunity Plus Service Center
ING National Trust
101 Sabin Street
Pawtucket, RI 02860
 
1-800-677-4636

Read the prospectus before you invest. Unless otherwise indicated, terms used in this Statement of
Additional Information have the same meaning as in the prospectus.

TABLE OF CONTENTS
  Page
General Information and History 2
Variable Annuity Account C 3
Offering and Purchase of Contracts 4
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
 
 
 
 
SAI.75962-09

GENERAL INFORMATION AND HISTORY
 
ING Life Insurance and Annuity Company (the “Company,” we, us, our) is a stock life insurance
company which was organized under the insurance laws of the State of Connecticut in 1976. Prior to
January 1, 2002, the Company was known as Aetna Life Insurance and Annuity Company. Through a
merger, it succeeded to the business of Aetna Variable Annuity Life Insurance Company (formerly
Participating Annuity Life Insurance Company organized in 1954).
 
As of December 31, 2008, the Company had $50 billion invested through their products, including
$37 billion in their separate accounts (of which the Company’s affiliates manages or oversees the
management of $22 billion). Based on assets, ING Life Insurance and Annuity Company is ranked
among the top 2% of all life and health insurance companies rated by A.M. Best Company as of July 15,
2008. The Company is an indirect wholly owned subsidiary of ING Groep N.V., a global financial
institution active in the fields of insurance, banking and asset management and is a direct, wholly owned
subsidiary of Lion Connecticut Holdings Inc. The Company is engaged in the business of issuing life
insurance policies and annuity contracts. Our Home Office is located at One Orange Way, Windsor,
Connecticut 06095-4774.
 
The Company serves as the depositor for the separate account.
 
The Company has established the Opportunity Plus Service Center to provide administrative support to
contract holders and participants investing in the Opportunity Plus Contract. This office will handle
enrollments, billing, transfers, redemptions, and inquiries for all Opportunity Plus contract holders and
participants. All forms and correspondence should be sent to:
 
For regular mail, please use:
 
Opportunity Plus Service Center
ING National Trust
P.O. Box 9810
Providence, RI 02940-8010
 
For overnight delivery, please use:
Opportunity Plus Service Center
ING National Trust
101 Sabin Street
Pawtucket, RI 02860
 
Telephone number: 1-800-677-4636
 
Other than the mortality and expense risk charge and the administrative expense charge 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 costs 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.
 
From this point forward, the term “contract(s)” refers only to those offered through the prospectus.
 
 
 
 
SAI.75962-09 2

VARIABLE ANNUITY ACCOUNT C
 
Variable Annuity Account C 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 substitution of available variable 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. The funds currently available under the contract are as follows:
 
AIM Mid Cap Core Equity Fund (Class A)(1)(2) ING JPMorgan Emerging Markets Equity Portfolio (Class I)
AIM V.I. Capital Appreciation Fund (Series I) ING Legg Mason Partners Aggressive Growth Portfolio (I Class)
AIM V.I. Core Equity Fund (Series I) ING Marsico Growth Portfolio (Class I)
Alger Green Fund (Class A)(1)(2) ING MFS Total Return Portfolio (Class I)
Amana Growth Fund(1)(2) ING Money Market Portfolio (Class I)(3)
Amana Income Fund(1)(2) ING Oppenheimer Global Portfolio (I Class)
American Century® Income & Growth Fund (A Class)(1) ING Oppenheimer Strategic Income Portfolio (I Class)
American Century® Inflation-Adjusted Bond Fund ING Opportunistic Large Cap Growth Portfolio (Class I)
   (Investor Class)(1)(2) ING Opportunistic Large Cap Portfolio (Class I)(3)
BlackRock Mid Cap Value Opportunities Fund (Class A)(1)(2) ING PIMCO High Yield Portfolio (Class I)
Calvert Social Balanced Portfolio ING PIMCO Total Return Portfolio (S Class)
EuroPacific Growth Fund® (Class R-4)(1) ING Pioneer Equity Income Portfolio (Class I)
Evergreen Special Values Fund (Class A)*(1) ING Pioneer Mid Cap Value Portfolio (Class I)
Fidelity® VIP Asset ManagerSM Portfolio (Initial Class) ING Small Company Portfolio (Class I)(3)
Fidelity® VIP Contrafund® Portfolio (Initial Class) ING Strategic Allocation Conservative Portfolio (Class I)(3)(5)
Fidelity® VIP Equity-Income Portfolio (Initial Class) ING Strategic Allocation Growth Portfolio (Class I)(3)(5)
Fidelity® VIP High Income Portfolio (Initial Class) ING Strategic Allocation Moderate Portfolio (Class I)(3)(5)
Fidelity® VIP Index 500 Portfolio (Initial Class) ING T. Rowe Price Diversified Mid Cap Growth Portfolio (I Class)
Fidelity® VIP Overseas Portfolio (Initial Class) ING T. Rowe Price Growth Equity Portfolio (I Class)
Franklin Small Cap Value Securities Fund (Class 2) ING Templeton Foreign Equity Portfolio (I Class)
ING Balanced Portfolio, Inc.(Class I)(3) ING Thornburg Value Portfolio (I Class)
ING Baron Small Cap Growth Portfolio (S Class) ING UBS U.S. Large Cap Equity Portfolio (I Class)
ING BlackRock Large Cap Growth Portfolio ( Class I) ING Van Kampen Capital Growth Portfolio (Class I)
ING BlackRock Science and Technology Opportunities Portfolio ING Van Kampen Comstock Portfolio (S Class)
   (Class I)(3) ING Van Kampen Equity and Income Portfolio (I Class)
ING Clarion Global Real Estate Portfolio (Class I)(3) ING Wells Fargo Small Cap Disciplined Portfolio (Class S)
ING GET U.S. Core Portfolio(4) Lord Abbett Series Fund - Mid-Cap Value Portfolio (Class VC)
ING Global Resources Portfolio (Class S) New Perspective Fund® (Class R-4)(1)
ING Growth and Income Portfolio (Class I)(3) Oppenheimer Developing Markets Fund (Class A)(1)
ING Index Plus International Equity Portfolio (Class I)(3) Pax World Balanced Fund (Individual Investor Class)(1)
ING Index Plus LargeCap Portfolio (Class I)(3) The Growth Fund of America® (Class R-4)(1)
ING Index Plus MidCap Portfolio (Class I)(3) Washington Mutual Investors FundSM (Class R-4)(1)
ING Index Plus SmallCap Portfolio (Class I)(3)  
ING Intermediate Bond Portfolio (Class I)(3)  

(*) This fund is closed to new plans.
(1) This fund is available to the general public. See “Additional Risks of Investing in the Funds” in the Contract Prospectus.
(2) This fund is scheduled to be available May 11, 2009.
(3) This fund has changed its name to the name listed above. See “Appendix III–Fund Descriptions,” in the Contract Prospectus for a list of
      former and current fund names.
(4) The ING GET U.S. Core Portfolio is not currently available for investment.
(5) These portfolios are structured as fund of funds that invest directly in shares of underlying funds. See “Fees–Funds Fees and Expenses”
      in the Contract Prospectus for additional information.

Complete descriptions of each of the funds, including their investment objectives, policies, risks and fees
and expenses, is contained in the prospectuses and statements of additional information for each of the
funds.
 
 
 
 
SAI.75962-09 3

OFFERING AND PURCHASE OF CONTRACTS
 
The Company’s subsidiary, ING Financial Advisers, LLC serves as the principal underwriter for
contracts. ING Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-
dealer with the SEC. ING Financial Advisers, LLC is also a member of the Financial Industry Regulatory
Authority and the Securities Investor Protection Corporation. ING Financial Advisers, LLC’s principal
office is located at One Orange Way, Windsor, Connecticut 06095-4774. The contracts are distributed
through life insurance agents licensed to sell variable annuities who are registered representatives of ING
Financial Advisers, LLC or of other registered broker-dealers who have entered into sales arrangements
with ING Financial Advisers, LLC. The offering of the contracts is continuous. A description of the
manner in which contracts are purchased may be found in the prospectus under the sections titled
“Contract - Ownership and Rights” and “Your Account Value.”
 
Compensation paid to the principal underwriter, ING Financial Advisers, LLC, for the years ending
December 31, 2008, 2007 and 2006 amounted to approximately $43,901,529.15, $44,267,199.63 and
$43,390,180.16 respectively. These amounts reflect approximate 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 C 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 options 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 annuity 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 5.0%
per annum). Selection of a 5.0% rate causes a higher first payment, but payments will increase thereafter
only to the extent that the net investment rate increases by more than 5.0% on an annual basis. Payments
would decline if the rate failed to increase by 5.0%. 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 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 5.0% 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.
 
 
 
 
SAI.75962-09 4

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 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 $1,000 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 on 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 5.0% 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.
 
SAI.75962-09 5

We may provide in advertising, sales literature, periodic publications or other materials information on
various topics of interest to current and prospective contract holders or participants. 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, 55 Ivan Allen Jr. Boulevard, Suite 1000, Atlanta, GA 30308, an Independent
Registered Public Accounting Firm, performs annual audits of ING Life Insurance and Annuity Company
and Variable Annuity Account C.
 
 
 
 
SAI.75962-09 6

FINANCIAL STATEMENTS
Variable Annuity Account C of
ING Life Insurance and Annuity Company
Year ended December 31, 2008
with Report of Independent Registered Public Accounting Firm

 

 

S-1

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VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Financial Statements
Year ended December 31, 2008

Contents
 
Report of Independent Registered Public Accounting Firm 1
 
Audited Financial Statements  
 
Statements of Assets and Liabilities 5
Statements of Operations 55
Statements of Changes in Net Assets 109
Notes to Financial Statements 176

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Report of Independent Registered Public Accounting Firm

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

We have audited the accompanying statements of assets and liabilities of the Divisions constituting
Variable Annuity Account C of ING Life Insurance and Annuity Company (the “Account”) as of
December 31, 2008, 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 Growth Series: Fidelity® Variable Insurance Products:
   AIM Mid Cap Core Equity Fund - Class A    Fidelity® VIP Equity-Income Portfolio - Initial Class
   AIM Small Cap Growth Fund - Class A    Fidelity® VIP Growth Portfolio - Initial Class
AIM Investment Funds:    Fidelity® VIP High Income Portfolio - Initial Class
   AIM Global Health Care Fund - Investor Class    Fidelity® VIP Overseas Portfolio - Initial Class
AIM Variable Insurance Funds: Fidelity® Variable Insurance Products II:
   AIM V.I. Capital Appreciation Fund - Series I Shares    Fidelity® VIP Contrafund® Portfolio - Initial Class
   AIM V.I. Core Equity Fund - Series I Shares    Fidelity® VIP Index 500 Portfolio - Initial Class
AllianceBernstein Growth and Income Fund, Inc.: Fidelity® Variable Insurance Products III:
   AllianceBernstein Growth and Income Fund, Inc. - Class A    Fidelity® VIP Mid Cap Portfolio - Initial Class
AllianceBernstein Variable Products Series Fund, Inc.: Fidelity® Variable Insurance Products V:
   AllianceBernstein Growth and Income Portfolio - Class A    Fidelity® VIP Asset ManagerSM Portfolio - Initial Class
Allianz Funds: Franklin Mutual Series Fund Inc.:
   Allianz NFJ Large-Cap Value Fund - Institutional Class    Mutual Discovery Fund - Class R
   Allianz NFJ Small-Cap Value Fund - Class A Franklin Strategic Series:
Amana Mutual Funds Trust:    Franklin Small-Mid Cap Growth Fund - Class A
   Amana Growth Fund Franklin Templeton Variable Insurance Products Trust:
   Amana Income Fund    Franklin Small Cap Value Securities Fund - Class 2
American Balanced Fund®, Inc.: Fundamental Investors, Inc.:
   American Balanced Fund® - Class R-3    Fundamental Investors, Inc. - Class R-3
American Century Quantitative Equity Funds, Inc.:    Fundamental Investors, Inc. - Class R-4
   American Century Income & Growth Fund - A Class The Growth Fund of America®, Inc.:
Ariel Investment Trust:    The Growth Fund of America® - Class R-3
   Ariel Appreciation Fund    The Growth Fund of America® - Class R-4
   Ariel Fund The Income Fund of America®, Inc.:
Artisan Funds, Inc.:    The Income Fund of America® - Class R-3
   Artisan International Fund - Investor Shares ING Equity Trust:
The Bond Fund of AmericaSM, Inc.:    ING Financial Services Fund - Class A
   The Bond Fund of AmericaSM, Inc. - Class R-4    ING Real Estate Fund - Class A
Calvert Variable Series, Inc.: ING Funds Trust:
   Calvert Social Balanced Portfolio    ING GNMA Income Fund - Class A
Capital One Funds:    ING Intermediate Bond Fund - Class A
   Capital One Mid Cap Equity Fund - Class A ING Investors Trust:
Columbia Acorn Trust:    ING AllianceBernstein Mid Cap Growth Portfolio - Service
   ColumbiaSM Acorn Fund® - Class Z          Class
Columbia Funds Series Trust:    ING BlackRock Large Cap Growth Portfolio - Institutional
   Columbia Mid Cap Value Fund - Class A          Class
   Columbia Mid Cap Value Fund - Class Z    ING BlackRock Large Cap Growth Portfolio - Service Class
DWS Institutional Funds:    ING BlackRock Large Cap Growth Portfolio - Service 2 Class
   DWS Equity 500 Index Fund - Class S    ING Evergreen Health Sciences Portfolio - Service Class
EuroPacific Growth Fund®:    ING Evergreen Omega Portfolio - Service Class
   EuroPacific Growth Fund® - Class R-3    ING FMRSM Diversified Mid Cap Portfolio - Service Class
   EuroPacific Growth Fund® - Class R-4    ING Global Real Estate Portfolio - Institutional Class
Evergreen Equity Trust:    ING Global Resources Portfolio - Institutional Class
   Evergreen Special Values Fund - Class A  

ING Investors Trust (continued): ING Partners, Inc.:
   ING Global Resources Portfolio - Service Class    ING American Century Large Company Value Portfolio -
   ING Janus Contrarian Portfolio - Service Class          Adviser Class
   ING JPMorgan Emerging Markets Equity Portfolio - Adviser    ING American Century Large Company Value Portfolio - Service
         Class          Class
   ING JPMorgan Emerging Markets Equity Portfolio - Institutional    ING American Century Small-Mid Cap Value Portfolio - Adviser
         Class          Class
   ING JPMorgan Emerging Markets Equity Portfolio - Service    ING American Century Small-Mid Cap Value Portfolio - Service
         Class          Class
   ING JPMorgan Small Cap Core Equity Portfolio - Service Class    ING Baron Asset Portfolio - Service Class
   ING JPMorgan Value Opportunities Portfolio - Institutional    ING Baron Small Cap Growth Portfolio - Adviser Class
         Class    ING Baron Small Cap Growth Portfolio - Service Class
   ING JPMorgan Value Opportunities Portfolio - Service Class    ING Columbia Small Cap Value II Portfolio - Service Class
   ING Julius Baer Foreign Portfolio - Service Class    ING Davis New York Venture Portfolio - Service Class
   ING Legg Mason Value Portfolio - Service Class    ING Fidelity® VIP Mid Cap Portfolio - Service Class
   ING Lord Abbett Affiliated Portfolio - Institutional Class    ING Index Solution 2015 Portfolio - Adviser Class
   ING Lord Abbett Affiliated Portfolio - Service Class    ING Index Solution 2025 Portfolio - Adviser Class
   ING Marsico Growth Portfolio - Institutional Class    ING Index Solution 2035 Portfolio - Adviser Class
   ING Marsico Growth Portfolio - Service Class    ING Index Solution 2045 Portfolio - Adviser Class
   ING Marsico International Opportunities Portfolio - Adviser    ING Index Solution Income Portfolio - Adviser Class
         Class    ING JPMorgan International Portfolio - Adviser Class
   ING Marsico International Opportunities Portfolio - Service    ING JPMorgan International Portfolio - Initial Class
         Class    ING JPMorgan International Portfolio - Service Class
   ING MFS Total Return Portfolio - Adviser Class    ING JPMorgan Mid Cap Value Portfolio - Adviser Class
   ING MFS Total Return Portfolio - Institutional Class    ING JPMorgan Mid Cap Value Portfolio - Service Class
   ING MFS Total Return Portfolio - Service Class    ING Legg Mason Partners Aggressive Growth Portfolio - Adviser
   ING MFS Utilities Portfolio - Service Class          Class
   ING Oppenheimer Main Street Portfolio® - Service Class    ING Legg Mason Partners Aggressive Growth Portfolio - Initial
   ING PIMCO High Yield Portfolio - Institutional Class          Class
   ING PIMCO High Yield Portfolio - Service Class    ING Legg Mason Partners Aggressive Growth Portfolio - Service
   ING Pioneer Equity Income Portfolio - Institutional Class          Class
   ING Pioneer Fund Portfolio - Institutional Class    ING Legg Mason Partners Large Cap Growth Portfolio - Adviser
   ING Pioneer Fund Portfolio - Service Class          Class
   ING Pioneer Mid Cap Value Portfolio - Adviser Class    ING Legg Mason Partners Large Cap Growth Portfolio - Initial
   ING Pioneer Mid Cap Value Portfolio - Institutional Class          Class
   ING Pioneer Mid Cap Value Portfolio - Service Class    ING Neuberger Berman Partners Portfolio - Service Class
   ING Stock Index Portfolio - Institutional Class    ING Neuberger Berman Regency Portfolio - Service Class
   ING T. Rowe Price Capital Appreciation Portfolio - Service Class    ING OpCap Balanced Value Portfolio - Service Class
   ING T. Rowe Price Equity Income Portfolio - Adviser Class    ING Oppenheimer Global Portfolio - Adviser Class
   ING T. Rowe Price Equity Income Portfolio - Service Class    ING Oppenheimer Global Portfolio - Initial Class
   ING Templeton Global Growth Portfolio - Institutional Class    ING Oppenheimer Global Portfolio - Service Class
   ING Templeton Global Growth Portfolio - Service Class    ING Oppenheimer Strategic Income Portfolio - Adviser Class
   ING Van Kampen Capital Growth Portfolio - Institutional Class    ING Oppenheimer Strategic Income Portfolio - Initial Class
   ING Van Kampen Capital Growth Portfolio - Service Class    ING Oppenheimer Strategic Income Portfolio - Service Class
   ING Van Kampen Growth and Income Portfolio - Service Class    ING PIMCO Total Return Portfolio - Adviser Class
   ING Van Kampen Large Cap Growth Portfolio - Institutional    ING PIMCO Total Return Portfolio - Service Class
         Class    ING Pioneer High Yield Portfolio - Initial Class
   ING Van Kampen Large Cap Growth Portfolio - Service Class    ING Pioneer High Yield Portfolio - Service Class
   ING Van Kampen Real Estate Portfolio - Institutional Class    ING Solution 2015 Portfolio - Adviser Class
   ING Van Kampen Real Estate Portfolio - Service Class    ING Solution 2015 Portfolio - Service Class
   ING VP Index Plus International Equity Portfolio - Institutional    ING Solution 2025 Portfolio - Adviser Class
         Class    ING Solution 2025 Portfolio - Service Class
   ING VP Index Plus International Equity Portfolio - Service Class    ING Solution 2035 Portfolio - Adviser Class
   ING Wells Fargo Disciplined Value Portfolio - Adviser Class    ING Solution 2035 Portfolio - Service Class
   ING Wells Fargo Disciplined Value Portfolio - Service Class    ING Solution 2045 Portfolio - Adviser Class
   ING Wells Fargo Small Cap Disciplined Portfolio - Service Class    ING Solution 2045 Portfolio - Service Class
ING Mutual Funds:    ING Solution Growth and Income Portfolio - Service Class
   ING International Growth Opportunities Fund - Class Q    ING Solution Growth Portfolio - Service Class
   ING International SmallCap Multi-Manager Fund - Class A    ING Solution Income Portfolio - Adviser Class
     ING Solution Income Portfolio - Service Class

ING Partners, Inc. (continued): ING Variable Portfolios, Inc. (continued):
   ING T. Rowe Price Diversified Mid Cap Growth Portfolio -    ING VP Index Plus SmallCap Portfolio - Class S
         Adviser Class    ING VP Small Company Portfolio - Class I
   ING T. Rowe Price Diversified Mid Cap Growth Portfolio -    ING VP Small Company Portfolio - Class S
         Initial Class ING Variable Products Trust:
   ING T. Rowe Price Diversified Mid Cap Growth Portfolio -    ING VP Financial Services Portfolio - Class I
         Service Class    ING VP International Value Portfolio - Class I
   ING T. Rowe Price Growth Equity Portfolio - Adviser Class    ING VP International Value Portfolio - Class S
   ING T. Rowe Price Growth Equity Portfolio - Initial Class    ING VP MidCap Opportunities Portfolio - Class I
   ING T. Rowe Price Growth Equity Portfolio - Service Class    ING VP MidCap Opportunities Portfolio - Class S
   ING Templeton Foreign Equity Portfolio - Adviser Class    ING VP Real Estate Portfolio - Class I
   ING Templeton Foreign Equity Portfolio - Initial Class    ING VP SmallCap Opportunities Portfolio - Class I
   ING Templeton Foreign Equity Portfolio - Service Class    ING VP SmallCap Opportunities Portfolio - Class S
   ING Thornburg Value Portfolio - Adviser Class ING VP Balanced Portfolio, Inc.:
   ING Thornburg Value Portfolio - Initial Class    ING VP Balanced Portfolio - Class I
   ING UBS U.S. Large Cap Equity Portfolio - Adviser Class ING VP Intermediate Bond Portfolio:
   ING UBS U.S. Large Cap Equity Portfolio - Initial Class    ING VP Intermediate Bond Portfolio - Class I
   ING UBS U.S. Large Cap Equity Portfolio - Service Class    ING VP Intermediate Bond Portfolio - Class S
   ING UBS U.S. Small Cap Growth Portfolio - Service Class ING VP Money Market Portfolio:
   ING Van Kampen Comstock Portfolio - Adviser Class    ING VP Money Market Portfolio - Class I
   ING Van Kampen Comstock Portfolio - Service Class Janus Adviser Series:
   ING Van Kampen Equity and Income Portfolio - Adviser Class    Janus Adviser Balanced Fund - Class S
   ING Van Kampen Equity and Income Portfolio - Initial Class Janus Aspen Series:
   ING Van Kampen Equity and Income Portfolio - Service Class    Janus Aspen Series Balanced Portfolio - Institutional Shares
ING Strategic Allocation Portfolios, Inc.:    Janus Aspen Series Flexible Bond Portfolio - Institutional Shares
   ING VP Strategic Allocation Conservative Portfolio - Class I    Janus Aspen Series Large Cap Growth Portfolio - Institutional
   ING VP Strategic Allocation Growth Portfolio - Class I          Shares
   ING VP Strategic Allocation Moderate Portfolio - Class I    Janus Aspen Series Mid Cap Growth Portfolio - Institutional
ING Variable Funds:          Shares
   ING VP Growth and Income Portfolio - Class A    Janus Aspen Series Worldwide Growth Portfolio - Institutional
   ING VP Growth and Income Portfolio - Class I          Shares
   ING VP Growth and Income Portfolio - Class S The Lazard Funds, Inc.:
ING Variable Insurance Trust:    Lazard U.S. Mid Cap Equity Portfolio - Open Shares
   ING GET U.S. Core Portfolio - Series 1 LKCM Funds:
   ING GET U.S. Core Portfolio - Series 2    LKCM Aquinas Growth Fund
   ING GET U.S. Core Portfolio - Series 3 Loomis Sayles Funds I:
   ING GET U.S. Core Portfolio - Series 5    Loomis Sayles Small Cap Value Fund - Retail Class
   ING GET U.S. Core Portfolio - Series 6 Lord Abbett Mid Cap Value Fund, Inc.:
   ING GET U.S. Core Portfolio - Series 7    Lord Abbett Mid-Cap Value Fund, Inc. - Class A
   ING GET U.S. Core Portfolio - Series 8 Lord Abbett Research Fund, Inc.:
   ING GET U.S. Core Portfolio - Series 9    Lord Abbett Small-Cap Value Fund - Class A
   ING GET U.S. Core Portfolio - Series 10 Lord Abbett Series Fund, Inc.:
   ING GET U.S. Core Portfolio - Series 11    Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC
ING Variable Portfolios, Inc.: Massachusetts Investors Growth Stock Fund:
   ING BlackRock Global Science and Technology Portfolio -    Massachusetts Investors Growth Stock Fund - Class A
         Class I Moderate Allocation Portfolio:
   ING International Index Portfolio - Class I    Moderate Allocation Portfolio
   ING Lehman Brothers U.S. Aggregate Bond Index® Portfolio - Morgan Stanley Institutional Fund Trust:
         Class I    Morgan Stanley U.S. Small Cap Value Portfolio - Class I
   ING Opportunistic Large Cap Growth Portfolio - Class I Neuberger Berman Equity Funds®:
   ING Opportunistic Large Cap Value Portfolio - Class I    Neuberger Berman Socially Responsive Fund® - Trust Class
   ING Russell™ Large Cap Index Portfolio - Class I New Perspective Fund®, Inc.:
   ING Russell™ Mid Cap Index Portfolio - Class I    New Perspective Fund®, Inc. - Class R-3
   ING Russell™ Small Cap Index Portfolio - Class I    New Perspective Fund®, Inc. - Class R-4
   ING VP Index Plus LargeCap Portfolio - Class I Oppenheimer Capital Appreciation Fund:
   ING VP Index Plus LargeCap Portfolio - Class S    Oppenheimer Capital Appreciation Fund - Class A
   ING VP Index Plus MidCap Portfolio - Class I Oppenheimer Developing Markets Fund:
   ING VP Index Plus MidCap Portfolio - Class S    Oppenheimer Developing Markets Fund - Class A
   ING VP Index Plus SmallCap Portfolio - Class I  

Oppenheimer Variable Account Funds: T. Rowe Price Mid-Cap Value Fund, Inc.:
   Oppenheimer Global Securities/VA    T. Rowe Price Mid-Cap Value Fund - R Class
   Oppenheimer Main Street Fund®/VA T. Rowe Price Value Fund, Inc.:
   Oppenheimer Main Street Small Cap Fund®/VA    T. Rowe Price Value Fund - Advisor Class
   Oppenheimer MidCap Fund/VA Templeton Funds, Inc.:
   Oppenheimer Strategic Bond Fund/VA    Templeton Foreign Fund - Class A
Pax World Funds Series Trust I: Templeton Income Trust:
   Pax World Balanced Fund    Templeton Global Bond Fund - Class A
PIMCO Variable Insurance Trust: Vanguard® Variable Insurance Fund:
   PIMCO Real Return Portfolio - Administrative Class    Diversified Value Portfolio
Pioneer High Yield Fund:    Equity Income Portfolio
   Pioneer High Yield Fund - Class A    Small Company Growth Portfolio
Pioneer Variable Contracts Trust: Wanger Advisors Trust:
   Pioneer Emerging Markets VCT Portfolio - Class I    Wanger International
   Pioneer Equity Income VCT Portfolio - Class I    Wanger Select
   Pioneer High Yield VCT Portfolio - Class I    Wanger USA
   Pioneer Mid Cap Value VCT Portfolio - Class I Washington Mutual Investors FundSM, Inc.:
Premier VIT:    Washington Mutual Investors FundSM, Inc. - Class R-3
   Premier VIT OpCap Mid Cap Portfolio    Washington Mutual Investors FundSM, Inc. - Class R-4
RiverSource Investment Series, Inc.: Wells Fargo Funds Trust:
   RiverSource Diversified Equity Income Fund - Class R-4    Wells Fargo Advantage Small Cap Value Fund - Class A
SmallCap World Fund, Inc.:  
   SMALLCAP World Fund® - Class R-4  

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. We were not engaged
to perform an audit of the Account’s internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Account’s internal control over financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our procedures included
confirmation of securities owned as of December 31, 2008, 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 respective Divisions constituting Variable Annuity Account C of ING
Life Insurance and Annuity Company at December 31, 2008, 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 12, 2009  

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                AIM V.I.    
            AIM Global   Capital    
    AIM Mid Cap   AIM Small Cap   Health Care   Appreciation   AIM V.I. Core
    Core Equity   Growth Fund -   Fund - Investor   Fund - Series I   Equity Fund -
    Fund - Class A   Class A   Class   Shares   Series I Shares
Assets                    
Investments in mutual funds                    
at fair value   $ 232   $ 20   $ 122   $ 17,871   $ 31,654
Total assets   232   20   122   17,871   31,654
Net assets   $ 232   $ 20   $ 122   $ 17,871   $ 31,654
 
Net assets                    
Accumulation units   $ 232   $ 20   $ 122   $ 17,824   $ 31,253
Contracts in payout (annuitization)   -   -   -   47   401
Total net assets   $ 232   $ 20   $ 122   $ 17,871   $ 31,654
 
Total number of mutual fund shares   14,411   1,206   6,089   1,058,110   1,602,740
 
Cost of mutual fund shares   $ 344   $ 34   $ 174   $ 26,737   $ 37,479

The accompanying notes are an integral part of these financial statements.
5

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                Allianz NFJ    
                Large-Cap   Allianz NFJ
    AllianceBernstein   AllianceBernstein   Value Fund -   Small-Cap
    Growth and Income   Growth and Income   Institutional   Value Fund -
    Fund, Inc. - Class A   Portfolio - Class A   Class   Class A
Assets                    
Investments in mutual funds                    
at fair value   $ 146   $ 371   $ 580   $ 336
Total assets   146       371   580   336
Net assets   $ 146   $ 371   $ 580   $ 336
 
Net assets                    
Accumulation units   $ 146   $ 371   $ 580   $ 336
Contracts in payout (annuitization)   -       -   -   -
Total net assets   $ 146   $ 371   $ 580   $ 336
 
Total number of mutual fund shares   59,198       28,316   51,626   17,627
 
Cost of mutual fund shares   $ 226   $ 669   $ 690   $ 502
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
        6            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

            American   American    
            Balanced   Century Income   Ariel
    Amana Growth   Amana Income   Fund® -   & Growth Fund   Appreciation
    Fund   Fund   Class R-3   - A Class   Fund
Assets                    
Investments in mutual funds                    
at fair value   $ 36   $ 46   $ 4,066   $ 3,705   $ 395
Total assets   36   46   4,066   3,705   395
Net assets   $ 36   $ 46   $ 4,066   $ 3,705   $ 395
 
Net assets                    
Accumulation units   $ 36   $ 46   $ 4,066   $ 3,705   $ 395
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 36   $ 46   $ 4,066    $ 3,705   $ 395
 
Total number of mutual fund shares   2,252   1,973   296,140   200,293   18,155
 
Cost of mutual fund shares   $ 35   $ 45   $ 5,379   $ 6,001   $ 740

The accompanying notes are an integral part of these financial statements.
7

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

Artisan
        International   The Bond Fund   Calvert Social   ColumbiaSM
        Fund - Investor   of AmericaSM,   Balanced   Acorn Fund® -
    Ariel Fund   Shares   Inc. - Class R-4   Portfolio   Class Z
Assets                        
Investments in mutual funds                        
at fair value   $ 638   $ 324   $ 1,929   $ 35,890   $ 807
Total assets   638       324   1,929   35,890   807
Net assets   $ 638   $ 324   $ 1,929   $ 35,890   $ 807
 
Net assets                        
Accumulation units   $ 638   $ 324   $ 1,929   $ 35,806   $ 807
Contracts in payout (annuitization)   -       -   -   84   -
Total net assets   $ 638   $ 324   $ 1,929   $ 35,890   $ 807
 
Total number of mutual fund shares   27,047       21,674   179,306   28,758,389   45,578
 
Cost of mutual fund shares   $ 1,110   $ 357   $ 2,011   $ 51,514   $ 1,090
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
               8                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    Columbia Mid   Columbia Mid   DWS Equity   EuroPacific   EuroPacific
    Cap Value Fund   Cap Value Fund   500 Index Fund   Growth Fund®   Growth Fund®
    - Class A   - Class Z   - Class S   - Class R-3   - Class R-4
Assets                    
Investments in mutual funds                    
at fair value   $ 1,575   $ 561   $ 168   $ 7,252   $ 155,758
Total assets   1,575   561   168   7,252   155,758
Net assets   $ 1,575   $ 561   $ 168   $ 7,252   $ 155,758
 
Net assets                    
Accumulation units   $ 1,575   $ 561   $ 168   $ 7,252   $ 155,758
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 1,575   $ 561   $ 168   $ 7,252   $ 155,758
 
Total number of mutual fund shares   186,602   66,395   1,661   263,145   5,651,599
 
Cost of mutual fund shares   $ 1,636   $ 755   $ 246   $ 11,736   $ 243,590
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        9            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

        Fidelity® VIP   Fidelity® VIP   Fidelity® VIP   Fidelity® VIP
    Evergreen   Equity-Income   Growth   High Income   Overseas
    Special Values   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Fund - Class A   Initial Class   Initial Class   Initial Class   Initial Class
Assets                    
Investments in mutual funds                    
at fair value   $ 62,156   $ 213,311   $ 159,095   $ 5,016   $ 29,665
Total assets   62,156   213,311   159,095   5,016   29,665
Net assets   $ 62,156   $ 213,311   $ 159,095   $ 5,016   $ 29,665
 
Net assets                    
Accumulation units   $ 62,156   $ 210,959   $ 158,680   $ 4,963   $ 29,665
Contracts in payout (annuitization)   -   2,352   415   53   -
Total net assets   $ 62,156   $ 213,311   $ 159,095   $ 5,016   $ 29,665
 
Total number of mutual fund shares   4,520,448   16,184,445   6,761,370   1,266,693   2,437,530
 
Cost of mutual fund shares   $ 114,060   $ 367,250   $ 233,146   $ 7,576   $ 50,466

The accompanying notes are an integral part of these financial statements.
10

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                    Fidelity® VIP    
    Fidelity® VIP   Fidelity® VIP   Fidelity® VIP   Asset    
    Contrafund®   Index 500   Mid Cap   ManagerSM   Mutual
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Discovery Fund
    Initial Class   Initial Class   Initial Class   Initial Class   - Class R
Assets                        
Investments in mutual funds                        
at fair value   $ 722,264   $ 75,139   $ 8,006   $ 15,560   $ 2,067
Total assets   722,264       75,139   8,006   15,560   2,067
Net assets   $ 722,264   $ 75,139   $ 8,006   $ 15,560   $ 2,067
 
Net assets                        
Accumulation units   $ 716,222   $ 75,139   $ 8,006   $ 15,560   $ 2,067
Contracts in payout (annuitization)   6,042       -   -   -   -
Total net assets   $ 722,264   $ 75,139   $ 8,006   $ 15,560   $ 2,067
 
Total number of mutual fund shares   46,930,763       757,528   434,395   1,509,230   93,432
 
Cost of mutual fund shares   $ 1,220,513   $ 95,693   $ 13,413   $ 21,551   $ 2,751
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             11                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    Franklin Small-   Franklin Small           The Growth
    Mid Cap   Cap Value   Fundamental   Fundamental   Fund of
    Growth Fund -   Securities Fund   Investors, Inc. -   Investors, Inc. -   America® -
    Class A   - Class 2   Class R-3   Class R-4   Class R-3
Assets                    
Investments in mutual funds                    
at fair value   $ 396   $ 63,473   $ 13   $ 8,280   $ 9,558
Total assets   396   63,473   13   8,280   9,558
Net assets   $ 396   $ 63,473   $ 13   $ 8,280   $ 9,558
 
Net assets                    
Accumulation units   $ 396   $ 62,506   $ 13   $ 8,280   $ 9,558
Contracts in payout (annuitization)   -   967   -   -   -
Total net assets   $ 396   $ 63,473   $ 13   $ 8,280   $ 9,558
 
Total number of mutual fund shares   19,538   6,016,394   536   331,874   473,152
 
Cost of mutual fund shares   $ 699   $ 100,460   $ 13   $ 9,494   $ 14,639
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
        12            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    The Growth   The Income            
    Fund of   Fund of   ING Financial       ING GNMA
    America® -   America® -   Services Fund -   ING Real Estate   Income Fund -
    Class R-4   Class R-3   Class A   Fund - Class A   Class A
Assets                        
Investments in mutual funds                        
at fair value   $ 181,120   $ 1,535   $ 101   $ 1,357   $ 2,835
Total assets   181,120       1,535   101   1,357   2,835
Net assets   $ 181,120   $ 1,535   $ 101   $ 1,357   $ 2,835
 
Net assets                        
Accumulation units   $ 181,120   $ 1,535   $ 101   $ 1,357   $ 2,835
Contracts in payout (annuitization)   -       -   -   -   -
Total net assets   $ 181,120   $ 1,535   $ 101   $ 1,357   $ 2,835
 
Total number of mutual fund shares   8,913,377       117,612   10,165   155,920   328,840
 
Cost of mutual fund shares   $ 266,400   $ 2,205   $ 191   $ 2,486   $ 2,740
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             13                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                ING BlackRock        
        ING   Large Cap   ING BlackRock   ING BlackRock
    ING   AllianceBernstein   Growth   Large Cap   Large Cap
    Intermediate   Mid Cap Growth   Portfolio -   Growth   Growth
    Bond Fund -   Portfolio - Service   Institutional   Portfolio -   Portfolio -
    Class A   Class   Class   Service Class   Service 2 Class
Assets                        
Investments in mutual funds                        
at fair value   $ 3,481   $ 2,033   $ 63,303   $ 86   $ 79
Total assets   3,481       2,033   63,303   86   79
Net assets   $ 3,481   $ 2,033   $ 63,303   $ 86   $ 79
 
Net assets                        
Accumulation units   $ 3,481   $ 2,033   $ 63,114   $ 86   $ 79
Contracts in payout (annuitization)   -       -   189   -   -
Total net assets   $ 3,481   $ 2,033   $ 63,303   $ 86   $ 79
 
Total number of mutual fund shares   406,137       275,101   9,476,530   12,989   12,018
 
Cost of mutual fund shares   $ 4,038   $ 3,930   $ 114,310   $ 133   $ 133
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        14                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                ING Global   ING Global
    ING Evergreen       ING FMRSM   Real Estate   Resources
    Health Sciences   ING Evergreen   Diversified Mid   Portfolio -   Portfolio -
    Portfolio -   Omega Portfolio   Cap Portfolio -   Institutional   Institutional
    Service Class   - Service Class   Service Class   Class   Class
Assets                    
Investments in mutual funds                    
at fair value   $ 7,198   $ 35   $ 21,437   $ 35,967   $ 25
Total assets   7,198   35   21,437   35,967   25
Net assets   $ 7,198   $ 35   $ 21,437   $ 35,967   $ 25
 
Net assets                    
Accumulation units   $ 7,198   $ 35   $ 21,437   $ 35,967   $ 25
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 7,198   $ 35   $ 21,437   $ 35,967   $ 25
 
Total number of mutual fund shares   839,929   4,324   2,507,238   5,051,527   1,907
 
Cost of mutual fund shares   $ 9,539   $ 35   $ 31,220   $ 51,479   $ 45
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        15            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                    ING JPMorgan    
                ING JPMorgan   Emerging   ING JPMorgan
    ING Global   ING Janus   Emerging   Markets Equity   Emerging
    Resources   Contrarian   Markets Equity   Portfolio -   Markets Equity
    Portfolio -   Portfolio -   Portfolio -   Institutional   Portfolio -
    Service Class   Service Class   Adviser Class   Class   Service Class
Assets                        
Investments in mutual funds                        
at fair value   $ 73,573   $ 7,405   $ 171   $ 18,447   $ 15,725
Total assets   73,573       7,405   171   18,447   15,725
Net assets   $ 73,573   $ 7,405   $ 171   $ 18,447   $ 15,725
 
Net assets                        
Accumulation units   $ 73,573   $ 7,405   $ 171   $ 18,447   $ 15,725
Contracts in payout (annuitization)   -       -   -   -   -
Total net assets   $ 73,573   $ 7,405   $ 171   $ 18,447   $ 15,725
 
Total number of mutual fund shares   5,646,393       948,134   14,515   1,532,173   1,309,341
 
Cost of mutual fund shares   $ 129,673   $ 13,120   $ 289   $ 30,996   $ 28,453
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             16                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

ING JPMorgan
        Value   ING JPMorgan        
    ING JPMorgan   Opportunities   Value   ING Julius Baer   ING Legg
    Small Cap Core   Portfolio -   Opportunities   Foreign   Mason Value
    Equity Portfolio   Institutional   Portfolio -   Portfolio -   Portfolio -
    - Service Class   Class   Service Class   Service Class   Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 2,129   $ 28   $ 1,126   $ 33,338   $ 1,448
Total assets   2,129   28   1,126   33,338   1,448
Net assets   $ 2,129   $ 28   $ 1,126   $ 33,338   $ 1,448
 
Net assets                    
Accumulation units   $ 2,129   $ 28   $ 1,126   $ 33,338   $ 1,448
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 2,129   $ 28   $ 1,126   $ 33,338   $ 1,448
 
Total number of mutual fund shares   253,478   4,641   188,293   3,573,249   427,058
 
Cost of mutual fund shares   $ 3,251   $ 47   $ 1,933   $ 58,052   $ 2,770

The accompanying notes are an integral part of these financial statements.
17

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Lord                
    Abbett   ING Lord   ING Marsico       ING Marsico
    Affiliated   Abbett   Growth   ING Marsico   International
    Portfolio -   Affiliated   Portfolio -   Growth   Opportunities
    Institutional   Portfolio -   Institutional   Portfolio -   Portfolio -
    Class   Service Class   Class   Service Class   Adviser Class
Assets                    
Investments in mutual funds                    
at fair value   $ 73,160   $ 506   $ 5,214   $ 306   $ 65
Total assets   73,160   506   5,214   306   65
Net assets   $ 73,160   $ 506   $ 5,214   $ 306   $ 65
 
Net assets                    
Accumulation units   $ 72,217   $ 506   $ 5,214   $ 306   $ 65
Contracts in payout (annuitization)   943   -   -   -   -
Total net assets   $ 73,160   $ 506   $ 5,214   $ 306   $ 65
 
Total number of mutual fund shares   11,203,749   76,947   458,983   27,249   8,453
 
Cost of mutual fund shares   $ 128,240   $ 886   $ 7,762   $ 468   $ 100
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        18            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Marsico                
    International       ING MFS Total       ING MFS
    Opportunities   ING MFS Total   Return Portfolio   ING MFS Total   Utilities
    Portfolio -   Return Portfolio   - Institutional   Return Portfolio   Portfolio -
    Service Class   - Adviser Class   Class   - Service Class   Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 6,408   $ 497   $ 51,654   $ 22,350   $ 24,775
Total assets   6,408   497   51,654   22,350   24,775
Net assets   $ 6,408   $ 497   $ 51,654   $ 22,350   $ 24,775
 
Net assets                    
Accumulation units   $ 6,408   $ 497   $ 51,654   $ 22,350   $ 24,775
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 6,408   $ 497   $ 51,654   $ 22,350   $ 24,775
 
Total number of mutual fund shares   836,526   41,782   4,351,615   1,878,142   2,605,205
 
Cost of mutual fund shares   $ 11,963   $ 672   $ 74,984   $ 32,828   $ 40,960
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        19            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING   ING PIMCO       ING Pioneer    
    Oppenheimer   High Yield   ING PIMCO   Equity Income   ING Pioneer
    Main Street   Portfolio -   High Yield   Portfolio -   Fund Portfolio -
    Portfolio® -   Institutional   Portfolio -   Institutional   Institutional
    Service Class   Class   Service Class   Class   Class
Assets                    
Investments in mutual funds                    
at fair value   $ 1,342   $ 609   $ 4,462   $ 111,368   $ 11,631
Total assets   1,342   609   4,462   111,368   11,631
Net assets   $ 1,342   $ 609   $ 4,462   $ 111,368   $ 11,631
 
Net assets                    
Accumulation units   $ 1,342   $ 609   $ 4,462   $ 109,331   $ 11,471
Contracts in payout (annuitization)   -   -   -   2,037   160
Total net assets   $ 1,342   $ 609   $ 4,462   $ 111,368   $ 11,631
 
Total number of mutual fund shares   110,274   86,762   635,655   18,079,171   1,468,527
 
Cost of mutual fund shares   $ 1,795   $ 776   $ 5,875   $ 165,315   $ 18,183
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        20            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                ING Pioneer        
        ING Pioneer   Mid Cap Value   ING Pioneer   ING Stock
    ING Pioneer   Mid Cap Value   Portfolio -   Mid Cap Value   Index Portfolio
    Fund Portfolio -   Portfolio -   Institutional   Portfolio -   Institutional
    Service Class   Adviser Class   Class   Service Class   Class
Assets                        
Investments in mutual funds                        
at fair value   $ 109   $ 2   $ 65,464   $ 204   $ 2,372
Total assets   109       2   65,464   204   2,372
Net assets   $ 109   $ 2   $ 65,464   $ 204   $ 2,372
 
Net assets                        
Accumulation units   $ 109   $ 2   $ 64,971   $ 204   $ 2,372
Contracts in payout (annuitization)   -       -   493   -   -
Total net assets   $ 109   $ 2   $ 65,464   $ 204   $ 2,372
 
Total number of mutual fund shares   13,683       233   8,625,055   26,891   308,085
 
Cost of mutual fund shares   $ 161   $ 3   $ 104,314   $ 278   $ 3,646
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             21                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING T. Rowe   ING T. Rowe   ING T. Rowe   ING Templeton    
    Price Capital   Price Equity   Price Equity   Global Growth   ING Templeton
    Appreciation   Income   Income   Portfolio -   Global Growth
    Portfolio -   Portfolio -   Portfolio -   Institutional   Portfolio -
    Service Class   Adviser Class   Service Class   Class   Service Class
Assets                        
Investments in mutual funds                        
at fair value   $ 158,868   $ 918   $ 74,508   $ 774   $ 2,110
Total assets   158,868       918   74,508   774   2,110
Net assets   $ 158,868   $ 918   $ 74,508   $ 774   $ 2,110
 
Net assets                        
Accumulation units   $ 158,868   $ 918   $ 74,508   $ 774   $ 2,110
Contracts in payout (annuitization)   -       -   -   -   -
Total net assets   $ 158,868   $ 918   $ 74,508   $ 774   $ 2,110
 
Total number of mutual fund shares   10,302,742       109,173   8,807,089   94,300   256,387
 
Cost of mutual fund shares   $ 246,047   $ 1,498   $ 117,288   $ 1,294   $ 3,455
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             22                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Van       ING Van        
    Kampen Capital   ING Van   Kampen   ING Van    
    Growth   Kampen Capital   Growth and   Kampen Real   ING Van
    Portfolio -   Growth   Income   Estate Portfolio   Kampen Real
    Institutional   Portfolio -   Portfolio -   - Institutional   Estate Portfolio
    Class   Service Class   Service Class   Class   - Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 362   $ 145   $ 13,111   $ 724   $ 17,289
Total assets   362   145   13,111   724   17,289
Net assets   $ 362   $ 145   $ 13,111   $ 724   $ 17,289
 
Net assets                    
Accumulation units   $ 359   $ 145   $ 13,111   $ -   $ 17,289
Contracts in payout (annuitization)   3   -   -   724   -
Total net assets   $ 362   $ 145   $ 13,111   $ 724   $ 17,289
 
Total number of mutual fund shares   52,199   21,054   830,355   51,174   1,227,902
 
Cost of mutual fund shares   $ 456   $ 268   $ 20,779   $ 1,561   $ 35,975
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        23            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING VP Index           ING
International
Growth
Opportunities
Fund - Class Q 		   
    Plus   ING VP Index   ING Wells     ING
    International   Plus   Fargo Small     International
    Equity Portfolio   International   Cap Disciplined     SmallCap
    - Institutional   Equity Portfolio   Portfolio -     Multi-Manager
    Class   - Service Class   Service Class     Fund - Class A
Assets                        
Investments in mutual funds                        
at fair value   $ 11,371   $ 2,933   $ 947   $ 7   $ 1,261
Total assets   11,371   2,933   947       7   1,261
Net assets   $ 11,371   $ 2,933   $ 947   $ 7   $ 1,261
 
Net assets                        
Accumulation units   $ 10,823   $ 2,933   $ 947   $ 7   $ 1,261
Contracts in payout (annuitization)   548   -   -       -   -
Total net assets   $ 11,371   $ 2,933   $ 947   $ 7   $ 1,261
 
Total number of mutual fund shares   2,203,711   569,601   151,321   1,260   55,950
 
Cost of mutual fund shares   $ 24,460   $ 6,297   $ 1,232   $ 15   $ 2,694
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        24                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING American   ING American   ING American   ING American    
    Century Large   Century Large   Century Small-   Century Small-    
    Company Value   Company Value   Mid Cap Value   Mid Cap Value   ING Baron
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Asset Portfolio -
    Adviser Class   Service Class   Adviser Class   Service Class   Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 78   $ 2,817   $ 39   $ 22,075   $ 2,126
Total assets   78   2,817   39   22,075   2,126
Net assets   $ 78   $ 2,817   $ 39   $ 22,075   $ 2,126
 
Net assets                    
Accumulation units   $ 78   $ 2,762   $ 39   $ 21,853   $ 2,126
Contracts in payout (annuitization)   -   55   -   222   -
Total net assets   $ 78   $ 2,817   $ 39   $ 22,075   $ 2,126
 
Total number of mutual fund shares   16,887   603,307   5,333   3,007,493   302,850
 
Cost of mutual fund shares   $ 157   $ 5,805   $ 55   $ 34,224   $ 3,451
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        25            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Baron   ING Baron   ING Columbia        
    Small Cap   Small Cap   Small Cap   ING Davis New   ING Fidelity®
    Growth   Growth   Value II   York Venture   VIP Mid Cap
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Service Class   Service Class   Service Class   Service Class
Assets                        
Investments in mutual funds                        
at fair value   $ 216   $ 66,236   $ 953   $ 8,589   $ 6,707
Total assets   216       66,236   953   8,589   6,707
Net assets   $ 216   $ 66,236   $ 953   $ 8,589   $ 6,707
 
Net assets                        
Accumulation units   $ 216   $ 65,732   $ 953   $ 8,333   $ 6,707
Contracts in payout (annuitization)   -       504   -   256   -
Total net assets   $ 216   $ 66,236   $ 953   $ 8,589   $ 6,707
 
Total number of mutual fund shares   19,865   5,977,936   139,758   705,142   755,297
 
Cost of mutual fund shares   $ 326   $ 95,544   $ 1,358   $ 12,697   $ 10,705
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             26                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Index   ING Index   ING Index   ING Index
Solution 2045
Portfolio -
Adviser Class 		  ING Index
    Solution 2015   Solution 2025   Solution 2035     Solution Income
    Portfolio -   Portfolio -   Portfolio -     Portfolio -
    Adviser Class   Adviser Class   Adviser Class     Adviser Class
Assets                            
Investments in mutual funds                            
at fair value   $ 37   $ 81   $ 51   $ 6   $ 1
Total assets   37       81   51       6   1
Net assets   $ 37   $ 81   $ 51   $ 6   $ 1
 
Net assets                            
Accumulation units   $ 37   $ 81   $ 51   $ 6   $ 1
Contracts in payout (annuitization)   -       -   -       -   -
Total net assets   $ 37   $ 81   $ 51   $ 6   $ 1
 
Total number of mutual fund shares   4,418       10,446   6,842   880   107
 
Cost of mutual fund shares   $ 36   $ 79   $ 50   $ 6   $ 1
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             27                    

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

            ING Legg   ING Legg   ING Legg
            Mason Partners   Mason Partners   Mason Partners
    ING JPMorgan  ING JPMorgan   Aggressive   Aggressive   Aggressive
    Mid Cap Value   Mid Cap Value   Growth   Growth   Growth
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Service Class   Adviser Class   Initial Class   Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 245   $ 21,120   $ 60   $ 84,378   $ 120
Total assets   245   21,120   60   84,378   120
Net assets   $ 245   $ 21,120   $ 60   $ 84,378   $ 120
 
Net assets                    
Accumulation units   $ 245   $ 20,508   $ 60   $ 84,259   $ 120
Contracts in payout (annuitization)   -   612   -   119   -
Total net assets   $ 245   $ 21,120   $ 60   $ 84,378   $ 120
 
Total number of mutual fund shares   26,528   2,273,437   2,098   2,872,944   4,149
 
Cost of mutual fund shares   $ 361   $ 33,201   $ 93   $ 119,107   $ 183
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        28            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                    ING
Oppenheimer
Strategic
Income
Portfolio -
Adviser Class
    ING Neuberger              
    Berman   ING   ING   ING  
    Partners   Oppenheimer   Oppenheimer   Oppenheimer  
    Portfolio -   Global Portfolio   Global Portfolio   Global Portfolio  
    Service Class   - Adviser Class   - Initial Class   - Service Class  
Assets                        
Investments in mutual funds                        
at fair value   $ 1,966   $ 238   $ 423,940   $ 267   $ 258
Total assets   1,966   238   423,940   267       258
Net assets   $ 1,966   $ 238   $ 423,940   $ 267   $ 258
 
Net assets                        
Accumulation units   $ 1,966   $ 238   $ 422,024   $ 267   $ 258
Contracts in payout (annuitization)   -   -   1,916   -       -
Total net assets   $ 1,966   $ 238   $ 423,940   $ 267   $ 258
 
Total number of mutual fund shares   358,800   27,074   46,689,450   30,222   29,071
 
Cost of mutual fund shares   $ 3,692   $ 394   $ 593,237   $ 457   $ 316
 
 
 
 
The accompanying notes are an integral part of these financial statements.        
 
        29                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING   ING            
    Oppenheimer   Oppenheimer            
    Strategic   Strategic   ING PIMCO   ING PIMCO   ING Pioneer
    Income   Income   Total Return   Total Return   High Yield
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Service Class   Adviser Class   Service Class   Initial Class
Assets                        
Investments in mutual funds                        
at fair value   $ 109,367   $ 216   $ 870   $ 104,849   $ 3,967
Total assets   109,367       216   870   104,849   3,967
Net assets   $ 109,367   $ 216   $ 870   $ 104,849   $ 3,967
 
Net assets                        
Accumulation units   $ 107,442   $ 204   $ 870   $ 102,645   $ 3,786
Contracts in payout (annuitization)   1,925       12   -   2,204   181
Total net assets   $ 109,367   $ 216   $ 870   $ 104,849   $ 3,967
 
Total number of mutual fund shares   12,206,158       24,098   79,737   9,523,059   609,350
 
Cost of mutual fund shares   $ 127,117   $ 245   $ 914   $ 107,673   $ 5,947
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             30                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Pioneer                
    High Yield   ING Solution   ING Solution   ING Solution   ING Solution
    Portfolio -   2015 Portfolio -   2015 Portfolio -   2025 Portfolio -   2025 Portfolio -
    Service Class   Adviser Class   Service Class   Adviser Class   Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 81   $ 10,621   $ 28,425   $ 12,028   $ 37,936
Total assets   81   10,621   28,425   12,028   37,936
Net assets   $ 81   $ 10,621   $ 28,425   $ 12,028   $ 37,936
 
Net assets                    
Accumulation units   $ 81   $ 10,621   $ 28,425   $ 12,028   $ 37,936
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 81   $ 10,621   $ 28,425   $ 12,028   $ 37,936
 
Total number of mutual fund shares   12,488   1,230,712   3,259,782   1,490,446   4,654,780
 
Cost of mutual fund shares   $ 125   $ 14,275   $ 38,058   $ 17,700   $ 54,516
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        31            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                    ING Solution
                    Growth and
    ING Solution   ING Solution   ING Solution   ING Solution   Income
    2035 Portfolio -   2035 Portfolio -   2045 Portfolio -   2045 Portfolio -   Portfolio -
    Adviser Class   Service Class   Adviser Class   Service Class   Service Class
Assets                    
Investments in mutual funds                    
at fair value   $ 9,767   $ 27,711   $ 6,465   $ 17,688   $ 625
Total assets   9,767   27,711   6,465   17,688   625
Net assets   $ 9,767   $ 27,711   $ 6,465   $ 17,688   $ 625
 
Net assets                    
Accumulation units   $ 9,767   $ 27,711   $ 6,465   $ 17,688   $ 625
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 9,767   $ 27,711   $ 6,465   $ 17,688   $ 625
 
Total number of mutual fund shares   1,230,150   3,455,199   820,419   2,227,745   81,823
 
Cost of mutual fund shares   $ 14,915   $ 41,018   $ 10,285   $ 26,784   $ 632
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        32            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

        ING Solution
Income
Portfolio -
Adviser Class 		      ING T. Rowe   ING T. Rowe
              Price Diversified   Price
    ING Solution     ING Solution   Mid Cap   Diversified Mid
    Growth     Income   Growth   Cap Growth
    Portfolio -     Portfolio -   Portfolio -   Portfolio -
    Service Class     Service Class   Adviser Class   Initial Class
Assets                        
Investments in mutual funds                        
at fair value   $ 174   $ 8,109   $ 6,949   $ 212   $ 200,073
Total assets   174       8,109   6,949   212   200,073
Net assets   $ 174   $ 8,109   $ 6,949   $ 212   $ 200,073
 
Net assets                        
Accumulation units   $ 174   $ 8,109   $ 6,949   $ 212   $ 199,575
Contracts in payout (annuitization)   -       -   -   -   498
Total net assets   $ 174   $ 8,109   $ 6,949   $ 212   $ 200,073
 
Total number of mutual fund shares   25,879       874,716   741,644   47,795   43,494,071
 
Cost of mutual fund shares   $ 181   $ 9,766   $ 8,344   $ 392   $ 334,643
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             33                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING T. Rowe                
    Price Diversified                
    Mid Cap   ING T. Rowe   ING T. Rowe   ING T. Rowe   ING Templeton
    Growth   Price Growth   Price Growth   Price Growth   Foreign Equity
    Portfolio -   Equity Portfolio   Equity Portfolio   Equity Portfolio   Portfolio -
    Service Class   - Adviser Class   - Initial Class   - Service Class   Adviser Class
Assets                    
Investments in mutual funds                    
at fair value   $ 272   $ 743   $ 141,775   $ 1,018   $ 143
Total assets   272   743   141,775   1,018   143
Net assets   $ 272   $ 743   $ 141,775   $ 1,018   $ 143
 
Net assets                    
Accumulation units   $ 272   $ 743   $ 141,038   $ 1,018   $ 143
Contracts in payout (annuitization)   -   -   737   -   -
Total net assets   $ 272   $ 743   $ 141,775   $ 1,018   $ 143
 
Total number of mutual fund shares   60,093   22,982   4,338,292   31,360   18,167
 
Cost of mutual fund shares   $ 499   $ 1,226   $ 199,711   $ 1,645   $ 219
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        34            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING Templeton   ING Templeton           ING UBS U.S.
    Foreign Equity   Foreign Equity   ING Thornburg   ING Thornburg   Large Cap
    Portfolio -   Portfolio -   Value Portfolio -   Value Portfolio -   Equity Portfolio
    Initial Class   Service Class   Adviser Class   Initial Class   - Adviser Class
Assets                        
Investments in mutual funds                        
at fair value   $ 75,608   $ 40   $ 295   $ 61,486   $ 43
Total assets   75,608       40   295   61,486   43
Net assets   $ 75,608   $ 40   $ 295   $ 61,486   $ 43
 
Net assets                        
Accumulation units   $ 74,216   $ 40   $ 295   $ 61,069   $ 43
Contracts in payout (annuitization)   1,392       -   -   417   -
Total net assets   $ 75,608   $ 40   $ 295   $ 61,486   $ 43
 
Total number of mutual fund shares   9,607,155       5,124   14,764   3,016,954   6,992
 
Cost of mutual fund shares   $ 123,712   $ 57   $ 492   $ 83,823   $ 67
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             35                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

            ING Van   ING Van   ING Van
    ING UBS U.S.   ING UBS U.S.   Kampen   Kampen   Kampen Equity
    Large Cap   Large Cap   Comstock   Comstock   and Income
    Equity Portfolio   Equity Portfolio   Portfolio -   Portfolio -   Portfolio -
    - Initial Class   - Service Class   Adviser Class   Service Class   Adviser Class
Assets                    
Investments in mutual funds                    
at fair value   $ 64,277   $ 6   $ 206   $ 42,974   $ 308
Total assets   64,277   6   206   42,974   308
Net assets   $ 64,277   $ 6   $ 206   $ 42,974   $ 308
 
Net assets                    
Accumulation units   $ 63,812   $ 6   $ 206   $ 41,813   $ 308
Contracts in payout (annuitization)   465   -   -   1,161   -
Total net assets   $ 64,277   $ 6   $ 206   $ 42,974   $ 308
 
Total number of mutual fund shares   10,367,269   938   29,103   6,035,702   12,119
 
Cost of mutual fund shares   $ 88,674   $ 9   $ 321   $ 71,304   $ 425
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        36            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

            ING VP   ING VP   ING VP
    ING Van   ING Van   Strategic   Strategic   Strategic
    Kampen Equity Kampen Equity     Allocation   Allocation   Allocation
    and Income   and Income   Conservative   Growth   Moderate
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Service Class   Class I   Class I   Class I
Assets                    
Investments in mutual funds                    
at fair value   $ 216,996   $ 157   $ 25,840   $ 48,875   $ 46,525
Total assets   216,996   157   25,840   48,875   46,525
Net assets   $ 216,996   $ 157   $ 25,840   $ 48,875   $ 46,525
 
Net assets                    
Accumulation units   $ 214,042   $ 157   $ 25,043   $ 48,311   $ 45,565
Contracts in payout (annuitization)   2,954   -   797   564   960
Total net assets   $ 216,996   $ 157   $ 25,840   $ 48,875   $ 46,525
 
Total number of mutual fund shares   8,427,011   6,147   2,827,144   5,400,536   5,112,678
 
Cost of mutual fund shares   $ 282,648   $ 223   $ 35,816   $ 75,174   $ 69,626
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        37            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING VP Growth   ING VP Growth   ING VP Growth        
    and Income   and Income   and Income   ING GET U.S.   ING GET U.S
    Portfolio -   Portfolio -   Portfolio -   Core Portfolio -   Core Portfolio
    Class A   Class I   Class S   Series 3   Series 5
Assets                    
Investments in mutual funds                    
at fair value   $ 371   $ 926,638   $ 305   $ 17,658   $ 481
Total assets   371   926,638   305   17,658   481
Net assets   $ 371   $ 926,638   $ 305   $ 17,658   $ 481
 
Net assets                    
Accumulation units   $ 371   $ 848,439   $ 305   $ 17,658   $ 481
Contracts in payout (annuitization)   -   78,199   -   -   -
Total net assets   $ 371   $ 926,638   $ 305   $ 17,658   $ 481
 
Total number of mutual fund shares   24,664   61,326,149   20,354   1,860,666   60,839
 
Cost of mutual fund shares   $ 510   $ 1,541,047   $ 461   $ 18,574   $ 590
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        38            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.
    Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -
    Series 6   Series 7   Series 8   Series 9   Series 10
Assets                    
Investments in mutual funds                    
at fair value   $ 2,235   $ 2,036   $ 774   $ 142   $ 70
Total assets   2,235   2,036   774   142   70
Net assets   $ 2,235   $ 2,036   $ 774   $ 142   $ 70
 
Net assets                    
Accumulation units   $ 2,235   $ 2,036   $ 774   $ 142   $ 70
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 2,235   $ 2,036   $ 774   $ 142   $ 70
 
Total number of mutual fund shares   274,253   254,131   97,087   17,845   8,422
 
Cost of mutual fund shares   $ 2,672   $ 2,450   $ 939   $ 171   $ 82
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        39            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                ING Lehman   ING
        ING BlackRock       Brothers U.S.   Opportunistic
        Global Science   ING   Aggregate Bond   Large Cap
    ING GET U.S.   and Technology   International   Index®   Growth
    Core Portfolio -   Portfolio -   Index Portfolio -   Portfolio -   Portfolio -
    Series 11   Class I   Class I   Class I   Class I
Assets                    
Investments in mutual funds                    
at fair value   $ 32   $ 23,396   $ 220   $ 1,559   $ 30,414
Total assets   32   23,396   220   1,559   30,414
Net assets   $ 32   $ 23,396   $ 220   $ 1,559   $ 30,414
 
Net assets                    
Accumulation units   $ 32   $ 23,396   $ 220   $ 1,559   $ 30,217
Contracts in payout (annuitization)   -   -   -   -   197
Total net assets   $ 32   $ 23,396   $ 220   $ 1,559   $ 30,414
 
Total number of mutual fund shares   3,847   7,133,002   34,346   154,050   4,369,887
 
Cost of mutual fund shares   $ 37   $ 31,297   $ 219   $ 1,528   $ 38,731
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        40            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING                
    Opportunistic   ING Russell™   ING Russell™   ING Russell™   ING VP Index
    Large Cap   Large Cap   Mid Cap Index   Small Cap   Plus LargeCap
    Value Portfolio -   Index Portfolio -   Portfolio -   Index Portfolio -   Portfolio -
    Class I   Class I   Class I   Class I   Class I
Assets                    
Investments in mutual funds                    
at fair value   $ 44,326   $ 2,675   $ 1,329   $ 635   $ 247,468
Total assets   44,326   2,675   1,329   635   247,468
Net assets   $ 44,326   $ 2,675   $ 1,329   $ 635   $ 247,468
 
Net assets                    
Accumulation units   $ 44,279   $ 2,675   $ 1,329   $ 635   $ 244,572
Contracts in payout (annuitization)   47   -   -   -   2,896
Total net assets   $ 44,326   $ 2,675   $ 1,329   $ 635   $ 247,468
 
Total number of mutual fund shares   5,124,416   371,052   200,452   81,883   23,703,860
 
Cost of mutual fund shares   $ 61,278   $ 2,735   $ 1,327   $ 793   $ 321,349
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        41            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING VP Index   ING VP Index   ING VP Index   ING VP Index   ING VP Index
    Plus LargeCap   Plus MidCap   Plus MidCap   Plus SmallCap   Plus SmallCap
    Portfolio -      Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class S   Class I   Class S   Class I   Class S
Assets                        
Investments in mutual funds                        
at fair value   $ 325   $ 212,512   $ 260   $ 85,771   $ 58
Total assets   325       212,512   260   85,771   58
Net assets   $ 325   $ 212,512   $ 260   $ 85,771   $ 58
 
Net assets                        
Accumulation units   $ 325   $ 211,588   $ 260   $ 85,160   $ 58
Contracts in payout (annuitization)   -       924   -   611   -
Total net assets   $ 325   $ 212,512   $ 260   $ 85,771   $ 58
 
Total number of mutual fund shares   31,416   21,379,487   26,511   9,114,925   6,224
 
Cost of mutual fund shares   $ 461   $ 351,940   $ 397   $ 142,192   $ 77
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             42                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

        ING VP Small
Company
Portfolio -
Class S 		          ING VP
    ING VP Small     ING VP   ING VP   MidCap
    Company     International   International   Opportunities
    Portfolio -     Value Portfolio -   Value Portfolio -   Portfolio -
    Class I     Class I   Class S   Class I
Assets                        
Investments in mutual funds                        
at fair value   $ 86,261   $ 100   $ 84,985   $ 248   $ 8,648
Total assets   86,261       100   84,985   248   8,648
Net assets   $ 86,261   $ 100   $ 84,985   $ 248   $ 8,648
 
Net assets                        
Accumulation units   $ 85,238   $ 100   $ 83,166   $ 248   $ 8,648
Contracts in payout (annuitization)   1,023       -   1,819   -   -
Total net assets   $ 86,261   $ 100   $ 84,985   $ 248   $ 8,648
 
Total number of mutual fund shares   7,372,764       8,666   12,553,214   35,832   1,351,228
 
Cost of mutual fund shares   $ 137,055   $ 143   $ 162,722   $ 433   $ 12,092
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             43                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    ING VP
MidCap
Opportunities
Portfolio -
Class S 		  ING VP
SmallCap
Opportunities
Portfolio -
Class I 		  ING VP
SmallCap
Opportunities
PortClass S		   ING VP
Balanced
Portfolio -
Class I 		  ING VP
Intermediate
Bond Portfolio -
Class I
           
           
           
           
Assets                            
Investments in mutual funds                            
at fair value   $ 108   $ 8,367   $ 47   $ 314,926   $ 350,384
Total assets   108       8,367       47   314,926   350,384
Net assets   $ 108   $ 8,367   $ 47   $ 314,926   $ 350,384
 
Net assets                            
Accumulation units   $ 108   $ 8,367   $ 47   $ 297,925   $ 344,443
Contracts in payout (annuitization)   -       -       -   17,001   5,941
Total net assets   $ 108   $ 8,367   $ 47   $ 314,926   $ 350,384
 
Total number of mutual fund shares   17,148       681,911   3,873   34,305,617   31,623,122
 
Cost of mutual fund shares   $ 147   $ 13,005   $ 65   $ 445,705   $ 420,367
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             44                    

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                    Janus Aspen
            Janus Aspen   Janus Aspen   Series Large
    ING VP   ING VP Money   Series Balanced   Series Flexible   Cap Growth
    Intermediate   Market   Portfolio -   Bond Portfolio -   Portfolio -
    Bond Portfolio -   Portfolio -   Institutional   Institutional   Institutional
    Class S   Class I   Shares   Shares   Shares
Assets                    
Investments in mutual funds                    
at fair value   $ 212   $ 541,019   $ 236   $ 98   $ 75
Total assets   212   541,019   236   98   75
Net assets   $ 212   $ 541,019   $ 236   $ 98   $ 75
 
Net assets                    
Accumulation units   $ 212   $ 527,341   $ 236   $ 98   $ 75
Contracts in payout (annuitization)   -   13,678   -   -   -
Total net assets   $ 212   $ 541,019   $ 236   $ 98   $ 75
 
Total number of mutual fund shares   19,237   541,019,379   10,300   8,445   4,759
 
Cost of mutual fund shares   $ 243   $ 541,019   $ 285   $ 96   $ 114
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        45            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

Janus Aspen
    Janus Aspen   Series            
    Series Mid Cap   Worldwide            
    Growth   Growth   Lazard U.S.       Loomis Sayles
    Portfolio -   Portfolio -   Mid Cap Equity       Small Cap
    Institutional   Institutional   Portfolio - Open   LKCM Aquinas   Value Fund -
    Shares   Shares   Shares   Growth Fund   Retail Class
Assets                    
Investments in mutual funds                    
at fair value   $ 240   $ 154   $ 388   $ 206   $ 905
Total assets   240   154   388   206   905
Net assets   $ 240   $ 154   $ 388   $ 206   $ 905
 
Net assets                    
Accumulation units   $ 240   $ 154   $ 388   $ 206   $ 905
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 240   $ 154   $ 388   $ 206   $ 905
 
Total number of mutual fund shares   11,276   8,002   52,380   18,752   54,716
 
Cost of mutual fund shares   $ 395   $ 261   $ 614   $ 275   $ 851
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        46            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

            Lord Abbett        
    Lord Abbett   Lord Abbett   Series Fund -   Massachusetts   Morgan Stanley
    Mid-Cap Value   Small-Cap   Mid-Cap Value   Investors   U.S. Small Cap
    Fund, Inc. -   Value Fund -   Portfolio -   Growth Stock   Value Portfolio -
    Class A   Class A   Class VC   Fund - Class A   Class I
Assets                    
Investments in mutual funds                    
at fair value   $ 739   $ 1,074   $ 75,150   $ 364   $ 841
Total assets   739   1,074   75,150   364   841
Net assets   $ 739   $ 1,074   $ 75,150   $ 364   $ 841
 
Net assets                    
Accumulation units   $ 739   $ 1,074   $ 74,515   $ 364   $ 841
Contracts in payout (annuitization)   -   -   635   -   -
Total net assets   $ 739   $ 1,074   $ 75,150   $ 364   $ 841
 
Total number of mutual fund shares   70,881   55,991   7,150,286   37,958   52,936
 
Cost of mutual fund shares   $ 1,386   $ 1,619   $ 140,292   $ 507   $ 1,056
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        47            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    Neuberger                
    Berman Socially           Oppenheimer   Oppenheimer
    Responsive   New Perspective New Perspective     Capital   Developing
    Fund® - Trust   Fund®, Inc. -   Fund®, Inc. -   Appreciation   Markets Fund -
    Class   Class R-3   Class R-4   Fund - Class A   Class A
Assets                    
Investments in mutual funds                    
at fair value   $ 2,187   $ 2,657   $ 39,040   $ 363   $ 114,355
Total assets   2,187   2,657   39,040   363   114,355
Net assets   $ 2,187   $ 2,657   $ 39,040   $ 363   $ 114,355
 
Net assets                    
Accumulation units   $ 2,187   $ 2,657   $ 39,040   $ 363   $ 114,355
Contracts in payout (annuitization)   -   -   -   -   -
Total net assets   $ 2,187   $ 2,657   $ 39,040   $ 363   $ 114,355
 
Total number of mutual fund shares   199,183   142,782   2,085,489   13,051   7,196,695
 
Cost of mutual fund shares   $ 3,256   $ 4,240   $ 60,079   $ 568   $ 224,759
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        48            

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

        Oppenheimer
Main Street
Fund®/VA 		  Oppenheimer   Oppenheimer
MidCap
Fund/VA 		   
    Oppenheimer     Main Street     Oppenheimer
    Global     Small Cap     Strategic Bond
    Securities/VA     Fund®/VA     Fund/VA
Assets                            
Investments in mutual funds                            
at fair value   $ 247   $ 63   $ 4,655   $ 13   $ 105
Total assets   247       63   4,655       13   105
Net assets   $ 247   $ 63   $ 4,655   $ 13   $ 105
 
Net assets                            
Accumulation units   $ 247   $  -   $ 4,655   $ -   $ 105
Contracts in payout (annuitization)   -       63   -       13   -
Total net assets   $ 247   $ 63   $ 4,655   $ 13   $ 105
 
Total number of mutual fund shares   12,239       4,333   437,118   484   23,366
 
Cost of mutual fund shares   $ 402   $ 96   $ 7,787   $ 27   $ 121
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        49                    

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                Pioneer  
        PIMCO Real       Emerging   Pioneer Equity
        Return Portfolio   Pioneer High   Markets VCT   Income VCT
    Pax World   - Administrative   Yield Fund -   Portfolio -   Portfolio -
    Balanced Fund   Class   Class A   Class I   Class I
Assets                        
Investments in mutual funds                        
at fair value   $ 44,509   $ 67,423   $ 2,557   $ 11,735   $ -
Total assets   44,509   67,423   2,557   11,735       -
Net assets   $ 44,509   $ 67,423   $ 2,557   $ 11,735   $ -
 
Net assets                        
Accumulation units   $ 44,509   $ 67,423   $ 2,557   $ 11,735   $ -
Contracts in payout (annuitization)   -   -   -   -       -
Total net assets   $ 44,509   $ 67,423   $ 2,557   $ 11,735   $ -
 
Total number of mutual fund shares   2,618,181   5,987,814   422,592   740,871       3
 
Cost of mutual fund shares   $ 62,639   $ 75,331   $ 4,360   $ 28,396   $ -
 
 
 
 
The accompanying notes are an integral part of these financial statements.        
 
        50                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

          RiverSource        
    Pioneer High     Diversified        
    Yield VCT   Premier VIT   Equity Income   SMALLCAP   T. Rowe Price
    Portfolio -   OpCap Mid   Fund -   World Fund® -   Mid-Cap Value
    Class I   Cap Portfolio   Class R-4   Class R-4   Fund - R Class
Assets                        
Investments in mutual funds                        
at fair value   $ 11,678   $ 2,476   $ 1,464   $ 434   $ 699
Total assets   11,678       2,476   1,464   434   699
Net assets   $ 11,678   $ 2,476   $ 1,464   $ 434   $ 699
 
Net assets                        
Accumulation units   $ 11,678   $ 2,476   $ 1,464   $ 434   $ 699
Contracts in payout (annuitization)   -       -   -   -   -
Total net assets   $ 11,678   $ 2,476   $ 1,464   $ 434   $ 699
 
Total number of mutual fund shares   1,807,810       285,892   207,005   21,109   49,531
 
Cost of mutual fund shares   $ 19,292   $ 3,586   $ 1,715   $ 584   $ 1,140
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
        51                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    T. Rowe Price   Templeton   Templeton        
    Value Fund -   Foreign Fund -   Global Bond   Diversified   Equity Income
    Advisor Class   Class A   Fund - Class A   Value Portfolio   Portfolio
Assets                        
Investments in mutual funds                        
at fair value   $ 44   $ 658   $ 110,722   $ 80   $ 165
Total assets   44       658   110,722   80   165
Net assets   $ 44   $ 658   $ 110,722   $ 80   $ 165
 
Net assets                        
Accumulation units   $ 44   $ 658   $ 110,722   $ 80   $ 165
Contracts in payout (annuitization)   -       -   -   -   -
Total net assets   $ 44   $ 658   $ 110,722   $ 80   $ 165
 
Total number of mutual fund shares   2,900       148,086   9,885,860   8,329   13,628
 
Cost of mutual fund shares   $ 72   $ 1,473   $ 112,276   $ 120   $ 245
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             52                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

                  Washington
                  Mutual
    Small Company             Investors
    Growth   Wanger           FundSM, Inc. -
    Portfolio   International   Wanger Select   Wanger USA   Class R-3
Assets                        
Investments in mutual funds                        
at fair value   $ 64   $ 6,819   $ 35,288   $ 14,699   $ 3,911
Total assets   64       6,819   35,288   14,699   3,911
Net assets   $ 64   $ 6,819   $ 35,288   $ 14,699   $ 3,911
 
Net assets                        
Accumulation units   $ 64   $ 6,819   $ 35,288   $ 14,699   $ 3,911
Contracts in payout (annuitization)   -       -   -   -   -
Total net assets   $ 64   $ 6,819   $ 35,288   $ 14,699   $ 3,911
 
Total number of mutual fund shares   6,560       329,583   2,544,208   761,615   183,610
 
Cost of mutual fund shares   $ 113   $ 12,377   $ 66,699   $ 25,154   $ 5,817
 
 
 
 
The accompanying notes are an integral part of these financial statements.    
 
             53                

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Assets and Liabilities
December 31, 2008
(Dollars in thousands)

    Washington   Wells Fargo
    Mutual   Advantage
    Investors   Small Cap
    FundSM, Inc. -   Value Fund -
    Class R-4   Class A
Assets        
Investments in mutual funds        
                                             at fair value   $ 60,944   $ 46
Total assets   60,944   46
Net assets   $ 60,944   $ 46
 
Net assets        
Accumulation units   $ 60,944   $ 46
Contracts in payout (annuitization)   -   -
Total net assets   $ 60,944   $ 46
 
Total number of mutual fund shares   2,855,858   2,590
 
Cost of mutual fund shares   $ 89,362   $ 76
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
    54     

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

              AIM V.I.    
            AIM Global   Capital    
    AIM Mid Cap   AIM Small Cap   Health Care   Appreciation   AIM V.I. Core
    Core Equity   Growth Fund -   Fund - Investor   Fund - Series I   Equity Fund -
    Fund - Class A   Class A   Class   Shares   Series I Shares
Net investment income (loss)                        
Income:                        
     Dividends   $ 2   $ -   $ -   $ -   $ 901
Total investment income   2   -       -   -   901
Expenses:                        
     Mortality, expense risk and                        
other charges   2   -       2   270   435
Total expenses   2   -       2   270   435
Net investment income (loss)   -   -       (2)   (270)   466
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   (29)   (9)       (4)   831   1,359
Capital gains distributions   10   1       4   -   -
Total realized gain (loss) on investments                        
     and capital gains distributions   (19)   (8)       -   831   1,359
Net unrealized appreciation                        
     (depreciation) of investments   (65)   (11)       (44)   (14,466)   (16,338)
Net realized and unrealized gain (loss)                        
     on investments   (84)   (19)       (44)   (13,635)   (14,979)
Net increase (decrease) in net assets                        
     resulting from operations   $ (84)   $ (19)   $ (46)   $ (13,905)   $ (14,513)

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

55

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            Allianz NFJ    
        AllianceBernstein   Large-Cap   Allianz NFJ
    AllianceBernstein   Growth and   Value Fund -   Small-Cap
    Growth and Income   Income Portfolio -   Institutional   Value Fund -
    Fund, Inc. - Class A   Class A   Class   Class A
Net investment income (loss)                
Income:                
     Dividends   $ 3   $ 11   $ 8   $ 5
Total investment income   3   11   8   5
Expenses:                
     Mortality, expense risk and                
other charges   1   6   -   5
Total expenses   1   6   -   5
Net investment income (loss)   2   5   8   -
 
Realized and unrealized gain (loss)                
     on investments                
Net realized gain (loss) on investments   (5)   (30)   (120)   (24)
Capital gains distributions   -   90   -   33
Total realized gain (loss) on investments                
     and capital gains distributions   (5)   60   (120)   9
Net unrealized appreciation                
     (depreciation) of investments   (78)   (321)   (110)   (140)
Net realized and unrealized gain (loss)                
     on investments   (83)   (261)   (230)   (131)
Net increase (decrease) in net assets                
     resulting from operations   $ (81)   $ (256)   $ (222)   $ (131)

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

56

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        American   American    
        Balanced   Century Income   Ariel
    Amana Growth   Amana Income   Fund® -   & Growth Fund   Appreciation
    Fund   Fund   Class R-3   - A Class   Fund
Net investment income (loss)                            
Income:                            
     Dividends   $ -   $ -   $ 153   $ 72   $ 3
Total investment income       -       -   153   72   3
Expenses:                            
     Mortality, expense risk and                            
other charges       -       -   40   48   5
Total expenses       -       -   40   48   5
Net investment income (loss)       -       -   113   24   (2)
 
Realized and unrealized gain (loss)                            
     on investments                            
Net realized gain (loss) on investments       -       -   (97)   (228)   (17)
Capital gains distributions       -       -   47   -   46
Total realized gain (loss) on investments                            
     and capital gains distributions       -       -   (50)   (228)   29
Net unrealized appreciation                            
     (depreciation) of investments       1       1   (1,566)   (1,827)   (284)
Net realized and unrealized gain (loss)                            
     on investments       1       1   (1,616)   (2,055)   (255)
Net increase (decrease) in net assets                            
     resulting from operations   $ 1   $ 1   $ (1,503)   $ (2,031)   $ (257)

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

57

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        Artisan            
        International   The Bond Fund   Calvert Social   Capital One
        Fund - Investor   of AmericaSM,   Balanced   Mid Cap Equity
    Ariel Fund   Shares   Inc. - Class R-4   Portfolio   Fund - Class A
Net investment income (loss)                        
Income:                        
     Dividends   $ 10   $ 4   $ 39   $ 1,199   $ -
Total investment income   10       4   39   1,199   -
Expenses:                        
     Mortality, expense risk and                        
other charges   8       1   6   523   1
Total expenses   8       1   6   523   1
Net investment income (loss)   2       3   33   676   (1)
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   (68)       (56)   (89)   (1,523)   (58)
Capital gains distributions   -       13   12   670   -
Total realized gain (loss) on investments                        
     and capital gains distributions   (68)       (43)   (77)   (853)   (58)
Net unrealized appreciation                        
     (depreciation) of investments   (363)       (33)   (82)   (17,531)   14
Net realized and unrealized gain (loss)                        
     on investments   (431)       (76)   (159)   (18,384)   (44)
Net increase (decrease) in net assets                        
     resulting from operations   $ (429)   $ (73)   $ (126)   $ (17,708)   $ (45)

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

58

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ColumbiaSM   Columbia Mid   Columbia Mid   DWS Equity   EuroPacific
    Acorn Fund® -   Cap Value Fund   Cap Value Fund   500 Index Fund   Growth Fund®
    Class Z   - Class A   - Class Z   - Class S   - Class R-3
Net investment income (loss)                    
Income:                    
     Dividends   $ 1   $ 10   $ 6   $ 4   $ 159
Total investment income   1   10   6   4   159
Expenses:                    
     Mortality, expense risk and                    
other charges   -   2   -   2   49
Total expenses   -   2   -   2   49
Net investment income (loss)   1   8   6   2   110
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (61)   (19)   (25)   (5)   80
Capital gains distributions   11   -   -   -   336
Total realized gain (loss) on investments                    
     and capital gains distributions   (50)   (19)   (25)   (5)   416
Net unrealized appreciation                    
     (depreciation) of investments   (283)   (61)   (194)   (96)   (5,005)
Net realized and unrealized gain (loss)                    
     on investments   (333)   (80)   (219)   (101)   (4,589)
Net increase (decrease) in net assets                    
     resulting from operations   $ (332)   $ (72)   $ (213)   $ (99)   $ (4,479)

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

59

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            Fidelity® VIP   Fidelity® VIP   Fidelity® VIP
    EuroPacific   Evergreen   Equity-Income   Growth   High Income
    Growth Fund®   Special Values   Portfolio -   Portfolio -   Portfolio -
    - Class R-4   Fund - Class A   Initial Class   Initial Class   Initial Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 4,099   $ 854   $ 7,891   $ 2,034   $ 555
Total investment income   4,099   854   7,891   2,034   555
Expenses:                    
     Mortality, expense risk and                    
other charges   1,845   826   3,236   2,594   67
Total expenses   1,845   826   3,236   2,594   67
Net investment income (loss)   2,254   28   4,655   (560)   488
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   794   (4,347)   (8,840)   (11,477)   (251)
Capital gains distributions   7,211   6   347   -   -
Total realized gain (loss) on investments                    
     and capital gains distributions   8,005   (4,341)   (8,493)   (11,477)   (251)
Net unrealized appreciation                    
     (depreciation) of investments   (111,600)   (25,388)   (167,463)   (137,412)   (2,028)
Net realized and unrealized gain (loss)                    
     on investments   (103,595)   (29,729)   (175,956)   (148,889)   (2,279)
Net increase (decrease) in net assets                    
     resulting from operations   $ (101,341)   $ (29,701)   $ (171,301)   $ (149,449)   $ (1,791)

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

60

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

                    Fidelity® VIP
    Fidelity® VIP   Fidelity® VIP   Fidelity® VIP   Fidelity® VIP   Asset
    Overseas   Contrafund®   Index 500   Mid Cap   ManagerSM
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Initial Class   Initial Class   Initial Class   Initial Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 1,155   $ 10,440   $ 2,248   $ 49   $ 538
Total investment income   1,155   10,440   2,248   49   538
Expenses:                    
     Mortality, expense risk and                    
other charges   469   10,199   1,032   -   193
Total expenses   469   10,199   1,032   -   193
Net investment income (loss)   686   241   1,216   49   345
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   614   (10,201)   (727)   (209)   (201)
Capital gains distributions   5,717   30,268   1,133   1,430   1,871
Total realized gain (loss) on investments                    
     and capital gains distributions   6,331   20,067   406   1,221   1,670
Net unrealized appreciation                    
     (depreciation) of investments   (32,555)   (575,536)   (47,617)   (5,975)   (8,664)
Net realized and unrealized gain (loss)                    
     on investments   (26,224)   (555,469)   (47,211)   (4,754)   (6,994)
Net increase (decrease) in net assets                    
     resulting from operations   $ (25,538)   $ (555,228)   $ (45,995)   $ (4,705)   $ (6,649)

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

61

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        Franklin Small-   Franklin Small      
    Mutual   Mid Cap   Cap Value   Fundamental   Fundamental
    Discovery Fund   Growth Fund -   Securities Fund   Investors, Inc. -   Investors, Inc. -
    - Class R   Class A   - Class 2   Class R-3   Class R-4
Net investment income (loss)                        
Income:                        
     Dividends   $ 27   $ 1   $ 941   $ -   $ 48
Total investment income   27   1   941       -   48
Expenses:                        
     Mortality, expense risk and                        
other charges   16   5   752       -   20
Total expenses   16   5   752       -   20
Net investment income (loss)   11   (4)   189       -   28
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   32   (39)   (142)       -   (116)
Capital gains distributions   76   -   6,516       -   33
Total realized gain (loss) on investments                        
     and capital gains distributions   108   (39)   6,374       -   (83)
Net unrealized appreciation                        
     (depreciation) of investments   (884)   (243)   (37,896)       -   (1,214)
Net realized and unrealized gain (loss)                        
     on investments   (776)   (282)   (31,522)       -   (1,297)
Net increase (decrease) in net assets                        
     resulting from operations   $ (765)   $ (286)   $ (31,333)   $ -   $ (1,269)

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

62

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    The Growth   The Growth   The Income        
    Fund of   Fund of   Fund of   ING Financial    
    America® -   America® -   America® -   Services Fund -   ING Real Estate
    Class R-3   Class R-4   Class R-3   Class A   Fund - Class A
Net investment income (loss)                    
Income:                    
     Dividends   $ 75   $ 2,115   $ 73   $ 2   $ 55
Total investment income   75   2,115   73   2   55
Expenses:                    
     Mortality, expense risk and                    
other charges   83   2,135   12   1   13
Total expenses   83   2,135   12   1   13
Net investment income (loss)   (8)   (20)   61   1   42
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (22)   382   (36)   (9)   (103)
Capital gains distributions   -   -   5   1   -
Total realized gain (loss) on investments                    
     and capital gains distributions   (22)   382   (31)   (8)   (103)
Net unrealized appreciation                    
     (depreciation) of investments   (5,721)   (110,408)   (621)   (56)   (668)
Net realized and unrealized gain (loss)                    
     on investments   (5,743)   (110,026)   (652)   (64)   (771)
Net increase (decrease) in net assets                    
     resulting from operations   $ (5,751)   $ (110,046)   $ (591)   $ (63)   $ (729)

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

63

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

              ING BlackRock    
          ING   Large Cap   ING BlackRock
        ING   AllianceBernstein   Growth   Large Cap
    ING GNMA   Intermediate   Mid Cap Growth   Portfolio -   Growth
    Income Fund -   Bond Fund -   Portfolio - Service   Institutional   Portfolio -
    Class A   Class A   Class   Class   Service Class
Net investment income (loss)                        
Income:                        
     Dividends   $ 75   $ 145   $ -   $ 181   $ -
Total investment income   75       145   -   181   -
Expenses:                        
     Mortality, expense risk and                        
other charges   14       21   31   935   -
Total expenses   14       21   31   935   -
Net investment income (loss)   61       124   (31)   (754)   -
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   -       (30)   (569)   (4,444)   -
Capital gains distributions   -       105   622   10,465   7
Total realized gain (loss) on investments                        
     and capital gains distributions   -       75   53   6,021   7
Net unrealized appreciation                        
     (depreciation) of investments   80       (577)   (1,906)   (49,073)   (47)
Net realized and unrealized gain (loss)                        
     on investments   80       (502)   (1,853)   (43,052)   (40)
Net increase (decrease) in net assets                        
     resulting from operations   $ 141   $ (378)   $ (1,884)   $ (43,806)   $ (40)

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

64

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING BlackRock               ING Global
    Large Cap   ING Evergreen       ING FMRSM   Real Estate
    Growth   Health Sciences   ING Evergreen   Diversified Mid   Portfolio -
    Portfolio -   Portfolio -   Omega Portfolio   Cap Portfolio -   Institutional
    Service 2 Class   Service Class   - Service Class   Service Class   Class
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ 10   $ -   $ 192   $ -
Total investment income   -   10   -   192   -
Expenses:                    
     Mortality, expense risk and                    
other charges   -   62   -   197   121
Total expenses   -   62   -   197   121
Net investment income (loss)   -   (52)   -   (5)   (121)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (27)   (73)   (1)   (101)   (913)
Capital gains distributions   16   359   -   1,578   -
Total realized gain (loss) on investments                    
     and capital gains distributions   (11)   286   (1)   1,477   (913)
Net unrealized appreciation                    
     (depreciation) of investments   (52)   (2,687)   -   (11,681)   (15,512)
Net realized and unrealized gain (loss)                    
     on investments   (63)   (2,401)   (1)   (10,204)   (16,425)
Net increase (decrease) in net assets                    
     resulting from operations   $ (63)   $ (2,453)   $ (1)   $ (10,209)   $ (16,546)

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

65

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

                    ING JPMorgan
    ING Global           ING JPMorgan   Emerging
    Resources   ING Global   ING Janus   Emerging   Markets Equity
    Portfolio -   Resources   Contrarian   Markets Equity   Portfolio -
    Institutional   Portfolio -   Portfolio -   Portfolio -   Institutional
    Class   Service Class   Service Class   Adviser Class   Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 1   $ 1,907   $ 43   $ 10   $ 826
Total investment income   1   1,907   43   10   826
Expenses:                    
     Mortality, expense risk and                    
other charges   -   1,093   37   1   314
Total expenses   -   1,093   37   1   314
Net investment income (loss)   1   814   6   9   512
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   -   (2,476)   (260)   (126)   1,440
Capital gains distributions   6   19,460   1,010   25   1,862
Total realized gain (loss) on investments                    
     and capital gains distributions   6   16,984   750   (101)   3,302
Net unrealized appreciation                    
     (depreciation) of investments   (24)   (74,214)   (5,728)   (153)   (25,117)
Net realized and unrealized gain (loss)                    
     on investments   (18)   (57,230)   (4,978)   (254)   (21,815)
Net increase (decrease) in net assets                    
     resulting from operations   $ (17)   $ (56,416)   $ (4,972)   $ (245)   $ (21,303)

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

66

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            ING JPMorgan        
    ING JPMorgan       Value   ING JPMorgan    
    Emerging   ING JPMorgan   Opportunities   Value   ING Julius Baer
    Markets Equity   Small Cap Core   Portfolio -   Opportunities   Foreign
    Portfolio -   Equity Portfolio   Institutional   Portfolio -   Portfolio -
    Service Class   - Service Class   Class   Service Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 688   $ 11   $ 2   $ 45   $ -
Total investment income   688   11   2   45   -
Expenses:                    
     Mortality, expense risk and                    
other charges   301   21   1   13   495
Total expenses   301   21   1   13   495
Net investment income (loss)   387   (10)   1   32   (495)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   1,270   (176)   (22)   (236)   (655)
Capital gains distributions   1,698   214   6   149   5,253
Total realized gain (loss) on investments                    
     and capital gains distributions   2,968   38   (16)   (87)   4,598
Net unrealized appreciation                    
     (depreciation) of investments   (22,553)   (903)   (8)   (626)   (31,754)
Net realized and unrealized gain (loss)                    
     on investments   (19,585)   (865)   (24)   (713)   (27,156)
Net increase (decrease) in net assets                    
     resulting from operations   $ (19,198)   $ (875)   $ (23)   $ (681)   $ (27,651)

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

67

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        ING Lord            
        Abbett   ING Lord   ING Marsico    
    ING Legg   Affiliated   Abbett   Growth   ING Marsico
    Mason Value   Portfolio -   Affiliated   Portfolio -   Growth
    Portfolio -   Institutional   Portfolio -   Institutional   Portfolio -
    Service Class   Class   Service Class   Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ 3,328   $ 17   $ 59   $ 2
Total investment income   -   3,328   17   59   2
Expenses:                    
     Mortality, expense risk and                    
other charges   29   1,015   4   46   16
Total expenses   29   1,015   4   46   16
Net investment income (loss)   (29)   2,313   13   13   (14)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (1,498)   (5,811)   (26)   (350)   120
Capital gains distributions   554   14,963   92   -   -
Total realized gain (loss) on investments                    
     and capital gains distributions   (944)   9,152   66   (350)   120
Net unrealized appreciation                    
     (depreciation) of investments   (1,123)   (57,524)   (350)   (2,548)   (600)
Net realized and unrealized gain (loss)                    
     on investments   (2,067)   (48,372)   (284)   (2,898)   (480)
Net increase (decrease) in net assets                    
     resulting from operations   $ (2,096)   $ (46,059)   $ (271)   $ (2,885)   $ (494)

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

68

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Marsico   ING Marsico            
    International   International       ING MFS Total    
    Opportunities   Opportunities   ING MFS Total   Return Portfolio   ING MFS Total
    Portfolio -   Portfolio -   Return Portfolio   - Institutional   Return Portfolio
    Adviser Class   Service Class   - Adviser Class   Class   - Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ 102   $ 26   $ 4,159   $ 1,671
Total investment income   -   102   26   4,159   1,671
Expenses:                    
     Mortality, expense risk and                    
other charges   -   101   2   653   309
Total expenses   -   101   2   653   309
Net investment income (loss)   -   1   24   3,506   1,362
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (56)   (601)   (82)   (2,102)   (1,536)
Capital gains distributions   15   1,059   57   6,268   2,811
Total realized gain (loss) on investments                    
     and capital gains distributions   (41)   458   (25)   4,166   1,275
Net unrealized appreciation                    
     (depreciation) of investments   (33)   (6,943)   (159)   (24,202)   (9,967)
Net realized and unrealized gain (loss)                    
     on investments   (74)   (6,485)   (184)   (20,036)   (8,692)
Net increase (decrease) in net assets                    
     resulting from operations   $ (74)   $ (6,484)   $ (160)   $ (16,530)   $ (7,330)

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

69

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        ING   ING PIMCO       ING Pioneer
    ING MFS   Oppenheimer   High Yield   ING PIMCO   Equity Income
    Utilities   Main Street   Portfolio -   High Yield   Portfolio -
    Portfolio -   Portfolio® -   Institutional   Portfolio -   Institutional
    Service Class   Service Class   Class   Service Class   Class
Net investment income (loss)                        
Income:                        
     Dividends   $ 1,116   $ 50   $ 63   $ 456   $ 4,229
Total investment income   1,116       50   63   456   4,229
Expenses:                        
     Mortality, expense risk and                        
other charges   341       19   7   52   1,323
Total expenses   341       19   7   52   1,323
Net investment income (loss)   775       31   56   404   2,906
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   (265)       (453)   (79)   (588)   (2,534)
Capital gains distributions   3,979       -   -   2   -
Total realized gain (loss) on investments                        
     and capital gains distributions   3,714       (453)   (79)   (586)   (2,534)
Net unrealized appreciation                        
     (depreciation) of investments   (20,213)       (434)   (157)   (1,227)   (48,595)
Net realized and unrealized gain (loss)                        
     on investments   (16,499)       (887)   (236)   (1,813)   (51,129)
Net increase (decrease) in net assets                        
     resulting from operations   $ (15,724)   $ (856)   $ (180)   $ (1,409)   $ (48,223)

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

70

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

                ING Pioneer    
    ING Pioneer       ING Pioneer   Mid Cap Value   ING Pioneer
    Fund Portfolio -   ING Pioneer   Mid Cap Value   Portfolio -   Mid Cap Value
    Institutional   Fund Portfolio -   Portfolio -   Institutional   Portfolio -
    Class   Service Class   Adviser Class   Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 533   $ 4   $ -   $ 1,770   $ 4
Total investment income   533   4   -   1,770   4
Expenses:                    
     Mortality, expense risk and                    
other charges   112   1   -   774   1
Total expenses   112   1   -   774   1
Net investment income (loss)   421   3   -   996   3
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (309)   (3)   (1)   (2,139)   (1)
Capital gains distributions   570   5   -   5,136   10
Total realized gain (loss) on investments                    
     and capital gains distributions   261   2   (1)   2,997   9
Net unrealized appreciation                    
     (depreciation) of investments   (6,636)   (53)   (1)   (36,707)   (74)
Net realized and unrealized gain (loss)                    
     on investments   (6,375)   (51)   (2)   (33,710)   (65)
Net increase (decrease) in net assets                    
     resulting from operations   $ (5,954)   $ (48)   $ (2)   $ (32,714)   $ (62)

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

71

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        ING T. Rowe           ING Templeton
    ING Stock   Price Capital   ING T. Rowe   ING T. Rowe   Global Growth
    Index Portfolio -   Appreciation   Price Equity   Price Equity   Portfolio -
Institutional Portfolio - Income Portfolio Income Portfolio Institutional
    Class   Service Class   - Adviser Class   - Service Class   Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 115   $ 7,860   $ 36   $ 4,033   $ 14
Total investment income   115   7,860   36   4,033   14
Expenses:                    
     Mortality, expense risk and                    
other charges   3   1,646   4   868   11
Total expenses   3   1,646   4   868   11
Net investment income (loss)   112   6,214   32   3,165   3
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (8)   (1,259)   (90)   (66)   (23)
Capital gains distributions   32   16,855   98   7,642   42
Total realized gain (loss) on investments                    
     and capital gains distributions   24   15,596   8   7,576   19
Net unrealized appreciation                    
     (depreciation) of investments   (1,486)   (79,630)   (532)   (49,945)   (514)
Net realized and unrealized gain (loss)                    
     on investments   (1,462)   (64,034)   (524)   (42,369)   (495)
Net increase (decrease) in net assets                    
     resulting from operations   $ (1,350)   $ (57,820)   $ (492)   $ (39,204)   $ (492)

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

72

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        ING Van           ING Van
        Kampen Capital   ING Van   ING Van   Kampen Large
    ING Templeton   Growth   Kampen Capital   Kampen   Cap Growth
    Global Growth   Portfolio -   Growth   Growth and   Portfolio -
    Portfolio -   Institutional   Portfolio -   Income Portfolio   Institutional
    Service Class   Class   Service Class   - Service Class   Class
Net investment income (loss)                        
Income:                        
     Dividends   $ 27   $ -   $ -   $ 620   $ 1
Total investment income   27   -   -   620       1
Expenses:                        
     Mortality, expense risk and                        
other charges   28   2   1   145       -
Total expenses   28   2   1   145       -
Net investment income (loss)   (1)   (2)   (1)   475       1
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   (116)   (96)   (19)   (615)       (9)
Capital gains distributions   112   6   8   1,331       6
Total realized gain (loss) on investments                        
     and capital gains distributions   (4)   (90)   (11)   716       (3)
Net unrealized appreciation                        
     (depreciation) of investments   (1,297)   (94)   (132)   (7,115)       (1)
Net realized and unrealized gain (loss)                        
     on investments   (1,301)   (184)   (143)   (6,399)       (4)
Net increase (decrease) in net assets                        
     resulting from operations   $ (1,302)   $ (186)   $ (144)   $ (5,924)   $ (3)

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

73

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

              ING VP Index    
    ING Van   ING Van       Plus   ING VP Index
    Kampen Large   Kampen Real   ING Van   International   Plus
    Cap Growth   Estate Portfolio   Kampen Real   Equity Portfolio   International
    Portfolio -   - Institutional   Estate Portfolio   - Institutional   Equity Portfolio
    Service Class   Class   - Service Class   Class   - Service Class
Net investment income (loss)                        
Income:                        
     Dividends   $ -   $ 16   $ 265   $ 1,128   $ 307
Total investment income       -   16   265   1,128   307
Expenses:                        
     Mortality, expense risk and                        
other charges       -   9   185   171   53
Total expenses       -   9   185   171   53
Net investment income (loss)       -   7   80   957   254
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments       -   (67)   (2,646)   (2,718)   (1,181)
Capital gains distributions       -   181   3,986   5,008   1,453
Total realized gain (loss) on investments                        
     and capital gains distributions       -   114   1,340   2,290   272
Net unrealized appreciation                        
     (depreciation) of investments       -   (590)   (11,957)   (12,785)   (3,273)
Net realized and unrealized gain (loss)                        
     on investments       -   (476)   (10,617)   (10,495)   (3,001)
Net increase (decrease) in net assets                        
     resulting from operations   $ -   $ (469)   $ (10,537)   $ (9,538)   $ (2,747)

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

74

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Wells   ING Wells   ING Wells   ING   ING
    Fargo   Fargo   Fargo Small   International   International
    Disciplined   Disciplined   Cap Disciplined   Growth   SmallCap
    Value Portfolio -   Value Portfolio -   Portfolio -   Opportunities   Multi-Manager
    Adviser Class   Service Class   Service Class   Fund - Class Q   Fund - Class A
Net investment income (loss)                  
Income:                  
     Dividends   $ -   $ 26   $ 7   $ -   $ 38
Total investment income   -   26   7   -   38
Expenses:                  
     Mortality, expense risk and                  
other charges   -   6   8   -   9
Total expenses   -   6   8   -   9
Net investment income (loss)   -   20   (1)   -   29
 
Realized and unrealized gain (loss)                  
     on investments                  
Net realized gain (loss) on investments   (1)   (211)   (306)   -   (92)
Capital gains distributions   -   -   114   -   -
Total realized gain (loss) on investments                  
     and capital gains distributions   (1)   (211)   (192)   -   (92)
Net unrealized appreciation                  
     (depreciation) of investments   -   87   (231)   (8)   (1,196)
Net realized and unrealized gain (loss)                  
     on investments   (1)   (124)   (423)   (8)   (1,288)
Net increase (decrease) in net assets                  
     resulting from operations   $ (1)   $ (104)   $ (424)   $ (8)   $ (1,259)

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

75

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING American   ING American   ING American   ING American    
    Century Large   Century Large   Century Small-   Century Small-    
    Company Value   Company Value   Mid Cap Value   Mid Cap Value   ING Baron
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Asset Portfolio -
    Adviser Class   Service Class   Adviser Class   Service Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 10   $ 515   $ 1   $ 202   $ -
Total investment income   10   515   1   202   -
Expenses:                    
     Mortality, expense risk and                    
other charges   -   40   -   245   23
Total expenses   -   40   -   245   23
Net investment income (loss)   10   475   1   (43)   (23)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   -   (799)   (21)   (504)   (86)
Capital gains distributions   30   1,528   14   3,252   46
Total realized gain (loss) on investments                    
     and capital gains distributions   30   729   (7)   2,748   (40)
Net unrealized appreciation                    
     (depreciation) of investments   (75)   (2,931)   (10)   (10,546)   (1,397)
Net realized and unrealized gain (loss)                    
     on investments   (45)   (2,202)   (17)   (7,798)   (1,437)
Net increase (decrease) in net assets                    
     resulting from operations   $ (35)   $ (1,727)   $ (16)   $ (7,841)   $ (1,460)

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

76

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Baron   ING Baron   ING Columbia        
    Small Cap   Small Cap   Small Cap   ING Davis New   ING Fidelity®
    Growth   Growth   Value II   York Venture   VIP Mid Cap
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Service Class   Service Class   Service Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ -   $ 1   $ 78   $ 20
Total investment income   -   -   1   78   20
Expenses:                    
     Mortality, expense risk and                    
other charges   1   814   10   104   34
Total expenses   1   814   10   104   34
Net investment income (loss)   (1)   (814)   (9)   (26)   (14)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (38)   1,779   (42)   (94)   (117)
Capital gains distributions   11   3,000   9   112   528
Total realized gain (loss) on investments                    
     and capital gains distributions   (27)   4,779   (33)   18   411
Net unrealized appreciation                    
     (depreciation) of investments   (109)   (50,479)   (377)   (5,140)   (4,082)
Net realized and unrealized gain (loss)                    
     on investments   (136)   (45,700)   (410)   (5,122)   (3,671)
Net increase (decrease) in net assets                    
     resulting from operations   $ (137)   $ (46,514)   $ (419)   $ (5,148)   $ (3,685)

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

77

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Index
Solution 2015
Portfolio -
Adviser Class 		  ING Index
Solution 2025
Portfolio -
Adviser Class 		  ING Index
Solution 2035
Portfolio -
Adviser Class 		  ING Index
Solution 2045
Portfolio -
Adviser Class 		  ING Index
Solution Income
Portfolio -
Adviser Class
           
           
           
Net investment income (loss)                                    
Income:                                    
     Dividends   $ -   $ -   $ -   $ -   $ -
Total investment income       -       -       -       -   -
Expenses:                                    
     Mortality, 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       1       2       1       -   -
Net realized and unrealized gain (loss)                                    
     on investments       1       2       1       -   -
Net increase (decrease) in net assets                                    
     resulting from operations   $ 1   $ 2   $ 1   $ -   $ -

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

78

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING JPMorgan   ING JPMorgan   ING JPMorgan   ING JPMorgan   ING JPMorgan
    International   International   International   Mid Cap Value   Mid Cap Value
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Initial Class   Service Class   Adviser Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 6   $ 4,023   $ 1   $ 5   $ 590
Total investment income   6   4,023   1   5   590
Expenses:                    
     Mortality, expense risk and                    
other charges   -   416   -   1   285
Total expenses   -   416   -   1   285
Net investment income (loss)   6   3,607   1   4   305
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (129)   (29,088)   (15)   (72)   (161)
Capital gains distributions   117   67,810   17   35   2,694
Total realized gain (loss) on investments                    
     and capital gains distributions   (12)   38,722   2   (37)   2,533
Net unrealized appreciation                    
     (depreciation) of investments   3   (47,137)   (3)   (85)   (13,907)
Net realized and unrealized gain (loss)                    
     on investments   (9)   (8,415)   (1)   (122)   (11,374)
Net increase (decrease) in net assets                    
     resulting from operations   $ (3)   $ (4,808)   $ -   $ (118)   $ (11,069)

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

79

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Legg
Mason Partners
Aggressive
Growth
Portfolio -
Adviser Class 		  ING Legg
Mason Partners
Aggressive
Growth
Portfolio -
Initial Class 		  ING Legg
Mason Partners
Aggressive
Growth
Portfolio -
Service Class 		  ING Legg
Mason Partners
Large Cap
Growth
Portfolio -
Adviser Class 		  ING Legg
Mason Partners
Large Cap
Growth
Portfolio -
Initial Class
           
           
           
           
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ -   $ -   $ -   $ -
Total investment income   -   -   -   -   -
Expenses:                    
     Mortality, expense risk and                    
other charges   -   1,316   1   -   10
Total expenses   -   1,316   1   -   10
Net investment income (loss)   -   (1,316)   (1)   -   (10)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (10)   (20,709)   1   (18)   (522)
Capital gains distributions   -   -   -   5   527
Total realized gain (loss) on investments                    
     and capital gains distributions   (10)   (20,709)   1   (13)   5
Net unrealized appreciation                    
     (depreciation) of investments   (27)   (37,274)   (67)   4   (250)
Net realized and unrealized gain (loss)                    
     on investments   (37)   (57,983)   (66)   (9)   (245)
Net increase (decrease) in net assets                    
     resulting from operations   $ (37)   $ (59,299)   $ (67)   $ (9)   $ (255)

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

80

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Neuberger   ING Neuberger            
    Berman   Berman   ING OpCap   ING   ING
    Partners   Regency   Balanced Value   Oppenheimer   Oppenheimer
    Portfolio -   Portfolio -   Portfolio -   Global Portfolio   Global Portfolio
    Service Class   Service Class   Service Class   - Adviser Class   - Initial Class
Net investment income (loss)                        
Income:                        
     Dividends   $ -   $ -   $ 477   $ 7   $ 14,508
Total investment income   -       -   477   7   14,508
Expenses:                        
     Mortality, expense risk and                        
other charges   24       -   82   1   6,345
Total expenses   24       -   82   1   6,345
Net investment income (loss)   (24)       -   395   6   8,163
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   (325)       (4)   (6,524)   (63)   12,361
Capital gains distributions   -       -   2,235   32   50,125
Total realized gain (loss) on investments                        
     and capital gains distributions   (325)       (4)   (4,289)   (31)   62,486
Net unrealized appreciation                        
     (depreciation) of investments   (1,673)       2   351   (148)   (385,205)
Net realized and unrealized gain (loss)                        
     on investments   (1,998)       (2)   (3,938)   (179)   (322,719)
Net increase (decrease) in net assets                        
     resulting from operations   $ (2,022)   $ (2)   $ (3,543)   $ (173)   $ (314,556)

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

81

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        ING   ING   ING    
    ING   Oppenheimer   Oppenheimer   Oppenheimer   ING PIMCO
    Oppenheimer   Strategic   Strategic   Strategic   Total Return
    Global Portfolio   Income Portfolio   Income Portfolio   Income Portfolio   Portfolio -
    - Service Class   - Adviser Class   - Initial Class   - Service Class   Adviser Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 7   $ 18   $ 6,727   $ 8   $ 39
Total investment income   7   18   6,727   8   39
Expenses:                    
     Mortality, expense risk and                    
other charges   3   1   1,255   1   3
Total expenses   3   1   1,255   1   3
Net investment income (loss)   4   17   5,472   7   36
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (12)   (14)   53   6   (1)
Capital gains distributions   27   1   450   1   13
Total realized gain (loss) on investments                    
     and capital gains distributions   15   (13)   503   7   12
Net unrealized appreciation                    
     (depreciation) of investments   (191)   (65)   (28,238)   (26)   (70)
Net realized and unrealized gain (loss)                    
     on investments   (176)   (78)   (27,735)   (19)   (58)
Net increase (decrease) in net assets                    
     resulting from operations   $ (172)   $ (61)   $ (22,263)   $ (12)   $ (22)

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

82

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING PIMCO
Total Return
Portfolio -
Service Class 		  ING Pioneer
High Yield
Portfolio -
Initial Class 		  ING Pioneer
High Yield
Portfolio -
Service Class 		  ING Solution
2015 Portfolio -
Adviser Class 		  ING Solution
2015 Portfolio -
Service Class
           
           
           
Net investment income (loss)                    
Income:                    
     Dividends   $ 5,097   $ 393   $ 7   $ 182   $ 518
Total investment income   5,097   393   7   182   518
Expenses:                    
     Mortality, expense risk and                    
other charges   1,023   46   1   62   266
Total expenses   1,023   46   1   62   266
Net investment income (loss)   4,074   347   6   120   252
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (40)   (328)   (1)   (31)   (11)
Capital gains distributions   1,627   131   2   247   667
Total realized gain (loss) on investments                    
     and capital gains distributions   1,587   (197)   1   216   656
Net unrealized appreciation                    
     (depreciation) of investments   (7,862)   (1,867)   (41)   (3,943)   (10,651)
Net realized and unrealized gain (loss)                    
     on investments   (6,275)   (2,064)   (40)   (3,727)   (9,995)
Net increase (decrease) in net assets                    
     resulting from operations   $ (2,201)   $ (1,717)   $ (34)   $ (3,607)   $ (9,743)

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

83

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Solution   ING Solution   ING Solution   ING Solution   ING Solution
    2025 Portfolio -   2025 Portfolio -   2035 Portfolio -   2035 Portfolio -   2045 Portfolio -
    Adviser Class   Service Class   Adviser Class   Service Class   Adviser Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 173   $ 545   $ 142   $ 388   $ 79
Total investment income   173   545   142   388   79
Expenses:                    
     Mortality, expense risk and                    
other charges   75   337   63   238   35
Total expenses   75   337   63   238   35
Net investment income (loss)   98   208   79   150   44
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (110)   (240)   (75)   (95)   (88)
Capital gains distributions   403   1,200   377   973   258
Total realized gain (loss) on investments                    
     and capital gains distributions   293   960   302   878   170
Net unrealized appreciation                    
     (depreciation) of investments   (6,064)   (18,098)   (5,470)   (14,504)   (4,003)
Net realized and unrealized gain (loss)                    
     on investments   (5,771)   (17,138)   (5,168)   (13,626)   (3,833)
Net increase (decrease) in net assets                    
     resulting from operations   $ (5,673)   $ (16,930)   $ (5,089)   $ (13,476)   $ (3,789)

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

84

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        ING Solution   ING Solution        
    ING Solution   Growth and   Growth   ING Solution   ING Solution
    2045 Portfolio -   Income Portfolio   Portfolio -   Income Portfolio   Income Portfolio
    Service Class   - Service Class   Service Class   - Adviser Class   - Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 199   $ -   $ -   $ 154   $ 150
Total investment income   199   -   -   154   150
Expenses:                    
     Mortality, expense risk and                    
other charges   157   1   1   40   67
Total expenses   157   1   1   40   67
Net investment income (loss)   42   (1)   (1)   114   83
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   9   (26)   (52)   (31)   (202)
Capital gains distributions   604   -   -   152   143
Total realized gain (loss) on investments                    
     and capital gains distributions   613   (26)   (52)   121   (59)
Net unrealized appreciation                    
     (depreciation) of investments   (9,919)   (7)   (7)   (1,905)   (1,545)
Net realized and unrealized gain (loss)                    
     on investments   (9,306)   (33)   (59)   (1,784)   (1,604)
Net increase (decrease) in net assets                    
     resulting from operations   $ (9,264)   $ (34)   $ (60)   $ (1,670)   $ (1,521)

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

85

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING T. Rowe   ING T. Rowe   ING T. Rowe        
    Price Diversified   Price Diversified   Price Diversified        
    Mid Cap   Mid Cap   Mid Cap   ING T. Rowe   ING T. Rowe
    Growth   Growth   Growth   Price Growth   Price Growth
    Portfolio -   Portfolio -   Portfolio -   Equity Portfolio   Equity Portfolio
    Adviser Class   Initial Class   Service Class   - Adviser Class   - Initial Class
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ 1,404   $ -   $ 3   $ 2,863
Total investment income   -   1,404   -   3   2,863
Expenses:                    
     Mortality, expense risk and                    
other charges   1   3,195   3   4   2,157
Total expenses   1   3,195   3   4   2,157
Net investment income (loss)   (1)   (1,791)   (3)   (1)   706
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (68)   (1,048)   (26)   (164)   (6,918)
Capital gains distributions   63   49,315   67   88   16,121
Total realized gain (loss) on investments                    
     and capital gains distributions   (5)   48,267   41   (76)   9,203
Net unrealized appreciation                    
     (depreciation) of investments   (174)   (208,361)   (254)   (464)   (120,189)
Net realized and unrealized gain (loss)                    
     on investments   (179)   (160,094)   (213)   (540)   (110,986)
Net increase (decrease) in net assets                    
     resulting from operations   $ (180)   $ (161,885)   $ (216)   $ (541)   $ (110,280)

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

86

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING T. Rowe   ING Templeton   ING Templeton   ING Templeton    
    Price Growth   Foreign Equity   Foreign Equity   Foreign Equity   ING Thornburg
    Equity Portfolio   Portfolio -   Portfolio -   Portfolio -   Value Portfolio -
    - Service Class   Adviser Class   Initial Class   Service Class   Adviser Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 13   $ 4   $ 2,486   $ 1   $ 1
Total investment income   13   4   2,486   1   1
Expenses:                    
     Mortality, expense risk and                    
other charges   8   -   712   16   2
Total expenses   8   -   712   16   2
Net investment income (loss)   5   4   1,774   (15)   (1)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (26)   (17)   (3,433)   (81)   (33)
Capital gains distributions   102   -   -   -   -
Total realized gain (loss) on investments                    
     and capital gains distributions   76   (17)   (3,433)   (81)   (33)
Net unrealized appreciation                    
     (depreciation) of investments   (750)   (76)   (48,104)   (155)   (179)
Net realized and unrealized gain (loss)                    
     on investments   (674)   (93)   (51,537)   (236)   (212)
Net increase (decrease) in net assets                    
     resulting from operations   $ (669)   $ (89)   $ (49,763)   $ (251)   $ (213)

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

87

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

                    ING UBS U.S.
        ING UBS U.S.   ING UBS U.S.   ING UBS U.S.   Small Cap
    ING Thornburg   Large Cap   Large Cap   Large Cap   Growth
    Value Portfolio -   Equity Portfolio   Equity Portfolio   Equity Portfolio   Portfolio -
    Initial Class   - Adviser Class   - Initial Class   - Service Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 473   $ 1   $ 2,309   $ -   $ -
Total investment income   473   1   2,309   -   -
Expenses:                    
     Mortality, expense risk and                    
other charges   902   -   1,035   -   2
Total expenses   902   -   1,035   -   2
Net investment income (loss)   (429)   1   1,274   -   (2)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (3,171)   -   (10,767)   -   (90)
Capital gains distributions   -   -   -   -   -
Total realized gain (loss) on investments                    
     and capital gains distributions   (3,171)   -   (10,767)   -   (90)
Net unrealized appreciation                    
     (depreciation) of investments   (40,240)   (24)   (36,911)   (4)   37
Net realized and unrealized gain (loss)                    
     on investments   (43,411)   (24)   (47,678)   (4)   (53)
Net increase (decrease) in net assets                    
     resulting from operations   $ (43,840)   $ (23)   $ (46,404)   $ (4)   $ (55)

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

88

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING Van   ING Van   ING Van   ING Van   ING Van
    Kampen   Kampen   Kampen Equity   Kampen Equity   Kampen Equity
    Comstock   Comstock   and Income   and Income   and Income
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Service Class   Adviser Class   Initial Class   Service Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 9   $ 2,359   $ 18   $ 14,010   $ 9
Total investment income   9   2,359   18   14,010   9
Expenses:                    
     Mortality, expense risk and                    
other charges   1   647   1   2,750   2
Total expenses   1   647   1   2,750   2
Net investment income (loss)   8   1,712   17   11,260   7
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (86)   (2,010)   (42)   (159)   (4)
Capital gains distributions   20   3,812   27   15,058   10
Total realized gain (loss) on investments                    
     and capital gains distributions   (66)   1,802   (15)   14,899   6
Net unrealized appreciation                    
     (depreciation) of investments   (77)   (31,217)   (113)   (98,950)   (62)
Net realized and unrealized gain (loss)                    
     on investments   (143)   (29,415)   (128)   (84,051)   (56)
Net increase (decrease) in net assets                    
     resulting from operations   $ (135)   $ (27,703)   $ (111)   $ (72,791)   $ (49)

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

89

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING VP   ING VP   ING VP        
    Strategic   Strategic   Strategic        
    Allocation   Allocation   Allocation   ING VP Growth   ING VP Growth
    Conservative   Growth   Moderate   and Income   and Income
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class I   Class I   Class I   Class A   Class I
Net investment income (loss)                    
Income:                    
     Dividends   $ 1,390   $ 1,710   $ 1,907   $ 5   $ 19,275
Total investment income   1,390   1,710   1,907   5   19,275
Expenses:                    
     Mortality, expense risk and                    
other charges   330   711   613   1   15,196
Total expenses   330   711   613   1   15,196
Net investment income (loss)   1,060   999   1,294   4   4,079
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (1,155)   (2,661)   (208)   (56)   (101,523)
Capital gains distributions   2,745   9,718   7,461   -   -
Total realized gain (loss) on investments                    
     and capital gains distributions   1,590   7,057   7,253   (56)   (101,523)
Net unrealized appreciation                    
     (depreciation) of investments   (11,399)   (37,541)   (30,451)   (138)   (526,910)
Net realized and unrealized gain (loss)                    
     on investments   (9,809)   (30,484)   (23,198)   (194)   (628,433)
Net increase (decrease) in net assets                    
     resulting from operations   $ (8,749)   $ (29,485)   $ (21,904)   $ (190)   $ (624,354)

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

90

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING VP Growth                
    and Income   ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.
    Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -
    Class S   Series 1   Series 2   Series 3   Series 5
Net investment income (loss)                    
Income:                    
     Dividends   $ 6   $ 31   $ 207   $ 443   $ 8
Total investment income   6   31   207   443   8
Expenses:                    
     Mortality, expense risk and                    
other charges   2   7   49   282   9
Total expenses   2   7   49   282   9
Net investment income (loss)   4   24   158   161   (1)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (17)   (116)   (579)   (16)   (5)
Capital gains distributions   -   83   318   1,024   92
Total realized gain (loss) on investments                    
     and capital gains distributions   (17)   (33)   (261)   1,008   87
Net unrealized appreciation                    
     (depreciation) of investments   (156)   (31)   (197)   (2,178)   (141)
Net realized and unrealized gain (loss)                    
     on investments   (173)   (64)   (458)   (1,170)   (54)
Net increase (decrease) in net assets                    
     resulting from operations   $ (169)   $ (40)   $ (300)   $ (1,009)   $ (55)

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

91

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.
    Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -
    Series 6   Series 7   Series 8   Series 9   Series 10
Net investment income (loss)                    
Income:                    
     Dividends   $ 47   $ 45   $ 17   $ 3   $ 2
Total investment income   47   45   17   3   2
Expenses:                    
     Mortality, expense risk and                    
other charges   42   33   15   3   1
Total expenses   42   33   15   3   1
Net investment income (loss)   5   12   2   -   1
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (33)   (31)   (12)   (4)   -
Capital gains distributions   400   433   159   32   13
Total realized gain (loss) on investments                    
     and capital gains distributions   367   402   147   28   13
Net unrealized appreciation                    
     (depreciation) of investments   (584)   (569)   (225)   (40)   (18)
Net realized and unrealized gain (loss)                    
     on investments   (217)   (167)   (78)   (12)   (5)
Net increase (decrease) in net assets                    
     resulting from operations   $ (212)   $ (155)   $ (76)   $ (12)   $ (4)

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

92

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING GET U.S.
Core Portfolio - 		          ING Lehman   ING
      ING BlackRock       Brothers U.S.   Opportunistic
      Global Science   ING   Aggregate Bond   Large Cap
     and Technology   International   Index®   Growth
      Portfolio -   Index Portfolio -   Portfolio -   Portfolio -
    Series 11   Class I   Class I   Class I   Class I
Net investment income (loss)                  
Income:                  
     Dividends   $ 1   $ -   $ 4   $ 20   $ 375
Total investment income   1   -   4   20   375
Expenses:                  
     Mortality, expense risk and                  
other charges   1   319   1   4   480
Total expenses   1   319   1   4   480
Net investment income (loss)   -   (319)   3   16   (105)
 
Realized and unrealized gain (loss)                  
     on investments                  
Net realized gain (loss) on investments   -   2,373   (58)   1   (1,150)
Capital gains distributions   6   -   -   3   -
Total realized gain (loss) on investments                  
     and capital gains distributions   6   2,373   (58)   4   (1,150)
Net unrealized appreciation                  
     (depreciation) of investments   (7)   (18,274)   1   31   (25,054)
Net realized and unrealized gain (loss)                  
     on investments   (1)   (15,901)   (57)   35   (26,204)
Net increase (decrease) in net assets                  
     resulting from operations   $ (1)   $ (16,220)   $ (54)   $ 51   $ (26,309)

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

93

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING                
    Opportunistic   ING Russell™   ING Russell™   ING Russell™   ING VP Index
    Large Cap   Large Cap   Mid Cap Index   Small Cap Index   Plus LargeCap
    Value Portfolio -   Index Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class I   Class I   Class I   Class I   Class I
Net investment income (loss)                    
Income:                    
     Dividends   $ 1,326   $ 30   $ 18   $ 6   $ 7,572
Total investment income   1,326   30   18   6   7,572
Expenses:                    
     Mortality, expense risk and                    
other charges   619   5   2   2   3,668
Total expenses   619   5   2   2   3,668
Net investment income (loss)   707   25   16   4   3,904
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (546)   (44)   (88)   (37)   (9,337)
Capital gains distributions   10,413   -   -   -   26,611
Total realized gain (loss) on investments                    
     and capital gains distributions   9,867   (44)   (88)   (37)   17,274
Net unrealized appreciation                    
     (depreciation) of investments   (37,665)   (60)   2   (158)   (184,448)
Net realized and unrealized gain (loss)                    
     on investments   (27,798)   (104)   (86)   (195)   (167,174)
Net increase (decrease) in net assets                    
     resulting from operations   $ (27,091)   $ (79)   $ (70)   $ (191)   $ (163,270)

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

94

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING VP Index   ING VP Index   ING VP Index   ING VP Index   ING VP Index
    Plus LargeCap   Plus MidCap   Plus MidCap   Plus SmallCap   Plus SmallCap
    Portfolio -   Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class S   Class I   Class S   Class I   Class S
Net investment income (loss)                    
Income:                    
     Dividends   $ 5   $ 4,290   $ 4   $ 1,142   $ -
Total investment income   5   4,290   4   1,142   -
Expenses:                    
     Mortality, expense risk and                    
other charges   1   2,941   1   1,136   -
Total expenses   1   2,941   1   1,136   -
Net investment income (loss)   4   1,349   3   6   -
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (49)   6,706   (73)   (613)   (14)
Capital gains distributions   19   40,232   46   7,780   4
Total realized gain (loss) on investments                    
     and capital gains distributions   (30)   46,938   (27)   7,167   (10)
Net unrealized appreciation                    
     (depreciation) of investments   (137)   (183,479)   (123)   (54,249)   (7)
Net realized and unrealized gain (loss)                    
     on investments   (167)   (136,541)   (150)   (47,082)   (17)
Net increase (decrease) in net assets                    
     resulting from operations   $ (163)   $ (135,192)   $ (147)   $ (47,076)   $ (17)

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

95

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            ING VP        
    ING VP Small   ING VP Small   Financial   ING VP   ING VP
    Company   Company   Services   International   International
    Portfolio -   Portfolio -   Portfolio -   Value Portfolio -   Value Portfolio -
    Class I   Class S   Class I   Class I   Class S
Net investment income (loss)                    
Income:                    
     Dividends   $ 1,196   $ 1   $ 53   $ 3,575   $ 11
Total investment income   1,196   1   53   3,575   11
Expenses:                    
     Mortality, expense risk and                    
other charges   1,122   -   24   1,215   2
Total expenses   1,122   -   24   1,215   2
Net investment income (loss)   74   1   29   2,360   9
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (768)   (21)   (1,155)   (5,480)   (149)
Capital gains distributions   15,135   14   200   20,149   75
Total realized gain (loss) on investments                    
     and capital gains distributions   14,367   (7)   (955)   14,669   (74)
Net unrealized appreciation                    
     (depreciation) of investments   (55,736)   (40)   393   (85,517)   (155)
Net realized and unrealized gain (loss)                    
     on investments   (41,369)   (47)   (562)   (70,848)   (229)
Net increase (decrease) in net assets                    
     resulting from operations   $ (41,295)   $ (46)   $ (533)   $ (68,488)   $ (220)

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

96

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING VP   ING VP       ING VP   ING VP
    MidCap   MidCap       SmallCap   SmallCap
    Opportunities   Opportunities   ING VP Real   Opportunities   Opportunities
    Portfolio -   Portfolio -   Estate Portfolio   Portfolio -   Portfolio -
    Class I   Class S   - Class I   Class I   Class S
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ -   $ 870   $ -   $ -
Total investment income   -   -   870   -   -
Expenses:                    
     Mortality, expense risk and                    
other charges   108   1   338   90   -
Total expenses   108   1   338   90   -
Net investment income (loss)   (108)   (1)   532   (90)   -
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   334   (20)   (14,423)   (28)   (14)
Capital gains distributions   -   -   8,841   1,731   13
Total realized gain (loss) on investments                    
     and capital gains distributions   334   (20)   (5,582)   1,703   (1)
Net unrealized appreciation                    
     (depreciation) of investments   (5,295)   (47)   6,008   (6,117)   (19)
Net realized and unrealized gain (loss)                    
     on investments   (4,961)   (67)   426   (4,414)   (20)
Net increase (decrease) in net assets                    
     resulting from operations   $ (5,069)   $ (68)   $ 958   $ (4,504)   $ (20)

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

97

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    ING VP   ING VP   ING VP   ING VP Money    
    Balanced   Intermediate   Intermediate   Market   Janus Adviser
    Portfolio -   Bond Portfolio -   Bond Portfolio -   Portfolio -   Balanced Fund -
    Class I   Class I   Class S   Class I   Class S
Net investment income (loss)                    
Income:                    
     Dividends   $ 15,681   $ 21,773   $ 13   $ 26,796   $ -
Total investment income   15,681   21,773   13   26,796   -
Expenses:                    
     Mortality, expense risk and                    
other charges   4,676   4,085   1   4,169   -
Total expenses   4,676   4,085   1   4,169   -
Net investment income (loss)   11,005   17,688   12   22,627   -
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (28,188)   (4,120)   (10)   1,312   -
Capital gains distributions   40,557   10,193   6   -   -
Total realized gain (loss) on investments                    
     and capital gains distributions   12,369   6,073   (4)   1,312   -
Net unrealized appreciation                    
     (depreciation) of investments   (162,838)   (62,449)   (30)   (14,424)   -
Net realized and unrealized gain (loss)                    
     on investments   (150,469)   (56,376)   (34)   (13,112)   -
Net increase (decrease) in net assets                    
     resulting from operations   $ (139,464)   $ (38,688)   $ (22)   $ 9,515   $ -

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

98

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

                Janus Aspen
          Janus Aspen   Janus Aspen   Series
    Janus Aspen   Janus Aspen   Series Large   Series Mid Cap   Worldwide
    Series Balanced   Series Flexible    Cap Growth   Growth   Growth
    Portfolio -   Bond Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Institutional   Institutional   Institutional   Institutional   Institutional
    Shares   Shares   Shares   Shares   Shares
Net investment income (loss)                            
Income:                            
     Dividends   $ 7   $ 4   $ 1   $ 1   $ 3
Total investment income       7   4       1   1   3
Expenses:                            
     Mortality, expense risk and                            
other charges       3   1       1   5   3
Total expenses       3   1       1   5   3
Net investment income (loss)       4   3       -   (4)   -
 
Realized and unrealized gain (loss)                            
     on investments                            
Net realized gain (loss) on investments       13   -       13   27   26
Capital gains distributions       20   -       -   23   -
Total realized gain (loss) on investments                            
     and capital gains distributions       33   -       13   50   26
Net unrealized appreciation                            
     (depreciation) of investments       (88)   1       (68)   (243)   (156)
Net realized and unrealized gain (loss)                            
     on investments       (55)   1       (55)   (193)   (130)
Net increase (decrease) in net assets                            
     resulting from operations   $ (51)   $ 4   $ (55)   $ (197)   $ (130)

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

99

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    Lazard U.S.       Loomis Sayles   Lord Abbett   Lord Abbett
    Mid Cap Equity       Small Cap   Mid-Cap Value   Small-Cap
    Portfolio - Open   LKCM Aquinas   Value Fund -   Fund, Inc. -   Value Fund -
    Shares   Growth Fund   Retail Class   Class A   Class A
Net investment income (loss)                    
Income:                    
     Dividends   $ 8   $ -   $ 3   $ 18   $ 3
Total investment income   8   -   3   18   3
Expenses:                    
     Mortality, expense risk and                    
other charges   3   3   1   11   14
Total expenses   3   3   1   11   14
Net investment income (loss)   5   (3)   2   7   (11)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (45)   (1)   (7)   (152)   (57)
Capital gains distributions   -   -   -   55   -
Total realized gain (loss) on investments                    
     and capital gains distributions   (45)   (1)   (7)   (97)   (57)
Net unrealized appreciation                    
     (depreciation) of investments   (165)   (94)   54   (409)   (465)
Net realized and unrealized gain (loss)                    
     on investments   (210)   (95)   47   (506)   (522)
Net increase (decrease) in net assets                    
     resulting from operations   $ (205)   $ (98)   $ 49   $ (499)   $ (533)

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

100

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    Lord Abbett             Neuberger
    Series Fund -   Massachusetts     Morgan Stanley   Berman Socially
    Mid-Cap Value   Investors   Moderate   U.S. Small Cap   Responsive
    Portfolio -   Growth Stock   Allocation   Value Portfolio -   Fund® - Trust
    Class VC   Fund - Class A   Portfolio   Class I   Class
Net investment income (loss)                        
Income:                        
     Dividends   $ 1,350   $ 2   $ -   $ 9   $ 15
Total investment income   1,350   2       -   9   15
Expenses:                        
     Mortality, expense risk and                        
other charges   1,107   6       -   -   21
Total expenses   1,107   6       -   -   21
Net investment income (loss)   243   (4)       -   9   (6)
 
Realized and unrealized gain (loss)                        
     on investments                        
Net realized gain (loss) on investments   (4,263)   27       (3)   (44)   (25)
Capital gains distributions   4,511   -       -   36   33
Total realized gain (loss) on investments                        
     and capital gains distributions   248   27       (3)   (8)   8
Net unrealized appreciation                        
     (depreciation) of investments   (54,679)   (270)       1   (215)   (1,057)
Net realized and unrealized gain (loss)                        
     on investments   (54,431)   (243)       (2)   (223)   (1,049)
Net increase (decrease) in net assets                        
     resulting from operations   $ (54,188)   $ (247)   $ (2)   $ (214)   $ (1,055)

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

101

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            Oppenheimer   Oppenheimer    
    New Perspective  New Perspective    Capital   Developing   Oppenheimer
    Fund®, Inc. -   Fund®, Inc. -   Appreciation   Markets Fund -   Global
    Class R-3   Class R-4   Fund - Class A   Class A   Securities/VA
Net investment income (loss)                    
Income:                    
     Dividends   $ 60   $ 1,046   $ -   $ 2,505   $ 7
Total investment income   60   1,046   -   2,505   7
Expenses:                    
     Mortality, expense risk and                    
other charges   10   398   5   1,846   4
Total expenses   10   398   5   1,846   4
Net investment income (loss)   50   648   (5)   659   3
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (98)   168   10   6,594   (25)
Capital gains distributions   202   2,939   -   37,340   32
Total realized gain (loss) on investments                    
     and capital gains distributions   104   3,107   10   43,934   7
Net unrealized appreciation                    
     (depreciation) of investments   (1,754)   (24,241)   (301)   (155,001)   (203)
Net realized and unrealized gain (loss)                    
     on investments   (1,650)   (21,134)   (291)   (111,067)   (196)
Net increase (decrease) in net assets                    
     resulting from operations   $ (1,600)   $ (20,486)   $ (296)   $ (110,408)   $ (193)

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

102

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

        Oppenheimer            
    Oppenheimer   Main Street   Oppenheimer   Oppenheimer    
    Main Street   Small Cap   MidCap   Strategic Bond   Pax World
    Fund®/VA   Fund®/VA   Fund/VA   Fund/VA   Balanced Fund
Net investment income (loss)                    
Income:                    
     Dividends   $ 1   $ 30   $ -   $ 6   $ 1,035
Total investment income   1   30   -   6   1,035
Expenses:                    
     Mortality, expense risk and                    
other charges   1   64   -   1   558
Total expenses   1   64   -   1   558
Net investment income (loss)   -   (34)   -   5   477
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   1   (223)   (2)   -   (506)
Capital gains distributions   6   329   -   1   624
Total realized gain (loss) on investments                    
     and capital gains distributions   7   106   (2)   1   118
Net unrealized appreciation                    
     (depreciation) of investments   (50)   (2,871)   (13)   (25)   (21,064)
Net realized and unrealized gain (loss)                    
     on investments   (43)   (2,765)   (15)   (24)   (20,946)
Net increase (decrease) in net assets                    
     resulting from operations   $ (43)   $ (2,799)   $ (15)   $ (19)   $ (20,469)

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

103

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            Pioneer        
    PIMCO Real       Emerging   Pioneer Equity   Pioneer High
    Return Portfolio   Pioneer High   Markets VCT   Income VCT   Yield VCT
    - Administrative   Yield Fund -   Portfolio -   Portfolio -   Portfolio -
    Class   Class A   Class I   Class I   Class I
Net investment income (loss)                    
Income:                    
     Dividends   $ 2,185   $ 219   $ 88   $ 16   $ 1,435
Total investment income   2,185   219   88   16   1,435
Expenses:                    
     Mortality, expense risk and                    
other charges   608   21   211   4   173
Total expenses   608   21   211   4   173
Net investment income (loss)   1,577   198   (123)   12   1,262
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (881)   (60)   (2,837)   (300)   (651)
Capital gains distributions   105   37   3,650   68   187
Total realized gain (loss) on investments                    
     and capital gains distributions   (776)   (23)   813   (232)   (464)
Net unrealized appreciation                    
     (depreciation) of investments   (8,434)   (1,613)   (18,300)   101   (7,575)
Net realized and unrealized gain (loss)                    
     on investments   (9,210)   (1,636)   (17,487)   (131)   (8,039)
Net increase (decrease) in net assets                    
     resulting from operations   $ (7,633)   $ (1,438)   $ (17,610)   $ (119)   $ (6,777)

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

104

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

            RiverSource        
    Pioneer Mid       Diversified        
    Cap Value VCT   Premier VIT   Equity Income   SMALLCAP   T. Rowe Price
    Portfolio -   OpCap Mid Cap   Fund -   World Fund® -   Mid-Cap Value
    Class I   Portfolio   Class R-4   Class R-4   Fund - R Class
Net investment income (loss)                    
Income:                    
     Dividends   $ 6   $ 6   $ 13   $ -   $ 4
Total investment income   6   6   13   -   4
Expenses:                    
     Mortality, expense risk and                    
other charges   2   14   4   2   7
Total expenses   2   14   4   2   7
Net investment income (loss)   4   (8)   9   (2)   (3)
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (132)   (164)   (18)   (77)   (19)
Capital gains distributions   40   156   -   -   11
Total realized gain (loss) on investments                    
     and capital gains distributions   (92)   (8)   (18)   (77)   (8)
Net unrealized appreciation                    
     (depreciation) of investments   36   (1,105)   (251)   (150)   (367)
Net realized and unrealized gain (loss)                    
     on investments   (56)   (1,113)   (269)   (227)   (375)
Net increase (decrease) in net assets                    
     resulting from operations   $ (52)   $ (1,121)   $ (260)   $ (229)   $ (378)

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

105

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    T. Rowe Price   Templeton   Templeton        
    Value Fund -   Foreign Fund -   Global Bond   Diversified   Equity Income
    Advisor Class   Class A   Fund - Class A   Value Portfolio   Portfolio
Net investment income (loss)                    
Income:                    
     Dividends   $ 1   $ 31   $ 8,285   $ 3   $ 9
Total investment income   1   31   8,285   3   9
Expenses:                    
     Mortality, expense risk and                    
other charges   1   11   980   1   3
Total expenses   1   11   980   1   3
Net investment income (loss)   -   20   7,305   2   6
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (1)   (92)   440   (1)   (33)
Capital gains distributions   -   195   -   6   24
Total realized gain (loss) on investments                    
     and capital gains distributions   (1)   103   440   5   (9)
Net unrealized appreciation                    
     (depreciation) of investments   (27)   (749)   (3,683)   (51)   (93)
Net realized and unrealized gain (loss)                    
     on investments   (28)   (646)   (3,243)   (46)   (102)
Net increase (decrease) in net assets                    
     resulting from operations   $ (28)   $ (626)   $ 4,062   $ (44)   $ (96)

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

106

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

                    Washington
                    Mutual
    Small Company               Investors
    Growth   Wanger           FundSM, Inc. -
    Portfolio   International   Wanger Select   Wanger USA   Class R-3
Net investment income (loss)                    
Income:                    
     Dividends   $ -   $ 82   $ -   $ -   $ 105
Total investment income   -   82   -   -   105
Expenses:                    
     Mortality, expense risk and                    
other charges   1   76   471   179   34
Total expenses   1   76   471   179   34
Net investment income (loss)   (1)   6   (471)   (179)   71
 
Realized and unrealized gain (loss)                    
     on investments                    
Net realized gain (loss) on investments   (1)   (1,593)   (352)   (280)   (64)
Capital gains distributions   8   1,238   1,728   2,251   88
Total realized gain (loss) on investments                    
     and capital gains distributions   7   (355)   1,376   1,971   24
Net unrealized appreciation                    
     (depreciation) of investments   (45)   (5,402)   (35,291)   (11,029)   (1,954)
Net realized and unrealized gain (loss)                    
     on investments   (38)   (5,757)   (33,915)   (9,058)   (1,930)
Net increase (decrease) in net assets                    
     resulting from operations   $ (39)   $ (5,751)   $ (34,386)   $ (9,237)   $ (1,859)

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

107

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Operations
For the year ended December 31, 2008
(Dollars in thousands)

    Washington    
    Mutual   Wells Fargo
    Investors   Advantage
    FundSM, Inc. -   Small Cap Value
    Class R-4   Fund - Class A
Net investment income (loss)        
Income:        
     Dividends   $ 1,949   $ -
Total investment income   1,949   -
Expenses:        
     Mortality, expense risk and        
other charges   783   1
Total expenses   783   1
Net investment income (loss)   1,166   (1)
 
Realized and unrealized gain (loss)        
     on investments        
Net realized gain (loss) on investments   (384)   (8)
Capital gains distributions   1,363   -
Total realized gain (loss) on investments        
     and capital gains distributions   979   (8)
Net unrealized appreciation        
     (depreciation) of investments   (33,169)   (23)
Net realized and unrealized gain (loss)        
     on investments   (32,190)   (31)
Net increase (decrease) in net assets        
     resulting from operations   $ (31,024)   $ (32)

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

108

 
VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    AIM Mid Cap
Core Equity
Fund - Class A 		  AIM Small Cap
Growth Fund -
Class A 		  AIM Global
Health Care
Fund - Investor
Class		   AIM V.I.
Capital
Appreciation
Fund - Series I
Shares
         
         
         
         
Net assets at January 1, 2007   $ 234   $ 17   $ 114   $ 32,996
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   1   -       (2)   (363)
     Total realized gain (loss) on investments and                    
           capital gains distributions   44   5       13   1,891
     Net unrealized appreciation (depreciation)                    
           of investments   (23)   (3)       -   1,877
Net increase (decrease) in net assets from operations   22   2       11   3,405
Changes from contract transactions:                    
     Total unit transactions   14   15       19   (2,945)
Net increase (decrease) in assets derived from                    
     principal transactions   14   15       19   (2,945)
Total increase (decrease) in net assets   36   17       30   460
Net assets at December 31, 2007   270   34       144   33,456
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   -   -       (2)   (270)
     Total realized gain (loss) on investments and                    
           capital gains distributions   (19)   (8)       -   831
     Net unrealized appreciation (depreciation)                    
           of investments   (65)   (11)       (44)   (14,466)
Net increase (decrease) in net assets from operations   (84)   (19)       (46)   (13,905)
Changes from contract transactions:                    
     Total unit transactions   46   5       24   (1,680)
Net increase (decrease) in assets derived from                    
     principal transactions   46   5       24   (1,680)
Total increase (decrease) in net assets   (38)   (14)       (22)   (15,585)
Net assets at December 31, 2008   $ 232   $ 20   $ 122   $ 17,871

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

109

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                Allianz NFJ
            AllianceBernstein   Large-Cap
    AIM V.I. Core   AllianceBernstein   Growth and   Value Fund -
    Equity Fund -   Growth and Income   Income Portfolio -   Institutional
    Series I Shares   Fund, Inc. - Class A   Class A   Class
Net assets at January 1, 2007   $ 49,719   $ 65   $ 557   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   13   -   2   -
     Total realized gain (loss) on investments and                
           capital gains distributions   1,463   11   51   -
     Net unrealized appreciation (depreciation)                
           of investments   1,934   (9)   (28)   -
Net increase (decrease) in net assets from operations   3,410   2   25   -
Changes from contract transactions:                
     Total unit transactions   (4,904)   53   63   -
Net increase (decrease) in assets derived from                
     principal transactions   (4,904)   53   63   -
Total increase (decrease) in net assets   (1,494)   55   88   -
Net assets at December 31, 2007   48,225   120   645   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   466   2   5   8
     Total realized gain (loss) on investments and                
           capital gains distributions   1,359   (5)   60   (120)
     Net unrealized appreciation (depreciation)                
           of investments   (16,338)   (78)   (321)   (110)
Net increase (decrease) in net assets from operations   (14,513)   (81)   (256)   (222)
Changes from contract transactions:                
     Total unit transactions   (2,058)   107   (18)   802
Net increase (decrease) in assets derived from                
     principal transactions   (2,058)   107   (18)   802
Total increase (decrease) in net assets   (16,571)   26   (274)   580
Net assets at December 31, 2008   $ 31,654   $ 146   $ 371   $ 580

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

110

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Allianz NFJ       American
    Small-Cap       Balanced
    Value Fund -   Amana Growth   Amana Income   Fund® -
    Class A   Fund   Fund   Class R-3
Net assets at January 1, 2007   $ 477   $ -   $ -   $ 5,014
 
Increase (decrease) in net assets from operations                        
Operations:                        
     Net investment income (loss)   4       -       -   91
     Total realized gain (loss) on investments and                        
           capital gains distributions   62       -       -   206
     Net unrealized appreciation (depreciation)                        
           of investments   (42)       -       -   (7)
Net increase (decrease) in net assets from operations   24       -       -   290
Changes from contract transactions:                        
     Total unit transactions   (47)       -       -   1,057
Net increase (decrease) in assets derived from                        
     principal transactions   (47)       -       -   1,057
Total increase (decrease) in net assets   (23)       -       -   1,347
Net assets at December 31, 2007   454       -       -   6,361
 
Increase (decrease) in net assets from operations                        
Operations:                        
     Net investment income (loss)   -       -       -   113
     Total realized gain (loss) on investments and                        
           capital gains distributions   9       -       -   (50)
     Net unrealized appreciation (depreciation)                        
           of investments   (140)       1       1   (1,566)
Net increase (decrease) in net assets from operations   (131)       1       1   (1,503)
Changes from contract transactions:                        
     Total unit transactions   13       35       45   (792)
Net increase (decrease) in assets derived from                        
     principal transactions   13       35       45   (792)
Total increase (decrease) in net assets   (118)       36       46   (2,295)
Net assets at December 31, 2008   $ 336   $ 36   $ 46   $ 4,066

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

111

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    American           Artisan
    Century Income   Ariel       International
    & Growth Fund   Appreciation       Fund - Investor
    - A Class   Fund   Ariel Fund   Shares
Net assets at January 1, 2007   $ 5,990   $ 629   $ 660   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   13   (4)   (7)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   950   69   72   -
     Net unrealized appreciation (depreciation)                
           of investments   (1,042)   (83)   (101)   -
Net increase (decrease) in net assets from operations   (79)   (18)   (36)   -
Changes from contract transactions:                
     Total unit transactions   (314)   (33)   214   -
Net increase (decrease) in assets derived from                
     principal transactions   (314)   (33)   214   -
Total increase (decrease) in net assets   (393)   (51)   178   -
Net assets at December 31, 2007   5,597   578   838   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   24   (2)   2   3
     Total realized gain (loss) on investments and                
           capital gains distributions   (228)   29   (68)   (43)
     Net unrealized appreciation (depreciation)                
           of investments   (1,827)   (284)   (363)   (33)
Net increase (decrease) in net assets from operations   (2,031)   (257)   (429)   (73)
Changes from contract transactions:                
     Total unit transactions   139   74   229   397
Net increase (decrease) in assets derived from                
     principal transactions   139   74   229   397
Total increase (decrease) in net assets   (1,892)   (183)   (200)   324
Net assets at December 31, 2008   $ 3,705   $ 395   $ 638   $ 324

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

112

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    The Bond Fund   Calvert Social   Capital One   ColumbiaSM
    of AmericaSM,   Balanced   Mid Cap Equity   Acorn Fund® -
    Inc. - Class R-4   Portfolio   Fund - Class A   Class Z
Net assets at January 1, 2007   $ -   $ 65,397   $ 96   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   801   (1)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   -   2,760   14   -
     Net unrealized appreciation (depreciation)                
           of investments   -   (2,483)   (12)   -
Net increase (decrease) in net assets from operations   -   1,078   1   -
Changes from contract transactions:                
     Total unit transactions   -   (7,007)   (10)   -
Net increase (decrease) in assets derived from                
     principal transactions   -   (7,007)   (10)   -
Total increase (decrease) in net assets   -   (5,929)   (9)   -
Net assets at December 31, 2007   -   59,468   87   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   33   676   (1)   1
     Total realized gain (loss) on investments and                
           capital gains distributions   (77)   (853)   (58)   (50)
     Net unrealized appreciation (depreciation)                
           of investments   (82)   (17,531)   14   (283)
Net increase (decrease) in net assets from operations   (126)   (17,708)   (45)   (332)
Changes from contract transactions:                
     Total unit transactions   2,055   (5,870)   (42)   1,139
Net increase (decrease) in assets derived from                
     principal transactions   2,055   (5,870)   (42)   1,139
Total increase (decrease) in net assets   1,929   (23,578)   (87)   807
Net assets at December 31, 2008   $ 1,929   $ 35,890   $ -   $ 807

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

113

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Columbia Mid   Columbia Mid   DWS Equity   EuroPacific
    Cap Value Fund   Cap Value Fund   500 Index Fund   Growth Fund®
    - Class A   - Class Z   - Class S   - Class R-3
Net assets at January 1, 2007   $ -   $ -   $ 167   $ 3,767
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   -   2   109
     Total realized gain (loss) on investments and                
           capital gains distributions   -   -   4   789
     Net unrealized appreciation (depreciation)                
           of investments   -   -   2   189
Net increase (decrease) in net assets from operations   -   -   8   1,087
Changes from contract transactions:                
     Total unit transactions   -   -   53   4,740
Net increase (decrease) in assets derived from                
     principal transactions   -   -   53   4,740
Total increase (decrease) in net assets   -   -   61   5,827
Net assets at December 31, 2007   -   -   228   9,594
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   8   6   2   110
     Total realized gain (loss) on investments and                
           capital gains distributions   (19)   (25)   (5)   416
     Net unrealized appreciation (depreciation)                
           of investments   (61)   (194)   (96)   (5,005)
Net increase (decrease) in net assets from operations   (72)   (213)   (99)   (4,479)
Changes from contract transactions:                
     Total unit transactions   1,647   774   39   2,137
Net increase (decrease) in assets derived from                
     principal transactions   1,647   774   39   2,137
Total increase (decrease) in net assets   1,575   561   (60)   (2,342)
Net assets at December 31, 2008   $ 1,575   $ 561   $ 168   $ 7,252

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

114

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            Fidelity® VIP   Fidelity® VIP
    EuroPacific   Evergreen   Equity-Income   Growth
    Growth Fund®   Special Values   Portfolio -   Portfolio -
    - Class R-4   Fund - Class A   Initial Class   Initial Class
Net assets at January 1, 2007   $ 141,230   $ 105,934   $ 455,731   $ 295,822
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   2,066   64   3,389   (665)
     Total realized gain (loss) on investments and                
           capital gains distributions   17,925   19,811   42,721   (13,059)
     Net unrealized appreciation (depreciation)                
           of investments   8,161   (29,475)   (42,979)   84,086
Net increase (decrease) in net assets from operations   28,152   (9,600)   3,131   70,362
Changes from contract transactions:                
     Total unit transactions   43,512   (1,772)   (32,334)   (36,470)
Net increase (decrease) in assets derived from                
     principal transactions   43,512   (1,772)   (32,334)   (36,470)
Total increase (decrease) in net assets   71,664   (11,372)   (29,203)   33,892
Net assets at December 31, 2007   212,894   94,562   426,528   329,714
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   2,254   28   4,655   (560)
     Total realized gain (loss) on investments and                
           capital gains distributions   8,005   (4,341)   (8,493)   (11,477)
     Net unrealized appreciation (depreciation)                
           of investments   (111,600)   (25,388)   (167,463)   (137,412)
Net increase (decrease) in net assets from operations   (101,341)   (29,701)   (171,301)   (149,449)
Changes from contract transactions:                
     Total unit transactions   44,205   (2,705)   (41,916)   (21,170)
Net increase (decrease) in assets derived from                
     principal transactions   44,205   (2,705)   (41,916)   (21,170)
Total increase (decrease) in net assets   (57,136)   (32,406)   (213,217)   (170,619)
Net assets at December 31, 2008   $ 155,758   $ 62,156   $ 213,311   $ 159,095

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

115

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Fidelity® VIP   Fidelity® VIP   Fidelity® VIP   Fidelity® VIP
    High Income   Overseas   Contrafund®   Index 500
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Initial Class   Initial Class   Initial Class
Net assets at January 1, 2007   $ 7,752   $ 51,710   $ 1,176,582   $ 128,845
 
Increase (decrease) in net assets from operations                
Operations:                
   Net investment income (loss)   550   1,300   (778)   3,367
   Total realized gain (loss) on investments and                
         capital gains distributions   (31)   7,491   362,570   156
   Net unrealized appreciation (depreciation)                
         of investments   (389)   (637)   (173,527)   2,132
Net increase (decrease) in net assets from operations   130   8,154   188,265   5,655
Changes from contract transactions:                
   Total unit transactions   (326)   834   (53,290)   (7,802)
Net increase (decrease) in assets derived from                
   principal transactions   (326)   834   (53,290)   (7,802)
Total increase (decrease) in net assets   (196)   8,988   134,975   (2,147)
Net assets at December 31, 2007   7,556   60,698   1,311,557   126,698
 
Increase (decrease) in net assets from operations                
Operations:                
   Net investment income (loss)   488   686   241   1,216
   Total realized gain (loss) on investments and                
         capital gains distributions   (251)   6,331   20,067   406
   Net unrealized appreciation (depreciation)                
         of investments   (2,028)   (32,555)   (575,536)   (47,617)
Net increase (decrease) in net assets from operations   (1,791)   (25,538)   (555,228)   (45,995)
Changes from contract transactions:                
   Total unit transactions   (749)   (5,495)   (34,065)   (5,564)
Net increase (decrease) in assets derived from                
   principal transactions   (749)   (5,495)   (34,065)   (5,564)
Total increase (decrease) in net assets   (2,540)   (31,033)   (589,293)   (51,559)
Net assets at December 31, 2008   $ 5,016   $ 29,665   $ 722,264   $ 75,139

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

116

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        Fidelity® VIP        
    Fidelity® VIP   Asset       Franklin Small-
    Mid Cap   ManagerSM   Mutual   Mid Cap
    Portfolio -   Portfolio -   Discovery Fund   Growth Fund -
    Initial Class   Initial Class   - Class R   Class A
Net assets at January 1, 2007   $ 5,451   $ 18,360   $ 1,438   $ 556
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   71   986   30   (8)
     Total realized gain (loss) on investments and                
           capital gains distributions   554   535   82   135
     Net unrealized appreciation (depreciation)                
           of investments   341   995   39   (69)
Net increase (decrease) in net assets from operations   966   2,516   151   58
Changes from contract transactions:                
     Total unit transactions   3,555   (616)   856   153
Net increase (decrease) in assets derived from                
     principal transactions   3,555   (616)   856   153
Total increase (decrease) in net assets   4,521   1,900   1,007   211
Net assets at December 31, 2007   9,972   20,260   2,445   767
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   49   345   11   (4)
     Total realized gain (loss) on investments and                
           capital gains distributions   1,221   1,670   108   (39)
     Net unrealized appreciation (depreciation)                
           of investments   (5,975)   (8,664)   (884)   (243)
Net increase (decrease) in net assets from operations   (4,705)   (6,649)   (765)   (286)
Changes from contract transactions:                
     Total unit transactions   2,739   1,949   387   (85)
Net increase (decrease) in assets derived from                
     principal transactions   2,739   1,949   387   (85)
Total increase (decrease) in net assets   (1,966)   (4,700)   (378)   (371)
Net assets at December 31, 2008   $ 8,006   $ 15,560   $ 2,067   $ 396

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

117

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Franklin Small           The Growth
    Cap Value   Fundamental   Fundamental   Fund of
    Securities Fund   Investors, Inc. -   Investors, Inc. -   America® -
    - Class 2   Class R-3   Class R-4   Class R-3
Net assets at January 1, 2007   $ 88,521   $ -   $ -   $ 7,813
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (354)   -   -   17
     Total realized gain (loss) on investments and                
           capital gains distributions   10,632   -   -   884
     Net unrealized appreciation (depreciation)                
           of investments   (13,832)   -   -   (45)
Net increase (decrease) in net assets from operations   (3,554)   -   -   856
Changes from contract transactions:                
     Total unit transactions   6,669   -   -   3,773
Net increase (decrease) in assets derived from                
     principal transactions   6,669   -   -   3,773
Total increase (decrease) in net assets   3,115   -   -   4,629
Net assets at December 31, 2007   91,636   -   -   12,442
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   189   -   28   (8)
     Total realized gain (loss) on investments and                
           capital gains distributions   6,374   -   (83)   (22)
     Net unrealized appreciation (depreciation)                
           of investments   (37,896)   -   (1,214)   (5,721)
Net increase (decrease) in net assets from operations   (31,333)   -   (1,269)   (5,751)
Changes from contract transactions:                
     Total unit transactions   3,170   13   9,549   2,867
Net increase (decrease) in assets derived from                
     principal transactions   3,170   13   9,549   2,867
Total increase (decrease) in net assets   (28,163)   13   8,280   (2,884)
Net assets at December 31, 2008   $ 63,473   $ 13   $ 8,280   $ 9,558

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

118

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    The Growth   The Income        
    Fund of   Fund of   ING Financial    
    America® -   America® -   Services Fund -   ING Real Estate
    Class R-4   Class R-3   Class A   Fund - Class A
Net assets at January 1, 2007   $ 196,584   $ 1,032   $ 84   $ 2,373
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   178   34   1   42
     Total realized gain (loss) on investments and                
           capital gains distributions   17,791   96   18   321
     Net unrealized appreciation (depreciation)                
           of investments   2,330   (114)   (37)   (765)
Net increase (decrease) in net assets from operations   20,299   16   (18)   (402)
Changes from contract transactions:                
     Total unit transactions   31,895   612   70   (48)
Net increase (decrease) in assets derived from                
     principal transactions   31,895   612   70   (48)
Total increase (decrease) in net assets   52,194   628   52   (450)
Net assets at December 31, 2007   248,778   1,660   136   1,923
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (20)   61   1   42
     Total realized gain (loss) on investments and                
           capital gains distributions   382   (31)   (8)   (103)
     Net unrealized appreciation (depreciation)                
           of investments   (110,408)   (621)   (56)   (668)
Net increase (decrease) in net assets from operations   (110,046)   (591)   (63)   (729)
Changes from contract transactions:                
     Total unit transactions   42,388   466   28   163
Net increase (decrease) in assets derived from                
     principal transactions   42,388   466   28   163
Total increase (decrease) in net assets   (67,658)   (125)   (35)   (566)
Net assets at December 31, 2008   $ 181,120   $ 1,535   $ 101   $ 1,357

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

119

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                ING BlackRock
            ING   Large Cap
        ING   AllianceBernstein   Growth
    ING GNMA   Intermediate   Mid Cap Growth   Portfolio -
    Income Fund -   Bond Fund -   Portfolio - Service   Institutional
    Class A   Class A   Class   Class
Net assets at January 1, 2007   $ 973   $ 1,633   $ 3,286   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   36   85   (33)   (879)
     Total realized gain (loss) on investments and                
           capital gains distributions   (4)   (8)   (317)   -
     Net unrealized appreciation (depreciation)                
           of investments   25   35   554   (1,934)
Net increase (decrease) in net assets from operations   57   112   204   (2,813)
Changes from contract transactions:                
     Total unit transactions   375   1,319   401   118,751
Net increase (decrease) in assets derived from                
     principal transactions   375   1,319   401   118,751
Total increase (decrease) in net assets   432   1,431   605   115,938
Net assets at December 31, 2007   1,405   3,064   3,891   115,938
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   61   124   (31)   (754)
     Total realized gain (loss) on investments and                
           capital gains distributions   -   75   53   6,021
     Net unrealized appreciation (depreciation)                
           of investments   80   (577)   (1,906)   (49,073)
Net increase (decrease) in net assets from operations   141   (378)   (1,884)   (43,806)
Changes from contract transactions:                
     Total unit transactions   1,289   795   26   (8,829)
Net increase (decrease) in assets derived from                
     principal transactions   1,289   795   26   (8,829)
Total increase (decrease) in net assets   1,430   417   (1,858)   (52,635)
Net assets at December 31, 2008   $ 2,835   $ 3,481   $ 2,033   $ 63,303

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

120

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING BlackRock   ING BlackRock        
    Large Cap   Large Cap   ING Evergreen    
    Growth   Growth   Health Sciences ING Evergreen
    Portfolio -   Portfolio -   Portfolio -   Omega Portfolio
    Service Class   Service 2 Class   Service Class   - Service Class
Net assets at January 1, 2007   $ -   $ -   $ 4,440   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   -   (48)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   1   -   395   -
     Net unrealized appreciation (depreciation)                
           of investments   -   (2)   13   -
Net increase (decrease) in net assets from operations   1   (2)   360   -
Changes from contract transactions:                
     Total unit transactions   42   149   1,456   -
Net increase (decrease) in assets derived from                
     principal transactions   42   149   1,456   -
Total increase (decrease) in net assets   43   147   1,816   -
Net assets at December 31, 2007   43   147   6,256   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   -   (52)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   7   (11)   286   (1)
     Net unrealized appreciation (depreciation)                
           of investments   (47)   (52)   (2,687)   -
Net increase (decrease) in net assets from operations   (40)   (63)   (2,453)   (1)
Changes from contract transactions:                
     Total unit transactions   83   (5)   3,395   36
Net increase (decrease) in assets derived from                
     principal transactions   83   (5)   3,395   36
Total increase (decrease) in net assets   43   (68)   942   35
Net assets at December 31, 2008   $ 86   $ 79   $ 7,198   $ 35

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

121

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING Global   ING Global    
    ING FMRSM   Real Estate   Resources   ING Global
    Diversified Mid   Portfolio -   Portfolio -   Resources
    Cap Portfolio -   Institutional   Institutional   Portfolio -
    Service Class   Class   Class       Service Class
Net assets at January 1, 2007   $ 14,604   $ -   $ -   $ -
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   (154)   -       -   (869)
     Total realized gain (loss) on investments and                    
           capital gains distributions   403   -       -   10,253
     Net unrealized appreciation (depreciation)                    
           of investments   1,812   -       4   18,114
Net increase (decrease) in net assets from operations   2,061   -       4   27,498
Changes from contract transactions:                    
     Total unit transactions   2,778   -       40   81,933
Net increase (decrease) in assets derived from                    
     principal transactions   2,778   -       40   81,933
Total increase (decrease) in net assets   4,839   -       44   109,431
Net assets at December 31, 2007   19,443   -       44   109,431
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   (5)   (121)       1   814
     Total realized gain (loss) on investments and                    
           capital gains distributions   1,477   (913)       6   16,984
     Net unrealized appreciation (depreciation)                    
           of investments   (11,681)   (15,512)       (24)   (74,214)
Net increase (decrease) in net assets from operations   (10,209)   (16,546)       (17)   (56,416)
Changes from contract transactions:                    
     Total unit transactions   12,203   52,513       (2)   20,558
Net increase (decrease) in assets derived from                    
     principal transactions   12,203   52,513       (2)   20,558
Total increase (decrease) in net assets   1,994   35,967       (19)   (35,858)
Net assets at December 31, 2008   $ 21,437   $ 35,967   $ 25   $ 73,573

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

122

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING JPMorgan    
        ING JPMorgan   Emerging   ING JPMorgan
    ING Janus   Emerging   Markets Equity   Emerging
    Contrarian   Markets Equity   Portfolio -   Markets Equity
    Portfolio -   Portfolio -   Institutional   Portfolio -
    Service Class   Adviser Class   Class   Service Class
Net assets at January 1, 2007   $ -   $ 57   $ 29,171   $ 21,610
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (5)   1   58   (32)
     Total realized gain (loss) on investments and                
           capital gains distributions   2   19   3,940   2,380
     Net unrealized appreciation (depreciation)                
           of investments   13   30   6,939   6,767
Net increase (decrease) in net assets from operations   10   50   10,937   9,115
Changes from contract transactions:                
     Total unit transactions   4,601   261   3,723   9,448
Net increase (decrease) in assets derived from                
     principal transactions   4,601   261   3,723   9,448
Total increase (decrease) in net assets   4,611   311   14,660   18,563
Net assets at December 31, 2007   4,611   368   43,831   40,173
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   6   9   512   387
     Total realized gain (loss) on investments and                
           capital gains distributions   750   (101)   3,302   2,968
     Net unrealized appreciation (depreciation)                
           of investments   (5,728)   (153)   (25,117)   (22,553)
Net increase (decrease) in net assets from operations   (4,972)   (245)   (21,303)   (19,198)
Changes from contract transactions:                
     Total unit transactions   7,766   48   (4,081)   (5,250)
Net increase (decrease) in assets derived from                
     principal transactions   7,766   48   (4,081)   (5,250)
Total increase (decrease) in net assets   2,794   (197)   (25,384)   (24,448)
Net assets at December 31, 2008   $ 7,405   $ 171   $ 18,447   $ 15,725

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

123

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING JPMorgan        
        Value   ING JPMorgan    
    ING JPMorgan   Opportunities   Value   ING Julius Baer
    Small Cap Core   Portfolio -   Opportunities   Foreign
    Equity Portfolio   Institutional   Portfolio -   Portfolio -
    - Service Class   Class   Service Class   Service Class
Net assets at January 1, 2007   $ 1,643   $ 26   $ 824   $ 30,166
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (22)   1   7   (456)
     Total realized gain (loss) on investments and                
           capital gains distributions   166   9   128   3,915
     Net unrealized appreciation (depreciation)                
           of investments   (257)   (12)   (217)   2,669
Net increase (decrease) in net assets from operations   (113)   (2)   (82)   6,128
Changes from contract transactions:                
     Total unit transactions   938   48   1,097   23,557
Net increase (decrease) in assets derived from                
     principal transactions   938   48   1,097   23,557
Total increase (decrease) in net assets   825   46   1,015   29,685
Net assets at December 31, 2007   2,468   72   1,839   59,851
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (10)   1   32   (495)
     Total realized gain (loss) on investments and                
           capital gains distributions   38   (16)   (87)   4,598
     Net unrealized appreciation (depreciation)                
           of investments   (903)   (8)   (626)   (31,754)
Net increase (decrease) in net assets from operations   (875)   (23)   (681)   (27,651)
Changes from contract transactions:                
     Total unit transactions   536   (21)   (32)   1,138
Net increase (decrease) in assets derived from                
     principal transactions   536   (21)   (32)   1,138
Total increase (decrease) in net assets   (339)   (44)   (713)   (26,513)
Net assets at December 31, 2008   $ 2,129   $ 28   $ 1,126   $ 33,338

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

124

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING Lord        
        Abbett   ING Lord   ING Marsico
    ING Legg   Affiliated   Abbett   Growth
    Mason Value   Portfolio -   Affiliated   Portfolio -
    Portfolio -   Institutional   Portfolio -   Institutional
    Service Class   Class   Service Class   Class
Net assets at January 1, 2007   $ 3,415   $ 1,068   $ -   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (45)   (572)   6   -
     Total realized gain (loss) on investments and                
           capital gains distributions   136   232   11   -
     Net unrealized appreciation (depreciation)                
           of investments   (434)   2,393   (30)   -
Net increase (decrease) in net assets from operations   (343)   2,053   (13)   -
Changes from contract transactions:                
     Total unit transactions   1,322   128,642   529   -
Net increase (decrease) in assets derived from                
     principal transactions   1,322   128,642   529   -
Total increase (decrease) in net assets   979   130,695   516   -
Net assets at December 31, 2007   4,394   131,763   516   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (29)   2,313   13   13
     Total realized gain (loss) on investments and                
           capital gains distributions   (944)   9,152   66   (350)
     Net unrealized appreciation (depreciation)                
           of investments   (1,123)   (57,524)   (350)   (2,548)
Net increase (decrease) in net assets from operations   (2,096)   (46,059)   (271)   (2,885)
Changes from contract transactions:                
     Total unit transactions   (850)   (12,544)   261   8,099
Net increase (decrease) in assets derived from                
     principal transactions   (850)   (12,544)   261   8,099
Total increase (decrease) in net assets   (2,946)   (58,603)   (10)   5,214
Net assets at December 31, 2008   $ 1,448   $ 73,160   $ 506   $ 5,214

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

125

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING Marsico   ING Marsico    
    ING Marsico   International   International    
    Growth   Opportunities   Opportunities   ING MFS Total
    Portfolio -   Portfolio -   Portfolio -   Return Portfolio
    Service Class   Adviser Class   Service Class   - Adviser Class
Net assets at January 1, 2007   $ 2,747   $ -   $ 7,306   $ 45
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (36)   -   (2)   3
     Total realized gain (loss) on investments and                
           capital gains distributions   148   -   1,033   11
     Net unrealized appreciation (depreciation)                
           of investments   278   (2)   569   (18)
Net increase (decrease) in net assets from operations   390   (2)   1,600   (4)
Changes from contract transactions:                
     Total unit transactions   1,190   66   3,645   526
Net increase (decrease) in assets derived from                
     principal transactions   1,190   66   3,645   526
Total increase (decrease) in net assets   1,580   64   5,245   522
Net assets at December 31, 2007   4,327   64   12,551   567
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (14)   -   1   24
     Total realized gain (loss) on investments and                
           capital gains distributions   120   (41)   458   (25)
     Net unrealized appreciation (depreciation)                
           of investments   (600)   (33)   (6,943)   (159)
Net increase (decrease) in net assets from operations   (494)   (74)   (6,484)   (160)
Changes from contract transactions:                
     Total unit transactions   (3,527)   75   341   90
Net increase (decrease) in assets derived from                
     principal transactions   (3,527)   75   341   90
Total increase (decrease) in net assets   (4,021)   1   (6,143)   (70)
Net assets at December 31, 2008   $ 306   $ 65   $ 6,408   $ 497

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

126

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                ING
    ING MFS Total       ING MFS   Oppenheimer
    Return Portfolio   ING MFS Total   Utilities   Main Street
    - Institutional   Return Portfolio   Portfolio -   Portfolio® -
    Class   - Service Class   Service Class   Service Class
Net assets at January 1, 2007   $ 269   $ 36,559   $ 13,022   $ 825
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (317)   638   (51)   (3)
     Total realized gain (loss) on investments and                
           capital gains distributions   17   2,370   3,078   102
     Net unrealized appreciation (depreciation)                
           of investments   858   (1,896)   2,510   (81)
Net increase (decrease) in net assets from operations   558   1,112   5,537   18
Changes from contract transactions:                
     Total unit transactions   80,319   (4,067)   18,964   1,161
Net increase (decrease) in assets derived from                
     principal transactions   80,319   (4,067)   18,964   1,161
Total increase (decrease) in net assets   80,877   (2,955)   24,501   1,179
Net assets at December 31, 2007   81,146   33,604   37,523   2,004
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3,506   1,362   775   31
     Total realized gain (loss) on investments and                
           capital gains distributions   4,166   1,275   3,714   (453)
     Net unrealized appreciation (depreciation)                
           of investments   (24,202)   (9,967)   (20,213)   (434)
Net increase (decrease) in net assets from operations   (16,530)   (7,330)   (15,724)   (856)
Changes from contract transactions:                
     Total unit transactions   (12,962)   (3,924)   2,976   194
Net increase (decrease) in assets derived from                
     principal transactions   (12,962)   (3,924)   2,976   194
Total increase (decrease) in net assets   (29,492)   (11,254)   (12,748)   (662)
Net assets at December 31, 2008   $ 51,654   $ 22,350   $ 24,775   $ 1,342

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

127

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING PIMCO       ING Pioneer    
    High Yield   ING PIMCO   Equity Income   ING Pioneer
    Portfolio -   High Yield   Portfolio -   Fund Portfolio -
    Institutional   Portfolio -   Institutional   Institutional
    Class   Service Class   Class   Class
Net assets at January 1, 2007   $ 247   $ 5,070   $ -   $ 2,509
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   27   331   1,448   (31)
     Total realized gain (loss) on investments and                
           capital gains distributions   (8)   11   74   217
     Net unrealized appreciation (depreciation)                
           of investments   (14)   (257)   (5,352)   14
Net increase (decrease) in net assets from operations   5   85   (3,830)   200
Changes from contract transactions:                
     Total unit transactions   548   567   160,312   13,780
Net increase (decrease) in assets derived from                
     principal transactions   548   567   160,312   13,780
Total increase (decrease) in net assets   553   652   156,482   13,980
Net assets at December 31, 2007   800   5,722   156,482   16,489
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   56   404   2,906   421
     Total realized gain (loss) on investments and                
           capital gains distributions   (79)   (586)   (2,534)   261
     Net unrealized appreciation (depreciation)                
           of investments   (157)   (1,227)   (48,595)   (6,636)
Net increase (decrease) in net assets from operations   (180)   (1,409)   (48,223)   (5,954)
Changes from contract transactions:                
     Total unit transactions   (11)   149   3,109   1,096
Net increase (decrease) in assets derived from                
     principal transactions   (11)   149   3,109   1,096
Total increase (decrease) in net assets   (191)   (1,260)   (45,114)   (4,858)
Net assets at December 31, 2008   $ 609   $ 4,462   $ 111,368   $ 11,631

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

128

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING Pioneer    
        ING Pioneer   Mid Cap Value   ING Pioneer
    ING Pioneer   Mid Cap Value   Portfolio -   Mid Cap Value
    Fund Portfolio -   Portfolio -   Institutional   Portfolio -
    Service Class   Adviser Class   Class   Service Class
Net assets at January 1, 2007   $ 25   $ -   $ 783   $ 6
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (1)   -   (383)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   2   -   16   -
     Net unrealized appreciation (depreciation)                
           of investments   (1)   -   (2,175)   -
Net increase (decrease) in net assets from operations   -   -   (2,542)   -
Changes from contract transactions:                
     Total unit transactions   86   -   98,750   10
Net increase (decrease) in assets derived from                
     principal transactions   86   -   98,750   10
Total increase (decrease) in net assets   86   -   96,208   10
Net assets at December 31, 2007   111   -   96,991   16
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3   -   996   3
     Total realized gain (loss) on investments and                
           capital gains distributions   2   (1)   2,997   9
     Net unrealized appreciation (depreciation)                
           of investments   (53)   (1)   (36,707)   (74)
Net increase (decrease) in net assets from operations   (48)   (2)   (32,714)   (62)
Changes from contract transactions:                
     Total unit transactions   46   4   1,187   250
Net increase (decrease) in assets derived from                
     principal transactions   46   4   1,187   250
Total increase (decrease) in net assets   (2)   2   (31,527)   188
Net assets at December 31, 2008   $ 109   $ 2   $ 65,464   $ 204

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

129

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING T. Rowe        
    ING Stock   Price Capital   ING T. Rowe   ING T. Rowe
    Index Portfolio -   Appreciation   Price Equity   Price Equity
    Institutional   Portfolio -   Income Portfolio   Income Portfolio
    Class   Service Class   - Adviser Class   - Service Class
Net assets at January 1, 2007   $ 3,625   $ 86,924   $ 215   $ 87,796
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   47   951   5   370
     Total realized gain (loss) on investments and                
           capital gains distributions   192   12,895   36   5,033
     Net unrealized appreciation (depreciation)                
           of investments   (63)   (11,663)   (61)   (3,764)
Net increase (decrease) in net assets from operations   176   2,183   (20)   1,639
Changes from contract transactions:                
     Total unit transactions   (213)   79,883   956   12,269
Net increase (decrease) in assets derived from                
     principal transactions   (213)   79,883   956   12,269
Total increase (decrease) in net assets   (37)   82,066   936   13,908
Net assets at December 31, 2007   3,588   168,990   1,151   101,704
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   112   6,214   32   3,165
     Total realized gain (loss) on investments and                
           capital gains distributions   24   15,596   8   7,576
     Net unrealized appreciation (depreciation)                
           of investments   (1,486)   (79,630)   (532)   (49,945)
Net increase (decrease) in net assets from operations   (1,350)   (57,820)   (492)   (39,204)
Changes from contract transactions:                
     Total unit transactions   134   47,698   259   12,008
Net increase (decrease) in assets derived from                
     principal transactions   134   47,698   259   12,008
Total increase (decrease) in net assets   (1,216)   (10,122)   (233)   (27,196)
Net assets at December 31, 2008   $ 2,372   $ 158,868   $ 918   $ 74,508

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

130

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING Van    
    ING Templeton       Kampen Capital   ING Van
    Global Growth   ING Templeton   Growth   Kampen Capital
    Portfolio -   Global Growth   Portfolio -   Growth
    Institutional   Portfolio -   Institutional   Portfolio -
    Class   Service Class   Class   Service Class
Net assets at January 1, 2007   $ -   $ 1,421   $ -   $ 14
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (5)   (2)   -   -
     Total realized gain (loss) on investments and                
           capital gains distributions   -   144   -   3
     Net unrealized appreciation (depreciation)                
           of investments   (6)   (144)   -   9
Net increase (decrease) in net assets from operations   (11)   (2)   -   12
Changes from contract transactions:                
     Total unit transactions   1,197   1,414   -   61
Net increase (decrease) in assets derived from                
     principal transactions   1,197   1,414   -   61
Total increase (decrease) in net assets   1,186   1,412   -   73
Net assets at December 31, 2007   1,186   2,833   -   87
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3   (1)   (2)   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   19   (4)   (90)   (11)
     Net unrealized appreciation (depreciation)                
           of investments   (514)   (1,297)   (94)   (132)
Net increase (decrease) in net assets from operations   (492)   (1,302)   (186)   (144)
Changes from contract transactions:                
     Total unit transactions   80   579   548   202
Net increase (decrease) in assets derived from                
     principal transactions   80   579   548   202
Total increase (decrease) in net assets   (412)   (723)   362   58
Net assets at December 31, 2008   $ 774   $ 2,110   $ 362   $ 145

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

131

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING Van      
    ING Van   Kampen Large   ING Van   ING Van
    Kampen   Cap Growth   Kampen Large   Kampen Real
    Growth and   Portfolio -   Cap Growth   Estate Portfolio
    Income Portfolio   Institutional   Portfolio -   - Institutional
    - Service Class   Class   Service Class   Class
Net assets at January 1, 2007   $ 15,704   $ 162   $ -   $ 754
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   103   (2)       -   3
     Total realized gain (loss) on investments and                    
           capital gains distributions   1,414   7       -   88
     Net unrealized appreciation (depreciation)                    
           of investments   (1,343)   (3)       -   (296)
Net increase (decrease) in net assets from operations   174   2       -   (205)
Changes from contract transactions:                    
     Total unit transactions   1,410   (22)       -   393
Net increase (decrease) in assets derived from                    
     principal transactions   1,410   (22)       -   393
Total increase (decrease) in net assets   1,584   (20)       -   188
Net assets at December 31, 2007   17,288   142       -   942
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   475   1       -   7
     Total realized gain (loss) on investments and                    
           capital gains distributions   716   (3)       -   114
     Net unrealized appreciation (depreciation)                    
           of investments   (7,115)   (1)       -   (590)
Net increase (decrease) in net assets from operations   (5,924)   (3)       -   (469)
Changes from contract transactions:                    
     Total unit transactions   1,747   (139)       -   251
Net increase (decrease) in assets derived from                    
     principal transactions   1,747   (139)       -   251
Total increase (decrease) in net assets   (4,177)   (142)       -   (218)
Net assets at December 31, 2008   $ 13,111   $ -   $ -   $ 724

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

132

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING VP Index        
        Plus   ING VP Index   ING Wells
    ING Van   International   Plus   Fargo
    Kampen Real   Equity Portfolio   International   Disciplined
    Estate Portfolio   - Institutional   Equity Portfolio   Value Portfolio -
    - Service Class   Class   - Service Class   Adviser Class
Net assets at January 1, 2007   $ 16,905   $ -   $ 2,537   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   36   (33)   (84)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   2,824   4   533   -
     Net unrealized appreciation (depreciation)                
           of investments   (7,927)   (304)   (190)   -
Net increase (decrease) in net assets from operations   (5,067)   (333)   259   -
Changes from contract transactions:                
     Total unit transactions   9,000   22,695   4,320   3
Net increase (decrease) in assets derived from                
     principal transactions   9,000   22,695   4,320   3
Total increase (decrease) in net assets   3,933   22,362   4,579   3
Net assets at December 31, 2007   20,838   22,362   7,116   3
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   80   957   254   -
     Total realized gain (loss) on investments and                
           capital gains distributions   1,340   2,290   272   (1)
     Net unrealized appreciation (depreciation)                
           of investments   (11,957)   (12,785)   (3,273)   -
Net increase (decrease) in net assets from operations   (10,537)   (9,538)   (2,747)   (1)
Changes from contract transactions:                
     Total unit transactions   6,988   (1,453)   (1,436)   (2)
Net increase (decrease) in assets derived from                
     principal transactions   6,988   (1,453)   (1,436)   (2)
Total increase (decrease) in net assets   (3,549)   (10,991)   (4,183)   (3)
Net assets at December 31, 2008   $ 17,289   $ 11,371   $ 2,933   $ -

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

133

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Wells   ING Wells   ING   ING
    Fargo   Fargo Small   International   International
    Disciplined   Cap Disciplined   Growth   SmallCap
    Value Portfolio -   Portfolio -   Opportunities   Multi-Manager
    Service Class   Service Class   Fund - Class Q   Fund - Class A
Net assets at January 1, 2007   $ 767   $ 1,141   $ 7   $ 837
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   5   (10)       -   4
     Total realized gain (loss) on investments and                    
           capital gains distributions   54   58       2   480
     Net unrealized appreciation (depreciation)                    
           of investments   (136)   (90)       -   (379)
Net increase (decrease) in net assets from operations   (77)   (42)       2   105
Changes from contract transactions:                    
     Total unit transactions   433   (77)       2   1,279
Net increase (decrease) in assets derived from                    
     principal transactions   433   (77)       2   1,279
Total increase (decrease) in net assets   356   (119)       4   1,384
Net assets at December 31, 2007   1,123   1,022       11   2,221
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   20   (1)       -   29
     Total realized gain (loss) on investments and                    
           capital gains distributions   (211)   (192)       -   (92)
     Net unrealized appreciation (depreciation)                    
           of investments   87   (231)       (8)   (1,196)
Net increase (decrease) in net assets from operations   (104)   (424)       (8)   (1,259)
Changes from contract transactions:                    
     Total unit transactions   (1,019)   349       4   299
Net increase (decrease) in assets derived from                    
     principal transactions   (1,019)   349       4   299
Total increase (decrease) in net assets   (1,123)   (75)       (4)   (960)
Net assets at December 31, 2008   $ -   $ 947   $ 7   $ 1,261

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

134

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING American   ING American   ING American   ING American
    Century Large   Century Large   Century Small-   Century Small-
    Company Value   Company Value   Mid Cap Value   Mid Cap Value
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Service Class   Adviser Class   Service Class
Net assets at January 1, 2007   $ 9   $ 5,290   $ 22   $ 33,826
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   5   -   (193)
     Total realized gain (loss) on investments and                
           capital gains distributions   2   628   6   4,881
     Net unrealized appreciation (depreciation)                
           of investments   (4)   (763)   (8)   (5,673)
Net increase (decrease) in net assets from operations   (2)   (130)   (2)   (985)
Changes from contract transactions:                
     Total unit transactions   79   (730)   17   (4,206)
Net increase (decrease) in assets derived from                
     principal transactions   79   (730)   17   (4,206)
Total increase (decrease) in net assets   77   (860)   15   (5,191)
Net assets at December 31, 2007   86   4,430   37   28,635
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   10   475   1   (43)
     Total realized gain (loss) on investments and                
           capital gains distributions   30   729   (7)   2,748
     Net unrealized appreciation (depreciation)                
           of investments   (75)   (2,931)   (10)   (10,546)
Net increase (decrease) in net assets from operations   (35)   (1,727)   (16)   (7,841)
Changes from contract transactions:                
     Total unit transactions   27   114   18   1,281
Net increase (decrease) in assets derived from                
     principal transactions   27   114   18   1,281
Total increase (decrease) in net assets   (8)   (1,613)   2   (6,560)
Net assets at December 31, 2008   $ 78   $ 2,817   $ 39   $ 22,075

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

135

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING Baron   ING Baron    
        Small Cap   Small Cap   ING Columbia
    ING Baron   Growth   Growth   Small Cap Value
    Asset Portfolio -   Portfolio -   Portfolio -   II Portfolio -
    Service Class   Adviser Class   Service Class   Service Class
Net assets at January 1, 2007   $ 306   $ 63   $ 91,451   $ 39
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (18)   (1)   (996)   (3)
     Total realized gain (loss) on investments and                
           capital gains distributions   48   8   3,264   9
     Net unrealized appreciation (depreciation)                
           of investments   58   (3)   2,329   (31)
Net increase (decrease) in net assets from operations   88   4   4,597   (25)
Changes from contract transactions:                
     Total unit transactions   2,823   190   12,652   782
Net increase (decrease) in assets derived from                
     principal transactions   2,823   190   12,652   782
Total increase (decrease) in net assets   2,911   194   17,249   757
Net assets at December 31, 2007   3,217   257   108,700   796
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (23)   (1)   (814)   (9)
     Total realized gain (loss) on investments and                
           capital gains distributions   (40)   (27)   4,779   (33)
     Net unrealized appreciation (depreciation)                
           of investments   (1,397)   (109)   (50,479)   (377)
Net increase (decrease) in net assets from operations   (1,460)   (137)   (46,514)   (419)
Changes from contract transactions:                
     Total unit transactions   369   96   4,050   576
Net increase (decrease) in assets derived from                
     principal transactions   369   96   4,050   576
Total increase (decrease) in net assets   (1,091)   (41)   (42,464)   157
Net assets at December 31, 2008   $ 2,126   $ 216   $ 66,236   $ 953

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

136

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Davis New   ING Fidelity®   ING Index   ING Index
    York Venture   VIP Mid Cap   Solution 2015   Solution 2025
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Service Class   Service Class   Adviser Class   Adviser Class
Net assets at January 1, 2007   $ 9,468   $ 110   $ -   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (85)   (5)   -   -
     Total realized gain (loss) on investments and                
           capital gains distributions   394   19   -   -
     Net unrealized appreciation (depreciation)                
           of investments   (49)   81   -   -
Net increase (decrease) in net assets from operations   260   95   -   -
Changes from contract transactions:                
     Total unit transactions   1,585   3,839   -   -
Net increase (decrease) in assets derived from                
     principal transactions   1,585   3,839   -   -
Total increase (decrease) in net assets   1,845   3,934   -   -
Net assets at December 31, 2007   11,313   4,044   -   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (26)   (14)   -   -
     Total realized gain (loss) on investments and                
           capital gains distributions   18   411   -   -
     Net unrealized appreciation (depreciation)                
           of investments   (5,140)   (4,082)   1   2
Net increase (decrease) in net assets from operations   (5,148)   (3,685)   1   2
Changes from contract transactions:                
     Total unit transactions   2,424   6,348   36   79
Net increase (decrease) in assets derived from                
     principal transactions   2,424   6,348   36   79
Total increase (decrease) in net assets   (2,724)   2,663   37   81
Net assets at December 31, 2008   $ 8,589   $ 6,707   $ 37   $ 81

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

137

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Index   ING Index   ING Index   ING JPMorgan
    Solution 2035   Solution 2045   Solution Income   International
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Adviser Class   Adviser Class   Adviser Class
Net assets at January 1, 2007   $ -   $ -   $ -   $ 20
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   -       -   -   3
     Total realized gain (loss) on investments and                    
           capital gains distributions   -       -   -   3
     Net unrealized appreciation (depreciation)                    
           of investments   -       -   -   (4)
Net increase (decrease) in net assets from operations   -       -   -   2
Changes from contract transactions:                    
     Total unit transactions   -       -   -   169
Net increase (decrease) in assets derived from                   -
     principal transactions   -       -   -   169
Total increase (decrease) in net assets   -       -   -   171
Net assets at December 31, 2007   -       -   -   191
 
Increase (decrease) in net assets from operations                    
Operations:                    
     Net investment income (loss)   -       -   -   6
     Total realized gain (loss) on investments and                   -
           capital gains distributions   -       -   -   (12)
     Net unrealized appreciation (depreciation)                    
           of investments   1       -   -   3
Net increase (decrease) in net assets from operations   1       -   -   (3)
Changes from contract transactions:                    
     Total unit transactions   50       6   1   (188)
Net increase (decrease) in assets derived from                    
     principal transactions   50       6   1   (188)
Total increase (decrease) in net assets   51       6   1   (191)
Net assets at December 31, 2008   $ 51   $ 6   $ 1   $ -

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

138

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING JPMorgan   ING JPMorgan   ING JPMorgan   ING JPMorgan
    International   International   Mid Cap Value   Mid Cap Value
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Service Class   Adviser Class   Service Class
Net assets at January 1, 2007   $ 150,203   $ 16   $ 91   $ 32,578
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1,581   -   -   (183)
     Total realized gain (loss) on investments and                
           capital gains distributions   14,809   -   23   2,736
     Net unrealized appreciation (depreciation)                
           of investments   (3,771)   1   (35)   (2,133)
Net increase (decrease) in net assets from operations   12,619   1   (12)   420
Changes from contract transactions:                
     Total unit transactions   (20,511)   14   307   1,986
Net increase (decrease) in assets derived from                
     principal transactions   (20,511)   14   307   1,986
Total increase (decrease) in net assets   (7,892)   15   295   2,406
Net assets at December 31, 2007   142,311   31   386   34,984
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3,607   1   4   305
     Total realized gain (loss) on investments and                
           capital gains distributions   38,722   2   (37)   2,533
     Net unrealized appreciation (depreciation)                
           of investments   (47,137)   (3)   (85)   (13,907)
Net increase (decrease) in net assets from operations   (4,808)   -   (118)   (11,069)
Changes from contract transactions:                
     Total unit transactions   (137,503)   (31)   (23)   (2,795)
Net increase (decrease) in assets derived from                
     principal transactions   (137,503)   (31)   (23)   (2,795)
Total increase (decrease) in net assets   (142,311)   (31)   (141)   (13,864)
Net assets at December 31, 2008   $ -   $ -   $ 245   $ 21,120

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

139

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Legg   ING Legg   ING Legg   ING Legg
    Mason Partners   Mason Partners   Mason Partners   Mason Partners
    Aggressive   Aggressive   Aggressive   Large Cap
    Growth   Growth   Growth   Growth
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Adviser Class   Initial Class   Service Class   Adviser Class
Net assets at January 1, 2007   $ 17   $ 203,807   $ 82   $ 33
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   (1,922)   (1)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   4   (9,429)   4   6
     Net unrealized appreciation (depreciation)                
           of investments   (7)   7,512   (6)   (5)
Net increase (decrease) in net assets from operations   (3)   (3,839)   (3)   1
Changes from contract transactions:                
     Total unit transactions   82   (38,945)   8   108
Net increase (decrease) in assets derived from                
     principal transactions   82   (38,945)   8   108
Total increase (decrease) in net assets   79   (42,784)   5   109
Net assets at December 31, 2007   96   161,023   87   142
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   (1,316)   (1)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   (10)   (20,709)   1   (13)
     Net unrealized appreciation (depreciation)                
           of investments   (27)   (37,274)   (67)   4
Net increase (decrease) in net assets from operations   (37)   (59,299)   (67)   (9)
Changes from contract transactions:                
     Total unit transactions   1   (17,346)   100   (133)
Net increase (decrease) in assets derived from                
     principal transactions   1   (17,346)   100   (133)
Total increase (decrease) in net assets   (36)   (76,645)   33   (142)
Net assets at December 31, 2008   $ 60   $ 84,378   $ 120   $ -

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

140

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Legg            
    Mason Partners   ING Neuberger   ING Neuberger    
    Large Cap   Berman   Berman   ING OpCap
    Growth   Partners   Regency   Balanced Value
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Service Class   Service Class   Service Class
Net assets at January 1, 2007   $ 3,850   $ 232   $ 1   $ 13,497
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (38)   (8)   -   27
     Total realized gain (loss) on investments and                
           capital gains distributions   153   40   -   1,739
     Net unrealized appreciation (depreciation)                
           of investments   26   (52)   (2)   (2,299)
Net increase (decrease) in net assets from operations   141   (20)   (2)   (533)
Changes from contract transactions:                
     Total unit transactions   (455)   2,054   63   (2,003)
Net increase (decrease) in assets derived from                
     principal transactions   (455)   2,054   63   (2,003)
Total increase (decrease) in net assets   (314)   2,034   61   (2,536)
Net assets at December 31, 2007   3,536   2,266   62   10,961
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (10)   (24)   -   395
     Total realized gain (loss) on investments and                
           capital gains distributions   5   (325)   (4)   (4,289)
     Net unrealized appreciation (depreciation)                
           of investments   (250)   (1,673)   2   351
Net increase (decrease) in net assets from operations   (255)   (2,022)   (2)   (3,543)
Changes from contract transactions:                
     Total unit transactions   (3,281)   1,722   (60)   (7,418)
Net increase (decrease) in assets derived from                
     principal transactions   (3,281)   1,722   (60)   (7,418)
Total increase (decrease) in net assets   (3,536)   (300)   (62)   (10,961)
Net assets at December 31, 2008   $ -   $ 1,966   $ -   $ -

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

141

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                ING
    ING   ING   ING   Oppenheimer
    Oppenheimer   Oppenheimer   Oppenheimer   Strategic
    Global Portfolio   Global Portfolio   Global Portfolio   Income Portfolio
    - Adviser Class   - Initial Class   - Service Class   - Adviser Class
Net assets at January 1, 2007   $ 96   $ 921,330   $ 180   $ 127
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   298   1   9
     Total realized gain (loss) on investments and                
           capital gains distributions   15   81,523   24   3
     Net unrealized appreciation (depreciation)                
           of investments   (12)   (31,597)   (17)   2
Net increase (decrease) in net assets from operations   3   50,224   8   14
Changes from contract transactions:                
     Total unit transactions   266   (130,832)   251   134
Net increase (decrease) in assets derived from                
     principal transactions   266   (130,832)   251   134
Total increase (decrease) in net assets   269   (80,608)   259   148
Net assets at December 31, 2007   365   840,722   439   275
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   6   8,163   4   17
     Total realized gain (loss) on investments and                
           capital gains distributions   (31)   62,486   15   (13)
     Net unrealized appreciation (depreciation)                
           of investments   (148)   (385,205)   (191)   (65)
Net increase (decrease) in net assets from operations   (173)   (314,556)   (172)   (61)
Changes from contract transactions:                
     Total unit transactions   46   (102,226)   -   44
Net increase (decrease) in assets derived from                
     principal transactions   46   (102,226)   -   44
Total increase (decrease) in net assets   (127)   (416,782)   (172)   (17)
Net assets at December 31, 2008   $ 238   $ 423,940   $ 267   $ 258

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

142

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING   ING        
    Oppenheimer   Oppenheimer   ING PIMCO   ING PIMCO
    Strategic   Strategic   Total Return   Total Return
    Income Portfolio   Income Portfolio   Portfolio -   Portfolio -
    - Initial Class   - Service Class   Adviser Class   Service Class
Net assets at January 1, 2007   $ 112,893   $ -   $ 269   $ 62,923
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   4,210   (2)   15   1,665
     Total realized gain (loss) on investments and                
           capital gains distributions   1,642   -   5   433
     Net unrealized appreciation (depreciation)                
           of investments   2,740   (3)   22   3,685
Net increase (decrease) in net assets from operations   8,592   (5)   42   5,783
Changes from contract transactions:                
     Total unit transactions   4,203   3,831   243   14,304
Net increase (decrease) in assets derived from                
     principal transactions   4,203   3,831   243   14,304
Total increase (decrease) in net assets   12,795   3,826   285   20,087
Net assets at December 31, 2007   125,688   3,826   554   83,010
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   5,472   7   36   4,074
     Total realized gain (loss) on investments and                
           capital gains distributions   503   7   12   1,587
     Net unrealized appreciation (depreciation)                
           of investments   (28,238)   (26)   (70)   (7,862)
Net increase (decrease) in net assets from operations   (22,263)   (12)   (22)   (2,201)
Changes from contract transactions:                
     Total unit transactions   5,942   (3,598)   338   24,040
Net increase (decrease) in assets derived from                
     principal transactions   5,942   (3,598)   338   24,040
Total increase (decrease) in net assets   (16,321)   (3,610)   316   21,839
Net assets at December 31, 2008   $ 109,367   $ 216   $ 870   $ 104,849

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

143

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Pioneer   ING Pioneer        
    High Yield   High Yield   ING Solution   ING Solution
    Portfolio -   Portfolio -   2015 Portfolio -   2015 Portfolio -
    Initial Class   Service Class   Adviser Class   Service Class
Net assets at January 1, 2007   $ 1,000   $ 6   $ 2,850   $ 15,208
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   162   2   (1)   (81)
     Total realized gain (loss) on investments and                
           capital gains distributions   40   -   68   673
     Net unrealized appreciation (depreciation)                
           of investments   (127)   (3)   137   52
Net increase (decrease) in net assets from operations   75   (1)   204   644
Changes from contract transactions:                
     Total unit transactions   4,109   90   6,696   14,447
Net increase (decrease) in assets derived from                
     principal transactions   4,109   90   6,696   14,447
Total increase (decrease) in net assets   4,184   89   6,900   15,091
Net assets at December 31, 2007   5,184   95   9,750   30,299
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   347   6   120   252
     Total realized gain (loss) on investments and                
           capital gains distributions   (197)   1   216   656
     Net unrealized appreciation (depreciation)                
           of investments   (1,867)   (41)   (3,943)   (10,651)
Net increase (decrease) in net assets from operations   (1,717)   (34)   (3,607)   (9,743)
Changes from contract transactions:                
     Total unit transactions   500   20   4,478   7,869
Net increase (decrease) in assets derived from                
     principal transactions   500   20   4,478   7,869
Total increase (decrease) in net assets   (1,217)   (14)   871   (1,874)
Net assets at December 31, 2008   $ 3,967   $ 81   $ 10,621   $ 28,425

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

144

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Solution   ING Solution   ING Solution   ING Solution
    2025 Portfolio -   2025 Portfolio -   2035 Portfolio -   2035 Portfolio -
    Adviser Class   Service Class   Adviser Class   Service Class
Net assets at January 1, 2007   $ 4,390   $ 18,183   $ 3,854   $ 12,006
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (12)   (127)   (13)   (85)
     Total realized gain (loss) on investments and                
           capital gains distributions   109   615   96   381
     Net unrealized appreciation (depreciation)                
           of investments   135   226   62   289
Net increase (decrease) in net assets from operations   232   714   145   585
Changes from contract transactions:                
     Total unit transactions   7,481   20,666   5,831   14,953
Net increase (decrease) in assets derived from                
     principal transactions   7,481   20,666   5,831   14,953
Total increase (decrease) in net assets   7,713   21,380   5,976   15,538
Net assets at December 31, 2007   12,103   39,563   9,830   27,544
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   98   208   79   150
     Total realized gain (loss) on investments and                
           capital gains distributions   293   960   302   878
     Net unrealized appreciation (depreciation)                
           of investments   (6,064)   (18,098)   (5,470)   (14,504)
Net increase (decrease) in net assets from operations   (5,673)   (16,930)   (5,089)   (13,476)
Changes from contract transactions:                
     Total unit transactions   5,598   15,303   5,026   13,643
Net increase (decrease) in assets derived from                
     principal transactions   5,598   15,303   5,026   13,643
Total increase (decrease) in net assets   (75)   (1,627)   (63)   167
Net assets at December 31, 2008   $ 12,028   $ 37,936   $ 9,767   $ 27,711

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

145

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING Solution   ING Solution
    ING Solution   ING Solution   Growth and   Growth
    2045 Portfolio -   2045 Portfolio -   Income Portfolio   Portfolio -
    Adviser Class   Service Class   - Service Class   Service Class
Net assets at January 1, 2007   $ 2,250   $ 7,586   $ -   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (12)   (88)   -   -
     Total realized gain (loss) on investments and                
           capital gains distributions   79   220   -   -
     Net unrealized appreciation (depreciation)                
           of investments   27   283   -   -
Net increase (decrease) in net assets from operations   94   415   -   -
Changes from contract transactions:                
     Total unit transactions   5,514   9,461   -   -
Net increase (decrease) in assets derived from                
     principal transactions   5,514   9,461   -   -
Total increase (decrease) in net assets   5,608   9,876   -   -
Net assets at December 31, 2007   7,858   17,462   -   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   44   42   (1)   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   170   613   (26)   (52)
     Net unrealized appreciation (depreciation)                
           of investments   (4,003)   (9,919)   (7)   (7)
Net increase (decrease) in net assets from operations   (3,789)   (9,264)   (34)   (60)
Changes from contract transactions:                
     Total unit transactions   2,396   9,490   659   234
Net increase (decrease) in assets derived from                
     principal transactions   2,396   9,490   659   234
Total increase (decrease) in net assets   (1,393)   226   625   174
Net assets at December 31, 2008   $ 6,465   $ 17,688   $ 625   $ 174

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

146

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING T. Rowe   ING T. Rowe
            Price Diversified   Price Diversified
            Mid Cap   Mid Cap
    ING Solution   ING Solution   Growth   Growth
    Income Portfolio   Income Portfolio   Portfolio -   Portfolio -
    - Adviser Class   - Service Class   Adviser Class   Initial Class
Net assets at January 1, 2007   $ 1,657   $ 2,746   $ 39   $ 397,287
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   8   (13)   -   (3,472)
     Total realized gain (loss) on investments and                
           capital gains distributions   41   125   13   49,859
     Net unrealized appreciation (depreciation)                
           of investments   211   63   (7)   275
Net increase (decrease) in net assets from operations   260   175   6   46,662
Changes from contract transactions:                
     Total unit transactions   5,510   4,464   320   (54,649)
Net increase (decrease) in assets derived from                
     principal transactions   5,510   4,464   320   (54,649)
Total increase (decrease) in net assets   5,770   4,639   326   (7,987)
Net assets at December 31, 2007   7,427   7,385   365   389,300
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   114   83   (1)   (1,791)
     Total realized gain (loss) on investments and                
           capital gains distributions   121   (59)   (5)   48,267
     Net unrealized appreciation (depreciation)                
           of investments   (1,905)   (1,545)   (174)   (208,361)
Net increase (decrease) in net assets from operations   (1,670)   (1,521)   (180)   (161,885)
Changes from contract transactions:                
     Total unit transactions   2,352   1,085   27   (27,342)
Net increase (decrease) in assets derived from                
     principal transactions   2,352   1,085   27   (27,342)
Total increase (decrease) in net assets   682   (436)   (153)   (189,227)
Net assets at December 31, 2008   $ 8,109   $ 6,949   $ 212   $ 200,073

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

147

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING T. Rowe            
    Price Diversified            
    Mid Cap   ING T. Rowe   ING T. Rowe   ING T. Rowe
    Growth   Price Growth   Price Growth   Price Growth
    Portfolio -   Equity Portfolio   Equity Portfolio   Equity Portfolio
    Service Class   - Adviser Class   - Initial Class   - Service Class
Net assets at January 1, 2007   $ 425   $ 143   $ 281,531   $ 867
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (3)   (2)   (1,573)   (6)
     Total realized gain (loss) on investments and                
           capital gains distributions   56   53   12,711   75
     Net unrealized appreciation (depreciation)                
           of investments   (3)   (29)   12,582   18
Net increase (decrease) in net assets from operations   50   22   23,720   87
Changes from contract transactions:                
     Total unit transactions   39   990   (30,226)   280
Net increase (decrease) in assets derived from                
     principal transactions   39   990   (30,226)   280
Total increase (decrease) in net assets   89   1,012   (6,506)   367
Net assets at December 31, 2007   514   1,155   275,025   1,234
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (3)   (1)   706   5
     Total realized gain (loss) on investments and                
           capital gains distributions   41   (76)   9,203   76
     Net unrealized appreciation (depreciation)                
           of investments   (254)   (464)   (120,189)   (750)
Net increase (decrease) in net assets from operations   (216)   (541)   (110,280)   (669)
Changes from contract transactions:                
     Total unit transactions   (26)   129   (22,970)   453
Net increase (decrease) in assets derived from                
     principal transactions   (26)   129   (22,970)   453
Total increase (decrease) in net assets   (242)   (412)   (133,250)   (216)
Net assets at December 31, 2008   $ 272   $ 743   $ 141,775   $ 1,018

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

148

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Templeton   ING Templeton   ING Templeton    
    Foreign Equity   Foreign Equity   Foreign Equity   ING Thornburg
    Portfolio -   Portfolio -   Portfolio -   Value Portfolio -
    Adviser Class   Initial Class   Service Class   Adviser Class
Net assets at January 1, 2007   $ -   -   $ 302   $ 54
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   -   11   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   -   -   131   7
     Net unrealized appreciation (depreciation)                
           of investments   -   -   122   (22)
Net increase (decrease) in net assets from operations   -   -   264   (16)
Changes from contract transactions:                
     Total unit transactions   -   -   4,867   483
Net increase (decrease) in assets derived from                
     principal transactions   -   -   4,867   483
Total increase (decrease) in net assets   -   -   5,131   467
Net assets at December 31, 2007   -   -   5,433   521
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   4   1,774   (15)   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   (17)   (3,433)   (81)   (33)
     Net unrealized appreciation (depreciation)                
           of investments   (76)   (48,104)   (155)   (179)
Net increase (decrease) in net assets from operations   (89)   (49,763)   (251)   (213)
Changes from contract transactions:                
     Total unit transactions   232   125,371   (5,142)   (13)
Net increase (decrease) in assets derived from                
     principal transactions   232   125,371   (5,142)   (13)
Total increase (decrease) in net assets   143   75,608   (5,393)   (226)
Net assets at December 31, 2008   $ 143   $ 75,608   $ 40   $ 295

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

149

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING UBS U.S.   ING UBS U.S.   ING UBS U.S.
    ING Thornburg   Large Cap   Large Cap   Large Cap
    Value Portfolio -   Equity Portfolio   Equity Portfolio   Equity Portfolio
    Initial Class   - Adviser Class   - Initial Class   - Service Class
Net assets at January 1, 2007   $ 117,356   $ -   $ 135,280   $ 3
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (695)   -   (518)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   (6,680)   -   (3,980)   -
     Net unrealized appreciation (depreciation)                
           of investments   14,266   -   4,862   -
Net increase (decrease) in net assets from operations   6,891   -   364   -
Changes from contract transactions:                
     Total unit transactions   (10,814)   13   (9,172)   3
Net increase (decrease) in assets derived from                
     principal transactions   (10,814)   13   (9,172)   3
Total increase (decrease) in net assets   (3,923)   13   (8,808)   3
Net assets at December 31, 2007   113,433   13   126,472   6
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (429)   1   1,274   -
     Total realized gain (loss) on investments and                
           capital gains distributions   (3,171)   -   (10,767)   -
     Net unrealized appreciation (depreciation)                
           of investments   (40,240)   (24)   (36,911)   (4)
Net increase (decrease) in net assets from operations   (43,840)   (23)   (46,404)   (4)
Changes from contract transactions:                
     Total unit transactions   (8,107)   53   (15,791)   4
Net increase (decrease) in assets derived from                
     principal transactions   (8,107)   53   (15,791)   4
Total increase (decrease) in net assets   (51,947)   30   (62,195)   -
Net assets at December 31, 2008   $ 61,486   $ 43   $ 64,277   $ 6

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

150

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING UBS U.S.   ING Van   ING Van   ING Van
    Small Cap   Kampen   Kampen   Kampen Equity
    Growth   Comstock   Comstock   and Income
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Service Class   Adviser Class   Service Class   Adviser Class
Net assets at January 1, 2007   $ 24   $ 151   $ 100,241   $ 21
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (3)   3   130   3
     Total realized gain (loss) on investments and                
           capital gains distributions   16   18   6,497   5
     Net unrealized appreciation (depreciation)                
           of investments   (37)   (42)   (9,132)   (4)
Net increase (decrease) in net assets from operations   (24)   (21)   (2,505)   4
Changes from contract transactions:                
     Total unit transactions   592   252   (13,824)   178
Net increase (decrease) in assets derived from                
     principal transactions   592   252   (13,824)   178
Total increase (decrease) in net assets   568   231   (16,329)   182
Net assets at December 31, 2007   592   382   83,912   203
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (2)   8   1,712   17
     Total realized gain (loss) on investments and                
           capital gains distributions   (90)   (66)   1,802   (15)
     Net unrealized appreciation (depreciation)                
           of investments   37   (77)   (31,217)   (113)
Net increase (decrease) in net assets from operations   (55)   (135)   (27,703)   (111)
Changes from contract transactions:                
     Total unit transactions   (537)   (41)   (13,235)   216
Net increase (decrease) in assets derived from                
     principal transactions   (537)   (41)   (13,235)   216
Total increase (decrease) in net assets   (592)   (176)   (40,938)   105
Net assets at December 31, 2008   $ -   $ 206   $ 42,974   $ 308

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

151

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING VP   ING VP
    ING Van   ING Van   Strategic   Strategic
    Kampen Equity Kampen Equity     Allocation   Allocation
    and Income   and Income   Conservative   Growth
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Initial Class   Service Class   Class I   Class I
Net assets at January 1, 2007   $ 378,557   $ 90   $ 39,520   $ 88,592
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   4,947   3   816   549
     Total realized gain (loss) on investments and                
           capital gains distributions   21,684   6   1,684   7,336
     Net unrealized appreciation (depreciation)                
           of investments   (16,807)   (8)   (754)   (4,560)
Net increase (decrease) in net assets from operations   9,824   1   1,746   3,325
Changes from contract transactions:                
     Total unit transactions   (63,112)   97   (3,605)   (7,328)
Net increase (decrease) in assets derived from                
     principal transactions   (63,112)   97   (3,605)   (7,328)
Total increase (decrease) in net assets   (53,288)   98   (1,859)   (4,003)
Net assets at December 31, 2007   325,269   188   37,661   84,589
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   11,260   7   1,060   999
     Total realized gain (loss) on investments and                
           capital gains distributions   14,899   6   1,590   7,057
     Net unrealized appreciation (depreciation)                
           of investments   (98,950)   (62)   (11,399)   (37,541)
Net increase (decrease) in net assets from operations   (72,791)   (49)   (8,749)   (29,485)
Changes from contract transactions:                
     Total unit transactions   (35,482)   18   (3,072)   (6,229)
Net increase (decrease) in assets derived from                
     principal transactions   (35,482)   18   (3,072)   (6,229)
Total increase (decrease) in net assets   (108,273)   (31)   (11,821)   (35,714)
Net assets at December 31, 2008   $ 216,996   $ 157   $ 25,840   $ 48,875

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

152

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING VP            
    Strategic            
    Allocation   ING VP Growth   ING VP Growth   ING VP Growth
    Moderate   and Income   and Income   and Income
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class I   Class A   Class I   Class S
Net assets at January 1, 2007   $ 82,807   $ -   $ 1,940,188   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   904   2   3,797   1
     Total realized gain (loss) on investments and                
           capital gains distributions   5,765   -   (106,075)   -
     Net unrealized appreciation (depreciation)                
           of investments   (3,399)   (1)   217,416   -
Net increase (decrease) in net assets from operations   3,270   1   115,138   1
Changes from contract transactions:                
     Total unit transactions   (12,927)   157   (296,758)   100
Net increase (decrease) in assets derived from                
     principal transactions   (12,927)   157   (296,758)   100
Total increase (decrease) in net assets   (9,657)   158   (181,620)   101
Net assets at December 31, 2007   73,150   158   1,758,568   101
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1,294   4   4,079   4
     Total realized gain (loss) on investments and                
           capital gains distributions   7,253   (56)   (101,523)   (17)
     Net unrealized appreciation (depreciation)                
           of investments   (30,451)   (138)   (526,910)   (156)
Net increase (decrease) in net assets from operations   (21,904)   (190)   (624,354)   (169)
Changes from contract transactions:                
     Total unit transactions   (4,721)   403   (207,576)   373
Net increase (decrease) in assets derived from                
     principal transactions   (4,721)   403   (207,576)   373
Total increase (decrease) in net assets   (26,625)   213   (831,930)   204
Net assets at December 31, 2008   $ 46,525   $ 371   $ 926,638   $ 305

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

153

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.
    Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -
    Series 1   Series 2   Series 3   Series 5
Net assets at January 1, 2007   $ 995   $ 7,605   $ 27,885   $ 685
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   13   113   292   -
     Total realized gain (loss) on investments and                
           capital gains distributions   22   123   305   34
     Net unrealized appreciation (depreciation)                
           of investments   (8)   (14)   326   (30)
Net increase (decrease) in net assets from operations   27   222   923   4
Changes from contract transactions:                
     Total unit transactions   (105)   (2,129)   (5,604)   (29)
Net increase (decrease) in assets derived from                
     principal transactions   (105)   (2,129)   (5,604)   (29)
Total increase (decrease) in net assets   (78)   (1,907)   (4,681)   (25)
Net assets at December 31, 2007   917   5,698   23,204   660
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   24   158   161   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   (33)   (261)   1,008   87
     Net unrealized appreciation (depreciation)                
           of investments   (31)   (197)   (2,178)   (141)
Net increase (decrease) in net assets from operations   (40)   (300)   (1,009)   (55)
Changes from contract transactions:                
     Total unit transactions   (877)   (5,398)   (4,537)   (124)
Net increase (decrease) in assets derived from                
     principal transactions   (877)   (5,398)   (4,537)   (124)
Total increase (decrease) in net assets   (917)   (5,698)   (5,546)   (179)
Net assets at December 31, 2008   $ -   $ -   $ 17,658   $ 481

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

154

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING GET U.S.   ING GET U.S.   ING GET U.S.   ING GET U.S.
    Core Portfolio -   Core Portfolio -   Core Portfolio -   Core Portfolio -
    Series 6   Series 7   Series 8   Series 9
Net assets at January 1, 2007   $ 3,931   $ 3,556   $ 1,507   $ 168
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   19   29   4   1
     Total realized gain (loss) on investments and                
           capital gains distributions   265   196   97   5
     Net unrealized appreciation (depreciation)                
           of investments   (239)   (169)   (84)   (3)
Net increase (decrease) in net assets from operations   45   56   17   3
Changes from contract transactions:                
     Total unit transactions   (1,058)   (1,096)   (555)   (7)
Net increase (decrease) in assets derived from                
     principal transactions   (1,058)   (1,096)   (555)   (7)
Total increase (decrease) in net assets   (1,013)   (1,040)   (538)   (4)
Net assets at December 31, 2007   2,918   2,516   969   164
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   5   12   2   -
     Total realized gain (loss) on investments and                
           capital gains distributions   367   402   147   28
     Net unrealized appreciation (depreciation)                
           of investments   (584)   (569)   (225)   (40)
Net increase (decrease) in net assets from operations   (212)   (155)   (76)   (12)
Changes from contract transactions:                
     Total unit transactions   (471)   (325)   (119)   (10)
Net increase (decrease) in assets derived from                
     principal transactions   (471)   (325)   (119)   (10)
Total increase (decrease) in net assets   (683)   (480)   (195)   (22)
Net assets at December 31, 2008   $ 2,235   $ 2,036   $ 774   $ 142

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

155

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING BlackRock    
            Global Science   ING
    ING GET U.S.   ING GET U.S.   and Technology   International
    Core Portfolio -   Core Portfolio -   Portfolio -   Index Portfolio -
    Series 10   Series 11   Class I   Class I
Net assets at January 1, 2007   $ 76   $ 47   $ 37,594   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   1   (385)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   2   1   1,796   -
     Net unrealized appreciation (depreciation)                
           of investments   -   (2)   4,645   -
Net increase (decrease) in net assets from operations   2   -   6,056   -
Changes from contract transactions:                
     Total unit transactions   (2)   -   (816)   -
Net increase (decrease) in assets derived from                
     principal transactions   (2)   -   (816)   -
Total increase (decrease) in net assets   -   -   5,240   -
Net assets at December 31, 2007   76   47   42,834   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1   -   (319)   3
     Total realized gain (loss) on investments and                
           capital gains distributions   13   6   2,373   (58)
     Net unrealized appreciation (depreciation)                
           of investments   (18)   (7)   (18,274)   1
Net increase (decrease) in net assets from operations   (4)   (1)   (16,220)   (54)
Changes from contract transactions:                
     Total unit transactions   (2)   (14)   (3,218)   274
Net increase (decrease) in assets derived from                
     principal transactions   (2)   (14)   (3,218)   274
Total increase (decrease) in net assets   (6)   (15)   (19,438)   220
Net assets at December 31, 2008   $ 70   $ 32   $ 23,396   $ 220

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

156

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Lehman   ING        
    Brothers U.S.   Opportunistic   ING    
    Aggregate Bond   Large Cap   Opportunistic   ING Russell™
    Index®   Growth   Large Cap   Large Cap
    Portfolio -   Portfolio -   Value Portfolio -   Index Portfolio -
    Class I   Class I   Class I   Class I
Net assets at January 1, 2007   $ -   $ 67,837   $ 96,810   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   (541)   590   -
     Total realized gain (loss) on investments and                
           capital gains distributions   -   (3,169)   3,989   -
     Net unrealized appreciation (depreciation)                
           of investments   -   13,275   (2,489)   -
Net increase (decrease) in net assets from operations   -   9,565   2,090   -
Changes from contract transactions:                
     Total unit transactions   -   (15,081)   (16,721)   -
Net increase (decrease) in assets derived from                
     principal transactions   -   (15,081)   (16,721)   -
Total increase (decrease) in net assets   -   (5,516)   (14,631)   -
Net assets at December 31, 2007   -   62,321   82,179   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   16   (105)   707   25
     Total realized gain (loss) on investments and                
           capital gains distributions   4   (1,150)   9,867   (44)
     Net unrealized appreciation (depreciation)                
           of investments   31   (25,054)   (37,665)   (60)
Net increase (decrease) in net assets from operations   51   (26,309)   (27,091)   (79)
Changes from contract transactions:                
     Total unit transactions   1,508   (5,598)   (10,762)   2,754
Net increase (decrease) in assets derived from                
     principal transactions   1,508   (5,598)   (10,762)   2,754
Total increase (decrease) in net assets   1,559   (31,907)   (37,853)   2,675
Net assets at December 31, 2008   $ 1,559   $ 30,414   $ 44,326   $ 2,675

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

157

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING Russell™   ING Russell™   ING VP Index   ING VP Index
    Mid Cap Index   Small Cap Index   Plus LargeCap   Plus LargeCap
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class I   Class I   Class I   Class S
Net assets at January 1, 2007   $ -   $ -   $ 539,452   $ 7
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   -   1,026   -
     Total realized gain (loss) on investments and                
           capital gains distributions   -   -   (7,474)   (3)
     Net unrealized appreciation (depreciation)                
           of investments   -   -   27,106   2
Net increase (decrease) in net assets from operations   -   -   20,658   (1)
Changes from contract transactions:                
     Total unit transactions   -   -   (91,018)   328
Net increase (decrease) in assets derived from                
     principal transactions   -   -   (91,018)   328
Total increase (decrease) in net assets   -   -   (70,360)   327
Net assets at December 31, 2007   -   -   469,092   334
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   16   4   3,904   4
     Total realized gain (loss) on investments and                
           capital gains distributions   (88)   (37)   17,274   (30)
     Net unrealized appreciation (depreciation)                
           of investments   2   (158)   (184,448)   (137)
Net increase (decrease) in net assets from operations   (70)   (191)   (163,270)   (163)
Changes from contract transactions:                
     Total unit transactions   1,399   826   (58,354)   154
Net increase (decrease) in assets derived from                
     principal transactions   1,399   826   (58,354)   154
Total increase (decrease) in net assets   1,329   635   (221,624)   (9)
Net assets at December 31, 2008   $ 1,329   $ 635   $ 247,468   $ 325

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

158

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING VP Index   ING VP Index   ING VP Index   ING VP Index
    Plus MidCap   Plus MidCap   Plus SmallCap   Plus SmallCap
    Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Class I   Class S   Class I   Class S
Net assets at January 1, 2007   $ 421,728   $ 43   $ 189,877   $ 52
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (928)   -   (944)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   50,730   9   31,898   5
     Net unrealized appreciation (depreciation)                
           of investments   (29,602)   (15)   (42,343)   (13)
Net increase (decrease) in net assets from operations   20,200   (6)   (11,389)   (8)
Changes from contract transactions:                
     Total unit transactions   (60,397)   306   (27,178)   46
Net increase (decrease) in assets derived from                
     principal transactions   (60,397)   306   (27,178)   46
Total increase (decrease) in net assets   (40,197)   300   (38,567)   38
Net assets at December 31, 2007   381,531   343   151,310   90
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1,349   3   6   -
     Total realized gain (loss) on investments and                
           capital gains distributions   46,938   (27)   7,167   (10)
     Net unrealized appreciation (depreciation)                
           of investments   (183,479)   (123)   (54,249)   (7)
Net increase (decrease) in net assets from operations   (135,192)   (147)   (47,076)   (17)
Changes from contract transactions:                
     Total unit transactions   (33,827)   64   (18,463)   (15)
Net increase (decrease) in assets derived from                
     principal transactions   (33,827)   64   (18,463)   (15)
Total increase (decrease) in net assets   (169,019)   (83)   (65,539)   (32)
Net assets at December 31, 2008   $ 212,512   $ 260   $ 85,771   $ 58

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

159

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            ING VP    
    ING VP Small   ING VP Small   Financial   ING VP
    Company   Company   Services   International
    Portfolio -   Portfolio -   Portfolio -   Value Portfolio -
    Class I   Class S   Class I   Class I
Net assets at January 1, 2007   $ 169,087   $ 11   $ 3,621   $ 123,753
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (1,271)   -   19   1,111
     Total realized gain (loss) on investments and                
           capital gains distributions   41,173   2   204   28,055
     Net unrealized appreciation (depreciation)                
           of investments   (31,382)   (3)   (574)   (13,036)
Net increase (decrease) in net assets from operations   8,520   (1)   (351)   16,130
Changes from contract transactions:                
     Total unit transactions   (42,469)   77   (707)   18,248
Net increase (decrease) in assets derived from                
     principal transactions   (42,469)   77   (707)   18,248
Total increase (decrease) in net assets   (33,949)   76   (1,058)   34,378
Net assets at December 31, 2007   135,138   87   2,563   158,131
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   74   1   29   2,360
     Total realized gain (loss) on investments and                
           capital gains distributions   14,367   (7)   (955)   14,669
     Net unrealized appreciation (depreciation)                
           of investments   (55,736)   (40)   393   (85,517)
Net increase (decrease) in net assets from operations   (41,295)   (46)   (533)   (68,488)
Changes from contract transactions:                
     Total unit transactions   (7,582)   59   (2,030)   (4,658)
Net increase (decrease) in assets derived from                
     principal transactions   (7,582)   59   (2,030)   (4,658)
Total increase (decrease) in net assets   (48,877)   13   (2,563)   (73,146)
Net assets at December 31, 2008   $ 86,261   $ 100   $ -   $ 84,985

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

160

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        ING VP   ING VP    
    ING VP   MidCap   MidCap    
    International   Opportunities   Opportunities   ING VP Real
    Value Portfolio -   Portfolio -   Portfolio -   Estate Portfolio
    Class S   Class I   Class S   - Class I
Net assets at January 1, 2007   $ 60   $ 6,141   $ 3   $ 86,706
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3   (76)   -   1,131
     Total realized gain (loss) on investments and                
           capital gains distributions   54   552   -   13,392
     Net unrealized appreciation (depreciation)                
           of investments   (32)   1,043   7   (26,636)
Net increase (decrease) in net assets from operations   25   1,519   7   (12,113)
Changes from contract transactions:                
     Total unit transactions   395   2,098   60   (25,561)
Net increase (decrease) in assets derived from                
     principal transactions   395   2,098   60   (25,561)
Total increase (decrease) in net assets   420   3,617   67   (37,674)
Net assets at December 31, 2007   480   9,758   70   49,032
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   9   (108)   (1)   532
     Total realized gain (loss) on investments and                
           capital gains distributions   (74)   334   (20)   (5,582)
     Net unrealized appreciation (depreciation)                
           of investments   (155)   (5,295)   (47)   6,008
Net increase (decrease) in net assets from operations   (220)   (5,069)   (68)   958
Changes from contract transactions:                
     Total unit transactions   (12)   3,959   106   (49,990)
Net increase (decrease) in assets derived from                
     principal transactions   (12)   3,959   106   (49,990)
Total increase (decrease) in net assets   (232)   (1,110)   38   (49,032)
Net assets at December 31, 2008   $ 248   $ 8,648   $ 108   $ -

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

161

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    ING VP   ING VP        
    SmallCap   SmallCap   ING VP   ING VP
    Opportunities   Opportunities   Balanced   Intermediate
    Portfolio -   Portfolio -   Portfolio -   Bond Portfolio -
    Class I   Class S   Class I   Class I
Net assets at January 1, 2007   $ 10,191   $ 10   $ 588,364   $ 400,146
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (95)   -   8,816   11,361
     Total realized gain (loss) on investments and                
           capital gains distributions   797   1   15,720   185
     Net unrealized appreciation (depreciation)                
           of investments   155   -   253   8,421
Net increase (decrease) in net assets from operations   857   1   24,789   19,967
Changes from contract transactions:                
     Total unit transactions   867   6   (84,719)   1,139
Net increase (decrease) in assets derived from                
     principal transactions   867   6   (84,719)   1,139
Total increase (decrease) in net assets   1,724   7   (59,930)   21,106
Net assets at December 31, 2007   11,915   17   528,434   421,252
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (90)   -   11,005   17,688
     Total realized gain (loss) on investments and                
           capital gains distributions   1,703   (1)   12,369   6,073
     Net unrealized appreciation (depreciation)                
           of investments   (6,117)   (19)   (162,838)   (62,449)
Net increase (decrease) in net assets from operations   (4,504)   (20)   (139,464)   (38,688)
Changes from contract transactions:                
     Total unit transactions   956   50   (74,044)   (32,180)
Net increase (decrease) in assets derived from                
     principal transactions   956   50   (74,044)   (32,180)
Total increase (decrease) in net assets   (3,548)   30   (213,508)   (70,868)
Net assets at December 31, 2008   $ 8,367   $ 47   $ 314,926   $ 350,384

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

162

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                Janus Aspen
    ING VP   ING VP Money       Series Balanced
    Intermediate   Market   Janus Adviser   Portfolio -
    Bond Portfolio -   Portfolio -   Balanced Fund -   Institutional
    Class S   Class I   Class S   Shares
Net assets at January 1, 2007   $ 12   $ 362,772   $ 1   $ 394
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   9   12,496   -   5
     Total realized gain (loss) on investments and                
           capital gains distributions   2   2,597   -   30
     Net unrealized appreciation (depreciation)                
           of investments   (1)   4,291   -   -
Net increase (decrease) in net assets from operations   10   19,384   -   35
Changes from contract transactions:                
     Total unit transactions   227   138,090   -   (62)
Net increase (decrease) in assets derived from                
     principal transactions   227   138,090   -   (62)
Total increase (decrease) in net assets   237   157,474   -   (27)
Net assets at December 31, 2007   249   520,246   1   367
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   12   22,627   -   4
     Total realized gain (loss) on investments and                
           capital gains distributions   (4)   1,312   -   33
     Net unrealized appreciation (depreciation)                
           of investments   (30)   (14,424)   -   (88)
Net increase (decrease) in net assets from operations   (22)   9,515   -   (51)
Changes from contract transactions:                
     Total unit transactions   (15)   11,258   (1)   (80)
Net increase (decrease) in assets derived from                
     principal transactions   (15)   11,258   (1)   (80)
Total increase (decrease) in net assets   (37)   20,773   (1)   (131)
Net assets at December 31, 2008   $ 212   $ 541,019   $ -   $ 236

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

163

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                Janus Aspen
        Janus Aspen   Janus Aspen   Series
    Janus Aspen   Series Large   Series Mid Cap   Worldwide
    Series Flexible   Cap Growth   Growth   Growth
    Bond Portfolio -   Portfolio -   Portfolio -   Portfolio -
    Institutional   Institutional   Institutional   Institutional
    Shares   Shares   Shares   Shares
Net assets at January 1, 2007   $ 114   $ 148   $ 466   $ 353
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   4   (1)   (5)   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   (3)   13   79   27
     Net unrealized appreciation (depreciation)                
           of investments   5   7   19   4
Net increase (decrease) in net assets from operations   6   19   93   30
Changes from contract transactions:                
     Total unit transactions   (21)   (17)   (69)   (66)
Net increase (decrease) in assets derived from                
     principal transactions   (21)   (17)   (69)   (66)
Total increase (decrease) in net assets   (15)   2   24   (36)
Net assets at December 31, 2007   99   150   490   317
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3   -   (4)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   -   13   50   26
     Net unrealized appreciation (depreciation)                
           of investments   1   (68)   (243)   (156)
Net increase (decrease) in net assets from operations   4   (55)   (197)   (130)
Changes from contract transactions:                
     Total unit transactions   (5)   (20)   (53)   (33)
Net increase (decrease) in assets derived from                
     principal transactions   (5)   (20)   (53)   (33)
Total increase (decrease) in net assets   (1)   (75)   (250)   (163)
Net assets at December 31, 2008   $ 98   $ 75   $ 240   $ 154

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

164

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Lazard U.S.       Loomis Sayles   Lord Abbett
    Mid Cap Equity       Small Cap Value   Mid-Cap Value
    Portfolio - Open   LKCM Aquinas   Fund - Retail   Fund, Inc. -
    Shares   Growth Fund   Class   Class A
Net assets at January 1, 2007   $ -   $ 183   $ -   $ 1,081
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1   (2)   -   (7)
     Total realized gain (loss) on investments and                
           capital gains distributions   18   17   -   221
     Net unrealized appreciation (depreciation)                
           of investments   (61)   8   -   (229)
Net increase (decrease) in net assets from operations   (42)   23   -   (15)
Changes from contract transactions:                
     Total unit transactions   368   30   -   191
Net increase (decrease) in assets derived from                
     principal transactions   368   30   -   191
Total increase (decrease) in net assets   326   53   -   176
Net assets at December 31, 2007   326   236   -   1,257
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   5   (3)   2   7
     Total realized gain (loss) on investments and                
           capital gains distributions   (45)   (1)   (7)   (97)
     Net unrealized appreciation (depreciation)                
           of investments   (165)   (94)   54   (409)
Net increase (decrease) in net assets from operations   (205)   (98)   49   (499)
Changes from contract transactions:                
     Total unit transactions   267   68   856   (19)
Net increase (decrease) in assets derived from                
     principal transactions   267   68   856   (19)
Total increase (decrease) in net assets   62   (30)   905   (518)
Net assets at December 31, 2008   $ 388   $ 206   $ 905   $ 739

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

165

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        Lord Abbett        
    Lord Abbett   Series Fund -   Massachusetts    
    Small-Cap   Mid-Cap Value   Investors   Moderate
    Value Fund -   Portfolio -   Growth Stock   Allocation
    Class A   Class VC   Fund - Class A   Portfolio
Net assets at January 1, 2007   $ 1,379   $ 156,234   $ 596   $ 25
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (14)   (1,001)   (3)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   258   25,132   7   2
     Net unrealized appreciation (depreciation)                
           of investments   (112)   (24,441)   62   -
Net increase (decrease) in net assets from operations   132   (310)   66   2
Changes from contract transactions:                
     Total unit transactions   137   (9,690)   75   (1)
Net increase (decrease) in assets derived from                
     principal transactions   137   (9,690)   75   (1)
Total increase (decrease) in net assets   269   (10,000)   141   1
Net assets at December 31, 2007   1,648   146,234   737   26
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (11)   243   (4)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   (57)   248   27   (3)
     Net unrealized appreciation (depreciation)                
           of investments   (465)   (54,679)   (270)   1
Net increase (decrease) in net assets from operations   (533)   (54,188)   (247)   (2)
Changes from contract transactions:                
     Total unit transactions   (41)   (16,896)   (126)   (24)
Net increase (decrease) in assets derived from                
     principal transactions   (41)   (16,896)   (126)   (24)
Total increase (decrease) in net assets   (574)   (71,084)   (373)   (26)
Net assets at December 31, 2008   $ 1,074   $ 75,150   $ 364   $ -

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

166

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

        Neuberger        
    Morgan Stanley   Berman Socially        
    U.S. Small Cap   Responsive   New Perspective   New Perspective
    Value Portfolio -   Fund® - Trust   Fund®, Inc. -   Fund®, Inc. -
    Class I   Class   Class R-3   Class R-4
Net assets at January 1, 2007   $ -   $ 519   $ 1,204   $ 27,925
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   (3)   55   397
     Total realized gain (loss) on investments and                
           capital gains distributions   -   85   418   3,385
     Net unrealized appreciation (depreciation)                
           of investments   -   (43)   96   830
Net increase (decrease) in net assets from operations   -   39   569   4,612
Changes from contract transactions:                
     Total unit transactions   -   1,427   2,265   8,924
Net increase (decrease) in assets derived from                
     principal transactions   -   1,427   2,265   8,924
Total increase (decrease) in net assets   -   1,466   2,834   13,536
Net assets at December 31, 2007   -   1,985   4,038   41,461
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   9   (6)   50   648
     Total realized gain (loss) on investments and                
           capital gains distributions   (8)   8   104   3,107
     Net unrealized appreciation (depreciation)                
           of investments   (215)   (1,057)   (1,754)   (24,241)
Net increase (decrease) in net assets from operations   (214)   (1,055)   (1,600)   (20,486)
Changes from contract transactions:                
     Total unit transactions   1,055   1,257   219   18,065
Net increase (decrease) in assets derived from                
     principal transactions   1,055   1,257   219   18,065
Total increase (decrease) in net assets   841   202   (1,381)   (2,421)
Net assets at December 31, 2008   $ 841   $ 2,187   $ 2,657   $ 39,040

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

167

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Oppenheimer   Oppenheimer        
    Capital   Developing   Oppenheimer   Oppenheimer
    Appreciation   Markets Fund -   Global   Main Street
    Fund - Class A   Class A   Securities/VA   Fund®/VA
Net assets at January 1, 2007   $ 414   $ 163,882   $ 765   $ 123
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (5)   (159)   2   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   18   39,241   101   5
     Net unrealized appreciation (depreciation)                
           of investments   45   15,075   (60)   -
Net increase (decrease) in net assets from operations   58   54,157   43   4
Changes from contract transactions:                
     Total unit transactions   125   12,959   (230)   (12)
Net increase (decrease) in assets derived from                
     principal transactions   125   12,959   (230)   (12)
Total increase (decrease) in net assets   183   67,116   (187)   (8)
Net assets at December 31, 2007   597   230,998   578   115
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (5)   659   3   -
     Total realized gain (loss) on investments and                
           capital gains distributions   10   43,934   7   7
     Net unrealized appreciation (depreciation)                
           of investments   (301)   (155,001)   (203)   (50)
Net increase (decrease) in net assets from operations   (296)   (110,408)   (193)   (43)
Changes from contract transactions:                
     Total unit transactions   62   (6,235)   (138)   (9)
Net increase (decrease) in assets derived from                
     principal transactions   62   (6,235)   (138)   (9)
Total increase (decrease) in net assets   (234)   (116,643)   (331)   (52)
Net assets at December 31, 2008   $ 363   $ 114,355   $ 247   $ 63

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

168

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Oppenheimer            
    Main Street   Oppenheimer   Oppenheimer    
    Small Cap   MidCap   Strategic Bond   Pax World
    Fund®/VA   Fund/VA   Fund/VA   Balanced Fund
Net assets at January 1, 2007   $ 4,722   $ 1   $ 128   $ 50,097
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (54)   -   4   411
     Total realized gain (loss) on investments and                
           capital gains distributions   242   -   4   3,027
     Net unrealized appreciation (depreciation)                
           of investments   (481)   (1)   3   830
Net increase (decrease) in net assets from operations   (293)   (1)   11   4,268
Changes from contract transactions:                
     Total unit transactions   2,542   31   (14)   5,093
Net increase (decrease) in assets derived from               -
     principal transactions   2,542   31   (14)   5,093
Total increase (decrease) in net assets   2,249   30   (3)   9,361
Net assets at December 31, 2007   6,971   31   125   59,458
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (34)   -   5   477
     Total realized gain (loss) on investments and               -
           capital gains distributions   106   (2)   1   118
     Net unrealized appreciation (depreciation)                
           of investments   (2,871)   (13)   (25)   (21,064)
Net increase (decrease) in net assets from operations   (2,799)   (15)   (19)   (20,469)
Changes from contract transactions:                
     Total unit transactions   483   (3)   (1)   5,520
Net increase (decrease) in assets derived from                
     principal transactions   483   (3)   (1)   5,520
Total increase (decrease) in net assets   (2,316)   (18)   (20)   (14,949)
Net assets at December 31, 2008   $ 4,655   $ 13   $ 105   $ 44,509

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

169

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

            Pioneer    
    PIMCO Real       Emerging   Pioneer Equity
    Return Portfolio   Pioneer High   Markets VCT   Income VCT
    - Administrative   Yield Fund -   Portfolio -   Portfolio -
    Class   Class A   Class I   Class I
Net assets at January 1, 2007   $ 25,436   $ 1,880   $ -   $ 119,307
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1,034   110   (77)   912
     Total realized gain (loss) on investments and                
           capital gains distributions   (532)   165   127   17,990
     Net unrealized appreciation (depreciation)                
           of investments   2,140   (148)   1,639   (17,177)
Net increase (decrease) in net assets from operations   2,642   127   1,689   1,725
Changes from contract transactions:                
     Total unit transactions   5,949   1,387   27,385   (119,843)
Net increase (decrease) in assets derived from                
     principal transactions   5,949   1,387   27,385   (119,843)
Total increase (decrease) in net assets   8,591   1,514   29,074   (118,118)
Net assets at December 31, 2007   34,027   3,394   29,074   1,189
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1,577   198   (123)   12
     Total realized gain (loss) on investments and                
           capital gains distributions   (776)   (23)   813   (232)
     Net unrealized appreciation (depreciation)                
           of investments   (8,434)   (1,613)   (18,300)   101
Net increase (decrease) in net assets from operations   (7,633)   (1,438)   (17,610)   (119)
Changes from contract transactions:                
     Total unit transactions   41,029   601   271   (1,070)
Net increase (decrease) in assets derived from                
     principal transactions   41,029   601   271   (1,070)
Total increase (decrease) in net assets   33,396   (837)   (17,339)   (1,189)
Net assets at December 31, 2008   $ 67,423   $ 2,557   $ 11,735   $ -

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

170

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                RiverSource
    Pioneer High   Pioneer Mid       Diversified
    Yield VCT   Cap Value VCT   Premier VIT   Equity Income
    Portfolio -   Portfolio -   OpCap Mid Cap   Fund -
    Class I   Class I   Portfolio   Class R-4
Net assets at January 1, 2007   $ 12,297   $ 81,306   $ -   $ -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   691   176   (1)   -
     Total realized gain (loss) on investments and                
           capital gains distributions   (25)   (234)   (3)   -
     Net unrealized appreciation (depreciation)                
           of investments   (53)   5,905   (5)   -
Net increase (decrease) in net assets from operations   613   5,847   (9)   -
Changes from contract transactions:                
     Total unit transactions   6,409   (86,640)   402   -
Net increase (decrease) in assets derived from                
     principal transactions   6,409   (86,640)   402   -
Total increase (decrease) in net assets   7,022   (80,793)   393   -
Net assets at December 31, 2007   19,319   513   393   -
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   1,262   4   (8)   9
     Total realized gain (loss) on investments and                
           capital gains distributions   (464)   (92)   (8)   (18)
     Net unrealized appreciation (depreciation)                
           of investments   (7,575)   36   (1,105)   (251)
Net increase (decrease) in net assets from operations   (6,777)   (52)   (1,121)   (260)
Changes from contract transactions:                
     Total unit transactions   (864)   (461)   3,204   1,724
Net increase (decrease) in assets derived from                
     principal transactions   (864)   (461)   3,204   1,724
Total increase (decrease) in net assets   (7,641)   (513)   2,083   1,464
Net assets at December 31, 2008   $ 11,678   $ -   $ 2,476   $ 1,464

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

171

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    SMALLCAP   T. Rowe Price   T. Rowe Price   Templeton
    World Fund® -   Mid-Cap Value   Value Fund -   Foreign Fund -
    Class R-4   Fund - R Class   Advisor Class   Class A
Net assets at January 1, 2007   $ -   $ 1,010   $ 30   $ 876
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   -   10   1   10
     Total realized gain (loss) on investments and                
           capital gains distributions   -   137   2   316
     Net unrealized appreciation (depreciation)                
           of investments   -   (155)   (4)   (160)
Net increase (decrease) in net assets from operations   -   (8)   (1)   166
Changes from contract transactions:                
     Total unit transactions   -   (11)   32   368
Net increase (decrease) in assets derived from                
     principal transactions   -   (11)   32   368
Total increase (decrease) in net assets   -   (19)   31   534
Net assets at December 31, 2007   -   991   61   1,410
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (2)   (3)   -   20
     Total realized gain (loss) on investments and                
           capital gains distributions   (77)   (8)   (1)   103
     Net unrealized appreciation (depreciation)                
           of investments   (150)   (367)   (27)   (749)
Net increase (decrease) in net assets from operations   (229)   (378)   (28)   (626)
Changes from contract transactions:                
     Total unit transactions   663   86   11   (126)
Net increase (decrease) in assets derived from                
     principal transactions   663   86   11   (126)
Total increase (decrease) in net assets   434   (292)   (17)   (752)
Net assets at December 31, 2008   $ 434   $ 699   $ 44   $ 658

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

172

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Templeton           Small Company
    Global Bond   Diversified   Equity Income   Growth
    Fund - Class A   Value Portfolio   Portfolio   Portfolio
Net assets at January 1, 2007   $ 33,054   $ 100   $ 235   $ 18
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   3,435   1   3   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   123   4   19   2
     Net unrealized appreciation (depreciation)                
           of investments   1,205   (2)   (15)   (3)
Net increase (decrease) in net assets from operations   4,763   3   7   (2)
Changes from contract transactions:                
     Total unit transactions   34,847   11   62   70
Net increase (decrease) in assets derived from                
     principal transactions   34,847   11   62   70
Total increase (decrease) in net assets   39,610   14   69   68
Net assets at December 31, 2007   72,664   114   304   86
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   7,305   2   6   (1)
     Total realized gain (loss) on investments and                
           capital gains distributions   440   5   (9)   7
     Net unrealized appreciation (depreciation)                
           of investments   (3,683)   (51)   (93)   (45)
Net increase (decrease) in net assets from operations   4,062   (44)   (96)   (39)
Changes from contract transactions:                
     Total unit transactions   33,996   10   (43)   17
Net increase (decrease) in assets derived from                
     principal transactions   33,996   10   (43)   17
Total increase (decrease) in net assets   38,058   (34)   (139)   (22)
Net assets at December 31, 2008   $ 110,722   $ 80   $ 165   $ 64

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

173

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

                Washington
                Mutual
                Investors
    Wanger           FundSM, Inc. -
    International   Wanger Select   Wanger USA   Class R-3
Net assets at January 1, 2007   $ -   $ 26,052   $ 17,111   $ 3,858
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   (24)   (497)   (197)   44
     Total realized gain (loss) on investments and                
           capital gains distributions   39   1,366   1,351   390
     Net unrealized appreciation (depreciation)                
           of investments   (156)   735   (498)   (338)
Net increase (decrease) in net assets from operations   (141)   1,604   656   96
Changes from contract transactions:                
     Total unit transactions   9,764   39,236   3,759   1,250
Net increase (decrease) in assets derived from                
     principal transactions   9,764   39,236   3,759   1,250
Total increase (decrease) in net assets   9,623   40,840   4,415   1,346
Net assets at December 31, 2007   9,623   66,892   21,526   5,204
 
Increase (decrease) in net assets from operations                
Operations:                
     Net investment income (loss)   6   (471)   (179)   71
     Total realized gain (loss) on investments and                
           capital gains distributions   (355)   1,376   1,971   24
     Net unrealized appreciation (depreciation)                
           of investments   (5,402)   (35,291)   (11,029)   (1,954)
Net increase (decrease) in net assets from operations   (5,751)   (34,386)   (9,237)   (1,859)
Changes from contract transactions:                
     Total unit transactions   2,947   2,782   2,410   566
Net increase (decrease) in assets derived from                
     principal transactions   2,947   2,782   2,410   566
Total increase (decrease) in net assets   (2,804)   (31,604)   (6,827)   (1,293)
Net assets at December 31, 2008   $ 6,819   $ 35,288   $ 14,699   $ 3,911

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

174

VARIABLE ANNUITY ACCOUNT C OF
ING LIFE INSURANCE AND ANNUITY COMPANY
Statements of Changes in Net Assets
For the years ended December 31, 2008 and 2007
(Dollars in thousands)

    Washington    
    Mutual   Wells Fargo
    Investors   Advantage
    FundSM, Inc. -   Small Cap Value
    Class R-4   Fund - Class A
Net assets at January 1, 2007   $ 88,156   $ 21
 
Increase (decrease) in net assets from operations        
Operations:        
     Net investment income (loss)   811   -
     Total realized gain (loss) on investments and        
           capital gains distributions   7,508   7
     Net unrealized appreciation (depreciation)        
           of investments   (5,611)   (5)
Net increase (decrease) in net assets from operations   2,708   2
Changes from contract transactions:        
     Total unit transactions   384   24
Net increase (decrease) in assets derived from        
     principal transactions   384   24
Total increase (decrease) in net assets   3,092   26
Net assets at December 31, 2007   91,248   47
 
Increase (decrease) in net assets from operations        
Operations:        
     Net investment income (loss)   1,166   (1)
     Total realized gain (loss) on investments and        
           capital gains distributions   979   (8)
     Net unrealized appreciation (depreciation)        
           of investments   (33,169)   (23)
Net increase (decrease) in net assets from operations   (31,024)   (32)
Changes from contract transactions:        
     Total unit transactions   720   31
Net increase (decrease) in assets derived from        
     principal transactions   720   31
Total increase (decrease) in net assets   (30,304)   (1)
Net assets at December 31, 2008   $ 60,944   $ 46

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

175

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

1. Organization

Variable Annuity Account C of ING Life Insurance and Annuity Company (the
“Account”) was established by ING Life Insurance and Annuity Company (“ILIAC” or
the “Company”) to support the operations of variable annuity contracts (“Contracts”).
The Company is an indirect wholly owned subsidiary of ING America Insurance
Holdings, Inc. (“ING AIH”), an insurance holding company domiciled in the State of
Delaware. ING AIH is an indirect wholly owned subsidiary of ING Groep, N.V., 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. 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, 2008, the Account had 246 investment divisions (the “Divisions”), 86
of which invest in independently managed mutual funds and 160 of which invest in
mutual funds managed by affiliates, either ING Investments, LLC (“IIL”) or Directed
Services LLC (“DSL”). The assets in each Division are invested in shares of a designated
fund (“Fund”) of various investment trusts (the “Trusts”). Investment Divisions with
asset balances at December 31, 2008 and related Trusts are as follows:

AIM Growth Series:
         AIM Mid Cap Core Equity Fund - Class A
         AIM Small Cap Growth Fund - Class A
AIM Investment Funds: 
         AIM Global Health Care Fund - Investor Class 
AIM Variable Insurance Funds: 
         AIM V.I. Capital Appreciation Fund - Series I Shares 
         AIM V.I. Core Equity Fund - Series I Shares
AllianceBernstein Growth and Income Fund, Inc.: 
         AllianceBernstein Growth and Income Fund, Inc. - Class A
AllianceBernstein Variable Products Series Fund, Inc.: 
         AllianceBernstein Growth and Income Portfolio - Class A
Allianz Funds:
         Allianz NFJ Large-Cap Value Fund - Institutional
                  Class**
         Allianz NFJ Small-Cap Value Fund - Class A
Amana Mutual Funds Trust: 
         Amana Growth Fund** 
         Amana Income Fund**

 

  

American Balanced Fund®, Inc.:
         American Balanced Fund® - Class R-3
American Century Quantitative Equity Funds, Inc.: 
         American Century Income & Growth Fund - A Class
Ariel Investment Trust: 
         Ariel Appreciation Fund 
Ariel Fund Artisan Funds, Inc.: 
         Artisan International Fund - Investor Shares**
The Bond Fund of AmericaSM, Inc.: 
         The Bond Fund of AmericaSM, Inc. - Class R-4**
Calvert Variable Series, Inc.: 
         Calvert Social Balanced Portfolio
Columbia Acorn Trust:
         ColumbiaSM Acorn Fund® - Class Z**
Columbia Funds Series Trust:
         Columbia Mid Cap Value Fund - Class A**
         Columbia Mid Cap Value Fund - Class Z**
DWS Institutional Funds: 
         DWS Equity 500 Index Fund - Class S

176

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

EuroPacific Growth Fund®:
         EuroPacific Growth Fund® - Class R-3 
         EuroPacific Growth Fund® - Class R-4
Evergreen Equity Trust: 
         Evergreen Special Values Fund - Class A
Fidelity® Variable Insurance Products:
         Fidelity® VIP Equity-Income Portfolio - Initial Class
         Fidelity® VIP Growth Portfolio - Initial Class 
         Fidelity® VIP High Income Portfolio - Initial Class 
         Fidelity® VIP Overseas Portfolio - Initial Class 
Fidelity® Variable Insurance Products II: 
         Fidelity® VIP Contrafund® Portfolio - Initial Class 
         Fidelity® VIP Index 500 Portfolio - Initial Class
Fidelity® Variable Insurance Products III: 
         Fidelity® VIP Mid Cap Portfolio - Initial Class
Fidelity® Variable Insurance Products V: 
         Fidelity® VIP Asset ManagerSM Portfolio - Initial Class
Franklin Mutual Series Fund Inc.: 
         Mutual Discovery Fund - Class R
Franklin Strategic Series:
         Franklin Small-Mid Cap Growth Fund - Class A
Franklin Templeton Variable Insurance Products Trust: 
         Franklin Small Cap Value Securities Fund - Class 2
Fundamental Investors, Inc.: 
         Fundamental Investors, Inc. - Class R-3** 
         Fundamental Investors, Inc. - Class R-4**
The Growth Fund of America®, Inc.: 
         The Growth Fund of America® - Class R-3 
         The Growth Fund of America® - Class R-4
The Income Fund of America®, Inc.: 
         The Income Fund of America® - Class R-3
ING Equity Trust: 
         ING Financial Services Fund - Class A
         ING Real Estate Fund - Class A
ING Funds Trust:
         ING GNMA Income Fund - Class A 
         ING Intermediate Bond Fund - Class A
ING Investors Trust:
         ING AllianceBernstein Mid Cap Growth Portfolio - Service Class 
         ING BlackRock Large Cap Growth Portfolio - Institutional Class* 
         ING BlackRock Large Cap Growth Portfolio - Service Class 
         ING BlackRock Large Cap Growth Portfolio - Service 2 Class* 
         ING Evergreen Health Sciences Portfolio - Service Class 
         ING Evergreen Omega Portfolio - Service Class* 
         ING FMRSM Diversified Mid Cap Portfolio - Service Class 
         ING Global Real Estate Portfolio - Institutional Class** 
         ING Global Resources Portfolio - Institutional Class 
         ING Global Resources Portfolio - Service Class 
         ING Janus Contrarian Portfolio - Service Class*

 

  

ING Investors Trust (continued):
         ING JPMorgan Emerging Markets Equity Portfolio - Adviser Class 
         ING JPMorgan Emerging Markets Equity Portfolio - Institutional Class 
         ING JPMorgan Emerging Markets Equity Portfolio - Service Class
         ING JPMorgan Small Cap Core Equity Portfolio - Service Class 
         ING JPMorgan Value Opportunities Portfolio - Institutional Class 
         ING JPMorgan Value Opportunities Portfolio - Service Class 
         ING Julius Baer Foreign Portfolio - Service Class 
         ING Legg Mason Value Portfolio - Service Class 
         ING Lord Abbett Affiliated Portfolio - Institutional Class 
         ING Lord Abbett Affiliated Portfolio - Service Class* 
         ING Marsico Growth Portfolio - Institutional Class** 
         ING Marsico Growth Portfolio - Service Class
         ING Marsico International Opportunities Portfolio - Adviser Class*
         ING Marsico International Opportunities Portfolio - Service Class 
         ING MFS Total Return Portfolio - Adviser Class 
         ING MFS Total Return Portfolio - Institutional Class 
         ING MFS Total Return Portfolio - Service Class 
         ING MFS Utilities Portfolio - Service Class 
         ING Oppenheimer Main Street Portfolio® - Service Class 
         ING PIMCO High Yield Portfolio - Institutional Class 
         ING PIMCO High Yield Portfolio - Service Class 
         ING Pioneer Equity Income Portfolio - Institutional
                  Class*
         ING Pioneer Fund Portfolio - Institutional Class
         ING Pioneer Fund Portfolio - Service Class 
         ING Pioneer Mid Cap Value Portfolio - Adviser
                  Class**
         ING Pioneer Mid Cap Value Portfolio - Institutional Class 
         ING Pioneer Mid Cap Value Portfolio - Service Class 
         ING Stock Index Portfolio - Institutional Class 
         ING T. Rowe Price Capital Appreciation Portfolio - Service Class 
         ING T. Rowe Price Equity Income Portfolio - Adviser Class 
         ING T. Rowe Price Equity Income Portfolio - Service Class 
         ING Templeton Global Growth Portfolio - Institutional Class 
         ING Templeton Global Growth Portfolio - Service Class 
         ING Van Kampen Capital Growth Portfolio - Institutional Class** 
         ING Van Kampen Capital Growth Portfolio - Service Class

177

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

ING Investors Trust (continued):
         ING Van Kampen Growth and Income Portfolio - Service Class 
         ING Van Kampen Real Estate Portfolio - Institutional Class 
         ING Van Kampen Real Estate Portfolio - Service Class 
         ING VP Index Plus International Equity Portfolio - Institutional Class* 
         ING VP Index Plus International Equity Portfolio - Service Class 
         ING Wells Fargo Small Cap Disciplined Portfolio - Service Class
ING Mutual Funds: 
         ING International Growth Opportunities Fund - Class Q
         ING International SmallCap Multi-Manager Fund - Class A
ING Partners, Inc.:
         ING American Century Large Company Value Portfolio - Adviser Class 
         ING American Century Large Company Value Portfolio - Service Class 
         ING American Century Small-Mid Cap Value Portfolio - Adviser Class 
         ING American Century Small-Mid Cap Value Portfolio - Service Class 
         ING Baron Asset Portfolio - Service Class 
         ING Baron Small Cap Growth Portfolio - Adviser Class 
         ING Baron Small Cap Growth Portfolio - Service Class 
         ING Columbia Small Cap Value II Portfolio - Service Class 
         ING Davis New York Venture Portfolio - Service Class 
         ING Fidelity® VIP Mid Cap Portfolio - Service Class 
         ING Index Solution 2015 Portfolio - Adviser Class** 
         ING Index Solution 2025 Portfolio - Adviser Class** 
         ING Index Solution 2035 Portfolio - Adviser Class** 
         ING Index Solution 2045 Portfolio - Adviser Class** 
         ING Index Solution Income Portfolio - Adviser Class** 
         ING JPMorgan Mid Cap Value Portfolio - Adviser Class 
         ING JPMorgan Mid Cap Value Portfolio - Service Class 
         ING Legg Mason Partners Aggressive Growth Portfolio - Adviser Class 
         ING Legg Mason Partners Aggressive Growth Portfolio - Initial Class 
         ING Legg Mason Partners Aggressive Growth Portfolio - Service Class 
         ING Neuberger Berman Partners Portfolio - Service Class 
         ING Oppenheimer Global Portfolio - Adviser Class 
         ING Oppenheimer Global Portfolio - Initial Class

 

  

ING Partners, Inc. (continued):
         ING Oppenheimer Global Portfolio - Service Class 
         ING Oppenheimer Strategic Income Portfolio - Adviser Class 
         ING Oppenheimer Strategic Income Portfolio - Initial Class 
         ING Oppenheimer Strategic Income Portfolio - Service Class* 
         ING PIMCO Total Return Portfolio - Adviser Class 
         ING PIMCO Total Return Portfolio - Service Class 
         ING Pioneer High Yield Portfolio - Initial Class 
         ING Pioneer High Yield Portfolio - Service Class 
         ING Solution 2015 Portfolio - Adviser Class 
         ING Solution 2015 Portfolio - Service Class 
         ING Solution 2025 Portfolio - Adviser Class 
         ING Solution 2025 Portfolio - Service Class
         ING Solution 2035 Portfolio - Adviser Class 
         ING Solution 2035 Portfolio - Service Class
         ING Solution 2045 Portfolio - Adviser Class
         ING Solution 2045 Portfolio - Service Class 
         ING Solution Growth and Income Portfolio - Service Class** 
         ING Solution Growth Portfolio - Service Class** 
         ING Solution Income Portfolio - Adviser Class 
         ING Solution Income Portfolio - Service Class 
         ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Adviser Class 
         ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial Class 
         ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class 
         ING T. Rowe Price Growth Equity Portfolio - Adviser Class 
         ING T. Rowe Price Growth Equity Portfolio - Initial Class 
         ING T. Rowe Price Growth Equity Portfolio - Service Class 
         ING Templeton Foreign Equity Portfolio - Adviser Class** 
         ING Templeton Foreign Equity Portfolio - Initial Class** 
         ING Templeton Foreign Equity Portfolio - Service Class 
         ING Thornburg Value Portfolio - Adviser Class 
         ING Thornburg Value Portfolio - Initial Class 
         ING UBS U.S. Large Cap Equity Portfolio - Adviser Class* 
         ING UBS U.S. Large Cap Equity Portfolio - Initial Class 
         ING UBS U.S. Large Cap Equity Portfolio - Service Class 
         ING Van Kampen Comstock Portfolio - Adviser Class 
         ING Van Kampen Comstock Portfolio - Service Class 
         ING Van Kampen Equity and Income Portfolio - Adviser Class

178

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

ING Partners, Inc. (continued):
         ING Van Kampen Equity and Income Portfolio - Initial Class
         ING Van Kampen Equity and Income Portfolio - Service Class
ING Strategic Allocation Portfolios, Inc.:
         ING VP Strategic Allocation Conservative Portfolio - Class I
         ING VP Strategic Allocation Growth Portfolio - Class I
         ING VP Strategic Allocation Moderate Portfolio - Class I
ING Variable Funds:
         ING VP Growth and Income Portfolio - Class A*
         ING VP Growth and Income Portfolio - Class I 
         ING VP Growth and Income Portfolio - Class S* 
ING Variable Insurance Trust: 
         ING GET U.S. Core Portfolio - Series 3 
         ING GET U.S. Core Portfolio - Series 5 
         ING GET U.S. Core Portfolio - Series 6 
         ING GET U.S. Core Portfolio - Series 7 
         ING GET U.S. Core Portfolio - Series 8 
         ING GET U.S. Core Portfolio - Series 9 
         ING GET U.S. Core Portfolio - Series 10 
         ING GET U.S. Core Portfolio - Series 11
ING Variable Portfolios, Inc.: 
         ING BlackRock Global Science and Technology Portfolio - Class I
         ING International Index Portfolio - Class I** 
         ING Lehman Brothers U.S. Aggregate Bond Index®
                  Portfolio - Class I**
         ING Opportunistic Large Cap Growth Portfolio - Class I
         ING Opportunistic Large Cap Value Portfolio - Class I
         ING Russell™ Large Cap Index Portfolio - Class I**
         ING Russell™ Mid Cap Index Portfolio - Class I** 
         ING Russell™ Small Cap Index Portfolio - Class I** 
         ING VP Index Plus LargeCap Portfolio - Class I 
         ING VP Index Plus LargeCap Portfolio - Class S 
         ING VP Index Plus MidCap Portfolio - Class I 
         ING VP Index Plus MidCap Portfolio - Class S 
         ING VP Index Plus SmallCap Portfolio - Class I 
         ING VP Index Plus SmallCap Portfolio - Class S 
         ING VP Small Company Portfolio - Class I
         ING VP Small Company Portfolio - Class S
ING Variable Products Trust:
         ING VP International Value Portfolio - Class I
         ING VP International Value Portfolio - Class S 
         ING VP MidCap Opportunities Portfolio - Class I
         ING VP MidCap Opportunities Portfolio - Class S 
         ING VP SmallCap Opportunities Portfolio - Class I 
         ING VP SmallCap Opportunities Portfolio - Class S
ING VP Balanced Portfolio, Inc.:
         ING VP Balanced Portfolio - Class I

  

ING VP Intermediate Bond Portfolio:
         ING VP Intermediate Bond Portfolio - Class I 
         ING VP Intermediate Bond Portfolio - Class S
ING VP Money Market Portfolio:
         ING VP Money Market Portfolio - Class I
Janus Aspen Series:
         Janus Aspen Series Balanced Portfolio - Institutional Shares
         Janus Aspen Series Flexible Bond Portfolio - Institutional Shares
         Janus Aspen Series Large Cap Growth Portfolio - Institutional Shares
         Janus Aspen Series Mid Cap Growth Portfolio - Institutional Shares
         Janus Aspen Series Worldwide Growth Portfolio - Institutional Shares
The Lazard Funds, Inc.: 
         Lazard U.S. Mid Cap Equity Portfolio - Open Shares*
LKCM Funds: 
         LKCM Aquinas Growth Fund
Loomis Sayles Funds I: 
         Loomis Sayles Small Cap Value Fund - Retail Class**
Lord Abbett Mid Cap Value Fund, Inc.: 
         Lord Abbett Mid-Cap Value Fund, Inc. - Class A
Lord Abbett Research Fund, Inc.: 
         Lord Abbett Small-Cap Value Fund - Class A
Lord Abbett Series Fund, Inc.:
         Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC
Massachusetts Investors Growth Stock Fund:
         Massachusetts Investors Growth Stock Fund - Class A
Morgan Stanley Institutional Fund Trust:
         Morgan Stanley U.S. Small Cap Value Portfolio - Class I**
Neuberger Berman Equity Funds®:
         Neuberger Berman Socially Responsive Fund® - Trust Class
New Perspective Fund®, Inc.: 
         New Perspective Fund®, Inc. - Class R-3 
         New Perspective Fund®, Inc. - Class R-4
Oppenheimer Capital Appreciation Fund: 
         Oppenheimer Capital Appreciation Fund - Class A 
Oppenheimer Developing Markets Fund: 
         Oppenheimer Developing Markets Fund - Class A
Oppenheimer Variable Account Funds: 
         Oppenheimer Global Securities/VA
         Oppenheimer Main Street Fund®/VA
         Oppenheimer Main Street Small Cap Fund®/VA 
         Oppenheimer MidCap Fund/VA
         Oppenheimer Strategic Bond Fund/VA
Pax World Funds Series Trust I: 
         Pax World Balanced Fund
PIMCO Variable Insurance Trust:
         PIMCO Real Return Portfolio - Administrative Class
Pioneer High Yield Fund: 
         Pioneer High Yield Fund - Class A

 
 
 

 

  

179

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

Pioneer Variable Contracts Trust:
      Pioneer Emerging Markets VCT Portfolio - Class I* 
      Pioneer Equity Income VCT Portfolio - Class I 
      Pioneer High Yield VCT Portfolio - Class I
Premier VIT:
      Premier VIT OpCap Mid Cap Portfolio*
RiverSource Investment Series, Inc.: 
      RiverSource Diversified Equity Income Fund -Class R-4**
SmallCap World Fund, Inc.:
      SMALLCAP World Fund® - Class R-4**
T. Rowe Price Mid-Cap Value Fund, Inc.: 
      T. Rowe Price Mid-Cap Value Fund - R Class
T. Rowe Price Value Fund, Inc.: 
      T. Rowe Price Value Fund - Advisor Class
Templeton Funds, Inc.: 
      Templeton Foreign Fund - Class A
Templeton Income Trust:
      Templeton Global Bond Fund - Class A

  

Vanguard® Variable Insurance Fund:
      Diversified Value Portfolio 
      Equity Income Portfolio
      Small Company Growth Portfolio
Wanger Advisors Trust:
      Wanger International* 
      Wanger Select 
      Wanger USA
Washington Mutual Investors FundSM, Inc.:
      Washington Mutual Investors FundSM, Inc. -Class R-3
      Washington Mutual Investors FundSM, Inc. - Class R-4
Wells Fargo Funds Trust: 
      Wells Fargo Advantage Small Cap Value Fund - Class A

  *   Division added in 2007
      ** Division added in 2008

The names of certain Divisions were changed during 2008. The following is a summary
of current and former names for those Divisions:

Current Name   Former Name
 

ING Investors Trust:
      ING Van Kampen Large Cap Growth Portfolio - Institutional Class 
      ING Van Kampen Large Cap Growth Portfolio - Service Class 
ING Variable Portfolios, Inc.: 
      ING BlackRock Global Science and Technology Portfolio - Class I
      ING Opportunistic Large Cap Growth Portfolio - Class I
      ING Opportunistic Large Cap Value Portfolio - Class I
The Lazard Funds, Inc.:
      Lazard U.S. Mid Cap Equity Portfolio - Open Shares
Wanger Advisors Trust: 
      Wanger International
       Wanger USA

 

  

ING Investors Trust: 
      ING FMRSM Large Cap Growth Portfolio - Institutional Class 
      ING FMRSM Large Cap Growth Portfolio - Service Class
ING Variable Portfolios, Inc.: 
      ING VP Global Science and Technology Portfolio - Class I
      ING VP Growth Portfolio - Class I
      ING VP Value Opportunity Portfolio - Class I
The Lazard Funds, Inc.:
      Lazard Mid Cap Portfolio - Open Shares
Wanger Advisors Trust: 
      Wanger International Small Cap 
      Wanger U.S. Smaller Companies

180

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

During 2008, the following Divisions were closed to contractowners:

Capital One Funds:
      Capital One Mid Cap Equity Fund - Class A
ING Investors Trust:
      ING Van Kampen Large Cap Growth Portfolio - Institutional Class
      ING Van Kampen Large Cap Growth Portfolio - Service Class
      ING Wells Fargo Disciplined Value Portfolio - Adviser Class
      ING Wells Fargo Disciplined Value Portfolio - Service Class
ING Partners, Inc.:
      ING JPMorgan International Portfolio - Adviser Class
      ING JPMorgan International Portfolio - Initial Class
      ING JPMorgan International Portfolio - Service Class
      ING Legg Mason Partners Large Cap Growth Portfolio - Adviser Class
      ING Legg Mason Partners Large Cap Growth Portfolio - Initial Class
      ING Neuberger Berman Regency Portfolio - Service Class
      ING OpCap Balanced Value Portfolio - Service Class
      ING UBS U.S. Small Cap Growth Portfolio - Service Class
ING Variable Insurance Trust:
      ING GET U.S. Core Portfolio - Series 1
      ING GET U.S. Core Portfolio - Series 2
ING Variable Products Trust:
      ING VP Financial Services Portfolio - Class I
      ING VP Real Estate Portfolio - Class I
Janus Adviser Series:
      Janus Adviser Balanced Fund - Class S
Moderate Allocation Portfolio:
      Moderate Allocation Portfolio
Pioneer Variable Contracts Trust:
      Pioneer Mid Cap Value VCT Portfolio - Class I

The following Divisions were offered during 2008, but had no investments as of
December 31, 2008:

AIM Equity Funds:
      AIM Charter Fund - Class A 
      AIM Constellation Fund - Class A
AIM Investment Securities Funds: 
      AIM Income Fund - Class A 
AIM Stock Funds: 
      AIM Dynamics Fund - Investor Class
Alger Funds:
      Alger SmallCap Growth Fund - Class A
Alger Funds II: 
      Alger Green Fund - Class A
Allianz Funds:
      Allianz NFJ Dividend Value Fund - Class A 
      Allianz NFJ Small-Cap Value Fund - Institutional Class
American Balanced Fund®, Inc.: 
      American Balanced Fund® - Class R-4
American Century Mutual Funds:
      American Century Ultra® Fund - Advisor Class
BlackRock Large Cap Series Funds, Inc.:
      BlackRock Large Cap Value Fund - Investor A Shares
Calvert World Values Fund, Inc.: 
      Calvert Capital Accumulation Fund - Class A

 

  

Capital World Growth & Income Fund®, Inc.:
      Capital World Growth & Income Fund®, Inc. - Class R-4
      Capital World Growth & Income Fund®, Inc. - Class R-5
Columbia Acorn Trust: 
      ColumbiaSM Acorn USA® - Class A
Davis New York Venture Fund, Inc.:
      Davis New York Venture Fund - Class R
Dodge & Cox Funds: 
      Dodge & Cox International Stock Fund
Fidelity® Advisor Series I:
      Fidelity® Advisor Balanced Fund - Class T 
      Fidelity® Advisor Equity Growth Fund - Class T 
      Fidelity® Advisor Equity Income Fund - Class T 
      Fidelity® Advisor Growth Opportunities Fund - Class T
      Fidelity® Advisor Leveraged Company Stock Fund - Institutional Class
Fidelity® Variable Insurance Products:
      Fidelity® VIP Equity-Income Portfolio - Service Class 2 
      Fidelity® VIP Growth Portfolio - Service Class 2

181

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

Fidelity® Variable Insurance Products II:
      Fidelity® VIP Contrafund® Portfolio - Service Class 2
Franklin Value Investors Trust:
      Franklin Balance Sheet Investment Fund - Class A
Goldman Sachs Trust:
      Goldman Sachs Capital Growth Fund - Class A
      Goldman Sachs Concentrated International Equity Fund - Class A
The Growth Fund of America®, Inc.: 
      The Growth Fund of America® - Class R-5
ING Equity Trust:
      ING LargeCap Growth Fund - Class A 
      ING SmallCap Opportunities Fund - Class A
ING Investors Trust:
      ING AllianceBernstein Mid Cap Growth Portfolio - Adviser Class
      ING Evergreen Omega Portfolio - Institutional Class
      ING FMRSM Diversified Mid Cap Portfolio - Adviser Class 
      ING FMRSM Equity Income Portfolio - Institutional Class 
      ING FMRSM Equity Income Portfolio - Service Class 
      ING Julius Baer Foreign Portfolio - Institutional Class 
      ING Legg Mason Value Portfolio - Institutional Class 
      ING Marsico Growth Portfolio - Adviser Class 
      ING Pioneer Equity Income Portfolio - Service Class
ING Mayflower Trust: 
      ING International Value Fund - Class A
ING Mutual Funds:
      ING Global Real Estate Fund - Class I 
      ING Global Value Choice Fund - Class A
ING Partners, Inc.:
      ING Columbia Small Cap Value II Portfolio - Adviser Class
      ING Davis New York Venture Portfolio - Adviser Class
      ING Index Solution 2015 Portfolio - Initial Class 
      ING Index Solution 2015 Portfolio - Service Class 
      ING Index Solution 2025 Portfolio - Initial Class
      ING Index Solution 2025 Portfolio - Service Class 
      ING Index Solution 2035 Portfolio - Initial Class
      ING Index Solution 2035 Portfolio - Service Class
      ING Index Solution 2045 Portfolio - Initial Class 
      ING Index Solution 2045 Portfolio - Service Class 
      ING Index Solution Income Portfolio - Initial Class 
      ING Index Solution Income Portfolio - Service Class 
      ING Thornburg Value Portfolio - Service Class
ING Series Fund, Inc.:
      ING Balanced Fund - Class A
      ING Global Science and Technology Fund - Class A 
      ING Growth and Income Fund - Class A
      ING Index Plus LargeCap Fund - Class A 
      ING Index Plus MidCap Fund - Class A 
      ING Index Plus SmallCap Fund - Class A 
      ING Money Market Fund - Class A 
      ING Small Company Fund - Class A

 

  

ING Series Fund, Inc. (continued):
      ING Strategic Allocation Conservative Fund - Class A 
      ING Strategic Allocation Growth Fund - Class A 
      ING Strategic Allocation Moderate Fund - Class A
ING Variable Portfolios, Inc.:
      ING BlackRock Global Science and Technology Portfolio - Class S
      ING Opportunistic Large Cap Growth Portfolio - Class S
      ING Opportunistic Large Cap Value Portfolio - Class S
Janus Adviser Series:
      Janus Adviser Flexible Bond Fund - Class S 
      Janus Adviser Forty Fund - Class S
      Janus Adviser Large Cap Growth Fund - Class S
      Janus Adviser Mid Cap Growth Fund - Class S 
      Janus Adviser Worldwide Fund - Class S
Janus Aspen Series:
      Janus Aspen Series International Growth Portfolio - Institutional Shares
Janus Investment Fund: 
      Janus Contrarian Fund
Keeley Small Cap Value Fund, Inc.: 
      Keeley Small Cap Value Fund
The Lazard Funds, Inc.: 
      Lazard Emerging Markets Equity Portfolio - Open Shares 
      Lazard International Equity Portfolio - Open Shares 
      Lazard U.S. Small-Mid Cap Equity Portfolio - Open Shares
Legg Mason Special Investment Trust, Inc.: 
      Legg Mason Special Investment Trust, Inc. - Primary Class
Loomis Sayles Funds II:
      Loomis Sayles Investment Grade Bond Fund - Class Y
MFS® Series Trust II:
      MFS® Growth Fund - Class A 
MFS® Series Trust V: 
      MFS® Research Fund - Class A
      MFS® Total Return Fund - Class A 
      MFS® Total Return Fund - Class I
MFS® Series Trust VI:
      MFS® Global Equity Fund - Class A
Morgan Stanley Institutional Fund Trust: 
      Morgan Stanley Mid Cap Growth Portfolio - Adviser Class 
      Morgan Stanley U.S. Small Cap Value Portfolio - Class P
Oppenheimer Capital Income Fund:
      Oppenheimer Capital Income Fund - Class A
Oppenheimer Champion Income Fund:
      Oppenheimer Champion Income Fund - Class A 
Oppenheimer Integrity Funds: 
      Oppenheimer Core Bond Fund - Class A

182

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

Oppenheimer International Bond Fund:
      Oppenheimer International Bond Fund - Class Y
Oppenheimer International Small Company Fund: 
      Oppenheimer International Small Company Fund - Class Y
Parnassus Income Funds:
      Parnassus Equity Income Fund - Investor Shares
Pioneer Equity Income Fund: 
      Pioneer Equity Income Fund - Class A
Pioneer Variable Contracts Trust:
      Pioneer Equity Income VCT Portfolio - Class II
Prudential Investment Portfolios, Inc.: 
      Jennison Equity Opportunity Fund - Class A
      Jennison Growth Fund - Class A
RiverSource Investment Series, Inc.:
      RiverSource Diversified Equity Income Fund - Class R-3
      RiverSource Diversified Equity Income Fund - Class R-5 
      RiverSource Mid Cap Value Fund - Class R-5

  

T. Rowe Price Science and Technology Fund, Inc.:
      T. Rowe Price Science and Technology Fund - Advisor Class
Thornburg Investment Trust: 
      Thornburg Core Growth Fund - Class R5
Vanguard® Index Funds:
      Vanguard® 500 Index Fund - Investor Shares 
      Vanguard® 500 Index Fund - Signal™ Shares 
      Vanguard® Extended Market Index Fund - Signal™ Shares
      Vanguard® Small-Cap Index Fund - Signal™ Shares 
      Vanguard® Total Bond Market Index Fund - Signal™ Shares
      Vanguard® Total Stock Market Index Fund - Signal™ Shares
Wells Fargo Funds Trust:
      Wells Fargo Advantage Mid Cap Disciplined Fund - Administrator Class


Effective October 7, 2008, ING VP Money Market Portfolio changed its investment
objective to seeking to maintain a stable share price of $1.00 per share. In connection
with this change, ING VP Money Market Portfolio utilized a stock split and distributed
additional shares to its shareholders such that each shareholder’s proportionate interest
and aggregate value of investment in ING VP Money Market Portfolio remained the
same.

2. Significant Accounting Policies

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

Use of Estimates

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

Investments

Investments are made in shares of a 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 on a first-in, first-out basis. The

                                                                            183

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

difference between cost and current market value of investments owned on the day of
measurement 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.

Contractowner Reserves

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

Changes from Principal Transactions

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

3. Recently Adopted Accounting Standards

Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“FAS”) No. 157, “Fair Value
Measurements” (“FAS No. 157”). FAS No. 157 provides guidance for using fair value to
measure assets and liabilities whenever other standards require (or permit) assets or
liabilities to be measured at fair value. FAS No. 157 does not expand the use of fair value
to any new circumstances.

                                                                            184

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

Under FAS No. 157, the FASB clarifies the principle that fair value should be based on
the assumptions market participants would use when pricing the asset or liability. In
support of this principle, FAS No. 157 establishes a fair value hierarchy that prioritizes
the information used to develop such assumptions. The fair value hierarchy gives the
highest priority to quoted prices in active markets and the lowest priority to unobservable
data. FAS No. 157 also requires separate disclosure of fair value measurements by level
within the hierarchy and expanded disclosure of the effect on earnings for items measured
using unobservable data.

The adoption of FAS No. 157 on January 1, 2008 did not have an impact on the
Account’s net assets or results of operations. New disclosures are included in the
Financial Instruments footnote.

4.      Financial Instruments
 
  The Account invests assets in shares of open-end mutual funds and funds of funds, which
process orders to purchase and redeem shares on a daily basis at the fund's next computed
net asset values (“NAV”). The fair value of the Account’s assets is based on the NAVs of
mutual funds, which are obtained from the custodian and reflect the fair values of the
mutual fund investments. The NAV is calculated daily upon close of the New York Stock
Exchange and is based on the fair values of the underlying securities.
 
  The Account’s financial assets are recorded at fair value on the Statements of Assets and
Liabilities and are categorized as Level 1 as of December 31, 2008, based on the priority
of the inputs to the valuation technique below. The Account had no financial liabilities as
of December 31, 2008.
 
  The FAS No. 157 fair value hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable
inputs (Level 3). If the inputs used to measure fair value fall within different levels of the
hierarchy, the category level is based on the lowest priority level input that is significant
to the fair value measurement of the instrument.
 
  §      Level 1 - Unadjusted quoted prices for identical assets or liabilities in an active
market.
  §      Level 2 - Quoted prices in markets that are not active or inputs that are observable
either directly or indirectly for substantially the full term of the asset or liability.
    Level 2 inputs include the following:
    a)      Quoted prices for similar assets or liabilities in active markets;
    b)      Quoted prices for identical or similar assets or liabilities in non-active markets;
    c)      Inputs other than quoted market prices that are observable; and
    d)      Inputs that are derived principally from or corroborated by observable market
 

                                                                            185

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

data through correlation or other means.
















                                                                            186

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

        
  §      Level 3 - Prices or valuation techniques that require inputs that are both
unobservable and significant to the overall fair value measurement. These
valuations, whether derived internally or obtained from a third party, use critical
assumptions that are not widely available to estimate market participant
expectations in valuing the asset or liability.
 
5. Charges and Fees

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

Mortality and Expense Risk Charges

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

Asset Based Administrative Charges

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

Contract Maintenance Charges

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

Contingent Deferred Sales Charges

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

Other Contract Charges

For certain Contracts, an additional annual charge of 1.00% is deducted daily from the
accumulation value of Contracts for contractowners who select the Five-Year Guaranteed
Minimum Income feature.

                                                            187

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

Premium Taxes

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

6. Related Party Transactions

During the year ended December 31, 2008, management and service fees were paid
indirectly to IIL, an affiliate of the Company, in its capacity as investment adviser to the
ING Equity Trust, ING Funds Trust, ING Mutual Funds, ING Variable Products Trust,
ING VP Intermediate Bond Portfolio, ING VP Money Market Portfolio, ING VP
Balanced Portfolio, Inc., ING Strategic Allocation Portfolios, Inc., ING Variable Funds,
ING Variable Insurance Trust, and ING Variable Portfolios, Inc. The annual fee rate
ranged from 0.08% to 1.00% of the average net assets of each respective Fund.

In addition, management fees were paid to DSL in its capacity as investment adviser to
ING Partners, Inc. and ING Investors Trust. The Trusts’ advisory agreement provided for
a fee at an annual rate up to 1.25% of the average net assets of each respective Fund.

 

                                                            188

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

7. Purchases and Sales of Investment Securities

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
AIM Growth Series:                
     AIM Mid Cap Core Equity Fund - Class A   $ 115   $ 58   $ 96 $ 39
     AIM Small Cap Growth Fund - Class A   14   8   23   4
AIM Investment Funds:                
     AIM Global Health Care Fund - Investor Class   45   19   56   26
AIM Variable Insurance Funds:                
     AIM V.I. Capital Appreciation Fund - Series I Shares   1,530   3,480   2,260   5,570
     AIM V.I. Core Equity Fund - Series I Shares   5,020   6,612   3,055   7,949
AllianceBernstein Growth and Income Fund, Inc.:                
     AllianceBernstein Growth and Income Fund, Inc. - Class A   127   18   68   6
AllianceBernstein Variable Products Series Fund, Inc.:                
     AllianceBernstein Growth and Income Portfolio - Class A   183   106   238   138
Allianz Funds:                
     Allianz NFJ Large-Cap Value Fund - Institutional Class   1,183   373   -   -
     Allianz NFJ Small-Cap Value Fund - Class A   159   114   154   151
Amana Mutual Funds Trust:                
     Amana Growth Fund   36   -   -   -
     Amana Income Fund   46   -   -   -
American Balanced Fund®, Inc.:                
     American Balanced Fund® - Class R-3   1,324   1,956   1,822   533
American Century Quantitative Equity Funds, Inc.:                
     American Century Income & Growth Fund - A Class   1,028   864   2,057   1,690
Ariel Investment Trust:                
     Ariel Appreciation Fund   178   60   208   192
     Ariel Fund   353   121   340   60
Artisan Funds, Inc.:                
     Artisan International Fund - Investor Shares   985   572   -   -
The Bond Fund of AmericaSM, Inc.:                
     The Bond Fund of AmericaSM, Inc. - Class R-4   2,871   771   -   -
Calvert Variable Series, Inc.:                
     Calvert Social Balanced Portfolio   3,688   8,210   7,707   10,570
Capital One Funds:                
     Capital One Mid Cap Equity Fund - Class A   23   66   117   118
Columbia Acorn Trust:                
     ColumbiaSM Acorn Fund® - Class Z   1,288   136   -   -
Columbia Funds Series Trust:                
     Columbia Mid Cap Value Fund - Class A   1,696   41   -   -
     Columbia Mid Cap Value Fund - Class Z   876   96   -   -
DWS Institutional Funds:                
     DWS Equity 500 Index Fund - Class S   61   19   78   23
EuroPacific Growth Fund®:                
     EuroPacific Growth Fund® - Class R-3   3,250   666   5,869   387
     EuroPacific Growth Fund® - Class R-4   63,122   9,451   70,434   10,878

                                                            189

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
Evergreen Equity Trust:                
     Evergreen Special Values Fund - Class A   $ 8,381   $ 11,051   $ 32,044   $ 16,609
Fidelity® Variable Insurance Products:                
     Fidelity® VIP Equity-Income Portfolio - Initial Class   17,331   54,245   64,478   57,707
     Fidelity® VIP Growth Portfolio - Initial Class   7,959   29,689   11,577   48,459
     Fidelity® VIP High Income Portfolio - Initial Class   1,529   1,790   2,701   2,477
     Fidelity® VIP Overseas Portfolio - Initial Class   12,038   11,131   16,564   10,870
Fidelity® Variable Insurance Products II:                
     Fidelity® VIP Contrafund® Portfolio - Initial Class   83,323   86,879   381,587   121,540
     Fidelity® VIP Index 500 Portfolio - Initial Class   8,380   11,595   10,266   14,708
Fidelity® Variable Insurance Products III:                
     Fidelity® VIP Mid Cap Portfolio - Initial Class   4,930   711   4,555   398
Fidelity® Variable Insurance Products V:                
     Fidelity® VIP Asset ManagerSM Portfolio - Initial Class   6,406   2,242   3,865   2,972
Franklin Mutual Series Fund Inc.:                
     Mutual Discovery Fund - Class R   1,015   541   1,026   88
Franklin Strategic Series:                
     Franklin Small-Mid Cap Growth Fund - Class A   167   256   319   53
Franklin Templeton Variable Insurance Products Trust:                
     Franklin Small Cap Value Securities Fund - Class 2   21,785   11,910   27,561   14,852
Fundamental Investors, Inc.:                
     Fundamental Investors, Inc. - Class R-3   13   -   -   -
     Fundamental Investors, Inc. - Class R-4   9,789   179   -   -
The Growth Fund of America®, Inc.:                
     The Growth Fund of America® - Class R-3   3,608   749   5,091   583
     The Growth Fund of America® - Class R-4   51,599   9,231   58,943   12,793
The Income Fund of America®, Inc.:                
     The Income Fund of America® - Class R-3   787   255   879   154
ING Equity Trust:                
     ING Financial Services Fund - Class A   44   15   98   8
     ING Real Estate Fund - Class A   559   354   835   653
ING Funds Trust:                
     ING GNMA Income Fund - Class A   1,665   316   556   144
     ING Intermediate Bond Fund - Class A   1,496   473   1,672   268
ING Investors Trust:                
     ING AllianceBernstein Mid Cap Growth Portfolio - Service                
           Class   2,079   1,463   2,837   2,291
     ING BlackRock Large Cap Growth Portfolio - Institutional Class   12,968   12,086   128,112   10,240
     ING BlackRock Large Cap Growth Portfolio - Service Class   91   -   80   38
     ING BlackRock Large Cap Growth Portfolio - Service 2 Class   65   54   156   7
     ING Evergreen Health Sciences Portfolio - Service Class   4,792   1,090   3,207   1,604
     ING Evergreen Omega Portfolio - Service Class   51   15   -   -
     ING FMRSM Diversified Mid Cap Portfolio - Service Class   14,704   929   5,324   2,631
     ING Global Real Estate Portfolio - Institutional Class   55,853   3,461   -   -
 
 
 
 
                                                                                                           190                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
ING Investors Trust (continued):                
     ING Global Resources Portfolio - Institutional Class   $ 7   $ 1   $ 40   $ -
     ING Global Resources Portfolio - Service Class   62,056   21,226   103,919   14,148
     ING Janus Contrarian Portfolio - Service Class   9,329   546   4,603   5
     ING JPMorgan Emerging Markets Equity Portfolio - Adviser                
           Class   353   271   339   77
     ING JPMorgan Emerging Markets Equity Portfolio - Institutional                
           Class   8,100   9,806   15,257   11,397
     ING JPMorgan Emerging Markets Equity Portfolio - Service                
           Class   10,292   13,457   19,506   10,023
     ING JPMorgan Small Cap Core Equity Portfolio - Service Class   1,471   730   1,933   870
     ING JPMorgan Value Opportunities Portfolio - Institutional                
           Class   31   45   163   109
     ING JPMorgan Value Opportunities Portfolio - Service Class   851   703   1,971   758
     ING Julius Baer Foreign Portfolio - Service Class   13,668   7,771   28,923   2,820
     ING Legg Mason Value Portfolio - Service Class   2,060   2,385   3,263   1,942
     ING Lord Abbett Affiliated Portfolio - Institutional Class   21,601   16,868   137,049   8,942
     ING Lord Abbett Affiliated Portfolio - Service Class   418   51   581   34
     ING Marsico Growth Portfolio - Institutional Class   9,787   1,675   -   -
     ING Marsico Growth Portfolio - Service Class   1,626   5,168   2,277   1,123
     ING Marsico International Opportunities Portfolio - Adviser                
           Class   166   77   66   -
     ING Marsico International Opportunities Portfolio - Service                
           Class   5,157   3,756   6,755   2,546
     ING MFS Total Return Portfolio - Adviser Class   346   175   629   91
     ING MFS Total Return Portfolio - Institutional Class   12,205   15,394   85,667   5,587
     ING MFS Total Return Portfolio - Service Class   6,317   6,069   7,005   8,503
     ING MFS Utilities Portfolio - Service Class   14,547   6,817   27,746   7,695
     ING Oppenheimer Main Street Portfolio® - Service Class   2,111   1,886   1,850   692
     ING PIMCO High Yield Portfolio - Institutional Class   525   479   1,012   434
     ING PIMCO High Yield Portfolio - Service Class   4,100   3,544   3,884   2,956
     ING Pioneer Equity Income Portfolio - Institutional Class   21,573   15,558   170,710   8,950
     ING Pioneer Fund Portfolio - Institutional Class   3,838   1,752   15,807   1,978
     ING Pioneer Fund Portfolio - Service Class   68   15   109   23
     ING Pioneer Mid Cap Value Portfolio - Adviser Class   8   5   -   -
     ING Pioneer Mid Cap Value Portfolio - Institutional Class   16,615   9,295   104,569   5,929
     ING Pioneer Mid Cap Value Portfolio - Service Class   273   11   11   -
     ING Stock Index Portfolio - Institutional Class   746   468   647   718
     ING T. Rowe Price Capital Appreciation Portfolio - Service                
           Class   76,797   6,029   97,533   4,012
     ING T. Rowe Price Equity Income Portfolio - Adviser Class   744   356   1,096   110
     ING T. Rowe Price Equity Income Portfolio - Service Class   29,676   6,860   23,005   6,815
     ING Templeton Global Growth Portfolio - Institutional Class   238   113   1,270   78
     ING Templeton Global Growth Portfolio - Service Class   1,075   385   2,224   752
     ING Van Kampen Capital Growth Portfolio - Institutional Class   739   186   -   -
     ING Van Kampen Capital Growth Portfolio - Service Class   322   114   74   11
     ING Van Kampen Growth and Income Portfolio - Service Class   7,260   3,708   7,730   5,017
 
 
 
                                                                                                           191                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
ING Investors Trust (continued):                
     ING Van Kampen Large Cap Growth Portfolio - Institutional                
           Class   $ 112   $ 244   $ 195   $ 219
     ING Van Kampen Large Cap Growth Portfolio - Service Class   -   -   -   -
     ING Van Kampen Real Estate Portfolio - Institutional Class   579   141   654   166
     ING Van Kampen Real Estate Portfolio - Service Class   14,906   3,853   20,511   9,175
     ING VP Index Plus International Equity Portfolio - Institutional                
           Class   9,708   5,196   23,401   739
     ING VP Index Plus International Equity Portfolio - Service Class   2,191   1,919   9,922   5,658
     ING Wells Fargo Disciplined Value Portfolio - Adviser Class   6   8   3   -
     ING Wells Fargo Disciplined Value Portfolio - Service Class   245   1,244   1,354   916
     ING Wells Fargo Small Cap Disciplined Portfolio - Service Class   1,118   656   814   901
ING Mutual Funds:                
     ING International Growth Opportunities Fund - Class Q   4   -   5   -
     ING International SmallCap Multi-Manager Fund - Class A   597   269   2,051   460
ING Partners, Inc.:                
     ING American Century Large Company Value Portfolio - Adviser                
           Class   68   -   81   -
     ING American Century Large Company Value Portfolio - Service                
           Class   3,172   1,055   1,490   1,873
     ING American Century Small-Mid Cap Value Portfolio - Adviser                
           Class   96   64   43   20
     ING American Century Small-Mid Cap Value Portfolio - Service                
           Class   7,460   2,970   5,907   6,289
     ING Baron Asset Portfolio - Service Class   1,012   620   3,527   722
     ING Baron Small Cap Growth Portfolio - Adviser Class   278   172   272   82
     ING Baron Small Cap Growth Portfolio - Service Class   15,624   9,389   21,285   9,634
     ING Columbia Small Cap Value II Portfolio - Service Class   706   129   924   145
     ING Davis New York Venture Portfolio - Service Class   3,980   1,471   3,154   1,617
     ING Fidelity® VIP Mid Cap Portfolio - Service Class   7,228   366   3,867   16
     ING Index Solution 2015 Portfolio - Adviser Class   37   -   -   -
     ING Index Solution 2025 Portfolio - Adviser Class   80   -   -   -
     ING Index Solution 2035 Portfolio - Adviser Class   50   -   -   -
     ING Index Solution 2045 Portfolio - Adviser Class   6   -   -   -
     ING Index Solution Income Portfolio - Adviser Class   1   -   -   -
     ING JPMorgan International Portfolio - Adviser Class   171   236   277   105
     ING JPMorgan International Portfolio - Initial Class   73,774   139,860   12,083   31,023
     ING JPMorgan International Portfolio - Service Class   26   40   15   1
     ING JPMorgan Mid Cap Value Portfolio - Adviser Class   222   206   412   90
     ING JPMorgan Mid Cap Value Portfolio - Service Class   5,508   5,303   7,888   4,358
     ING Legg Mason Partners Aggressive Growth Portfolio - Adviser                
           Class   24   23   155   73
     ING Legg Mason Partners Aggressive Growth Portfolio - Initial                
           Class   1,877   20,540   2,952   43,831
     ING Legg Mason Partners Aggressive Growth Portfolio - Service                
           Class   105   6   26   18
     ING Legg Mason Partners Large Cap Growth Portfolio - Adviser                
           Class   11   139   166   56
 
 
 
                                                                                                           192                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
ING Partners, Inc. (continued):                
     ING Legg Mason Partners Large Cap Growth Portfolio - Initial                
           Class   $ 771   $ 3,534   $ 687   $ 1,133
     ING Neuberger Berman Partners Portfolio - Service Class   2,501   802   3,601   1,492
     ING Neuberger Berman Regency Portfolio - Service Class   4   65   64   -
     ING OpCap Balanced Value Portfolio - Service Class   3,211   8,000   2,475   3,110
     ING Oppenheimer Global Portfolio - Adviser Class   219   135   360   86
     ING Oppenheimer Global Portfolio - Initial Class   71,401   115,339   55,048   149,707
     ING Oppenheimer Global Portfolio - Service Class   168   137   318   53
     ING Oppenheimer Strategic Income Portfolio - Adviser Class   323   260   192   49
     ING Oppenheimer Strategic Income Portfolio - Initial Class   27,530   15,665   26,922   18,515
     ING Oppenheimer Strategic Income Portfolio - Service Class   317   3,908   3,849   20
     ING PIMCO Total Return Portfolio - Adviser Class   878   491   409   151
     ING PIMCO Total Return Portfolio - Service Class   49,759   20,018   24,623   8,657
     ING Pioneer High Yield Portfolio - Initial Class   2,788   1,810   5,895   1,624
     ING Pioneer High Yield Portfolio - Service Class   36   8   93   1
     ING Solution 2015 Portfolio - Adviser Class   6,088   1,242   7,188   480
     ING Solution 2015 Portfolio - Service Class   13,824   5,036   19,648   5,245
     ING Solution 2025 Portfolio - Adviser Class   7,199   1,100   8,121   621
     ING Solution 2025 Portfolio - Service Class   21,652   4,941   24,006   3,374
     ING Solution 2035 Portfolio - Adviser Class   6,053   570   6,338   500
     ING Solution 2035 Portfolio - Service Class   17,035   2,269   17,108   2,183
     ING Solution 2045 Portfolio - Adviser Class   3,343   645   5,897   382
     ING Solution 2045 Portfolio - Service Class   11,939   1,802   10,977   1,571
     ING Solution Growth and Income Portfolio - Service Class   908   250   -   -
     ING Solution Growth Portfolio - Service Class   443   210   -   -
     ING Solution Income Portfolio - Adviser Class   3,604   986   5,998   473
     ING Solution Income Portfolio - Service Class   4,348   3,037   6,004   1,547
     ING T. Rowe Price Diversified Mid Cap Growth Portfolio -                
           Adviser Class   193   104   506   174
     ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial                
           Class   57,324   37,143   41,586   65,054
     ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service                
           Class   152   113   173   98
     ING T. Rowe Price Growth Equity Portfolio - Adviser Class   705   490   1,180   158
     ING T. Rowe Price Growth Equity Portfolio - Initial Class   23,639   29,782   22,362   41,447
     ING T. Rowe Price Growth Equity Portfolio - Service Class   688   129   429   101
     ING Templeton Foreign Equity Portfolio - Adviser Class   273   38   -   -
     ING Templeton Foreign Equity Portfolio - Initial Class   140,891   13,745   -   -
     ING Templeton Foreign Equity Portfolio - Service Class   2,081   7,239   5,590   670
     ING Thornburg Value Portfolio - Adviser Class   67   81   529   47
     ING Thornburg Value Portfolio - Initial Class   3,720   12,256   8,843   20,359
     ING UBS U.S. Large Cap Equity Portfolio - Adviser Class   54   -   18   5
     ING UBS U.S. Large Cap Equity Portfolio - Initial Class   4,316   18,834   11,253   20,951
 
 
 
 
                                                                                                           193                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
ING Partners, Inc. (continued):                
     ING UBS U.S. Large Cap Equity Portfolio - Service Class   $ 3   $ -   $ 4   $ -
     ING UBS U.S. Small Cap Growth Portfolio - Service Class   195   735   1,398   775
     ING Van Kampen Comstock Portfolio - Adviser Class   217   230   432   168
     ING Van Kampen Comstock Portfolio - Service Class   9,513   17,225   9,397   20,557
     ING Van Kampen Equity and Income Portfolio - Adviser Class   352   92   213   28
     ING Van Kampen Equity and Income Portfolio - Initial Class   36,380   45,544   27,797   76,265
     ING Van Kampen Equity and Income Portfolio - Service Class   85   50   144   39
ING Strategic Allocation Portfolios, Inc.:                
     ING VP Strategic Allocation Conservative Portfolio - Class I   8,346   7,613   8,033   9,917
     ING VP Strategic Allocation Growth Portfolio - Class I   16,895   12,408   12,867   14,719
     ING VP Strategic Allocation Moderate Portfolio - Class I   15,058   11,023   12,224   21,441
ING Variable Funds:                
     ING VP Growth and Income Portfolio - Class A   747   340   159   -
     ING VP Growth and Income Portfolio - Class I   24,117   227,614   28,873   321,954
     ING VP Growth and Income Portfolio - Class S   412   35   101   -
ING Variable Insurance Trust:                
     ING GET U.S. Core Portfolio - Series 1   114   884   42   117
     ING GET U.S. Core Portfolio - Series 2   545   5,468   248   2,211
     ING GET U.S. Core Portfolio - Series 3   1,514   4,867   687   5,992
     ING GET U.S. Core Portfolio - Series 5   100   133   42   41
     ING GET U.S. Core Portfolio - Series 6   447   512   248   1,116
     ING GET U.S. Core Portfolio - Series 7   478   358   165   1,138
     ING GET U.S. Core Portfolio - Series 8   176   134   70   574
     ING GET U.S. Core Portfolio - Series 9   36   14   9   10
     ING GET U.S. Core Portfolio - Series 10   15   3   3   3
     ING GET U.S. Core Portfolio - Series 11   7   15   2   1
ING Variable Portfolios, Inc.:                
     ING BlackRock Global Science and Technology Portfolio - Class I   6,451   9,988   8,100   9,303
     ING International Index Portfolio - Class I   436   158   -   -
     ING Lehman Brothers U.S. Aggregate Bond Index® Portfolio -                
               Class I   2,310   783   -   -
     ING Opportunistic Large Cap Growth Portfolio - Class I   2,644   8,345   5,125   20,750
     ING Opportunistic Large Cap Value Portfolio - Class I   13,379   13,020   4,163   20,299
     ING Russell™ Large Cap Index Portfolio - Class I   2,937   158   -   -
     ING Russell™ Mid Cap Index Portfolio - Class I   1,810   396   -   -
     ING Russell™ Small Cap Index Portfolio - Class I   1,010   181   -   -
     ING VP Index Plus LargeCap Portfolio - Class I   38,938   66,777   12,536   102,559
     ING VP Index Plus LargeCap Portfolio - Class S   312   136   422   93
     ING VP Index Plus MidCap Portfolio - Class I   54,014   46,260   47,272   77,318
     ING VP Index Plus MidCap Portfolio - Class S   241   127   330   16
     ING VP Index Plus SmallCap Portfolio - Class I   15,010   25,686   25,665   35,541
     ING VP Index Plus SmallCap Portfolio - Class S   31   41   59   8
     ING VP Small Company Portfolio - Class I   26,182   18,555   29,223   49,543
     ING VP Small Company Portfolio - Class S   127   53   88   9
 
 
 
 
                                                                                                           194                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
ING Variable Products Trust:                
     ING VP Financial Services Portfolio - Class I   $ 3,987   $ 5,788   $ 2,044   $ 2,574
     ING VP International Value Portfolio - Class I   37,177   19,325   60,974   18,020
     ING VP International Value Portfolio - Class S   331   258   482   32
     ING VP MidCap Opportunities Portfolio - Class I   5,673   1,822   3,877   1,856
     ING VP MidCap Opportunities Portfolio - Class S   198   94   61   -
     ING VP Real Estate Portfolio - Class I   19,719   60,336   14,159   36,026
     ING VP SmallCap Opportunities Portfolio - Class I   4,958   2,360   3,302   2,530
     ING VP SmallCap Opportunities Portfolio - Class S   117   55   16   9
ING VP Balanced Portfolio, Inc.:                
     ING VP Balanced Portfolio - Class I   61,094   83,578   45,746   99,520
ING VP Intermediate Bond Portfolio:                
     ING VP Intermediate Bond Portfolio - Class I   53,907   58,206   52,355   39,876
     ING VP Intermediate Bond Portfolio - Class S   199   195   395   159
ING VP Money Market Portfolio:                
     ING VP Money Market Portfolio - Class I   198,085   164,200   244,213   93,643
Janus Adviser Series:                
     Janus Adviser Balanced Fund - Class S   -   1   -   -
Janus Aspen Series:                
     Janus Aspen Series Balanced Portfolio - Institutional Shares   67   123   130   186
     Janus Aspen Series Flexible Bond Portfolio - Institutional Shares   17   19   39   56
     Janus Aspen Series Large Cap Growth Portfolio - Institutional                
               Shares   61   81   45   63
     Janus Aspen Series Mid Cap Growth Portfolio - Institutional Shares   118   152   202   272
     Janus Aspen Series Worldwide Growth Portfolio - Institutional                
               Shares   194   227   55   121
The Lazard Funds, Inc.:                
     Lazard U.S. Mid Cap Equity Portfolio - Open Shares   351   79   568   166
LKCM Funds:                
     LKCM Aquinas Growth Fund   75   9   59   17
Loomis Sayles Funds I:                
     Loomis Sayles Small Cap Value Fund - Retail Class   878   20   -   -
Lord Abbett Affiliated Fund, Inc.:                
     Lord Abbett Mid-Cap Value Fund, Inc. - Class A   292   249   507   105
Lord Abbett Research Fund, Inc.:                
     Lord Abbett Small-Cap Value Fund - Class A   300   352   453   88
Lord Abbett Series Fund, Inc.:                
     Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC   9,774   21,917   31,337   22,353
Massachusetts Investors Growth Stock Fund:                
     Massachusetts Investors Growth Stock Fund - Class A   163   293   103   31
Moderate Allocation Portfolio:                
     Moderate Allocation Portfolio   9   33   16   15
Morgan Stanley Institutional Fund Trust:                
     Morgan Stanley U.S. Small Cap Value Portfolio - Class I   1,439   340   -   -
 
 
 
 
                                                                                                           195                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
Neuberger Berman Equity Funds®:                
     Neuberger Berman Socially Responsive Fund® - Trust Class   $ 1,656   $ 372   $ 1,641   $ 157
New Perspective Fund®, Inc.:                
     New Perspective Fund®, Inc. - Class R-3   1,158   687   3,430   854
     New Perspective Fund®, Inc. - Class R-4   25,476   3,823   15,273   3,416
Oppenheimer Capital Appreciation Fund:                
     Oppenheimer Capital Appreciation Fund - Class A   169   113   156   23
Oppenheimer Developing Markets Fund:                
     Oppenheimer Developing Markets Fund - Class A   59,067   27,303   69,785   30,746
Oppenheimer Variable Account Funds:                
     Oppenheimer Global Securities/VA   107   209   118   308
     Oppenheimer Main Street Fund®/VA   8   10   1   14
     Oppenheimer Main Street Small Cap Fund®/VA   1,591   813   3,380   705
     Oppenheimer MidCap Fund/VA   -   3   31   1
     Oppenheimer Strategic Bond Fund/VA   11   6   42   52
Pax World Funds Series Trust I:                
     Pax World Balanced Fund   12,104   5,484   13,279   5,386
PIMCO Variable Insurance Trust:                
     PIMCO Real Return Portfolio - Administrative Class   53,532   10,821   14,258   7,200
Pioneer High Yield Fund:                
     Pioneer High Yield Fund - Class A   1,074   238   1,856   186
Pioneer Variable Contracts Trust:                
     Pioneer Emerging Markets VCT Portfolio - Class I   14,277   10,479   30,868   3,364
     Pioneer Equity Income VCT Portfolio - Class I   320   1,310   48,713   162,589
     Pioneer High Yield VCT Portfolio - Class I   4,106   3,519   8,380   1,266
     Pioneer Mid Cap Value VCT Portfolio - Class I   166   582   17,135   94,326
Premier VIT:                
     Premier VIT OpCap Mid Cap Portfolio   3,765   413   477   76
RiverSource Investment Series, Inc.:                
     RiverSource Diversified Equity Income Fund - Class R-4   1,830   97   -   -
SmallCap World Fund, Inc.:                
     SMALLCAP World Fund® - Class R-4   765   104   -   -
T. Rowe Price Mid-Cap Value Fund, Inc.:                
     T. Rowe Price Mid-Cap Value Fund - R Class   177   84   350   240
T. Rowe Price Value Fund, Inc.:                
     T. Rowe Price Value Fund - Advisor Class   14   3   36   1
Templeton Funds, Inc.:                
     Templeton Foreign Fund - Class A   420   331   786   120
Templeton Income Trust:                
     Templeton Global Bond Fund - Class A   50,189   8,888   40,658   2,314
Vanguard® Variable Insurance Fund:                
     Diversified Value Portfolio   25   7   20   5
     Equity Income Portfolio   94   108   104   22
     Small Company Growth Portfolio   26   1   73   2
 
 
 
 
                                                                                                           196                

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

    Year ended December 31
    2008   2007
    Purchases   Sales   Purchases   Sales
        (Dollars in thousands)    
Wanger Advisors Trust:                
     Wanger International   $ 7,705   $ 3,515   $ 10,636   $ 895
     Wanger Select   11,319   7,280   42,066   2,690
     Wanger USA   6,380   1,897   6,892   2,409
Washington Mutual Investors FundSM, Inc.:                
     Washington Mutual Investors FundSM, Inc. - Class R-3   1,406   682   2,109   527
     Washington Mutual Investors FundSM, Inc. - Class R-4   12,794   9,546   18,491   12,342
Wells Fargo Funds Trust:                
     Wells Fargo Advantage Small Cap Value Fund - Class A   38   7   33   1
 
 
 
 
                                                                                                           197                

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

8. Changes in Units

The changes in units outstanding were as follows:

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
AIM Growth Series:                        
     AIM Mid Cap Core Equity Fund - Class A   12,951   9,343   3,608   5,723   4,719   1,004
     AIM Small Cap Growth Fund - Class A   1,137   1,179   (42)   4,109   3,068   1,041
AIM Investment Funds:                        
     AIM Global Health Care Fund - Investor Class   3,002   2,200   802   3,197   2,664   533
AIM Variable Insurance Funds:                        
     AIM V.I. Capital Appreciation Fund - Series I Shares   760,617   941,265   (180,648)   577,438   858,308   (280,870)
     AIM V.I. Core Equity Fund - Series I Shares   1,270,407   1,486,860   (216,453)   835,408   1,304,710   (469,302)
AllianceBernstein Growth and Income Fund, Inc.:                        
     AllianceBernstein Growth and Income Fund, Inc. - Class A   24,695   15,092   9,603   8,476   4,643   3,833
AllianceBernstein Variable Products Series Fund, Inc.:                        
     AllianceBernstein Growth and Income Portfolio - Class A   9,648   10,558   (910)   23,704   18,988   4,716
Allianz Funds:                        
     Allianz NFJ Large-Cap Value Fund - Institutional Class   148,552   54,015   94,537   -   -   -
     Allianz NFJ Small-Cap Value Fund - Class A   10,657   10,196   461   6,745   9,594   (2,849)
Amana Mutual Funds Trust:                        
     Amana Growth Fund   4,930   1   4,929   -   -   -
     Amana Income Fund   5,711   (2)   5,713   -   -   -
American Balanced Fund®, Inc.:                        
     American Balanced Fund® - Class R-3   200,602   267,883   (67,281)   408,249   323,605   84,644
American Century Quantitative Equity Funds, Inc.:                        
     American Century Income & Growth Fund - A Class   216,423   203,459   12,964   107,985   132,017   (24,032)
Ariel Investment Trust:                        
     Ariel Appreciation Fund   45,372   37,472   7,900   42,982   45,961   (2,979)
     Ariel Fund   65,680   32,658   33,022   63,431   47,774   15,657
Artisan Funds, Inc.:                        
     Artisan International Fund - Investor Shares   278,603   221,622   56,981   -   -   -
 
 
 
 
    198                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
The Bond Fund of AmericaSM, Inc.:                        
     The Bond Fund of AmericaSM, Inc. - Class R-4   339,680   118,152   221,528   -   -   -
Calvert Variable Series, Inc.:                        
     Calvert Social Balanced Portfolio   511,652   762,918   (251,266)   423,920   730,452   (306,532)
Capital One Funds:                        
     Capital One Mid Cap Equity Fund - Class A   3,602   9,979   (6,377)   7,626   8,398   (772)
Columbia Acorn Trust:                        
     ColumbiaSM Acorn Fund® - Class Z   147,291   20,951   126,340   -   -   -
Columbia Funds Series Trust:                        
     Columbia Mid Cap Value Fund - Class A   269,870   11,555   258,315   -   -   -
     Columbia Mid Cap Value Fund - Class Z   101,124   9,742   91,382   -   -   -
DWS Institutional Funds:                        
     DWS Equity 500 Index Fund - Class S   4,775   2,013   2,762   4,945   1,450   3,495
EuroPacific Growth Fund®:                        
     EuroPacific Growth Fund® - Class R-3   370,363   233,872   136,491   399,141   138,712   260,429
     EuroPacific Growth Fund® - Class R-4   7,070,003   4,356,252   2,713,751   4,956,896   2,492,904   2,463,992
Evergreen Equity Trust:                        
     Evergreen Special Values Fund - Class A   1,324,898   1,444,352   (119,454)   1,076,997   1,147,297   (70,300)
Fidelity® Variable Insurance Products:                        
     Fidelity® VIP Equity-Income Portfolio - Initial Class   4,189,021   5,987,003   (1,797,982)   3,744,191   4,876,313   (1,132,122)
     Fidelity® VIP Growth Portfolio - Initial Class   3,977,068   4,725,593   (748,525)   2,927,325   4,827,239   (1,899,914)
     Fidelity® VIP High Income Portfolio - Initial Class   223,272   301,391   (78,119)   220,235   252,226   (31,991)
     Fidelity® VIP Overseas Portfolio - Initial Class   1,109,004   1,385,792   (276,788)   1,073,246   1,017,479   55,767
Fidelity® Variable Insurance Products II:                        
     Fidelity® VIP Contrafund® Portfolio - Initial Class   12,028,758   12,280,285   (251,527)   8,807,157   9,668,894   (861,737)
     Fidelity® VIP Index 500 Portfolio - Initial Class   671,547   885,397   (213,850)   245,462   513,380   (267,918)
Fidelity® Variable Insurance Products III:                        
     Fidelity® VIP Mid Cap Portfolio - Initial Class   350,921   121,379   229,542   289,297   29,672   259,625
Fidelity® Variable Insurance Products V:                        
     Fidelity® VIP Asset ManagerSM Portfolio - Initial Class   280,484   201,562   78,922   111,148   142,968   (31,820)
 
 
 
 
    199                    

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

            Year Ended December 31,        
        2008       2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
Franklin Mutual Series Fund Inc.:                        
     Mutual Discovery Fund - Class R   111,234   88,706   22,528   94,824   46,401   48,423
Franklin Strategic Series:                        
     Franklin Small-Mid Cap Growth Fund - Class A   53,946   59,363   (5,417)   19,230   8,325   10,905
Franklin Templeton Variable Insurance Products Trust:                        
     Franklin Small Cap Value Securities Fund - Class 2   2,386,371   2,172,012   214,359   1,982,307   1,646,525   335,782
Fundamental Investors, Inc.:                        
     Fundamental Investors, Inc. - Class R-3   2,188   -   2,188   -   -   -
     Fundamental Investors, Inc. - Class R-4   1,469,391   114,820   1,354,571   -   -   -
The Growth Fund of America®, Inc.:                        
     The Growth Fund of America® - Class R-3   617,227   383,947   233,280   583,448   318,903   264,545
     The Growth Fund of America® - Class R-4   8,883,524   5,402,023   3,481,501   5,779,822   3,553,075   2,226,747
The Income Fund of America®, Inc.:                        
     The Income Fund of America® - Class R-3   141,162   103,420   37,742   86,768   42,949   43,819
ING Equity Trust:                        
     ING Financial Services Fund - Class A   11,805   8,585   3,220   12,431   6,876   5,555
     ING Real Estate Fund - Class A   68,114   56,725   11,389   94,357   97,354   (2,997)
ING Funds Trust:                        
     ING GNMA Income Fund - Class A   172,356   59,936   112,420   104,192   70,034   34,158
     ING Intermediate Bond Fund - Class A   224,313   151,391   72,922   221,053   102,722   118,331
ING Investors Trust:                        
     ING AllianceBernstein Mid Cap Growth Portfolio - Service Class   224,325   229,040   (4,715)   249,477   228,989   20,488
     ING BlackRock Large Cap Growth Portfolio - Institutional Class   2,087,443   3,158,777   (1,071,334)   12,563,326   1,437,420   11,125,906
     ING BlackRock Large Cap Growth Portfolio - Service Class   10,015   1,831   8,184   6,613   3,017   3,596
     ING BlackRock Large Cap Growth Portfolio - Service 2 Class   5,376   7,011   (1,635)   14,800   710   14,090
     ING Evergreen Health Sciences Portfolio - Service Class   666,860   377,032   289,828   362,287   253,753   108,534
     ING Evergreen Omega Portfolio - Service Class   5,436   1,664   3,772   19   -   19
     ING FMRSM Diversified Mid Cap Portfolio - Service Class   1,618,664   541,459   1,077,205   648,072   455,939   192,133
     ING Global Real Estate Portfolio - Institutional Class   6,215,671   854,577   5,361,094   -   -   -
     ING Global Resources Portfolio - Institutional Class   -   112   (112)   3,163   -   3,163
 
 
 
 
    200                    

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

            Year Ended December 31,        
        2008       2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
ING Investors Trust (continued):                        
     ING Global Resources Portfolio - Service Class   6,214,891   4,986,705   1,228,186   10,819,849   2,723,054   8,096,795
     ING Janus Contrarian Portfolio - Service Class   1,062,516   180,583   881,933   403,338   297   403,041
     ING JPMorgan Emerging Markets Equity Portfolio - Adviser Class   19,443   20,120   (677)   18,637   4,302   14,335
     ING JPMorgan Emerging Markets Equity Portfolio - Institutional Class   718,580   988,140   (269,560)   910,736   733,949   176,787
     ING JPMorgan Emerging Markets Equity Portfolio - Service Class   991,706   1,276,669   (284,963)   1,435,605   992,766   442,839
     ING JPMorgan Small Cap Core Equity Portfolio - Service Class   158,631   111,732   46,899   165,576   97,612   67,964
     ING JPMorgan Value Opportunities Portfolio - Institutional Class   2,533   4,854   (2,321)   13,215   9,003   4,212
     ING JPMorgan Value Opportunities Portfolio - Service Class   129,333   125,480   3,853   190,319   96,855   93,464
     ING Julius Baer Foreign Portfolio - Service Class   1,378,474   1,379,620   (1,146)   1,936,596   667,158   1,269,438
     ING Legg Mason Value Portfolio - Service Class   270,131   368,522   (98,391)   331,690   223,908   107,782
     ING Lord Abbett Affiliated Portfolio - Institutional Class   3,326,566   4,734,056   (1,407,490)   13,555,753   1,854,866   11,700,887
     ING Lord Abbett Affiliated Portfolio - Service Class   31,055   5,349   25,706   48,981   2,795   46,186
     ING Marsico Growth Portfolio - Institutional Class   1,046,857   249,585   797,272   -   -   -
     ING Marsico Growth Portfolio - Service Class   130,652   417,523   (286,871)   244,311   151,526   92,785
     ING Marsico International Opportunities Portfolio - Adviser Class   16,659   10,866   5,793   5,652   1   5,651
     ING Marsico International Opportunities Portfolio - Service Class   512,497   495,535   16,962   489,162   279,587   209,575
     ING MFS Total Return Portfolio - Adviser Class   25,026   18,372   6,654   52,240   7,557   44,683
     ING MFS Total Return Portfolio - Institutional Class   882,143   2,148,919   (1,266,776)   7,808,929   543,137   7,265,792
     ING MFS Total Return Portfolio - Service Class   561,070   858,965   (297,895)   652,101   913,221   (261,120)
     ING MFS Utilities Portfolio - Service Class   1,283,623   1,137,644   145,979   2,164,991   1,033,978   1,131,013
     ING Oppenheimer Main Street Portfolio® - Service Class   243,625   226,131   17,494   167,768   75,288   92,480
     ING PIMCO High Yield Portfolio - Institutional Class   54,117   54,831   (714)   92,474   41,737   50,737
     ING PIMCO High Yield Portfolio - Service Class   629,697   621,427   8,270   401,342   352,696   48,646
     ING Pioneer Equity Income Portfolio - Institutional Class   7,008,917   6,546,358   462,559   19,629,191   2,532,801   17,096,390
     ING Pioneer Fund Portfolio - Institutional Class   621,653   497,276   124,377   1,663,331   441,239   1,222,092
     ING Pioneer Fund Portfolio - Service Class   6,830   1,746   5,084   9,573   2,005   7,568
     ING Pioneer Mid Cap Value Portfolio - Adviser Class   783   538   245   -   -   -
     ING Pioneer Mid Cap Value Portfolio - Institutional Class   3,061,080   2,929,679   131,401   10,041,374   1,387,993   8,653,381
     ING Pioneer Mid Cap Value Portfolio - Service Class   32,563   6,477   26,086   884   -   884
 
 
 
 
    201                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
ING Investors Trust (continued):                        
     ING Stock Index Portfolio - Institutional Class   120,017   107,094   12,923   278,329   295,247   (16,918)
     ING T. Rowe Price Capital Appreciation Portfolio - Service Class   8,908,597   4,875,658   4,032,939   8,366,631   2,223,481   6,143,150
     ING T. Rowe Price Equity Income Portfolio - Adviser Class   56,069   32,855   23,214   83,760   8,523   75,237
     ING T. Rowe Price Equity Income Portfolio - Service Class   2,197,549   1,355,572   841,977   1,675,199   997,623   677,576
     ING Templeton Global Growth Portfolio - Institutional Class   23,828   17,294   6,534   85,161   14,585   70,576
     ING Templeton Global Growth Portfolio - Service Class   182,066   119,496   62,570   242,420   118,130   124,290
     ING Van Kampen Capital Growth Portfolio - Institutional Class   96,631   30,549   66,082   -   -   -
     ING Van Kampen Capital Growth Portfolio - Service Class   31,601   16,949   14,652   6,001   889   5,112
     ING Van Kampen Growth and Income Portfolio - Service Class   877,614   703,133   174,481   717,617   616,921   100,696
     ING Van Kampen Large Cap Growth Portfolio - Institutional Class   40,551   54,525   (13,974)   20,322   22,750   (2,428)
     ING Van Kampen Large Cap Growth Portfolio - Service Class   6   16   (10)   10   -   10
     ING Van Kampen Real Estate Portfolio - Institutional Class   45,440   21,480   23,960   45,648   13,254   32,394
     ING Van Kampen Real Estate Portfolio - Service Class   1,923,211   1,175,859   747,352   2,206,811   1,507,215   699,596
     ING VP Index Plus International Equity Portfolio - Institutional Class   752,324   940,171   (187,847)   2,247,490   107,202   2,140,288
     ING VP Index Plus International Equity Portfolio - Service Class   158,852   317,248   (158,396)   1,012,580   632,793   379,787
     ING Wells Fargo Disciplined Value Portfolio - Adviser Class   640   933   (293)   293   -   293
     ING Wells Fargo Disciplined Value Portfolio - Service Class   29,760   138,803   (109,043)   134,502   96,560   37,942
     ING Wells Fargo Small Cap Disciplined Portfolio - Service Class   147,427   107,822   39,605   90,288   96,877   (6,589)
ING Mutual Funds:                        
     ING International Growth Opportunities Fund - Class Q   251   -   251   786   587   199
     ING International SmallCap Multi-Manager Fund - Class A   56,840   36,689   20,151   98,878   34,237   64,641
ING Partners, Inc.:                        
     ING American Century Large Company Value Portfolio - Adviser Class   3,330   -   3,330   6,597   -   6,597
     ING American Century Large Company Value Portfolio - Service Class   152,255   141,442   10,813   261,606   312,721   (51,115)
     ING American Century Small-Mid Cap Value Portfolio - Adviser Class   7,653   6,292   1,361   3,046   1,610   1,436
     ING American Century Small-Mid Cap Value Portfolio - Service Class   642,768   530,000   112,768   334,590   587,143   (252,553)
     ING Baron Asset Portfolio - Service Class   195,627   157,395   38,232   362,660   98,595   264,065
     ING Baron Small Cap Growth Portfolio - Adviser Class   22,721   13,612   9,109   21,838   6,475   15,363
     ING Baron Small Cap Growth Portfolio - Service Class   2,443,020   2,115,308   327,712   2,302,412   1,557,538   744,874
 
 
 
 
    202                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
ING Partners, Inc. (continued):                        
     ING Columbia Small Cap Value II Portfolio - Service Class   126,584   61,840   64,744   90,561   16,977   73,584
     ING Davis New York Venture Portfolio - Service Class   429,149   269,610   159,539   90,239   206   90,033
     ING Fidelity® VIP Mid Cap Portfolio - Service Class   644,350   62,151   582,199   320,169   1,293   318,876
     ING Index Solution 2015 Portfolio - Adviser Class   4,707   (2)   4,709   -   -   -
     ING Index Solution 2025 Portfolio - Adviser Class   11,318   -   11,318   -   -   -
     ING Index Solution 2035 Portfolio - Adviser Class   7,489   4   7,485   -   -   -
     ING Index Solution 2045 Portfolio - Adviser Class   973   -   973   -   -   -
     ING Index Solution Income Portfolio - Adviser Class   112   -   112   -   -   -
     ING JPMorgan International Portfolio - Adviser Class   4,590   18,591   (14,001)   91,909   79,500   12,409
     ING JPMorgan International Portfolio - Initial Class   6,217,517   11,695,433   (5,477,916)   930,958   1,763,555   (832,597)
     ING JPMorgan International Portfolio - Service Class   588   2,456   (1,868)   75,148   74,302   846
     ING JPMorgan Mid Cap Value Portfolio - Adviser Class   14,310   15,736   (1,426)   31,188   7,076   24,112
     ING JPMorgan Mid Cap Value Portfolio - Service Class   716,794   895,344   (178,550)   753,529   624,087   129,442
     ING Legg Mason Partners Aggressive Growth Portfolio - Adviser Class   3,398   3,164   234   7,698   395   7,303
     ING Legg Mason Partners Aggressive Growth Portfolio - Initial Class   2,068,223   3,589,805   (1,521,582)   1,451,954   4,147,807   (2,695,853)
     ING Legg Mason Partners Aggressive Growth Portfolio - Service Class   10,294   1,190   9,104   612   15   597
     ING Legg Mason Partners Large Cap Growth Portfolio - Adviser Class   628   13,566   (12,938)   14,820   5,011   9,809
     ING Legg Mason Partners Large Cap Growth Portfolio - Initial Class   360,786   658,548   (297,762)   56,393   95,397   (39,004)
     ING Neuberger Berman Partners Portfolio - Service Class   351,721   191,937   159,784   333,138   154,696   178,442
     ING Neuberger Berman Regency Portfolio - Service Class   376   5,842   (5,466)   5,336   1   5,335
     ING OpCap Balanced Value Portfolio - Service Class   140,167   914,713   (774,546)   55,321   200,551   (145,230)
     ING Oppenheimer Global Portfolio - Adviser Class   13,040   10,145   2,895   26,982   6,598   20,384
     ING Oppenheimer Global Portfolio - Initial Class   10,464,561   18,538,373   (8,073,812)   7,087,217   16,752,035   (9,664,818)
     ING Oppenheimer Global Portfolio - Service Class   11,864   11,108   756   17,666   3,042   14,624
     ING Oppenheimer Strategic Income Portfolio - Adviser Class   24,828   22,006   2,822   16,071   4,281   11,790
     ING Oppenheimer Strategic Income Portfolio - Initial Class   4,753,262   4,325,808   427,454   3,657,876   3,311,398   346,478
     ING Oppenheimer Strategic Income Portfolio - Service Class   30,449   336,194   (305,745)   331,994   1,560   330,434
     ING PIMCO Total Return Portfolio - Adviser Class   56,433   28,172   28,261   36,805   13,949   22,856
     ING PIMCO Total Return Portfolio - Service Class   6,195,346   4,369,373   1,825,973   3,136,099   1,922,724   1,213,375
 
 
 
 
    203                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
ING Partners, Inc. (continued):                        
     ING Pioneer High Yield Portfolio - Initial Class   303,304   260,075   43,229   580,371   209,590   370,781
     ING Pioneer High Yield Portfolio - Service Class   9,605   7,619   1,986   9,054   1,022   8,032
     ING Solution 2015 Portfolio - Adviser Class   755,877   352,694   403,183   964,555   407,696   556,859
     ING Solution 2015 Portfolio - Service Class   2,065,621   1,332,946   732,675   2,247,322   1,055,928   1,191,394
     ING Solution 2025 Portfolio - Adviser Class   904,991   412,861   492,130   1,051,286   454,599   596,687
     ING Solution 2025 Portfolio - Service Class   3,058,307   1,616,896   1,441,411   2,769,924   1,130,437   1,639,487
     ING Solution 2035 Portfolio - Adviser Class   766,635   320,528   446,107   759,253   316,591   442,662
     ING Solution 2035 Portfolio - Service Class   2,337,613   1,052,525   1,285,088   1,839,346   694,675   1,144,671
     ING Solution 2045 Portfolio - Adviser Class   451,435   232,684   218,751   553,666   149,504   404,162
     ING Solution 2045 Portfolio - Service Class   1,592,320   688,354   903,966   1,135,541   431,202   704,339
     ING Solution Growth and Income Portfolio - Service Class   119,437   37,751   81,686   -   -   -
     ING Solution Growth Portfolio - Service Class   64,306   39,245   25,061   -   -   -
     ING Solution Income Portfolio - Adviser Class   372,956   164,342   208,614   953,824   458,294   495,530
     ING Solution Income Portfolio - Service Class   521,217   432,641   88,576   697,660   303,763   393,897
     ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Adviser                        
           Class   11,479   10,658   821   38,827   13,501   25,326
     ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Initial Class   5,398,433   7,844,400   (2,445,967)   3,622,133   7,955,554   (4,333,421)
     ING T. Rowe Price Diversified Mid Cap Growth Portfolio - Service Class   9,431   11,687   (2,256)   361,336   357,445   3,891
     ING T. Rowe Price Growth Equity Portfolio - Adviser Class   51,958   40,712   11,246   79,555   36   79,519
     ING T. Rowe Price Growth Equity Portfolio - Initial Class   2,738,286   3,742,230   (1,003,944)   2,119,084   3,231,669   (1,112,585)
     ING T. Rowe Price Growth Equity Portfolio - Service Class   68,959   30,548   38,411   40,453   20,038   20,415
     ING Templeton Foreign Equity Portfolio - Adviser Class   28,033   5,346   22,687   -   -   -
     ING Templeton Foreign Equity Portfolio - Initial Class   14,957,289   2,918,419   12,038,870   -   -   -
     ING Templeton Foreign Equity Portfolio - Service Class   160,983   580,948   (419,965)   505,988   107,681   398,307
     ING Thornburg Value Portfolio - Adviser Class   4,983   7,217   (2,234)   43,011   6,164   36,847
     ING Thornburg Value Portfolio - Initial Class   1,028,341   1,344,413   (316,072)   908,253   1,370,840   (462,587)
     ING UBS U.S. Large Cap Equity Portfolio - Adviser Class   5,230   4   5,226   20,061   18,948   1,113
     ING UBS U.S. Large Cap Equity Portfolio - Initial Class   1,242,138   2,446,870   (1,204,732)   1,455,655   1,896,676   (441,021)
     ING UBS U.S. Large Cap Equity Portfolio - Service Class   326   28   298   1,564   1,274   290
     ING UBS U.S. Small Cap Growth Portfolio - Service Class   48,815   107,367   (58,552)   138,155   82,091   56,064
 
 
 
    204                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
ING Partners, Inc. (continued):                        
     ING Van Kampen Comstock Portfolio - Adviser Class   11,588   16,360   (4,772)   33,669   13,389   20,280
     ING Van Kampen Comstock Portfolio - Service Class   1,795,226   2,877,099   (1,081,873)   1,263,056   2,168,753   (905,697)
     ING Van Kampen Equity and Income Portfolio - Adviser Class   28,806   11,457   17,349   17,787   2,302   15,485
     ING Van Kampen Equity and Income Portfolio - Initial Class   5,712,119   8,989,943   (3,277,824)   4,447,388   9,639,063   (5,191,675)
     ING Van Kampen Equity and Income Portfolio - Service Class   1,804   1,927   (123)   188,210   185,893   2,317
ING Strategic Allocation Portfolios, Inc.:                        
     ING VP Strategic Allocation Conservative Portfolio - Class I   824,694   995,527   (170,833)   728,854   933,922   (205,068)
     ING VP Strategic Allocation Growth Portfolio - Class I   1,352,865   1,668,249   (315,384)   1,086,612   1,404,602   (317,990)
     ING VP Strategic Allocation Moderate Portfolio - Class I   1,674,269   1,847,461   (173,192)   1,158,918   1,809,637   (650,719)
ING Variable Funds:                        
     ING VP Growth and Income Portfolio - Class A   61,481   20,473   41,008   14,612   7   14,605
     ING VP Growth and Income Portfolio - Class I   8,411,252   19,391,889   (10,980,637)   7,117,241   16,768,633   (9,651,392)
     ING VP Growth and Income Portfolio - Class S   47,033   10,670   36,363   9,341   -   9,341
ING Variable Insurance Trust:                        
     ING GET U.S. Core Portfolio - Series 1   -   79,603   (79,603)   -   9,163   (9,163)
     ING GET U.S. Core Portfolio - Series 2   6,499   517,054   (510,555)   36,724   230,619   (193,895)
     ING GET U.S. Core Portfolio - Series 3   24,582   462,586   (438,004)   97,747   621,892   (524,145)
     ING GET U.S. Core Portfolio - Series 5   -   11,347   (11,347)   -   2,418   (2,418)
     ING GET U.S. Core Portfolio - Series 6   245   44,313   (44,068)   3,892   99,492   (95,600)
     ING GET U.S. Core Portfolio - Series 7   3,423   34,178   (30,755)   9,451   108,202   (98,751)
     ING GET U.S. Core Portfolio - Series 8   1,489   12,901   (11,412)   -   50,524   (50,524)
     ING GET U.S. Core Portfolio - Series 9   1,230   2,352   (1,122)   -   654   (654)
     ING GET U.S. Core Portfolio - Series 10   1,051   1,199   (148)   -   119   (119)
     ING GET U.S. Core Portfolio - Series 11   2,022   3,423   (1,401)   1,378   1,387   (9)
ING Variable Portfolios, Inc.:                        
     ING BlackRock Global Science and Technology Portfolio - Class I   3,205,098   4,004,636   (799,538)   3,050,740   3,458,973   (408,233)
     ING International Index Portfolio - Class I   65,337   28,124   37,213   -   -   -
     ING Lehman Brothers U.S. Aggregate Bond Index® Portfolio - Class I   245,094   92,194   152,900   -   -   -
     ING Opportunistic Large Cap Growth Portfolio - Class I   878,310   1,278,791   (400,481)   918,075   1,844,379   (926,304)
 
 
 
 
    205                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
ING Variable Portfolios, Inc. (continued):                        
     ING Opportunistic Large Cap Value Portfolio - Class I   878,286   1,478,814   (600,528)   615,854   1,440,721   (824,867)
     ING Russell™ Large Cap Index Portfolio - Class I   438,570   35,576   402,994   -   -   -
     ING Russell™ Mid Cap Index Portfolio - Class I   280,175   55,934   224,241   -   -   -
     ING Russell™ Small Cap Index Portfolio - Class I   124,705   33,512   91,193   -   -   -
     ING VP Index Plus LargeCap Portfolio - Class I   4,700,264   7,518,268   (2,818,004)   3,132,176   7,400,122   (4,267,946)
     ING VP Index Plus LargeCap Portfolio - Class S   29,154   13,839   15,315   34,733   7,800   26,933
     ING VP Index Plus MidCap Portfolio - Class I   3,748,737   5,296,655   (1,547,918)   3,013,153   5,345,859   (2,332,706)
     ING VP Index Plus MidCap Portfolio - Class S   22,153   15,652   6,501   26,670   1,311   25,359
     ING VP Index Plus SmallCap Portfolio - Class I   2,156,481   3,391,049   (1,234,568)   1,855,429   3,309,955   (1,454,526)
     ING VP Index Plus SmallCap Portfolio - Class S   4,159   4,354   (195)   4,508   640   3,868
     ING VP Small Company Portfolio - Class I   1,778,485   1,936,409   (157,924)   1,082,126   2,632,490   (1,550,364)
     ING VP Small Company Portfolio - Class S   9,399   4,606   4,793   6,798   735   6,063
ING Variable Products Trust:                        
     ING VP Financial Services Portfolio - Class I   470,025   684,679   (214,654)   205,752   253,616   (47,864)
     ING VP International Value Portfolio - Class I   2,238,132   2,685,227   (447,095)   990,186   382   989,804
     ING VP International Value Portfolio - Class S   15,757   18,951   (3,194)   29,605   2,213   27,392
     ING VP MidCap Opportunities Portfolio - Class I   771,053   485,532   285,521   386,244   246,512   139,732
     ING VP MidCap Opportunities Portfolio - Class S   15,833   8,420   7,413   4,777   21   4,756
     ING VP Real Estate Portfolio - Class I   1,235,660   4,087,262   (2,851,602)   1,182,755   2,488,798   (1,306,043)
     ING VP SmallCap Opportunities Portfolio - Class I   958,830   867,957   90,873   464,165   386,491   77,674
     ING VP SmallCap Opportunities Portfolio - Class S   9,151   4,832   4,319   1,261   736   525
ING VP Balanced Portfolio, Inc.:                        
     ING VP Balanced Portfolio - Class I   2,918,839   6,598,521   (3,679,682)   2,955,259   5,433,278   (2,478,019)
ING VP Intermediate Bond Portfolio:                        
     ING VP Intermediate Bond Portfolio - Class I   5,513,773   6,888,917   (1,375,144)   5,417,154   4,942,349   474,805
     ING VP Intermediate Bond Portfolio - Class S   11,030   12,550   (1,520)   37,708   15,412   22,296
ING VP Money Market Portfolio:                        
     ING VP Money Market Portfolio - Class I   25,711,004   20,488,837   5,222,167   19,867,213   12,375,205   7,492,008
 
 
 
 
    206                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
Janus Adviser Series:                        
     Janus Adviser Balanced Fund - Class S   -   46   (46)   2,759   2,759   -
Janus Aspen Series:                        
     Janus Aspen Series Balanced Portfolio - Institutional Shares   2,504   5,803   (3,299)   5,933   7,591   (1,658)
     Janus Aspen Series Flexible Bond Portfolio - Institutional Shares   1,329   1,573   (244)   2,104   3,023   (919)
     Janus Aspen Series Large Cap Growth Portfolio - Institutional Shares   5,889   6,589   (700)   3,432   4,271   (839)
     Janus Aspen Series Mid Cap Growth Portfolio - Institutional Shares   8,675   10,518   (1,843)   8,231   10,635   (2,404)
     Janus Aspen Series Worldwide Growth Portfolio - Institutional Shares   13,922   14,574   (652)   3,238   5,612   (2,374)
The Lazard Funds, Inc.:                        
     Lazard U.S. Mid Cap Equity Portfolio - Open Shares   49,608   14,297   35,311   56,367   19,163   37,204
LKCM Funds:                        
     LKCM Aquinas Growth Fund   7,144   949   6,195   22,791   20,172   2,619
Loomis Sayles Funds I:                        
     Loomis Sayles Small Cap Value Fund - Retail Class   132,753   6,488   126,265   -   -   -
Lord Abbett Affiliated Fund, Inc.:                        
     Lord Abbett Mid-Cap Value Fund, Inc. - Class A   46,076   48,401   (2,325)   62,464   50,314   12,150
Lord Abbett Research Fund, Inc.:                        
     Lord Abbett Small-Cap Value Fund - Class A   39,227   43,645   (4,418)   67,759   59,864   7,895
Lord Abbett Series Fund, Inc.:                        
     Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC   2,068,375   3,447,988   (1,379,613)   1,899,814   2,525,719   (625,905)
Massachusetts Investors Growth Stock Fund:                        
     Massachusetts Investors Growth Stock Fund - Class A   13,538   25,419   (11,881)   23,149   17,169   5,980
Moderate Allocation Portfolio:                        
     Moderate Allocation Portfolio   -   2,583   (2,583)   646   -   646
Morgan Stanley Institutional Fund Trust:                        
     Morgan Stanley U.S. Small Cap Value Portfolio - Class I   153,997   40,399   113,598   -   -   -
Neuberger Berman Equity Funds®:                        
     Neuberger Berman Socially Responsive Fund® - Trust Class   260,191   117,032   143,159   159,925   33,771   126,154
 
 
 
 
    207                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
New Perspective Fund®, Inc.:                        
     New Perspective Fund®, Inc. - Class R-3   91,701   75,474   16,227   231,269   75,992   155,277
     New Perspective Fund®, Inc. - Class R-4   2,285,471   978,958   1,306,513   1,180,646   620,099   560,547
Oppenheimer Capital Appreciation Fund:                        
     Oppenheimer Capital Appreciation Fund - Class A   40,754   34,576   6,178   39,871   29,627   10,244
Oppenheimer Developing Markets Fund:                        
     Oppenheimer Developing Markets Fund - Class A   1,431,493   1,576,308   (144,815)   1,631,150   1,356,798   274,352
Oppenheimer Variable Account Funds:                        
     Oppenheimer Global Securities/VA   5,423   11,863   (6,440)   5,379   14,493   (9,114)
     Oppenheimer Main Street Fund®/VA   -   1,077   (1,077)   14   1,154   (1,140)
     Oppenheimer Main Street Small Cap Fund®/VA   236,045   189,455   46,590   332,421   152,188   180,233
     Oppenheimer MidCap Fund/VA   -   520   (520)   4,230   100   4,130
     Oppenheimer Strategic Bond Fund/VA   429   534   (105)   2,831   3,717   (886)
Pax World Funds Series Trust I:                        
     Pax World Balanced Fund   1,917,060   1,518,986   398,074   1,456,218   1,070,970   385,248
PIMCO Variable Insurance Trust:                        
     PIMCO Real Return Portfolio - Administrative Class   6,383,005   3,029,053   3,353,952   1,872,114   1,349,048   523,066
Pioneer High Yield Fund:                        
     Pioneer High Yield Fund - Class A   150,622   95,568   55,054   229,101   117,129   111,972
Pioneer Variable Contracts Trust:                        
     Pioneer Emerging Markets VCT Portfolio - Class I   2,051,135   2,106,780   (55,645)   3,024,096   744,570   2,279,526
     Pioneer Equity Income VCT Portfolio - Class I   22,339   101,777   (79,438)   3,785,938   11,822,590   (8,036,652)
     Pioneer High Yield VCT Portfolio - Class I   609,690   697,348   (87,658)   878,955   346,365   532,590
     Pioneer Mid Cap Value VCT Portfolio - Class I   8,525   35,963   (27,438)   808,549   5,489,676   (4,681,127)
Premier VIT:                        
     Premier VIT OpCap Mid Cap Portfolio   532,282   135,793   396,489   48,932   8,831   40,101
RiverSource Investment Series, Inc.:                        
     RiverSource Diversified Equity Income Fund - Class R-4   256,781   20,088   236,693   -   -   -
SmallCap World Fund, Inc.:                        
     SMALLCAP World Fund® - Class R-4   102,952   23,436   79,516   -   -   -
 
 
 
 
    208                    

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

            Year Ended December 31,        
    2008   2007
    Units   Units   Net Increase   Units   Units   Net Increase
    Issued   Redeemed   (Decrease)   Issued   Redeemed   (Decrease)
T. Rowe Price Mid-Cap Value Fund, Inc.:                        
     T. Rowe Price Mid-Cap Value Fund - R Class   33,109   27,192   5,917   47,799   48,781   (982)
T. Rowe Price Value Fund, Inc.:                        
     T. Rowe Price Value Fund - Advisor Class   1,503   404   1,099   1,127,366   1,124,683   2,683
Templeton Funds, Inc.:                        
     Templeton Foreign Fund - Class A   34,265   44,692   (10,427)   39,429   16,711   22,718
Templeton Income Trust:                        
     Templeton Global Bond Fund - Class A   4,912,843   3,025,426   1,887,417   3,323,277   848,473   2,474,804
Vanguard® Variable Insurance Fund:                        
     Diversified Value Portfolio   1,456   633   823   1,484   705   779
     Equity Income Portfolio   6,373   10,764   (4,391)   7,478   3,087   4,391
     Small Company Growth Portfolio   3,329   1,681   1,648   7,104   1,898   5,206
Wanger Advisors Trust:                        
     Wanger International   1,134,746   847,490   287,256   1,117,096   201,335   915,761
     Wanger Select   2,004,217   1,816,671   187,546   3,483,410   1,088,696   2,394,714
     Wanger USA   762,962   547,518   215,444   759,102   501,522   257,580
Washington Mutual Investors FundSM, Inc.:                        
     Washington Mutual Investors FundSM, Inc. - Class R-3   254,746   201,698   53,048   277,535   184,207   93,328
     Washington Mutual Investors FundSM, Inc. - Class R-4   2,584,263   2,507,231   77,032   2,074,064   2,019,305   54,759
Wells Fargo Funds Trust:                        
     Wells Fargo Advantage Small Cap Value Fund - Class A   3,657   1,190   2,467   2,194   88   2,106
 
 
 
 
    209                    

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

9.   Unit Summary            
 
 
                                             Division/Contract   Units   Unit Value   Extended Value
    AIM Mid Cap Core Equity Fund - Class A            
    Contracts in accumulation period:            
    ING MAP PLUS NP4   2,262.231   $ 10.46   $ 23,663
    ING MAP PLUS NP8   1,289.149   10.35   13,343
    ING MAP PLUS NP9   1,740.348   10.33   17,978
    ING MAP PLUS NP11   11,543.378   10.28   118,666
    ING MAP PLUS NP15   17.848   10.18   182
    ING MAP PLUS NP25   3,230.491   9.93   32,079
    ING MAP PLUS NP26   4.098   9.91   41
    ING MAP PLUS NP28   1,564.968   9.86   15,431
    ING MAP PLUS NP30   30.956   9.81   304
    Qualified XII (1.00)   901.947   11.62   10,481
        22,585.414       $ 232,168
    AIM Small Cap Growth Fund - Class A            
    Contracts in accumulation period:            
    Qualified XII (1.00)   2,334.842   $ 8.69   $ 20,290
 
    AIM Global Health Care Fund - Investor Class            
    Contracts in accumulation period:            
    ING MAP PLUS NP9   602.805   $ 25.33   $ 15,269
    ING MAP PLUS NP11   913.840   25.24   23,065
    ING MAP PLUS NP17   266.703   24.98   6,662
    ING MAP PLUS NP21   828.274   24.80   20,541
    ING MAP PLUS NP23   902.254   24.72   22,304
    ING MAP PLUS NP26   727.689   24.59   17,894
    ING MAP PLUS NP28   303.025   24.50   7,424
    ING MAP PLUS NP29   102.265   24.46   2,501
    ING MAP PLUS NP30   260.758   24.42   6,368
        4,907.613       $ 122,028
    AIM V.I. Capital Appreciation Fund - Series I Shares            
    Currently payable annuity contracts:   9,511.604   $4.01 to $8.14   $ 47,244
    Contracts in accumulation period:            
    Qualified VI   1,016,485.894   6.54   6,647,818
    Qualified VIII   1,779.133   6.53   11,618
    Qualified X (1.15)   22,383.309   6.60   147,730
    Qualified X (1.25)   101,840.729   6.54   666,038
    Qualified XII (0.00)   746.220   7.38   5,507
    Qualified XII (0.05)   6,265.229   7.11   44,546
    Qualified XII (0.20)   2,277.403   7.24   16,488
    Qualified XII (0.25)   240.752   7.21   1,736
    Qualified XII (0.30)   33,500.004   7.17   240,195
    Qualified XII (0.35)   726.654   7.14   5,188
    Qualified XII (0.40)   16,872.461   7.10   119,794
    Qualified XII (0.50)   23,865.026   7.03   167,771
    Qualified XII (0.55)   22,321.517   7.00   156,251
    Qualified XII (0.60)   19,488.792   6.96   135,642
    Qualified XII (0.65)   73,508.805   6.93   509,416
    Qualified XII (0.70)   53,838.287   6.90   371,484
 
                                                                                                               210            

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

Division/Contract   Units   Unit Value   Extended Value
AIM V.I. Capital Appreciation Fund - Series I Shares            
      (continued)            
Qualified XII (0.75)   69,732.631   $ 6.86   $ 478,366
Qualified XII (0.80)   103,556.934   6.83   707,294
Qualified XII (0.85)   185,083.679   6.80   1,258,569
Qualified XII (0.90)   7,630.074   6.76   51,579
Qualified XII (0.95)   162,909.314   6.73   1,096,380
Qualified XII (1.00)   208,692.479   6.70   1,398,240
Qualified XII (1.05)   31,256.708   6.67   208,482
Qualified XII (1.10)   51,644.976   6.63   342,406
Qualified XII (1.15)   43,317.374   6.60   285,895
Qualified XII (1.20)   31,562.673   6.57   207,367
Qualified XII (1.25)   51,977.544   6.54   339,933
Qualified XII (1.30)   4,679.393   6.51   30,463
Qualified XII (1.35)   6,682.566   6.48   43,303
Qualified XII (1.40)   12,848.557   6.44   82,745
Qualified XII (1.45)   3,093.339   6.41   19,828
Qualified XII (1.50)   1,273.854   6.38   8,127
Qualified XV   11,558.656   6.71   77,559
Qualified XVI   31,228.951   6.38   199,241
Qualified XVII   817.540   6.54   5,347
Qualified XVIII   3,002.818   6.54   19,638
Qualified XXV   9,264.897   6.81   63,094
Qualified XXVI   4,727.878   6.73   31,819
Qualified XXVII   302,165.874   4.13   1,247,945
Qualified XXXII   1,532.654   7.65   11,725
Qualified XXXVI   1,391.157   7.65   10,642
Qualified XXXVIII   10,104.984   5.60   56,588
Qualified XLIII   1,109.246   5.58   6,190
Qualified LIII   13,181.885   7.90   104,137
Qualified LIV   7,894.954   7.84   61,896
Qualified LVI   14,915.777   7.93   118,282
Qualified LIX   507.783   7.73   3,925
    2,794,998.968       $ 17,871,471
AIM V.I. Core Equity Fund - Series I Shares            
Currently payable annuity contracts:   40,192.784   $9.19 to $10.02   $ 400,662
Contracts in accumulation period:            
Qualified VI   1,576,598.643   7.33   11,556,468
Qualified VIII   4.083   7.33   30
Qualified X (1.15)   33,778.666   7.40   249,962
Qualified X (1.25)   96,277.832   7.33   705,717
Qualified XII (0.00)   386.406   8.28   3,199
Qualified XII (0.05)   15,072.452   7.98   120,278
Qualified XII (0.10)   8.649   8.20   71
Qualified XII (0.20)   5,627.032   8.12   45,692
Qualified XII (0.25)   59.715   8.08   483
Qualified XII (0.30)   60,384.812   8.04   485,494
Qualified XII (0.35)   2,046.544   8.00   16,372
 
 
 
 
211            

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

Division/Contract       Units   Unit Value   Extended Value
AIM V.I. Core Equity Fund - Series I Shares                
      (continued)                
Qualified XII (0.40)       14,949.729   $ 7.96   $ 119,000
Qualified XII (0.50)       34,384.455   7.89   271,293
Qualified XII (0.55)       54,037.396   7.85   424,194
Qualified XII (0.60)       41,182.708   7.81   321,637
Qualified XII (0.65)       48,014.799   7.77   373,075
Qualified XII (0.70)       62,974.940   7.73   486,796
Qualified XII (0.75)       96,141.968   7.70   740,293
Qualified XII (0.80)       193,666.698   7.66   1,483,487
Qualified XII (0.85)       199,412.807   7.62   1,519,526
Qualified XII (0.90)       9,414.225   7.59   71,454
Qualified XII (0.95)       215,265.995   7.55   1,625,258
Qualified XII (1.00)       481,590.988   7.51   3,616,748
Qualified XII (1.05)       86,233.914   7.48   645,030
Qualified XII (1.10)       63,604.590   7.44   473,218
Qualified XII (1.15)       39,837.982   7.40   294,801
Qualified XII (1.20)       44,763.802   7.37   329,909
Qualified XII (1.25)       62,944.889   7.33   461,386
Qualified XII (1.30)       3,168.251   7.30   23,128
Qualified XII (1.35)       10,489.865   7.26   76,156
Qualified XII (1.40)       19,761.501   7.23   142,876
Qualified XII (1.45)       2,458.149   7.19   17,674
Qualified XII (1.50)       2,673.697   7.16   19,144
Qualified XV       6,036.454   7.53   45,455
Qualified XVI       37,028.947   7.16   265,127
Qualified XVII       2,182.548   7.34   16,020
Qualified XVIII       5,002.014   7.34   36,715
Qualified XXV       19,916.885   7.64   152,165
Qualified XXVI       4,209.624   7.55   31,783
Qualified XXVII       535,570.594   5.93   3,175,934
Qualified XXXII       856.377   9.85   8,435
Qualified XXXIII (0.65)       659.484   10.08   6,648
Qualified XXXVI       1,678.856   10.16   17,057
Qualified XXXVIII       25,941.121   6.87   178,216
Qualified XLIII       122.841   6.85   841
Qualified LIII       33,696.777   9.49   319,782
Qualified LIV       5,241.761   9.43   49,430
Qualified LVI       16,969.652   9.53   161,721
Qualified LIX       6,660.733   10.25   68,273
        4,319,185.634       $ 31,654,113
 
 
 
 
    212            

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

Division/Contract   Units   Unit Value   Extended Value
AllianceBernstein Growth and Income Fund, Inc. -            
Class A            
Contracts in accumulation period:            
ING MAP PLUS NP11   6,592.785   $ 7.94   $ 52,347
ING MAP PLUS NP15   61.853   7.87   487
ING MAP PLUS NP17   1,761.494   7.83   13,793
ING MAP PLUS NP18   6,124.347   7.81   47,831
ING MAP PLUS NP22   800.376   7.73   6,187
ING MAP PLUS NP23   1,978.971   7.71   15,258
ING MAP PLUS NP26   1,058.748   7.66   8,110
ING MAP PLUS NP28   212.024   7.62   1,616
    18,590.598       $ 145,629
AllianceBernstein Growth and Income Portfolio -            
Class A            
Contracts in accumulation period:            
Qualified X (1.15)   24,218.846   $ 8.24   $ 199,563
Qualified X (1.25)   20,172.820   8.20   165,417
Qualified XVIII   718.472   8.30   5,963
    45,110.138       $ 370,943
Allianz NFJ Large-Cap Value Fund - Institutional Class            
Contracts in accumulation period:            
Qualified VI   426.499   $ 6.09   $ 2,597
Qualified XLII   88,909.379   6.14   545,904
Qualified LIV   5,201.298   6.11   31,780
    94,537.176       $ 580,281
Allianz NFJ Small-Cap Value Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP8   64.746   $ 12.02   $ 778
ING MAP PLUS NP9   1,220.794   11.99   14,637
ING MAP PLUS NP14   3,225.812   11.84   38,194
ING MAP PLUS NP15   569.988   11.81   6,732
ING MAP PLUS NP17   0.466   11.75   5
ING MAP PLUS NP18   16,744.725   11.72   196,248
ING MAP PLUS NP21   6,834.265   11.64   79,551
    28,660.796       $ 336,145
Amana Growth Fund            
Contracts in accumulation period:            
Qualified XII (0.05)   4,928.827   $ 7.36   $ 36,276
 
Amana Income Fund            
Contracts in accumulation period:            
Qualified XII (0.05)   5,713.198   $ 8.12   $ 46,391
 
 
 
 
213            

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

Division/Contract   Units   Unit Value   Extended Value
American Balanced Fund® - Class R-3            
Contracts in accumulation period:            
ING MAP PLUS NP1   8,669.980   $ 9.59   $ 83,145
ING MAP PLUS NP3   13,348.398   9.55   127,477
ING MAP PLUS NP4   2,412.104   9.52   22,963
ING MAP PLUS NP6   41,107.572   9.48   389,700
ING MAP PLUS NP8   10,046.818   9.43   94,741
ING MAP PLUS NP9   24,621.701   9.41   231,690
ING MAP PLUS NP10   17,376.093   9.38   162,988
ING MAP PLUS NP11   2,361.908   9.36   22,107
ING MAP PLUS NP14   67,763.794   9.29   629,526
ING MAP PLUS NP15   28,336.174   9.27   262,676
ING MAP PLUS NP16   29,721.538   9.25   274,924
ING MAP PLUS NP17   8,384.995   9.22   77,310
ING MAP PLUS NP18   4,757.975   9.20   43,773
ING MAP PLUS NP19   34,461.526   9.18   316,357
ING MAP PLUS NP20   65,199.024   9.16   597,223
ING MAP PLUS NP21   38,848.811   9.13   354,690
ING MAP PLUS NP23   8,466.691   9.09   76,962
ING MAP PLUS NP25   1,754.931   9.05   15,882
ING MAP PLUS NP26   5,694.125   9.02   51,361
ING MAP PLUS NP27   6,033.063   9.00   54,298
ING MAP PLUS NP28   19,030.982   8.98   170,898
ING MAP PLUS NP29   592.781   8.96   5,311
    438,990.984       $ 4,066,002
American Century Income & Growth Fund - A Class            
Contracts in accumulation period:            
Qualified XII (1.00)   279.684   $ 23.62   $ 6,606
Qualified XXVII   484,137.556   7.64   3,698,811
    484,417.240       $ 3,705,417
Ariel Appreciation Fund            
Contracts in accumulation period:            
ING MAP PLUS NP9   15,380.234   $ 7.09   $ 109,046
ING MAP PLUS NP11   90.465   7.05   638
ING MAP PLUS NP14   14,898.756   7.00   104,291
ING MAP PLUS NP15   9,779.711   6.98   68,262
ING MAP PLUS NP17   5,307.875   6.95   36,890
ING MAP PLUS NP18   887.680   6.93   6,152
ING MAP PLUS NP19   104.744   6.92   725
ING MAP PLUS NP22   944.666   6.86   6,480
ING MAP PLUS NP23   6,410.111   6.85   43,909
ING MAP PLUS NP26   130.713   6.80   889
ING MAP PLUS NP28   355.201   6.76   2,401
ING MAP PLUS NP29   1,346.203   6.75   9,087
ING MAP PLUS NP30   80.024   6.73   539
ING MAP PLUS NP32   90.931   6.70   609
ING MAP PLUS NP36   829.265   6.63   5,498
    56,636.579       $ 395,416
 
 
 
214            

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

Division/Contract       Units   Unit Value   Extended Value
Ariel Fund                
Contracts in accumulation period:                
ING MAP PLUS NP6       98.544   $ 6.51   $ 642
ING MAP PLUS NP8       1,375.167   6.48   8,911
ING MAP PLUS NP9       17,660.302   6.46   114,086
ING MAP PLUS NP14       2,780.956   6.38   17,743
ING MAP PLUS NP15       24,153.085   6.37   153,855
ING MAP PLUS NP17       11,034.789   6.34   69,961
ING MAP PLUS NP18       3,705.396   6.32   23,418
ING MAP PLUS NP19       12,232.208   6.30   77,063
ING MAP PLUS NP20       10,131.429   6.29   63,727
ING MAP PLUS NP21       1,902.738   6.27   11,930
ING MAP PLUS NP22       537.832   6.26   3,367
ING MAP PLUS NP23       8,732.276   6.24   54,489
ING MAP PLUS NP24       1,582.348   6.23   9,858
ING MAP PLUS NP26       1,637.676   6.20   10,154
ING MAP PLUS NP27       181.662   6.18   1,123
ING MAP PLUS NP28       210.073   6.17   1,296
ING MAP PLUS NP29       1,638.135   6.15   10,075
ING MAP PLUS NP30       1,078.376   6.14   6,621
        100,672.992       $ 638,319
Artisan International Fund - Investor Shares                
Contracts in accumulation period:                
Qualified VI       20,632.354   $ 5.56   $ 114,716
Qualified XII (0.30)       7,259.493   5.82   42,250
Qualified XII (0.40)       31.714   5.81   184
Qualified XII (0.50)       3,807.612   5.80   22,084
Qualified XII (0.65)       27.207   5.79   158
Qualified XII (0.70)       430.604   5.78   2,489
Qualified XII (0.80)       326.366   5.77   1,883
Qualified XII (0.85)       7,622.929   5.77   43,984
Qualified XII (0.90)       365.622   5.76   2,106
Qualified XII (0.95)       1,181.972   5.76   6,808
Qualified XII (1.00)       9,978.089   5.76   57,474
Qualified XII (1.05)       166.431   5.75   957
Qualified XII (1.10)       334.452   5.75   1,923
Qualified XII (1.15)       5.575   5.74   32
Qualified XII (1.20)       469.681   5.74   2,696
Qualified XII (1.25)       1,879.545   5.73   10,770
Qualified XV       128.022   5.57   713
Qualified XVI       546.470   5.55   3,033
Qualified XXV       64.211   5.58   358
Qualified XXXVIII       47.763   5.61   268
Qualified LIII       884.506   5.59   4,944
Qualified LIV       790.699   5.58   4,412
        56,981.317       $ 324,242
 
 
 
 
    215            

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

Division/Contract       Units   Unit Value   Extended Value
The Bond Fund of AmericaSM, Inc. - Class R-4                
Contracts in accumulation period:                
Qualified VI       82,234.641   $ 8.70   $ 715,441
Qualified XII (0.30)       136.322   8.75   1,193
Qualified XII (0.40)       1,903.399   8.74   16,636
Qualified XII (0.50)       1,853.725   8.74   16,202
Qualified XII (0.55)       54.273   8.73   474
Qualified XII (0.60)       357.377   8.73   3,120
Qualified XII (0.65)       783.233   8.73   6,838
Qualified XII (0.70)       761.706   8.73   6,650
Qualified XII (0.75)       20,904.534   8.72   182,288
Qualified XII (0.80)       13,168.701   8.72   114,831
Qualified XII (0.85)       24,007.122   8.72   209,342
Qualified XII (0.90)       961.915   8.71   8,378
Qualified XII (0.95)       12,918.268   8.71   112,518
Qualified XII (1.00)       40,459.385   8.71   352,401
Qualified XII (1.05)       375.247   8.71   3,268
Qualified XII (1.10)       5,339.917   8.70   46,457
Qualified XII (1.15)       3,460.989   8.70   30,111
Qualified XII (1.20)       3,389.545   8.70   29,489
Qualified XII (1.25)       1,634.444   8.70   14,220
Qualified XII (1.35)       0.381   8.69   3
Qualified XII (1.40)       60.878   8.69   529
Qualified XII (1.45)       39.608   8.68   344
Qualified XV       668.380   8.71   5,822
Qualified XVI       336.695   8.68   2,923
Qualified XXVI       13.310   8.71   116
Qualified XXXVIII       4.617   8.77   40
Qualified LIII       16.072   8.74   140
Qualified LIV       5,683.789   8.72   49,563
        221,528.473       $ 1,929,337
Calvert Social Balanced Portfolio                
Currently payable annuity contracts:       9,957.727   $7.95 to $8.55   $ 84,364
Contracts in accumulation period:                
ING Custom Choice 62       842.457   8.34   7,026
Qualified V       485.528   16.90   8,205
Qualified VI       623,035.692   16.83   10,485,691
Qualified VIII       5,009.135   15.28   76,540
Qualified X (1.15)       5,010.648   8.72   43,693
Qualified X (1.25)       63,181.760   8.63   545,259
Qualified XII (0.00)       785.823   10.00   7,858
Qualified XII (0.05)       6,590.400   18.48   121,791
Qualified XII (0.20)       3,290.328   9.79   32,212
Qualified XII (0.25)       99.966   9.74   974
Qualified XII (0.30)       7,775.976   9.69   75,349
Qualified XII (0.35)       210.737   9.64   2,032
Qualified XII (0.40)       5,470.827   13.40   73,309
Qualified XII (0.50)       11,277.386   9.71   109,503
 
 
 
    216            

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

Division/Contract       Units   Unit Value   Extended Value
Calvert Social Balanced Portfolio (continued)                
Qualified XII (0.55)       9,755.015   $ 9.44   $ 92,087
Qualified XII (0.60)       17,132.674   9.39   160,876
Qualified XII (0.65)       61,197.758   9.34   571,587
Qualified XII (0.70)       86,794.771   9.29   806,323
Qualified XII (0.75)       63,654.731   9.24   588,170
Qualified XII (0.80)       100,175.518   9.67   968,697
Qualified XII (0.85)       139,551.037   12.83   1,790,440
Qualified XII (0.90)       9,420.914   9.50   89,499
Qualified XII (0.95)       117,437.198   12.67   1,487,929
Qualified XII (1.00)       274,305.777   12.59   3,453,510
Qualified XII (1.05)       12,995.786   12.51   162,577
Qualified XII (1.10)       34,686.078   12.43   431,148
Qualified XII (1.15)       11,283.081   12.35   139,346
Qualified XII (1.20)       6,664.840   12.28   81,844
Qualified XII (1.25)       35,566.454   12.20   433,911
Qualified XII (1.30)       245.851   12.12   2,980
Qualified XII (1.35)       2,661.819   12.05   32,075
Qualified XII (1.40)       15,212.955   11.97   182,099
Qualified XII (1.45)       2,076.890   11.89   24,694
Qualified XII (1.50)       177.629   11.82   2,100
Qualified XV       3,789.186   17.45   66,121
Qualified XVI       29,852.889   16.34   487,796
Qualified XVII       510.899   16.83   8,598
Qualified XVIII       4,332.574   8.63   37,390
Qualified XXV       4,075.676   17.54   71,487
Qualified XXVII       403,348.769   22.80   9,196,352
Qualified XXVIII       102,579.385   22.60   2,318,294
Qualified XXXII       490.067   8.42   4,126
Qualified XXXVI       533.882   8.80   4,698
Qualified XXXVIII       57,871.735   6.80   393,528
Qualified LVI       5,775.699   8.26   47,707
Qualified LIII       1,955.363   8.23   16,093
Qualified LIV       7,659.781   8.17   62,580
        2,366,797.071       $ 35,890,468
ColumbiaSM Acorn Fund® - Class Z                
Contracts in accumulation period:                
Qualified VI       1,927.563   $ 6.34   $ 12,221
Qualified XV       579.841   6.35   3,682
Qualified XLII       123,561.124   6.39   789,556
Qualified XLIII       271.413   6.37   1,729
        126,339.941       $ 807,188
 
 
 
 
    217            

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

Division/Contract       Units   Unit Value   Extended Value
Columbia Mid Cap Value Fund - Class A                
Contracts in accumulation period:                
ING MAP PLUS NP9       493.426   $ 6.11   $ 3,015
ING MAP PLUS NP15       53.581   6.09   326
ING MAP PLUS NP28       178.468   6.07   1,083
Qualified VI       16,917.712   6.08   102,860
Qualified XII (0.00)       1,776.656   6.13   10,891
Qualified XII (0.30)       649.706   6.12   3,976
Qualified XII (0.50)       239.064   6.11   1,461
Qualified XII (0.55)       1,035.386   6.11   6,326
Qualified XII (0.60)       81.669   6.11   499
Qualified XII (0.65)       23.959   6.10   146
Qualified XII (0.70)       17.275   6.10   105
Qualified XII (0.75)       1,333.552   6.10   8,135
Qualified XII (0.80)       1,033.082   6.10   6,302
Qualified XII (0.85)       7,723.462   6.10   47,113
Qualified XII (0.90)       173.305   6.09   1,055
Qualified XII (0.95)       1,681.514   6.09   10,240
Qualified XII (1.00)       44,363.897   6.09   270,176
Qualified XII (1.10)       1,664.452   6.09   10,137
Qualified XII (1.15)       1,633.058   6.08   9,929
Qualified XII (1.20)       1,085.972   6.08   6,603
Qualified XII (1.25)       1,165.776   6.08   7,088
Qualified XXI       168,795.015   6.10   1,029,650
Qualified XXV       285.610   6.10   1,742
Qualified XXVI       4.194   6.09   26
Qualified LIII       452.872   6.11   2,767
Qualified LIV       5,054.405   6.10   30,832
Qualified LVI       398.250   6.12   2,437
        258,315.318       $ 1,574,920
Columbia Mid Cap Value Fund - Class Z                
Contracts in accumulation period:                
Qualified XLII       89,751.992   6.14   551,077
Qualified LIV       1,630.339   $ 6.11   $ 9,961
        91,382.331       $ 561,038
DWS Equity 500 Index Fund - Class S                
Contracts in accumulation period:                
Qualified XII (1.00)       17,680.032   $ 9.51   $ 168,137
 
 
 
 
    218            

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

Division/Contract       Units   Unit Value   Extended Value
EuroPacific Growth Fund® - Class R-3                
Contracts in accumulation period:                
ING MAP PLUS NP1       73,097.230   $ 11.98   $ 875,705
ING MAP PLUS NP4       20,169.731   11.89   239,818
ING MAP PLUS NP6       29,507.784   11.83   349,077
ING MAP PLUS NP8       86,788.390   11.77   1,021,499
ING MAP PLUS NP9       54,286.561   11.74   637,324
ING MAP PLUS NP10       9,008.990   11.71   105,495
ING MAP PLUS NP11       28,231.565   11.69   330,027
ING MAP PLUS NP12       22,504.669   11.66   262,404
ING MAP PLUS NP13       8,988.259   11.63   104,533
ING MAP PLUS NP14       56,412.028   11.60   654,380
ING MAP PLUS NP15       70,564.979   11.57   816,437
ING MAP PLUS NP16       29,008.234   11.54   334,755
ING MAP PLUS NP17       19,775.667   11.52   227,816
ING MAP PLUS NP18       2,740.306   11.49   31,486
ING MAP PLUS NP19       21,096.061   11.46   241,761
ING MAP PLUS NP20       391.487   11.43   4,475
ING MAP PLUS NP21       17,628.519   11.40   200,965
ING MAP PLUS NP22       13,673.294   11.37   155,465
ING MAP PLUS NP23       23,617.788   11.35   268,062
ING MAP PLUS NP24       5,113.069   11.32   57,880
ING MAP PLUS NP25       204.993   11.29   2,314
ING MAP PLUS NP26       9,893.079   11.26   111,396
ING MAP PLUS NP28       11,907.452   11.21   133,483
ING MAP PLUS NP29       4,073.167   11.18   45,538
ING MAP PLUS NP30       1,889.916   11.15   21,073
ING MAP PLUS NP32       1,381.716   11.10   15,337
ING MAP PLUS NP36       343.555   10.99   3,776
        622,298.489       $ 7,252,281
EuroPacific Growth Fund® - Class R-4                
Contracts in accumulation period:                
ING Custom Choice 62       12,699.257   $ 11.82   $ 150,105
Qualified V       2,530.130   11.27   28,515
Qualified VI       3,083,530.379   11.35   34,998,070
Qualified XII (0.00)       24,302.083   12.03   292,354
Qualified XII (0.05)       252,788.818   12.00   3,033,466
Qualified XII (0.10)       66.169   11.98   793
Qualified XII (0.25)       258.760   11.89   3,077
Qualified XII (0.30)       197,718.831   11.86   2,344,945
Qualified XII (0.35)       3,482.182   11.84   41,229
Qualified XII (0.40)       39,583.838   11.81   467,485
Qualified XII (0.50)       1,541,792.983   11.75   18,116,068
Qualified XII (0.55)       119,192.448   11.73   1,398,127
Qualified XII (0.60)       48,805.382   11.70   571,023
Qualified XII (0.65)       247,467.308   11.67   2,887,943
Qualified XII (0.70)       297,411.430   11.65   3,464,843
Qualified XII (0.75)       953,033.541   11.62   11,074,250
 
 
 
    219            

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

Division/Contract   Units   Unit Value   Extended Value
EuroPacific Growth Fund® - Class R-4 (continued)            
Qualified XII (0.80)   571,656.608   $ 11.59   $ 6,625,500
Qualified XII (0.85)   457,663.593   11.56   5,290,591
Qualified XII (0.90)   48,357.953   11.54   558,051
Qualified XII (0.95)   450,088.871   11.51   5,180,523
Qualified XII (1.00)   2,509,419.156   11.48   28,808,132
Qualified XII (1.05)   66,849.757   11.46   766,098
Qualified XII (1.10)   66,317.801   11.43   758,012
Qualified XII (1.15)   128,680.898   11.40   1,466,962
Qualified XII (1.20)   9,980.151   11.38   113,574
Qualified XII (1.25)   127,676.334   11.35   1,449,126
Qualified XII (1.30)   559.694   11.32   6,336
Qualified XII (1.35)   4,955.935   11.30   56,002
Qualified XII (1.40)   17,474.067   11.27   196,933
Qualified XII (1.45)   1,623.763   11.24   18,251
Qualified XII (1.50)   808.946   11.22   9,076
Qualified XV   8,650.940   11.51   99,572
Qualified XVI   68,762.362   11.22   771,514
Qualified XVII   604.380   11.44   6,914
Qualified XXI   27,027.068   11.59   313,244
Qualified XXV   11,207.015   11.63   130,338
Qualified XXVI   2,133.031   11.56   24,658
Qualified XXVII   2,180,851.956   10.10   22,026,605
Qualified XXXIII (0.65)   2,092.970   12.16   25,451
Qualified XXXVIII   72,952.808   5.89   429,692
Qualified XLIII   5,628.306   5.88   33,094
Qualified LIII   10,110.433   10.45   105,654
Qualified LIV   136,956.741   10.38   1,421,611
Qualified LVI   15,538.717   10.50   163,157
Qualified LIX   2,624.624   11.85   31,102
    13,831,918.417       $ 155,758,066
Evergreen Special Values Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP8   3,368.293   $ 9.58   $ 32,268
ING MAP PLUS NP9   5,092.119   9.55   48,630
ING MAP PLUS NP11   967.550   9.51   9,201
ING MAP PLUS NP14   133.779   9.44   1,263
ING MAP PLUS NP16   29.188   9.39   274
ING MAP PLUS NP17   6,068.212   9.37   56,859
ING MAP PLUS NP19   5,059.803   9.32   47,157
ING MAP PLUS NP25   1,802.764   9.18   16,549
ING MAP PLUS NP26   1,515.754   9.16   13,884
ING MAP PLUS NP27   240.894   9.14   2,202
Qualified V   717.558   14.36   10,304
Qualified VI   800,543.014   14.55   11,647,901
Qualified XII (0.10)   14.401   16.03   231
Qualified XII (0.30)   52,238.502   15.76   823,279
Qualified XII (0.40)   23,182.473   15.63   362,342
 
 
 
                                                                                                           220            

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

Division/Contract   Units   Unit Value   Extended Value
Evergreen Special Values Fund - Class A (continued)            
Qualified XII (0.50)   6,633.638   $ 15.50   $ 102,821
Qualified XII (0.55)   19,571.086   15.43   301,982
Qualified XII (0.60)   12,045.427   15.37   185,138
Qualified XII (0.65)   2,997.688   15.30   45,865
Qualified XII (0.70)   29,935.576   15.24   456,218
Qualified XII (0.75)   204,611.032   15.18   3,105,995
Qualified XII (0.80)   13,390.680   15.11   202,333
Qualified XII (0.85)   102,484.348   15.05   1,542,389
Qualified XII (0.90)   36,985.509   14.99   554,413
Qualified XII (0.95)   105,233.275   14.92   1,570,080
Qualified XII (1.00)   555,936.045   14.86   8,261,210
Qualified XII (1.05)   34,945.377   14.80   517,192
Qualified XII (1.10)   20,994.858   14.74   309,464
Qualified XII (1.15)   46,123.181   14.68   677,088
Qualified XII (1.20)   5,470.192   14.61   79,920
Qualified XII (1.25)   38,157.158   14.55   555,187
Qualified XII (1.30)   3,296.159   14.49   47,761
Qualified XII (1.35)   82.699   14.43   1,193
Qualified XII (1.40)   3,075.493   14.37   44,195
Qualified XII (1.45)   786.008   14.31   11,248
Qualified XII (1.50)   20.685   14.25   295
Qualified XVI   15,303.832   14.25   218,080
Qualified XVII   406.810   14.55   5,919
Qualified XXVII   2,033,089.813   14.72   29,927,082
Qualified XXXVIII   1,509.081   6.42   9,688
Qualified LIV   40,773.515   8.61   351,060
    4,234,833.469       $ 62,156,160
Fidelity® VIP Equity-Income Portfolio - Initial Class            
Currently payable annuity contracts:   281,683.616   $7.51 to $8.37   $ 2,352,491
Contracts in accumulation period:            
ING Custom Choice 62   1,747.676   7.96   13,912
ING MAP PLUS NP1   13,255.538   8.00   106,044
ING MAP PLUS NP8   13,546.646   7.86   106,477
ING MAP PLUS NP9   5,035.814   7.84   39,481
ING MAP PLUS NP11   10,882.473   7.80   84,883
ING MAP PLUS NP12   27,356.222   7.78   212,831
ING MAP PLUS NP13   108.394   7.76   841
ING MAP PLUS NP14   1,381.769   7.74   10,695
ING MAP PLUS NP15   8,676.124   7.73   67,066
ING MAP PLUS NP16   990.649   7.71   7,638
ING MAP PLUS NP19   8,371.080   7.65   64,039
ING MAP PLUS NP21   17.635   7.61   134
ING MAP PLUS NP22   1,980.781   7.59   15,034
ING MAP PLUS NP23   8,301.016   7.57   62,839
ING MAP PLUS NP24   768.463   7.56   5,810
ING MAP PLUS NP25   831.849   7.54   6,272
 
 
 
 
                                                                                                           221            

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

Division/Contract   Units   Unit Value   Extended Value
Fidelity® VIP Equity-Income Portfolio - Initial Class            
(continued)            
ING MAP PLUS NP26   3,798.565   $ 7.52   $ 28,565
ING MAP PLUS NP28   3,199.154   7.48   23,930
ING MAP PLUS NP29   2,701.847   7.46   20,156
ING MAP PLUS NP30   1,933.693   7.45   14,406
ING MAP PLUS NP32   27.238   7.41   202
ING MAP PLUS NP36   971.309   7.34   7,129
Qualified V   2,360.686   14.73   34,773
Qualified VI   3,663,836.011   15.10   55,323,924
Qualified VIII   5,813.772   15.03   87,381
Qualified X (1.15)   275,725.304   19.17   5,285,654
Qualified X (1.25)   309,037.727   18.89   5,837,723
Qualified XII (0.00)   25,570.614   9.80   250,592
Qualified XII (0.05)   134,256.917   16.59   2,227,322
Qualified XII (0.10)   321.593   9.69   3,116
Qualified XII (0.20)   60,756.209   9.59   582,652
Qualified XII (0.25)   11,805.416   9.54   112,624
Qualified XII (0.30)   292,020.925   9.49   2,771,279
Qualified XII (0.35)   11,582.174   9.44   109,336
Qualified XII (0.40)   125,190.309   14.30   1,790,221
Qualified XII (0.45)   47.227   9.34   441
Qualified XII (0.50)   1,444,799.374   9.66   13,956,762
Qualified XII (0.55)   142,179.299   9.24   1,313,737
Qualified XII (0.60)   83,732.898   9.19   769,505
Qualified XII (0.65)   398,153.865   9.14   3,639,126
Qualified XII (0.70)   343,186.738   9.09   3,119,567
Qualified XII (0.75)   460,360.136   9.05   4,166,259
Qualified XII (0.80)   864,138.844   9.82   8,485,843
Qualified XII (0.85)   442,827.336   13.70   6,066,735
Qualified XII (0.90)   57,482.485   9.56   549,533
Qualified XII (0.95)   721,774.214   13.53   9,765,605
Qualified XII (1.00)   1,319,771.083   13.44   17,737,723
Qualified XII (1.05)   125,298.708   13.36   1,673,991
Qualified XII (1.10)   142,173.164   13.27   1,886,638
Qualified XII (1.15)   132,451.011   13.19   1,747,029
Qualified XII (1.20)   42,895.330   13.11   562,358
Qualified XII (1.25)   156,680.184   13.02   2,039,976
Qualified XII (1.30)   9,766.014   12.94   126,372
Qualified XII (1.35)   2,620.621   12.86   33,701
Qualified XII (1.40)   18,963.088   12.78   242,348
Qualified XII (1.45)   8,034.228   12.70   102,035
Qualified XII (1.50)   2,271.189   12.62   28,662
Qualified XV   28,603.612   15.65   447,647
Qualified XVI   124,935.314   14.66   1,831,552
Qualified XVII   2,552.451   15.10   38,542
Qualified XVIII   16,919.646   18.89   319,612
Qualified XXV   17,196.219   15.73   270,497
Qualified XXVI   9,292.551   15.54   144,406
 
 
 
                                                      222            

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

Division/Contract   Units   Unit Value   Extended Value
Fidelity® VIP Equity-Income Portfolio - Initial Class            
(continued)            
Qualified XXVII   1,985,243.381   $ 16.14   $ 32,041,828
Qualified XXVIII   1,243,575.268   16.00   19,897,204
Qualified XXXII   22,881.557   8.15   186,485
Qualified XXXVI   33,843.129   8.51   288,005
Qualified XXXVIII   65,062.022   5.48   356,540
Qualified XLIII   12,675.910   5.46   69,210
Qualified LIII   82,882.919   7.68   636,541
Qualified LIV   63,468.779   7.63   484,267
Qualified LVI   68,689.693   7.71   529,598
Qualified LIX   10,202.456   8.59   87,639
    16,023,477.151       $ 213,310,991
Fidelity® VIP Growth Portfolio - Initial Class            
Currently payable annuity contracts:   54,070.884   $ 7.67   $ 414,724
Contracts in accumulation period:            
ING Custom Choice 62   4,448.433   7.71   34,297
ING MAP PLUS NP1   11,648.697   7.39   86,084
ING MAP PLUS NP9   1,935.207   7.25   14,030
ING MAP PLUS NP11   4,255.577   7.21   30,683
ING MAP PLUS NP21   3,414.697   7.04   24,039
ING MAP PLUS NP23   1,868.481   7.00   13,079
ING MAP PLUS NP25   994.996   6.97   6,935
ING MAP PLUS NP26   903.114   6.95   6,277
ING MAP PLUS NP30   90.062   6.89   621
Qualified V   938.779   12.28   11,528
Qualified VI   4,753,254.647   12.40   58,940,358
Qualified VIII   6,672.295   12.54   83,671
Qualified X (1.15)   319,697.004   17.49   5,591,501
Qualified X (1.25)   369,712.363   17.24   6,373,841
Qualified XII (0.00)   29,445.853   8.95   263,540
Qualified XII (0.05)   28,403.873   13.62   386,861
Qualified XII (0.10)   194.225   8.86   1,721
Qualified XII (0.20)   73,657.216   8.76   645,237
Qualified XII (0.25)   8,551.658   8.72   74,570
Qualified XII (0.30)   409,764.859   8.67   3,552,661
Qualified XII (0.35)   25,554.167   8.63   220,532
Qualified XII (0.40)   59,880.254   12.35   739,521
Qualified XII (0.45)   277.836   8.53   2,370
Qualified XII (0.50)   327,083.383   8.91   2,914,313
Qualified XII (0.55)   227,708.378   8.44   1,921,859
Qualified XII (0.60)   222,467.302   8.40   1,868,725
Qualified XII (0.65)   757,025.953   8.35   6,321,167
Qualified XII (0.70)   393,530.369   8.31   3,270,237
Qualified XII (0.75)   639,980.883   8.27   5,292,642
Qualified XII (0.80)   645,218.893   9.01   5,813,422
Qualified XII (0.85)   732,400.454   11.83   8,664,297
Qualified XII (0.90)   71,973.515   8.70   626,170
 
 
 
 
223            

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

Division/Contract   Units   Unit Value   Extended Value
Fidelity® VIP Growth Portfolio - Initial Class            
(continued)            
Qualified XII (0.95)   635,450.280   $ 11.68   $ 7,422,059
Qualified XII (1.00)   1,795,843.944   11.60   20,831,790
Qualified XII (1.05)   104,015.605   11.53   1,199,300
Qualified XII (1.10)   200,468.654   11.46   2,297,371
Qualified XII (1.15)   137,893.569   11.39   1,570,608
Qualified XII (1.20)   59,659.739   11.31   674,752
Qualified XII (1.25)   134,845.488   11.24   1,515,663
Qualified XII (1.30)   10,510.198   11.17   117,399
Qualified XII (1.35)   9,925.465   11.10   110,173
Qualified XII (1.40)   23,970.782   11.03   264,398
Qualified XII (1.45)   6,224.118   10.96   68,216
Qualified XII (1.50)   6,515.799   10.89   70,957
Qualified XV   33,603.552   12.85   431,806
Qualified XVI   146,277.500   12.04   1,761,181
Qualified XVII   2,772.702   12.40   34,382
Qualified XVIII   22,296.882   17.24   384,398
Qualified XXI   95,499.201   13.04   1,245,310
Qualified XXV   46,505.834   12.92   600,855
Qualified XXVI   20,053.927   12.76   255,888
Qualified XXXII   26,649.735   7.61   202,804
Qualified XXXVI   41,426.123   7.07   292,883
Qualified XXXVIII   159,854.829   5.16   824,851
Qualified XLIII   23,297.691   5.14   119,750
Qualified LIII   118,136.633   8.02   947,456
Qualified LIV   66,033.146   7.97   526,284
Qualified LVI   107,871.241   8.05   868,363
Qualified LIX   34,308.499   7.13   244,620
    14,256,935.443       $ 159,095,030
Fidelity® VIP High Income Portfolio - Initial Class            
Currently payable annuity contracts:   6,417.612   $7.94 to $8.31   $ 53,294
Contracts in accumulation period:            
Qualified XXVII   491,879.034   7.65   3,762,875
Qualified XXVIII   158,302.706   7.58   1,199,935
    656,599.352       $ 5,016,104
 
 
 
 
224            

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

Division/Contract       Units   Unit Value   Extended Value
Fidelity® VIP Overseas Portfolio - Initial Class                
Contracts in accumulation period:                
Qualified V       722.811   $ 12.92   $ 9,339
Qualified VI       762,219.628   13.20   10,061,299
Qualified VIII       645.153   13.18   8,503
Qualified X (1.15)       75,548.030   13.80   1,042,563
Qualified X (1.25)       95,291.706   13.60   1,295,967
Qualified XII (0.00)       3,365.685   10.37   34,902
Qualified XII (0.05)       42,653.783   14.49   618,053
Qualified XII (0.20)       39,505.860   10.15   400,984
Qualified XII (0.25)       3,419.266   10.10   34,535
Qualified XII (0.30)       46,046.506   10.04   462,307
Qualified XII (0.35)       6,359.448   9.99   63,531
Qualified XII (0.40)       14,940.461   13.85   206,925
Qualified XII (0.45)       15.861   9.88   157
Qualified XII (0.50)       50,711.924   10.60   537,546
Qualified XII (0.55)       19,242.475   9.78   188,191
Qualified XII (0.60)       8,352.945   9.73   81,274
Qualified XII (0.65)       204,170.979   9.68   1,976,375
Qualified XII (0.70)       41,797.774   9.62   402,095
Qualified XII (0.75)       84,325.558   9.57   806,996
Qualified XII (0.80)       139,619.531   10.64   1,485,552
Qualified XII (0.85)       126,656.296   13.27   1,680,729
Qualified XII (0.90)       11,257.180   10.55   118,763
Qualified XII (0.95)       66,559.139   13.10   871,925
Qualified XII (1.00)       136,696.412   13.02   1,779,787
Qualified XII (1.05)       13,669.223   12.94   176,880
Qualified XII (1.10)       23,844.069   12.85   306,396
Qualified XII (1.15)       17,837.109   12.77   227,780
Qualified XII (1.20)       9,198.076   12.69   116,724
Qualified XII (1.25)       27,668.309   12.61   348,897
Qualified XII (1.30)       2,712.595   12.53   33,989
Qualified XII (1.35)       645.773   12.45   8,040
Qualified XII (1.40)       4,484.206   12.38   55,514
Qualified XII (1.45)       191.563   12.30   2,356
Qualified XII (1.50)       1,145.993   12.22   14,004
Qualified XV       8,729.828   13.68   119,424
Qualified XVI       26,669.552   12.82   341,904
Qualified XVII       1,749.603   13.20   23,095
Qualified XVIII       4,637.865   13.60   63,075
Qualified XXV       5,770.022   13.75   79,338
Qualified XXVI       1,078.547   13.58   14,647
Qualified XXVII       396,703.152   7.41   2,939,570
Qualified XXXII       2,667.803   10.41   27,772
Qualified XXXVI       4,458.450   11.12   49,578
Qualified XXXVIII       20,252.127   5.51   111,589
Qualified XLIII       1,313.153   5.50   7,222
Qualified LIII       21,329.929   9.56   203,914
Qualified LIV       6,852.517   9.50   65,099
Qualified LVI       14,302.119   9.61   137,443
Qualified LIX       1,975.833   11.23   22,189
        2,600,011.827       $ 29,664,737
 
 
    225            

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

Division/Contract   Units   Unit Value   Extended Value
Fidelity® VIP Contrafund® Portfolio - Initial Class            
Currently payable annuity contracts:   608,471.243   $ 9.93   $ 6,042,119
Contracts in accumulation period:            
ING Custom Choice 62   32,250.113   9.60   309,601
ING MAP PLUS NP1   165,284.078   9.96   1,646,229
ING MAP PLUS NP3   8,010.109   9.91   79,380
ING MAP PLUS NP4   23,760.378   9.89   234,990
ING MAP PLUS NP6   36,990.957   9.84   363,991
ING MAP PLUS NP8   138,928.095   9.79   1,360,106
ING MAP PLUS NP9   29,734.053   9.77   290,502
ING MAP PLUS NP10   31,158.359   9.74   303,482
ING MAP PLUS NP11   35,797.250   9.72   347,949
ING MAP PLUS NP12   45,441.809   9.70   440,786
ING MAP PLUS NP13   4,741.025   9.67   45,846
ING MAP PLUS NP14   41,443.074   9.65   399,926
ING MAP PLUS NP15   49,359.451   9.62   474,838
ING MAP PLUS NP16   59,626.083   9.60   572,410
ING MAP PLUS NP17   50,972.768   9.58   488,319
ING MAP PLUS NP18   14,139.224   9.55   135,030
ING MAP PLUS NP19   38,373.766   9.53   365,702
ING MAP PLUS NP20   44,556.543   9.51   423,733
ING MAP PLUS NP21   41,660.582   9.48   394,942
ING MAP PLUS NP22   13,269.286   9.46   125,527
ING MAP PLUS NP23   37,908.799   9.44   357,859
ING MAP PLUS NP24   6,404.133   9.41   60,263
ING MAP PLUS NP25   13,788.141   9.39   129,471
ING MAP PLUS NP26   33,294.019   9.37   311,965
ING MAP PLUS NP27   731.620   9.34   6,833
ING MAP PLUS NP28   30,121.627   9.32   280,734
ING MAP PLUS NP29   9,537.576   9.30   88,699
ING MAP PLUS NP30   6,548.106   9.28   60,766
ING MAP PLUS NP32   1,076.882   9.23   9,940
ING MAP PLUS NP35   1,695.055   9.16   15,527
ING MAP PLUS NP36   809.298   9.14   7,397
Qualified V   2,826.102   20.61   58,246
Qualified VI   8,286,539.192   20.92   173,354,400
Qualified VIII   5,872.307   21.04   123,553
Qualified X (1.15)   319,440.433   23.82   7,609,071
Qualified X (1.25)   593,820.158   23.50   13,954,774
Qualified XII (0.00)   48,834.559   13.91   679,289
Qualified XII (0.00)   1,238,584.164   8.16   10,106,847
Qualified XII (0.05)   443,452.942   22.98   10,190,549
Qualified XII (0.10)   183.227   13.77   2,523
Qualified XII (0.20)   211,178.899   13.62   2,876,257
Qualified XII (0.25)   20,555.303   13.55   278,524
Qualified XII (0.30)   694,988.545   13.48   9,368,446
Qualified XII (0.35)   25,934.632   13.41   347,783
Qualified XII (0.40)   150,860.253   20.69   3,121,299
 
 
 
 
                                                                                                           226            

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

Division/Contract   Units   Unit Value   Extended Value
Fidelity® VIP Contrafund® Portfolio - Initial Class            
(continued)            
Qualified XII (0.45)   1,473.375   $ 13.26   $ 19,537
Qualified XII (0.50)   2,189,446.620   13.78   30,170,574
Qualified XII (0.55)   360,448.799   13.12   4,729,088
Qualified XII (0.60)   275,711.147   13.05   3,598,030
Qualified XII (0.65)   796,911.818   12.99   10,351,885
Qualified XII (0.70)   797,104.900   12.92   10,298,595
Qualified XII (0.75)   1,521,976.631   12.85   19,557,400
Qualified XII (0.80)   1,739,497.372   14.05   24,439,938
Qualified XII (0.85)   884,693.075   19.82   17,534,617
Qualified XII (0.90)   217,735.663   13.58   2,956,850
Qualified XII (0.95)   4,412,465.345   19.57   86,351,947
Qualified XII (1.00)   3,541,959.877   19.45   68,891,120
Qualified XII (1.05)   219,261.167   19.33   4,238,318
Qualified XII (1.10)   238,469.566   19.20   4,578,616
Qualified XII (1.15)   419,212.921   19.08   7,998,583
Qualified XII (1.20)   53,125.016   18.96   1,007,250
Qualified XII (1.25)   332,768.721   18.84   6,269,363
Qualified XII (1.30)   7,531.745   18.72   140,994
Qualified XII (1.35)   4,196.958   18.61   78,105
Qualified XII (1.40)   36,107.142   18.49   667,621
Qualified XII (1.45)   10,582.388   18.37   194,398
Qualified XII (1.50)   6,546.319   18.26   119,536
Qualified XIII   1,958.351   21.72   42,535
Qualified XV   37,172.283   21.69   806,267
Qualified XVI   203,283.903   20.31   4,128,696
Qualified XVII   17,803.336   20.92   372,446
Qualified XVIII   29,551.938   23.50   694,471
Qualified XXI   145,938.081   22.00   3,210,638
Qualified XXV   41,808.539   21.80   911,426
Qualified XXVI   5,982.007   21.53   128,793
Qualified XXVII   4,704,381.455   24.16   113,657,856
Qualified XXVIII   1,380,039.543   23.94   33,038,147
Qualified XXXII   28,661.694   9.92   284,324
Qualified XXXIII (0.65)   103,341.286   11.33   1,170,857
Qualified XXXVI   59,293.066   11.41   676,534
Qualified XXXVIII   324,267.350   5.65   1,832,111
Qualified XLIII   73,289.310   5.64   413,352
Qualified LIII   297,491.043   8.90   2,647,670
Qualified LIV   422,623.643   8.84   3,735,993
Qualified LVI   189,808.532   8.94   1,696,888
Qualified LIX   32,695.793   11.52   376,656
    39,865,571.936       $ 722,264,448
Fidelity® VIP Index 500 Portfolio - Initial Class            
Contracts in accumulation period:            
Qualified XXVII   3,816,430.431   $ 18.22   $ 69,535,362
Qualified XXVIII   310,462.751   18.05   5,603,853
    4,126,893.182       $ 75,139,215
 
 
 
                                              227            

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

Division/Contract   Units   Unit Value   Extended Value
Fidelity® VIP Mid Cap Portfolio - Initial Class            
Contracts in accumulation period:            
Qualified XII (0.00)   935,267.924   $ 8.56   $ 8,005,893
 
Fidelity® VIP Asset ManagerSM Portfolio - Initial Class            
Contracts in accumulation period:            
Qualified XXVII   773,803.653   $ 16.10   $ 12,458,239
Qualified XXVIII   194,478.089   15.95   3,101,926
    968,281.742       $ 15,560,165
Mutual Discovery Fund - Class R            
Contracts in accumulation period:            
ING MAP PLUS NP8   25,072.974   $ 13.10   $ 328,456
ING MAP PLUS NP9   21,454.142   13.07   280,406
ING MAP PLUS NP11   19,734.354   13.01   256,744
ING MAP PLUS NP12   8,470.716   12.98   109,950
ING MAP PLUS NP14   2,928.651   12.91   37,809
ING MAP PLUS NP15   11,046.394   12.88   142,278
ING MAP PLUS NP16   2,706.220   12.85   34,775
ING MAP PLUS NP17   5,219.083   12.82   66,909
ING MAP PLUS NP18   14,642.513   12.79   187,278
ING MAP PLUS NP19   14,654.118   12.75   186,840
ING MAP PLUS NP20   21,156.834   12.72   269,115
ING MAP PLUS NP21   2,679.277   12.69   34,000
ING MAP PLUS NP22   94.227   12.66   1,193
ING MAP PLUS NP23   3,777.607   12.63   47,711
ING MAP PLUS NP24   2,555.989   12.60   32,205
ING MAP PLUS NP25   1,129.290   12.57   14,195
ING MAP PLUS NP26   475.002   12.54   5,957
ING MAP PLUS NP27   229.464   12.51   2,871
ING MAP PLUS NP28   1,521.464   12.48   18,988
ING MAP PLUS NP29   662.035   12.45   8,242
ING MAP PLUS NP32   64.904   12.35   802
    160,275.258       $ 2,066,724
 
 
 
 
228            

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

Division/Contract   Units   Unit Value   Extended Value
Franklin Small-Mid Cap Growth Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP3   691.203   $ 8.27   $ 5,716
ING MAP PLUS NP4   15,083.434   8.25   124,438
ING MAP PLUS NP8   73.812   8.17   603
ING MAP PLUS NP14   545.764   8.05   4,393
ING MAP PLUS NP15   4,996.638   8.03   40,123
ING MAP PLUS NP17   865.454   7.99   6,915
ING MAP PLUS NP18   4,161.861   7.97   33,170
ING MAP PLUS NP19   4.239   7.95   34
ING MAP PLUS NP20   221.518   7.93   1,757
ING MAP PLUS NP21   8,664.930   7.91   68,540
ING MAP PLUS NP22   4,030.776   7.89   31,803
ING MAP PLUS NP23   3,809.431   7.88   30,018
ING MAP PLUS NP25   651.247   7.84   5,106
ING MAP PLUS NP26   3,146.134   7.82   24,603
ING MAP PLUS NP27   1,839.304   7.80   14,347
ING MAP PLUS NP28   506.544   7.78   3,941
ING MAP PLUS NP30   97.827   7.74   757
ING MAP PLUS NP32   20.123   7.70   155
    49,410.239       $ 396,419
Franklin Small Cap Value Securities Fund - Class 2            
Currently payable annuity contracts:   94,188.916   $ 10.27   $ 967,320
Contracts in accumulation period:            
ING Custom Choice 62   820.311   9.80   8,039
ING MAP PLUS NP1   699.023   10.13   7,081
ING MAP PLUS NP4   14,092.661   10.06   141,772
ING MAP PLUS NP6   133.293   10.01   1,334
ING MAP PLUS NP8   32,115.237   9.96   319,868
ING MAP PLUS NP9   2,142.448   9.93   21,275
ING MAP PLUS NP10   47.530   9.91   471
ING MAP PLUS NP11   4,391.492   9.89   43,432
ING MAP PLUS NP12   6,073.508   9.86   59,885
ING MAP PLUS NP13   2,596.063   9.84   25,545
ING MAP PLUS NP14   8,894.142   9.81   87,252
ING MAP PLUS NP15   15,805.168   9.79   154,733
ING MAP PLUS NP16   8,951.490   9.76   87,367
ING MAP PLUS NP17   135.771   9.74   1,322
ING MAP PLUS NP18   1,345.541   9.72   13,079
ING MAP PLUS NP19   567.492   9.69   5,499
ING MAP PLUS NP20   19,120.572   9.67   184,896
ING MAP PLUS NP21   4,104.495   9.65   39,608
ING MAP PLUS NP22   4,006.394   9.62   38,542
ING MAP PLUS NP23   3,547.739   9.60   34,058
ING MAP PLUS NP24   796.556   9.57   7,623
ING MAP PLUS NP26   571.226   9.53   5,444
ING MAP PLUS NP28   1,304.019   9.48   12,362
ING MAP PLUS NP29   439.723   9.46   4,160
 
 
 
229            

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

Division/Contract   Units   Unit Value   Extended Value
Franklin Small Cap Value Securities Fund - Class 2            
(continued)            
ING MAP PLUS NP32   307.023   $ 9.39   $ 2,883
ING MAP PLUS NP35   1,176.680   9.32   10,967
Qualified V   358.983   11.50   4,128
Qualified VI   1,140,863.635   11.64   13,279,653
Qualified X (1.15)   50,835.870   11.73   596,305
Qualified X (1.25)   112,832.299   11.64   1,313,368
Qualified XII (0.00)   1,668.163   12.78   21,319
Qualified XII (0.05)   28,051.487   12.56   352,327
Qualified XII (0.10)   194.188   12.68   2,462
Qualified XII (0.20)   37.403   12.59   471
Qualified XII (0.25)   26.275   12.54   329
Qualified XII (0.30)   159,549.581   12.49   1,992,774
Qualified XII (0.35)   1,088.619   12.45   13,553
Qualified XII (0.40)   27,273.969   12.40   338,197
Qualified XII (0.50)   808,892.708   12.31   9,957,469
Qualified XII (0.55)   32,065.667   12.26   393,125
Qualified XII (0.60)   39,969.791   12.22   488,431
Qualified XII (0.65)   170,768.688   12.17   2,078,255
Qualified XII (0.70)   54,528.954   12.13   661,436
Qualified XII (0.75)   164,813.331   12.08   1,990,945
Qualified XII (0.80)   34,402.786   12.04   414,210
Qualified XII (0.85)   176,258.250   11.99   2,113,336
Qualified XII (0.90)   17,372.552   11.95   207,602
Qualified XII (0.95)   156,837.300   11.90   1,866,364
Qualified XII (1.00)   708,475.746   11.86   8,402,522
Qualified XII (1.05)   27,826.631   11.81   328,633
Qualified XII (1.10)   18,329.424   11.77   215,737
Qualified XII (1.15)   49,190.118   11.73   577,000
Qualified XII (1.20)   16,535.306   11.68   193,132
Qualified XII (1.25)   60,560.456   11.64   704,924
Qualified XII (1.30)   1,662.668   11.60   19,287
Qualified XII (1.35)   504.685   11.55   5,829
Qualified XII (1.40)   3,418.719   11.51   39,349
Qualified XII (1.45)   2,466.582   11.47   28,292
Qualified XII (1.50)   768.439   11.43   8,783
Qualified XIII   17.298   11.90   206
Qualified XV   4,629.338   11.90   55,089
Qualified XVI   23,020.486   11.43   263,124
Qualified XVII   2,177.545   11.64   25,347
Qualified XVIII   3,916.662   11.64   45,590
Qualified XXI   28,953.401   12.04   348,599
Qualified XXV   19,476.614   12.08   235,278
Qualified XXVI   4,239.626   11.95   50,664
Qualified XXVII   379,036.640   13.05   4,946,428
Qualified XXVIII   502,921.711   11.16   5,612,606
Qualified XXXII   1,838.628   10.01   18,405
Qualified XXXIII (0.65)   42,901.993   12.23   524,691
 
 
 
                                                                                                           230            

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

Division/Contract   Units   Unit Value   Extended Value
Franklin Small Cap Value Securities Fund - Class 2            
(continued)            
Qualified XXXVIII   5,531.450   $ 6.35   $ 35,125
Qualified XLIII   1,766.303   6.33   11,181
Qualified LIII   20,874.353   8.53   178,058
Qualified LIV   19,671.748   8.48   166,816
Qualified LVI   5,936.630   8.57   50,877
Qualified LIX   764.629   12.44   9,512
    5,364,478.841       $ 63,472,960
Fundamental Investors, Inc. - Class R-3            
Contracts in accumulation period:            
ING MAP PLUS NP9   1,879.167   $ 6.12   $ 11,501
ING MAP PLUS NP28   308.500   6.08   1,876
    2,187.667       $ 13,377
Fundamental Investors, Inc. - Class R-4            
Contracts in accumulation period:            
ING Custom Choice 62   158.413   $ 6.10   $ 966
Qualified VI   325,547.248   6.10   1,985,838
Qualified XII (0.30)   549.308   6.14   3,373
Qualified XII (0.40)   3,433.176   6.13   21,045
Qualified XII (0.50)   4,779.263   6.13   29,297
Qualified XII (0.55)   69.943   6.13   429
Qualified XII (0.60)   3,604.856   6.12   22,062
Qualified XII (0.65)   210.270   6.12   1,287
Qualified XII (0.70)   10,065.366   6.12   61,600
Qualified XII (0.75)   82,594.533   6.12   505,479
Qualified XII (0.80)   64,420.149   6.12   394,251
Qualified XII (0.85)   57,981.758   6.11   354,269
Qualified XII (0.90)   8,431.272   6.11   51,515
Qualified XII (0.95)   49,533.326   6.11   302,649
Qualified XII (1.00)   172,816.257   6.11   1,055,907
Qualified XII (1.05)   2,982.196   6.11   18,221
Qualified XII (1.10)   1,659.862   6.10   10,125
Qualified XII (1.15)   8,490.021   6.10   51,789
Qualified XII (1.20)   255.518   6.10   1,559
Qualified XII (1.25)   4,596.087   6.10   28,036
Qualified XII (1.35)   1.100   6.09   7
Qualified XII (1.40)   17.734   6.09   108
Qualified XVI   4,245.589   6.09   25,856
Qualified XXI   532,614.729   6.12   3,259,602
Qualified XXV   87.675   6.12   537
Qualified XXXVIII   1,185.141   6.15   7,289
Qualified LIII   956.631   6.13   5,864
Qualified LIV   13,283.786   6.12   81,297
    1,354,571.207       $ 8,280,257
 
 
 
 
                                                     231            

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

Division/Contract       Units   Unit Value   Extended Value
The Growth Fund of America® - Class R-3                
Contracts in accumulation period:                
ING MAP PLUS NP1       42,844.858   $ 9.22   $ 395,030
ING MAP PLUS NP4       23,734.745   9.15   217,173
ING MAP PLUS NP6       39,505.582   9.10   359,501
ING MAP PLUS NP8       46,398.700   9.06   420,372
ING MAP PLUS NP9       108,074.790   9.04   976,996
ING MAP PLUS NP10       908.405   9.01   8,185
ING MAP PLUS NP11       82,512.505   8.99   741,787
ING MAP PLUS NP12       39,595.900   8.97   355,175
ING MAP PLUS NP13       13,745.596   8.95   123,023
ING MAP PLUS NP14       97,589.865   8.93   871,477
ING MAP PLUS NP15       88,105.409   8.90   784,138
ING MAP PLUS NP16       45,109.218   8.88   400,570
ING MAP PLUS NP17       38,239.605   8.86   338,803
ING MAP PLUS NP18       58,739.810   8.84   519,260
ING MAP PLUS NP19       55,641.443   8.82   490,758
ING MAP PLUS NP20       89,476.585   8.80   787,394
ING MAP PLUS NP21       38,413.872   8.77   336,890
ING MAP PLUS NP22       22,145.726   8.75   193,775
ING MAP PLUS NP23       56,800.047   8.73   495,864
ING MAP PLUS NP24       4,175.116   8.71   36,365
ING MAP PLUS NP25       2,227.083   8.69   19,353
ING MAP PLUS NP26       6,191.779   8.67   53,683
ING MAP PLUS NP27       329.194   8.65   2,848
ING MAP PLUS NP28       27,134.526   8.62   233,900
ING MAP PLUS NP29       4,708.145   8.60   40,490
ING MAP PLUS NP30       2,966.152   8.58   25,450
ING MAP PLUS NP32       1,486.674   8.54   12,696
ING MAP PLUS NP35       645.397   8.48   5,473
ING MAP PLUS NP36       12.967   8.46   110
Qualified XII (1.00)       44,257.219   7.03   311,128
        1,081,716.913       $ 9,557,667
The Growth Fund of America® - Class R-4                
Contracts in accumulation period:                
ING Custom Choice 62       10,181.736   $ 9.05   $ 92,145
Qualified V       5,570.627   8.74   48,687
Qualified VI       4,851,610.259   8.81   42,742,686
Qualified XII (0.00)       18,492.938   9.34   172,724
Qualified XII (0.10)       390.032   9.29   3,623
Qualified XII (0.25)       1,011.069   9.23   9,332
Qualified XII (0.30)       250,524.812   9.21   2,307,334
Qualified XII (0.35)       1,335.892   9.18   12,263
Qualified XII (0.40)       80,865.210   9.16   740,725
Qualified XII (0.50)       2,946,764.720   9.12   26,874,494
Qualified XII (0.55)       273,606.430   9.10   2,489,819
Qualified XII (0.60)       100,070.721   9.08   908,642
Qualified XII (0.65)       119,542.118   9.06   1,083,052
 
 
 
    232            

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

Division/Contract   Units   Unit Value   Extended Value
The Growth Fund of America® - Class R-4 (continued)            
Qualified XII (0.70)   419,556.434   $ 9.03   $ 3,788,595
Qualified XII (0.75)   1,259,860.736   9.01   11,351,345
Qualified XII (0.80)   1,711,635.976   8.99   15,387,607
Qualified XII (0.85)   688,354.509   8.97   6,174,540
Qualified XII (0.90)   125,481.620   8.95   1,123,061
Qualified XII (0.95)   685,932.548   8.93   6,125,378
Qualified XII (1.00)   3,497,301.062   8.91   31,160,952
Qualified XII (1.05)   125,546.156   8.89   1,116,105
Qualified XII (1.10)   101,535.460   8.87   900,620
Qualified XII (1.15)   238,743.087   8.85   2,112,876
Qualified XII (1.20)   17,587.934   8.83   155,301
Qualified XII (1.25)   260,809.078   8.81   2,297,728
Qualified XII (1.30)   3,386.288   8.78   29,732
Qualified XII (1.35)   1,028.877   8.76   9,013
Qualified XII (1.40)   29,373.937   8.74   256,728
Qualified XII (1.45)   8,273.489   8.72   72,145
Qualified XII (1.50)   648.530   8.70   5,642
Qualified XIII   1,048.774   8.93   9,366
Qualified XV   23,952.396   8.93   213,895
Qualified XVI   75,408.563   8.70   656,055
Qualified XVII   27,173.081   8.87   241,025
Qualified XXI   162,147.447   8.99   1,457,706
Qualified XXV   44,260.983   9.03   399,677
Qualified XXVI   2,714.211   8.97   24,346
Qualified XXVII   1,992,111.192   8.54   17,012,630
Qualified XXXIII (0.65)   6,653.054   9.30   61,873
Qualified XXXVIII   48,284.823   5.92   285,846
Qualified XLIII   21,785.841   5.91   128,754
Qualified LIII   26,988.425   8.81   237,768
Qualified LIV   86,310.757   8.76   756,082
Qualified LVI   8,715.983   8.85   77,136
Qualified LIX   519.692   9.19   4,776
    20,363,097.507       $ 181,119,829
 
 
 
 
                                                         233            

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

Division/Contract       Units   Unit Value   Extended Value
The Income Fund of America® - Class R-3                
Contracts in accumulation period:                
ING MAP PLUS NP1       3,974.672   $ 10.05   $ 39,945
ING MAP PLUS NP6       4,764.181   9.93   47,308
ING MAP PLUS NP8       2,079.539   9.88   20,546
ING MAP PLUS NP9       3,599.993   9.85   35,460
ING MAP PLUS NP10       5,979.599   9.83   58,779
ING MAP PLUS NP11       26,877.753   9.80   263,402
ING MAP PLUS NP12       13,920.849   9.78   136,146
ING MAP PLUS NP13       2,499.308   9.76   24,393
ING MAP PLUS NP14       2,922.020   9.73   28,431
ING MAP PLUS NP15       26,112.424   9.71   253,552
ING MAP PLUS NP16       4,265.015   9.69   41,328
ING MAP PLUS NP17       5,660.503   9.66   54,680
ING MAP PLUS NP18       126.567   9.64   1,220
ING MAP PLUS NP19       6,827.693   9.61   65,614
ING MAP PLUS NP20       7,780.883   9.59   74,619
ING MAP PLUS NP21       11,934.867   9.57   114,217
ING MAP PLUS NP22       1,742.530   9.54   16,624
ING MAP PLUS NP23       6,607.342   9.52   62,902
ING MAP PLUS NP24       510.125   9.50   4,846
ING MAP PLUS NP25       4,213.603   9.47   39,903
ING MAP PLUS NP26       10,911.689   9.45   103,115
ING MAP PLUS NP27       261.801   9.43   2,469
ING MAP PLUS NP28       1,157.149   9.40   10,877
ING MAP PLUS NP29       207.472   9.38   1,946
ING MAP PLUS NP30       1,091.031   9.36   10,212
ING MAP PLUS NP32       636.614   9.31   5,927
ING MAP PLUS NP35       1,760.251   9.24   16,265
ING MAP PLUS NP36       12.162   9.22   112
        158,437.635       $ 1,534,838
ING Financial Services Fund - Class A                
Contracts in accumulation period:                
ING MAP PLUS NP9       7,067.241   $ 6.86   $ 48,481
ING MAP PLUS NP15       346.166   6.76   2,340
ING MAP PLUS NP17       1,036.431   6.73   6,975
ING MAP PLUS NP23       637.293   6.63   4,225
ING MAP PLUS NP25       31.317   6.60   207
ING MAP PLUS NP26       4,326.137   6.58   28,466
ING MAP PLUS NP28       57.369   6.55   376
ING MAP PLUS NP29       978.499   6.53   6,390
ING MAP PLUS NP30       486.281   6.52   3,171
        14,966.734       $ 100,631
 
 
 
 
    234            

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

Division/Contract       Units   Unit Value   Extended Value
ING Real Estate Fund - Class A                
Contracts in accumulation period:                
ING MAP PLUS NP1       12,788.413   $ 10.59   $ 135,429
ING MAP PLUS NP3       249.928   10.54   2,634
ING MAP PLUS NP4       6,040.132   10.51   63,482
ING MAP PLUS NP6       6,392.958   10.46   66,870
ING MAP PLUS NP9       14,758.199   10.38   153,190
ING MAP PLUS NP11       871.834   10.33   9,006
ING MAP PLUS NP12       7,161.539   10.31   73,835
ING MAP PLUS NP13       67.407   10.28   693
ING MAP PLUS NP14       3,463.701   10.26   35,538
ING MAP PLUS NP15       6,290.450   10.23   64,351
ING MAP PLUS NP16       2,221.223   10.21   22,679
ING MAP PLUS NP17       2,500.289   10.18   25,453
ING MAP PLUS NP18       12,248.318   10.16   124,443
ING MAP PLUS NP19       6,192.250   10.13   62,727
ING MAP PLUS NP20       31,333.333   10.11   316,780
ING MAP PLUS NP21       4,032.030   10.08   40,643
ING MAP PLUS NP23       4,624.883   10.03   46,388
ING MAP PLUS NP24       74.649   10.01   747
ING MAP PLUS NP25       2,590.987   9.98   25,858
ING MAP PLUS NP26       721.928   9.96   7,190
ING MAP PLUS NP27       1,244.801   9.93   12,361
ING MAP PLUS NP28       3,492.502   9.91   34,611
ING MAP PLUS NP29       3,066.902   9.89   30,332
ING MAP PLUS NP30       128.541   9.86   1,267
        132,557.197       $ 1,356,507
ING GNMA Income Fund - Class A                
Contracts in accumulation period:                
ING MAP PLUS NP1       6,064.597   $ 12.37   $ 75,019
ING MAP PLUS NP6       13,074.020   12.21   159,634
ING MAP PLUS NP8       1,214.797   12.16   14,772
ING MAP PLUS NP9       5,788.904   12.13   70,219
ING MAP PLUS NP11       13,956.722   12.07   168,458
ING MAP PLUS NP12       337.032   12.04   4,058
ING MAP PLUS NP13       14.614   12.01   176
ING MAP PLUS NP14       24,276.320   11.98   290,830
ING MAP PLUS NP15       82,302.147   11.95   983,511
ING MAP PLUS NP17       20,379.383   11.89   242,311
ING MAP PLUS NP18       9,000.598   11.86   106,747
ING MAP PLUS NP19       6,533.993   11.83   77,297
ING MAP PLUS NP20       16,212.925   11.80   191,313
ING MAP PLUS NP21       4,507.557   11.77   53,054
ING MAP PLUS NP23       2,605.514   11.72   30,537
ING MAP PLUS NP24       581.197   11.69   6,794
ING MAP PLUS NP26       2,671.628   11.63   31,071
ING MAP PLUS NP28       15,587.275   11.57   180,345
ING MAP PLUS NP29       2,293.923   11.54   26,472
ING MAP PLUS NP30       873.536   11.52   10,063
ING MAP PLUS NP32       333.243   11.46   3,819
Qualified XII (1.00)       9,351.268   11.56   108,101
        237,961.193       $ 2,834,601
 
 
    235            

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

Division/Contract   Units   Unit Value   Extended Value
ING Intermediate Bond Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP1   26,542.872   $ 10.48   $ 278,169
ING MAP PLUS NP8   77,248.137   10.31   796,428
ING MAP PLUS NP9   17,555.569   10.28   180,471
ING MAP PLUS NP10   26,138.716   10.26   268,183
ING MAP PLUS NP11   30,601.044   10.23   313,049
ING MAP PLUS NP14   26,991.642   10.15   273,965
ING MAP PLUS NP15   5,022.281   10.13   50,876
ING MAP PLUS NP16   5,071.641   10.11   51,274
ING MAP PLUS NP17   14,087.682   10.08   142,004
ING MAP PLUS NP18   3,452.052   10.06   34,728
ING MAP PLUS NP19   20,774.385   10.03   208,367
ING MAP PLUS NP20   24,948.543   10.01   249,735
ING MAP PLUS NP21   305.002   9.98   3,044
ING MAP PLUS NP22   11,297.885   9.96   112,527
ING MAP PLUS NP23   22,686.428   9.93   225,276
ING MAP PLUS NP24   4,488.639   9.91   44,482
ING MAP PLUS NP25   490.790   9.88   4,849
ING MAP PLUS NP26   16,143.963   9.86   159,179
ING MAP PLUS NP28   6,109.114   9.81   59,930
ING MAP PLUS NP29   1,810.924   9.79   17,729
ING MAP PLUS NP32   651.169   9.72   6,329
    342,418.478       $ 3,480,594
ING AllianceBernstein Mid Cap Growth Portfolio -            
Service Class            
Contracts in accumulation period:            
Qualified VI   105,152.887   $ 7.26   $ 763,410
Qualified XII (0.00)   111.433   7.60   847
Qualified XII (0.30)   900.053   7.52   6,768
Qualified XII (0.40)   2,856.454   7.49   21,395
Qualified XII (0.50)   43,448.886   7.46   324,129
Qualified XII (0.55)   1,450.086   7.45   10,803
Qualified XII (0.60)   2,425.106   7.44   18,043
Qualified XII (0.65)   1,439.713   7.42   10,683
Qualified XII (0.70)   6,805.668   7.41   50,430
Qualified XII (0.75)   13,378.012   7.40   98,997
Qualified XII (0.80)   3,126.806   7.38   23,076
Qualified XII (0.85)   11,036.231   7.37   81,337
Qualified XII (0.90)   1,606.757   7.36   11,826
Qualified XII (0.95)   16,841.339   7.34   123,615
Qualified XII (1.00)   34,788.292   7.33   254,998
Qualified XII (1.05)   176.862   7.31   1,293
Qualified XII (1.10)   933.092   7.30   6,812
Qualified XII (1.15)   7,838.502   7.29   57,143
Qualified XII (1.20)   1,426.732   7.27   10,372
Qualified XII (1.25)   7,018.904   7.26   50,957
Qualified XII (1.30)   83.865   7.25   608
Qualified XII (1.40)   1,090.230   7.22   7,871
 
 
 
                                                      236            

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

Division/Contract   Units   Unit Value   Extended Value
ING AllianceBernstein Mid Cap Growth Portfolio -            
   Service Class (continued)            
Qualified XII (1.45)   51.011   $ 7.21   $ 368
Qualified XII (1.50)   496.656   7.19   3,571
Qualified XXXVIII   466.731   4.99   2,329
Qualified XVI   1,066.755   7.19   7,670
Qualified XVII   4,245.667   7.26   30,824
Qualified XXV   46.674   7.40   345
Qualified XLIII   40.382   4.97   201
Qualified LIII   5,696.217   7.52   42,836
Qualified LIV   1,225.774   7.47   9,157
Qualified LVI   37.464   7.55   283
    277,309.241       $ 2,032,997
ING BlackRock Large Cap Growth Portfolio -            
   Institutional Class            
Currently payable annuity contracts:   31,916.330   $5.87 to $5.93   $ 188,508
Contracts in accumulation period:            
Qualified V   1,595.238   6.25   9,970
Qualified VI   3,634,764.737   6.27   22,789,975
Qualified VIII   1,498.917   6.27   9,398
Qualified X (1.15)   161,950.594   6.28   1,017,050
Qualified X (1.25)   249,176.818   6.27   1,562,339
Qualified XII (0.00)   14,085.278   6.43   90,568
Qualified XII (0.05)   23,736.022   6.42   152,385
Qualified XII (0.10)   82.732   6.42   531
Qualified XII (0.25)   6,085.625   6.40   38,948
Qualified XII (0.30)   56,575.332   6.39   361,516
Qualified XII (0.35)   14,704.854   6.39   93,964
Qualified XII (0.40)   83,057.108   6.38   529,904
Qualified XII (0.45)   1,200.003   6.38   7,656
Qualified XII (0.50)   173,932.254   6.37   1,107,948
Qualified XII (0.55)   74,987.819   6.36   476,923
Qualified XII (0.60)   61,775.371   6.36   392,891
Qualified XII (0.65)   156,092.387   6.35   991,187
Qualified XII (0.70)   193,916.195   6.35   1,231,368
Qualified XII (0.75)   283,823.839   6.34   1,799,443
Qualified XII (0.80)   299,398.483   6.33   1,895,192
Qualified XII (0.85)   390,962.428   6.33   2,474,792
Qualified XII (0.90)   36,238.549   6.32   229,028
Qualified XII (0.95)   326,604.087   6.32   2,064,138
Qualified XII (1.00)   917,951.166   6.31   5,792,272
Qualified XII (1.05)   114,357.035   6.31   721,593
Qualified XII (1.10)   119,373.776   6.30   752,055
Qualified XII (1.15)   59,675.200   6.29   375,357
Qualified XII (1.20)   19,286.566   6.29   121,313
Qualified XII (1.25)   77,451.605   6.28   486,396
Qualified XII (1.30)   15,644.231   6.28   98,246
Qualified XII (1.35)   3,650.837   6.27   22,891
Qualified XII (1.40)   19,269.241   6.26   120,625
Qualified XII (1.45)   3,411.276   6.26   21,355
 
 
                                                    237            

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

Division/Contract   Units   Unit Value   Extended Value
ING BlackRock Large Cap Growth Portfolio -            
   Institutional Class (continued)            
Qualified XII (1.50)   2,741.586   $ 6.25   $ 17,135
Qualified XV   28,318.198   6.31   178,688
Qualified XVI   97,996.641   6.24   611,499
Qualified XVII   2,582.182   6.28   16,216
Qualified XVIII   18,918.803   6.30   119,188
Qualified XXV   42,858.409   6.33   271,294
Qualified XXVI   24,878.802   6.31   156,985
Qualified XXVII   1,802,753.979   6.30   11,357,350
Qualified XXVIII   199,596.302   6.30   1,257,457
Qualified XXXII   16,968.856   6.27   106,395
Qualified XXII   494.975   6.36   3,148
Qualified XXXVI   15,872.715   6.35   100,792
Qualified XXXVIII   33,919.334   5.93   201,142
Qualified XLIII   8,118.676   5.92   48,063
Qualified LIII   50,188.994   6.36   319,202
Qualified LIV   18,763.326   6.32   118,584
Qualified LVI   51,399.727   6.40   328,958
Qualified LIX   9,968.281   6.36   63,398
    10,054,571.719       $ 63,303,219
ING BlackRock Large Cap Growth Portfolio - Service            
   Class            
Contracts in accumulation period:            
Qualified XII (0.00)   178.228   $ 7.41   $ 1,321
Qualified XII (0.50)   11,603.505   7.33   85,054
    11,781.733       $ 86,375
ING BlackRock Large Cap Growth Portfolio - Service 2            
   Class            
Contracts in accumulation period:            
Qualified XXXV   12,454.561   $ 6.33   $ 78,837
 
ING Evergreen Health Sciences Portfolio - Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   334.861   $ 9.52   $ 3,188
ING MAP PLUS NP9   667.787   9.78   6,531
ING MAP PLUS NP11   274.572   9.75   2,677
ING MAP PLUS NP12   14,532.514   9.73   141,401
ING MAP PLUS NP14   3,909.308   9.69   37,881
ING MAP PLUS NP17   219.669   9.64   2,118
ING MAP PLUS NP18   12.564   9.62   121
ING MAP PLUS NP23   2,654.717   9.53   25,299
ING MAP PLUS NP24   2,603.160   9.52   24,782
ING MAP PLUS NP25   362.861   9.50   3,447
ING MAP PLUS NP26   2,128.790   9.48   20,181
ING MAP PLUS NP28   457.983   9.45   4,328
Qualified VI   229,746.901   9.52   2,187,191
Qualified XII (0.00)   1,467.565   9.97   14,632
Qualified XII (0.25)   3,896.092   9.87   38,454
Qualified XII (0.30)   116,460.622   9.86   1,148,302
 
 
                                                          238            

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

Division/Contract   Units   Unit Value   Extended Value
ING Evergreen Health Sciences Portfolio - Service            
   Class (continued)            
Qualified XII (0.40)   16,026.716   $ 9.82   $ 157,382
Qualified XII (0.50)   19,677.235   9.78   192,443
Qualified XII (0.55)   4,760.371   9.77   46,509
Qualified XII (0.60)   2,249.808   9.75   21,936
Qualified XII (0.65)   2,676.170   9.73   26,039
Qualified XII (0.70)   10,862.506   9.71   105,475
Qualified XII (0.75)   34,263.820   9.69   332,016
Qualified XII (0.80)   24,694.435   9.68   239,042
Qualified XII (0.85)   24,330.384   9.66   235,032
Qualified XII (0.90)   4,094.250   9.64   39,469
Qualified XII (0.95)   24,789.928   9.62   238,479
Qualified XII (1.00)   118,802.070   9.61   1,141,688
Qualified XII (1.05)   4,620.685   9.59   44,312
Qualified XII (1.10)   6,500.864   9.57   62,213
Qualified XII (1.15)   6,546.681   9.55   62,521
Qualified XII (1.20)   1,637.273   9.53   15,603
Qualified XII (1.25)   15,474.970   9.52   147,322
Qualified XII (1.30)   101.277   9.50   962
Qualified XII (1.35)   13.017   9.48   123
Qualified XII (1.40)   1,074.180   9.46   10,162
Qualified XII (1.45)   20.931   9.45   198
Qualified XII (1.50)   5.239   9.43   49
Qualified XV   1,486.782   9.62   14,303
Qualified XVI   5,652.869   9.43   53,307
Qualified XXI   11,913.946   9.68   115,327
Qualified XXV   1,676.079   9.69   16,241
Qualified XXVI   19.425   9.64   187
Qualified XXXVIII   12,460.272   7.09   88,343
Qualified XLIII   27.982   7.07   198
Qualified LIII   9,550.670   9.85   94,074
Qualified LIV   1,410.481   9.79   13,809
Qualified LVI   1,263.519   9.90   12,509
Qualified LIX   1,059.813   9.80   10,386
    749,474.614       $ 7,198,192
ING Evergreen Omega Portfolio - Service Class            
Contracts in accumulation period:            
Qualified XII (0.00)   113.732   $ 9.40   $ 1,069
Qualified XII (0.50)   3,677.588   9.28   34,128
    3,791.320       $ 35,197
 
 
 
 
239            

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

Division/Contract   Units   Unit Value   Extended Value
ING FMRSM Diversified Mid Cap Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING Custom Choice 62   653.188   $ 8.88   $ 5,800
ING MAP PLUS NP1   42,888.759   9.27   397,579
ING MAP PLUS NP6   25,078.048   9.18   230,216
ING MAP PLUS NP8   19,201.931   9.15   175,698
ING MAP PLUS NP9   26,965.059   9.13   246,191
ING MAP PLUS NP10   10,446.296   9.11   95,166
ING MAP PLUS NP11   10,060.341   9.10   91,549
ING MAP PLUS NP12   12,976.711   9.08   117,829
ING MAP PLUS NP13   1,885.056   9.06   17,079
ING MAP PLUS NP14   23,188.291   9.05   209,854
ING MAP PLUS NP15   36,405.591   9.03   328,742
ING MAP PLUS NP16   4,732.404   9.01   42,639
ING MAP PLUS NP17   5,250.019   9.00   47,250
ING MAP PLUS NP18   3,196.520   8.98   28,705
ING MAP PLUS NP19   3,607.651   8.96   32,325
ING MAP PLUS NP20   290.545   8.95   2,600
ING MAP PLUS NP21   4,131.186   8.93   36,891
ING MAP PLUS NP22   3,348.282   8.91   29,833
ING MAP PLUS NP23   7,301.311   8.90   64,982
ING MAP PLUS NP24   853.572   8.88   7,580
ING MAP PLUS NP25   662.326   8.87   5,875
ING MAP PLUS NP26   3,768.227   8.85   33,349
ING MAP PLUS NP27   291.638   8.83   2,575
ING MAP PLUS NP28   1,663.257   8.82   14,670
ING MAP PLUS NP29   1,813.275   8.80   15,957
ING MAP PLUS NP30   649.681   8.78   5,704
Qualified VI   584,794.351   8.88   5,192,974
Qualified XII (0.00)   835.898   9.30   7,774
Qualified XII (0.10)   25.527   9.26   236
Qualified XII (0.25)   91.446   9.21   842
Qualified XII (0.30)   7,925.938   9.20   72,919
Qualified XII (0.40)   5,152.141   9.16   47,194
Qualified XII (0.50)   295,965.094   9.13   2,702,161
Qualified XII (0.55)   4,420.620   9.11   40,272
Qualified XII (0.60)   4,463.606   9.09   40,574
Qualified XII (0.65)   24,262.883   9.08   220,307
Qualified XII (0.70)   23,761.085   9.06   215,275
Qualified XII (0.75)   103,266.133   9.04   933,526
Qualified XII (0.80)   25,427.258   9.03   229,608
Qualified XII (0.85)   73,161.075   9.01   659,181
Qualified XII (0.90)   4,810.279   8.99   43,244
Qualified XII (0.95)   56,933.893   8.98   511,266
Qualified XII (1.00)   569,770.746   8.96   5,105,146
Qualified XII (1.05)   5,658.408   8.94   50,586
Qualified XII (1.10)   12,894.673   8.93   115,149
Qualified XII (1.15)   20,335.789   8.91   181,192
 
 
 
240            

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

Division/Contract   Units   Unit Value   Extended Value
ING FMRSM Diversified Mid Cap Portfolio - Service            
Class (continued)            
Qualified XII (1.20)   2,844.725   $ 8.90   $ 25,318
Qualified XII (1.25)   26,068.816   8.88   231,491
Qualified XII (1.30)   728.847   8.86   6,458
Qualified XII (1.35)   1,097.225   8.85   9,710
Qualified XII (1.40)   529.898   8.83   4,679
Qualified XII (1.45)   17.355   8.81   153
Qualified XII (1.50)   38.078   8.80   335
Qualified XV   672.418   8.98   6,038
Qualified XVI   12,793.506   8.80   112,583
Qualified XXI   226,366.467   9.03   2,044,089
Qualified XXV   801.003   9.04   7,241
Qualified XXVI   914.056   8.99   8,217
Qualified XXXVIII   252.205   5.94   1,498
Qualified XLIII   299.579   5.92   1,774
Qualified LIII   565.802   9.19   5,200
Qualified LIV   33,277.705   9.13   303,825
Qualified LVI   981.127   9.24   9,066
Qualified LIX   343.331   9.15   3,141
    2,383,858.151       $ 21,436,880
ING Global Real Estate Portfolio - Institutional Class            
Contracts in accumulation period:            
ING Custom Choice 62   508.203   $ 6.70   $ 3,405
Qualified V   210.649   6.70   1,411
Qualified VI   1,311,568.599   6.70   8,787,510
Qualified X (1.15)   26,156.058   6.71   175,507
Qualified X (1.25)   95,555.104   6.71   641,175
Qualified XII (0.00)   1,808.648   6.73   12,172
Qualified XII (0.10)   20.817   6.73   140
Qualified XII (0.25)   355.735   6.72   2,391
Qualified XII (0.30)   76,690.027   6.72   515,357
Qualified XII (0.40)   101,466.670   6.72   681,856
Qualified XII (0.50)   628,608.869   6.72   4,224,252
Qualified XII (0.55)   43,651.195   6.72   293,336
Qualified XII (0.60)   17,016.875   6.72   114,353
Qualified XII (0.65)   10,411.835   6.71   69,863
Qualified XII (0.70)   44,812.584   6.71   300,692
Qualified XII (0.75)   233,095.246   6.71   1,564,069
Qualified XII (0.80)   233,966.435   6.71   1,569,915
Qualified XII (0.85)   213,771.911   6.71   1,434,410
Qualified XII (0.90)   25,364.116   6.71   170,193
Qualified XII (0.95)   135,152.726   6.71   906,875
Qualified XII (1.00)   874,547.876   6.71   5,868,216
Qualified XII (1.05)   25,586.913   6.70   171,432
Qualified XII (1.10)   22,327.631   6.70   149,595
Qualified XII (1.15)   54,036.725   6.70   362,046
Qualified XII (1.20)   5,877.863   6.70   39,382
Qualified XII (1.25)   41,246.472   6.70   276,351
 
 
 
                                                      241            

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

Division/Contract   Units   Unit Value   Extended Value
ING Global Real Estate Portfolio - Institutional Class            
(continued)            
Qualified XII (1.35)   169.052   $ 6.70   $ 1,133
Qualified XII (1.40)   6,334.418   6.70   42,441
Qualified XII (1.45)   892.698   6.69   5,972
Qualified XII (1.50)   5.803   6.69   39
Qualified XV   2,071.405   6.71   13,899
Qualified XVI   15,004.620   6.69   100,381
Qualified XVII   1,552.354   6.70   10,401
Qualified XVIII   3,637.967   6.73   24,484
Qualified XXI   5,060.598   6.71   33,957
Qualified XXV   4,208.603   6.72   28,282
Qualified XXVI   3,086.213   6.71   20,708
Qualified XXVII   914,997.197   6.71   6,139,631
Qualified XXVIII   160,935.838   6.71   1,079,879
Qualified XXXII   2,320.462   6.71   15,570
Qualified XXXVIII   2,085.884   6.73   14,038
Qualified XLIII   246.258   6.71   1,652
Qualified LIII   4,296.475   6.72   28,872
Qualified LIV   6,978.881   6.71   46,828
Qualified LVI   3,089.082   6.72   20,759
Qualified LIX   304.301   6.72   2,045
    5,361,093.891       $ 35,966,875
ING Global Resources Portfolio - Institutional Class            
Contracts in accumulation period:            
Qualified XII (0.20)   3,051.029   $ 8.22   $ 25,079
 
ING Global Resources Portfolio - Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   14,453.830   $ 7.84   $ 113,318
Qualified V   41.519   7.82   325
Qualified VI   2,762,519.239   7.84   21,658,151
Qualified VIII   784.042   7.84   6,147
Qualified XII (0.00)   10,361.813   8.06   83,516
Qualified XII (0.05)   75,851.517   8.05   610,605
Qualified XII (0.10)   40.840   8.04   328
Qualified XII (0.25)   8,797.803   8.01   70,470
Qualified XII (0.30)   81,646.674   8.00   653,173
Qualified XII (0.35)   3,380.586   8.00   27,045
Qualified XII (0.40)   174,590.706   7.99   1,394,980
Qualified XII (0.45)   209.677   7.98   1,673
Qualified XII (0.50)   91,789.390   7.97   731,561
Qualified XII (0.55)   68,665.363   7.96   546,576
Qualified XII (0.60)   60,758.615   7.95   483,031
Qualified XII (0.65)   143,706.021   7.94   1,141,026
Qualified XII (0.70)   111,387.829   7.94   884,419
Qualified XII (0.75)   337,276.641   7.93   2,674,604
Qualified XII (0.80)   405,271.293   7.92   3,209,749
Qualified XII (0.85)   305,370.126   7.91   2,415,478
 
 
 
242            

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

Division/Contract       Units   Unit Value   Extended Value
ING Global Resources Portfolio - Service Class                
(continued)                
Qualified XII (0.90)       63,283.349   $ 7.90   $ 499,938
Qualified XII (0.95)       438,296.202   7.89   3,458,157
Qualified XII (1.00)       1,063,665.198   7.88   8,381,682
Qualified XII (1.05)       50,497.902   7.88   397,923
Qualified XII (1.10)       75,024.381   7.87   590,442
Qualified XII (1.15)       101,898.017   7.86   800,918
Qualified XII (1.20)       8,373.294   7.85   65,730
Qualified XII (1.25)       101,621.939   7.84   796,716
Qualified XII (1.30)       151.458   7.83   1,186
Qualified XII (1.35)       493.009   7.83   3,860
Qualified XII (1.40)       8,053.793   7.82   62,981
Qualified XII (1.45)       424.699   7.81   3,317
Qualified XII (1.50)       40.437   7.80   315
Qualified XIII       1,055.473   7.89   8,328
Qualified XV       28,931.801   7.89   228,272
Qualified XVI       61,533.018   7.80   479,958
Qualified XVII       3,221.657   7.85   25,290
Qualified XXI       47,843.080   7.92   378,917
Qualified XXV       67,872.643   7.95   539,588
Qualified XXVI       10,594.657   7.93   84,016
Qualified XXVII       1,593,082.463   7.94   12,649,075
Qualified XXVIII       708,273.686   7.93   5,616,610
Qualified XXXVI       18,968.222   7.96   150,987
Qualified XXXVIII       28,762.128   6.01   172,860
Qualified XLIII       8,627.642   6.00   51,766
Qualified LIII       87,653.487   7.99   700,351
Qualified LIV       36,868.528   7.94   292,736
Qualified LVI       37,944.975   8.03   304,698
Qualified LIX       15,020.557   7.97   119,714
        9,324,981.219       $ 73,572,506
ING Janus Contrarian Portfolio - Service Class                
Contracts in accumulation period:                
ING MAP PLUS NP15       188.254   $ 5.35   $ 1,007
ING MAP PLUS NP28       541.332   5.33   2,885
Qualified VI       105,496.677   5.33   562,297
Qualified XII (0.00)       109.474   5.86   642
Qualified XII (0.40)       2,331.586   5.82   13,570
Qualified XII (0.50)       1,051,207.153   5.81   6,107,514
Qualified XII (0.55)       825.041   5.80   4,785
Qualified XII (0.70)       2,485.575   5.79   14,391
Qualified XII (0.75)       21,333.495   5.78   123,308
Qualified XII (0.80)       11,213.343   5.78   64,813
Qualified XII (0.85)       44,030.274   5.77   254,055
Qualified XII (0.90)       3,562.255   5.77   20,554
Qualified XII (0.95)       3,893.642   5.76   22,427
Qualified XII (1.00)       20,973.604   5.76   120,808
Qualified XII (1.05)       1,638.254   5.75   9,420
 
 
 
    243            

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

Division/Contract   Units   Unit Value   Extended Value
ING Janus Contrarian Portfolio - Service Class            
   (continued)            
Qualified XII (1.10)   760.389   $ 5.74   $ 4,365
Qualified XII (1.15)   2,743.124   5.74   15,746
Qualified XII (1.20)   217.625   5.73   1,247
Qualified XII (1.25)   506.426   5.73   2,902
Qualified XII (1.40)   6.658   5.71   38
Qualified XVI   7,584.137   5.32   40,348
Qualified XXI   930.093   5.35   4,976
Qualified XXV   26.428   5.35   141
Qualified LIII   914.845   5.36   4,904
Qualified LIV   1,454.664   5.35   7,782
    1,284,974.348       $ 7,404,925
ING JPMorgan Emerging Markets Equity Portfolio -            
   Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   17,549.110   $ 9.76   $ 171,279
 
ING JPMorgan Emerging Markets Equity Portfolio -            
   Institutional Class            
Contracts in accumulation period:            
Qualified XXVII   981,393.626   $ 10.20   $ 10,010,215
Qualified XXVIII   826,361.552   10.21   8,437,151
    1,807,755.178       $ 18,447,366
ING JPMorgan Emerging Markets Equity Portfolio -            
   Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   689.451   $ 11.83   $ 8,156
ING MAP PLUS NP1   37,987.613   7.77   295,164
ING MAP PLUS NP9   8,204.000   7.69   63,089
ING MAP PLUS NP12   3,608.321   7.66   27,640
ING MAP PLUS NP13   2,099.447   7.65   16,061
ING MAP PLUS NP14   1,543.842   7.64   11,795
ING MAP PLUS NP15   8,095.260   7.63   61,767
ING MAP PLUS NP16   2,144.609   7.62   16,342
ING MAP PLUS NP19   440.835   7.59   3,346
ING MAP PLUS NP23   3,759.217   7.55   28,382
ING MAP PLUS NP24   617.988   7.54   4,660
ING MAP PLUS NP25   1,171.384   7.53   8,821
ING MAP PLUS NP26   10,002.184   7.52   75,216
ING MAP PLUS NP28   144.721   7.50   1,085
Qualified VI   607,353.010   11.83   7,184,986
Qualified VIII   28.597   11.83   338
Qualified XII (0.00)   233.973   12.39   2,899
Qualified XII (0.10)   23.830   12.34   294
Qualified XII (0.25)   74.775   12.28   918
Qualified XII (0.30)   5,400.768   12.25   66,159
Qualified XII (0.40)   13,533.098   12.21   165,239
Qualified XII (0.50)   14,500.251   12.16   176,323
Qualified XII (0.55)   7,316.192   12.14   88,819
Qualified XII (0.60)   6,116.139   12.12   74,128
Qualified XII (0.65)   29,378.737   12.10   355,483
                                                      244            

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

Division/Contract   Units   Unit Value   Extended Value
ING JPMorgan Emerging Markets Equity Portfolio -            
   Service Class (continued)            
Qualified XII (0.70)   12,658.686   $ 12.07   $ 152,790
Qualified XII (0.75)   31,688.152   12.05   381,842
Qualified XII (0.80)   34,094.733   12.03   410,160
Qualified XII (0.85)   59,973.467   12.01   720,281
Qualified XII (0.90)   14,870.178   11.99   178,293
Qualified XII (0.95)   74,366.063   11.96   889,418
Qualified XII (1.00)   206,597.399   11.94   2,466,773
Qualified XII (1.05)   9,666.185   11.92   115,221
Qualified XII (1.10)   13,653.069   11.90   162,472
Qualified XII (1.15)   23,371.010   11.88   277,648
Qualified XII (1.20)   1,268.291   11.85   15,029
Qualified XII (1.25)   32,316.427   11.83   382,303
Qualified XII (1.30)   351.697   11.81   4,154
Qualified XII (1.40)   1,206.026   11.77   14,195
Qualified XII (1.45)   404.610   11.74   4,750
Qualified XII (1.50)   171.154   11.72   2,006
Qualified XIII   511.628   11.96   6,119
Qualified XV   4,534.914   11.96   54,238
Qualified XVI   11,172.482   11.72   130,941
Qualified XVII   830.107   11.83   9,820
Qualified XXV   5,651.805   12.05   68,104
Qualified XXVI   3,237.029   11.99   38,812
Qualified XXXVIII   13,398.391   4.91   65,786
Qualified XLIII   2,215.391   4.89   10,833
Qualified LIII   15,348.900   12.25   188,024
Qualified LIV   7,415.581   12.17   90,248
Qualified LVI   10,146.173   12.31   124,899
Qualified LIX   1,879.877   12.19   22,916
    1,357,467.667       $ 15,725,185
ING JPMorgan Small Cap Core Equity Portfolio -            
Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   1,126.380   $ 8.74   $ 9,845
Qualified VI   66,719.857   8.74   583,132
Qualified XII (0.00)   255.926   9.15   2,342
Qualified XII (0.30)   1,074.856   9.05   9,727
Qualified XII (0.35)   2,373.838   9.03   21,436
Qualified XII (0.40)   1,587.467   9.02   14,319
Qualified XII (0.50)   65,526.143   8.98   588,425
Qualified XII (0.55)   582.911   8.97   5,229
Qualified XII (0.60)   2,793.328   8.95   25,000
Qualified XII (0.65)   2,584.392   8.93   23,079
Qualified XII (0.70)   1,369.290   8.92   12,214
Qualified XII (0.75)   8,399.624   8.90   74,757
Qualified XII (0.80)   7,369.876   8.88   65,445
Qualified XII (0.85)   10,255.440   8.87   90,966
Qualified XII (0.90)   1,330.931   8.85   11,779
Qualified XII (0.95)   13,019.770   8.83   114,965
 
 
                                                       245            

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

Division/Contract   Units   Unit Value   Extended Value
ING JPMorgan Small Cap Core Equity Portfolio -            
   Service Class (continued)            
Qualified XII (1.00)   33,115.474   $ 8.82   $ 292,078
Qualified XII (1.05)   1,142.264   8.80   10,052
Qualified XII (1.10)   2,626.924   8.79   23,091
Qualified XII (1.15)   1,673.767   8.77   14,679
Qualified XII (1.20)   838.533   8.75   7,337
Qualified XII (1.25)   5,552.860   8.74   48,532
Qualified XII (1.30)   454.474   8.72   3,963
Qualified XII (1.40)   1,399.524   8.69   12,162
Qualified XII (1.45)   7.349   8.67   64
Qualified XVI   2,871.746   8.66   24,869
Qualified XXV   194.930   8.90   1,735
Qualified XXXVIII   1,174.508   6.57   7,717
Qualified LIII   1,006.484   9.05   9,109
Qualified LIV   1,383.660   8.99   12,439
Qualified LVI   960.465   9.09   8,731
    240,772.991       $ 2,129,218
ING JPMorgan Value Opportunities Portfolio -            
   Institutional Class            
Contracts in accumulation period:            
Qualified X (1.15)   831.134   $ 6.64   $ 5,519
Qualified X (1.25)   3,330.814   6.62   22,050
    4,161.948       $ 27,569
ING JPMorgan Value Opportunities Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP23   5,359.263   $ 6.59   $ 35,318
Qualified VI   69,500.199   6.57   456,616
Qualified XII (0.00)   645.103   6.79   4,380
Qualified XII (0.40)   1,409.165   6.72   9,470
Qualified XII (0.50)   36,466.582   6.70   244,326
Qualified XII (0.55)   550.625   6.69   3,684
Qualified XII (0.60)   403.304   6.68   2,694
Qualified XII (0.65)   37.006   6.68   247
Qualified XII (0.70)   486.430   6.67   3,244
Qualified XII (0.75)   3,841.137   6.66   25,582
Qualified XII (0.80)   3,597.520   6.65   23,924
Qualified XII (0.85)   5,209.697   6.64   34,592
Qualified XII (0.90)   980.066   6.63   6,498
Qualified XII (0.95)   6,787.224   6.62   44,931
Qualified XII (1.00)   19,719.070   6.61   130,343
Qualified XII (1.05)   1,772.192   6.60   11,696
Qualified XII (1.10)   1,510.509   6.60   9,969
Qualified XII (1.15)   2,792.360   6.59   18,402
Qualified XII (1.20)   131.460   6.58   865
Qualified XII (1.25)   2,676.403   6.57   17,584
Qualified XII (1.35)   134.679   6.55   882
Qualified XII (1.40)   208.255   6.54   1,362
Qualified XII (1.45)   37.285   6.53   243
Qualified XV   32.798   6.62   217
 
                                                           246            

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

Division/Contract   Units   Unit Value   Extended Value
ING JPMorgan Value Opportunities Portfolio - Service            
Class (continued)            
Qualified XVI   2,307.161   $ 6.52   $ 15,043
Qualified XXV   362.000   6.66   2,411
Qualified XXXVIII   850.818   5.78   4,918
Qualified XLIII   497.708   5.76   2,867
Qualified LIII   237.288   6.73   1,597
Qualified LIV   720.344   6.68   4,812
Qualified LVI   1,076.207   6.76   7,275
    170,339.858       $ 1,125,992
ING Julius Baer Foreign Portfolio - Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   6,675.754   $ 11.39   $ 76,037
Qualified VI   1,170,853.378   10.87   12,727,176
Qualified X (1.15)   42,846.302   11.34   485,877
Qualified X (1.25)   91,946.153   11.29   1,038,072
Qualified XII (0.00)   562.436   11.53   6,485
Qualified XII (0.10)   149.547   11.47   1,715
Qualified XII (0.25)   30.083   11.39   343
Qualified XII (0.30)   8,137.011   11.36   92,436
Qualified XII (0.35)   53.112   11.34   602
Qualified XII (0.40)   59,974.056   11.31   678,307
Qualified XII (0.50)   342,688.437   11.26   3,858,672
Qualified XII (0.55)   22,344.998   11.23   250,934
Qualified XII (0.60)   15,110.166   11.21   169,385
Qualified XII (0.65)   29,906.595   11.18   334,356
Qualified XII (0.70)   25,169.028   11.15   280,635
Qualified XII (0.75)   138,663.085   11.13   1,543,320
Qualified XII (0.80)   47,392.982   11.10   526,062
Qualified XII (0.85)   98,359.405   11.08   1,089,822
Qualified XII (0.90)   13,865.657   11.05   153,216
Qualified XII (0.95)   103,800.666   11.02   1,143,883
Qualified XII (1.00)   599,153.440   11.00   6,590,688
Qualified XII (1.05)   8,259.247   10.97   90,604
Qualified XII (1.10)   19,218.018   10.95   210,437
Qualified XII (1.15)   32,705.911   10.92   357,149
Qualified XII (1.20)   3,515.889   10.90   38,323
Qualified XII (1.25)   54,619.230   10.87   593,711
Qualified XII (1.30)   21.630   10.85   235
Qualified XII (1.35)   93.124   10.82   1,008
Qualified XII (1.40)   2,537.047   10.80   27,400
Qualified XII (1.45)   4,346.036   10.77   46,807
Qualified XII (1.50)   29.779   10.75   320
Qualified XV   1,727.986   11.02   19,042
Qualified XVI   16,806.481   10.75   180,670
Qualified XVII   5,451.251   10.96   59,746
Qualified XVIII   9,915.378   11.41   113,134
Qualified XXV   5,155.169   11.14   57,429
Qualified XXVI   150.378   11.08   1,666
 
 
 
                                           247            

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

Division/Contract   Units   Unit Value   Extended Value
ING Julius Baer Foreign Portfolio - Service Class            
(continued)            
Qualified XXXII   1,983.841   $ 11.29   $ 22,398
Qualified XXXVIII   5,579.057   5.60   31,243
Qualified XLIII   1,010.710   5.58   5,640
Qualified LIII   2,453.830   9.96   24,440
Qualified LIV   31,366.166   9.89   310,211
Qualified LVI   9,724.179   10.00   97,242
Qualified LIX   135.442   11.35   1,537
    3,034,488.070       $ 33,338,415
ING Legg Mason Value Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP15   1,711.840   $ 5.01   $ 8,576
ING MAP PLUS NP17   3,153.142   5.00   15,766
ING MAP PLUS NP18   601.533   4.99   3,002
ING MAP PLUS NP23   2,159.289   4.94   10,667
ING MAP PLUS NP24   308.229   4.93   1,520
ING MAP PLUS NP28   2,096.853   4.90   10,275
ING MAP PLUS NP29   40.186   4.89   197
Qualified VI   142,427.892   4.93   702,170
Qualified XII (0.00)   4,781.012   5.16   24,670
Qualified XII (0.30)   1,250.773   5.11   6,391
Qualified XII (0.40)   9,727.493   5.09   49,513
Qualified XII (0.50)   6,327.540   5.07   32,081
Qualified XII (0.55)   2,882.968   5.06   14,588
Qualified XII (0.60)   4,130.402   5.05   20,859
Qualified XII (0.65)   145.978   5.04   736
Qualified XII (0.70)   4,780.968   5.03   24,048
Qualified XII (0.75)   14,089.699   5.02   70,730
Qualified XII (0.80)   1,124.066   5.01   5,632
Qualified XII (0.85)   13,460.242   5.00   67,301
Qualified XII (0.90)   4,677.144   5.00   23,386
Qualified XII (0.95)   21,538.389   4.99   107,477
Qualified XII (1.00)   25,051.347   4.98   124,756
Qualified XII (1.05)   915.537   4.97   4,550
Qualified XII (1.10)   1,417.258   4.96   7,030
Qualified XII (1.15)   4,591.659   4.95   22,729
Qualified XII (1.20)   3,549.945   4.94   17,537
Qualified XII (1.25)   5,800.136   4.93   28,595
Qualified XII (1.30)   90.963   4.92   448
Qualified XII (1.40)   643.310   4.90   3,152
Qualified XII (1.45)   121.233   4.90   594
Qualified XVI   1,812.609   4.89   8,864
Qualified XXV   318.070   5.02   1,597
Qualified XXVI   203.330   5.00   1,017
Qualified XXXVIII   943.498   4.12   3,887
Qualified LIII   505.386   5.11   2,583
Qualified LIV   404.398   5.07   2,050
Qualified LVI   3,656.971   5.13   18,760
    291,441.288       $ 1,447,734
 
 
                                                    248            

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

Division/Contract   Units   Unit Value   Extended Value
ING Lord Abbett Affiliated Portfolio - Institutional            
Class            
Currently payable annuity contracts:   134,137.149   $6.85 to $7.04   $ 942,801
Contracts in accumulation period:            
ING Custom Choice 62   2,345.082   6.99   16,392
ING MAP PLUS NP8   873.186   7.14   6,235
ING MAP PLUS NP9   5,614.405   7.13   40,031
ING MAP PLUS NP11   26,411.097   7.11   187,783
ING MAP PLUS NP12   131.754   7.10   935
ING MAP PLUS NP14   65.826   7.08   466
ING MAP PLUS NP15   1,157.214   7.07   8,182
ING MAP PLUS NP17   7,163.613   7.05   50,503
ING MAP PLUS NP18   58,225.328   7.04   409,906
ING MAP PLUS NP20   5,456.437   7.02   38,304
ING MAP PLUS NP21   7,426.860   7.01   52,062
ING MAP PLUS NP22   4,892.874   7.00   34,250
ING MAP PLUS NP23   14,272.310   6.99   99,763
ING MAP PLUS NP25   502.602   6.98   3,508
ING MAP PLUS NP27   490.648   6.96   3,415
ING MAP PLUS NP28   95.928   6.95   667
ING MAP PLUS NP30   2,716.531   6.93   18,826
ING MAP PLUS NP32   243.961   6.91   1,686
ING MAP PLUS NP35   2,841.603   6.88   19,550
Qualified V   2,410.767   6.96   16,779
Qualified VI   2,960,798.577   6.99   20,695,982
Qualified VIII   2,270.640   6.98   15,849
Qualified X (1.15)   125,481.696   7.00   878,372
Qualified X (1.25)   474,937.469   6.99   3,319,813
Qualified XII (0.00)   10,634.165   7.22   76,779
Qualified XII (0.20)   54.675   7.19   393
Qualified XII (0.25)   10,697.269   7.18   76,806
Qualified XII (0.30)   731,179.399   7.17   5,242,556
Qualified XII (0.40)   55,548.295   7.15   397,170
Qualified XII (0.50)   176,093.247   7.13   1,255,545
Qualified XII (0.55)   119,096.541   7.12   847,967
Qualified XII (0.60)   178,167.709   7.11   1,266,772
Qualified XII (0.65)   592,199.599   7.10   4,204,617
Qualified XII (0.70)   142,735.808   7.09   1,011,997
Qualified XII (0.75)   640,099.953   7.08   4,531,908
Qualified XII (0.80)   182,999.354   7.07   1,293,805
Qualified XII (0.85)   490,972.395   7.06   3,466,265
Qualified XII (0.90)   30,342.501   7.05   213,915
Qualified XII (0.95)   603,799.697   7.04   4,250,750
Qualified XII (1.00)   1,647,462.771   7.03   11,581,663
Qualified XII (1.05)   64,914.724   7.02   455,701
Qualified XII (1.10)   56,368.632   7.01   395,144
Qualified XII (1.15)   84,464.339   7.00   591,250
Qualified XII (1.20)   30,780.614   7.00   215,464
Qualified XII (1.25)   223,697.748   6.99   1,563,647
 
 
 
                                                     249            

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

Division/Contract   Units   Unit Value   Extended Value
ING Lord Abbett Affiliated Portfolio - Institutional            
Class (continued)            
Qualified XII (1.30)   2,543.294   $ 6.98   $ 17,752
Qualified XII (1.35)   1,369.471   6.97   9,545
Qualified XII (1.40)   21,794.787   6.96   151,692
Qualified XII (1.45)   8,189.009   6.95   56,914
Qualified XII (1.50)   12,195.009   6.94   84,633
Qualified XIII   857.565   7.04   6,037
Qualified XV   27,825.705   7.04   195,893
Qualified XVI   104,892.108   6.94   727,951
Qualified XVII   418.212   6.99   2,923
Qualified XVIII   12,198.256   7.03   85,754
Qualified XXV   68,909.826   7.08   487,882
Qualified XXVI   4,070.308   7.05   28,696
Qualified XXXII   2,481.295   6.99   17,344
Qualified XXXVIII   20,417.297   6.19   126,383
Qualified XLIII   3,566.494   6.17   22,005
Qualified LIII   22,201.800   7.15   158,743
Qualified LIV   101,749.734   7.11   723,441
Qualified LVI   56,094.524   7.19   403,320
Qualified LIX   7,208.029   7.13   51,393
    10,392,255.715       $ 73,160,475
ING Lord Abbett Affiliated Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP12   21,129.313   $ 7.06   $ 149,173
ING MAP PLUS NP15   1,955.277   7.03   13,746
ING MAP PLUS NP16   48,740.887   7.02   342,161
ING MAP PLUS NP26   66.603   6.93   462
    71,892.080       $ 505,542
ING Marsico Growth Portfolio - Institutional Class            
Contracts in accumulation period:            
ING Custom Choice 62   112.945   $ 6.56   $ 741
Qualified VI   151,929.963   6.56   996,661
Qualified X (1.15)   5,821.167   6.57   38,245
Qualified X (1.25)   33,497.720   6.56   219,745
Qualified XII (0.00)   2,031.474   6.62   13,448
Qualified XII (0.30)   3,318.903   6.61   21,938
Qualified XII (0.40)   8,683.961   6.60   57,314
Qualified XII (0.50)   95,443.362   6.60   629,926
Qualified XII (0.55)   6,014.232   6.60   39,694
Qualified XII (0.60)   4,452.514   6.59   29,342
Qualified XII (0.65)   1,169.501   6.59   7,707
Qualified XII (0.70)   3,312.039   6.59   21,826
Qualified XII (0.75)   20,524.634   6.59   135,257
Qualified XII (0.80)   11,712.887   6.45   75,548
Qualified XII (0.85)   20,381.383   6.58   134,110
Qualified XII (0.90)   1,616.324   6.58   10,635
Qualified XII (0.95)   57,857.884   6.58   380,705
Qualified XII (1.00)   82,531.233   6.58   543,056
 
 
                                                     250            

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

Division/Contract   Units   Unit Value   Extended Value
ING Marsico Growth Portfolio - Institutional Class            
(continued)            
Qualified XII (1.05)   1,310.374   $ 6.57   $ 8,609
Qualified XII (1.10)   2,788.776   6.57   18,322
Qualified XII (1.15)   8,080.586   6.57   53,089
Qualified XII (1.20)   3,657.662   6.57   24,031
Qualified XII (1.25)   24,173.127   6.56   158,576
Qualified XII (1.30)   7.700   6.56   51
Qualified XII (1.40)   887.012   6.56   5,819
Qualified XII (1.45)   1,124.895   6.55   7,368
Qualified XV   4,153.769   6.58   27,332
Qualified XVI   1,517.815   6.55   9,942
Qualified XVIII   2,798.607   6.56   18,359
Qualified XXVI   660.394   6.58   4,345
Qualified XXVII   222,270.344   6.45   1,433,644
Qualified XXXII   333.534   6.56   2,188
Qualified XXXVIII   1,451.131   6.62   9,606
Qualified XLIII   19.761   6.60   130
Qualified LIII   5,385.800   6.60   35,546
Qualified LIV   950.974   6.58   6,257
Qualified LVI   3,947.115   6.61   26,090
Qualified LIX   1,340.095   6.60   8,845
    797,271.597       $ 5,214,047
ING Marsico Growth Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP8   3,989.485   $ 8.08   $ 32,235
ING MAP PLUS NP9   16,587.161   8.06   133,693
ING MAP PLUS NP10   22.839   8.05   184
ING MAP PLUS NP11   795.651   8.03   6,389
ING MAP PLUS NP12   2,971.524   8.02   23,832
ING MAP PLUS NP17   10,138.441   7.94   80,499
ING MAP PLUS NP19   924.252   7.91   7,311
ING MAP PLUS NP21   160.336   7.89   1,265
ING MAP PLUS NP23   511.340   7.86   4,019
Qualified XII (0.60)   406.442   8.03   3,264
Qualified XII (0.75)   64.290   7.99   514
Qualified XXXV   1,984.637   6.59   13,079
    38,556.398       $ 306,284
ING Marsico International Opportunities Portfolio -            
Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   11,444.026   $ 5.68   $ 65,002
 
 
 
 
                                                    251            

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

Division/Contract   Units   Unit Value   Extended Value
ING Marsico International Opportunities Portfolio -            
Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   227.058   $ 9.04   $ 2,053
ING MAP PLUS NP9   193.154   9.29   1,794
ING MAP PLUS NP11   1,811.337   9.26   16,773
ING MAP PLUS NP12   777.024   9.24   7,180
ING MAP PLUS NP17   5,260.844   9.16   48,189
ING MAP PLUS NP18   172.094   9.14   1,573
ING MAP PLUS NP25   833.618   9.02   7,519
Qualified VI   259,285.129   9.04   2,343,938
Qualified XII (0.00)   1,281.763   9.46   12,125
Qualified XII (0.10)   5.562   9.43   52
Qualified XII (0.30)   2,966.573   9.36   27,767
Qualified XII (0.40)   9,400.954   9.33   87,711
Qualified XII (0.50)   62,279.961   9.29   578,581
Qualified XII (0.55)   4,314.853   9.28   40,042
Qualified XII (0.60)   3,796.428   9.26   35,155
Qualified XII (0.65)   12,132.009   9.24   112,100
Qualified XII (0.70)   7,282.153   9.22   67,141
Qualified XII (0.75)   19,952.339   9.21   183,761
Qualified XII (0.80)   46,644.292   9.19   428,661
Qualified XII (0.85)   42,128.795   9.17   386,321
Qualified XII (0.90)   4,853.836   9.16   44,461
Qualified XII (0.95)   31,613.533   9.14   288,948
Qualified XII (1.00)   118,675.209   9.12   1,082,318
Qualified XII (1.05)   4,565.630   9.11   41,593
Qualified XII (1.10)   11,952.017   9.09   108,644
Qualified XII (1.15)   7,371.480   9.07   66,859
Qualified XII (1.20)   6,403.462   9.06   58,015
Qualified XII (1.25)   9,614.760   9.04   86,917
Qualified XII (1.40)   849.378   8.99   7,636
Qualified XII (1.45)   13.194   8.97   118
Qualified XV   1,160.159   9.14   10,604
Qualified XVI   4,651.185   8.96   41,675
Qualified XXI   6,715.798   9.19   61,718
Qualified XXV   236.844   9.21   2,181
Qualified XXVI   250.592   9.16   2,295
Qualified XXXVIII   5,294.303   4.95   26,207
Qualified XLIII   717.410   4.93   3,537
Qualified LIII   2,770.244   9.36   25,929
Qualified LIV   4,903.776   9.30   45,605
Qualified LVI   1,460.602   9.40   13,730
Qualified LIX   39.108   9.31   364
    704,858.460       $ 6,407,790
 
 
 
 
                                                        252            

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

Division/Contract   Units   Unit Value   Extended Value
ING MFS Total Return Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   55,306.165   $ 8.99   $ 497,202
 
ING MFS Total Return Portfolio - Institutional Class            
Contracts in accumulation period:            
Qualified XXVII   3,186,933.641   $ 8.57   $ 27,312,021
Qualified XXVIII   2,837,022.334   8.58   24,341,652
    6,023,955.975       $ 51,653,673
ING MFS Total Return Portfolio - Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   2,045.745   $ 9.87   $ 20,192
ING MAP PLUS NP1   104.153   10.11   1,053
ING MAP PLUS NP9   42,128.114   9.91   417,490
ING MAP PLUS NP11   223.762   9.86   2,206
ING MAP PLUS NP12   37,197.569   9.84   366,024
ING MAP PLUS NP14   2,448.198   9.79   23,968
ING MAP PLUS NP17   461.729   9.72   4,488
ING MAP PLUS NP20   20,831.365   9.65   201,023
ING MAP PLUS NP22   30.972   9.60   297
ING MAP PLUS NP24   27.394   9.55   262
ING MAP PLUS NP25   60.339   9.53   575
ING MAP PLUS NP30   2,357.782   9.42   22,210
Qualified V   74.201   10.86   806
Qualified VI   845,711.799   11.42   9,658,029
Qualified X (1.15)   11,644.996   9.76   113,655
Qualified X (1.25)   56,958.358   9.72   553,635
Qualified XII (0.00)   1,856.387   12.47   23,149
Qualified XII (0.25)   8,302.763   12.30   102,124
Qualified XII (0.30)   3,661.372   12.27   44,925
Qualified XII (0.40)   20,095.794   12.20   245,169
Qualified XII (0.50)   32,506.394   12.12   393,977
Qualified XII (0.55)   3,329.869   12.10   40,291
Qualified XII (0.60)   5,213.723   12.07   62,930
Qualified XII (0.65)   6,642.418   12.03   79,908
Qualified XII (0.70)   17,715.489   12.00   212,586
Qualified XII (0.75)   47,571.438   11.97   569,430
Qualified XII (0.80)   73,523.594   11.91   875,666
Qualified XII (0.85)   98,517.862   11.87   1,169,407
Qualified XII (0.90)   12,637.384   11.85   149,753
Qualified XII (0.95)   107,236.745   11.80   1,265,394
Qualified XII (1.00)   243,050.428   11.77   2,860,704
Qualified XII (1.05)   17,226.820   11.74   202,243
Qualified XII (1.10)   53,152.680   11.70   621,886
Qualified XII (1.15)   28,139.219   11.67   328,385
Qualified XII (1.20)   17,724.368   11.64   206,312
Qualified XII (1.25)   85,308.882   11.61   990,436
Qualified XII (1.30)   1,273.579   11.58   14,748
 
 
 
                                                      253            

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

Division/Contract       Units   Unit Value   Extended Value
ING MFS Total Return Portfolio - Service Class                
(continued)                
Qualified XII (1.35)       427.601   $ 11.54   $ 4,935
Qualified XII (1.40)       5,991.448   11.51   68,962
Qualified XII (1.45)       1,904.713   11.48   21,866
Qualified XII (1.50)       597.016   11.45   6,836
Qualified XV       393.498   11.15   4,388
Qualified XVI       19,831.384   11.26   223,301
Qualified XVII       4,674.721   10.96   51,235
Qualified XXV       208.043   11.28   2,347
Qualified XXVI       409.420   11.18   4,577
Qualified XXXII       1,165.191   9.72   11,326
Qualified XXXVIII       3,589.203   7.63   27,386
Qualified XLIII       470.168   7.60   3,573
Qualified LIII       3,125.684   9.36   29,256
Qualified LIV       3,231.920   9.30   30,057
Qualified LVI       1,543.969   9.40   14,513
        1,954,557.663       $ 22,349,894
ING MFS Utilities Portfolio - Service Class                
Contracts in accumulation period:                
ING Custom Choice 62       1,626.432   $ 11.41   $ 18,558
Qualified V       287.836   11.34   3,264
Qualified VI       845,406.557   11.41   9,646,089
Qualified XII (0.00)       2,653.802   11.94   31,686
Qualified XII (0.10)       10.537   11.90   125
Qualified XII (0.25)       978.730   11.83   11,578
Qualified XII (0.30)       9,758.157   11.81   115,244
Qualified XII (0.40)       23,010.328   11.77   270,832
Qualified XII (0.50)       236,809.272   11.72   2,775,405
Qualified XII (0.55)       5,849.399   11.70   68,438
Qualified XII (0.60)       11,870.246   11.68   138,644
Qualified XII (0.65)       12,348.310   11.66   143,981
Qualified XII (0.70)       18,545.119   11.64   215,865
Qualified XII (0.75)       101,395.886   11.62   1,178,220
Qualified XII (0.80)       61,285.720   11.60   710,914
Qualified XII (0.85)       77,071.799   11.57   891,721
Qualified XII (0.90)       15,207.950   11.55   175,652
Qualified XII (0.95)       110,758.320   11.53   1,277,043
Qualified XII (1.00)       408,124.597   11.51   4,697,514
Qualified XII (1.05)       8,717.668   11.49   100,166
Qualified XII (1.10)       12,391.671   11.47   142,132
Qualified XII (1.15)       32,852.003   11.45   376,155
Qualified XII (1.20)       3,595.236   11.43   41,094
Qualified XII (1.25)       42,078.840   11.41   480,120
Qualified XII (1.30)       2,295.609   11.38   26,124
Qualified XII (1.35)       89.516   11.36   1,017
Qualified XII (1.40)       3,048.982   11.34   34,575
Qualified XII (1.45)       315.849   11.32   3,575
Qualified XII (1.50)       5.570   11.30   63
 
 
 
    254            

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

Division/Contract   Units   Unit Value   Extended Value
ING MFS Utilities Portfolio - Service Class (continued)            
Qualified XIII   874.710   $ 11.53   $ 10,085
Qualified XV   4,027.191   11.53   46,434
Qualified XVI   18,959.533   11.30   214,243
Qualified XVII   1,270.394   11.41   14,495
Qualified XXI   21,966.407   11.60   254,810
Qualified XXV   9,651.905   11.62   112,155
Qualified XXVI   676.928   11.55   7,819
Qualified XXXVIII   8,933.139   6.31   56,368
Qualified XLIII   5,841.116   6.29   36,741
Qualified LIII   22,406.156   11.81   264,617
Qualified LIV   5,660.413   11.73   66,397
Qualified LVI   5,206.575   11.86   61,750
Qualified LIX   4,577.847   11.75   53,790
    2,158,442.255       $ 24,775,498
ING Oppenheimer Main Street Portfolio® - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP9   467.581   $ 6.85   $ 3,203
ING MAP PLUS NP10   866.288   6.84   5,925
ING MAP PLUS NP11   6,503.171   6.83   44,417
ING MAP PLUS NP12   5,230.025   6.82   35,669
ING MAP PLUS NP14   3,652.690   6.80   24,838
ING MAP PLUS NP15   12,530.091   6.79   85,079
ING MAP PLUS NP17   1,349.247   6.77   9,134
ING MAP PLUS NP22   1,200.165   6.73   8,077
ING MAP PLUS NP24   860.343   6.71   5,773
ING MAP PLUS NP25   282.966   6.70   1,896
ING MAP PLUS NP26   887.250   6.69   5,936
ING MAP PLUS NP29   876.182   6.66   5,835
ING MAP PLUS NP32   244.869   6.64   1,626
Qualified VI   68,250.925   7.77   530,310
Qualified XII (0.00)   88.267   8.14   718
Qualified XII (0.25)   297.422   8.06   2,397
Qualified XII (0.30)   185.979   8.05   1,497
Qualified XII (0.40)   4,379.213   8.02   35,121
Qualified XII (0.50)   4,472.607   7.99   35,736
Qualified XII (0.55)   1,251.780   7.97   9,977
Qualified XII (0.60)   3,530.503   7.96   28,103
Qualified XII (0.65)   1,395.365   7.94   11,079
Qualified XII (0.70)   770.216   7.93   6,108
Qualified XII (0.75)   3,602.360   7.91   28,495
Qualified XII (0.80)   2,123.013   7.90   16,772
Qualified XII (0.85)   5,724.904   7.88   45,112
Qualified XII (0.90)   728.436   7.87   5,733
Qualified XII (0.95)   8,157.258   7.86   64,116
Qualified XII (1.00)   22,581.449   7.84   177,039
Qualified XII (1.05)   1,898.061   7.83   14,862
Qualified XII (1.10)   1,266.146   7.81   9,889
 
 
 
                                                255            

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

Division/Contract   Units   Unit Value   Extended Value
ING Oppenheimer Main Street Portfolio® - Service            
Class (continued)            
Qualified XII (1.15)   509.728   $ 7.80   $ 3,976
Qualified XII (1.20)   1,581.193   7.78   12,302
Qualified XII (1.25)   2,492.295   7.77   19,365
Qualified XII (1.30)   157.129   7.75   1,218
Qualified XII (1.35)   13.682   7.74   106
Qualified XII (1.40)   560.091   7.73   4,330
Qualified XII (1.45)   108.014   7.71   833
Qualified XV   1,567.184   7.86   12,318
Qualified XVI   1,616.014   7.70   12,443
Qualified XXV   44.574   7.91   353
Qualified XXVI   20.150   7.87   159
Qualified LIII   1,726.955   8.04   13,885
Qualified LIV   20.060   7.99   160
Qualified LVI   15.073   8.08   122
    176,086.914       $ 1,342,042
ING PIMCO High Yield Portfolio - Institutional Class            
Contracts in accumulation period:            
Qualified XXVII   59,567.654   $ 8.30   $ 494,412
Qualified XXVIII   13,797.171   8.31   114,654
    73,364.825       $ 609,066
ING PIMCO High Yield Portfolio - Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   1,461.267   $ 8.77   $ 12,815
ING MAP PLUS NP9   1,135.378   8.39   9,526
ING MAP PLUS NP12   4,405.654   8.35   36,787
ING MAP PLUS NP13   1,715.219   8.34   14,305
ING MAP PLUS NP14   2,801.695   8.33   23,338
ING MAP PLUS NP15   7,270.379   8.32   60,490
ING MAP PLUS NP23   18.086   8.23   149
ING MAP PLUS NP25   171.116   8.21   1,405
Qualified VI   176,821.513   8.77   1,550,725
Qualified XII (0.00)   696.170   9.18   6,391
Qualified XII (0.30)   3,073.030   9.08   27,903
Qualified XII (0.40)   10,277.624   9.04   92,910
Qualified XII (0.50)   87,760.873   9.01   790,725
Qualified XII (0.55)   411.608   8.99   3,700
Qualified XII (0.60)   4,155.314   8.98   37,315
Qualified XII (0.65)   3,810.324   8.96   34,141
Qualified XII (0.70)   19,366.112   8.95   173,327
Qualified XII (0.75)   8,146.989   8.93   72,753
Qualified XII (0.80)   9,270.875   8.91   82,604
Qualified XII (0.85)   29,565.366   8.90   263,132
Qualified XII (0.90)   4,417.150   8.88   39,224
Qualified XII (0.95)   16,989.735   8.86   150,529
Qualified XII (1.00)   50,113.612   8.85   443,505
Qualified XII (1.05)   5,396.698   8.83   47,653
Qualified XII (1.10)   1,596.877   8.81   14,068
 
 
                                          256            

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

Division/Contract   Units   Unit Value   Extended Value
ING PIMCO High Yield Portfolio - Service Class            
(continued)            
Qualified XII (1.15)   2,705.302   $ 8.80   $ 23,807
Qualified XII (1.20)   2,612.090   8.78   22,934
Qualified XII (1.25)   11,335.789   8.77   99,415
Qualified XII (1.30)   48.621   8.75   425
Qualified XII (1.40)   1,585.405   8.72   13,825
Qualified XII (1.45)   753.716   8.70   6,557
Qualified XIII   102.049   8.86   904
Qualified XV   1,484.727   8.86   13,155
Qualified XVI   8,093.319   8.69   70,331
Qualified XXI   9,180.499   8.91   81,798
Qualified XXV   1,159.279   8.93   10,352
Qualified XXXVIII   5,710.342   7.69   43,913
Qualified XLIII   699.046   7.67   5,362
Qualified LIII   3,826.433   9.08   34,744
Qualified LIV   2,164.671   9.02   19,525
Qualified LVI   2,546.770   9.12   23,227
Qualified LIX   288.732   9.03   2,607
    505,145.454       $ 4,462,301
ING Pioneer Equity Income Portfolio - Institutional            
   Class            
Currently payable annuity contracts:   321,813.591   $6.20 to $6.35   $ 2,036,638
Contracts in accumulation period:            
ING Custom Choice 62   9,978.809   6.29   62,767
ING MAP PLUS NP1   118,829.164   6.48   770,013
ING MAP PLUS NP6   26,292.149   6.44   169,321
ING MAP PLUS NP8   83,273.864   6.42   534,618
ING MAP PLUS NP9   16,470.023   6.41   105,573
ING MAP PLUS NP10   920.584   6.40   5,892
ING MAP PLUS NP11   4,331.003   6.40   27,718
ING MAP PLUS NP13   7,453.020   6.38   47,550
ING MAP PLUS NP14   11,475.094   6.37   73,096
ING MAP PLUS NP15   10,918.984   6.36   69,445
ING MAP PLUS NP17   417.965   6.34   2,650
ING MAP PLUS NP19   22,975.423   6.33   145,434
ING MAP PLUS NP21   260.388   6.31   1,643
ING MAP PLUS NP22   523.986   6.30   3,301
ING MAP PLUS NP23   5,339.908   6.29   33,588
ING MAP PLUS NP24   4,581.936   6.29   28,820
ING MAP PLUS NP25   8,456.295   6.28   53,106
ING MAP PLUS NP26   8,488.598   6.27   53,224
ING MAP PLUS NP32   90.259   6.22   561
Qualified VI   3,716,467.126   6.29   23,376,578
Qualified VIII   4,886.750   6.29   30,738
Qualified X (1.15)   123,192.588   6.31   777,345
Qualified X (1.25)   208,364.798   6.29   1,310,615
Qualified XII (0.00)   5,502.675   6.50   35,767
Qualified XII (0.10)   141.106   6.49   916
Qualified XII (0.20)   522.090   6.47   3,378
 
 
                                                 257            

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

Division/Contract   Units   Unit Value   Extended Value
ING Pioneer Equity Income Portfolio - Institutional            
Class (continued)            
Qualified XII (0.25)   6,475.241   $ 6.46   $ 41,830
Qualified XII (0.30)   605,801.859   6.45   3,907,422
Qualified XII (0.35)   1,937.171   6.44   12,475
Qualified XII (0.40)   220,247.589   6.43   1,416,192
Qualified XII (0.50)   1,238,564.699   6.42   7,951,585
Qualified XII (0.55)   181,409.320   6.41   1,162,834
Qualified XII (0.60)   78,541.275   6.40   502,664
Qualified XII (0.65)   95,174.867   6.39   608,167
Qualified XII (0.70)   169,127.828   6.38   1,079,036
Qualified XII (0.75)   864,613.479   6.37   5,507,588
Qualified XII (0.80)   862,180.854   6.36   5,483,470
Qualified XII (0.85)   626,384.788   6.36   3,983,807
Qualified XII (0.90)   100,143.643   6.35   635,912
Qualified XII (0.95)   640,956.811   6.34   4,063,666
Qualified XII (1.00)   2,802,649.491   6.33   17,740,771
Qualified XII (1.05)   84,222.290   6.32   532,285
Qualified XII (1.10)   117,145.398   6.31   739,187
Qualified XII (1.15)   206,884.865   6.31   1,305,444
Qualified XII (1.20)   12,131.165   6.30   76,426
Qualified XII (1.25)   156,353.073   6.29   983,461
Qualified XII (1.30)   7,697.288   6.28   48,339
Qualified XII (1.35)   311.622   6.27   1,954
Qualified XII (1.40)   15,530.973   6.26   97,224
Qualified XII (1.45)   3,583.773   6.25   22,399
Qualified XII (1.50)   1,155.882   6.25   7,224
Qualified XIII   186.860   6.34   1,185
Qualified XV   1,384.874   6.34   8,780
Qualified XVI   62,405.773   6.25   390,036
Qualified XVII   23,482.914   6.29   147,708
Qualified XVIII   27,245.771   6.33   172,466
Qualified XXI   60,248.918   6.36   383,183
Qualified XXV   27,390.246   6.37   174,476
Qualified XXVI   2,379.452   6.35   15,110
Qualified XXVII   3,054,174.384   6.33   19,332,924
Qualified XXXII   7,277.447   6.29   45,775
Qualified XXXIII (0.65)   156,726.942   6.39   1,001,485
Qualified XXXVIII   12,213.010   6.74   82,316
Qualified XLIII   5,391.798   6.72   36,233
Qualified LIII   11,187.328   6.44   72,046
Qualified LIV   264,070.787   6.40   1,690,053
Qualified LVI   21,763.852   6.47   140,812
Qualified LIX   225.536   6.42   1,448
    17,558,949.312       $ 111,367,693
 
 
 
 
                                                    258            

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

Division/Contract       Units   Unit Value   Extended Value
ING Pioneer Fund Portfolio - Institutional Class                
Currently payable annuity contracts:       19,753.518   $ 8.11   $ 160,201
Contracts in accumulation period:                
ING Custom Choice 62       997.218   7.26   7,240
ING MAP PLUS NP1       118,252.274   7.48   884,527
ING MAP PLUS NP8       18,203.306   7.41   134,887
ING MAP PLUS NP9       11,480.349   7.40   84,955
ING MAP PLUS NP10       301.800   7.39   2,230
ING MAP PLUS NP11       4,106.066   7.38   30,303
ING MAP PLUS NP12       13,361.551   7.37   98,475
ING MAP PLUS NP13       866.529   7.36   6,378
ING MAP PLUS NP14       5,373.263   7.35   39,493
ING MAP PLUS NP15       8,557.089   7.34   62,809
ING MAP PLUS NP17       1,063.742   7.32   7,787
ING MAP PLUS NP18       1,436.252   7.31   10,499
ING MAP PLUS NP23       533.216   7.26   3,871
ING MAP PLUS NP24       1,223.237   7.25   8,868
ING MAP PLUS NP25       1,964.312   7.24   14,222
ING MAP PLUS NP26       1,413.841   7.23   10,222
Qualified VI       294,259.021   7.26   2,136,320
Qualified VIII       439.124   7.26   3,188
Qualified X (1.15)       42,407.132   7.28   308,724
Qualified X (1.25)       53,096.460   7.26   385,480
Qualified XII (0.00)       2,955.577   7.51   22,196
Qualified XII (0.05)       186,936.226   7.51   1,403,891
Qualified XII (0.20)       2,259.867   7.47   16,881
Qualified XII (0.25)       358.786   7.46   2,677
Qualified XII (0.30)       39,837.305   7.45   296,788
Qualified XII (0.40)       8,760.816   7.43   65,093
Qualified XII (0.50)       119,890.323   7.41   888,387
Qualified XII (0.55)       18,669.155   7.40   138,152
Qualified XII (0.60)       2,345.831   7.39   17,336
Qualified XII (0.65)       208,049.469   7.38   1,535,405
Qualified XII (0.70)       8,355.476   7.37   61,580
Qualified XII (0.75)       27,694.254   7.36   203,830
Qualified XII (0.80)       41,664.210   7.35   306,232
Qualified XII (0.85)       50,525.330   7.34   370,856
Qualified XII (0.90)       5,149.067   7.33   37,743
Qualified XII (0.95)       63,777.109   7.32   466,848
Qualified XII (1.00)       83,533.940   7.31   610,633
Qualified XII (1.05)       8,997.918   7.30   65,685
Qualified XII (1.10)       5,592.926   7.29   40,772
Qualified XII (1.15)       34,878.065   7.28   253,912
Qualified XII (1.20)       4,298.036   7.27   31,247
Qualified XII (1.25)       14,630.025   7.26   106,214
Qualified XII (1.30)       22.535   7.25   163
Qualified XII (1.35)       114.247   7.24   827
Qualified XII (1.40)       1,740.001   7.23   12,580
 
 
 
 
    259            

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

Division/Contract   Units   Unit Value   Extended Value
ING Pioneer Fund Portfolio - Institutional Class            
(continued)            
Qualified XII (1.45)   326.629   $ 7.22   $ 2,358
Qualified XV   871.712   7.32   6,381
Qualified XVI   10,543.513   7.21   76,019
Qualified XVII   2,349.399   7.26   17,057
Qualified XVIII   2,275.568   7.31   16,634
Qualified XXI   2,070.239   7.35   15,216
Qualified XXV   1,182.370   7.36   8,702
Qualified XXVI   634.795   7.33   4,653
Qualified XXXII   1,336.828   7.26   9,705
Qualified XXXVIII   4,181.304   6.39   26,719
Qualified XLIII   263.662   6.37   1,680
Qualified LIII   228.440   7.44   1,700
Qualified LIV   8,479.371   7.39   62,663
Qualified LVI   3,298.372   7.47   24,639
    1,578,167.996       $ 11,630,733
ING Pioneer Fund Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP13   65.482   $ 7.33   $ 480
ING MAP PLUS NP19   10.372   7.28   76
ING MAP PLUS NP25   661.698   7.22   4,777
Qualified XII (1.00)   14,211.698   7.26   103,177
    14,949.250       $ 108,510
ING Pioneer Mid Cap Value Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   244.588   $ 7.14   $ 1,746
 
ING Pioneer Mid Cap Value Portfolio - Institutional            
   Class            
Currently payable annuity contracts:   66,690.080   $ 7.39   $ 492,840
Contracts in accumulation period:            
ING Custom Choice 62   2,847.679   7.33   20,873
ING MAP PLUS NP1   13,061.648   7.55   98,615
ING MAP PLUS NP4   16,526.407   7.52   124,279
ING MAP PLUS NP9   8,281.705   7.47   61,864
ING MAP PLUS NP11   12,175.579   7.45   90,708
ING MAP PLUS NP12   5,817.602   7.44   43,283
ING MAP PLUS NP13   3,557.844   7.43   26,435
ING MAP PLUS NP14   16,994.915   7.42   126,102
ING MAP PLUS NP15   515.134   7.41   3,817
ING MAP PLUS NP16   22,740.678   7.40   168,281
ING MAP PLUS NP17   231.562   7.39   1,711
ING MAP PLUS NP18   333.058   7.38   2,458
ING MAP PLUS NP20   189.452   7.36   1,394
ING MAP PLUS NP21   606.103   7.35   4,455
ING MAP PLUS NP23   178.929   7.34   1,313
ING MAP PLUS NP25   591.510   7.32   4,330
ING MAP PLUS NP26   2,038.477   7.31   14,901
ING MAP PLUS NP28   448.512   7.29   3,270
ING MAP PLUS NP29   725.266   7.28   5,280
 
                                                          260            

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

Division/Contract   Units   Unit Value   Extended Value
ING Pioneer Mid Cap Value Portfolio - Institutional            
Class (continued)            
ING MAP PLUS NP30   1,809.006   $ 7.27   $ 13,151
Qualified V   300.633   7.30   2,195
Qualified VI   1,820,095.884   7.33   13,341,303
Qualified VIII   42.188   7.33   309
Qualified X (1.15)   67,590.073   7.35   496,787
Qualified X (1.25)   130,542.235   7.33   956,875
Qualified XII (0.00)   3,331.269   7.58   25,251
Qualified XII (0.05)   57,418.897   7.58   435,235
Qualified XII (0.10)   102.176   7.56   772
Qualified XII (0.20)   254.293   7.54   1,917
Qualified XII (0.25)   1,474.968   7.53   11,107
Qualified XII (0.30)   111,759.588   7.52   840,432
Qualified XII (0.40)   37,963.773   7.50   284,728
Qualified XII (0.50)   1,140,145.218   7.48   8,528,286
Qualified XII (0.55)   64,062.312   7.47   478,545
Qualified XII (0.60)   101,159.684   7.46   754,651
Qualified XII (0.65)   379,480.961   7.45   2,827,133
Qualified XII (0.70)   95,969.687   7.44   714,014
Qualified XII (0.75)   360,540.067   7.43   2,678,813
Qualified XII (0.80)   743,213.398   7.42   5,514,643
Qualified XII (0.85)   244,138.717   7.41   1,809,068
Qualified XII (0.90)   40,053.147   7.40   296,393
Qualified XII (0.95)   221,746.736   7.39   1,638,708
Qualified XII (1.00)   1,420,080.511   7.38   10,480,194
Qualified XII (1.05)   30,014.400   7.37   221,206
Qualified XII (1.10)   33,073.371   7.36   243,420
Qualified XII (1.15)   56,637.512   7.35   416,286
Qualified XII (1.20)   19,686.843   7.34   144,501
Qualified XII (1.25)   82,796.056   7.33   606,895
Qualified XII (1.30)   14,059.624   7.32   102,916
Qualified XII (1.35)   1,652.475   7.31   12,080
Qualified XII (1.40)   14,693.045   7.30   107,259
Qualified XII (1.45)   6,746.775   7.29   49,184
Qualified XIII   242.815   7.39   1,794
Qualified XV   4,259.180   7.39   31,475
Qualified XVI   48,710.401   7.28   354,612
Qualified XVII   1,717.308   7.33   12,588
Qualified XVIII   4,990.621   7.38   36,831
Qualified XXV   19,064.884   7.43   141,652
Qualified XXVI   15,923.009   7.40   117,830
Qualified XXVII   1,146,541.467   7.33   8,404,149
Qualified XXXII   1,398.577   7.33   10,252
Qualified XXXIII (0.65)   62,485.278   7.45   465,515
Qualified XXXVIII   11,005.734   6.39   70,327
Qualified XLIII   29.769   6.37   190
Qualified LIII   11,735.326   7.51   88,132
Qualified LIV   38,821.481   7.46   289,608
Qualified LVI   11,537.666   7.54   86,994
Qualified LIX   2,907.881   7.48   21,751
    8,858,559.059       $ 65,464,166
 
 
                                                      261            

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

Division/Contract   Units   Unit Value   Extended Value
ING Pioneer Mid Cap Value Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP1   7,756.527   $ 7.52   $ 58,329
ING MAP PLUS NP6   138.842   7.47   1,037
ING MAP PLUS NP9   3,296.864   7.44   24,529
ING MAP PLUS NP11   1,989.881   7.42   14,765
ING MAP PLUS NP12   861.306   7.41   6,382
ING MAP PLUS NP13   615.015   7.40   4,551
ING MAP PLUS NP16   3,364.267   7.37   24,795
ING MAP PLUS NP18   1,923.257   7.35   14,136
ING MAP PLUS NP22   1,570.171   7.31   11,478
ING MAP PLUS NP23   2,444.429   7.30   17,844
ING MAP PLUS NP24   490.584   7.29   3,576
ING MAP PLUS NP25   1,073.782   7.28   7,817
ING MAP PLUS NP26   2,007.569   7.27   14,595
    27,532.494       $ 203,834
ING Stock Index Portfolio - Institutional Class            
Contracts in accumulation period:            
ING Custom Choice 62   1,579.229   $ 8.48   $ 13,392
Qualified XII (0.00)   26.731   8.84   236
Qualified XII (0.05)   257,341.817   8.82   2,269,755
Qualified XII (0.40)   912.684   8.68   7,922
Qualified XII (0.75)   1,572.665   8.54   13,431
Qualified XII (0.80)   7,253.636   8.52   61,801
Qualified XII (1.00)   677.078   8.44   5,715
    269,363.840       $ 2,372,252
ING T. Rowe Price Capital Appreciation Portfolio -            
Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   73,733.868   $ 9.14   $ 673,928
ING MAP PLUS NP1   144,861.086   9.53   1,380,526
ING MAP PLUS NP8   31,840.306   9.41   299,617
ING MAP PLUS NP9   22,784.705   9.39   213,948
ING MAP PLUS NP10   457.064   9.37   4,283
ING MAP PLUS NP11   68,703.111   9.36   643,061
ING MAP PLUS NP12   23,685.191   9.34   221,220
ING MAP PLUS NP14   6,779.059   9.31   63,113
ING MAP PLUS NP15   30,306.351   9.29   281,546
ING MAP PLUS NP16   2,501.175   9.27   23,186
ING MAP PLUS NP17   85,127.716   9.25   787,431
ING MAP PLUS NP18   6,497.741   9.24   60,039
ING MAP PLUS NP19   39,035.759   9.22   359,910
ING MAP PLUS NP23   26,469.154   9.15   242,193
ING MAP PLUS NP24   4,494.633   9.14   41,081
ING MAP PLUS NP25   10,244.913   9.12   93,434
ING MAP PLUS NP26   10,807.595   9.10   98,349
ING MAP PLUS NP28   892.406   9.07   8,094
ING MAP PLUS NP29   281.219   9.05   2,545
ING MAP PLUS NP30   1,771.194   9.04   16,012
 
 
                                                       262            

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

Division/Contract   Units   Unit Value   Extended Value
ING T. Rowe Price Capital Appreciation Portfolio -            
   Service Class (continued)            
Qualified V   3,475.689   $ 9.08   $ 31,559
Qualified VI   5,143,535.168   9.14   47,011,911
Qualified VIII   2,594.048   9.13   23,684
Qualified XII (0.00)   6,953.342   9.57   66,543
Qualified XII (0.10)   83.255   9.53   793
Qualified XII (0.25)   8,134.905   9.48   77,119
Qualified XII (0.30)   167,504.903   9.46   1,584,596
Qualified XII (0.35)   4,535.396   9.44   42,814
Qualified XII (0.40)   80,884.594   9.43   762,742
Qualified XII (0.50)   3,156,635.678   9.39   29,640,809
Qualified XII (0.55)   246,391.090   9.37   2,308,685
Qualified XII (0.60)   106,898.641   9.36   1,000,571
Qualified XII (0.65)   43,203.974   9.34   403,525
Qualified XII (0.70)   79,770.611   9.32   743,462
Qualified XII (0.75)   1,635,361.508   9.30   15,208,862
Qualified XII (0.80)   314,347.672   9.29   2,920,290
Qualified XII (0.85)   600,670.529   9.27   5,568,216
Qualified XII (0.90)   101,481.025   9.25   938,699
Qualified XII (0.95)   478,584.496   9.24   4,422,121
Qualified XII (1.00)   3,247,291.553   9.22   29,940,028
Qualified XII (1.05)   93,763.857   9.20   862,627
Qualified XII (1.10)   68,191.630   9.19   626,681
Qualified XII (1.15)   117,936.866   9.17   1,081,481
Qualified XII (1.20)   15,303.859   9.15   140,030
Qualified XII (1.25)   373,017.071   9.14   3,409,376
Qualified XII (1.30)   2,670.122   9.12   24,352
Qualified XII (1.35)   334.943   9.10   3,048
Qualified XII (1.40)   10,794.609   9.08   98,015
Qualified XII (1.45)   5,791.026   9.07   52,525
Qualified XII (1.50)   994.978   9.05   9,005
Qualified XIII   455.186   9.24   4,206
Qualified XV   10,316.399   9.24   95,324
Qualified XVI   91,305.453   9.05   826,314
Qualified XVII   13,658.867   9.14   124,842
Qualified XXI   32,285.087   9.29   299,928
Qualified XXV   95,900.694   9.30   891,876
Qualified XXVI   2,000.650   9.25   18,506
Qualified XXXVIII   17,769.021   7.14   126,871
Qualified XLIII   444.152   7.12   3,162
Qualified LIII   20,132.261   9.46   190,451
Qualified LIV   158,863.595   9.40   1,493,318
Qualified LVI   29,031.664   9.50   275,801
    17,180,574.313       $ 158,868,284
ING T. Rowe Price Equity Income Portfolio - Adviser            
   Class            
Contracts in accumulation period:            
Qualified XXXV   116,220.582   $ 7.90   $ 918,143
 
 
 
                                             263            

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

Division/Contract   Units   Unit Value   Extended Value
ING T. Rowe Price Equity Income Portfolio - Service            
Class            
Contracts in accumulation period:            
ING Custom Choice 62   4,171.879   $ 8.95   $ 37,338
ING MAP PLUS NP1   4,383.850   9.21   40,375
ING MAP PLUS NP6   26,818.552   9.10   244,049
ING MAP PLUS NP9   24,262.850   9.03   219,094
ING MAP PLUS NP10   4,201.339   9.01   37,854
ING MAP PLUS NP11   10,674.819   8.99   95,967
ING MAP PLUS NP12   3,491.565   8.96   31,284
ING MAP PLUS NP13   7,149.199   8.94   63,914
ING MAP PLUS NP14   10,528.925   8.92   93,918
ING MAP PLUS NP15   8,586.864   8.90   76,423
ING MAP PLUS NP16   62.293   8.88   553
ING MAP PLUS NP17   3,699.965   8.86   32,782
ING MAP PLUS NP18   437.690   8.83   3,865
ING MAP PLUS NP19   558.742   8.81   4,923
ING MAP PLUS NP21   17,182.657   8.77   150,692
ING MAP PLUS NP22   1,001.134   8.75   8,760
ING MAP PLUS NP23   1,425.192   8.73   12,442
ING MAP PLUS NP24   1,173.745   8.70   10,212
ING MAP PLUS NP25   107.744   8.68   935
ING MAP PLUS NP26   1,499.547   8.66   12,986
ING MAP PLUS NP28   7,768.553   8.62   66,965
ING MAP PLUS NP30   1,142.530   8.58   9,803
ING MAP PLUS NP32   89.018   8.54   760
Qualified VI   861,176.476   11.46   9,869,082
Qualified X (1.15)   15,632.770   8.88   138,819
Qualified X (1.25)   61,258.840   8.85   542,141
Qualified XII (0.00)   7,322.649   12.30   90,069
Qualified XII (0.05)   149,177.484   12.22   1,822,949
Qualified XII (0.25)   1.437   12.13   17
Qualified XII (0.30)   25,956.178   12.10   314,070
Qualified XII (0.40)   20,902.656   12.03   251,459
Qualified XII (0.50)   211,117.941   11.95   2,522,859
Qualified XII (0.55)   13,397.987   11.93   159,838
Qualified XII (0.60)   13,977.887   11.90   166,337
Qualified XII (0.65)   11,778.703   11.87   139,813
Qualified XII (0.70)   29,593.728   11.83   350,094
Qualified XII (0.75)   39,616.392   11.80   467,473
Qualified XII (0.80)   57,425.220   11.75   674,746
Qualified XII (0.85)   59,740.176   11.70   698,960
Qualified XII (0.90)   17,037.040   11.68   198,993
Qualified XII (0.95)   4,028,893.450   11.64   46,896,320
Qualified XII (1.00)   311,881.357   11.60   3,617,824
Qualified XII (1.05)   11,747.157   11.57   135,915
Qualified XII (1.10)   44,337.564   11.54   511,655
Qualified XII (1.15)   35,273.841   11.51   406,002
Qualified XII (1.20)   12,810.812   11.48   147,068
 
 
 
                                                     264            

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

Division/Contract   Units   Unit Value   Extended Value
ING T. Rowe Price Equity Income Portfolio - Service            
Class (continued)            
Qualified XII (1.25)   59,042.932   $ 11.45   $ 676,042
Qualified XII (1.30)   41.006   11.42   468
Qualified XII (1.35)   425.496   11.38   4,842
Qualified XII (1.40)   4,909.680   11.35   55,725
Qualified XII (1.45)   88.901   11.32   1,006
Qualified XII (1.50)   516.854   11.29   5,835
Qualified XIII   953.957   10.96   10,455
Qualified XV   4,538.082   10.96   49,737
Qualified XVI   17,137.675   11.30   193,656
Qualified XVII   1,071.903   10.78   11,555
Qualified XVIII   3,052.673   8.94   27,291
Qualified XXI   158,900.498   11.06   1,757,440
Qualified XXV   1,345.789   11.09   14,925
Qualified XXVI   1,400.383   10.99   15,390
Qualified XXXVIII   16,188.733   6.25   101,180
Qualified XLIII   3,806.438   6.23   23,714
Qualified LIII   5,487.783   8.36   45,878
Qualified LIV   11,926.548   8.31   99,110
Qualified LVI   4,007.665   8.40   33,664
Qualified LIX   146.679   11.35   1,665
    6,475,466.072       $ 74,507,975
ING Templeton Global Growth Portfolio - Institutional            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP9   1,866.659   $ 10.17   $ 18,984
ING MAP PLUS NP11   2,324.408   10.14   23,570
ING MAP PLUS NP14   1,748.247   10.10   17,657
ING MAP PLUS NP16   22,721.749   10.08   229,035
ING MAP PLUS NP17   3,110.129   10.06   31,288
ING MAP PLUS NP18   24.012   10.05   241
ING MAP PLUS NP19   1,186.819   10.04   11,916
ING MAP PLUS NP20   27,025.058   10.02   270,791
ING MAP PLUS NP21   2,830.713   10.01   28,335
ING MAP PLUS NP23   6,783.906   9.98   67,703
ING MAP PLUS NP25   1,722.616   9.96   17,157
ING MAP PLUS NP26   4,045.957   9.94   40,217
ING MAP PLUS NP28   30.878   9.92   306
ING MAP PLUS NP32   7.357   9.86   73
Qualified XII (1.00)   1,685.930   10.04   16,927
    77,114.438       $ 774,200
 
 
 
 
                                                   265            

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

Division/Contract   Units   Unit Value   Extended Value
ING Templeton Global Growth Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP21   36.118   $ 6.71   $ 242
ING MAP PLUS NP26   8.949   6.66   60
ING MAP PLUS NP29   193.541   6.64   1,285
Qualified VI   136,159.908   6.66   906,825
Qualified VIII   1,072.336   6.66   7,142
Qualified XII (0.00)   85.025   6.89   586
Qualified XII (0.30)   398.214   6.83   2,720
Qualified XII (0.40)   1,757.956   6.82   11,989
Qualified XII (0.50)   2,819.497   6.80   19,173
Qualified XII (0.55)   368.826   6.79   2,504
Qualified XII (0.60)   400.774   6.78   2,717
Qualified XII (0.65)   2,178.470   6.77   14,748
Qualified XII (0.70)   1,998.049   6.76   13,507
Qualified XII (0.75)   23,634.434   6.75   159,532
Qualified XII (0.80)   3,568.374   6.74   24,051
Qualified XII (0.85)   36,304.942   6.73   244,332
Qualified XII (0.90)   1,984.079   6.72   13,333
Qualified XII (0.95)   35,988.042   6.72   241,840
Qualified XII (1.00)   38,955.110   6.71   261,389
Qualified XII (1.05)   3,165.199   6.70   21,207
Qualified XII (1.10)   1,855.462   6.69   12,413
Qualified XII (1.15)   635.654   6.68   4,246
Qualified XII (1.20)   2,012.294   6.67   13,422
Qualified XII (1.25)   7,233.239   6.66   48,173
Qualified XII (1.35)   30.137   6.64   200
Qualified XII (1.40)   1,889.685   6.64   12,548
Qualified XV   13.415   6.72   90
Qualified XVI   1,767.773   6.62   11,703
Qualified XXI   3,375.441   6.74   22,750
Qualified XXV   2,135.870   6.75   14,417
Qualified XXVI   15.756   6.72   106
Qualified XXXVIII   828.140   5.92   4,903
Qualified XLIII   47.541   5.90   280
Qualified LIII   256.452   6.82   1,749
Qualified LIV   1,760.482   6.78   11,936
Qualified LVI   284.130   6.85   1,946
    315,219.314       $ 2,110,064
 
 
 
 
                                                 266            

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

Division/Contract   Units   Unit Value   Extended Value
ING Van Kampen Capital Growth Portfolio -            
   Institutional Class            
Currently payable annuity contracts:   497.000   $ 5.37   $ 2,669
Contracts in accumulation period:            
Qualified VI   18,975.492   5.51   104,555
Qualified X (1.15)   3,881.759   5.51   21,388
Qualified X (1.25)   5,388.541   5.51   29,691
Qualified XII (0.00)   33.802   5.56   188
Qualified XII (0.40)   159.795   5.55   887
Qualified XII (0.50)   986.834   5.54   5,467
Qualified XII (0.55)   15.895   5.54   88
Qualified XII (0.60)   127.780   5.54   708
Qualified XII (0.65)   16.222   5.54   90
Qualified XII (0.70)   698.072   5.53   3,860
Qualified XII (0.75)   11.108   5.53   61
Qualified XII (0.80)   578.347   5.53   3,198
Qualified XII (0.85)   2,435.071   5.53   13,466
Qualified XII (0.90)   37.830   5.53   209
Qualified XII (0.95)   1,315.489   5.52   7,262
Qualified XII (1.00)   3,657.759   5.52   20,191
Qualified XII (1.05)   449.728   5.52   2,483
Qualified XII (1.10)   90.344   5.52   499
Qualified XII (1.15)   22.085   5.51   122
Qualified XII (1.20)   865.956   5.51   4,771
Qualified XII (1.25)   231.902   5.51   1,278
Qualified XII (1.30)   0.726   5.51   4
Qualified XII (1.35)   16.800   5.51   93
Qualified XII (1.45)   44.238   5.50   243
Qualified XVI   556.229   5.50   3,059
Qualified XXI   3.611   5.53   20
Qualified XXV   89.720   5.53   496
Qualified XXVII   14,707.752   5.36   78,834
Qualified XXXII   835.198   5.51   4,602
Qualified XXXVIII   2,337.482   5.56   12,996
Qualified LIV   7,013.083   5.53   38,782
    66,081.650       $ 362,260
ING Van Kampen Capital Growth Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP28   30.115   $ 5.49   $ 165
Qualified XII (0.00)   121.284   6.98   847
Qualified XII (0.50)   20,846.454   6.89   143,632
    20,997.853       $ 144,644
 
 
 
 
                                                    267            

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

Division/Contract   Units   Unit Value   Extended Value
ING Van Kampen Growth and Income Portfolio -            
Service Class            
Contracts in accumulation period:            
ING Custom Choice 62   2,979.117   $ 8.58   $ 25,561
Qualified VI   465,666.470   8.58   3,995,418
Qualified XII (0.00)   3,215.873   8.98   28,879
Qualified XII (0.25)   320.517   8.90   2,853
Qualified XII (0.30)   8,131.377   8.88   72,207
Qualified XII (0.40)   5,168.773   8.85   45,744
Qualified XII (0.50)   327,917.034   8.82   2,892,228
Qualified XII (0.55)   6,060.455   8.80   53,332
Qualified XII (0.60)   10,437.960   8.79   91,750
Qualified XII (0.65)   26,601.852   8.77   233,298
Qualified XII (0.70)   18,098.821   8.75   158,365
Qualified XII (0.75)   69,650.791   8.74   608,748
Qualified XII (0.80)   16,493.180   8.72   143,821
Qualified XII (0.85)   41,381.788   8.71   360,435
Qualified XII (0.90)   8,324.075   8.69   72,336
Qualified XII (0.95)   60,708.858   8.67   526,346
Qualified XII (1.00)   314,224.665   8.66   2,721,186
Qualified XII (1.05)   8,015.433   8.64   69,253
Qualified XII (1.10)   4,788.078   8.63   41,321
Qualified XII (1.15)   20,660.672   8.61   177,888
Qualified XII (1.20)   2,463.392   8.59   21,161
Qualified XII (1.25)   22,145.367   8.58   190,007
Qualified XII (1.30)   155.801   8.56   1,334
Qualified XII (1.35)   218.600   8.55   1,869
Qualified XII (1.40)   2,258.667   8.53   19,266
Qualified XII (1.50)   4.029   8.50   34
Qualified XIII   105.525   8.67   915
Qualified XV   578.954   8.67   5,020
Qualified XVI   13,808.711   8.50   117,374
Qualified XXI   6,334.671   8.72   55,238
Qualified XXV   8,527.569   8.74   74,531
Qualified XXVI   759.649   8.69   6,601
Qualified XXXVIII   6,919.097   6.59   45,597
Qualified XLIII   3,800.052   6.57   24,966
Qualified LIII   2,064.404   8.88   18,332
Qualified LIV   20,662.851   8.82   182,246
Qualified LVI   2,678.139   8.92   23,889
Qualified LIX   221.968   8.84   1,962
    1,512,553.235       $ 13,111,311
ING Van Kampen Real Estate Portfolio - Institutional            
   Class            
Currently payable annuity contracts:   117,467.157   $ 6.16   $ 723,598
 
 
 
 
                                              268            

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

Division/Contract       Units   Unit Value   Extended Value
ING Van Kampen Real Estate Portfolio - Service                
Class                
Contracts in accumulation period:                
ING Custom Choice 62       5,273.166   $ 6.07   $ 32,008
ING MAP PLUS NP1       81,725.679   6.27   512,420
ING MAP PLUS NP4       1,278.285   6.24   7,977
ING MAP PLUS NP8       13,197.179   6.21   81,954
ING MAP PLUS NP9       5,668.711   6.20   35,146
ING MAP PLUS NP11       6,277.675   6.18   38,796
ING MAP PLUS NP12       2,132.003   6.17   13,154
ING MAP PLUS NP13       6,756.010   6.17   41,685
ING MAP PLUS NP14       20,825.614   6.16   128,286
ING MAP PLUS NP15       6,695.834   6.15   41,179
ING MAP PLUS NP16       21.244   6.14   130
ING MAP PLUS NP17       81.639   6.13   500
ING MAP PLUS NP18       1,624.240   6.12   9,940
ING MAP PLUS NP19       1,174.874   6.12   7,190
ING MAP PLUS NP20       2,177.245   6.11   13,303
ING MAP PLUS NP23       2,207.285   6.08   13,420
ING MAP PLUS NP24       713.168   6.08   4,336
ING MAP PLUS NP26       9,845.210   6.06   59,662
ING MAP PLUS NP28       70.134   6.04   424
Qualified V       730.341   6.04   4,411
Qualified VI       607,737.142   6.07   3,688,964
Qualified XII (0.00)       3,411.356   6.27   21,389
Qualified XII (0.25)       309.045   6.23   1,925
Qualified XII (0.30)       8,763.748   6.22   54,511
Qualified XII (0.40)       32,634.464   6.21   202,660
Qualified XII (0.50)       808,288.370   6.19   5,003,305
Qualified XII (0.55)       15,437.176   6.18   95,402
Qualified XII (0.60)       5,647.507   6.17   34,845
Qualified XII (0.65)       17,157.698   6.16   105,691
Qualified XII (0.70)       16,289.630   6.16   100,344
Qualified XII (0.75)       94,090.120   6.15   578,654
Qualified XII (0.80)       79,392.117   6.14   487,468
Qualified XII (0.85)       131,923.458   6.13   808,691
Qualified XII (0.90)       9,895.632   6.12   60,561
Qualified XII (0.95)       87,635.364   6.12   536,328
Qualified XII (1.00)       554,232.301   6.11   3,386,359
Qualified XII (1.05)       14,403.975   6.10   87,864
Qualified XII (1.10)       14,365.544   6.09   87,486
Qualified XII (1.15)       23,845.334   6.08   144,980
Qualified XII (1.20)       1,940.629   6.07   11,780
Qualified XII (1.25)       36,902.278   6.07   223,997
Qualified XII (1.30)       3,120.515   6.06   18,910
Qualified XII (1.40)       1,382.316   6.04   8,349
Qualified XII (1.45)       18.312   6.03   110
Qualified XII (1.50)       67.572   6.03   407
Qualified XV       3,810.954   6.12   23,323
 
 
 
    269            

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

Division/Contract   Units   Unit Value   Extended Value
ING Van Kampen Real Estate Portfolio - Service            
   Class (continued)            
Qualified XVI   13,168.308   $ 6.03   $ 79,405
Qualified XVII   13.901   6.07   84
Qualified XXI   8,929.428   6.14   54,827
Qualified XXV   13,969.010   6.15   85,909
Qualified XXVI   2,360.154   6.12   14,444
Qualified XXXVIII   12,491.697   5.35   66,831
Qualified XLIII   452.298   5.33   2,411
Qualified LIII   13,969.573   6.21   86,751
Qualified LIV   6,625.216   6.17   40,878
Qualified LVI   5,650.189   6.24   35,257
Qualified LIX   295.701   6.19   1,830
    2,819,103.568       $ 17,288,851
ING VP Index Plus International Equity Portfolio -            
   Institutional Class            
Currently payable annuity contracts:   104,337.094   $5.22 to $5.25   $ 547,557
Contracts in accumulation period:            
ING Custom Choice 62   309.619   6.01   1,861
Qualified VI   516,586.394   6.01   3,104,684
Qualified VIII   16.547   6.00   99
Qualified X (1.15)   21,210.324   5.31   112,627
Qualified X (1.25)   104,328.544   5.31   553,985
Qualified XII (0.00)   176.250   6.11   1,077
Qualified XII (0.05)   16,567.809   6.11   101,229
Qualified XII (0.20)   894.450   6.09   5,447
Qualified XII (0.25)   546.289   6.09   3,327
Qualified XII (0.30)   35,921.247   6.08   218,401
Qualified XII (0.35)   264.433   6.08   1,608
Qualified XII (0.40)   8,248.516   6.08   50,151
Qualified XII (0.50)   66,049.427   6.07   400,920
Qualified XII (0.55)   5,621.863   6.06   34,068
Qualified XII (0.60)   10,347.315   6.06   62,705
Qualified XII (0.65)   16,958.112   6.06   102,766
Qualified XII (0.70)   14,813.476   6.05   89,622
Qualified XII (0.75)   99,286.689   6.05   600,684
Qualified XII (0.80)   79,193.826   6.04   478,331
Qualified XII (0.85)   85,620.283   6.04   517,147
Qualified XII (0.90)   9,823.595   6.03   59,236
Qualified XII (0.95)   109,318.488   6.03   659,190
Qualified XII (1.00)   196,247.788   6.03   1,183,374
Qualified XII (1.05)   7,960.505   6.02   47,922
Qualified XII (1.10)   18,605.309   6.02   112,004
Qualified XII (1.15)   29,755.903   6.01   178,833
Qualified XII (1.20)   1,429.637   6.01   8,592
Qualified XII (1.25)   21,973.521   6.01   132,061
Qualified XII (1.35)   47.480   6.00   285
Qualified XII (1.40)   5,840.237   5.99   34,983
Qualified XII (1.45)   446.943   5.99   2,677
Qualified XII (1.50)   37.977   5.98   227
 
 
                                                    270            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Index Plus International Equity Portfolio -            
   Institutional Class (continued)            
Qualified XV   5,780.993   $ 6.03   $ 34,859
Qualified XVI   12,165.724   5.98   72,751
Qualified XVIII   7,384.774   5.31   39,213
Qualified XXI   10,240.157   6.04   61,851
Qualified XXV   483.959   6.06   2,933
Qualified XXVI   74.720   6.04   451
Qualified XXVII   296,630.184   5.28   1,566,207
Qualified XXXII   864.987   5.31   4,593
Qualified XXXVI   3,334.234   6.06   20,205
Qualified XXXVIII   2,225.763   5.40   12,019
Qualified LIII   12,882.229   6.07   78,195
Qualified LIV   5,893.137   6.04   35,595
Qualified LVI   5,024.094   6.09   30,597
Qualified LIX   670.639   5.96   3,997
    1,952,441.484       $ 11,371,146
ING VP Index Plus International Equity Portfolio -            
Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP28   168.389   $ 6.42   $ 1,081
Qualified VI   188,659.672   6.44   1,214,968
Qualified X (1.15)   9,429.492   6.46   60,915
Qualified X (1.25)   22,105.492   6.44   142,359
Qualified XII (0.00)   4,214.083   6.66   28,066
Qualified XII (0.10)   8.255   6.64   55
Qualified XII (0.25)   791.542   6.61   5,232
Qualified XII (0.30)   108.036   6.61   714
Qualified XII (0.40)   4,424.927   6.59   29,160
Qualified XII (0.50)   3,160.056   6.57   20,762
Qualified XII (0.55)   340.273   6.56   2,232
Qualified XII (0.65)   13,716.856   6.54   89,708
Qualified XII (0.70)   377.720   6.54   2,470
Qualified XII (0.75)   12,017.905   6.53   78,477
Qualified XII (0.80)   9,132.801   6.52   59,546
Qualified XII (0.85)   16,087.762   6.51   104,731
Qualified XII (0.90)   2,050.731   6.50   13,330
Qualified XII (0.95)   31,590.880   6.49   205,025
Qualified XII (1.00)   75,211.042   6.48   487,368
Qualified XII (1.05)   1,925.623   6.47   12,459
Qualified XII (1.10)   5,372.110   6.47   34,758
Qualified XII (1.15)   8,522.474   6.46   55,055
Qualified XII (1.20)   1,350.231   6.45   8,709
Qualified XII (1.25)   3,306.189   6.44   21,292
Qualified XII (1.35)   111.755   6.42   717
Qualified XII (1.40)   1,678.895   6.41   10,762
Qualified XVI   7,579.902   6.40   48,511
Qualified XVIII   10,570.117   6.48   68,494
Qualified XXI   3,633.810   6.52   23,692
Qualified XXV   2,859.870   6.53   18,675
 
 
                                                     271            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Index Plus International Equity Portfolio -            
   Service Class (continued)            
Qualified XXVII   15.812   $ 6.61   $ 105
Qualified XXXII   527.978   6.44   3,400
Qualified XXXV   1,905.231   6.07   11,565
Qualified XLIII   446.222   5.37   2,396
Qualified LIII   4,868.903   6.60   32,135
Qualified LIV   1,464.408   6.55   9,592
Qualified LVI   3,260.583   6.62   21,585
Qualified LIX   509.341   6.57   3,346
    453,505.368       $ 2,933,447
ING Wells Fargo Small Cap Disciplined Portfolio -            
Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP26   940.730   $ 6.63   $ 6,237
Qualified VI   26,420.399   6.64   175,431
Qualified XII (0.00)   6,810.073   6.86   46,717
Qualified XII (0.30)   27.070   6.81   184
Qualified XII (0.40)   504.882   6.79   3,428
Qualified XII (0.50)   16,805.174   6.77   113,771
Qualified XII (0.55)   4,152.706   6.76   28,072
Qualified XII (0.65)   10,605.536   6.75   71,587
Qualified XII (0.75)   2,048.838   6.73   13,789
Qualified XII (0.80)   2,145.801   6.72   14,420
Qualified XII (0.85)   1,067.086   6.71   7,160
Qualified XII (0.90)   1,947.664   6.70   13,049
Qualified XII (0.95)   3,548.549   6.69   23,740
Qualified XII (1.00)   8,812.022   6.68   58,864
Qualified XII (1.05)   46.135   6.67   308
Qualified XII (1.10)   45.942   6.67   306
Qualified XII (1.15)   1,989.221   6.66   13,248
Qualified XII (1.20)   105.053   6.65   699
Qualified XII (1.25)   1,842.818   6.64   12,236
Qualified XII (1.40)   633.175   6.61   4,185
Qualified XII (1.45)   10.664   6.60   70
Qualified XVI   218.668   6.59   1,441
Qualified XXV   210.070   6.73   1,414
Qualified XXVII   49,157.511   6.62   325,423
Qualified XLIII   21.051   6.44   136
Qualified LIII   1,669.446   6.80   11,352
    141,786.284       $ 947,267
ING International Growth Opportunities Fund -            
Class Q            
Contracts in accumulation period:            
ING MAP PLUS NP22   879.735   $ 7.92   $ 6,968
ING MAP PLUS NP29   14.906   7.78   116
    894.641       $ 7,084
 
 
 
 
                                                272            

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

Division/Contract   Units   Unit Value   Extended Value
ING International SmallCap Multi-Manager Fund -            
   Class A            
Contracts in accumulation period:            
ING MAP PLUS NP1   53,892.871   $ 9.84   $ 530,306
ING MAP PLUS NP8   13,875.613   9.67   134,177
ING MAP PLUS NP9   3,510.049   9.65   33,872
ING MAP PLUS NP11   7,239.049   9.60   69,495
ING MAP PLUS NP13   4.903   9.55   47
ING MAP PLUS NP14   1,981.060   9.53   18,880
ING MAP PLUS NP15   4,520.709   9.51   42,992
ING MAP PLUS NP16   8,317.623   9.48   78,851
ING MAP PLUS NP17   29.746   9.46   281
ING MAP PLUS NP18   1,425.197   9.44   13,454
ING MAP PLUS NP19   3,472.302   9.41   32,674
ING MAP PLUS NP20   28,634.887   9.39   268,882
ING MAP PLUS NP23   1,055.997   9.32   9,842
ING MAP PLUS NP24   672.668   9.30   6,256
ING MAP PLUS NP26   658.741   9.25   6,093
ING MAP PLUS NP29   650.532   9.19   5,978
ING MAP PLUS NP30   27.902   9.16   256
ING MAP PLUS NP35   970.535   9.05   8,783
    130,940.384       $ 1,261,119
ING American Century Large Company Value            
   Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   10,645.977   $ 7.36   $ 78,354
 
ING American Century Large Company Value            
   Portfolio - Service Class            
Currently payable annuity contracts:   6,707.613   $ 8.21   $ 55,070
Contracts in accumulation period:            
ING Custom Choice 62   929.494   7.93   7,371
Qualified VI   96,719.332   9.81   948,817
Qualified X (1.15)   18,398.562   7.87   144,797
Qualified X (1.25)   31,865.975   7.62   242,819
Qualified XII (0.25)   30.838   10.54   325
Qualified XII (0.30)   527.048   10.50   5,534
Qualified XII (0.40)   9,406.735   10.43   98,112
Qualified XII (0.50)   3,000.018   10.35   31,050
Qualified XII (0.55)   654.813   10.32   6,758
Qualified XII (0.60)   103.192   10.28   1,061
Qualified XII (0.65)   6,885.127   10.24   70,504
Qualified XII (0.70)   1,987.577   10.21   20,293
Qualified XII (0.75)   3,897.094   10.17   39,633
Qualified XII (0.80)   5,107.702   10.14   51,792
Qualified XII (0.85)   14,394.428   10.10   145,384
Qualified XII (0.90)   913.538   10.06   9,190
Qualified XII (0.95)   15,043.328   10.03   150,885
Qualified XII (1.00)   50,569.262   9.99   505,187
Qualified XII (1.05)   904.550   9.96   9,009
Qualified XII (1.10)   3,800.294   9.92   37,699
 
                                                      273            

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

Division/Contract       Units   Unit Value   Extended Value
ING American Century Large Company Value                
   Portfolio - Service Class (continued)                
Qualified XII (1.15)       619.080   $ 9.88   $ 6,117
Qualified XII (1.20)       387.902   9.85   3,821
Qualified XII (1.25)       8,922.370   9.81   87,528
Qualified XII (1.30)       367.718   9.78   3,596
Qualified XII (1.35)       422.612   9.74   4,116
Qualified XII (1.40)       1,026.846   9.71   9,971
Qualified XIII       36.326   10.03   364
Qualified XV       892.547   10.03   8,952
Qualified XVI       2,158.726   9.64   20,810
Qualified XXV       684.031   10.17   6,957
Qualified XXVI       1,370.194   10.06   13,784
Qualified XXXVIII       138.217   6.05   836
Qualified XLIII       299.788   6.03   1,808
Qualified LIII       4,690.845   7.75   36,354
Qualified LIV       2,128.508   7.70   16,390
Qualified LVI       1,893.670   7.79   14,752
        297,885.900       $ 2,817,446
ING American Century Small-Mid Cap Value                
   Portfolio - Adviser Class                
Contracts in accumulation period:                
Qualified XXXV       4,657.036   $ 8.28   $ 38,560
 
ING American Century Small-Mid Cap Value                
   Portfolio - Service Class                
Currently payable annuity contracts:       20,897.102   $ 10.64   $ 222,345
Contracts in accumulation period:                
ING Custom Choice 62       570.841   9.95   5,680
ING MAP PLUS NP10       4,515.965   10.23   46,198
ING MAP PLUS NP11       4,146.402   10.21   42,335
ING MAP PLUS NP15       7,526.132   10.11   76,089
ING MAP PLUS NP16       31.472   10.08   317
ING MAP PLUS NP19       671.100   10.01   6,718
ING MAP PLUS NP21       7,244.716   9.96   72,157
ING MAP PLUS NP22       364.576   9.94   3,624
ING MAP PLUS NP26       530.482   9.84   5,220
ING MAP PLUS NP28       267.559   9.79   2,619
Qualified V       107.753   10.83   1,167
Qualified VI       234,492.737   10.94   2,565,351
Qualified X (1.15)       18,367.288   11.02   202,408
Qualified X (1.25)       20,233.828   10.94   221,358
Qualified XII (0.00)       296.519   11.90   3,529
Qualified XII (0.05)       39,840.049   11.75   468,121
Qualified XII (0.10)       16.136   11.82   191
Qualified XII (0.25)       814.507   11.70   9,530
Qualified XII (0.30)       10,524.938   11.66   122,721
Qualified XII (0.35)       11.355   11.62   132
Qualified XII (0.40)       10,979.477   11.58   127,142
Qualified XII (0.50)       27,666.099   11.51   318,437
Qualified XII (0.55)       1,742.173   11.47   19,983
 
    274            

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

Division/Contract       Units   Unit Value   Extended Value
ING American Century Small-Mid Cap Value                
Portfolio - Service Class (continued)                
Qualified XII (0.60)       13,719.996   $ 11.43   $ 156,820
Qualified XII (0.65)       13,474.229   11.39   153,471
Qualified XII (0.70)       14,960.016   11.35   169,796
Qualified XII (0.75)       32,018.744   11.32   362,452
Qualified XII (0.80)       4,843.192   11.28   54,631
Qualified XII (0.85)       25,079.617   11.24   281,895
Qualified XII (0.90)       1,457.982   11.20   16,329
Qualified XII (0.95)       1,194,533.884   11.17   13,342,943
Qualified XII (1.00)       186,081.181   11.13   2,071,084
Qualified XII (1.05)       4,519.133   11.09   50,117
Qualified XII (1.10)       7,798.831   11.05   86,177
Qualified XII (1.15)       5,152.750   11.02   56,783
Qualified XII (1.20)       853.111   10.98   9,367
Qualified XII (1.25)       15,366.474   10.94   168,109
Qualified XII (1.30)       180.160   10.91   1,966
Qualified XII (1.35)       133.654   10.87   1,453
Qualified XII (1.40)       2,224.501   10.84   24,114
Qualified XII (1.45)       46.225   10.80   499
Qualified XIII       329.895   11.17   3,685
Qualified XV       913.672   11.17   10,206
Qualified XVI       11,663.003   10.76   125,494
Qualified XVII       3,613.704   10.94   39,534
Qualified XVIII       3,077.430   11.13   34,252
Qualified XXI       6,123.624   11.28   69,074
Qualified XXV       1,026.947   11.32   11,625
Qualified XXVI       142.953   11.20   1,601
Qualified XXXII       222.276   10.38   2,307
Qualified XXXVIII       11,028.332   7.02   77,419
Qualified XLIII       194.106   7.00   1,359
Qualified LIII       7,260.216   9.24   67,084
Qualified LIV       3,771.859   9.18   34,626
Qualified LVI       4,346.838   9.28   40,339
Qualified LIX       430.384   11.65   5,014
        1,988,448.125       $ 22,074,997
ING Baron Asset Portfolio - Service Class                
Contracts in accumulation period:                
ING MAP PLUS NP6       4,944.370   $ 6.49   $ 32,089
ING MAP PLUS NP8       32,074.442   6.47   207,522
ING MAP PLUS NP9       16,026.088   6.46   103,529
ING MAP PLUS NP10       3,354.729   6.45   21,638
ING MAP PLUS NP11       13,943.623   6.44   89,797
ING MAP PLUS NP13       2,816.485   6.43   18,110
ING MAP PLUS NP14       19,271.539   6.42   123,723
ING MAP PLUS NP15       1,975.011   6.41   12,660
ING MAP PLUS NP17       25,334.266   6.39   161,886
ING MAP PLUS NP18       3,546.947   6.38   22,630
ING MAP PLUS NP19       18,289.897   6.38   116,690
 
 
 
    275            

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

Division/Contract   Units   Unit Value   Extended Value
ING Baron Asset Portfolio - Service Class (continued)            
ING MAP PLUS NP20   15,109.064   $ 6.37   $ 96,245
ING MAP PLUS NP21   18,992.439   6.36   120,792
ING MAP PLUS NP22   192.754   6.35   1,224
ING MAP PLUS NP23   12,312.076   6.34   78,059
ING MAP PLUS NP24   0.670   6.33   4
ING MAP PLUS NP26   1,849.024   6.32   11,686
ING MAP PLUS NP27   301.113   6.31   1,900
ING MAP PLUS NP28   1,802.319   6.30   11,355
ING MAP PLUS NP29   3,101.587   6.29   19,509
ING MAP PLUS NP30   3.232   6.28   20
ING MAP PLUS NP32   26.689   6.27   167
Qualified VI   47,182.877   6.32   298,196
Qualified XII (0.00)   1.458   6.53   10
Qualified XII (0.30)   741.613   6.48   4,806
Qualified XII (0.40)   1,863.333   6.46   12,037
Qualified XII (0.50)   37,554.739   6.44   241,853
Qualified XII (0.55)   954.898   6.44   6,150
Qualified XII (0.60)   2,087.373   6.43   13,422
Qualified XII (0.65)   1,079.072   6.42   6,928
Qualified XII (0.70)   564.931   6.41   3,621
Qualified XII (0.75)   3,523.673   6.40   22,552
Qualified XII (0.80)   2,611.102   6.39   16,685
Qualified XII (0.85)   9,103.353   6.38   58,079
Qualified XII (0.90)   339.204   6.38   2,164
Qualified XII (0.95)   4,104.793   6.37   26,148
Qualified XII (1.00)   12,398.742   6.36   78,856
Qualified XII (1.05)   882.231   6.35   5,602
Qualified XII (1.10)   1,431.429   6.34   9,075
Qualified XII (1.15)   1,249.483   6.33   7,909
Qualified XII (1.20)   1,162.013   6.32   7,344
Qualified XII (1.25)   2,699.959   6.32   17,064
Qualified XII (1.40)   208.429   6.29   1,311
Qualified XII (1.45)   5.685   6.28   36
Qualified XV   10.185   6.37   65
Qualified XVI   3,290.818   6.27   20,633
Qualified XXVI   175.307   6.38   1,118
Qualified XXXVIII   40.951   5.76   236
Qualified XLIII   328.202   5.75   1,887
Qualified LIV   1,034.222   6.43   6,650
Qualified LVI   667.992   6.50   4,342
    332,566.431       $ 2,126,014
ING Baron Small Cap Growth Portfolio - Adviser            
   Class            
Contracts in accumulation period:            
Qualified XXXV   29,810.779   $ 7.25   $ 216,128
 
 
 
 
                                                      276            

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

Division/Contract   Units   Unit Value   Extended Value
ING Baron Small Cap Growth Portfolio - Service            
   Class            
Currently payable annuity contracts:   53,062.269   $ 9.49   $ 503,561
Contracts in accumulation period:            
ING Custom Choice 62   1,128.980   8.91   10,059
ING MAP PLUS NP1   8,253.538   9.46   78,078
ING MAP PLUS NP4   9,999.393   9.39   93,894
ING MAP PLUS NP6   3,440.740   9.34   32,137
ING MAP PLUS NP8   24,877.661   9.30   231,362
ING MAP PLUS NP9   23,204.115   9.27   215,102
ING MAP PLUS NP10   662.717   9.25   6,130
ING MAP PLUS NP11   30,352.052   9.23   280,149
ING MAP PLUS NP12   7,903.891   9.21   72,795
ING MAP PLUS NP13   2,376.939   9.18   21,820
ING MAP PLUS NP14   16,872.225   9.16   154,550
ING MAP PLUS NP15   40,243.671   9.14   367,827
ING MAP PLUS NP16   2,248.442   9.12   20,506
ING MAP PLUS NP17   11,263.944   9.09   102,389
ING MAP PLUS NP18   16,165.674   9.07   146,623
ING MAP PLUS NP19   8,758.895   9.05   79,268
ING MAP PLUS NP20   43,781.560   9.03   395,347
ING MAP PLUS NP21   17,765.048   9.00   159,885
ING MAP PLUS NP22   106.980   8.98   961
ING MAP PLUS NP23   13,644.765   8.96   122,257
ING MAP PLUS NP24   2,585.187   8.94   23,112
ING MAP PLUS NP26   2,033.352   8.89   18,077
ING MAP PLUS NP27   364.582   8.87   3,234
ING MAP PLUS NP28   1,596.418   8.85   14,128
ING MAP PLUS NP29   31.381   8.83   277
ING MAP PLUS NP30   2,981.669   8.81   26,269
ING MAP PLUS NP32   50.288   8.76   441
Qualified VI   1,032,298.907   10.61   10,952,691
Qualified X (1.15)   62,552.022   10.68   668,056
Qualified X (1.25)   109,538.205   10.61   1,162,200
Qualified XII (0.00)   5,482.575   11.54   63,269
Qualified XII (0.05)   42,357.627   11.40   482,877
Qualified XII (0.10)   198.865   11.46   2,279
Qualified XII (0.25)   1,616.228   11.35   18,344
Qualified XII (0.30)   42,300.024   11.31   478,413
Qualified XII (0.35)   1,445.872   11.27   16,295
Qualified XII (0.40)   45,355.326   11.23   509,340
Qualified XII (0.50)   1,201,988.239   11.16   13,414,189
Qualified XII (0.55)   37,115.218   11.12   412,721
Qualified XII (0.60)   38,971.850   11.08   431,808
Qualified XII (0.65)   38,438.428   11.05   424,745
Qualified XII (0.70)   31,643.649   11.01   348,397
Qualified XII (0.75)   170,720.709   10.97   1,872,806
Qualified XII (0.80)   61,280.157   10.94   670,405
Qualified XII (0.85)   167,687.470   10.90   1,827,793
 
 
 
                                                  277            

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

Division/Contract   Units   Unit Value   Extended Value
ING Baron Small Cap Growth Portfolio - Service            
Class (continued)            
Qualified XII (0.90)   26,244.655   $ 10.86   $ 285,017
Qualified XII (0.95)   1,047,522.418   10.83   11,344,668
Qualified XII (1.00)   554,432.848   10.79   5,982,330
Qualified XII (1.05)   15,893.805   10.76   171,017
Qualified XII (1.10)   26,313.748   10.72   282,083
Qualified XII (1.15)   47,092.798   10.68   502,951
Qualified XII (1.20)   10,006.213   10.65   106,566
Qualified XII (1.25)   53,816.420   10.61   570,992
Qualified XII (1.30)   69.211   10.58   732
Qualified XII (1.35)   916.424   10.54   9,659
Qualified XII (1.40)   6,826.595   10.51   71,748
Qualified XII (1.45)   937.313   10.47   9,814
Qualified XII (1.50)   264.733   10.44   2,764
Qualified XIII   1,179.538   10.83   12,774
Qualified XV   484.318   10.83   5,245
Qualified XVI   33,410.082   10.44   348,801
Qualified XVII   2,885.923   10.61   30,620
Qualified XVIII   2,964.675   10.79   31,989
Qualified XXI   20,859.399   10.94   228,202
Qualified XXV   7,435.754   10.97   81,570
Qualified XXVI   703.907   10.86   7,644
Qualified XXVII   575,621.011   12.23   7,039,845
Qualified XXVIII   247,715.489   5.77   1,429,318
Qualified XXXII   415.574   9.48   3,940
Qualified XXXIII (0.65)   19,812.977   11.23   222,500
Qualified XXXVIII   6,051.667   5.68   34,373
Qualified XLIII   813.007   5.66   4,602
Qualified LIII   22,448.867   7.80   175,101
Qualified LIV   28,006.708   7.75   217,052
Qualified LVI   6,133.889   7.83   48,028
Qualified LIX   3,249.581   11.30   36,720
    6,207,277.294       $ 66,235,531
ING Columbia Small Cap Value II Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP8   2,536.464   $ 6.83   $ 17,324
ING MAP PLUS NP11   4,049.703   6.80   27,538
ING MAP PLUS NP17   6,144.767   6.74   41,416
ING MAP PLUS NP18   2,212.924   6.73   14,893
ING MAP PLUS NP19   1,284.064   6.73   8,642
ING MAP PLUS NP24   18.734   6.68   125
ING MAP PLUS NP28   65.167   6.65   433
Qualified V   756.757   6.63   5,017
Qualified VI   54,338.345   6.66   361,893
Qualified XII (0.00)   11.617   6.89   80
Qualified XII (0.30)   152.607   6.84   1,044
Qualified XII (0.40)   377.804   6.82   2,577
Qualified XII (0.50)   1,237.868   6.80   8,418
 
 
                                                        278            

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

Division/Contract   Units   Unit Value   Extended Value
ING Columbia Small Cap Value II Portfolio - Service            
Class (continued)            
Qualified XII (0.55)   882.373   $ 6.79   $ 5,991
Qualified XII (0.60)   62.667   6.78   425
Qualified XII (0.65)   272.347   6.77   1,844
Qualified XII (0.70)   5,249.059   6.76   35,484
Qualified XII (0.75)   8,907.738   6.75   60,127
Qualified XII (0.80)   771.318   6.74   5,199
Qualified XII (0.85)   6,608.698   6.73   44,477
Qualified XII (0.90)   2,466.211   6.73   16,598
Qualified XII (0.95)   2,275.196   6.72   15,289
Qualified XII (1.00)   22,549.914   6.71   151,310
Qualified XII (1.05)   1,186.821   6.70   7,952
Qualified XII (1.10)   3,092.538   6.69   20,689
Qualified XII (1.15)   6,272.341   6.68   41,899
Qualified XII (1.20)   1,912.180   6.67   12,754
Qualified XII (1.25)   3,522.956   6.66   23,463
Qualified XII (1.30)   0.632   6.65   4
Qualified XII (1.40)   142.607   6.64   947
Qualified XVI   1,567.136   6.62   10,374
Qualified XXV   7.932   6.75   54
Qualified LIII   2.849   6.82   19
Qualified LIV   93.614   6.78   635
Qualified LVI   1,199.934   6.85   8,220
    142,233.882       $ 953,154
ING Davis New York Venture Portfolio - Service            
   Class            
Currently payable annuity contracts:   31,743.185   $ 8.05   $ 255,533
Contracts in accumulation period:            
ING Custom Choice 62   317.202   7.83   2,484
ING MAP PLUS NP1   11,471.362   7.85   90,050
ING MAP PLUS NP8   41,807.523   7.72   322,754
ING MAP PLUS NP11   4,824.786   7.66   36,958
ING MAP PLUS NP14   7,735.166   7.60   58,787
ING MAP PLUS NP16   4,072.403   7.57   30,828
ING MAP PLUS NP17   1,442.193   7.55   10,889
ING MAP PLUS NP18   421.665   7.53   3,175
ING MAP PLUS NP19   1,849.628   7.51   13,891
ING MAP PLUS NP20   192.053   7.49   1,438
ING MAP PLUS NP22   610.643   7.46   4,555
ING MAP PLUS NP23   7,365.531   7.44   54,800
ING MAP PLUS NP24   5.430   7.42   40
ING MAP PLUS NP26   553.850   7.38   4,087
ING MAP PLUS NP27   2.465   7.37   18
ING MAP PLUS NP28   211.171   7.35   1,552
ING MAP PLUS NP29   829.381   7.33   6,079
Qualified VI   262,812.784   12.61   3,314,069
Qualified X (1.15)   13,188.599   8.17   107,751
Qualified X (1.25)   20,117.770   7.92   159,333
Qualified XII (0.00)   338.981   13.79   4,675
 
 
                                                         279            

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

Division/Contract   Units   Unit Value   Extended Value
ING Davis New York Venture Portfolio - Service            
Class (continued)            
Qualified XII (0.25)   601.766   $ 13.54   $ 8,148
Qualified XII (0.30)   6,384.142   13.49   86,122
Qualified XII (0.40)   11,013.041   13.40   147,575
Qualified XII (0.50)   39,316.873   13.30   522,914
Qualified XII (0.55)   6,104.744   13.26   80,949
Qualified XII (0.60)   10,487.372   13.21   138,538
Qualified XII (0.65)   1,456.131   13.16   19,163
Qualified XII (0.70)   6,350.977   13.11   83,261
Qualified XII (0.75)   30,406.629   13.07   397,415
Qualified XII (0.80)   7,168.551   13.02   93,335
Qualified XII (0.85)   22,012.135   12.97   285,497
Qualified XII (0.90)   3,216.745   12.93   41,593
Qualified XII (0.95)   30,187.586   12.88   388,816
Qualified XII (1.00)   84,261.709   12.84   1,081,920
Qualified XII (1.05)   4,826.905   12.79   61,736
Qualified XII (1.10)   4,429.894   12.74   56,437
Qualified XII (1.15)   3,211.644   12.70   40,788
Qualified XII (1.20)   1,441.553   12.65   18,236
Qualified XII (1.25)   15,209.815   12.61   191,796
Qualified XII (1.30)   289.131   12.56   3,631
Qualified XII (1.35)   0.528   12.52   7
Qualified XII (1.40)   958.796   12.47   11,956
Qualified XII (1.45)   156.220   12.43   1,942
Qualified XII (1.50)   26.527   12.39   329
Qualified XIII   1,342.806   12.88   17,295
Qualified XV   2,674.578   12.88   34,449
Qualified XVI   5,787.241   12.39   71,704
Qualified XVII   1,373.839   12.61   17,324
Qualified XVIII   1,863.616   8.26   15,393
Qualified XXV   6,501.305   13.07   84,972
Qualified XXVI   1,042.258   12.93   13,476
Qualified XXXVIII   5,435.540   5.96   32,396
Qualified XLIII   585.328   5.94   3,477
Qualified LIII   2,284.486   7.92   18,093
Qualified LIV   675.179   7.86   5,307
Qualified LVI   3,631.857   7.95   28,873
Qualified LIX   1.948   13.49   26
    734,633.166       $ 8,588,635
ING Fidelity® VIP Mid Cap Portfolio - Service Class            
Contracts in accumulation period:            
Qualified XII (0.00)   72.191   $ 7.45   $ 538
Qualified XII (0.50)   911,209.454   7.36   6,706,502
    911,281.645       $ 6,707,040
ING Index Solution 2015 Portfolio - Adviser Class            
Contracts in accumulation period:            
ING MAP PLUS NP15   42.684   $ 7.95   $ 339
ING MAP PLUS NP28   4,666.027   7.91   36,908
    4,708.711       $ 37,247
 
                                                  280            

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

Division/Contract   Units   Unit Value   Extended Value
ING Index Solution 2025 Portfolio - Adviser Class            
Contracts in accumulation period:            
ING MAP PLUS NP28   11,318.209   $ 7.19   $ 81,378
 
ING Index Solution 2035 Portfolio - Adviser Class            
Contracts in accumulation period:            
ING MAP PLUS NP28   7,485.145   $ 6.81   $ 50,974
 
ING Index Solution 2045 Portfolio - Adviser Class            
Contracts in accumulation period:            
ING MAP PLUS NP28   972.851   $ 6.43   $ 6,255
 
ING Index Solution Income Portfolio - Adviser Class            
Contracts in accumulation period:            
ING MAP PLUS NP15   111.606   $ 8.90   $ 993
 
ING JPMorgan Mid Cap Value Portfolio - Adviser            
   Class            
Contracts in accumulation period:            
Qualified XXXV   30,336.835   $ 8.08   $ 245,122
 
ING JPMorgan Mid Cap Value Portfolio - Service            
   Class            
Currently payable annuity contracts:   60,289.287   $ 10.15   $ 611,936
Contracts in accumulation period:            
ING Custom Choice 62   1,237.227   9.64   11,927
ING MAP PLUS NP1   7,550.780   10.21   77,093
ING MAP PLUS NP8   3,746.114   10.03   37,574
ING MAP PLUS NP9   5,811.751   10.01   58,176
ING MAP PLUS NP10   10.494   9.98   105
ING MAP PLUS NP11   6,889.026   9.96   68,615
ING MAP PLUS NP13   158.015   9.91   1,566
ING MAP PLUS NP14   5,481.384   9.89   54,211
ING MAP PLUS NP15   9,339.826   9.86   92,091
ING MAP PLUS NP16   16,875.173   9.84   166,052
ING MAP PLUS NP19   2,155.691   9.76   21,040
ING MAP PLUS NP20   23,190.851   9.74   225,879
ING MAP PLUS NP21   8,891.386   9.72   86,424
ING MAP PLUS NP22   106.536   9.69   1,032
ING MAP PLUS NP23   10,205.490   9.67   98,687
ING MAP PLUS NP24   1,212.237   9.65   11,698
ING MAP PLUS NP25   184.598   9.62   1,776
ING MAP PLUS NP26   99.188   9.60   952
ING MAP PLUS NP28   1,066.212   9.55   10,182
ING MAP PLUS NP29   12.434   9.53   119
ING MAP PLUS NP32   118.939   9.46   1,125
Qualified VI   577,573.642   11.56   6,676,751
Qualified X (1.15)   36,418.513   11.63   423,547
Qualified X (1.25)   126,246.195   11.56   1,459,406
Qualified XII (0.00)   979.579   12.56   12,304
 
 
                                                        281            

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

Division/Contract   Units   Unit Value   Extended Value
ING JPMorgan Mid Cap Value Portfolio - Service            
   Class (continued)            
Qualified XII (0.05)   42,804.166   $ 12.41   $ 531,200
Qualified XII (0.10)   130.318   12.48   1,626
Qualified XII (0.25)   2,484.355   12.35   30,682
Qualified XII (0.30)   11,786.986   12.31   145,098
Qualified XII (0.35)   1,630.628   12.27   20,008
Qualified XII (0.40)   14,212.412   12.23   173,818
Qualified XII (0.50)   34,298.309   12.15   416,724
Qualified XII (0.55)   21,651.962   12.11   262,205
Qualified XII (0.60)   35,721.838   12.07   431,163
Qualified XII (0.65)   13,796.174   12.03   165,968
Qualified XII (0.70)   20,708.271   11.99   248,292
Qualified XII (0.75)   108,132.600   11.95   1,292,185
Qualified XII (0.80)   16,866.036   11.91   200,874
Qualified XII (0.85)   63,941.331   11.87   758,984
Qualified XII (0.90)   17,364.548   11.83   205,423
Qualified XII (0.95)   77,266.800   11.79   910,976
Qualified XII (1.00)   296,734.874   11.75   3,486,635
Qualified XII (1.05)   6,469.580   11.71   75,759
Qualified XII (1.10)   19,104.410   11.67   222,948
Qualified XII (1.15)   10,941.156   11.63   127,246
Qualified XII (1.20)   3,517.252   11.59   40,765
Qualified XII (1.25)   20,976.490   11.56   242,488
Qualified XII (1.35)   197.901   11.48   2,272
Qualified XII (1.40)   3,535.618   11.44   40,447
Qualified XII (1.45)   714.232   11.40   8,142
Qualified XII (1.50)   98.707   11.36   1,121
Qualified XIII   1,211.807   11.79   14,287
Qualified XV   1,818.631   11.79   21,442
Qualified XVI   14,273.805   11.36   162,150
Qualified XVIII   620.862   11.75   7,295
Qualified XXI   7,663.208   11.91   91,269
Qualified XXV   1,998.683   11.95   23,884
Qualified XXVI   261.040   11.83   3,088
Qualified XXXII   1,691.215   10.05   16,997
Qualified XXXVIII   4,123.035   6.53   26,923
Qualified XLIII   465.619   6.51   3,031
Qualified LIII   6,686.040   8.65   57,834
Qualified LIV   44,280.349   8.59   380,368
Qualified LVI   6,210.695   8.69   53,971
Qualified LIX   355.301   12.30   4,370
    1,842,597.812       $ 21,120,226
ING Legg Mason Partners Aggressive Growth            
   Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   9,059.588   $ 6.57   $ 59,521
 
 
 
 
                                                    282            

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

Division/Contract       Units   Unit Value   Extended Value
ING Legg Mason Partners Aggressive Growth                
   Portfolio - Initial Class                
Currently payable annuity contracts:       13,400.290   $8.04 to $9.77   $ 118,633
Contracts in accumulation period:                
Qualified V       2,172.297   9.58   20,811
Qualified VI       3,225,449.201   9.77   31,512,639
Qualified VIII       5,446.045   10.23   55,713
Qualified X (1.15)       306,369.082   9.93   3,042,245
Qualified X (1.25)       157,667.231   9.77   1,540,409
Qualified XII (0.00)       12,528.100   6.39   80,055
Qualified XII (0.05)       52,969.682   10.74   568,894
Qualified XII (0.10)       131.510   6.33   832
Qualified XII (0.20)       24,484.236   6.26   153,271
Qualified XII (0.25)       8,466.692   6.23   52,747
Qualified XII (0.30)       66,596.751   6.19   412,234
Qualified XII (0.35)       19,410.914   6.16   119,571
Qualified XII (0.40)       31,152.278   7.11   221,493
Qualified XII (0.45)       869.039   6.10   5,301
Qualified XII (0.50)       245,384.828   5.98   1,467,401
Qualified XII (0.55)       125,345.022   6.03   755,830
Qualified XII (0.60)       110,333.625   6.00   662,002
Qualified XII (0.65)       190,578.549   5.97   1,137,754
Qualified XII (0.70)       291,857.375   5.94   1,733,633
Qualified XII (0.75)       377,307.236   5.90   2,226,113
Qualified XII (0.80)       511,208.161   6.34   3,241,060
Qualified XII (0.85)       606,165.934   6.81   4,127,990
Qualified XII (0.90)       35,480.634   6.07   215,367
Qualified XII (0.95)       456,027.418   6.73   3,069,065
Qualified XII (1.00)       1,290,936.530   6.68   8,623,456
Qualified XII (1.05)       120,140.309   6.64   797,732
Qualified XII (1.10)       89,383.583   6.60   589,932
Qualified XII (1.15)       88,994.207   6.56   583,802
Qualified XII (1.20)       29,024.325   6.52   189,239
Qualified XII (1.25)       52,530.619   6.48   340,398
Qualified XII (1.30)       4,769.708   6.44   30,717
Qualified XII (1.35)       1,665.661   6.40   10,660
Qualified XII (1.40)       19,484.575   6.36   123,922
Qualified XII (1.45)       2,306.580   6.31   14,555
Qualified XII (1.50)       6,174.492   6.28   38,776
Qualified XV       10,552.692   10.13   106,899
Qualified XVI       66,834.215   9.49   634,257
Qualified XVII       2,008.198   9.77   19,620
Qualified XVIII       6,458.037   9.77   63,095
Qualified XXV       17,774.109   10.19   181,118
Qualified XXVI       5,517.848   10.06   55,510
Qualified XXVII       1,106,993.597   10.06   11,136,356
Qualified XXVIII       220,287.403   10.03   2,209,483
Qualified XXXII       9,751.967   7.97   77,723
Qualified XXXVI       38,195.264   7.07   270,041
Qualified XXXVIII       89,896.768   5.87   527,694
Qualified XLIII       4,583.761   5.85   26,815
 
    283            

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

Division/Contract   Units   Unit Value   Extended Value
ING Legg Mason Partners Aggressive Growth            
   Portfolio - Initial Class            
Qualified LIII   48,820.146   $ 7.83   $ 382,262
Qualified LIV   27,739.512   7.78   215,813
Qualified LVI   59,185.786   7.86   465,200
Qualified LIX   17,120.297   7.14   122,239
    10,313,932.319       $ 84,378,377
ING Legg Mason Partners Aggressive Growth            
   Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP1   284.591   $ 7.56   $ 2,152
ING MAP PLUS NP3   631.181   7.52   4,746
ING MAP PLUS NP9   7,454.718   7.41   55,239
ING MAP PLUS NP17   5,703.073   7.27   41,461
ING MAP PLUS NP22   2,113.337   7.18   15,174
ING MAP PLUS NP26   134.108   7.11   954
    16,321.008       $ 119,726
ING Neuberger Berman Partners Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP23   3,472.420   $ 5.43   $ 18,855
ING MAP PLUS NP26   8,257.280   5.40   44,589
Qualified VI   88,658.061   5.40   478,754
Qualified XII (0.00)   108.957   5.59   609
Qualified XII (0.30)   1,067.856   5.54   5,916
Qualified XII (0.40)   528.687   5.53   2,924
Qualified XII (0.50)   129,725.278   5.51   714,786
Qualified XII (0.55)   2,610.263   5.51   14,383
Qualified XII (0.60)   22.425   5.50   123
Qualified XII (0.65)   2,033.812   5.49   11,166
Qualified XII (0.70)   2,401.511   5.48   13,160
Qualified XII (0.75)   30,934.803   5.48   169,523
Qualified XII (0.80)   135.384   5.47   741
Qualified XII (0.85)   4,059.766   5.46   22,166
Qualified XII (0.90)   1,175.795   5.46   6,420
Qualified XII (0.95)   9,471.525   5.45   51,620
Qualified XII (1.00)   50,600.421   5.44   275,266
Qualified XII (1.05)   2,856.453   5.43   15,511
Qualified XII (1.10)   1,946.698   5.43   10,571
Qualified XII (1.15)   6,541.221   5.42   35,453
Qualified XII (1.20)   1,034.503   5.41   5,597
Qualified XII (1.25)   3,124.315   5.40   16,871
Qualified XII (1.30)   920.487   5.40   4,971
Qualified XII (1.40)   144.751   5.38   779
Qualified XV   2,788.695   5.45   15,198
Qualified XVI   2,556.117   5.37   13,726
Qualified XXV   31.172   5.48   171
Qualified XXVI   848.330   5.46   4,632
Qualified XXXVIII   848.660   4.86   4,124
Qualified XLIII   439.210   4.85   2,130
Qualified LIII   954.872   5.53   5,280
Qualified LIV   14.222   5.50   78
Qualified LVI   23.763   5.56   132
    360,337.713       $ 1,966,225
 
 
 
                                                         284            

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

Division/Contract   Units   Unit Value   Extended Value
ING Oppenheimer Global Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   31,103.530   $ 7.66   $ 238,253
 
ING Oppenheimer Global Portfolio - Initial Class            
Currently payable annuity contracts:   225,893.303   $8.33 to $8.50   $ 1,915,794
Contracts in accumulation period:            
ING Custom Choice 62   5,013.011   8.42   42,210
ING MAP PLUS NP1   13,128.349   8.77   115,136
ING MAP PLUS NP3   3,422.786   8.74   29,915
ING MAP PLUS NP8   10,068.002   8.65   87,088
ING MAP PLUS NP10   15,806.145   8.62   136,249
ING MAP PLUS NP11   28,611.760   8.60   246,061
ING MAP PLUS NP12   12,781.822   8.59   109,796
ING MAP PLUS NP14   10,562.574   8.55   90,310
ING MAP PLUS NP15   23,959.689   8.54   204,616
ING MAP PLUS NP17   16,652.729   8.50   141,548
ING MAP PLUS NP18   13,163.648   8.49   111,759
ING MAP PLUS NP19   8,984.523   8.47   76,099
ING MAP PLUS NP20   22,592.076   8.45   190,903
ING MAP PLUS NP21   9,680.940   8.44   81,707
ING MAP PLUS NP22   4,419.328   8.42   37,211
ING MAP PLUS NP23   12,122.489   8.40   101,829
ING MAP PLUS NP24   1,017.588   8.39   8,538
ING MAP PLUS NP25   7,952.872   8.37   66,566
ING MAP PLUS NP26   2,194.219   8.36   18,344
ING MAP PLUS NP27   446.585   8.34   3,725
ING MAP PLUS NP28   14,030.143   8.32   116,731
ING MAP PLUS NP29   1,465.534   8.31   12,179
ING MAP PLUS NP30   3,995.183   8.29   33,120
ING MAP PLUS NP32   417.240   8.26   3,446
ING MAP PLUS NP35   1,244.071   8.21   10,214
Qualified V   2,634.406   8.37   22,050
Qualified VI   15,113,545.848   8.42   127,256,056
Qualified VIII   15,355.909   8.42   129,297
Qualified X (1.15)   799,138.915   8.45   6,752,724
Qualified X (1.25)   1,246,856.825   8.42   10,498,534
Qualified XII (0.00)   62,670.534   9.20   576,569
Qualified XII (0.05)   538,260.704   9.22   4,962,764
Qualified XII (0.10)   502.935   8.81   4,431
Qualified XII (0.20)   104,815.382   8.77   919,231
Qualified XII (0.25)   22,622.799   9.09   205,641
Qualified XII (0.30)   777,795.050   8.74   6,797,929
Qualified XII (0.35)   57,029.070   8.72   497,293
Qualified XII (0.40)   198,507.587   8.70   1,727,016
Qualified XII (0.45)   2,187.270   8.69   19,007
Qualified XII (0.50)   1,281,593.639   9.04   11,585,607
Qualified XII (0.55)   334,131.927   8.65   2,890,241
 
 
 
 
                                                     285            

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

Division/Contract   Units   Unit Value   Extended Value
ING Oppenheimer Global Portfolio - Initial Class            
(continued)            
Qualified XII (0.60)   514,068.553   $ 8.64   $ 4,441,552
Qualified XII (0.65)   935,360.868   8.62   8,062,811
Qualified XII (0.70)   618,430.600   8.60   5,318,503
Qualified XII (0.75)   1,740,357.517   8.59   14,949,671
Qualified XII (0.80)   1,961,961.878   8.93   17,520,320
Qualified XII (0.85)   1,562,267.520   8.55   13,357,387
Qualified XII (0.90)   151,270.481   8.89   1,344,795
Qualified XII (0.95)   1,893,044.675   8.52   16,128,741
Qualified XII (1.00)   4,895,755.260   8.86   43,376,392
Qualified XII (1.05)   361,586.103   8.84   3,196,421
Qualified XII (1.10)   406,348.984   8.83   3,588,062
Qualified XII (1.15)   368,463.527   8.80   3,242,479
Qualified XII (1.20)   124,953.171   8.77   1,095,839
Qualified XII (1.25)   423,529.071   8.76   3,710,115
Qualified XII (1.30)   22,729.907   8.74   198,659
Qualified XII (1.35)   11,716.277   8.39   98,300
Qualified XII (1.40)   59,696.315   8.91   531,894
Qualified XII (1.45)   19,338.266   8.36   161,668
Qualified XII (1.50)   14,371.311   8.34   119,857
Qualified XIII   610.950   8.52   5,205
Qualified XV   90,310.140   8.52   769,442
Qualified XVI   392,660.821   8.34   3,274,791
Qualified XVII   35,467.935   8.42   298,640
Qualified XVIII   61,961.815   8.42   521,718
Qualified XXII   1,815.809   8.69   15,779
Qualified XXV   160,039.447   8.59   1,374,739
Qualified XXVI   36,322.867   8.54   310,197
Qualified XXVII   7,651,915.256   8.49   64,964,761
Qualified XXVIII   2,840,311.555   8.49   24,114,245
Qualified XXXII   37,415.401   8.42   315,038
Qualified XXXIII (0.65)   46,864.672   8.62   403,973
Qualified XXXVI   72,336.797   8.65   625,713
Qualified XXXVIII   358,220.694   5.76   2,063,351
Qualified XLIII   29,433.925   5.74   168,951
Qualified LIII   213,686.371   8.92   1,906,082
Qualified LIV   143,516.884   8.87   1,272,995
Qualified LVI   212,876.910   8.96   1,907,377
Qualified LIX   40,030.451   8.70   348,265
    49,538,324.393       $ 423,940,212
ING Oppenheimer Global Portfolio - Service Class            
Contracts in accumulation period:            
Qualified VI   0.714   $ 9.87   $ 7
Qualified X (1.25)   33.889   9.87   334
Qualified XII (1.00)   26,571.871   10.03   266,516
    26,606.474       $ 266,857
 
 
 
 
          286            

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

Division/Contract   Units   Unit Value   Extended Value
ING Oppenheimer Strategic Income Portfolio -            
Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   26,264.009   $ 9.84   $ 258,438
 
ING Oppenheimer Strategic Income Portfolio - Initial            
   Class            
Currently payable annuity contracts:   196,452.079   $9.46 to $9.83   $ 1,924,963
Contracts in accumulation period:            
Qualified V   2,324.727   9.54   22,178
Qualified VI   3,183,170.909   9.60   30,558,441
Qualified VIII   2,185.515   9.60   20,981
Qualified X (1.15)   113,577.381   9.64   1,094,886
Qualified X (1.25)   230,526.738   9.60   2,213,057
Qualified XII (0.00)   10,512.973   10.08   105,971
Qualified XII (0.05)   161,168.327   10.20   1,643,917
Qualified XII (0.20)   26,195.005   10.00   261,950
Qualified XII (0.25)   4,259.651   9.98   42,511
Qualified XII (0.30)   261,592.669   9.96   2,605,463
Qualified XII (0.35)   3,310.732   9.95   32,942
Qualified XII (0.40)   110,126.331   10.04   1,105,668
Qualified XII (0.45)   10.652   9.91   106
Qualified XII (0.50)   538,205.498   10.00   5,382,055
Qualified XII (0.55)   60,616.383   9.97   604,345
Qualified XII (0.60)   90,415.311   9.95   899,632
Qualified XII (0.65)   223,197.562   9.83   2,194,032
Qualified XII (0.70)   184,286.778   9.81   1,807,853
Qualified XII (0.75)   395,254.371   9.79   3,869,540
Qualified XII (0.80)   446,158.269   9.88   4,408,044
Qualified XII (0.85)   487,485.129   9.86   4,806,603
Qualified XII (0.90)   73,247.435   9.84   720,755
Qualified XII (0.95)   530,219.390   9.82   5,206,754
Qualified XII (1.00)   1,398,547.367   9.80   13,705,764
Qualified XII (1.05)   98,318.985   9.68   951,728
Qualified XII (1.10)   110,697.831   9.76   1,080,411
Qualified XII (1.15)   76,222.345   9.74   742,406
Qualified XII (1.20)   63,281.849   9.71   614,467
Qualified XII (1.25)   168,466.235   9.70   1,634,122
Qualified XII (1.30)   15,654.710   9.68   151,538
Qualified XII (1.35)   2,222.530   9.69   21,536
Qualified XII (1.40)   25,995.804   9.68   251,639
Qualified XII (1.45)   9,805.031   9.65   94,619
Qualified XII (1.50)   698.615   9.62   6,721
Qualified XIII   3,332.456   9.72   32,391
Qualified XV   15,739.365   9.72   152,987
Qualified XVI   87,074.261   9.51   828,076
Qualified XVII   16,996.375   9.60   163,165
Qualified XVIII   13,303.951   9.60   127,718
Qualified XXI   26,196.942   9.77   255,944
Qualified XXV   13,542.184   9.79   132,578
 
 
                                                         287            

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

Division/Contract   Units   Unit Value   Extended Value
ING Oppenheimer Strategic Income Portfolio - Initial            
Class (continued)            
Qualified XXVI   6,990.360   $ 9.74   $ 68,086
Qualified XXVII   1,042,675.835   9.81   10,228,650
Qualified XXVIII   367,236.071   9.81   3,602,586
Qualified XXXII   4,492.665   9.60   43,130
Qualified XXXIII (0.65)   50,046.345   9.83   491,956
Qualified XXXVI   13,867.669   9.87   136,874
Qualified XXXVIII   40,880.428   8.53   348,710
Qualified XLIII   3,178.100   8.50   27,014
Qualified LIII   66,460.260   10.03   666,596
Qualified LIV   73,896.802   9.96   736,012
Qualified LVI   49,703.833   10.07   500,518
Qualified LIX   3,688.579   9.92   36,591
    11,203,713.598       $ 109,367,180
ING Oppenheimer Strategic Income Portfolio -            
Service Class            
Currently payable annuity contracts:   1,264.806   $ 9.50   $ 12,016
Contracts in accumulation period:            
ING MAP PLUS NP9   2,857.435   8.73   24,945
ING MAP PLUS NP10   3,831.036   8.72   33,407
ING MAP PLUS NP11   9,966.809   8.71   86,811
ING MAP PLUS NP12   3,972.342   8.71   34,599
ING MAP PLUS NP19   515.826   8.66   4,467
ING MAP PLUS NP22   1,771.699   8.63   15,290
ING MAP PLUS NP24   165.331   8.62   1,425
ING MAP PLUS NP28   343.896   8.59   2,954
    24,689.180       $ 215,914
ING PIMCO Total Return Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   76,713.649   $ 11.34   $ 869,933
 
ING PIMCO Total Return Portfolio - Service Class            
Currently payable annuity contracts:   189,318.102   $10.96 to $11.67   $ 2,204,086
Contracts in accumulation period:            
ING Custom Choice 62   4,006.789   11.50   46,078
ING MAP PLUS NP1   126,745.699   11.99   1,519,681
ING MAP PLUS NP4   28,367.579   11.91   337,858
ING MAP PLUS NP6   19,760.597   11.85   234,163
ING MAP PLUS NP8   4,099.217   11.79   48,330
ING MAP PLUS NP9   25,419.207   11.76   298,930
ING MAP PLUS NP10   25,258.529   11.73   296,283
ING MAP PLUS NP11   33,070.096   11.70   386,920
ING MAP PLUS NP12   22,841.750   11.67   266,563
ING MAP PLUS NP13   1,231.155   11.65   14,343
ING MAP PLUS NP14   20,570.567   11.62   239,030
ING MAP PLUS NP15   22,597.862   11.59   261,909
ING MAP PLUS NP16   11,861.561   11.56   137,120
ING MAP PLUS NP17   428.827   11.53   4,944
ING MAP PLUS NP18   34,071.883   11.50   391,827
 
 
                                                       288            

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

Division/Contract   Units   Unit Value   Extended Value
ING PIMCO Total Return Portfolio - Service Class            
(continued)            
ING MAP PLUS NP19   17,094.451   $ 11.48   $ 196,244
ING MAP PLUS NP20   56,051.284   11.45   641,787
ING MAP PLUS NP21   40,172.417   11.42   458,769
ING MAP PLUS NP22   781.286   11.39   8,899
ING MAP PLUS NP23   12,640.666   11.36   143,598
ING MAP PLUS NP24   157.900   11.34   1,791
ING MAP PLUS NP25   2,525.244   11.31   28,561
ING MAP PLUS NP26   15,560.433   11.28   175,522
ING MAP PLUS NP27   464.259   11.25   5,223
ING MAP PLUS NP28   15,029.238   11.22   168,628
ING MAP PLUS NP29   2,653.996   11.20   29,725
ING MAP PLUS NP30   1,996.400   11.17   22,300
ING MAP PLUS NP32   344.030   11.11   3,822
ING MAP PLUS NP35   1,239.117   11.03   13,667
ING MAP PLUS NP36   809.676   11.01   8,915
Qualified V   1,120.101   12.38   13,867
Qualified VI   2,062,760.382   12.51   25,805,132
Qualified VIII   730.284   12.51   9,136
Qualified X (1.15)   33,225.296   12.60   418,639
Qualified X (1.25)   159,392.894   12.51   1,994,005
Qualified XII (0.00)   5,931.513   13.60   80,669
Qualified XII (0.25)   2,218.916   13.38   29,689
Qualified XII (0.30)   118,713.229   13.33   1,582,447
Qualified XII (0.35)   1,576.309   13.29   20,949
Qualified XII (0.40)   315,701.875   13.24   4,179,893
Qualified XII (0.50)   68,749.088   13.15   904,051
Qualified XII (0.55)   109,249.908   13.11   1,432,266
Qualified XII (0.60)   54,887.294   13.07   717,377
Qualified XII (0.65)   148,197.313   13.02   1,929,529
Qualified XII (0.70)   90,947.722   12.98   1,180,501
Qualified XII (0.75)   221,434.023   12.94   2,865,356
Qualified XII (0.80)   143,360.486   12.89   1,847,917
Qualified XII (0.85)   315,621.503   12.85   4,055,736
Qualified XII (0.90)   35,263.922   12.81   451,731
Qualified XII (0.95)   379,648.742   12.76   4,844,318
Qualified XII (1.00)   904,320.996   12.72   11,502,963
Qualified XII (1.05)   50,215.276   12.68   636,730
Qualified XII (1.10)   43,629.199   12.64   551,473
Qualified XII (1.15)   54,299.978   12.60   684,180
Qualified XII (1.20)   23,609.340   12.55   296,297
Qualified XII (1.25)   143,141.405   12.51   1,790,699
Qualified XII (1.30)   1,678.689   12.47   20,933
Qualified XII (1.35)   3,297.289   12.43   40,985
Qualified XII (1.40)   11,691.820   12.39   144,862
Qualified XII (1.45)   11,334.130   12.35   139,977
Qualified XII (1.50)   9,582.547   12.30   117,865
Qualified XIII   1,601.452   12.76   20,435
 
 
 
                                                      289            

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

Division/Contract   Units   Unit Value   Extended Value
ING PIMCO Total Return Portfolio - Service Class            
(continued)            
Qualified XV   6,987.172   $ 12.76   $ 89,156
Qualified XVI   64,254.920   12.30   790,336
Qualified XVII   1,667.728   12.51   20,863
Qualified XVIII   2,386.100   12.72   30,351
Qualified XXI   15,482.289   12.89   199,567
Qualified XXV   15,358.926   12.94   198,745
Qualified XXVI   4,460.668   12.81   57,141
Qualified XXVII   1,322,612.020   11.66   15,421,656
Qualified XXVIII   543,017.579   12.73   6,912,614
Qualified XXXII   1,765.211   11.38   20,088
Qualified XXXIII (0.65)   26,533.345   13.24   351,301
Qualified XXXVIII   27,750.502   10.20   283,055
Qualified XLIII   315.674   10.17   3,210
Qualified LIII   41,788.794   11.39   475,974
Qualified LIV   66,131.931   11.32   748,613
Qualified LVI   25,669.153   11.44   293,655
Qualified LIX   3,486.149   13.32   46,436
    8,433,970.899       $ 104,848,884
ING Pioneer High Yield Portfolio - Initial Class            
Currently payable annuity contracts:   23,223.394   $ 7.79   $ 180,910
Contracts in accumulation period:            
Qualified VI   137,289.671   7.73   1,061,249
Qualified X (1.15)   2,309.797   7.75   17,901
Qualified X (1.25)   13,366.613   7.73   103,324
Qualified XII (0.00)   1,301.155   7.99   10,396
Qualified XII (0.25)   268.238   7.94   2,130
Qualified XII (0.30)   487.330   7.93   3,865
Qualified XII (0.40)   3,690.288   7.91   29,190
Qualified XII (0.50)   154,034.839   7.89   1,215,335
Qualified XII (0.55)   700.948   7.88   5,523
Qualified XII (0.60)   372.262   7.87   2,930
Qualified XII (0.65)   2,869.719   7.86   22,556
Qualified XII (0.70)   2,290.263   7.84   17,956
Qualified XII (0.75)   16,238.462   7.83   127,147
Qualified XII (0.80)   2,363.863   7.82   18,485
Qualified XII (0.85)   19,694.471   7.81   153,814
Qualified XII (0.90)   2,473.787   7.80   19,296
Qualified XII (0.95)   31,965.858   7.79   249,014
Qualified XII (1.00)   60,169.848   7.78   468,121
Qualified XII (1.05)   3,630.873   7.77   28,212
Qualified XII (1.10)   581.325   7.76   4,511
Qualified XII (1.15)   857.819   7.75   6,648
Qualified XII (1.20)   332.556   7.74   2,574
Qualified XII (1.25)   12,276.334   7.73   94,896
Qualified XII (1.35)   113.006   7.71   871
Qualified XII (1.40)   7,469.703   7.70   57,517
Qualified XII (1.45)   44.092   7.69   339
 
 
 
                                                      290            

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

Division/Contract       Units   Unit Value   Extended Value
ING Pioneer High Yield Portfolio - Initial Class                
(continued)                
Qualified XII (1.50)       8.521   $ 7.68   $ 65
Qualified XV       402.082   7.79   3,132
Qualified XVI       1,865.615   7.68   14,328
Qualified XVIII       886.866   7.78   6,900
Qualified XXV       1,442.554   7.83   11,295
Qualified XXVI       609.054   7.80   4,751
Qualified XXXVIII       26.000   6.96   181
Qualified LIII       530.636   7.92   4,203
Qualified LIV       1,198.154   7.86   9,417
Qualified LVI       963.834   7.95   7,662
Qualified LIX       28.502   7.89   225
        508,378.332       $ 3,966,869
ING Pioneer High Yield Portfolio - Service Class                
Contracts in accumulation period:                
ING MAP PLUS NP15       4.456   $ 7.79   $ 35
ING MAP PLUS NP21       13.613   7.73   105
ING MAP PLUS NP22       367.058   7.72   2,834
ING MAP PLUS NP23       1,076.481   7.71   8,300
ING MAP PLUS NP26       938.203   7.68   7,205
ING MAP PLUS NP28       1,392.760   7.66   10,669
ING MAP PLUS NP29       6,816.625   7.65   52,147
        10,609.196       $ 81,295
ING Solution 2015 Portfolio - Adviser Class                
Contracts in accumulation period:                
ING MAP PLUS NP1       156,787.485   $ 9.03   $ 1,415,791
ING MAP PLUS NP3       3,895.256   9.00   35,057
ING MAP PLUS NP4       111.197   8.98   999
ING MAP PLUS NP6       20,903.735   8.95   187,088
ING MAP PLUS NP8       103,925.688   8.92   927,017
ING MAP PLUS NP9       39,675.184   8.90   353,109
ING MAP PLUS NP10       229,066.448   8.88   2,034,110
ING MAP PLUS NP11       49,798.024   8.87   441,708
ING MAP PLUS NP12       55,806.049   8.85   493,884
ING MAP PLUS NP13       29,290.258   8.84   258,926
ING MAP PLUS NP14       17,651.714   8.82   155,688
ING MAP PLUS NP15       45,726.343   8.80   402,392
ING MAP PLUS NP16       61,297.235   8.79   538,803
ING MAP PLUS NP17       66,806.109   8.77   585,890
ING MAP PLUS NP18       4,718.431   8.75   41,286
ING MAP PLUS NP19       44,122.214   8.74   385,628
ING MAP PLUS NP20       19,221.570   8.72   167,612
ING MAP PLUS NP21       65,385.766   8.71   569,510
ING MAP PLUS NP22       25,963.012   8.69   225,619
ING MAP PLUS NP23       38,863.796   8.67   336,949
ING MAP PLUS NP24       9,214.863   8.66   79,801
ING MAP PLUS NP25       653.676   8.64   5,648
ING MAP PLUS NP26       5,526.611   8.63   47,695
 
 
    291            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2015 Portfolio - Adviser Class                
(continued)                
ING MAP PLUS NP27       36,277.393   $ 8.61   $ 312,348
ING MAP PLUS NP28       1,854.909   8.60   15,952
ING MAP PLUS NP29       38,616.462   8.58   331,329
ING MAP PLUS NP30       7,550.334   8.56   64,631
ING MAP PLUS NP32       128.309   8.53   1,094
Qualified XXXV       24,117.279   8.52   205,479
        1,202,955.350       $ 10,621,043
ING Solution 2015 Portfolio - Service Class                
Contracts in accumulation period:                
ING Custom Choice 62       762.550   $ 8.72   $ 6,649
Qualified V       2,039.564   8.67   17,683
Qualified VI       847,119.666   8.72   7,386,883
Qualified X (1.15)       46,279.221   8.75   404,943
Qualified X (1.25)       101,928.077   8.72   888,813
Qualified XII (0.00)       1,917.927   9.13   17,511
Qualified XII (0.05)       216,896.404   9.13   1,980,264
Qualified XII (0.25)       4.625   9.05   42
Qualified XII (0.30)       55,754.732   9.03   503,465
Qualified XII (0.35)       184,289.226   9.01   1,660,446
Qualified XII (0.40)       31,167.003   9.00   280,503
Qualified XII (0.50)       231,754.094   8.96   2,076,517
Qualified XII (0.55)       71,175.051   8.95   637,017
Qualified XII (0.60)       160,681.896   8.93   1,434,889
Qualified XII (0.65)       24,589.088   8.91   219,089
Qualified XII (0.70)       88,111.138   8.90   784,189
Qualified XII (0.75)       135,591.014   8.88   1,204,048
Qualified XII (0.80)       56,930.859   8.86   504,407
Qualified XII (0.85)       154,945.948   8.85   1,371,272
Qualified XII (0.90)       35,051.171   8.83   309,502
Qualified XII (0.95)       165,605.726   8.82   1,460,643
Qualified XII (1.00)       162,348.532   8.80   1,428,667
Qualified XII (1.05)       78,013.556   8.78   684,959
Qualified XII (1.10)       20,302.161   8.77   178,050
Qualified XII (1.15)       45,987.007   8.75   402,386
Qualified XII (1.20)       6,738.528   8.73   58,827
Qualified XII (1.25)       81,061.912   8.72   706,860
Qualified XII (1.30)       3,175.902   8.70   27,630
Qualified XII (1.40)       7,535.488   8.67   65,333
Qualified XII (1.45)       755.850   8.65   6,538
Qualified XIII       42.741   8.82   377
Qualified XV       7,859.710   8.82   69,323
Qualified XVI       44,341.424   8.64   383,110
Qualified XVIII       10,911.694   8.72   95,150
Qualified XXI       7,208.315   8.86   63,866
Qualified XXV       1,083.985   8.88   9,626
Qualified XXVI       341.821   8.83   3,018
Qualified XXVIII       26,841.644   7.21   193,528
 
 
 
    292            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2015 Portfolio - Service Class                
(continued)                
Qualified XXXII       5,337.610   $ 8.72   $ 46,544
Qualified XXXVI       288.678   8.95   2,584
Qualified XXXVIII       3,865.147   7.19   27,790
Qualified XLIII       154.897   7.17   1,111
Qualified LIII       33,271.709   9.03   300,444
Qualified LIV       16,604.775   8.97   148,945
Qualified LVI       40,854.933   9.07   370,554
Qualified LIX       145.337   8.98   1,305
        3,217,668.336       $ 28,425,300
ING Solution 2025 Portfolio - Adviser Class                
Contracts in accumulation period:                
ING MAP PLUS NP1       245,662.027   $ 8.49   $ 2,085,671
ING MAP PLUS NP3       428.017   8.46   3,621
ING MAP PLUS NP4       11,629.602   8.44   98,154
ING MAP PLUS NP6       8,555.096   8.41   71,948
ING MAP PLUS NP8       110,596.925   8.38   926,802
ING MAP PLUS NP9       92,067.379   8.36   769,683
ING MAP PLUS NP10       136,123.235   8.35   1,136,629
ING MAP PLUS NP11       87,095.092   8.33   725,502
ING MAP PLUS NP12       107,218.093   8.32   892,055
ING MAP PLUS NP13       15,146.889   8.30   125,719
ING MAP PLUS NP14       50,358.084   8.29   417,469
ING MAP PLUS NP15       80,400.392   8.27   664,911
ING MAP PLUS NP16       65,597.065   8.26   541,832
ING MAP PLUS NP17       33,985.745   8.24   280,043
ING MAP PLUS NP18       2,542.865   8.23   20,928
ING MAP PLUS NP19       50,865.753   8.21   417,608
ING MAP PLUS NP20       14,016.366   8.20   114,934
ING MAP PLUS NP21       111,887.259   8.18   915,238
ING MAP PLUS NP22       18,430.699   8.17   150,579
ING MAP PLUS NP23       53,726.347   8.15   437,870
ING MAP PLUS NP24       36,525.350   8.14   297,316
ING MAP PLUS NP25       6,733.032   8.12   54,672
ING MAP PLUS NP26       14,979.925   8.11   121,487
ING MAP PLUS NP27       25,609.046   8.09   207,177
ING MAP PLUS NP28       13,241.772   8.08   106,994
ING MAP PLUS NP29       16,978.808   8.06   136,849
ING MAP PLUS NP30       7,136.769   8.05   57,451
ING MAP PLUS NP32       6,643.495   8.02   53,281
Qualified XXXV       24,870.085   7.86   195,479
        1,449,051.212       $ 12,027,902
 
 
 
 
    293            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2025 Portfolio - Service Class                
Contracts in accumulation period:                
Qualified V       1,833.714   $ 8.14   $ 14,926
Qualified VI       1,273,395.295   8.19   10,429,107
Qualified X (1.15)       38,679.313   8.22   317,944
Qualified X (1.25)       94,699.400   8.19   775,588
Qualified XII (0.00)       24,076.462   8.57   206,335
Qualified XII (0.05)       501,318.194   8.56   4,291,284
Qualified XII (0.25)       3,924.915   8.49   33,323
Qualified XII (0.30)       103,083.593   8.48   874,149
Qualified XII (0.35)       205,625.329   8.46   1,739,590
Qualified XII (0.40)       45,787.675   8.45   386,906
Qualified XII (0.50)       205,307.566   8.41   1,726,637
Qualified XII (0.55)       61,284.949   8.40   514,794
Qualified XII (0.60)       282,861.628   8.38   2,370,380
Qualified XII (0.65)       11,054.431   8.37   92,526
Qualified XII (0.70)       166,858.824   8.35   1,393,271
Qualified XII (0.75)       226,390.459   8.34   1,888,096
Qualified XII (0.80)       32,066.286   8.32   266,792
Qualified XII (0.85)       278,523.229   8.31   2,314,528
Qualified XII (0.90)       50,384.847   8.29   417,690
Qualified XII (0.95)       257,129.244   8.28   2,129,030
Qualified XII (1.00)       214,322.869   8.26   1,770,307
Qualified XII (1.05)       49,901.915   8.25   411,691
Qualified XII (1.10)       63,036.826   8.23   518,793
Qualified XII (1.15)       61,988.655   8.22   509,547
Qualified XII (1.20)       22,181.637   8.20   181,889
Qualified XII (1.25)       45,542.954   8.19   372,997
Qualified XII (1.30)       2,997.388   8.17   24,489
Qualified XII (1.35)       72.848   8.15   594
Qualified XII (1.40)       23,029.722   8.14   187,462
Qualified XII (1.45)       3,531.617   8.13   28,712
Qualified XV       1,813.341   8.28   15,014
Qualified XVI       40,147.042   8.11   325,593
Qualified XVIII       289.328   8.19   2,370
Qualified XXI       20,099.901   8.32   167,231
Qualified XXV       632.291   8.34   5,273
Qualified XXVI       1,167.203   8.29   9,676
Qualified XXVIII       33,376.720   6.47   215,947
Qualified XXXII       2,054.078   8.19   16,823
Qualified XXXVI       449.317   8.40   3,774
Qualified XXXVIII       5,926.451   6.45   38,226
Qualified XLIII       137.608   6.43   885
Qualified LIII       41,497.499   8.48   351,899
Qualified LIV       26,857.521   8.42   226,140
Qualified LVI       43,270.256   8.51   368,230
        4,568,610.340       $ 37,936,458
 
 
 
 
    294            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2035 Portfolio - Adviser Class                
Contracts in accumulation period:                
ING MAP PLUS NP1       110,404.498   $ 8.36   $ 922,982
ING MAP PLUS NP4       779.322   8.32   6,484
ING MAP PLUS NP6       5,176.036   8.29   42,909
ING MAP PLUS NP8       176,524.452   8.26   1,458,092
ING MAP PLUS NP9       99,664.208   8.24   821,233
ING MAP PLUS NP10       76,647.795   8.23   630,811
ING MAP PLUS NP11       50,713.468   8.21   416,358
ING MAP PLUS NP12       95,572.394   8.20   783,694
ING MAP PLUS NP13       20,938.978   8.18   171,281
ING MAP PLUS NP14       73,308.256   8.17   598,928
ING MAP PLUS NP15       65,763.459   8.15   535,972
ING MAP PLUS NP16       45,201.471   8.14   367,940
ING MAP PLUS NP17       66,359.787   8.12   538,841
ING MAP PLUS NP18       5,461.515   8.11   44,293
ING MAP PLUS NP19       39,442.871   8.09   319,093
ING MAP PLUS NP20       13,915.837   8.08   112,440
ING MAP PLUS NP21       62,444.439   8.06   503,302
ING MAP PLUS NP22       20,144.602   8.05   162,164
ING MAP PLUS NP23       25,176.918   8.03   202,171
ING MAP PLUS NP24       21,989.812   8.02   176,358
ING MAP PLUS NP25       6,247.198   8.00   49,978
ING MAP PLUS NP26       13,786.498   7.99   110,154
ING MAP PLUS NP27       38,382.458   7.97   305,908
ING MAP PLUS NP28       9,501.020   7.96   75,628
ING MAP PLUS NP29       18,715.390   7.94   148,600
ING MAP PLUS NP30       5,965.784   7.93   47,309
ING MAP PLUS NP32       1,280.341   7.90   10,115
Qualified XXXV       26,678.097   7.66   204,354
        1,196,186.904       $ 9,767,392
 
 
 
 
    295            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2035 Portfolio - Service Class                
Contracts in accumulation period:                
Qualified VI       753,836.188   $ 8.07   $ 6,083,458
Qualified X (1.15)       14,092.698   8.10   114,151
Qualified X (1.25)       61,689.674   8.07   497,836
Qualified XII (0.00)       14,316.167   8.45   120,972
Qualified XII (0.05)       330,457.848   8.44   2,789,064
Qualified XII (0.25)       853.268   8.37   7,142
Qualified XII (0.30)       113,613.116   8.36   949,806
Qualified XII (0.35)       139,376.776   8.34   1,162,402
Qualified XII (0.40)       30,561.882   8.33   254,580
Qualified XII (0.50)       228,490.035   8.29   1,894,182
Qualified XII (0.55)       40,252.894   8.28   333,294
Qualified XII (0.60)       139,208.884   8.26   1,149,865
Qualified XII (0.65)       10,473.320   8.25   86,405
Qualified XII (0.70)       144,870.671   8.23   1,192,286
Qualified XII (0.75)       67,801.050   8.22   557,325
Qualified XII (0.80)       16,141.002   8.20   132,356
Qualified XII (0.85)       293,653.917   8.19   2,405,026
Qualified XII (0.90)       76,061.985   8.17   621,426
Qualified XII (0.95)       155,506.740   8.16   1,268,935
Qualified XII (1.00)       282,299.204   8.14   2,297,916
Qualified XII (1.05)       26,444.974   8.13   214,998
Qualified XII (1.10)       56,998.039   8.11   462,254
Qualified XII (1.15)       60,944.949   8.10   493,654
Qualified XII (1.20)       11,383.151   8.08   91,976
Qualified XII (1.25)       63,052.761   8.07   508,836
Qualified XII (1.30)       1,997.252   8.05   16,078
Qualified XII (1.35)       17.194   8.04   138
Qualified XII (1.40)       15,217.085   8.02   122,041
Qualified XII (1.45)       431.740   8.01   3,458
Qualified XII (1.50)       2,270.003   7.99   18,137
Qualified XIII       1,187.114   8.16   9,687
Qualified XV       24.038   8.16   196
Qualified XVI       54,863.004   7.99   438,355
Qualified XVIII       2,071.732   8.07   16,719
Qualified XXI       51,405.283   8.20   421,523
Qualified XXV       8,141.738   8.22   66,925
Qualified XXVI       343.404   8.17   2,806
Qualified XXXII       2,323.994   8.07   18,755
Qualified XXXVI       6,412.873   8.28   53,099
Qualified XXXVIII       24,052.483   6.13   147,442
Qualified XLIII       1,785.065   6.11   10,907
Qualified LIII       25,362.072   8.35   211,773
Qualified LIV       18,919.680   8.30   157,033
Qualified LVI       34,912.505   8.39   292,916
Qualified LIX       1,511.811   8.31   12,563
        3,385,631.263       $ 27,710,696
 
 
 
 
    296            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2045 Portfolio - Adviser Class                
Contracts in accumulation period:                
ING MAP PLUS NP1       189,549.634   $ 8.26   $ 1,565,680
ING MAP PLUS NP3       363.137   8.23   2,989
ING MAP PLUS NP4       2,828.613   8.21   23,223
ING MAP PLUS NP6       13,506.242   8.18   110,481
ING MAP PLUS NP8       163,988.913   8.15   1,336,510
ING MAP PLUS NP9       49,390.160   8.14   402,036
ING MAP PLUS NP10       18,535.268   8.12   150,506
ING MAP PLUS NP11       42,430.165   8.11   344,109
ING MAP PLUS NP12       17,806.022   8.09   144,051
ING MAP PLUS NP13       14,433.712   8.08   116,624
ING MAP PLUS NP14       42,550.247   8.06   342,955
ING MAP PLUS NP15       61,318.513   8.05   493,614
ING MAP PLUS NP16       4,053.122   8.03   32,547
ING MAP PLUS NP17       27,120.244   8.02   217,504
ING MAP PLUS NP18       846.134   8.00   6,769
ING MAP PLUS NP19       18,195.118   7.99   145,379
ING MAP PLUS NP20       3,511.225   7.97   27,984
ING MAP PLUS NP21       35,170.114   7.96   279,954
ING MAP PLUS NP22       12,970.842   7.95   103,118
ING MAP PLUS NP23       16,113.739   7.93   127,782
ING MAP PLUS NP24       10,672.920   7.92   84,530
ING MAP PLUS NP25       6,257.967   7.90   49,438
ING MAP PLUS NP26       11,664.665   7.89   92,034
ING MAP PLUS NP27       2,030.831   7.87   15,983
ING MAP PLUS NP28       3,420.253   7.86   26,883
ING MAP PLUS NP29       16,423.205   7.84   128,758
ING MAP PLUS NP30       4,835.649   7.83   37,863
ING MAP PLUS NP32       3,794.905   7.80   29,600
Qualified XXXV       3,498.564   7.43   25,994
        797,280.123       $ 6,464,898
 
 
 
 
    297            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution 2045 Portfolio - Service Class                
Contracts in accumulation period:                
Qualified VI       587,537.146   $ 7.95   $ 4,670,920
Qualified X (1.15)       5,144.060   7.98   41,050
Qualified X (1.25)       31,958.003   7.95   254,066
Qualified XII (0.00)       4,131.246   8.32   34,372
Qualified XII (0.05)       187,679.667   8.32   1,561,495
Qualified XII (0.30)       100,303.819   8.23   825,500
Qualified XII (0.35)       16,962.620   8.22   139,433
Qualified XII (0.40)       20,618.717   8.20   169,073
Qualified XII (0.50)       149,502.699   8.17   1,221,437
Qualified XII (0.55)       23,976.308   8.16   195,647
Qualified XII (0.60)       70,951.878   8.14   577,548
Qualified XII (0.65)       12,258.554   8.13   99,662
Qualified XII (0.70)       108,425.379   8.11   879,330
Qualified XII (0.75)       53,974.485   8.10   437,193
Qualified XII (0.80)       4,802.991   8.08   38,808
Qualified XII (0.85)       205,962.627   8.07   1,662,118
Qualified XII (0.90)       21,630.005   8.05   174,122
Qualified XII (0.95)       129,544.760   8.04   1,041,540
Qualified XII (1.00)       165,753.158   8.02   1,329,340
Qualified XII (1.05)       15,800.813   8.01   126,565
Qualified XII (1.10)       55,699.569   7.99   445,040
Qualified XII (1.15)       25,773.380   7.98   205,672
Qualified XII (1.20)       13,002.891   7.96   103,503
Qualified XII (1.25)       40,658.420   7.95   323,234
Qualified XII (1.30)       1,916.261   7.93   15,196
Qualified XII (1.35)       12.544   7.92   99
Qualified XII (1.40)       22,707.453   7.91   179,616
Qualified XII (1.45)       252.006   7.89   1,988
Qualified XIII       97.558   8.04   784
Qualified XV       2,225.032   8.04   17,889
Qualified XVI       24,995.551   7.88   196,965
Qualified XXI       14,260.340   8.08   115,224
Qualified XXV       1,735.465   8.10   14,057
Qualified XXVI       1,594.866   8.05   12,839
Qualified XXVIII       9,152.521   5.89   53,908
Qualified XXXVI       11,959.161   8.16   97,587
Qualified XXXVIII       5,051.361   5.84   29,500
Qualified XLIII       2,946.567   5.82   17,149
Qualified LIII       10,083.341   8.23   82,986
Qualified LIV       12,034.692   8.18   98,444
Qualified LVI       23,132.414   8.27   191,305
Qualified LIX       743.447   8.19   6,089
        2,196,953.775       $ 17,688,293
 
 
 
 
    298            

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

Division/Contract   Units   Unit Value   Extended Value
ING Solution Growth and Income Portfolio - Service            
   Class            
Contracts in accumulation period:            
Qualified VI   32,180.847   $ 7.64   $ 245,862
Qualified XII (0.50)   427.777   7.67   3,281
Qualified XII (0.60)   132.494   7.67   1,016
Qualified XII (0.65)   41.975   7.67   322
Qualified XII (0.70)   2,161.829   7.66   16,560
Qualified XII (0.80)   2,250.688   7.66   17,240
Qualified XII (0.85)   2,658.285   7.66   20,362
Qualified XII (0.95)   17.980   7.65   138
Qualified XII (1.00)   21,087.485   7.65   161,319
Qualified XII (1.10)   2,890.971   7.64   22,087
Qualified XII (1.25)   4,029.936   7.64   30,789
Qualified XII (1.40)   264.853   7.63   2,021
Qualified LIV   98.868   7.66   757
Qualified LVI   13,442.432   7.69   103,372
    81,686.420       $ 625,126
ING Solution Growth Portfolio - Service Class            
Contracts in accumulation period:            
Qualified VI   10,721.602   $ 6.91   $ 74,086
Qualified XII (0.70)   5,381.584   6.94   37,348
Qualified XII (0.80)   11.280   6.93   78
Qualified XII (0.85)   607.313   6.93   4,209
Qualified XII (0.90)   156.512   6.93   1,085
Qualified XII (0.95)   2,050.000   6.93   14,207
Qualified XII (1.00)   1,119.089   6.93   7,755
Qualified XII (1.05)   26.488   6.92   183
Qualified XII (1.10)   6.019   6.92   42
Qualified XII (1.25)   177.735   6.91   1,228
Qualified XV   45.698   6.93   317
Qualified XLIII   8.534   6.95   59
Qualified LIV   100.345   6.93   695
Qualified LVI   4,649.234   6.96   32,359
    25,061.433       $ 173,651
 
 
 
 
                                                      299            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution Income Portfolio - Adviser Class                
Contracts in accumulation period:                
ING MAP PLUS NP1       11,460.677   $ 9.68   $ 110,939
ING MAP PLUS NP4       8.096   9.63   78
ING MAP PLUS NP6       36,734.582   9.59   352,285
ING MAP PLUS NP8       164,589.865   9.56   1,573,479
ING MAP PLUS NP9       35,314.473   9.54   336,900
ING MAP PLUS NP10       305,682.724   9.52   2,910,100
ING MAP PLUS NP11       25,950.507   9.50   246,530
ING MAP PLUS NP12       23,709.744   9.49   225,005
ING MAP PLUS NP13       14,236.091   9.47   134,816
ING MAP PLUS NP14       13,820.551   9.45   130,604
ING MAP PLUS NP15       19,677.624   9.43   185,560
ING MAP PLUS NP16       26,895.602   9.42   253,357
ING MAP PLUS NP17       1,081.470   9.40   10,166
ING MAP PLUS NP18       6,180.926   9.38   57,977
ING MAP PLUS NP19       17,525.226   9.36   164,036
ING MAP PLUS NP21       31,729.571   9.33   296,037
ING MAP PLUS NP22       15,325.220   9.31   142,678
ING MAP PLUS NP23       739.978   9.30   6,882
ING MAP PLUS NP24       22,859.388   9.28   212,135
ING MAP PLUS NP25       1,467.154   9.26   13,586
ING MAP PLUS NP26       1,011.438   9.25   9,356
ING MAP PLUS NP28       568.230   9.21   5,233
ING MAP PLUS NP29       1,360.953   9.19   12,507
Qualified XXXV       76,422.111   9.40   718,368
        854,352.201       $ 8,108,614
ING Solution Income Portfolio - Service Class                
Contracts in accumulation period:                
ING Custom Choice 62       428.173   $ 9.34   $ 3,999
Qualified VI       196,648.931   9.34   1,836,701
Qualified X (1.15)       16,264.626   9.38   152,562
Qualified X (1.25)       83,878.663   9.34   783,427
Qualified XII (0.00)       284.612   9.78   2,784
Qualified XII (0.05)       47,168.619   9.78   461,309
Qualified XII (0.30)       91,871.050   9.68   889,312
Qualified XII (0.35)       5,920.575   9.66   57,193
Qualified XII (0.40)       1,170.330   9.64   11,282
Qualified XII (0.50)       53,963.051   9.60   518,045
Qualified XII (0.55)       6,853.338   9.59   65,724
Qualified XII (0.60)       27,938.770   9.57   267,374
Qualified XII (0.65)       5,293.895   9.55   50,557
Qualified XII (0.70)       12,606.163   9.53   120,137
Qualified XII (0.75)       7,502.477   9.52   71,424
Qualified XII (0.85)       22,487.914   9.48   213,185
Qualified XII (0.90)       713.198   9.46   6,747
Qualified XII (0.95)       20,663.996   9.45   195,275
Qualified XII (1.00)       64,790.098   9.43   610,971
 
 
 
    300            

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

Division/Contract       Units   Unit Value   Extended Value
ING Solution Income Portfolio - Service Class                
(continued)                
Qualified XII (1.05)       8,685.515   $ 9.41   $ 81,731
Qualified XII (1.10)       6,426.589   9.39   60,346
Qualified XII (1.15)       4.779   9.38   45
Qualified XII (1.20)       36.928   9.36   346
Qualified XII (1.25)       5,441.987   9.34   50,828
Qualified XII (1.40)       662.258   9.29   6,152
Qualified XII (1.45)       193.656   9.27   1,795
Qualified XVI       1,113.215   9.26   10,308
Qualified XVIII       5,698.953   9.34   53,228
Qualified XXI       2,431.337   9.50   23,098
Qualified XXVIII       66.041   8.35   551
Qualified XXXII       1,177.952   9.34   11,002
Qualified LIV       122.592   9.61   1,178
Qualified LVI       34,010.973   9.72   330,587
        732,521.254       $ 6,949,203
ING T. Rowe Price Diversified Mid Cap Growth                
   Portfolio - Adviser Class                
Contracts in accumulation period:                
Qualified XXXV       29,596.662   $ 7.17   $ 212,208
 
ING T. Rowe Price Diversified Mid Cap Growth                
   Portfolio - Initial Class                
Currently payable annuity contracts:       65,104.697   $ 7.65   $ 498,051
Contracts in accumulation period:                
ING Custom Choice 62       1,460.574   7.52   10,984
ING MAP PLUS NP8       927.701   6.86   6,364
ING MAP PLUS NP15       597.180   6.78   4,049
ING MAP PLUS NP17       449.676   6.76   3,040
ING MAP PLUS NP18       1,119.806   6.75   7,559
ING MAP PLUS NP20       3,284.584   6.73   22,105
ING MAP PLUS NP22       4,991.280   6.71   33,491
ING MAP PLUS NP25       21.207   6.68   142
ING MAP PLUS NP26       43.601   6.67   291
ING MAP PLUS NP28       3,352.979   6.65   22,297
ING MAP PLUS NP29       796.681   6.64   5,290
Qualified V       1,926.147   7.47   14,388
Qualified VI       9,772,481.320   7.52   73,489,060
Qualified VIII       15,263.358   7.51   114,628
Qualified X (1.15)       449,141.695   7.54   3,386,528
Qualified X (1.25)       604,355.008   7.52   4,544,750
Qualified XII (0.00)       24,513.651   8.16   200,031
Qualified XII (0.05)       158,005.674   8.15   1,287,746
Qualified XII (0.10)       580.341   7.86   4,561
Qualified XII (0.20)       109,613.504   7.83   858,274
Qualified XII (0.25)       28,558.487   7.81   223,042
Qualified XII (0.30)       188,320.668   7.80   1,468,901
Qualified XII (0.35)       39,391.000   7.78   306,462
Qualified XII (0.40)       102,984.089   7.77   800,186
Qualified XII (0.45)       891.637   7.75   6,910
 
    301            

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

Division/Contract       Units   Unit Value   Extended Value
ING T. Rowe Price Diversified Mid Cap Growth                
   Portfolio - Initial Class (continued)                
Qualified XII (0.50)       574,121.233   $ 7.99   $ 4,587,229
Qualified XII (0.55)       209,937.768   7.92   1,662,707
Qualified XII (0.60)       219,117.929   7.71   1,689,399
Qualified XII (0.65)       519,114.519   7.69   3,991,991
Qualified XII (0.70)       320,539.871   7.68   2,461,746
Qualified XII (0.75)       632,228.406   7.66   4,842,870
Qualified XII (0.80)       893,653.847   7.89   7,050,929
Qualified XII (0.85)       985,768.906   7.63   7,521,417
Qualified XII (0.90)       78,804.125   7.86   619,400
Qualified XII (0.95)       971,117.104   7.60   7,380,490
Qualified XII (1.00)       2,328,633.046   7.84   18,256,483
Qualified XII (1.05)       203,871.573   7.82   1,594,276
Qualified XII (1.10)       235,938.134   7.81   1,842,677
Qualified XII (1.15)       185,791.220   7.78   1,445,456
Qualified XII (1.20)       60,842.008   7.53   458,140
Qualified XII (1.25)       167,991.054   7.75   1,301,931
Qualified XII (1.30)       13,901.935   7.73   107,462
Qualified XII (1.35)       11,993.813   7.49   89,834
Qualified XII (1.40)       55,676.391   7.47   415,903
Qualified XII (1.45)       4,745.567   7.46   35,402
Qualified XII (1.50)       11,581.075   7.44   86,163
Qualified XIII       24.866   7.60   189
Qualified XV       94,485.232   7.60   718,088
Qualified XVI       220,931.461   7.44   1,643,730
Qualified XVII       14,496.355   7.52   109,013
Qualified XVIII       32,220.206   7.52   242,296
Qualified XXV       139,193.967   7.66   1,066,226
Qualified XXVI       58,039.735   7.62   442,263
Qualified XXVII       4,008,264.746   7.64   30,623,143
Qualified XXVIII       458,591.603   7.64   3,503,640
Qualified XXXII       17,665.652   7.52   132,846
Qualified XXII       95.258   7.75   738
Qualified XXXVI       71,144.106   7.72   549,233
Qualified XXXVIII       192,209.714   5.55   1,066,764
Qualified XLIII       18,897.888   5.53   104,505
Qualified LIII       256,599.937   8.13   2,086,157
Qualified LIV       76,133.905   8.08   615,162
Qualified LVI       186,941.583   8.17   1,527,313
Qualified LIX       113,452.053   7.76   880,388
        26,222,934.336       $ 200,072,729
 
 
 
 
    302            

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

Division/Contract   Units   Unit Value   Extended Value
ING T. Rowe Price Diversified Mid Cap Growth            
   Portfolio - Service Class            
Contracts in accumulation period:            
ING MAP PLUS NP1   2,299.143   $ 7.91   $ 18,186
ING MAP PLUS NP8   1,352.153   7.77   10,506
ING MAP PLUS NP11   9,310.926   7.72   71,880
ING MAP PLUS NP12   5,339.326   7.70   41,113
ING MAP PLUS NP20   12,722.608   7.55   96,056
ING MAP PLUS NP26   37.995   7.44   283
Qualified VI   7.705   5.56   43
Qualified XII (1.00)   6,034.208   5.66   34,154
    37,104.064       $ 272,221
ING T. Rowe Price Growth Equity Portfolio - Adviser            
   Class            
Contracts in accumulation period:            
Qualified XXXV   103,133.008   $ 7.20   $ 742,558
 
ING T. Rowe Price Growth Equity Portfolio - Initial            
   Class            
Currently payable annuity contracts:   82,875.859   $5.91 to $9.90   $ 736,608
Contracts in accumulation period:            
ING Custom Choice 62   3,182.259   8.12   25,840
Qualified V   1,628.782   14.83   24,155
Qualified VI   2,863,918.288   14.84   42,500,547
Qualified VIII   1,803.238   15.14   27,301
Qualified X (1.15)   152,373.054   16.85   2,567,486
Qualified X (1.25)   193,057.107   16.63   3,210,540
Qualified XII (0.00)   21,905.206   10.28   225,186
Qualified XII (0.05)   22,315.507   16.30   363,743
Qualified XII (0.10)   204.892   10.17   2,084
Qualified XII (0.20)   79,027.050   10.06   795,012
Qualified XII (0.25)   3,113.428   10.01   31,165
Qualified XII (0.30)   289,012.715   9.95   2,875,677
Qualified XII (0.35)   10,910.460   9.90   108,014
Qualified XII (0.40)   88,083.941   15.02   1,323,021
Qualified XII (0.45)   361.357   9.80   3,541
Qualified XII (0.50)   316,428.927   10.18   3,221,246
Qualified XII (0.55)   82,227.363   9.69   796,783
Qualified XII (0.60)   219,788.133   9.64   2,118,758
Qualified XII (0.65)   176,699.754   9.59   1,694,551
Qualified XII (0.70)   250,547.829   9.54   2,390,226
Qualified XII (0.75)   347,978.751   9.49   3,302,318
Qualified XII (0.80)   352,773.086   10.40   3,668,840
Qualified XII (0.85)   321,690.549   14.38   4,625,910
Qualified XII (0.90)   22,561.831   9.99   225,393
Qualified XII (0.95)   774,473.124   14.20   10,997,518
Qualified XII (1.00)   877,473.364   14.11   12,381,149
Qualified XII (1.05)   68,507.693   14.02   960,478
Qualified XII (1.10)   69,701.755   13.94   971,642
Qualified XII (1.15)   63,751.910   13.85   882,964
Qualified XII (1.20)   19,536.759   13.76   268,826
 
                                                        303            

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

Division/Contract   Units   Unit Value   Extended Value
ING T. Rowe Price Growth Equity Portfolio - Initial            
Class (continued)            
Qualified XII (1.25)   85,841.534   $ 13.67   $ 1,173,454
Qualified XII (1.30)   5,199.026   13.59   70,655
Qualified XII (1.35)   2,264.842   13.50   30,575
Qualified XII (1.40)   12,536.661   13.42   168,242
Qualified XII (1.45)   2,101.446   13.33   28,012
Qualified XII (1.50)   1,334.940   13.25   17,688
Qualified XIII   205.223   15.41   3,162
Qualified XV   5,829.199   15.39   89,711
Qualified XVI   104,429.728   14.41   1,504,832
Qualified XVII   9,893.265   14.84   146,816
Qualified XVIII   10,681.473   16.63   177,633
Qualified XXI   44,470.566   15.61   694,186
Qualified XXV   12,784.682   15.47   197,779
Qualified XXVI   11,625.760   15.28   177,642
Qualified XXVII   1,193,388.078   17.48   20,860,424
Qualified XXVIII   630,309.015   17.43   10,986,286
Qualified XXXII   7,793.540   8.20   63,907
Qualified XXXIII (0.65)   9,513.059   8.42   80,100
Qualified XXII   51.391   15.98   821
Qualified XXXVI   10,647.351   8.48   90,290
Qualified XXXVIII   75,352.713   5.65   425,743
Qualified XLIII   4,117.563   5.63   23,182
Qualified LIII   35,576.889   8.12   288,884
Qualified LIV   54,368.595   8.07   438,755
Qualified LVI   81,168.527   8.16   662,335
Qualified LIX   5,578.472   8.56   47,752
    10,194,977.509       $ 141,775,388
ING T. Rowe Price Growth Equity Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP1   9,729.579   $ 8.15   $ 79,296
ING MAP PLUS NP8   2,221.898   8.01   17,797
ING MAP PLUS NP9   3,000.922   7.99   23,977
ING MAP PLUS NP10   14,305.163   7.97   114,012
ING MAP PLUS NP11   43,179.800   7.95   343,279
ING MAP PLUS NP15   10,111.924   7.87   79,581
ING MAP PLUS NP17   11,813.235   7.84   92,616
ING MAP PLUS NP19   248.904   7.80   1,941
ING MAP PLUS NP21   1,472.347   7.76   11,425
ING MAP PLUS NP22   251.411   7.74   1,946
ING MAP PLUS NP24   169.048   7.70   1,302
ING MAP PLUS NP25   3,085.557   7.68   23,697
ING MAP PLUS NP26   4,265.210   7.66   32,672
ING MAP PLUS NP27   467.224   7.65   3,574
ING MAP PLUS NP30   1,854.621   7.59   14,077
ING MAP PLUS NP32   13.079   7.55   99
Qualified XII (1.00)   19,947.190   8.84   176,333
    126,137.112       $ 1,017,624
 
 
                                                        304            

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

Division/Contract   Units   Unit Value   Extended Value
ING Templeton Foreign Equity Portfolio - Adviser            
Class            
Contracts in accumulation period:            
Qualified XXXV   22,686.761   $ 6.31   $ 143,153
 
ING Templeton Foreign Equity Portfolio - Initial            
Class            
Currently payable annuity contracts:   222,835.570   $6.23 to $6.25   $ 1,392,420
Contracts in accumulation period:            
ING Custom Choice 62   137.643   6.28   864
Qualified V   1,445.339   6.28   9,077
Qualified VI   2,950,264.500   6.28   18,527,661
Qualified VIII   26,256.503   6.28   164,891
Qualified X (1.15)   309,317.390   6.29   1,945,606
Qualified X (1.25)   229,208.244   6.28   1,439,428
Qualified XII (0.00)   6,547.036   6.34   41,508
Qualified XII (0.05)   43,786.944   6.30   275,858
Qualified XII (0.10)   481.782   6.34   3,055
Qualified XII (0.20)   35,676.618   6.33   225,833
Qualified XII (0.25)   6,036.496   6.33   38,211
Qualified XII (0.30)   54,109.878   6.33   342,516
Qualified XII (0.35)   5,716.506   6.33   36,185
Qualified XII (0.40)   17,867.786   6.32   112,924
Qualified XII (0.45)   152.935   6.32   967
Qualified XII (0.50)   245,016.715   6.32   1,548,506
Qualified XII (0.55)   73,809.774   6.32   466,478
Qualified XII (0.60)   49,258.454   6.32   311,313
Qualified XII (0.65)   504,314.586   6.31   3,182,225
Qualified XII (0.70)   243,350.930   6.31   1,535,544
Qualified XII (0.75)   187,578.593   6.31   1,183,621
Qualified XII (0.80)   385,344.732   6.31   2,431,525
Qualified XII (0.85)   549,115.100   6.30   3,459,425
Qualified XII (0.90)   31,935.903   6.30   201,196
Qualified XII (0.95)   378,454.552   6.30   2,384,264
Qualified XII (1.00)   1,233,293.921   6.30   7,769,752
Qualified XII (1.05)   54,247.226   6.29   341,215
Qualified XII (1.10)   47,146.998   6.29   296,555
Qualified XII (1.15)   64,548.259   6.29   406,009
Qualified XII (1.20)   6,568.135   6.29   41,314
Qualified XII (1.25)   45,956.723   6.28   288,608
Qualified XII (1.30)   2,079.852   6.28   13,061
Qualified XII (1.35)   16.311   6.28   102
Qualified XII (1.40)   11,536.404   6.28   72,449
Qualified XII (1.45)   2,351.694   6.28   14,769
Qualified XII (1.50)   4,559.169   6.27   28,586
Qualified XV   55,720.524   6.30   351,039
Qualified XVI   86,034.766   6.27   539,438
Qualified XVII   859.826   6.28   5,400
Qualified XVIII   11,960.734   6.28   75,113
Qualified XXV   7,439.488   6.31   46,943
 
 
                                                     305            

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

Division/Contract   Units   Unit Value   Extended Value
ING Templeton Foreign Equity Portfolio - Initial            
Class (continued)            
Qualified XXVI   1,690.062   $ 6.30   $ 10,647
Qualified XXVII   3,048,126.814   6.25   19,050,793
Qualified XXVIII   561,920.614   6.25   3,512,004
Qualified XXXII   47,388.177   6.28   297,598
Qualified XXXIII (0.65)   46.063   6.31   291
Qualified XXXVI   26,651.296   6.32   168,436
Qualified XXXVIII   75,532.352   6.34   478,875
Qualified XLIII   75.188   6.32   475
Qualified LIII   28,930.380   6.32   182,840
Qualified LIV   25,434.843   6.31   160,494
Qualified LVI   16,456.242   6.33   104,168
Qualified LIX   14,277.655   6.32   90,235
    12,038,870.225       $ 75,608,310
ING Templeton Foreign Equity Portfolio - Service            
   Class            
Contracts in accumulation period:            
ING MAP PLUS NP1   2,445.205   $ 7.71   $ 18,853
ING MAP PLUS NP12   276.746   7.60   2,103
ING MAP PLUS NP23   597.656   7.49   4,476
ING MAP PLUS NP25   1,871.505   7.47   13,980
ING MAP PLUS NP29   115.704   7.43   860
    5,306.816       $ 40,272
ING Thornburg Value Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   39,135.088   $ 7.53   $ 294,687
 
ING Thornburg Value Portfolio - Initial Class            
Currently payable annuity contracts:   48,257.708   $4.48 to $17.41   $ 417,286
Contracts in accumulation period:            
Qualified V   694.422   17.07   11,854
Qualified VI   863,983.811   17.41   15,041,958
Qualified VIII   3,451.025   14.95   51,593
Qualified X (1.15)   35,736.190   7.65   273,382
Qualified X (1.25)   105,253.053   7.57   796,766
Qualified XII (0.00)   3,619.936   8.74   31,638
Qualified XII (0.05)   10,204.558   19.12   195,111
Qualified XII (0.10)   73.960   8.65   640
Qualified XII (0.20)   23,159.458   8.56   198,245
Qualified XII (0.25)   1,181.615   8.52   10,067
Qualified XII (0.30)   52,011.639   8.47   440,539
Qualified XII (0.35)   2,014.687   8.43   16,984
Qualified XII (0.40)   9,541.515   12.31   117,456
Qualified XII (0.45)   5.885   8.34   49
Qualified XII (0.50)   75,191.998   8.80   661,690
Qualified XII (0.55)   48,395.278   8.25   399,261
Qualified XII (0.60)   27,438.302   8.20   224,994
Qualified XII (0.65)   84,038.743   8.16   685,756
Qualified XII (0.70)   82,621.696   8.12   670,888
 
 
                                                    306            

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

Division/Contract   Units   Unit Value   Extended Value
ING Thornburg Value Portfolio - Initial Class            
(continued)            
Qualified XII (0.75)   181,449.587   $ 8.08   $ 1,466,113
Qualified XII (0.80)   153,636.359   9.09   1,396,555
Qualified XII (0.85)   242,543.494   11.79   2,859,588
Qualified XII (0.90)   15,424.877   8.70   134,196
Qualified XII (0.95)   165,116.680   11.64   1,921,958
Qualified XII (1.00)   596,197.474   11.56   6,892,043
Qualified XII (1.05)   33,324.064   11.49   382,894
Qualified XII (1.10)   39,511.623   11.42   451,223
Qualified XII (1.15)   32,102.014   11.35   364,358
Qualified XII (1.20)   11,151.111   11.28   125,785
Qualified XII (1.25)   20,170.383   11.21   226,110
Qualified XII (1.30)   1,281.506   11.13   14,263
Qualified XII (1.40)   10,669.888   10.99   117,262
Qualified XII (1.45)   1,276.794   10.93   13,955
Qualified XII (1.50)   474.398   10.86   5,152
Qualified XV   13,688.306   18.05   247,074
Qualified XVI   19,684.205   16.91   332,860
Qualified XVII   180.937   17.41   3,150
Qualified XVIII   4,106.223   7.57   31,084
Qualified XXV   5,893.676   18.14   106,911
Qualified XXVI   2,012.571   17.92   36,065
Qualified XXVII   905,418.855   21.60   19,557,047
Qualified XXVIII   171,755.603   21.54   3,699,616
Qualified XXXII   2,411.648   8.41   20,282
Qualified XXXVI   9,131.097   7.35   67,114
Qualified XXXVIII   45,982.728   5.74   263,941
Qualified XLIII   314.509   5.72   1,799
Qualified LIII   19,225.491   8.07   155,150
Qualified LIV   22,881.355   8.01   183,280
Qualified LVI   15,771.011   8.10   127,745
Qualified LIX   4,690.314   7.42   34,802
    4,224,354.260       $ 61,485,532
ING UBS U.S. Large Cap Equity Portfolio - Adviser            
   Class            
Contracts in accumulation period:            
Qualified XXXV   6,339.471   $ 6.75   $ 42,791
 
 
 
 
        307            

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

Division/Contract   Units   Unit Value   Extended Value
ING UBS U.S. Large Cap Equity Portfolio - Initial            
Class            
Currently payable annuity contracts:   54,403.229   $7.96 to $8.68   $ 464,729
Contracts in accumulation period:            
ING Custom Choice 62   568.889   8.31   4,727
Qualified V   745.292   11.11   8,280
Qualified VI   2,251,578.505   11.40   25,667,995
Qualified VII   33,642.719   9.67   325,325
Qualified VIII   7,248.477   9.61   69,658
Qualified IX   2,601.154   9.71   25,257
Qualified X (1.15)   74,807.299   11.57   865,520
Qualified X (1.25)   186,231.559   11.40   2,123,040
Qualified XII (0.00)   7,482.343   8.17   61,131
Qualified XII (0.05)   16,899.011   12.52   211,576
Qualified XII (0.10)   106.174   8.09   859
Qualified XII (0.20)   22,964.434   8.00   183,715
Qualified XII (0.25)   16,485.069   7.96   131,221
Qualified XII (0.30)   54,021.506   7.92   427,850
Qualified XII (0.35)   7,130.429   7.88   56,188
Qualified XII (0.40)   5,858.218   7.88   46,163
Qualified XII (0.45)   848.570   7.79   6,610
Qualified XII (0.50)   137,354.615   8.16   1,120,814
Qualified XII (0.55)   48,469.913   7.71   373,703
Qualified XII (0.60)   35,708.076   7.67   273,881
Qualified XII (0.65)   95,392.332   7.63   727,843
Qualified XII (0.70)   117,322.660   7.59   890,479
Qualified XII (0.75)   200,877.240   7.55   1,516,623
Qualified XII (0.80)   225,785.514   8.31   1,876,278
Qualified XII (0.85)   418,815.975   7.55   3,162,061
Qualified XII (0.90)   18,341.398   8.01   146,915
Qualified XII (0.95)   324,278.693   7.45   2,415,876
Qualified XII (1.00)   457,400.229   7.41   3,389,336
Qualified XII (1.05)   24,797.785   7.36   182,512
Qualified XII (1.10)   24,844.145   7.31   181,611
Qualified XII (1.15)   84,565.197   7.27   614,789
Qualified XII (1.20)   5,386.756   7.22   38,892
Qualified XII (1.25)   35,916.643   7.17   257,522
Qualified XII (1.30)   1,068.682   7.13   7,620
Qualified XII (1.35)   579.205   7.08   4,101
Qualified XII (1.40)   11,581.450   7.04   81,533
Qualified XII (1.45)   1,382.340   7.00   9,676
Qualified XII (1.50)   1,271.498   6.95   8,837
Qualified XIII   1,302.078   11.84   15,417
Qualified XV   13,555.201   11.82   160,222
Qualified XVI   63,478.550   11.07   702,708
Qualified XVII   23,026.789   11.40   262,505
Qualified XVIII   12,344.652   11.40   140,729
Qualified XIX   2,116.652   7.52   15,917
Qualified XX   1,221.398   9.88   12,067
 
 
 
308            

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

Division/Contract   Units   Unit Value   Extended Value
ING UBS U.S. Large Cap Equity Portfolio - Initial            
Class (continued)            
Qualified XXV   8,162.276   $ 11.88   $ 96,968
Qualified XXVI   4,162.906   11.73   48,831
Qualified XXVII   737,123.533   11.03   8,130,473
Qualified XXVIII   368,505.754   11.00   4,053,563
Qualified XXX   35,271.256   9.68   341,426
Qualified XXXII   57,233.622   8.51   487,058
Qualified XXIX   2,133.647   9.88   21,080
Qualified XXXVI   30,699.381   7.89   242,218
Qualified XXXVIII   57,509.377   5.75   330,679
Qualified XLIII   221.002   5.74   1,269
Qualified LIII   51,308.906   7.80   400,209
Qualified LIV   34,978.379   7.75   271,082
Qualified LVI   68,370.968   7.84   536,028
Qualified LIX   5,755.778   7.97   45,874
    6,593,245.328       $ 64,277,069
ING UBS U.S. Large Cap Equity Portfolio - Service            
   Class            
Contracts in accumulation period:            
Qualified XII (1.00)   879.774   $ 6.56   $ 5,771
 
ING Van Kampen Comstock Portfolio - Adviser Class            
Contracts in accumulation period:            
Qualified XXXV   28,073.823   $ 7.35   $ 206,343
 
ING Van Kampen Comstock Portfolio - Service Class            
Currently payable annuity contracts:   133,747.540   $7.90 to $8.77   $ 1,160,663
Contracts in accumulation period:            
ING Custom Choice 62   4,094.800   8.21   33,618
ING MAP PLUS NP4   11,434.239   8.38   95,819
ING MAP PLUS NP8   4,684.008   8.30   38,877
ING MAP PLUS NP9   7,537.168   8.28   62,408
ING MAP PLUS NP10   4.188   8.26   35
ING MAP PLUS NP11   61,633.312   8.24   507,858
ING MAP PLUS NP15   20,106.714   8.16   164,071
ING MAP PLUS NP17   19,079.287   8.12   154,924
ING MAP PLUS NP18   285.867   8.10   2,316
ING MAP PLUS NP19   1,934.853   8.08   15,634
ING MAP PLUS NP20   209.053   8.06   1,685
ING MAP PLUS NP21   3,959.216   8.04   31,832
ING MAP PLUS NP22   1,157.920   8.02   9,287
ING MAP PLUS NP23   15,243.452   8.00   121,948
ING MAP PLUS NP24   1,376.566   7.98   10,985
ING MAP PLUS NP26   642.936   7.94   5,105
ING MAP PLUS NP28   3,541.696   7.90   27,979
ING MAP PLUS NP29   726.835   7.88   5,727
ING MAP PLUS NP32   12.364   7.82   97
Qualified V   332.530   8.59   2,856
Qualified VI   1,203,907.562   8.68   10,449,918
 
 
  309            

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

Division/Contract   Units   Unit Value   Extended Value
ING Van Kampen Comstock Portfolio - Service Class            
(continued)            
Qualified X (1.15)   58,062.241   $ 8.74   $ 507,464
Qualified X (1.25)   194,660.495   8.68   1,689,653
Qualified XII (0.00)   6,993.468   9.44   66,018
Qualified XII (0.10)   104.085   9.38   976
Qualified XII (0.30)   24,161.301   9.25   223,492
Qualified XII (0.35)   317.299   9.22   2,926
Qualified XII (0.40)   11,514.418   9.19   105,818
Qualified XII (0.50)   144,880.249   9.13   1,322,757
Qualified XII (0.55)   32,182.445   9.10   292,860
Qualified XII (0.60)   31,411.432   9.07   284,902
Qualified XII (0.65)   150,798.433   9.04   1,363,218
Qualified XII (0.70)   46,060.060   9.01   415,001
Qualified XII (0.75)   391,246.723   8.98   3,513,396
Qualified XII (0.80)   87,715.057   8.95   785,050
Qualified XII (0.85)   146,396.450   8.92   1,305,856
Qualified XII (0.90)   48,408.234   8.89   430,349
Qualified XII (0.95)   114,381.356   8.86   1,013,419
Qualified XII (1.00)   626,095.792   8.83   5,528,426
Qualified XII (1.05)   22,049.485   8.80   194,035
Qualified XII (1.10)   19,116.400   8.77   167,651
Qualified XII (1.15)   23,296.578   8.74   203,612
Qualified XII (1.20)   4,314.056   8.71   37,575
Qualified XII (1.25)   71,894.766   8.68   624,047
Qualified XII (1.30)   368.606   8.65   3,188
Qualified XII (1.35)   353.655   8.62   3,049
Qualified XII (1.40)   2,835.758   8.59   24,359
Qualified XII (1.45)   2,224.513   8.57   19,064
Qualified XII (1.50)   39.896   8.54   341
Qualified XV   2,347.231   8.86   20,796
Qualified XVI   29,781.550   8.54   254,334
Qualified XVII   1,426.280   8.68   12,380
Qualified XVIII   5,263.082   8.83   46,473
Qualified XXV   5,120.921   8.98   45,986
Qualified XXVI   1,252.291   8.89   11,133
Qualified XXVII   824,062.143   10.31   8,496,081
Qualified XXXII   3,976.975   8.54   33,963
Qualified XXXIII (0.65)   12,509.276   9.18   114,835
Qualified XXXVIII   62,696.140   6.05   379,312
Qualified XLIII   1,749.904   6.03   10,552
Qualified LIII   11,516.753   7.62   87,758
Qualified LIV   46,203.527   7.57   349,761
Qualified LVI   6,774.528   7.65   51,825
Qualified LIX   2,907.562   9.24   26,866
    4,775,123.520       $ 42,974,199
 
 
 
 
                   310            

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

Division/Contract       Units   Unit Value   Extended Value
ING Van Kampen Equity and Income Portfolio -                
Adviser Class                
Contracts in accumulation period:                
Qualified XXXV       34,718.452   $ 8.88   $ 308,300
 
ING Van Kampen Equity and Income Portfolio -                
Initial Class                
Currently payable annuity contracts:       317,584.966   $8.98 to $9.33   $ 2,953,576
Contracts in accumulation period:                
Qualified V       3,158.738   9.15   28,902
Qualified VI       7,957,358.243   9.20   73,207,696
Qualified VIII       14,126.048   9.20   129,960
Qualified X (1.15)       431,866.754   9.24   3,990,449
Qualified X (1.25)       786,937.018   9.20   7,239,821
Qualified XII (0.00)       26,805.709   9.66   258,943
Qualified XII (0.05)       108,398.827   10.03   1,087,240
Qualified XII (0.10)       607.334   9.62   5,843
Qualified XII (0.20)       146,260.667   9.89   1,446,518
Qualified XII (0.25)       12,532.054   9.88   123,817
Qualified XII (0.30)       895,039.193   9.55   8,547,624
Qualified XII (0.35)       16,731.554   9.84   164,638
Qualified XII (0.40)       80,134.634   9.81   786,121
Qualified XII (0.45)       147.100   9.49   1,396
Qualified XII (0.50)       633,249.921   9.82   6,218,514
Qualified XII (0.55)       185,525.004   9.74   1,807,014
Qualified XII (0.60)       297,636.020   9.72   2,893,022
Qualified XII (0.65)       685,885.081   9.42   6,461,037
Qualified XII (0.70)       375,078.507   9.66   3,623,258
Qualified XII (0.75)       855,619.147   9.38   8,025,708
Qualified XII (0.80)       851,813.675   9.70   8,262,593
Qualified XII (0.85)       759,859.608   9.69   7,363,040
Qualified XII (0.90)       54,955.419   9.66   530,869
Qualified XII (0.95)       954,043.905   9.65   9,206,524
Qualified XII (1.00)       2,829,579.043   9.63   27,248,846
Qualified XII (1.05)       357,526.769   9.27   3,314,273
Qualified XII (1.10)       301,980.441   9.59   2,895,992
Qualified XII (1.15)       173,778.545   9.56   1,661,323
Qualified XII (1.20)       68,006.509   9.22   627,020
Qualified XII (1.25)       298,358.036   9.52   2,840,369
Qualified XII (1.30)       16,213.027   9.50   154,024
Qualified XII (1.35)       3,353.636   9.17   30,753
Qualified XII (1.40)       43,640.886   9.69   422,880
Qualified XII (1.45)       13,615.170   9.13   124,307
Qualified XII (1.50)       7,418.089   9.11   67,579
Qualified XIII       25.773   9.31   240
Qualified XV       22,735.671   9.31   211,669
Qualified XVI       213,576.360   9.11   1,945,681
Qualified XVII       1,105.765   9.20   10,173
Qualified XVIII       30,298.935   9.20   278,750
Qualified XXI       234,750.850   9.37   2,199,615
 
 
    311            

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

Division/Contract   Units   Unit Value   Extended Value
ING Van Kampen Equity and Income Portfolio -            
   Initial Class (continued)            
Qualified XXV   131,224.818   $ 9.38   $ 1,230,889
Qualified XXVI   17,821.794   9.33   166,277
Qualified XXVII   1,423,376.749   9.31   13,251,638
Qualified XXXII   18,209.135   9.20   167,524
Qualified XXXIII (0.65)   20,796.070   9.42   195,899
Qualified XXXVI   37,120.829   9.46   351,163
Qualified XXXVIII   105,356.169   7.51   791,225
Qualified XLIII   6,347.344   7.48   47,478
Qualified LIII   71,768.252   9.67   693,999
Qualified LIV   70,262.022   9.61   675,218
Qualified LVI   94,484.197   9.72   918,386
Qualified LIX   11,392.715   9.50   108,231
    23,075,478.725       $ 216,995,544
ING Van Kampen Equity and Income Portfolio -            
Service Class            
Contracts in accumulation period:            
Qualified VI   0.038   $ 29.41   $ 1
Qualified XII (0.60)   4.333   30.80   133
Qualified XII (1.00)   5,247.742   29.94   157,117
    5,252.113       $ 157,251
ING VP Strategic Allocation Conservative Portfolio -            
Class I            
Currently payable annuity contracts:   81,168.235   $8.90 to $14.72   $ 796,983
Contracts in accumulation period:            
ING MAP PLUS NP1   4,856.189   9.60   46,619
ING MAP PLUS NP4   2,180.322   9.53   20,778
ING MAP PLUS NP9   11,446.351   9.41   107,710
ING MAP PLUS NP10   2,868.916   9.39   26,939
ING MAP PLUS NP11   9,618.552   9.37   90,126
ING MAP PLUS NP12   12,139.835   9.34   113,386
ING MAP PLUS NP14   306.563   9.30   2,851
ING MAP PLUS NP15   26.282   9.27   244
ING MAP PLUS NP17   4,565.073   9.23   42,136
ING MAP PLUS NP18   9,649.130   9.21   88,868
ING MAP PLUS NP19   6,339.488   9.18   58,197
ING MAP PLUS NP20   14,986.127   9.16   137,273
ING MAP PLUS NP21   22,668.183   9.14   207,187
ING MAP PLUS NP22   687.264   9.12   6,268
ING MAP PLUS NP23   4,612.444   9.09   41,927
ING MAP PLUS NP25   281.666   9.05   2,549
ING MAP PLUS NP26   28,856.087   9.03   260,570
ING MAP PLUS NP28   5,749.455   8.98   51,630
ING MAP PLUS NP29   525.820   8.96   4,711
ING MAP PLUS NP30   39.238   8.94   351
Qualified V   164.316   14.41   2,368
Qualified VI   456,136.328   14.72   6,714,327
Qualified X (1.15)   65,112.102   14.98   975,379
Qualified X (1.25)   41,203.652   14.78   608,990
Qualified XII (0.00)   5,533.893   11.82   65,411
 
                                                        312            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Strategic Allocation Conservative Portfolio -            
Class I (continued)            
Qualified XII (0.05)   11,572.133   $ 16.17   $ 187,121
Qualified XII (0.10)   8.974   11.70   105
Qualified XII (0.20)   32.283   11.57   374
Qualified XII (0.25)   1,190.294   11.51   13,700
Qualified XII (0.30)   34,020.856   11.45   389,539
Qualified XII (0.35)   416.696   11.39   4,746
Qualified XII (0.40)   52,219.496   14.75   770,238
Qualified XII (0.45)   20.571   11.27   232
Qualified XII (0.50)   36,749.185   11.46   421,146
Qualified XII (0.55)   17,010.569   11.15   189,668
Qualified XII (0.60)   35,695.212   11.09   395,860
Qualified XII (0.65)   947.519   11.03   10,451
Qualified XII (0.70)   38,507.370   10.98   422,811
Qualified XII (0.75)   62,489.041   10.92   682,380
Qualified XII (0.80)   54,011.624   11.26   608,171
Qualified XII (0.85)   61,179.217   14.12   863,851
Qualified XII (0.90)   7,713.832   11.07   85,392
Qualified XII (0.95)   93,025.984   13.95   1,297,712
Qualified XII (1.00)   268,083.488   13.86   3,715,637
Qualified XII (1.05)   18,748.185   13.77   258,163
Qualified XII (1.10)   39,158.391   13.68   535,687
Qualified XII (1.15)   39,250.788   13.60   533,811
Qualified XII (1.20)   5,189.453   13.51   70,110
Qualified XII (1.25)   22,603.912   13.43   303,571
Qualified XII (1.30)   2,937.189   13.34   39,182
Qualified XII (1.35)   15.837   13.26   210
Qualified XII (1.40)   10,065.328   13.17   132,560
Qualified XII (1.45)   1,563.603   13.09   20,468
Qualified XII (1.50)   247.142   13.01   3,215
Qualified XV   1,238.537   15.26   18,900
Qualified XVI   16,069.171   14.29   229,628
Qualified XVII   12,346.897   15.33   189,278
Qualified XVIII   18,274.145   15.39   281,239
Qualified XXV   7,557.893   15.53   117,374
Qualified XXVI   925.613   15.34   14,199
Qualified XXVII   89,653.367   15.03   1,347,490
Qualified XXVIII   38,488.740   14.98   576,561
Qualified XXXII   2,030.881   9.39   19,070
Qualified XXXIII (0.65)   4,533.186   10.19   46,193
Qualified XXXVI   6,206.687   10.27   63,743
Qualified XXXVIII   2,700.297   7.64   20,630
Qualified LIII   10,417.281   9.16   95,422
Qualified LIV   7,500.370   9.10   68,253
Qualified LVI   34,769.061   9.21   320,223
Qualified LIX   192.340   10.40   2,000
    1,959,300.149       $ 25,840,092
 
 
 
 
                     313            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Strategic Allocation Growth Portfolio -                
Class I                
Currently payable annuity contracts:       62,933.874   $7.21 to $9.37   $ 564,098
Contracts in accumulation period:                
ING MAP PLUS NP1       6,757.688   8.80   59,468
ING MAP PLUS NP4       56,778.765   8.73   495,679
ING MAP PLUS NP9       21,571.794   8.63   186,165
ING MAP PLUS NP10       2,026.187   8.61   17,445
ING MAP PLUS NP11       8,033.845   8.59   69,011
ING MAP PLUS NP12       24,250.831   8.56   207,587
ING MAP PLUS NP14       809.972   8.52   6,901
ING MAP PLUS NP15       804.742   8.50   6,840
ING MAP PLUS NP17       28,740.862   8.46   243,148
ING MAP PLUS NP18       88.314   8.44   745
ING MAP PLUS NP19       4,213.335   8.42   35,476
ING MAP PLUS NP20       41,271.149   8.40   346,678
ING MAP PLUS NP21       35,346.377   8.38   296,203
ING MAP PLUS NP22       1,714.211   8.36   14,331
ING MAP PLUS NP23       1,308.140   8.34   10,910
ING MAP PLUS NP25       163.314   8.30   1,356
ING MAP PLUS NP26       18,429.591   8.28   152,597
ING MAP PLUS NP28       4,982.927   8.23   41,009
ING MAP PLUS NP29       303.864   8.21   2,495
ING MAP PLUS NP30       197.177   8.19   1,615
Qualified V       726.200   13.37   9,709
Qualified VI       1,321,160.941   13.66   18,047,058
Qualified VIII       8.581   13.65   117
Qualified X (1.15)       113,612.869   14.24   1,617,847
Qualified X (1.25)       78,269.902   14.05   1,099,692
Qualified XII (0.00)       8,393.445   9.30   78,059
Qualified XII (0.05)       5,060.753   15.01   75,962
Qualified XII (0.20)       371.353   9.11   3,383
Qualified XII (0.25)       1,423.455   9.06   12,897
Qualified XII (0.30)       37,172.011   9.01   334,920
Qualified XII (0.35)       3,377.727   8.96   30,264
Qualified XII (0.40)       24,458.574   13.19   322,609
Qualified XII (0.50)       129,715.275   9.13   1,184,300
Qualified XII (0.55)       90,646.007   8.77   794,965
Qualified XII (0.60)       132,592.982   8.73   1,157,537
Qualified XII (0.65)       34,645.377   8.68   300,722
Qualified XII (0.70)       114,956.442   8.64   993,224
Qualified XII (0.75)       107,712.719   8.59   925,252
Qualified XII (0.80)       110,112.211   9.09   1,000,920
Qualified XII (0.85)       137,569.244   12.63   1,737,500
Qualified XII (0.90)       26,263.223   8.86   232,692
Qualified XII (0.95)       137,772.624   12.47   1,718,025
Qualified XII (1.00)       412,933.562   12.39   5,116,247
Qualified XII (1.05)       75,844.820   12.32   934,408
Qualified XII (1.10)       66,139.373   12.24   809,546
 
 
 
    314            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Strategic Allocation Growth Portfolio -            
Class I (continued)            
Qualified XII (1.15)   79,897.366   $ 12.16   $ 971,552
Qualified XII (1.20)   9,594.358   12.08   115,900
Qualified XII (1.25)   43,263.356   12.01   519,593
Qualified XII (1.30)   80.521   11.93   961
Qualified XII (1.40)   14,197.668   11.78   167,249
Qualified XII (1.45)   310.787   11.71   3,639
Qualified XII (1.50)   2,745.298   11.63   31,928
Qualified XIII   618.648   14.19   8,779
Qualified XV   4,894.963   14.16   69,313
Qualified XVI   39,316.197   13.27   521,726
Qualified XVIII   2,898.635   14.63   42,407
Qualified XXV   7,952.546   14.41   114,596
Qualified XXVI   408.199   14.23   5,809
Qualified XXVII   141,655.061   13.95   1,976,088
Qualified XXVIII   160,904.365   13.91   2,238,180
Qualified XXXII   6,824.589   8.76   59,783
Qualified XXXIII (0.65)   1,561.489   9.06   14,147
Qualified XXII   1,446.216   14.71   21,274
Qualified XXXVI   7,566.050   9.14   69,154
Qualified XXXVIII   25,964.222   6.32   164,094
Qualified XLIII   39.189   6.30   247
Qualified LIII   6,144.583   8.29   50,939
Qualified LIV   19,418.320   8.24   160,007
Qualified LVI   25,444.450   8.34   212,207
Qualified LIX   4,072.120   9.25   37,667
    4,098,885.825       $ 48,874,851
ING VP Strategic Allocation Moderate Portfolio -            
Class I            
Currently payable annuity contracts:   104,162.597   $8.07 to $9.94   $ 959,699
Contracts in accumulation period:            
ING MAP PLUS NP1   7,765.867   9.17   71,213
ING MAP PLUS NP4   8,708.032   9.10   79,243
ING MAP PLUS NP9   17,954.261   8.99   161,409
ING MAP PLUS NP10   1,245.610   8.97   11,173
ING MAP PLUS NP11   55,236.715   8.95   494,369
ING MAP PLUS NP12   74,116.601   8.92   661,120
ING MAP PLUS NP13   233.720   8.90   2,080
ING MAP PLUS NP14   1,473.766   8.88   13,087
ING MAP PLUS NP15   22,936.404   8.86   203,217
ING MAP PLUS NP17   45,902.146   8.81   404,398
ING MAP PLUS NP18   3,130.904   8.79   27,521
ING MAP PLUS NP19   19,262.559   8.77   168,933
ING MAP PLUS NP20   31,530.184   8.75   275,889
ING MAP PLUS NP21   23,620.213   8.73   206,204
ING MAP PLUS NP22   5,294.320   8.71   46,114
ING MAP PLUS NP23   6,008.124   8.69   52,211
ING MAP PLUS NP25   28.774   8.64   249
ING MAP PLUS NP26   40,700.998   8.62   350,843
 
 
                                315            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Strategic Allocation Moderate Portfolio -            
Class I (continued)            
ING MAP PLUS NP28   3,689.693   $ 8.58   $ 31,658
ING MAP PLUS NP29   928.159   8.56   7,945
ING MAP PLUS NP30   292.347   8.54   2,497
Qualified V   733.046   13.67   10,021
Qualified VI   1,080,869.637   13.97   15,099,749
Qualified VIII   365.481   13.95   5,098
Qualified X (1.15)   70,919.580   14.49   1,027,625
Qualified X (1.25)   67,904.241   14.30   971,031
Qualified XII (0.00)   1,798.278   10.29   18,504
Qualified XII (0.05)   3,270.155   15.34   50,164
Qualified XII (0.20)   162.100   10.07   1,632
Qualified XII (0.25)   6,618.172   10.02   66,314
Qualified XII (0.30)   52,427.731   9.96   522,180
Qualified XII (0.35)   3,585.446   9.91   35,532
Qualified XII (0.40)   59,917.112   13.70   820,864
Qualified XII (0.45)   33.528   9.81   329
Qualified XII (0.50)   156,719.288   10.04   1,573,462
Qualified XII (0.55)   311,073.588   9.70   3,017,414
Qualified XII (0.60)   123,282.310   9.65   1,189,674
Qualified XII (0.65)   25,794.524   9.60   247,627
Qualified XII (0.70)   111,872.607   9.55   1,068,383
Qualified XII (0.75)   108,882.097   9.50   1,034,380
Qualified XII (0.80)   111,012.694   9.96   1,105,686
Qualified XII (0.85)   92,821.034   13.13   1,218,740
Qualified XII (0.90)   19,693.916   9.73   191,622
Qualified XII (0.95)   149,654.677   12.96   1,939,525
Qualified XII (1.00)   243,241.332   12.88   3,132,948
Qualified XII (1.05)   62,347.304   12.80   798,045
Qualified XII (1.10)   81,075.332   12.72   1,031,278
Qualified XII (1.15)   86,697.297   12.64   1,095,854
Qualified XII (1.20)   12,123.331   12.56   152,269
Qualified XII (1.25)   47,688.405   12.48   595,151
Qualified XII (1.30)   4,119.297   12.40   51,079
Qualified XII (1.35)   15.957   12.32   197
Qualified XII (1.40)   24,561.053   12.24   300,627
Qualified XII (1.45)   871.260   12.17   10,603
Qualified XII (1.50)   1,271.555   12.09   15,373
Qualified XIII   630.913   14.50   9,148
Qualified XV   3,450.829   14.48   49,968
Qualified XVI   23,547.752   13.56   319,308
Qualified XVIII   5,130.433   14.89   76,392
Qualified XXV   2,784.687   14.74   41,046
Qualified XXVII   111,966.088   14.26   1,596,636
Qualified XXVIII   86,001.885   14.22   1,222,947
Qualified XXXII   3,127.066   9.05   28,300
Qualified XXXIII (0.65)   291.709   9.58   2,795
Qualified XXII   508.980   15.04   7,655
 
 
 
                                      316            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Strategic Allocation Moderate Portfolio -            
Class I (continued)            
Qualified XXXVI   5,914.065   $ 9.65   $ 57,071
Qualified XXXVIII   26,032.162   6.91   179,882
Qualified LIII   5,044.079   8.69   43,833
Qualified LIV   9,833.195   8.63   84,860
Qualified LVI   19,599.491   8.74   171,300
Qualified LIX   427.581   9.78   4,182
    3,901,936.274       $ 46,525,375
ING VP Growth and Income Portfolio - Class A            
Contracts in accumulation period:            
Qualified XXXV   55,613.418   $ 6.67   $ 370,942
 
ING VP Growth and Income Portfolio - Class I            
Currently payable annuity contracts:   1,438,077.877   $8.14 to $213.96   $ 78,198,989
Contracts in accumulation period:            
ING Custom Choice 62   4,114.940   8.63   35,512
Qualified I   28,223.696   207.42   5,854,159
Qualified V   1,052.007   15.73   16,548
Qualified VI   23,673,744.878   16.02   379,253,393
Qualified VII   2,206,134.166   15.19   33,511,178
Qualified VIII   16,273.557   14.86   241,825
Qualified IX   5,143.929   15.65   80,502
Qualified X (1.15)   1,005,252.640   16.26   16,345,408
Qualified X (1.25)   3,507,350.811   16.02   56,187,760
Qualified XII (0.00)   74,349.302   7.36   547,211
Qualified XII (0.05)   125,722.065   17.59   2,211,451
Qualified XII (0.10)   302.982   7.29   2,209
Qualified XII (0.20)   116,405.280   7.21   839,282
Qualified XII (0.25)   138,850.233   7.17   995,556
Qualified XII (0.30)   589,750.658   7.13   4,204,922
Qualified XII (0.35)   89,124.278   7.09   631,891
Qualified XII (0.40)   27,237.021   11.64   317,039
Qualified XII (0.45)   2,983.322   7.02   20,943
Qualified XII (0.50)   1,222,363.063   7.34   8,972,145
Qualified XII (0.55)   591,776.768   6.95   4,112,849
Qualified XII (0.60)   664,655.774   6.91   4,592,771
Qualified XII (0.65)   547,476.961   6.87   3,761,167
Qualified XII (0.70)   743,352.060   6.84   5,084,528
Qualified XII (0.75)   1,949,572.190   6.80   13,257,091
Qualified XII (0.80)   3,193,694.745   7.42   23,697,215
Qualified XII (0.85)   2,990,614.883   11.15   33,345,356
Qualified XII (0.90)   279,404.570   7.14   1,994,949
Qualified XII (0.95)   2,037,143.571   11.01   22,428,951
Qualified XII (1.00)   3,711,290.336   10.94   40,601,516
Qualified XII (1.05)   209,441.077   10.87   2,276,625
Qualified XII (1.10)   203,476.991   10.80   2,197,552
Qualified XII (1.15)   700,973.973   10.73   7,521,451
Qualified XII (1.20)   40,050.387   10.66   426,937
 
 
 
                                                   317            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Growth and Income Portfolio - Class I                
(continued)                
Qualified XII (1.25)       95,114.404   $ 10.60   $ 1,008,213
Qualified XII (1.30)       6,473.364   10.53   68,165
Qualified XII (1.35)       15.406   10.46   161
Qualified XII (1.40)       35,843.026   10.40   372,767
Qualified XII (1.45)       190.667   10.33   1,970
Qualified XII (1.50)       7,858.249   10.27   80,704
Qualified XIII       1,455.938   16.63   24,212
Qualified XV       58,481.852   16.61   971,384
Qualified XVI       498,310.841   15.55   7,748,734
Qualified XVII       1,284,629.855   16.49   21,183,546
Qualified XVIII       1,535,874.097   16.49   25,326,564
Qualified XIX       7,632.454   213.51   1,629,605
Qualified XX       32,873.849   161.47   5,308,140
Qualified XXV       77,320.422   16.90   1,306,715
Qualified XXVI       14,429.908   16.69   240,835
Qualified XXVII       491,620.723   160.14   78,728,143
Qualified XXVIII       7,563.229   159.69   1,207,772
Qualified XXX       21,239.840   153.73   3,265,201
Qualified XXXII       443,035.560   8.81   3,903,143
Qualified LIII       843,248.911   8.46   7,133,886
Qualified LIV       234,803.754   8.40   1,972,352
Qualified LVI       384,838.284   8.50   3,271,125
Qualified XXII       674.496   17.25   11,635
Qualified XXIX       1,120.178   156.87   175,722
Qualified XXXVI       177,933.172   7.90   1,405,672
Qualified XXXVIII       479,365.067   6.12   2,933,714
Qualified XLII       411,959.162   6.12   2,521,190
Qualified XLIII       22,885.303   6.10   139,600
Qualified LIX       116,294.779   8.00   930,358
        59,428,467.781       $ 926,638,109
ING VP Growth and Income Portfolio - Class S                
Contracts in accumulation period:                
Qualified XII (0.30)       472.310   $ 6.70   $ 3,164
Qualified XII (0.50)       44,761.195   6.68   299,005
Qualified XII (0.55)       2.820   6.67   19
Qualified XII (0.75)       467.971   6.66   3,117
        45,704.296       $ 305,305
 
 
 
 
    318            

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

Division/Contract       Units   Unit Value   Extended Value
ING GET U.S. Core Portfolio - Series 3                
Contracts in accumulation period:                
Qualified VI       447,995.661   $ 10.21   $ 4,574,036
Qualified X (1.15)       112,357.935   10.09   1,133,692
Qualified X (1.25)       194,580.277   10.19   1,982,773
Qualified XII (0.80)       125,115.054   10.43   1,304,950
Qualified XII (0.85)       25,933.086   10.40   269,704
Qualified XII (0.90)       1,630.066   10.38   16,920
Qualified XII (0.95)       23,560.784   10.35   243,854
Qualified XII (1.00)       273,781.122   10.46   2,863,751
Qualified XII (1.10)       2,367.846   10.27   24,318
Qualified XII (1.15)       31,640.383   10.24   323,998
Qualified XVIII       37,546.170   10.09   378,841
Qualified XXVII       403,981.060   10.34   4,177,164
Qualified XXVIII       17,953.616   10.45   187,615
Qualified XXXII       17,453.830   10.09   176,109
        1,715,896.890       $ 17,657,725
ING GET U.S. Core Portfolio - Series 5                
Contracts in accumulation period:                
Qualified X (1.15)       3,209.785   $ 10.56   $ 33,895
Qualified X (1.25)       23,507.670   10.55   248,006
Qualified XXXII       18,836.866   10.55   198,729
        45,554.321       $ 480,630
ING GET U.S. Core Portfolio - Series 6                
Contracts in accumulation period:                
Qualified X (1.15)       50,929.305   $ 10.33   $ 526,100
Qualified X (1.25)       117,993.440   10.33   1,218,872
Qualified XVIII       23,159.437   10.34   239,469
Qualified XXXII       24,271.161   10.33   250,721
        216,353.343       $ 2,235,162
ING GET U.S. Core Portfolio - Series 7                
Contracts in accumulation period:                
Qualified X (1.15)       61,278.728   $ 10.33   $ 633,009
Qualified X (1.25)       34,001.771   10.33   351,238
Qualified XVIII       4,059.156   10.33   41,931
Qualified XXVII       68,360.250   10.53   719,833
Qualified XXVIII       24,755.968   10.63   263,156
Qualified XXXII       2,557.640   10.33   26,420
        195,013.513       $ 2,035,587
ING GET U.S. Core Portfolio - Series 8                
Contracts in accumulation period:                
Qualified X (1.15)       12,998.913   $ 10.28   $ 133,629
Qualified X (1.25)       41,233.587   10.28   423,881
Qualified XVIII       20,254.224   10.29   208,416
Qualified XXXII       764.060   10.28   7,855
        75,250.784       $ 773,781
 
 
 
 
    319            

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

Division/Contract       Units   Unit Value   Extended Value
ING GET U.S. Core Portfolio - Series 9                
Contracts in accumulation period:                
Qualified X (1.15)       4,137.082   $ 10.27   $ 42,488
Qualified X (1.25)       9,492.573   10.27   97,489
Qualified XXXII       149.514   10.27   1,536
        13,779.169       $ 141,513
ING GET U.S. Core Portfolio - Series 10                
Contracts in accumulation period:                
Qualified X (1.15)       1,050.441   $ 10.35   $ 10,872
Qualified X (1.25)       5,719.985   10.35   59,202
        6,770.426       $ 70,074
ING GET U.S. Core Portfolio - Series 11                
Contracts in accumulation period:                
Qualified X (1.15)       2,152.326   $ 10.52   $ 22,642
Qualified X (1.25)       857.630   10.52   9,022
        3,009.956       $ 31,664
ING BlackRock Global Science and Technology                
Portfolio - Class I                
Contracts in accumulation period:                
ING MAP PLUS NP6       429.845   $ 8.08   $ 3,473
ING MAP PLUS NP9       3,941.913   8.02   31,614
ING MAP PLUS NP11       3,205.533   7.98   25,580
ING MAP PLUS NP12       192.041   7.96   1,529
ING MAP PLUS NP17       2,027.619   7.87   15,957
ING MAP PLUS NP19       3,362.263   7.83   26,327
ING MAP PLUS NP21       588.347   7.79   4,583
ING MAP PLUS NP23       1,741.394   7.75   13,496
ING MAP PLUS NP24       213.106   7.73   1,647
ING MAP PLUS NP25       531.908   7.71   4,101
ING MAP PLUS NP26       3,867.832   7.69   29,744
ING MAP PLUS NP29       35.818   7.64   274
ING MAP PLUS NP30       2.803   7.62   21
Qualified V       2,141.217   2.90   6,210
Qualified VI       2,269,556.915   2.94   6,672,497
Qualified VIII       13.167   2.94   39
Qualified X (1.15)       84,404.064   2.97   250,680
Qualified X (1.25)       164,378.078   2.94   483,272
Qualified XII (0.00)       3,571.506   3.28   11,715
Qualified XII (0.05)       132,966.828   3.20   425,494
Qualified XII (0.10)       10.277   3.25   33
Qualified XII (0.20)       3,476.385   3.22   11,194
Qualified XII (0.25)       3,070.150   3.21   9,855
Qualified XII (0.30)       83,165.509   3.20   266,130
Qualified XII (0.40)       80,420.773   3.17   254,934
Qualified XII (0.50)       457,810.557   3.14   1,437,525
Qualified XII (0.55)       92,626.866   3.13   289,922
Qualified XII (0.60)       35,953.543   3.11   111,816
Qualified XII (0.65)       188,168.216   3.10   583,321
Qualified XII (0.70)       121,347.246   3.09   374,963
 
 
    320            

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

Division/Contract       Units   Unit Value   Extended Value
ING BlackRock Global Science and Technology                
   Portfolio - Class I (continued)                
Qualified XII (0.75)       228,908.606   $ 3.07   $ 702,749
Qualified XII (0.80)       444,632.644   3.06   1,360,576
Qualified XII (0.85)       295,268.367   3.05   900,569
Qualified XII (0.90)       16,226.739   3.03   49,167
Qualified XII (0.95)       273,112.457   3.02   824,800
Qualified XII (1.00)       875,160.674   3.01   2,634,234
Qualified XII (1.05)       41,757.602   2.99   124,855
Qualified XII (1.10)       62,764.282   2.98   187,038
Qualified XII (1.15)       42,019.781   2.97   124,799
Qualified XII (1.20)       13,471.875   2.95   39,742
Qualified XII (1.25)       89,357.741   2.94   262,712
Qualified XII (1.30)       2,452.976   2.93   7,187
Qualified XII (1.35)       169.651   2.92   495
Qualified XII (1.40)       13,349.990   2.90   38,715
Qualified XII (1.45)       2,083.682   2.89   6,022
Qualified XII (1.50)       4.410   2.88   13
Qualified XV       16,204.950   3.02   48,939
Qualified XVI       47,319.257   2.88   136,279
Qualified XVII       4,209.023   3.00   12,627
Qualified XVIII       5,979.213   3.01   17,997
Qualified XXI       178,797.990   3.06   547,122
Qualified XXV       34,580.768   3.10   107,200
Qualified XXVI       14,587.609   3.07   44,784
Qualified XXVII       998,012.303   2.94   2,934,156
Qualified XXXII       786.574   8.17   6,426
Qualified XXXVI       15,150.122   7.47   113,171
Qualified XXXVIII       15,735.535   5.87   92,368
Qualified XLIII       1,626.586   5.85   9,516
Qualified LIII       26,108.691   9.59   250,382
Qualified LIV       14,898.602   9.53   141,984
Qualified LVI       19,467.775   9.65   187,864
Qualified LIX       17,700.097   7.56   133,813
        7,555,128.291       $ 23,396,247
 
 
 
 
    321            

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

Division/Contract   Units   Unit Value   Extended Value
ING International Index Portfolio - Class I            
Contracts in accumulation period:            
Qualified VI   20,028.889   $ 5.92   $ 118,571
Qualified XII (0.30)   778.734   5.95   4,633
Qualified XII (0.40)   920.230   5.95   5,475
Qualified XII (0.60)   886.646   5.94   5,267
Qualified XII (0.70)   378.956   5.94   2,251
Qualified XII (0.75)   2,270.067   5.94   13,484
Qualified XII (0.80)   21.248   5.93   126
Qualified XII (0.85)   760.140   5.93   4,508
Qualified XII (0.90)   1,527.587   5.93   9,059
Qualified XII (0.95)   564.339   5.93   3,347
Qualified XII (1.00)   4,697.174   5.93   27,854
Qualified XII (1.05)   806.532   5.92   4,775
Qualified XII (1.10)   5.787   5.92   34
Qualified XII (1.15)   3,344.682   5.92   19,801
Qualified XII (1.25)   180.098   5.92   1,066
Qualified XLIII   40.595   5.95   242
Qualified LIV   1.180   5.93   7
    37,212.884       $ 220,500
ING Lehman Brothers U.S. Aggregate Bond Index®            
   Portfolio - Class I            
Contracts in accumulation period:            
Qualified VI   81,100.776   $ 10.19   $ 826,417
Qualified XII (0.00)   740.074   10.27   7,601
Qualified XII (0.30)   1,543.101   10.25   15,817
Qualified XII (0.40)   1,777.691   10.24   18,204
Qualified XII (0.55)   2,255.684   10.23   23,076
Qualified XII (0.60)   303.029   10.23   3,100
Qualified XII (0.65)   5.909   10.23   60
Qualified XII (0.70)   8.863   10.22   91
Qualified XII (0.75)   17.115   10.22   175
Qualified XII (0.80)   240.281   10.22   2,456
Qualified XII (0.85)   1,176.674   10.21   12,014
Qualified XII (0.90)   593.678   10.21   6,061
Qualified XII (0.95)   1,848.444   10.21   18,873
Qualified XII (1.00)   50,548.979   10.20   515,600
Qualified XII (1.05)   537.170   10.20   5,479
Qualified XII (1.10)   191.608   10.20   1,954
Qualified XII (1.15)   4,568.014   10.19   46,548
Qualified XII (1.20)   16.762   10.19   171
Qualified XII (1.25)   2,233.004   10.19   22,754
Qualified XII (1.40)   1,878.978   10.18   19,128
Qualified XVI   768.080   10.17   7,811
Qualified XXVI   2.529   10.21   26
Qualified XXXVIII   168.305   10.27   1,728
Qualified XLIII   7.080   10.24   73
Qualified LIII   320.177   10.24   3,279
Qualified LIV   19.748   10.22   202
Qualified LVI   28.450   10.25   292
    152,900.203       $ 1,558,990
 
322            

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

Division/Contract       Units   Unit Value   Extended Value
ING Opportunistic Large Cap Growth Portfolio -                
Class I                
Currently payable annuity contracts:       35,404.649   $3.76 to $10.07   $ 196,697
Contracts in accumulation period:                
Qualified VI       1,202,513.400   10.07   12,109,310
Qualified VIII       412.707   10.06   4,152
Qualified X (1.15)       65,079.782   10.19   663,163
Qualified X (1.25)       127,650.039   10.07   1,285,436
Qualified XII (0.05)       8,104.933   11.05   89,560
Qualified XII (0.10)       137.452   7.25   997
Qualified XII (0.20)       3,023.414   7.17   21,678
Qualified XII (0.25)       2,486.164   7.14   17,751
Qualified XII (0.30)       48,180.814   7.10   342,084
Qualified XII (0.35)       6,238.793   7.06   44,046
Qualified XII (0.40)       105,725.433   11.03   1,166,152
Qualified XII (0.45)       77.793   6.99   544
Qualified XII (0.50)       43,036.293   7.51   323,203
Qualified XII (0.55)       18,230.067   6.91   125,970
Qualified XII (0.60)       46,516.555   6.88   320,034
Qualified XII (0.65)       24,930.972   6.84   170,528
Qualified XII (0.70)       62,913.169   6.80   427,810
Qualified XII (0.75)       181,002.310   6.77   1,225,386
Qualified XII (0.80)       144,688.077   7.66   1,108,311
Qualified XII (0.85)       103,417.047   10.55   1,091,050
Qualified XII (0.90)       14,815.195   7.38   109,336
Qualified XII (0.95)       130,484.315   10.43   1,360,951
Qualified XII (1.00)       390,074.811   10.37   4,045,076
Qualified XII (1.05)       29,624.468   10.31   305,428
Qualified XII (1.10)       30,297.916   10.25   310,554
Qualified XII (1.15)       22,244.809   10.19   226,675
Qualified XII (1.20)       5,197.247   10.13   52,648
Qualified XII (1.25)       31,028.359   10.07   312,456
Qualified XII (1.30)       1,410.772   10.01   14,122
Qualified XII (1.35)       702.745   9.95   6,992
Qualified XII (1.40)       8,489.797   9.90   84,049
Qualified XII (1.45)       2,277.608   9.84   22,412
Qualified XII (1.50)       531.249   9.78   5,196
Qualified XV       7,586.982   10.43   79,132
Qualified XVI       36,802.879   9.78   359,932
Qualified XVII       3,171.777   10.07   31,940
Qualified XVIII       21,476.942   10.49   225,293
Qualified XXV       10,484.162   10.63   111,447
Qualified XXVI       3,001.388   10.49   31,485
Qualified XXVII       253,011.521   3.82   966,504
Qualified XXXII       4,827.810   7.70   37,174
Qualified XXXVI       19,319.789   6.83   131,954
Qualified XXXVIII       10,971.234   5.60   61,439
Qualified XLIII       3,192.217   5.58   17,813
Qualified LIII       38,332.960   7.79   298,614
Qualified LIV       19,562.058   7.74   151,410
Qualified LVI       26,184.857   7.83   205,027
Qualified LIX       16,690.773   6.92   115,500
        3,371,566.503       $ 30,414,421
 
    323            

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

Division/Contract   Units   Unit Value   Extended Value
ING Opportunistic Large Cap Value Portfolio - Class I            
Currently payable annuity contracts:   5,189.257   $ 8.98   $ 46,600
Contracts in accumulation period:            
ING MAP PLUS NP18   189.398   8.50   1,610
ING MAP PLUS NP35   35.482   8.15   289
Qualified V   129.241   13.84   1,789
Qualified VI   932,520.816   14.10   13,148,544
Qualified VIII   508.698   14.09   7,168
Qualified X (1.15)   45,023.256   14.26   642,032
Qualified X (1.25)   65,381.709   14.10   921,882
Qualified XII (0.00)   10,493.114   10.63   111,542
Qualified XII (0.05)   25,773.705   15.47   398,719
Qualified XII (0.20)   11,238.965   10.41   116,998
Qualified XII (0.25)   1,639.495   10.35   16,969
Qualified XII (0.30)   180,834.174   10.30   1,862,592
Qualified XII (0.35)   4,168.733   10.25   42,730
Qualified XII (0.40)   17,463.203   15.44   269,632
Qualified XII (0.45)   124.341   10.14   1,261
Qualified XII (0.50)   69,715.212   10.78   751,530
Qualified XII (0.55)   45,196.188   10.03   453,318
Qualified XII (0.60)   36,039.011   9.98   359,669
Qualified XII (0.65)   9,884.404   9.92   98,053
Qualified XII (0.70)   65,184.886   9.87   643,375
Qualified XII (0.75)   171,347.668   9.82   1,682,634
Qualified XII (0.80)   222,861.839   10.76   2,397,993
Qualified XII (0.85)   101,345.376   14.78   1,497,885
Qualified XII (0.90)   26,799.029   10.44   279,782
Qualified XII (0.95)   142,466.411   14.60   2,080,010
Qualified XII (1.00)   351,468.817   14.52   5,103,327
Qualified XII (1.05)   31,051.204   14.43   448,069
Qualified XII (1.10)   35,734.815   14.35   512,795
Qualified XII (1.15)   30,844.612   14.26   439,844
Qualified XII (1.20)   6,106.324   14.18   86,588
Qualified XII (1.25)   28,505.290   14.10   401,925
Qualified XII (1.30)   2,770.422   14.02   38,841
Qualified XII (1.35)   83.331   13.93   1,161
Qualified XII (1.40)   7,628.458   13.85   105,654
Qualified XII (1.45)   1,695.346   13.77   23,345
Qualified XII (1.50)   1,295.965   13.69   17,742
Qualified XV   1,425.651   14.60   20,815
Qualified XVI   19,480.589   13.69   266,689
Qualified XVII   807.008   14.10   11,379
Qualified XVIII   730.964   14.68   10,731
Qualified XXV   13,015.231   14.87   193,536
Qualified XXVI   2,509.643   14.69   36,867
Qualified XXVII   459,720.602   10.85   4,987,969
Qualified XXVIII   294,745.725   10.82   3,189,149
Qualified XXXII   4,574.587   8.87   40,577
 
 
 
 
                     324            

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

Division/Contract   Units   Unit Value   Extended Value
ING Opportunistic Large Cap Value Portfolio - Class I            
(continued)            
Qualified XXXVI   11,181.720   $ 7.81   $ 87,329
Qualified XXXVIII   8,712.522   6.26   54,540
Qualified XLIII   2,927.011   6.24   18,265
Qualified LIII   11,203.377   8.52   95,453
Qualified LIV   8,039.216   8.46   68,012
Qualified LVI   26,859.790   8.56   229,920
Qualified LIX   136.350   7.91   1,079
    3,554,808.181       $ 44,326,207
ING Russell™ Large Cap Index Portfolio - Class I            
Contracts in accumulation period:            
ING Custom Choice 62   2,744.560   $ 6.63   $ 18,196
Qualified VI   87,065.611   6.63   577,245
Qualified XII (0.40)   1,506.896   6.66   10,036
Qualified XII (0.50)   1,423.239   6.66   9,479
Qualified XII (0.60)   2,280.492   6.65   15,165
Qualified XII (0.70)   175.185   6.65   1,165
Qualified XII (0.75)   5,300.714   6.65   35,250
Qualified XII (0.80)   22.033   6.64   146
Qualified XII (0.85)   3,063.898   6.64   20,344
Qualified XII (0.90)   3,219.005   6.64   21,374
Qualified XII (0.95)   2,112.068   6.64   14,024
Qualified XII (1.00)   6,920.750   6.64   45,954
Qualified XII (1.10)   346.790   6.63   2,299
Qualified XII (1.15)   1,374.845   6.63   9,115
Qualified XII (1.20)   22.718   6.63   151
Qualified XII (1.25)   34.466   6.63   229
Qualified XII (1.40)   238.275   6.62   1,577
Qualified XII (1.45)   1,895.261   6.62   12,547
Qualified XXI   275,243.864   6.64   1,827,619
Qualified XXV   1,086.877   6.65   7,228
Qualified XXXVIII   3,911.436   6.68   26,128
Qualified LIV   1,013.351   6.64   6,729
Qualified LVI   1,991.384   6.67   13,283
    402,993.718       $ 2,675,283
 
 
 
 
                         325            

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

Division/Contract       Units   Unit Value   Extended Value
ING Russell™ Mid Cap Index Portfolio - Class I                
Contracts in accumulation period:                
ING Custom Choice 62       354.679   $ 5.91   $ 2,096
Qualified VI       35,364.000   5.91   209,001
Qualified XII (0.00)       126.015   5.96   751
Qualified XII (0.40)       378.948   5.95   2,255
Qualified XII (0.50)       554.067   5.94   3,291
Qualified XII (0.55)       302.259   5.94   1,795
Qualified XII (0.60)       526.024   5.94   3,125
Qualified XII (0.70)       36.820   5.94   219
Qualified XII (0.75)       2,500.939   5.93   14,831
Qualified XII (0.80)       9,712.204   5.93   57,593
Qualified XII (0.85)       8,430.219   5.93   49,991
Qualified XII (0.95)       8,927.879   5.93   52,942
Qualified XII (1.00)       6,947.449   5.92   41,129
Qualified XII (1.05)       422.868   5.92   2,503
Qualified XII (1.10)       227.372   5.92   1,346
Qualified XII (1.15)       959.394   5.92   5,680
Qualified XII (1.25)       116.181   5.91   687
Qualified XXI       147,022.487   5.93   871,843
Qualified LIII       1,331.182   5.95   7,921
        224,240.986       $ 1,328,999
ING Russell™ Small Cap Index Portfolio - Class I                
Contracts in accumulation period:                
ING Custom Choice 62       294.224   $ 6.95   $ 2,045
ING MAP PLUS NP17       1,014.507   6.96   7,061
Qualified VI       42,015.419   6.95   292,007
Qualified XII (0.40)       504.710   6.99   3,528
Qualified XII (0.50)       787.036   6.98   5,494
Qualified XII (0.55)       1,356.513   6.98   9,468
Qualified XII (0.60)       1,145.516   6.98   7,996
Qualified XII (0.65)       1,494.011   6.98   10,428
Qualified XII (0.70)       234.075   6.97   1,632
Qualified XII (0.75)       3,258.222   6.97   22,710
Qualified XII (0.80)       8,670.638   6.97   60,434
Qualified XII (0.85)       4,717.681   6.97   32,882
Qualified XII (0.95)       7,367.963   6.96   51,281
Qualified XII (1.00)       12,286.897   6.96   85,517
Qualified XII (1.10)       628.664   6.96   4,376
Qualified XII (1.15)       1,943.591   6.95   13,508
Qualified XII (1.20)       180.639   6.95   1,255
Qualified XII (1.25)       292.304   6.95   2,032
Qualified XII (1.40)       217.460   6.94   1,509
Qualified XXV       79.033   6.97   551
Qualified LIII       2,017.173   6.98   14,080
Qualified LVI       687.170   6.99   4,803
        91,193.446       $ 634,597
 
 
 
 
    326            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Index Plus LargeCap Portfolio - Class I                
Currently payable annuity contracts:       326,606.859   $5.99 to $14.04   $ 2,895,625
Contracts in accumulation period:                
ING Custom Choice 62       11,013.179   8.45   93,061
ING MAP PLUS NP1       5,298.323   8.48   44,930
ING MAP PLUS NP3       512.677   8.44   4,327
ING MAP PLUS NP4       1,932.414   8.42   16,271
ING MAP PLUS NP6       9,779.124   8.38   81,949
ING MAP PLUS NP8       6,130.535   8.34   51,129
ING MAP PLUS NP9       31,572.531   8.32   262,683
ING MAP PLUS NP10       8,630.037   8.30   71,629
ING MAP PLUS NP11       17,294.580   8.28   143,199
ING MAP PLUS NP13       6,088.519   8.24   50,169
ING MAP PLUS NP14       18,231.472   8.22   149,863
ING MAP PLUS NP15       8,952.311   8.20   73,409
ING MAP PLUS NP16       41,516.315   8.18   339,603
ING MAP PLUS NP17       7,293.779   8.16   59,517
ING MAP PLUS NP18       2,568.918   8.14   20,911
ING MAP PLUS NP20       28,237.912   8.10   228,727
ING MAP PLUS NP21       21,105.361   8.08   170,531
ING MAP PLUS NP22       2,868.947   8.06   23,124
ING MAP PLUS NP23       4,395.363   8.04   35,339
ING MAP PLUS NP24       842.505   8.02   6,757
ING MAP PLUS NP25       1,596.580   8.00   12,773
ING MAP PLUS NP26       3,174.249   7.98   25,331
ING MAP PLUS NP27       286.930   7.96   2,284
ING MAP PLUS NP28       2,166.817   7.94   17,205
ING MAP PLUS NP29       10.413   7.92   82
ING MAP PLUS NP30       411.100   7.90   3,248
Qualified V       77.518   13.77   1,067
Qualified VI       6,093,123.355   14.04   85,547,452
Qualified VIII       3,440.319   14.03   48,268
Qualified X (1.15)       222,560.177   14.22   3,164,806
Qualified X (1.25)       464,533.758   14.04   6,522,054
Qualified XII (0.00)       64,139.516   9.61   616,381
Qualified XII (0.05)       179,311.911   15.43   2,766,783
Qualified XII (0.10)       274.579   9.51   2,611
Qualified XII (0.20)       70,527.655   9.41   663,665
Qualified XII (0.25)       16,231.819   9.36   151,930
Qualified XII (0.30)       188,676.054   9.31   1,756,574
Qualified XII (0.35)       25,116.689   9.26   232,581
Qualified XII (0.40)       103,896.523   15.41   1,601,045
Qualified XII (0.45)       720.641   9.16   6,601
Qualified XII (0.50)       594,638.728   9.69   5,762,049
Qualified XII (0.55)       143,761.260   9.07   1,303,915
Qualified XII (0.60)       164,902.210   9.02   1,487,418
Qualified XII (0.65)       362,378.071   8.97   3,250,531
Qualified XII (0.70)       427,312.017   8.92   3,811,623
 
 
 
 
    327            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Index Plus LargeCap Portfolio - Class I                
(continued)                
Qualified XII (0.75)       842,036.066   $ 8.88   $ 7,477,280
Qualified XII (0.80)       1,047,075.400   9.85   10,313,693
Qualified XII (0.85)       595,013.786   14.75   8,776,453
Qualified XII (0.90)       116,681.471   9.46   1,103,807
Qualified XII (0.95)       620,993.958   14.57   9,047,882
Qualified XII (1.00)       2,687,577.414   14.48   38,916,121
Qualified XII (1.05)       79,402.874   14.39   1,142,607
Qualified XII (1.10)       153,608.856   14.31   2,198,143
Qualified XII (1.15)       205,125.554   14.22   2,916,885
Qualified XII (1.20)       36,042.880   14.13   509,286
Qualified XII (1.25)       147,668.986   14.04   2,073,273
Qualified XII (1.30)       6,248.665   13.96   87,231
Qualified XII (1.35)       1,572.702   13.87   21,813
Qualified XII (1.40)       19,455.401   13.79   268,290
Qualified XII (1.45)       4,527.586   13.70   62,028
Qualified XII (1.50)       3,312.896   13.62   45,122
Qualified XV       30,019.984   14.56   437,091
Qualified XVI       116,316.348   13.64   1,586,555
Qualified XVII       21,307.584   14.21   302,781
Qualified XVIII       38,346.536   14.62   560,626
Qualified XXV       25,449.857   14.82   377,167
Qualified XXVI       4,720.587   14.63   69,062
Qualified XXVII       1,573,666.563   14.34   22,566,379
Qualified XXVIII       459,790.200   14.30   6,575,000
Qualified XXXII       27,580.554   8.59   236,917
Qualified XXXIII (0.65)       5,586.797   8.28   46,259
Qualified XXXVI       79,688.743   8.34   664,604
Qualified XXXVIII       209,655.279   6.20   1,299,863
Qualified XLIII       6,908.481   6.18   42,694
Qualified LIII       212,870.457   8.25   1,756,181
Qualified LIV       122,044.104   8.19   999,541
Qualified LVI       137,124.273   8.29   1,136,760
Qualified LIX       31,938.297   8.45   269,879
        19,363,499.689       $ 247,468,303
ING VP Index Plus LargeCap Portfolio - Class S                
Contracts in accumulation period:                
Qualified XXXV       42,854.991   $ 7.58   $ 324,841
 
 
 
 
    328            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Index Plus MidCap Portfolio - Class I                
Currently payable annuity contracts:       103,091.754   $ 8.96   $ 923,702
Contracts in accumulation period:                
ING Custom Choice 62       7,353.609   8.92   65,594
ING MAP PLUS NP1       9,742.393   8.96   87,292
ING MAP PLUS NP6       346.355   8.85   3,065
ING MAP PLUS NP8       20,028.737   8.81   176,453
ING MAP PLUS NP9       11,676.354   8.79   102,635
ING MAP PLUS NP10       3,185.033   8.77   27,933
ING MAP PLUS NP11       7,728.874   8.75   67,628
ING MAP PLUS NP12       8,060.660   8.73   70,370
ING MAP PLUS NP13       1,583.425   8.70   13,776
ING MAP PLUS NP14       3,950.873   8.68   34,294
ING MAP PLUS NP15       13,959.282   8.66   120,887
ING MAP PLUS NP16       10,436.372   8.64   90,170
ING MAP PLUS NP17       7,010.053   8.62   60,427
ING MAP PLUS NP18       2,449.408   8.60   21,065
ING MAP PLUS NP19       7,620.015   8.58   65,380
ING MAP PLUS NP21       5,037.535   8.53   42,970
ING MAP PLUS NP22       3,455.175   8.51   29,404
ING MAP PLUS NP23       1,342.547   8.49   11,398
ING MAP PLUS NP24       46.123   8.47   391
ING MAP PLUS NP25       1,018.424   8.45   8,606
ING MAP PLUS NP26       1,822.148   8.43   15,361
ING MAP PLUS NP28       12,519.702   8.39   105,040
ING MAP PLUS NP29       984.922   8.37   8,244
ING MAP PLUS NP30       912.119   8.35   7,616
ING MAP PLUS NP32       374.700   8.31   3,114
ING MAP PLUS NP35       280.761   8.25   2,316
Qualified V       2,174.344   14.08   30,615
Qualified VI       3,310,498.542   14.32   47,406,339
Qualified VIII       571.947   14.31   8,185
Qualified X (1.15)       84,062.328   14.48   1,217,223
Qualified X (1.25)       282,100.714   14.32   4,039,682
Qualified XII (0.00)       22,053.336   16.74   369,173
Qualified XII (0.05)       244,804.882   15.66   3,833,644
Qualified XII (0.10)       24.465   16.57   405
Qualified XII (0.20)       24,795.133   16.39   406,392
Qualified XII (0.25)       5,004.811   16.30   81,578
Qualified XII (0.30)       247,422.073   16.22   4,013,186
Qualified XII (0.35)       2,813.935   16.13   45,389
Qualified XII (0.40)       180,885.684   15.64   2,829,052
Qualified XII (0.50)       452,409.936   15.52   7,021,402
Qualified XII (0.55)       88,402.298   15.79   1,395,872
Qualified XII (0.60)       60,818.190   15.71   955,454
Qualified XII (0.65)       317,641.260   15.63   4,964,733
Qualified XII (0.70)       158,219.082   15.54   2,458,725
Qualified XII (0.75)       406,072.514   15.46   6,277,881
 
 
 
 
    329            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Index Plus MidCap Portfolio - Class I                
(continued)                
Qualified XII (0.80)       618,674.766   $ 15.03   $ 9,298,682
Qualified XII (0.85)       424,192.433   14.95   6,341,677
Qualified XII (0.90)       57,437.950   14.87   854,102
Qualified XII (0.95)       1,877,948.283   14.79   27,774,855
Qualified XII (1.00)       1,636,314.768   14.71   24,070,190
Qualified XII (1.05)       62,920.448   14.63   920,526
Qualified XII (1.10)       110,413.092   14.55   1,606,510
Qualified XII (1.15)       152,651.160   14.48   2,210,389
Qualified XII (1.20)       29,269.557   14.40   421,482
Qualified XII (1.25)       151,967.212   14.32   2,176,170
Qualified XII (1.30)       2,638.970   14.25   37,605
Qualified XII (1.35)       735.455   14.17   10,421
Qualified XII (1.40)       17,659.931   14.09   248,828
Qualified XII (1.45)       7,286.429   14.02   102,156
Qualified XII (1.50)       2,902.126   13.94   40,456
Qualified XIII       425.264   14.79   6,290
Qualified XV       14,946.961   14.79   221,066
Qualified XVI       86,516.567   13.94   1,206,041
Qualified XVII       4,591.677   14.32   65,753
Qualified XVIII       13,483.098   14.32   193,078
Qualified XXV       30,819.612   15.11   465,684
Qualified XXVI       13,497.505   14.92   201,383
Qualified XXVII       1,759,942.581   15.22   26,786,326
Qualified XXVIII       884,019.976   15.18   13,419,423
Qualified XXXII       11,403.155   8.93   101,830
Qualified XXXIII (0.65)       8,978.087   10.63   95,437
Qualified XXXVI       32,771.472   10.72   351,310
Qualified XXXVIII       120,897.785   6.04   730,223
Qualified XLIII       2,963.876   6.03   17,872
Qualified LIII       74,027.347   8.29   613,687
Qualified LIV       144,515.537   8.23   1,189,363
Qualified LVI       136,200.145   8.33   1,134,547
Qualified LIX       7,251.183   10.85   78,675
        14,637,057.235       $ 212,512,098
ING VP Index Plus MidCap Portfolio - Class S                
Contracts in accumulation period:                
Qualified XXXV       35,711.374   $ 7.29   $ 260,336
 
 
 
 
    330            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Index Plus SmallCap Portfolio - Class I                
Currently payable annuity contracts:       67,772.319   $ 9.01   $ 610,629
Contracts in accumulation period:                
ING Custom Choice 62       5,465.088   8.86   48,421
ING MAP PLUS NP1       23,642.264   8.89   210,180
ING MAP PLUS NP6       8,652.541   8.78   75,969
ING MAP PLUS NP8       3,924.944   8.74   34,304
ING MAP PLUS NP9       2,588.790   8.72   22,574
ING MAP PLUS NP10       4,820.976   8.70   41,942
ING MAP PLUS NP11       26,992.663   8.67   234,026
ING MAP PLUS NP12       5,302.956   8.65   45,871
ING MAP PLUS NP13       999.767   8.63   8,628
ING MAP PLUS NP14       2,601.143   8.61   22,396
ING MAP PLUS NP15       1,014.220   8.59   8,712
ING MAP PLUS NP16       1,834.196   8.57   15,719
ING MAP PLUS NP17       8,753.092   8.55   74,839
ING MAP PLUS NP18       700.000   8.53   5,971
ING MAP PLUS NP19       3,426.848   8.51   29,162
ING MAP PLUS NP20       65.729   8.48   557
ING MAP PLUS NP21       1,074.716   8.46   9,092
ING MAP PLUS NP22       1,986.494   8.44   16,766
ING MAP PLUS NP23       783.348   8.42   6,596
ING MAP PLUS NP24       5.618   8.40   47
ING MAP PLUS NP26       2,039.876   8.36   17,053
ING MAP PLUS NP28       4,440.565   8.32   36,946
ING MAP PLUS NP29       145.995   8.30   1,212
ING MAP PLUS NP30       1,031.896   8.28   8,544
ING MAP PLUS NP32       328.337   8.24   2,706
ING MAP PLUS NP35       481.301   8.18   3,937
Qualified V       1,558.306   10.49   16,347
Qualified VI       1,789,693.058   10.67   19,096,025
Qualified VIII       596.296   10.66   6,357
Qualified X (1.15)       44,586.301   10.78   480,640
Qualified X (1.25)       160,870.060   10.67   1,716,484
Qualified XII (0.00)       3,268.593   12.68   41,446
Qualified XII (0.05)       152,451.371   11.67   1,779,108
Qualified XII (0.10)       63.573   12.54   797
Qualified XII (0.20)       21,588.647   12.41   267,915
Qualified XII (0.25)       2,428.183   12.34   29,964
Qualified XII (0.30)       145,900.555   12.28   1,791,659
Qualified XII (0.35)       1,643.933   12.21   20,072
Qualified XII (0.40)       102,557.786   11.65   1,194,798
Qualified XII (0.50)       399,728.550   11.56   4,620,862
Qualified XII (0.55)       43,827.760   11.96   524,180
Qualified XII (0.60)       38,949.252   11.89   463,107
Qualified XII (0.65)       109,681.239   11.83   1,297,529
Qualified XII (0.70)       71,338.050   11.77   839,649
Qualified XII (0.75)       186,984.228   11.71   2,189,585
 
 
 
 
    331            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Index Plus SmallCap Portfolio - Class I                
(continued)                
Qualified XII (0.80)       481,806.270   $ 11.19   $ 5,391,412
Qualified XII (0.85)       209,995.378   11.13   2,337,249
Qualified XII (0.90)       56,987.683   11.07   630,854
Qualified XII (0.95)       301,782.787   11.02   3,325,646
Qualified XII (1.00)       985,346.014   10.96   10,799,392
Qualified XII (1.05)       29,021.730   10.90   316,337
Qualified XII (1.10)       67,034.363   10.84   726,652
Qualified XII (1.15)       92,831.331   10.78   1,000,722
Qualified XII (1.20)       13,077.953   10.72   140,196
Qualified XII (1.25)       94,434.206   10.67   1,007,613
Qualified XII (1.30)       1,357.841   10.61   14,407
Qualified XII (1.35)       62.804   10.55   663
Qualified XII (1.40)       10,787.890   10.50   113,273
Qualified XII (1.45)       1,918.559   10.44   20,030
Qualified XII (1.50)       612.117   10.39   6,360
Qualified XV       14,752.413   11.02   162,572
Qualified XVI       49,131.203   10.39   510,473
Qualified XVII       357.729   10.67   3,817
Qualified XVIII       11,940.054   10.67   127,400
Qualified XXV       5,401.956   11.25   60,772
Qualified XXVI       4,506.778   11.12   50,115
Qualified XXVII       1,120,219.629   11.31   12,669,684
Qualified XXVIII       565,946.473   11.28   6,383,876
Qualified XXXII       3,033.183   8.92   27,056
Qualified XXXIII (0.65)       8,917.630   10.87   96,935
Qualified XXXVI       15,284.688   10.96   167,520
Qualified XXXVIII       84,619.868   6.21   525,489
Qualified XLIII       3,148.869   6.19   19,492
Qualified LIII       44,872.826   8.05   361,226
Qualified LIV       27,912.632   8.00   223,301
Qualified LVI       64,720.421   8.10   524,235
Qualified LIX       5,166.841   11.10   57,352
        7,835,581.542       $ 85,771,444
ING VP Index Plus SmallCap Portfolio - Class S                
Contracts in accumulation period:                
Qualified XXXV       8,219.055   $ 7.05   $ 57,944
 
 
 
 
    332            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Small Company Portfolio - Class I                
Currently payable annuity contracts:       83,717.941   $9.74 to $19.83   $ 1,023,385
Contracts in accumulation period:                
ING Custom Choice 62       1,906.756   10.59   20,193
ING MAP PLUS NP8       903.277   10.29   9,295
ING MAP PLUS NP9       936.961   10.27   9,623
ING MAP PLUS NP11       12.155   10.22   124
ING MAP PLUS NP13       4.359   10.17   44
ING MAP PLUS NP14       381.758   10.14   3,871
ING MAP PLUS NP15       790.238   10.12   7,997
ING MAP PLUS NP16       30.626   10.09   309
ING MAP PLUS NP17       935.643   10.07   9,422
ING MAP PLUS NP19       3,898.781   10.02   39,066
ING MAP PLUS NP21       110.765   9.97   1,104
ING MAP PLUS NP22       46.541   9.94   463
ING MAP PLUS NP24       5.648   9.89   56
ING MAP PLUS NP25       6,096.550   9.87   60,173
ING MAP PLUS NP26       2,719.696   9.85   26,789
ING MAP PLUS NP28       1,857.014   9.80   18,199
ING MAP PLUS NP29       3,718.257   9.77   36,327
ING MAP PLUS NP30       53.212   9.75   519
Qualified V       220.411   19.47   4,291
Qualified VI       1,285,065.057   19.83   25,482,840
Qualified VIII       14.422   19.82   286
Qualified X (1.15)       61,879.061   20.07   1,241,913
Qualified X (1.25)       127,454.702   19.83   2,527,427
Qualified XII (0.00)       8,605.496   15.17   130,545
Qualified XII (0.05)       44,610.956   21.76   970,734
Qualified XII (0.10)       7.106   15.01   107
Qualified XII (0.20)       12,630.233   14.85   187,559
Qualified XII (0.25)       4,166.538   14.77   61,540
Qualified XII (0.30)       138,577.494   14.69   2,035,703
Qualified XII (0.35)       3,757.729   14.62   54,938
Qualified XII (0.40)       48,123.017   21.72   1,045,232
Qualified XII (0.45)       454.283   14.46   6,569
Qualified XII (0.50)       136,964.482   14.60   1,999,681
Qualified XII (0.55)       63,505.046   14.31   908,757
Qualified XII (0.60)       86,085.618   14.23   1,224,998
Qualified XII (0.65)       57,445.468   14.16   813,428
Qualified XII (0.70)       103,890.557   14.08   1,462,779
Qualified XII (0.75)       256,519.601   14.01   3,593,840
Qualified XII (0.80)       528,456.709   14.86   7,852,867
Qualified XII (0.85)       179,453.987   20.79   3,730,848
Qualified XII (0.90)       19,452.339   14.33   278,752
Qualified XII (0.95)       159,679.729   20.54   3,279,822
Qualified XII (1.00)       590,550.076   20.42   12,059,033
Qualified XII (1.05)       30,423.792   20.31   617,907
Qualified XII (1.10)       38,814.466   20.19   783,664
 
 
 
 
    333            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Small Company Portfolio - Class I (continued)            
Qualified XII (1.15)   58,495.753   $ 20.07   $ 1,174,010
Qualified XII (1.20)   4,544.021   19.95   90,653
Qualified XII (1.25)   25,923.255   19.83   514,058
Qualified XII (1.30)   2,733.027   19.72   53,895
Qualified XII (1.35)   894.095   19.60   17,524
Qualified XII (1.40)   7,757.807   19.49   151,200
Qualified XII (1.45)   1,574.665   19.37   30,501
Qualified XII (1.50)   2,623.407   19.26   50,527
Qualified XV   9,075.119   20.54   186,403
Qualified XVI   40,304.759   19.26   776,270
Qualified XVII   3,985.191   19.83   79,026
Qualified XVIII   11,577.061   20.65   239,066
Qualified XXV   14,688.452   20.93   307,429
Qualified XXVI   2,847.701   20.67   58,862
Qualified XXVII   568,936.313   9.96   5,666,606
Qualified XXVIII   130,704.522   10.61   1,386,775
Qualified XXXII   4,001.074   10.31   41,251
Qualified XXXVI   21,546.620   11.47   247,140
Qualified XXXVIII   45,372.626   6.61   299,913
Qualified XLIII   870.428   6.59   5,736
Qualified LIII   32,064.130   10.02   321,283
Qualified LIV   47,318.988   9.96   471,297
Qualified LVI   36,841.511   10.08   371,362
Qualified LIX   8,400.850   11.61   97,534
    5,178,015.928       $ 86,261,340
ING VP Small Company Portfolio - Class S            
Contracts in accumulation period:            
Qualified XXXV   11,778.295   $ 8.52   $ 100,351
 
ING VP International Value Portfolio - Class I            
Currently payable annuity contracts:   168,754.607   $ 10.78   $ 1,819,175
Contracts in accumulation period:            
ING Custom Choice 62   1,308.135   10.41   13,618
ING MAP PLUS NP3   113.809   10.64   1,211
ING MAP PLUS NP8   868.748   10.51   9,131
ING MAP PLUS NP10   75.918   10.46   794
ING MAP PLUS NP11   7,405.623   10.43   77,241
ING MAP PLUS NP12   587.256   10.41   6,113
ING MAP PLUS NP16   14.458   10.31   149
ING MAP PLUS NP18   247.292   10.26   2,537
ING MAP PLUS NP19   5.503   10.23   56
ING MAP PLUS NP20   4,071.974   10.21   41,575
ING MAP PLUS NP21   989.848   10.18   10,077
ING MAP PLUS NP22   604.934   10.16   6,146
ING MAP PLUS NP26   767.509   10.06   7,721
ING MAP PLUS NP27   328.115   10.03   3,291
ING MAP PLUS NP30   467.627   9.96   4,658
 
 
 
                                                          334            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP International Value Portfolio - Class I                
(continued)                
ING MAP PLUS NP32       67.715   $ 9.91   $ 671
ING MAP PLUS NP35       224.510   9.84   2,209
Qualified V       469.804   10.26   4,820
Qualified VI       965,543.709   10.38   10,022,344
Qualified X (1.15)       73,545.229   10.46   769,283
Qualified X (1.25)       201,857.432   10.38   2,095,280
Qualified XII (0.00)       3,538.939   11.39   40,309
Qualified XII (0.10)       14.905   11.31   169
Qualified XII (0.20)       101,460.236   11.23   1,139,398
Qualified XII (0.25)       1,601.041   11.18   17,900
Qualified XII (0.30)       108,668.895   11.14   1,210,571
Qualified XII (0.40)       151,769.408   11.06   1,678,570
Qualified XII (0.50)       296,268.285   10.98   3,253,026
Qualified XII (0.55)       45,851.819   10.94   501,619
Qualified XII (0.60)       30,523.462   10.90   332,706
Qualified XII (0.65)       37,828.958   10.86   410,822
Qualified XII (0.70)       47,593.444   10.82   514,961
Qualified XII (0.75)       79,304.651   10.78   854,904
Qualified XII (0.80)       202,554.272   10.74   2,175,433
Qualified XII (0.85)       79,090.817   10.70   846,272
Qualified XII (0.90)       14,503.620   10.66   154,609
Qualified XII (0.95)       3,508,367.983   10.62   37,258,868
Qualified XII (1.00)       587,996.110   10.58   6,220,999
Qualified XII (1.05)       5,841.887   10.54   61,573
Qualified XII (1.10)       16,271.151   10.50   170,847
Qualified XII (1.15)       100,465.516   10.46   1,050,869
Qualified XII (1.20)       7,373.873   10.42   76,836
Qualified XII (1.25)       40,503.402   10.38   420,425
Qualified XII (1.30)       3,622.070   10.34   37,452
Qualified XII (1.35)       225.469   10.30   2,322
Qualified XII (1.40)       4,443.083   10.27   45,630
Qualified XII (1.45)       913.832   10.23   9,349
Qualified XII (1.50)       1,362.908   10.19   13,888
Qualified XIII       652.672   10.62   6,931
Qualified XV       3,615.202   10.62   38,393
Qualified XVI       26,186.839   10.19   266,844
Qualified XVII       649.128   10.38   6,738
Qualified XVIII       13,531.307   10.38   140,455
Qualified XXI       42,886.000   10.74   460,596
Qualified XXV       2,605.234   10.88   28,345
Qualified XXVI       1,772.895   10.71   18,988
Qualified XXVIII       819,968.227   11.79   9,667,425
Qualified XXXII       2,033.034   10.64   21,631
Qualified XXXIII (0.65)       46,818.063   10.80   505,635
Qualified XXXVIII       16,933.063   5.69   96,349
Qualified XLIII       636.801   5.67   3,611
Qualified LIII       7,494.562   9.52   71,348
 
 
 
    335            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP International Value Portfolio - Class I                
(continued)                
Qualified LIV       8,432.791   $ 9.46   $ 79,774
Qualified LVI       15,601.683   9.58   149,464
Qualified LIX       2,213.720   10.98   24,307
        7,918,311.012       $ 84,985,261
ING VP International Value Portfolio - Class S                
Contracts in accumulation period:                
Qualified XXXV       28,707.290   $ 8.65   $ 248,318
 
ING VP MidCap Opportunities Portfolio - Class I                
Contracts in accumulation period:                
ING Custom Choice 62       715.161   $ 10.14   $ 7,252
Qualified VI       336,536.225   9.12   3,069,210
Qualified X (1.15)       7,609.289   9.19   69,929
Qualified X (1.25)       38,226.163   9.12   348,623
Qualified XII (0.00)       879.180   10.02   8,809
Qualified XII (0.30)       39,348.648   9.79   385,223
Qualified XII (0.40)       14,661.918   9.72   142,514
Qualified XII (0.50)       5,469.481   9.65   52,780
Qualified XII (0.55)       8,422.973   9.61   80,945
Qualified XII (0.60)       5,274.716   9.58   50,532
Qualified XII (0.65)       22,955.410   9.54   218,995
Qualified XII (0.70)       8,901.244   9.51   84,651
Qualified XII (0.75)       75,660.905   9.47   716,509
Qualified XII (0.80)       60,532.788   9.44   571,430
Qualified XII (0.85)       36,423.360   9.40   342,380
Qualified XII (0.90)       10,458.191   9.37   97,993
Qualified XII (0.95)       62,519.404   9.33   583,306
Qualified XII (1.00)       121,056.645   9.30   1,125,827
Qualified XII (1.05)       1,265.427   9.26   11,718
Qualified XII (1.10)       13,434.459   9.23   124,000
Qualified XII (1.15)       6,486.814   9.19   59,614
Qualified XII (1.20)       2,661.709   9.16   24,381
Qualified XII (1.25)       9,681.339   9.12   88,294
Qualified XII (1.30)       2,002.562   9.09   18,203
Qualified XII (1.35)       35.313   9.06   320
Qualified XII (1.40)       828.341   9.02   7,472
Qualified XII (1.45)       224.176   8.99   2,015
Qualified XII (1.50)       75.773   8.96   679
Qualified XV       1,036.703   9.33   9,672
Qualified XVI       9,470.469   8.96   84,855
Qualified XVIII       5,536.217   9.12   50,490
Qualified XXV       2,527.768   9.56   24,165
Qualified XXVI       681.043   9.41   6,409
Qualified XXXII       127.998   10.01   1,281
Qualified XXXVIII       13,942.355   6.37   88,813
Qualified XLIII       109.480   6.36   696
Qualified LIII       5,757.785   9.76   56,196
Qualified LIV       103.975   9.70   1,009
Qualified LVI       1,265.848   9.82   12,431
Qualified LIX       1,705.940   10.69   18,237
        934,613.195       $ 8,647,858
 
    336            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP MidCap Opportunities Portfolio - Class S            
Contracts in accumulation period:            
Qualified XXXV   12,412.067   $ 8.69   $ 107,861
 
ING VP SmallCap Opportunities Portfolio - Class I            
Contracts in accumulation period:            
Qualified V   67.869   $ 6.18   $ 419
Qualified VI   251,417.349   6.25   1,571,358
Qualified VIII   126.454   6.25   790
Qualified X (1.15)   24,725.030   6.30   155,768
Qualified X (1.25)   33,603.720   6.25   210,023
Qualified XII (0.00)   116.621   6.86   800
Qualified XII (0.20)   74.720   6.76   505
Qualified XII (0.25)   611.458   6.74   4,121
Qualified XII (0.30)   370,460.176   6.71   2,485,788
Qualified XII (0.40)   11,905.407   6.66   79,290
Qualified XII (0.50)   3,212.994   6.61   21,238
Qualified XII (0.55)   8,944.759   6.59   58,946
Qualified XII (0.60)   13,913.041   6.56   91,270
Qualified XII (0.65)   101,609.547   6.54   664,526
Qualified XII (0.70)   5,511.720   6.51   35,881
Qualified XII (0.75)   26,985.536   6.49   175,136
Qualified XII (0.80)   84,843.865   6.46   548,091
Qualified XII (0.85)   33,603.345   6.44   216,406
Qualified XII (0.90)   4,579.204   6.42   29,398
Qualified XII (0.95)   51,116.776   6.39   326,636
Qualified XII (1.00)   197,317.744   6.37   1,256,914
Qualified XII (1.05)   6,247.814   6.35   39,674
Qualified XII (1.10)   7,517.774   6.32   47,512
Qualified XII (1.15)   6,823.825   6.30   42,990
Qualified XII (1.20)   3,259.617   6.27   20,438
Qualified XII (1.25)   15,178.054   6.25   94,863
Qualified XII (1.30)   149.090   6.23   929
Qualified XII (1.40)   2,417.204   6.18   14,938
Qualified XII (1.45)   1,067.269   6.16   6,574
Qualified XV   327.294   6.39   2,091
Qualified XVI   5,564.785   6.14   34,168
Qualified XVIII   2,423.798   6.25   15,149
Qualified XXV   4,296.594   6.55   28,143
Qualified XXVI   730.388   6.45   4,711
Qualified XXXVIII   281.637   6.34   1,786
Qualified XLIII   62.191   6.33   394
Qualified LIII   1,149.902   9.63   11,074
Qualified LIV   3,554.781   9.57   34,019
Qualified LVI   316.118   9.68   3,060
Qualified LIX   4,355.442   7.17   31,229
    1,290,470.912       $ 8,367,046
 
 
 
 
               337            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP SmallCap Opportunities Portfolio - Class S            
Contracts in accumulation period:            
Qualified XXXV   5,691.374   $ 8.20   $ 46,669
 
ING VP Balanced Portfolio - Class I            
Currently payable annuity contracts:   855,986.362   $8.63 to $28.53   $ 17,000,524
Contracts in accumulation period:            
ING MAP PLUS NP1   1,834.321   9.24   16,949
ING MAP PLUS NP14   572.373   8.95   5,123
ING MAP PLUS NP15   27.188   8.93   243
ING MAP PLUS NP21   8,396.578   8.80   73,890
ING MAP PLUS NP22   10,371.002   8.78   91,057
ING MAP PLUS NP25   222.834   8.72   1,943
ING MAP PLUS NP26   1,348.829   8.69   11,721
Qualified I   18,796.343   27.98   525,922
Qualified V   659.737   20.66   13,630
Qualified VI   5,925,047.637   21.06   124,781,503
Qualified VII   98,258.815   20.39   2,003,497
Qualified VIII   2,224.702   19.54   43,471
Qualified IX   1,463.243   20.66   30,231
Qualified X (1.15)   345,777.781   21.38   7,392,729
Qualified X (1.25)   1,052,478.852   21.06   22,165,205
Qualified XII (0.00)   41,538.894   11.75   488,082
Qualified XII (0.05)   51,503.720   23.13   1,191,281
Qualified XII (0.10)   65.905   11.63   766
Qualified XII (0.20)   36,612.798   11.51   421,413
Qualified XII (0.25)   43,293.785   11.44   495,281
Qualified XII (0.30)   217,774.729   11.38   2,478,276
Qualified XII (0.35)   12,253.294   11.32   138,707
Qualified XII (0.40)   22,299.924   16.18   360,813
Qualified XII (0.45)   36.872   11.20   413
Qualified XII (0.50)   336,346.775   11.58   3,894,896
Qualified XII (0.55)   136,408.373   11.09   1,512,769
Qualified XII (0.60)   243,822.506   11.03   2,689,362
Qualified XII (0.65)   178,483.498   10.97   1,957,964
Qualified XII (0.70)   291,415.203   10.91   3,179,340
Qualified XII (0.75)   604,118.777   10.85   6,554,689
Qualified XII (0.80)   1,235,406.997   11.52   14,231,889
Qualified XII (0.85)   803,014.231   15.50   12,446,721
Qualified XII (0.90)   183,469.079   11.20   2,054,854
Qualified XII (0.95)   834,263.468   15.31   12,772,574
Qualified XII (1.00)   1,221,726.781   15.21   18,582,464
Qualified XII (1.05)   77,643.109   15.11   1,173,187
Qualified XII (1.10)   184,494.941   15.02   2,771,114
Qualified XII (1.15)   274,078.919   14.92   4,089,257
Qualified XII (1.20)   15,527.307   14.83   230,270
Qualified XII (1.25)   88,949.868   14.74   1,311,121
Qualified XII (1.30)   4,492.960   14.64   65,777
 
 
 
 
             338            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Balanced Portfolio - Class I (continued)                
Qualified XII (1.35)       2,295.742   $ 14.55   $ 33,403
Qualified XII (1.40)       15,460.662   14.46   223,561
Qualified XII (1.45)       208.148   14.37   2,991
Qualified XII (1.50)       1,356.609   14.28   19,372
Qualified XIII       8.512   21.87   186
Qualified XV       11,755.637   21.84   256,743
Qualified XVI       124,977.343   20.45   2,555,787
Qualified XVII       95,222.378   21.68   2,064,421
Qualified XVIII       146,727.776   21.68   3,181,058
Qualified XIX       9,976.108   28.80   287,312
Qualified XX       19,914.801   28.47   566,974
Qualified XXV       37,947.460   22.22   843,193
Qualified XXVI       4,969.746   21.95   109,086
Qualified XXVII       826,872.862   28.23   23,342,621
Qualified XXVIII       102,517.264   28.15   2,885,861
Qualified XXX       40,737.368   27.10   1,103,983
Qualified XXXII       217,887.765   9.14   1,991,494
Qualified XXXVI       23,631.215   9.95   235,131
Qualified XXXVIII       207,840.997   7.16   1,488,142
Qualified XLIII       12,433.588   7.13   88,651
Qualified LIII       154,708.476   8.84   1,367,623
Qualified LIV       232,643.460   8.78   2,042,610
Qualified LVI       105,315.658   8.89   936,256
Qualified LIX       4,785.311   10.07   48,188
        17,862,704.196       $ 314,925,565
ING VP Intermediate Bond Portfolio - Class I                
Currently payable annuity contracts:       295,681.914   $9.89 to $83.76   $ 5,940,774
Contracts in accumulation period:                
ING Custom Choice 62       7,378.504   10.38   76,589
ING MAP PLUS NP1       37,722.100   10.62   400,609
ING MAP PLUS NP6       26,873.318   10.49   281,901
ING MAP PLUS NP8       39,309.754   10.44   410,394
ING MAP PLUS NP9       11,721.298   10.41   122,019
ING MAP PLUS NP10       230.615   10.38   2,394
ING MAP PLUS NP11       109,386.945   10.36   1,133,249
ING MAP PLUS NP12       55,533.585   10.33   573,662
ING MAP PLUS NP13       5,522.661   10.31   56,939
ING MAP PLUS NP14       5,900.766   10.28   60,660
ING MAP PLUS NP15       62,189.408   10.26   638,063
ING MAP PLUS NP16       979.648   10.23   10,022
ING MAP PLUS NP17       16,570.654   10.21   169,186
ING MAP PLUS NP18       6,164.972   10.18   62,759
ING MAP PLUS NP19       757.897   10.16   7,700
ING MAP PLUS NP20       291.653   10.13   2,954
ING MAP PLUS NP21       2,716.043   10.11   27,459
ING MAP PLUS NP23       9,680.783   10.06   97,389
ING MAP PLUS NP24       1,638.123   10.03   16,430
ING MAP PLUS NP25       557.927   10.01   5,585
 
 
    339            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Intermediate Bond Portfolio - Class I                
(continued)                
ING MAP PLUS NP26       746.945   $ 9.98   $ 7,455
ING MAP PLUS NP27       3,727.362   9.96   37,125
ING MAP PLUS NP28       15,306.125   9.94   152,143
ING MAP PLUS NP29       1,701.270   9.91   16,860
ING MAP PLUS NP30       1,515.183   9.89   14,985
ING MAP PLUS NP35       1,257.529   9.77   12,286
Qualified I       5,483.794   73.34   402,181
Qualified V       1,185.824   18.47   21,902
Qualified VI       4,992,356.036   18.57   92,708,052
Qualified VII       62,712.843   17.29   1,084,305
Qualified VIII       7,996.226   17.09   136,656
Qualified IX       553.548   18.08   10,008
Qualified X (1.15)       271,720.350   18.86   5,124,646
Qualified X (1.25)       703,102.523   18.57   13,056,614
Qualified XII (0.00)       26,354.370   15.71   414,027
Qualified XII (0.05)       209,522.685   20.41   4,276,358
Qualified XII (0.10)       6.334   15.54   98
Qualified XII (0.20)       38,193.010   15.38   587,409
Qualified XII (0.25)       31,797.180   15.29   486,179
Qualified XII (0.30)       189,955.718   15.21   2,889,226
Qualified XII (0.35)       5,567.904   15.13   84,242
Qualified XII (0.40)       59,370.861   17.28   1,025,928
Qualified XII (0.45)       809.370   14.97   12,116
Qualified XII (0.50)       463,233.691   15.10   6,994,829
Qualified XII (0.55)       233,534.895   14.81   3,458,652
Qualified XII (0.60)       123,333.212   14.74   1,817,932
Qualified XII (0.65)       461,356.211   14.66   6,763,482
Qualified XII (0.70)       411,319.418   14.58   5,997,037
Qualified XII (0.75)       373,088.946   14.50   5,409,790
Qualified XII (0.80)       966,351.581   14.63   14,137,724
Qualified XII (0.85)       775,031.794   16.55   12,826,776
Qualified XII (0.90)       82,848.322   14.49   1,200,472
Qualified XII (0.95)       2,994,466.155   16.34   48,929,577
Qualified XII (1.00)       1,700,056.020   16.24   27,608,910
Qualified XII (1.05)       73,671.367   16.13   1,188,319
Qualified XII (1.10)       130,907.828   16.03   2,098,452
Qualified XII (1.15)       158,911.537   15.93   2,531,461
Qualified XII (1.20)       44,152.548   15.83   698,935
Qualified XII (1.25)       121,609.453   15.73   1,912,917
Qualified XII (1.30)       5,293.579   15.63   82,739
Qualified XII (1.35)       3,013.917   15.53   46,806
Qualified XII (1.40)       25,237.260   15.44   389,663
Qualified XII (1.45)       7,872.748   15.34   120,768
Qualified XII (1.50)       1,041.107   15.24   15,866
Qualified XV       7,842.564   19.26   151,048
Qualified XVI       143,535.671   18.04   2,589,384
Qualified XVII       112,091.714   18.90   2,118,533
Qualified XVIII       174,989.521   18.90   3,307,302
 
 
    340            

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

Division/Contract       Units   Unit Value   Extended Value
ING VP Intermediate Bond Portfolio - Class I                
(continued)                
Qualified XIX       15.553   $ 74.63   $ 1,161
Qualified XX       7,112.050   73.28   521,171
Qualified XXI       21,798.099   19.54   425,935
Qualified XXV       23,421.091   19.59   458,819
Qualified XXVI       10,470.949   19.35   202,613
Qualified XXVII       576,494.321   73.52   42,383,862
Qualified XXVIII       156,594.803   73.31   11,479,965
Qualified XXX       18,281.029   70.58   1,290,275
Qualified XXXII       94,934.097   10.30   977,821
Qualified XXXIII (0.65)       26,899.284   12.34   331,937
Qualified XXXV       3,927.286   10.08   39,587
Qualified XXIX       307.818   72.02   22,169
Qualified XXXVI       42,348.150   12.44   526,811
Qualified XXXVIII       143,974.240   9.25   1,331,762
Qualified XLIII       12,500.482   9.22   115,254
Qualified LIII       231,330.109   10.23   2,366,507
Qualified LIV       177,823.331   10.16   1,806,685
Qualified LVI       95,615.210   10.28   982,924
Qualified LIX       5,085.538   12.59   64,027
        18,571,476.057       $ 350,384,197
ING VP Intermediate Bond Portfolio - Class S                
Contracts in accumulation period:                
Qualified XXXV       21,971.157   $ 9.64   $ 211,802
 
ING VP Money Market Portfolio - Class I                
Currently payable annuity contracts:       1,213,874.450   $10.68 to $12.98   $ 13,677,870
Contracts in accumulation period:                
ING Custom Choice 62       273,075.388   11.10   3,031,137
ING MAP PLUS NP4       2,317.484   11.41   26,442
ING MAP PLUS NP6       12.220   11.35   139
ING MAP PLUS NP15       6,640.462   11.10   73,709
ING MAP PLUS NP17       687.285   11.05   7,595
ING MAP PLUS NP19       24,465.035   11.00   269,115
ING MAP PLUS NP21       941.994   10.94   10,305
ING MAP PLUS NP25       1,013.073   10.83   10,972
ING MAP PLUS NP26       486.964   10.81   5,264
Qualified I       3,905.472   54.26   211,911
Qualified V       24,448.478   15.08   368,683
Qualified VI       5,263,804.102   15.42   81,167,859
Qualified VII       66,945.829   15.42   1,032,305
Qualified VIII       8,305.971   14.84   123,261
Qualified IX       868.685   15.69   13,630
Qualified X (1.15)       395,971.404   15.66   6,200,912
Qualified X (1.25)       819,903.676   15.42   12,642,915
Qualified XII (0.00)       16,516.336   14.51   239,652
Qualified XII (0.05)       44,401.187   16.94   752,156
Qualified XII (0.25)       5,139.268   14.13   72,618
Qualified XII (0.30)       582,760.278   14.05   8,187,782
 
 
    341            

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

Division/Contract   Units   Unit Value   Extended Value
ING VP Money Market Portfolio - Class I (continued)            
Qualified XII (0.35)   88,510.200   $ 13.98   $ 1,237,373
Qualified XII (0.40)   254,244.825   15.14   3,849,267
Qualified XII (0.45)   334.852   13.83   4,631
Qualified XII (0.50)   1,857,130.772   13.89   25,795,546
Qualified XII (0.55)   248,143.341   13.68   3,394,601
Qualified XII (0.60)   422,638.988   13.61   5,752,117
Qualified XII (0.65)   1,668,292.366   13.54   22,588,679
Qualified XII (0.70)   1,104,772.716   13.47   14,881,288
Qualified XII (0.75)   1,480,502.667   13.40   19,838,736
Qualified XII (0.80)   1,831,765.099   13.50   24,728,829
Qualified XII (0.85)   931,951.521   14.50   13,513,297
Qualified XII (0.90)   201,555.761   13.32   2,684,723
Qualified XII (0.95)   3,316,496.492   14.32   47,492,230
Qualified XII (1.00)   4,585,229.181   14.23   65,247,811
Qualified XII (1.05)   208,197.288   14.14   2,943,910
Qualified XII (1.10)   287,943.348   14.05   4,045,604
Qualified XII (1.15)   201,803.071   13.96   2,817,171
Qualified XII (1.20)   60,965.910   13.88   846,207
Qualified XII (1.25)   813,394.346   13.79   11,216,708
Qualified XII (1.30)   8,505.961   13.70   116,532
Qualified XII (1.35)   2,810.007   13.62   38,272
Qualified XII (1.40)   46,061.786   13.53   623,216
Qualified XII (1.45)   16,415.776   13.45   220,792
Qualified XII (1.50)   5,570.085   13.36   74,416
Qualified XIII   20,037.370   16.02   320,999
Qualified XV   27,161.909   15.99   434,319
Qualified XVI   160,993.788   14.98   2,411,687
Qualified XVII   133,856.005   15.42   2,064,060
Qualified XVIII   254,553.658   15.42   3,925,217
Qualified XIX   159.202   54.26   8,638
Qualified XX   23,931.595   53.14   1,271,725
Qualified XXI   61,458.099   16.22   996,850
Qualified XXV   78,148.377   16.27   1,271,474
Qualified XXVI   14,553.054   16.07   233,868
Qualified XXVII   1,255,218.711   57.58   72,275,493
Qualified XXVIII   757,774.535   56.47   42,791,528
Qualified XXIX   1.550   53.14   82
Qualified XXX   40,069.364   52.08   2,086,812
Qualified XXXII   42,730.896   11.07   473,031
Qualified XXXIII (0.65)   68,430.098   11.78   806,107
Qualified XXXV   261,737.154   11.27   2,949,778
Qualified XXXVI   18,680.948   11.87   221,743
Qualified XXXVIII   97,098.675   10.36   1,005,942
Qualified LIII   177,630.688   11.48   2,039,200
Qualified LIV   65,819.639   11.41   751,002
Qualified LVI   26,299.354   11.54   303,495
Qualified XLIII   11,048.288   10.33   114,129
Qualified LIX   15,309.037   12.02   184,015
    32,012,423.394       $ 541,019,382
 
 
                                                         342            

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

Division/Contract   Units   Unit Value   Extended Value
Janus Aspen Series Balanced Portfolio - Institutional            
Shares            
Contracts in accumulation period:            
Qualified VI   6,528.723   $ 26.71   $ 174,382
Qualified XII (0.50)   159.972   17.96   2,873
Qualified XII (0.55)   4.948   16.99   84
Qualified XII (0.65)   15.044   16.81   253
Qualified XII (0.70)   119.880   16.73   2,006
Qualified XII (0.75)   531.044   16.64   8,837
Qualified XII (0.80)   26.060   17.88   466
Qualified XII (0.85)   17.961   25.02   449
Qualified XII (0.90)   675.410   17.36   11,725
Qualified XII (0.95)   102.209   24.70   2,525
Qualified XII (1.00)   838.002   24.55   20,573
Qualified XII (1.15)   32.698   24.09   788
Qualified XII (1.25)   40.610   23.78   966
Qualified XII (1.40)   0.198   23.34   5
Qualified XII (1.45)   5.572   23.19   129
Qualified XVII   367.136   26.71   9,806
    9,465.467       $ 235,867
Janus Aspen Series Flexible Bond Portfolio -            
   Institutional Shares            
Contracts in accumulation period:            
Qualified VI   3,019.991   $ 23.44   $ 70,789
Qualified X (1.25)   7.952   15.77   125
Qualified XII (0.50)   22.232   17.36   386
Qualified XII (0.55)   23.993   16.94   406
Qualified XII (0.60)   3.220   16.85   54
Qualified XII (0.70)   604.748   16.68   10,087
Qualified XII (0.75)   162.952   16.59   2,703
Qualified XII (0.80)   40.389   16.85   681
Qualified XII (0.85)   21.428   20.60   441
Qualified XII (0.90)   97.999   16.67   1,634
Qualified XII (0.95)   21.086   20.34   429
Qualified XII (1.00)   496.797   20.21   10,040
Qualified XII (1.15)   10.360   19.83   205
Qualified XII (1.50)   8.012   18.97   152
    4,541.159       $ 98,132
 
 
 
 
                                                           343            

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

Division/Contract   Units   Unit Value   Extended Value
Janus Aspen Series Large Cap Growth Portfolio -            
   Institutional Shares            
Contracts in accumulation period:            
Qualified VI   3,477.959   $ 13.76   $ 47,857
Qualified X (1.25)   18.923   14.72   279
Qualified XII (0.50)   162.488   8.90   1,446
Qualified XII (0.55)   7.915   8.35   66
Qualified XII (0.70)   1,141.786   8.22   9,385
Qualified XII (0.75)   849.163   8.17   6,938
Qualified XII (0.80)   38.027   8.95   340
Qualified XII (0.85)   27.897   12.37   345
Qualified XII (0.90)   394.288   8.60   3,391
Qualified XII (0.95)   89.380   12.22   1,092
Qualified XII (1.00)   325.933   12.14   3,957
Qualified XII (1.40)   4.036   11.54   47
Qualified XVII   4.154   13.76   57
    6,541.949       $ 75,200
Janus Aspen Series Mid Cap Growth Portfolio -            
   Institutional Shares            
Contracts in accumulation period:            
Qualified VI   10,622.299   $ 17.72   $ 188,227
Qualified XII (0.30)   306.371   11.30   3,462
Qualified XII (0.45)   0.049   11.12   1
Qualified XII (0.50)   167.938   11.44   1,921
Qualified XII (0.55)   5.683   11.00   63
Qualified XII (0.65)   15.013   10.88   163
Qualified XII (0.70)   1,027.257   10.83   11,125
Qualified XII (0.75)   187.035   10.77   2,014
Qualified XII (0.80)   262.084   11.55   3,027
Qualified XII (0.85)   522.517   12.46   6,511
Qualified XII (0.90)   316.520   11.24   3,558
Qualified XII (0.95)   151.856   12.30   1,868
Qualified XII (1.00)   603.393   12.23   7,380
Qualified XII (1.20)   504.462   11.92   6,013
Qualified XII (1.45)   8.855   11.55   102
Qualified XII (1.50)   12.837   11.48   147
Qualified XVII   234.248   17.72   4,151
    14,948.417       $ 239,733
 
 
 
 
                     344            

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

Division/Contract   Units   Unit Value   Extended Value
Janus Aspen Series Worldwide Growth Portfolio -            
   Institutional Shares            
Contracts in accumulation period:            
Qualified VI   6,444.407   $ 14.85   $ 95,699
Qualified XII (0.45)   0.093   7.73   1
Qualified XII (0.50)   183.400   8.63   1,583
Qualified XII (0.65)   14.975   7.57   113
Qualified XII (0.70)   1,085.977   7.53   8,177
Qualified XII (0.75)   893.306   7.49   6,691
Qualified XII (0.80)   1,362.297   8.76   11,934
Qualified XII (0.85)   95.276   12.79   1,219
Qualified XII (0.90)   640.245   8.48   5,429
Qualified XII (0.95)   67.212   12.63   849
Qualified XII (1.00)   896.436   12.55   11,250
Qualified XII (1.15)   45.699   12.31   563
Qualified XII (1.20)   134.796   12.23   1,649
Qualified XII (1.50)   4.429   11.78   52
Qualified XVII   605.844   14.85   8,997
    12,474.392       $ 154,206
Lazard U.S. Mid Cap Equity Portfolio - Open Shares            
Contracts in accumulation period:            
ING Custom Choice 62   1,538.540   $ 5.30   $ 8,154
ING MAP PLUS NP8   17,114.523   5.37   91,905
ING MAP PLUS NP22   46.204   5.30   245
Qualified VI   12,946.621   5.30   68,617
Qualified XII (0.00)   127.017   5.42   688
Qualified XII (0.30)   172.139   5.39   928
Qualified XII (0.40)   92.353   5.38   497
Qualified XII (0.50)   21,512.855   5.37   115,524
Qualified XII (0.55)   621.298   5.37   3,336
Qualified XII (0.65)   37.093   5.36   199
Qualified XII (0.70)   44.198   5.35   236
Qualified XII (0.75)   228.256   5.35   1,221
Qualified XII (0.80)   4,104.397   5.34   21,917
Qualified XII (0.85)   133.938   5.34   715
Qualified XII (0.90)   670.540   5.33   3,574
Qualified XII (0.95)   1,964.600   5.33   10,471
Qualified XII (1.00)   6,137.381   5.33   32,712
Qualified XII (1.05)   373.801   5.32   1,989
Qualified XII (1.10)   924.128   5.32   4,916
Qualified XII (1.15)   134.467   5.31   714
Qualified XII (1.20)   1,688.851   5.31   8,968
Qualified XII (1.25)   1,816.177   5.30   9,626
Qualified XV   10.313   5.33   55
Qualified XXV   49.104   5.36   263
Qualified XXVI   26.275   5.35   141
    72,515.069       $ 387,611
 
 
 
 
                  345            

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

Division/Contract   Units   Unit Value   Extended Value
LKCM Aquinas Growth Fund            
Contracts in accumulation period:            
Qualified XII (1.05)   25,657.965   $ 8.01   $ 205,520
 
Loomis Sayles Small Cap Value Fund - Retail Class            
Contracts in accumulation period:            
Qualified VI   13,494.603   $ 7.15   $ 96,486
Qualified XII (0.40)   13.522   7.19   97
Qualified XII (0.50)   1,313.391   7.19   9,443
Qualified XII (0.70)   6.866   7.18   49
Qualified XII (0.75)   612.874   7.17   4,394
Qualified XII (0.80)   0.473   7.17   3
Qualified XII (0.85)   3,415.039   7.17   24,486
Qualified XII (0.90)   288.987   7.17   2,072
Qualified XII (0.95)   1,034.700   7.16   7,408
Qualified XII (1.00)   3,939.031   7.16   28,203
Qualified XII (1.05)   180.365   7.16   1,291
Qualified XII (1.15)   1,710.443   7.16   12,247
Qualified XII (1.25)   27.917   7.15   200
Qualified XII (1.50)   4.424   7.14   32
Qualified XVI   177.866   7.14   1,270
Qualified XXI   99,616.819   7.17   714,253
Qualified XXV   274.294   7.17   1,967
Qualified LIII   17.650   7.19   127
Qualified LIV   96.569   7.17   692
Qualified LVI   39.008   7.20   281
    126,264.841       $ 905,001
Lord Abbett Mid-Cap Value Fund, Inc. - Class A            
Contracts in accumulation period:            
Qualified XII (1.00)   10,402.549   $ 10.13   $ 105,378
ING MAP PLUS NP8   3,964.098   8.71   34,527
ING MAP PLUS NP9   8,582.035   8.69   74,578
ING MAP PLUS NP11   3,468.677   8.64   29,969
ING MAP PLUS NP12   4,635.048   8.62   39,954
ING MAP PLUS NP15   3,775.352   8.56   32,317
ING MAP PLUS NP16   5,655.100   8.54   48,295
ING MAP PLUS NP17   11,119.506   8.52   94,738
ING MAP PLUS NP20   11,410.413   8.45   96,418
ING MAP PLUS NP21   11,032.133   8.43   93,001
ING MAP PLUS NP23   7,708.306   8.39   64,673
ING MAP PLUS NP25   463.776   8.35   3,873
ING MAP PLUS NP28   31.455   8.29   261
ING MAP PLUS NP30   1,206.749   8.25   9,956
ING MAP PLUS NP32   77.415   8.21   636
ING MAP PLUS NP35   1,315.312   8.15   10,720
    84,847.924       $ 739,294
 
 
 
 
                                                         346            

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

Division/Contract   Units   Unit Value   Extended Value
Lord Abbett Small-Cap Value Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP8   114.333   $ 12.03   $ 1,375
ING MAP PLUS NP9   18,147.402   12.01   217,950
ING MAP PLUS NP11   14,916.558   11.95   178,253
ING MAP PLUS NP12   1,587.212   11.92   18,920
ING MAP PLUS NP14   6,999.141   11.86   83,010
ING MAP PLUS NP15   2,954.702   11.83   34,954
ING MAP PLUS NP17   3,420.889   11.77   40,264
ING MAP PLUS NP20   25,996.133   11.69   303,895
ING MAP PLUS NP21   4,044.516   11.66   47,159
ING MAP PLUS NP22   334.061   11.63   3,885
ING MAP PLUS NP23   644.622   11.60   7,478
ING MAP PLUS NP28   7,890.551   11.46   90,426
ING MAP PLUS NP29   3,042.303   11.43   34,774
ING MAP PLUS NP30   1,013.709   11.40   11,556
    91,106.132       $ 1,073,899
Lord Abbett Series Fund - Mid-Cap Value Portfolio -            
   Class VC            
Currently payable annuity contracts:   69,589.139   $ 9.12   $ 634,653
Contracts in accumulation period:            
ING Custom Choice 62   2,099.978   8.52   17,892
Qualified VI   1,608,994.623   8.85   14,239,602
Qualified X (1.15)   65,316.185   8.92   582,620
Qualified X (1.25)   214,956.892   8.85   1,902,368
Qualified XII (0.00)   6,443.540   9.72   62,631
Qualified XII (0.10)   66.860   9.64   645
Qualified XII (0.20)   107.336   9.57   1,027
Qualified XII (0.25)   55.100   9.54   526
Qualified XII (0.30)   295,857.305   9.50   2,810,644
Qualified XII (0.35)   1,591.448   9.47   15,071
Qualified XII (0.40)   23,024.381   9.43   217,120
Qualified XII (0.50)   109,355.716   9.36   1,023,570
Qualified XII (0.55)   36,506.043   9.33   340,601
Qualified XII (0.60)   19,908.343   9.29   184,949
Qualified XII (0.65)   30,323.774   9.26   280,798
Qualified XII (0.70)   59,386.380   9.22   547,542
Qualified XII (0.75)   161,695.103   9.19   1,485,978
Qualified XII (0.80)   120,524.590   9.15   1,102,800
Qualified XII (0.85)   248,848.323   9.12   2,269,497
Qualified XII (0.90)   39,703.166   9.09   360,902
Qualified XII (0.95)   1,641,821.559   9.05   14,858,485
Qualified XII (1.00)   999,731.257   9.02   9,017,576
Qualified XII (1.05)   40,909.576   8.98   367,368
Qualified XII (1.10)   40,064.575   8.95   358,578
Qualified XII (1.15)   53,989.889   8.92   481,590
Qualified XII (1.20)   11,887.521   8.88   105,561
Qualified XII (1.25)   107,584.744   8.85   952,125
Qualified XII (1.30)   2,105.865   8.82   18,574
 
 
 
  347            

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

Division/Contract   Units   Unit Value   Extended Value
Lord Abbett Series Fund - Mid-Cap Value Portfolio -            
   Class VC (continued)            
Qualified XII (1.35)   1,998.309   $ 8.79   $ 17,565
Qualified XII (1.40)   9,113.795   8.75   79,746
Qualified XII (1.45)   2,607.264   8.72   22,735
Qualified XII (1.50)   2,209.497   8.69   19,201
Qualified XIII   1,147.110   9.05   10,381
Qualified XV   5,576.346   9.05   50,466
Qualified XVI   48,955.573   8.69   425,424
Qualified XVII   3,045.859   8.85   26,956
Qualified XVIII   2,166.810   8.85   19,176
Qualified XXV   33,439.534   9.19   307,309
Qualified XXVI   7,426.778   9.09   67,509
Qualified XXVII   918,372.095   11.16   10,249,033
Qualified XXVIII   897,059.683   9.65   8,656,626
Qualified XXXII   7,743.997   8.92   69,076
Qualified XXXIII (0.65)   27,615.749   10.36   286,099
Qualified XXXVIII   10,612.625   5.73   60,810
Qualified XLIII   873.916   5.71   4,990
Qualified LIII   18,986.062   7.70   146,193
Qualified LIV   39,803.460   7.65   304,496
Qualified LVI   8,297.977   7.73   64,143
Qualified LIX   1,923.516   10.54   20,274
    8,061,425.166       $ 75,149,501
Massachusetts Investors Growth Stock Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP9   13,177.404   $ 8.09   $ 106,605
ING MAP PLUS NP12   9,602.874   8.03   77,111
ING MAP PLUS NP17   864.774   7.93   6,858
ING MAP PLUS NP20   22,059.225   7.88   173,827
    45,704.277       $ 364,401
Morgan Stanley U.S. Small Cap Value Portfolio -            
Class I            
Contracts in accumulation period:            
Qualified XLII   113,598.391   $ 7.40   $ 840,628
 
 
 
 
                                             348            

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

Division/Contract       Units   Unit Value   Extended Value
Neuberger Berman Socially Responsive Fund® -                
   Trust Class                
Contracts in accumulation period:                
ING MAP PLUS NP8       2,586.827   $ 6.98   $ 18,056
ING MAP PLUS NP11       9,517.066   6.95   66,144
ING MAP PLUS NP12       15,562.032   6.94   108,001
ING MAP PLUS NP13       1,417.066   6.93   9,820
ING MAP PLUS NP15       35,499.713   6.91   245,303
ING MAP PLUS NP16       240.607   6.90   1,660
ING MAP PLUS NP17       367.933   6.90   2,539
ING MAP PLUS NP18       1,744.347   6.89   12,019
ING MAP PLUS NP19       61.167   6.88   421
ING MAP PLUS NP20       854.125   6.87   5,868
ING MAP PLUS NP22       440.686   6.85   3,019
ING MAP PLUS NP23       122.680   6.84   839
ING MAP PLUS NP24       61.647   6.83   421
ING MAP PLUS NP25       100.859   6.82   688
ING MAP PLUS NP26       3,577.426   6.81   24,362
Qualified VI       99,706.904   6.84   681,995
Qualified XII (0.00)       219.546   7.07   1,552
Qualified XII (0.30)       1,040.879   7.01   7,297
Qualified XII (0.40)       3,468.019   7.00   24,276
Qualified XII (0.50)       593.149   6.98   4,140
Qualified XII (0.55)       9,575.879   6.97   66,744
Qualified XII (0.60)       16.619   6.96   116
Qualified XII (0.65)       8.114   6.95   56
Qualified XII (0.70)       3,092.084   6.94   21,459
Qualified XII (0.75)       12,402.297   6.93   85,948
Qualified XII (0.80)       4,074.707   6.92   28,197
Qualified XII (0.85)       9,811.168   6.91   67,795
Qualified XII (0.90)       3,155.125   6.90   21,770
Qualified XII (0.95)       27,716.424   6.89   190,966
Qualified XII (1.00)       48,300.624   6.88   332,308
Qualified XII (1.05)       1,455.901   6.87   10,002
Qualified XII (1.10)       5,022.703   6.87   34,506
Qualified XII (1.15)       1,735.649   6.86   11,907
Qualified XII (1.20)       318.581   6.85   2,182
Qualified XII (1.25)       3,661.833   6.84   25,047
Qualified XII (1.30)       17.832   6.83   122
Qualified XII (1.35)       114.537   6.82   781
Qualified XII (1.40)       1,880.777   6.81   12,808
Qualified XII (1.50)       424.087   6.79   2,880
Qualified XV       207.611   6.89   1,430
Qualified XVI       5,859.630   6.79   39,787
Qualified XXV       12.984   6.93   90
Qualified XXXVIII       337.505   6.12   2,066
Qualified LIII       666.366   7.00   4,665
Qualified LIV       672.767   6.96   4,682
Qualified LVI       41.737   7.03   293
        317,766.219       $ 2,187,027
 
 
    349            

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

Division/Contract       Units   Unit Value   Extended Value
New Perspective Fund®, Inc. - Class R-3                
Contracts in accumulation period:                
ING MAP PLUS NP1       120,619.695   $ 10.62   $ 1,280,981
ING MAP PLUS NP4       12,194.923   10.55   128,656
ING MAP PLUS NP6       9,442.686   10.49   99,054
ING MAP PLUS NP8       8,714.842   10.44   90,983
ING MAP PLUS NP9       8,842.665   10.42   92,141
ING MAP PLUS NP11       6,236.128   10.37   64,669
ING MAP PLUS NP12       5,703.095   10.34   58,970
ING MAP PLUS NP13       11.152   10.32   115
ING MAP PLUS NP14       27,128.087   10.29   279,148
ING MAP PLUS NP15       12,104.970   10.27   124,318
ING MAP PLUS NP16       89.778   10.24   919
ING MAP PLUS NP17       3,117.980   10.22   31,866
ING MAP PLUS NP18       17,036.733   10.19   173,604
ING MAP PLUS NP19       6,272.335   10.17   63,790
ING MAP PLUS NP20       8,825.700   10.14   89,493
ING MAP PLUS NP21       152.253   10.12   1,541
ING MAP PLUS NP22       4,178.071   10.09   42,157
ING MAP PLUS NP23       285.134   10.07   2,871
ING MAP PLUS NP24       137.628   10.04   1,382
ING MAP PLUS NP26       1,435.966   9.99   14,345
ING MAP PLUS NP28       242.240   9.94   2,408
ING MAP PLUS NP30       1,392.400   9.89   13,771
        254,164.461       $ 2,657,182
New Perspective Fund®, Inc. - Class R-4                
Contracts in accumulation period:                
ING Custom Choice 62       4,142.103   $ 10.63   $ 44,031
Qualified V       207.995   10.27   2,136
Qualified VI       800,025.158   10.34   8,272,260
Qualified XII (0.00)       901.751   10.97   9,892
Qualified XII (0.25)       1,002.757   10.84   10,870
Qualified XII (0.30)       163,521.208   10.81   1,767,664
Qualified XII (0.35)       1,881.055   10.79   20,297
Qualified XII (0.40)       24,554.072   10.76   264,202
Qualified XII (0.50)       494,219.866   10.71   5,293,095
Qualified XII (0.55)       19,110.027   10.69   204,286
Qualified XII (0.60)       28,948.840   10.66   308,595
Qualified XII (0.65)       11,890.704   10.64   126,517
Qualified XII (0.70)       30,286.634   10.61   321,341
Qualified XII (0.75)       143,929.836   10.59   1,524,217
Qualified XII (0.80)       228,121.419   10.56   2,408,962
Qualified XII (0.85)       139,486.931   10.54   1,470,192
Qualified XII (0.90)       11,733.443   10.51   123,318
Qualified XII (0.95)       147,639.370   10.49   1,548,737
Qualified XII (1.00)       562,864.583   10.47   5,893,192
Qualified XII (1.05)       12,246.246   10.44   127,851
Qualified XII (1.10)       17,613.402   10.42   183,532
 
 
 
    350            

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

Division/Contract   Units   Unit Value   Extended Value
New Perspective Fund®, Inc. - Class R-4 (continued)            
Qualified XII (1.15)   19,816.549   $ 10.39   $ 205,894
Qualified XII (1.20)   7,629.804   10.37   79,121
Qualified XII (1.25)   52,270.074   10.34   540,473
Qualified XII (1.30)   308.832   10.32   3,187
Qualified XII (1.35)   191.517   10.30   1,973
Qualified XII (1.40)   8,569.930   10.27   88,013
Qualified XII (1.45)   573.413   10.25   5,877
Qualified XV   1,004.771   10.49   10,540
Qualified XVI   10,323.341   10.22   105,505
Qualified XVII   2,794.323   10.42   29,117
Qualified XXI   256,382.056   10.56   2,707,395
Qualified XXV   4,182.367   10.60   44,333
Qualified XXVI   800.736   10.54   8,440
Qualified XXVII   532,037.439   9.58   5,096,919
Qualified XXXIII (0.65)   34.917   10.93   382
Qualified XXXVIII   7,494.527   6.13   45,941
Qualified XLIII   46.126   6.11   282
Qualified LIII   1,382.138   9.94   13,738
Qualified LIV   10,034.553   9.87   99,041
Qualified LVI   1,211.701   9.98   12,093
Qualified LIX   1,564.907   10.80   16,901
    3,762,981.421       $ 39,040,352
Oppenheimer Capital Appreciation Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP8   978.848   $ 7.03   $ 6,881
ING MAP PLUS NP9   5,198.690   7.01   36,443
ING MAP PLUS NP10   301.649   6.99   2,109
ING MAP PLUS NP11   19,203.911   6.97   133,851
ING MAP PLUS NP12   2,076.793   6.96   14,454
ING MAP PLUS NP14   797.792   6.92   5,521
ING MAP PLUS NP18   5,224.421   6.86   35,840
ING MAP PLUS NP23   13,184.635   6.77   89,260
ING MAP PLUS NP26   1,201.908   6.72   8,077
ING MAP PLUS NP28   4,561.513   6.69   30,517
    52,730.160       $ 362,953
 
 
 
 
                                                        351            

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

Division/Contract   Units   Unit Value   Extended Value
Oppenheimer Developing Markets Fund - Class A            
Contracts in accumulation period:            
ING Custom Choice 62   3,027.453   $ 16.82   $ 50,922
ING MAP PLUS NP1   18,485.401   16.00   295,766
ING MAP PLUS NP8   3,041.230   15.72   47,808
ING MAP PLUS NP9   14,421.382   15.69   226,271
ING MAP PLUS NP10   2,073.315   15.65   32,447
ING MAP PLUS NP11   6,501.280   15.61   101,485
ING MAP PLUS NP12   15,453.216   15.57   240,607
ING MAP PLUS NP14   53.900   15.49   835
ING MAP PLUS NP15   4,925.699   15.46   76,151
ING MAP PLUS NP17   11,351.114   15.38   174,580
ING MAP PLUS NP19   3,896.746   15.31   59,659
ING MAP PLUS NP20   8,721.734   15.27   133,181
ING MAP PLUS NP21   9,218.439   15.23   140,397
ING MAP PLUS NP22   532.315   15.19   8,086
ING MAP PLUS NP23   1,301.699   15.16   19,734
ING MAP PLUS NP24   116.894   15.12   1,767
ING MAP PLUS NP25   1,807.974   15.08   27,264
ING MAP PLUS NP26   731.264   15.04   10,998
ING MAP PLUS NP27   1,196.356   15.01   17,957
ING MAP PLUS NP28   2,041.527   14.97   30,562
ING MAP PLUS NP29   1,863.516   14.93   27,822
ING MAP PLUS NP30   734.990   14.90   10,951
Qualified V   276.017   33.24   9,175
Qualified VI   1,006,710.723   33.69   33,916,084
Qualified XII (0.00)   2,188.353   37.41   81,866
Qualified XII (0.10)   8.073   37.10   300
Qualified XII (0.25)   641.586   36.63   23,501
Qualified XII (0.30)   29,836.199   36.48   1,088,425
Qualified XII (0.40)   43,790.089   36.18   1,584,325
Qualified XII (0.45)   82.313   36.02   2,965
Qualified XII (0.50)   176,630.312   35.87   6,335,729
Qualified XII (0.55)   16,305.551   35.72   582,434
Qualified XII (0.60)   11,153.030   35.57   396,713
Qualified XII (0.65)   20,674.967   35.42   732,307
Qualified XII (0.70)   87,307.946   35.28   3,080,224
Qualified XII (0.75)   50,289.899   35.13   1,766,684
Qualified XII (0.80)   48,560.501   34.98   1,698,646
Qualified XII (0.85)   111,277.128   34.84   3,876,895
Qualified XII (0.90)   25,538.429   34.69   885,928
Qualified XII (0.95)   149,476.490   34.54   5,162,918
Qualified XII (1.00)   507,977.653   34.40   17,474,431
Qualified XII (1.05)   25,176.794   34.26   862,557
Qualified XII (1.10)   20,068.728   34.11   684,544
Qualified XII (1.15)   38,609.579   33.97   1,311,567
Qualified XII (1.20)   2,889.717   33.83   97,759
Qualified XII (1.25)   44,277.471   33.69   1,491,708
 
 
 
 
                                                    352            

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

Division/Contract   Units   Unit Value   Extended Value
Oppenheimer Developing Markets Fund - Class A            
(continued)            
Qualified XII (1.30)   656.101   $ 33.54   $ 22,006
Qualified XII (1.35)   237.369   33.40   7,928
Qualified XII (1.40)   4,942.278   33.26   164,380
Qualified XII (1.45)   1,170.812   33.12   38,777
Qualified XII (1.50)   295.951   32.99   9,763
Qualified XIII   39.897   34.54   1,378
Qualified XV   3,810.182   34.54   131,604
Qualified XVI   21,658.624   32.99   714,518
Qualified XVII   3,421.741   33.69   115,278
Qualified XXI   20,457.445   34.98   715,601
Qualified XXV   15,415.232   35.10   541,075
Qualified XXVI   1,629.457   34.67   56,493
Qualified XXVII   1,124,498.882   22.68   25,503,635
Qualified XXXVIII   43,081.596   5.12   220,578
Qualified XLIII   5,492.922   5.11   28,069
Qualified LIII   23,862.285   12.00   286,347
Qualified LIV   43,297.420   11.92   516,105
Qualified LVI   24,999.385   12.05   301,243
Qualified LIX   2,787.007   35.08   97,768
    3,872,999.578       $ 114,355,481
Oppenheimer Global Securities/VA            
Contracts in accumulation period:            
ING MAP PLUS NP15   40.381   $ 9.36   $ 378
ING MAP PLUS NP17   61.377   9.31   571
ING MAP PLUS NP28   0.046   9.06   0
Qualified VI   7,491.395   14.70   110,124
Qualified X (1.25)   26.465   14.70   389
Qualified XII (0.45)   2.478   15.97   40
Qualified XII (0.50)   122.645   15.93   1,954
Qualified XII (0.55)   4.120   15.80   65
Qualified XII (0.60)   21.295   15.72   335
Qualified XII (0.70)   3,312.435   15.55   51,508
Qualified XII (0.75)   848.106   15.47   13,120
Qualified XII (0.80)   635.415   15.43   9,804
Qualified XII (0.85)   470.131   15.35   7,217
Qualified XII (0.90)   60.747   15.27   928
Qualified XII (0.95)   129.771   15.18   1,970
Qualified XII (1.00)   1,793.056   15.10   27,075
Qualified XII (1.10)   96.276   14.94   1,438
Qualified XII (1.15)   318.727   14.86   4,736
Qualified XII (1.25)   136.457   14.70   2,006
Qualified XII (1.40)   0.075   14.47   1
Qualified XII (1.50)   12.793   14.32   183
Qualified XVII   918.614   14.70   13,504
    16,502.805       $ 247,346
 
 
 
 
                                                    353            

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

Division/Contract       Units   Unit Value   Extended Value
Oppenheimer Main Street Fund®/VA                
Currently payable annuity contracts:       10,365.984   $5.99 to $6.76   $ 63,088
 
Oppenheimer Main Street Small Cap Fund®/VA                
Contracts in accumulation period:                
ING Custom Choice 62       405.293   $ 7.98   $ 3,234
Qualified V       617.878   7.93   4,900
Qualified VI       223,505.187   7.98   1,783,571
Qualified X (1.15)       2,430.959   9.13   22,195
Qualified X (1.25)       16,322.646   9.09   148,373
Qualified XII (0.00)       518.788   8.35   4,332
Qualified XII (0.25)       289.145   8.27   2,391
Qualified XII (0.30)       1,169.570   8.26   9,661
Qualified XII (0.40)       3,434.810   8.23   28,268
Qualified XII (0.50)       11,496.299   8.20   94,270
Qualified XII (0.55)       2,611.572   8.18   21,363
Qualified XII (0.60)       1,958.200   8.17   15,998
Qualified XII (0.65)       10,602.151   8.15   86,408
Qualified XII (0.70)       6,550.124   8.14   53,318
Qualified XII (0.75)       17,774.163   8.12   144,326
Qualified XII (0.80)       12,636.646   8.11   102,483
Qualified XII (0.85)       56,609.476   8.09   457,971
Qualified XII (0.90)       3,897.839   8.08   31,495
Qualified XII (0.95)       30,484.138   8.06   245,702
Qualified XII (1.00)       104,048.288   8.05   837,589
Qualified XII (1.05)       3,695.650   8.03   29,676
Qualified XII (1.10)       7,928.132   8.02   63,584
Qualified XII (1.15)       5,762.361   8.00   46,099
Qualified XII (1.20)       1,089.497   7.99   8,705
Qualified XII (1.25)       9,411.470   7.98   75,104
Qualified XII (1.35)       1,643.714   7.95   13,068
Qualified XII (1.40)       709.781   7.93   5,629
Qualified XII (1.45)       686.991   7.92   5,441
Qualified XII (1.50)       42.348   7.90   335
Qualified XIII       23.285   8.06   188
Qualified XV       4,415.484   8.06   35,589
Qualified XVI       7,287.272   7.90   57,569
Qualified XVIII       1,457.898   9.19   13,398
Qualified XXV       158.411   8.12   1,286
Qualified XXVI       17.005   8.08   137
Qualified XXXII       948.982   9.09   8,626
Qualified XXXVIII       5,306.700   5.87   31,150
Qualified XLIII       297.142   5.85   1,738
Qualified LIII       4,886.715   8.26   40,364
Qualified LIV       10,303.716   8.20   84,490
Qualified LVI       4,250.549   8.30   35,280
        577,686.275       $ 4,655,304
 
 
 
 
    354            

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

Division/Contract       Units   Unit Value   Extended Value
Oppenheimer MidCap Fund/VA                
Currently payable annuity contracts:       3,741.553   $2.76 to $5.50   $ 13,330
 
Oppenheimer Strategic Bond Fund/VA                
Contracts in accumulation period:                
Qualified VI       2,902.320   $ 13.83   $ 40,139
Qualified XII (0.50)       0.961   14.99   14
Qualified XII (0.55)       14.039   14.91   209
Qualified XII (0.60)       2.996   14.84   44
Qualified XII (0.65)       0.304   14.76   4
Qualified XII (0.70)       3,647.545   14.68   53,546
Qualified XII (0.75)       166.157   14.60   2,426
Qualified XII (0.85)       227.199   14.44   3,281
Qualified XII (0.95)       24.829   14.28   355
Qualified XII (1.00)       335.481   14.21   4,767
Qualified XII (1.45)       9.383   13.54   127
        7,331.214       $ 104,912
Pax World Balanced Fund                
Contracts in accumulation period:                
ING Custom Choice 62       8,284.429   $ 9.51   $ 78,785
ING MAP PLUS NP1       11,392.794   9.80   111,649
ING MAP PLUS NP8       27,328.717   9.63   263,176
ING MAP PLUS NP9       12.745   9.61   122
ING MAP PLUS NP11       14,249.087   9.56   136,221
ING MAP PLUS NP12       15,632.759   9.54   149,137
ING MAP PLUS NP14       7,793.562   9.49   73,961
ING MAP PLUS NP15       472.733   9.47   4,477
ING MAP PLUS NP16       1,481.401   9.45   13,999
ING MAP PLUS NP17       509.566   9.42   4,800
ING MAP PLUS NP18       1,386.247   9.40   13,031
ING MAP PLUS NP19       8,299.673   9.38   77,851
ING MAP PLUS NP22       471.539   9.31   4,390
ING MAP PLUS NP23       451.393   9.29   4,193
ING MAP PLUS NP24       126.888   9.26   1,175
ING MAP PLUS NP25       1,959.867   9.24   18,109
ING MAP PLUS NP26       1,918.618   9.22   17,690
ING MAP PLUS NP28       715.147   9.17   6,558
ING MAP PLUS NP30       2.565   9.13   23
ING MAP PLUS NP32       197.618   9.08   1,794
Qualified V       260.121   8.77   2,281
Qualified VI       1,219,996.868   8.89   10,845,772
Qualified XII (0.00)       1,770.820   9.87   17,478
Qualified XII (0.30)       9,207.524   9.63   88,668
Qualified XII (0.40)       39,453.140   9.55   376,777
Qualified XII (0.50)       205,673.479   9.47   1,947,728
Qualified XII (0.55)       104,238.310   9.43   982,967
Qualified XII (0.60)       9,700.212   9.39   91,085
 
 
 
 
    355            

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

Division/Contract   Units   Unit Value   Extended Value
Pax World Balanced Fund (continued)            
Qualified XII (0.65)   20,687.834   $ 9.35   $ 193,431
Qualified XII (0.70)   244,186.620   9.31   2,273,377
Qualified XII (0.75)   133,781.052   9.27   1,240,150
Qualified XII (0.80)   40,564.915   9.23   374,414
Qualified XII (0.85)   162,971.168   9.19   1,497,705
Qualified XII (0.90)   23,113.284   9.15   211,487
Qualified XII (0.95)   239,657.423   9.11   2,183,279
Qualified XII (1.00)   1,039,840.939   9.08   9,441,756
Qualified XII (1.05)   25,494.927   9.04   230,474
Qualified XII (1.10)   24,966.427   9.00   224,698
Qualified XII (1.15)   46,316.908   8.96   415,000
Qualified XII (1.20)   4,909.471   8.93   43,842
Qualified XII (1.25)   59,920.352   8.89   532,692
Qualified XII (1.30)   943.609   8.85   8,351
Qualified XII (1.35)   2,158.892   8.81   19,020
Qualified XII (1.40)   14,351.407   8.78   126,005
Qualified XII (1.45)   1,153.760   8.74   10,084
Qualified XII (1.50)   192.192   8.70   1,672
Qualified XVI   26,904.921   8.70   234,073
Qualified XVII   1,006.795   8.89   8,950
Qualified XXI   8,425.905   9.23   77,771
Qualified XXV   695.285   9.26   6,438
Qualified XXVI   1,507.496   9.15   13,794
Qualified XXVII   1,062,501.427   9.10   9,668,763
Qualified XXXVIII   4,332.755   6.91   29,939
Qualified XLIII   116.231   6.89   801
Qualified LIII   1,159.541   9.02   10,459
Qualified LIV   7,373.287   8.96   66,065
Qualified LVI   3,387.810   9.06   30,694
    4,895,610.455       $ 44,509,081
PIMCO Real Return Portfolio - Administrative Class            
Contracts in accumulation period:            
ING Custom Choice 62   2,894.942   $ 10.64   $ 30,802
ING MAP PLUS NP8   2,045.614   10.46   21,397
ING MAP PLUS NP9   27,142.133   10.45   283,635
ING MAP PLUS NP10   215.182   10.44   2,247
ING MAP PLUS NP11   14,149.511   10.42   147,438
ING MAP PLUS NP13   848.519   10.39   8,816
ING MAP PLUS NP15   167.329   10.37   1,735
ING MAP PLUS NP16   5,545.959   10.35   57,401
ING MAP PLUS NP19   757.287   10.31   7,808
ING MAP PLUS NP21   52.835   10.28   543
ING MAP PLUS NP22   397.482   10.27   4,082
ING MAP PLUS NP23   1,772.381   10.26   18,185
ING MAP PLUS NP24   306.146   10.24   3,135
ING MAP PLUS NP26   59.375   10.22   607
ING MAP PLUS NP29   13.957   10.17   142
 
 
 
                                    356            

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

Division/Contract   Units   Unit Value   Extended Value
PIMCO Real Return Portfolio - Administrative Class            
(continued)            
Qualified VI   1,327,095.427   $ 10.85   $ 14,398,985
Qualified X (1.15)   37,300.649   10.54   393,149
Qualified X (1.25)   152,363.283   10.50   1,599,814
Qualified XII (0.00)   24,274.615   11.50   279,158
Qualified XII (0.05)   196,768.963   11.48   2,258,908
Qualified XII (0.25)   877.775   11.37   9,980
Qualified XII (0.30)   17,789.174   11.34   201,729
Qualified XII (0.35)   1,243.343   11.31   14,062
Qualified XII (0.40)   173,753.818   11.29   1,961,681
Qualified XII (0.50)   413,594.924   11.23   4,644,671
Qualified XII (0.55)   41,952.988   11.21   470,293
Qualified XII (0.60)   16,697.267   11.18   186,675
Qualified XII (0.65)   18,274.276   11.16   203,941
Qualified XII (0.70)   65,949.225   11.13   734,015
Qualified XII (0.75)   226,275.889   11.10   2,511,662
Qualified XII (0.80)   134,508.759   11.08   1,490,357
Qualified XII (0.85)   239,599.552   11.05   2,647,575
Qualified XII (0.90)   38,860.850   11.03   428,635
Qualified XII (0.95)   258,943.913   11.00   2,848,383
Qualified XII (1.00)   1,714,639.984   10.97   18,809,601
Qualified XII (1.05)   27,192.249   10.95   297,755
Qualified XII (1.10)   40,344.652   10.92   440,564
Qualified XII (1.15)   40,013.794   10.90   436,150
Qualified XII (1.20)   6,534.827   10.87   71,034
Qualified XII (1.25)   80,142.153   10.85   869,542
Qualified XII (1.30)   281.811   10.82   3,049
Qualified XII (1.35)   1,576.608   10.80   17,027
Qualified XII (1.40)   11,391.376   10.77   122,685
Qualified XII (1.45)   314.076   10.75   3,376
Qualified XII (1.50)   4.288   10.72   46
Qualified XV   6,776.121   11.00   74,537
Qualified XVI   32,594.883   10.72   349,417
Qualified XVII   1,444.260   10.93   15,786
Qualified XVIII   10,477.899   10.61   111,171
Qualified XXI   10,579.236   11.08   117,218
Qualified XXV   8,099.278   11.12   90,064
Qualified XXVI   1,633.164   11.05   18,046
Qualified XXVIII   710,010.504   9.87   7,007,804
Qualified XXXIII (0.65)   1,763.405   10.93   19,274
Qualified XXXVIII   12,629.988   9.56   120,743
Qualified XLIII   1,328.770   9.53   12,663
Qualified LIII   16,119.817   10.34   166,679
Qualified LIV   16,657.625   10.28   171,240
Qualified LVI   18,382.482   10.39   190,994
Qualified LIX   1,296.629   11.32   14,678
    6,214,723.221       $ 67,422,789
 
 
 
 
                                                        357            

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

Division/Contract   Units   Unit Value   Extended Value
Pioneer High Yield Fund - Class A            
Contracts in accumulation period:            
ING MAP PLUS NP1   103,291.491   $ 7.95   $ 821,167
ING MAP PLUS NP4   8,740.241   7.89   68,961
ING MAP PLUS NP6   26,273.462   7.86   206,509
ING MAP PLUS NP8   25,654.780   7.82   200,620
ING MAP PLUS NP9   26,820.573   7.80   209,200
ING MAP PLUS NP10   12,894.607   7.78   100,320
ING MAP PLUS NP11   14,364.375   7.76   111,468
ING MAP PLUS NP12   226.718   7.74   1,755
ING MAP PLUS NP13   88.949   7.72   687
ING MAP PLUS NP14   5,444.449   7.70   41,922
ING MAP PLUS NP15   19,747.892   7.68   151,664
ING MAP PLUS NP16   5,382.364   7.66   41,229
ING MAP PLUS NP17   10,963.562   7.65   83,871
ING MAP PLUS NP18   9,818.773   7.63   74,917
ING MAP PLUS NP19   19,312.037   7.61   146,965
ING MAP PLUS NP20   7,428.628   7.59   56,383
ING MAP PLUS NP21   7,369.077   7.57   55,784
ING MAP PLUS NP22   5,573.217   7.55   42,078
ING MAP PLUS NP23   1,190.880   7.53   8,967
ING MAP PLUS NP24   1,610.342   7.52   12,110
ING MAP PLUS NP25   723.632   7.50   5,427
ING MAP PLUS NP26   7,586.508   7.48   56,747
ING MAP PLUS NP27   444.365   7.46   3,315
ING MAP PLUS NP28   5,640.929   7.44   41,969
ING MAP PLUS NP29   437.220   7.42   3,244
ING MAP PLUS NP30   621.371   7.41   4,604
ING MAP PLUS NP32   651.018   7.37   4,798
    328,301.460       $ 2,556,681
Pioneer Emerging Markets VCT Portfolio - Class I            
Contracts in accumulation period:            
ING Custom Choice 62   1,687.139   $ 5.25   $ 8,857
ING MAP PLUS NP11   2,949.323   5.30   15,631
ING MAP PLUS NP13   85.994   5.29   455
ING MAP PLUS NP15   19.386   5.28   102
ING MAP PLUS NP18   2,164.778   5.26   11,387
ING MAP PLUS NP24   11.401   5.24   60
ING MAP PLUS NP25   292.503   5.23   1,530
Qualified VI   667,484.011   5.25   3,504,291
Qualified XII (0.00)   2,893.506   5.36   15,509
Qualified XII (0.25)   18,253.436   5.34   97,473
Qualified XII (0.30)   28,966.148   5.34   154,679
Qualified XII (0.35)   95.844   5.33   511
Qualified XII (0.40)   14,769.861   5.33   78,723
Qualified XII (0.45)   448.186   5.32   2,384
Qualified XII (0.50)   458,374.938   5.32   2,438,555
Qualified XII (0.55)   6,476.201   5.32   34,453
 
 
 
                                                    358            

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

Division/Contract   Units   Unit Value   Extended Value
Pioneer Emerging Markets VCT Portfolio - Class I            
(continued)            
Qualified XII (0.60)   3,484.979   $ 5.31   $ 18,505
Qualified XII (0.65)   5,299.574   5.31   28,141
Qualified XII (0.70)   10,358.183   5.30   54,898
Qualified XII (0.75)   171,416.706   5.30   908,509
Qualified XII (0.80)   85,598.499   5.29   452,816
Qualified XII (0.85)   106,502.242   5.29   563,397
Qualified XII (0.90)   12,833.898   5.28   67,763
Qualified XII (0.95)   110,979.167   5.28   585,970
Qualified XII (1.00)   347,146.161   5.28   1,832,932
Qualified XII (1.05)   13,808.061   5.27   72,768
Qualified XII (1.10)   11,488.074   5.27   60,542
Qualified XII (1.15)   21,863.399   5.26   115,001
Qualified XII (1.20)   2,065.428   5.26   10,864
Qualified XII (1.25)   29,801.749   5.25   156,459
Qualified XII (1.35)   42.170   5.25   221
Qualified XII (1.40)   3,626.105   5.24   19,001
Qualified XII (1.45)   189.905   5.24   995
Qualified XII (1.50)   1,170.153   5.23   6,120
Qualified XV   1,766.780   5.28   9,329
Qualified XVI   11,169.780   5.23   58,418
Qualified XVII   1,417.110   5.26   7,454
Qualified XXV   19,955.203   5.31   105,962
Qualified XXVI   2,451.996   5.30   12,996
Qualified XXXVIII   9,162.194   4.13   37,840
Qualified XLIII   3,212.066   4.12   13,234
Qualified LIII   17,315.086   5.32   92,116
Qualified LIV   7,572.817   5.29   40,060
Qualified LVI   4,066.667   5.35   21,757
Qualified LIX   3,144.017   5.32   16,726
    2,223,880.824       $ 11,735,394
Pioneer Equity Income VCT Portfolio - Class I            
Contracts in accumulation period:            
Qualified XXXIII (0.65)   4.889   $ 10.36   $ 51
 
 
 
 
                                                  359            

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

Division/Contract       Units   Unit Value   Extended Value
Pioneer High Yield VCT Portfolio - Class I                
Contracts in accumulation period:                
ING Custom Choice 62       805.224   $ 7.91   $ 6,369
Qualified V       132.109   7.60   1,004
Qualified VI       403,225.906   7.66   3,088,710
Qualified X (1.15)       15,534.692   7.73   120,083
Qualified X (1.25)       30,426.964   7.70   234,288
Qualified XII (0.00)       151.366   8.12   1,229
Qualified XII (0.25)       717.516   8.02   5,754
Qualified XII (0.30)       42,786.822   8.00   342,295
Qualified XII (0.35)       91.241   7.98   728
Qualified XII (0.40)       11,733.783   7.97   93,518
Qualified XII (0.50)       9,881.221   7.93   78,358
Qualified XII (0.55)       9,686.662   7.91   76,622
Qualified XII (0.60)       37,619.918   7.89   296,821
Qualified XII (0.65)       6,544.507   7.87   51,505
Qualified XII (0.70)       16,192.401   7.85   127,110
Qualified XII (0.75)       19,205.230   7.84   150,569
Qualified XII (0.80)       14,913.962   7.82   116,627
Qualified XII (0.85)       55,748.856   7.80   434,841
Qualified XII (0.90)       26,037.062   7.78   202,568
Qualified XII (0.95)       85,880.293   7.76   666,431
Qualified XII (1.00)       589,305.111   7.75   4,567,115
Qualified XII (1.05)       23,034.091   7.73   178,054
Qualified XII (1.10)       10,612.921   7.71   81,826
Qualified XII (1.15)       18,956.078   7.69   145,772
Qualified XII (1.20)       2,519.658   7.67   19,326
Qualified XII (1.25)       26,321.735   7.66   201,624
Qualified XII (1.35)       344.955   7.62   2,629
Qualified XII (1.40)       5,727.988   7.60   43,533
Qualified XII (1.45)       994.447   7.58   7,538
Qualified XII (1.50)       515.513   7.57   3,902
Qualified XV       1,156.784   7.76   8,977
Qualified XVI       21,334.954   7.57   161,506
Qualified XVIII       1,126.602   7.78   8,765
Qualified XXV       2,277.843   7.85   17,881
Qualified XXVI       260.901   7.80   2,035
Qualified XXXII       208.918   7.70   1,609
Qualified XXXVIII       6,071.562   6.35   38,554
Qualified LIII       5,853.431   7.70   45,071
Qualified LIV       2,206.481   7.65   16,880
Qualified LVI       3,936.405   7.73   30,428
        1,510,082.113       $ 11,678,455
 
 
 
 
    360            

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

Division/Contract       Units   Unit Value   Extended Value
Premier VIT OpCap Mid Cap Portfolio                
Contracts in accumulation period:                
ING Custom Choice 62       106.332   $ 5.64   $ 600
ING MAP PLUS NP4       116.180   5.72   665
ING MAP PLUS NP9       2,389.814   5.70   13,622
ING MAP PLUS NP11       1,236.830   5.69   7,038
ING MAP PLUS NP15       5,535.834   5.67   31,388
ING MAP PLUS NP19       23.352   5.65   132
Qualified VI       96,249.429   5.64   542,847
Qualified XII (0.00)       225.903   5.76   1,301
Qualified XII (0.25)       954.402   5.74   5,478
Qualified XII (0.30)       12,541.520   5.73   71,863
Qualified XII (0.40)       605.493   5.72   3,463
Qualified XII (0.50)       66,908.846   5.71   382,050
Qualified XII (0.55)       1,328.788   5.71   7,587
Qualified XII (0.65)       1,876.074   5.70   10,694
Qualified XII (0.70)       2,384.837   5.69   13,570
Qualified XII (0.75)       14,997.306   5.69   85,335
Qualified XII (0.80)       3,871.599   5.68   21,991
Qualified XII (0.85)       47,134.298   5.68   267,723
Qualified XII (0.90)       1,095.568   5.67   6,212
Qualified XII (0.95)       18,803.286   5.67   106,615
Qualified XII (1.00)       131,573.140   5.66   744,704
Qualified XII (1.05)       2,233.094   5.66   12,639
Qualified XII (1.10)       830.336   5.65   4,691
Qualified XII (1.15)       3,795.988   5.65   21,447
Qualified XII (1.20)       47.055   5.65   266
Qualified XII (1.25)       4,007.541   5.64   22,603
Qualified XII (1.35)       202.330   5.63   1,139
Qualified XII (1.40)       33.638   5.63   189
Qualified XV       1,527.039   5.67   8,658
Qualified XVI       2,389.601   5.62   13,430
Qualified XXI       1,954.238   5.68   11,100
Qualified XXV       4,270.067   5.70   24,339
Qualified XXVI       1,862.107   5.69   10,595
Qualified LIII       1,763.288   5.72   10,086
Qualified LIV       1,381.234   5.68   7,845
Qualified LVI       334.101   5.74   1,918
        436,590.488       $ 2,475,823
 
 
 
 
    361            

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

Division/Contract       Units   Unit Value   Extended Value
RiverSource Diversified Equity Income Fund -                
Class R-4                
Contracts in accumulation period:                
Qualified VI       54,341.062   $ 6.17   $ 335,284
Qualified XII (0.30)       153.934   6.21   956
Qualified XII (0.40)       390.823   6.21   2,427
Qualified XII (0.50)       1,351.648   6.20   8,380
Qualified XII (0.55)       4,161.465   6.20   25,801
Qualified XII (0.60)       62.185   6.20   386
Qualified XII (0.65)       3,419.902   6.20   21,203
Qualified XII (0.70)       13.425   6.19   83
Qualified XII (0.75)       14,042.407   6.19   86,923
Qualified XII (0.80)       8,256.465   6.19   51,108
Qualified XII (0.85)       16,827.486   6.19   104,162
Qualified XII (0.90)       513.850   6.19   3,181
Qualified XII (0.95)       12,591.950   6.18   77,818
Qualified XII (1.00)       25,313.139   6.18   156,435
Qualified XII (1.05)       232.631   6.18   1,438
Qualified XII (1.10)       331.937   6.18   2,051
Qualified XII (1.15)       155.990   6.18   964
Qualified XII (1.25)       460.272   6.17   2,840
Qualified XII (1.35)       186.060   6.17   1,148
Qualified XII (1.50)       150.445   6.16   927
Qualified XVI       7,266.625   6.16   44,762
Qualified XXI       66,219.580   6.19   409,899
Qualified XXV       358.171   6.19   2,217
Qualified XLIII       186.627   6.20   1,157
Qualified LIV       19,701.905   6.19   121,955
Qualified LVI       3.388   6.21   21
        236,693.372       $ 1,463,526
SMALLCAP World Fund® - Class R-4                
Contracts in accumulation period:                
Qualified VI       22,554.077   $ 5.45   $ 122,920
Qualified XII (0.25)       31.015   5.48   170
Qualified XII (0.30)       88.184   5.48   483
Qualified XII (0.40)       2,902.982   5.48   15,908
Qualified XII (0.50)       1,024.560   5.48   5,615
Qualified XII (0.65)       12.380   5.47   68
Qualified XII (0.70)       1,353.007   5.47   7,401
Qualified XII (0.75)       2,086.592   5.47   11,414
Qualified XII (0.85)       2,311.322   5.46   12,620
Qualified XII (0.90)       1,373.810   5.46   7,501
Qualified XII (0.95)       3,507.841   5.46   19,153
Qualified XII (1.00)       36,361.172   5.46   198,532
Qualified XII (1.05)       214.029   5.46   1,169
Qualified XII (1.15)       1,647.872   5.45   8,981
Qualified XII (1.25)       2,488.703   5.45   13,563
Qualified XV       48.668   5.46   266
Qualified XVI       464.562   5.44   2,527
Qualified XXV       321.846   5.47   1,761
Qualified XLIII       21.803   5.48   119
Qualified LIV       701.412   5.46   3,830
        79,515.837       $ 434,001
 
    362            

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

Division/Contract       Units   Unit Value   Extended Value
T. Rowe Price Mid-Cap Value Fund - R Class                
Contracts in accumulation period:                
ING MAP PLUS NP8       7,114.880   $ 9.62   $ 68,445
ING MAP PLUS NP9       5,053.246   9.59   48,461
ING MAP PLUS NP11       12,382.249   9.55   118,250
ING MAP PLUS NP12       759.843   9.52   7,234
ING MAP PLUS NP14       21,607.098   9.48   204,835
ING MAP PLUS NP15       230.887   9.45   2,182
ING MAP PLUS NP19       4,500.369   9.36   42,123
ING MAP PLUS NP20       19,046.092   9.34   177,891
ING MAP PLUS NP21       161.583   9.32   1,506
ING MAP PLUS NP22       2,214.702   9.29   20,575
ING MAP PLUS NP27       492.621   9.18   4,522
ING MAP PLUS NP28       311.517   9.16   2,854
        73,875.087       $ 698,878
T. Rowe Price Value Fund - Advisor Class                
Contracts in accumulation period:                
Qualified XII (1.00)       6,428.155   $ 6.79   $ 43,647
 
Templeton Foreign Fund - Class A                
Contracts in accumulation period:                
ING MAP PLUS NP8       4,950.260   $ 9.41   $ 46,582
ING MAP PLUS NP9       1,191.917   9.39   11,192
ING MAP PLUS NP11       12,144.671   9.34   113,431
ING MAP PLUS NP12       2,745.716   9.32   25,590
ING MAP PLUS NP14       428.209   9.28   3,974
ING MAP PLUS NP16       23,840.832   9.23   220,051
ING MAP PLUS NP17       1,676.567   9.21   15,441
ING MAP PLUS NP18       11,307.165   9.19   103,913
ING MAP PLUS NP20       1,409.984   9.14   12,887
ING MAP PLUS NP21       6,445.859   9.12   58,786
ING MAP PLUS NP22       1,194.199   9.10   10,867
ING MAP PLUS NP26       483.694   9.01   4,358
ING MAP PLUS NP28       3,134.950   8.96   28,089
ING MAP PLUS NP32       263.721   8.88   2,342
        71,217.744       $ 657,503
 
 
 
 
    363            

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

Division/Contract       Units   Unit Value   Extended Value
Templeton Global Bond Fund - Class A                
Contracts in accumulation period:                
ING Custom Choice 62       15,690.813   $ 14.54   $ 228,144
Qualified V       19,443.099   14.20   276,092
Qualified VI       2,251,199.089   14.31   32,214,659
Qualified XII (0.00)       3,054.361   23.17   70,770
Qualified XII (0.10)       4.431   23.00   102
Qualified XII (0.25)       2,584.487   22.75   58,797
Qualified XII (0.30)       48,185.252   22.66   1,091,878
Qualified XII (0.35)       1,021.798   22.58   23,072
Qualified XII (0.40)       114,312.508   22.49   2,570,888
Qualified XII (0.50)       555,982.900   22.33   12,415,098
Qualified XII (0.55)       26,913.143   22.24   598,548
Qualified XII (0.60)       33,866.278   22.16   750,477
Qualified XII (0.65)       23,050.614   22.08   508,958
Qualified XII (0.70)       63,945.672   22.00   1,406,805
Qualified XII (0.75)       538,148.062   21.91   11,790,824
Qualified XII (0.80)       78,307.383   21.83   1,709,450
Qualified XII (0.85)       251,583.056   14.57   3,665,565
Qualified XII (0.90)       38,562.299   21.67   835,645
Qualified XII (0.95)       415,129.185   14.51   6,023,524
Qualified XII (1.00)       1,839,213.070   14.47   26,613,413
Qualified XII (1.05)       65,933.536   14.44   952,080
Qualified XII (1.10)       48,042.029   14.41   692,286
Qualified XII (1.15)       71,677.147   14.37   1,030,001
Qualified XII (1.20)       4,362.458   14.34   62,558
Qualified XII (1.25)       109,145.878   14.31   1,561,878
Qualified XII (1.35)       1,086.456   14.24   15,471
Qualified XII (1.40)       10,416.036   14.21   148,012
Qualified XII (1.45)       974.387   14.17   13,807
Qualified XII (1.50)       1,557.292   14.14   22,020
Qualified XIII       827.657   14.51   12,009
Qualified XV       5,261.535   14.51   76,345
Qualified XVI       61,334.987   14.14   867,277
Qualified XVII       4,981.611   14.42   71,835
Qualified XXI       24,062.883   14.61   351,559
Qualified XXV       26,308.065   14.66   385,676
Qualified XXVI       4,550.373   14.57   66,299
Qualified XXXVIII       29,681.540   10.62   315,218
Qualified XLIII       233.474   10.59   2,472
Qualified LIII       27,218.324   13.01   354,110
Qualified LIV       56,949.087   12.92   735,782
Qualified LVI       8,276.090   13.07   108,168
Qualified LIX       1,611.459   14.93   24,059
        6,884,689.804       $ 110,721,631
 
 
 
 
    364            

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

Division/Contract       Units   Unit Value   Extended Value
Diversified Value Portfolio                
Contracts in accumulation period:                
ING MAP PLUS NP8       7,226.880   $ 9.44   $ 68,222
ING MAP PLUS NP28       1,275.423   9.01   11,492
        8,502.303       $ 79,714
Equity Income Portfolio                
Contracts in accumulation period:                
ING MAP PLUS NP11       9,715.185   $ 9.76   $ 94,820
ING MAP PLUS NP14       263.703   9.69   2,555
ING MAP PLUS NP15       3,615.562   9.67   34,962
ING MAP PLUS NP23       1,951.294   9.49   18,518
ING MAP PLUS NP28       1,468.149   9.38   13,771
        17,013.893       $ 164,626
Small Company Growth Portfolio                
Contracts in accumulation period:                
ING MAP PLUS NP8       597.506   $ 7.93   $ 4,738
ING MAP PLUS NP13       1,639.194   7.84   12,851
ING MAP PLUS NP14       2,717.991   7.82   21,255
ING MAP PLUS NP15       72.249   7.80   564
ING MAP PLUS NP28       3,269.386   7.57   24,749
        8,296.326       $ 64,157
Wanger International                
Contracts in accumulation period:                
ING Custom Choice 62       826.371   $ 5.63   $ 4,652
ING MAP PLUS NP8       9,541.849   5.70   54,389
ING MAP PLUS NP9       1,654.930   5.69   9,417
ING MAP PLUS NP12       151.694   5.68   862
ING MAP PLUS NP13       43.349   5.67   246
ING MAP PLUS NP15       83.140   5.66   471
ING MAP PLUS NP18       1,483.320   5.65   8,381
Qualified VI       196,246.288   5.63   1,104,867
Qualified XII (0.00)       106.734   5.75   614
Qualified XII (0.10)       94.948   5.74   545
Qualified XII (0.25)       275.166   5.72   1,574
Qualified XII (0.30)       6,520.733   5.72   37,299
Qualified XII (0.40)       5,298.820   5.71   30,256
Qualified XII (0.50)       408,172.311   5.70   2,326,582
Qualified XII (0.55)       5,342.340   5.70   30,451
Qualified XII (0.65)       1,375.105   5.69   7,824
Qualified XII (0.70)       6,648.625   5.68   37,764
Qualified XII (0.75)       141,151.681   5.68   801,742
Qualified XII (0.80)       23,373.492   5.67   132,528
Qualified XII (0.85)       62,225.347   5.67   352,818
Qualified XII (0.90)       2,310.133   5.66   13,075
Qualified XII (0.95)       25,579.309   5.66   144,779
Qualified XII (1.00)       237,476.922   5.65   1,341,745
Qualified XII (1.05)       6,418.607   5.65   36,265
Qualified XII (1.10)       3,047.681   5.64   17,189
 
 
 
    365            

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

Division/Contract       Units   Unit Value   Extended Value
Wanger International (continued)                
Qualified XII (1.15)       7,871.876   $ 5.64   $ 44,397
Qualified XII (1.20)       2,122.817   5.63   11,951
Qualified XII (1.25)       8,775.412   5.63   49,406
Qualified XII (1.30)       0.712   5.62   4
Qualified XII (1.40)       88.938   5.62   500
Qualified XII (1.50)       1,374.824   5.61   7,713
Qualified XV       772.428   5.66   4,372
Qualified XVI       4,365.053   5.61   24,488
Qualified XVII       990.673   5.63   5,577
Qualified XXI       2,793.697   5.67   15,840
Qualified XXV       7,504.545   5.69   42,701
Qualified XXVI       1,127.963   5.68   6,407
Qualified XXXVIII       5,143.246   5.12   26,333
Qualified XLIII       132.483   5.11   677
Qualified LIII       1,678.946   5.71   9,587
Qualified LIV       10,463.081   5.67   59,326
Qualified LVI       304.433   5.73   1,744
Qualified LIX       2,057.246   5.70   11,726
        1,203,017.268       $ 6,819,084
Wanger Select                
Contracts in accumulation period:                
ING Custom Choice 62       1,422.773   $ 8.25   $ 11,738
Qualified V       25.612   7.94   203
Qualified VI       1,008,916.966   8.00   8,071,336
Qualified X (1.15)       31,462.384   8.34   262,396
Qualified X (1.25)       43,853.565   8.30   363,985
Qualified XII (0.00)       1,437.075   8.48   12,186
Qualified XII (0.05)       166,678.487   8.46   1,410,100
Qualified XII (0.10)       11.826   8.44   100
Qualified XII (0.25)       841.345   8.38   7,050
Qualified XII (0.30)       104,462.760   8.36   873,309
Qualified XII (0.35)       1,293.803   8.34   10,790
Qualified XII (0.40)       20,391.573   8.32   169,658
Qualified XII (0.50)       771,205.419   8.28   6,385,581
Qualified XII (0.55)       77,282.116   8.26   638,350
Qualified XII (0.60)       9,785.817   8.24   80,635
Qualified XII (0.65)       318,946.386   8.22   2,621,739
Qualified XII (0.70)       60,884.388   8.20   499,252
Qualified XII (0.75)       234,334.562   8.19   1,919,200
Qualified XII (0.80)       71,741.039   8.17   586,124
Qualified XII (0.85)       228,012.427   8.15   1,858,301
Qualified XII (0.90)       17,195.841   8.13   139,802
Qualified XII (0.95)       166,317.703   8.11   1,348,837
Qualified XII (1.00)       736,136.258   8.09   5,955,342
Qualified XII (1.05)       18,915.959   8.07   152,652
Qualified XII (1.10)       17,632.255   8.05   141,940
Qualified XII (1.15)       38,324.624   8.03   307,747
 
 
 
    366            

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

Division/Contract       Units   Unit Value   Extended Value
Wanger Select (continued)                
Qualified XII (1.20)       3,397.122   $ 8.02   $ 27,245
Qualified XII (1.25)       44,493.618   8.00   355,949
Qualified XII (1.30)       602.504   7.98   4,808
Qualified XII (1.35)       180.039   7.96   1,433
Qualified XII (1.40)       5,239.139   7.94   41,599
Qualified XII (1.45)       148.179   7.92   1,174
Qualified XII (1.50)       789.327   7.90   6,236
Qualified XV       2,710.734   8.11   21,984
Qualified XVI       17,240.111   7.90   136,197
Qualified XVII       7.906   8.06   64
Qualified XVIII       4,785.536   8.40   40,199
Qualified XXI       13,330.541   8.17   108,911
Qualified XXV       18,931.409   8.20   155,238
Qualified XXVI       2,823.872   8.15   23,015
Qualified XXXVIII       20,090.226   4.82   96,835
Qualified XLIII       1,348.196   4.80   6,471
Qualified LIII       14,913.873   7.98   119,013
Qualified LIV       33,603.474   7.93   266,476
Qualified LVI       4,520.327   8.02   36,253
Qualified LIX       1,283.593   8.35   10,718
        4,337,952.689       $ 35,288,171
Wanger USA                
Contracts in accumulation period:                
ING Custom Choice 62       1,746.145   $ 8.54   $ 14,912
Qualified V       22.835   8.34   190
Qualified VI       427,875.544   8.40   3,594,155
Qualified X (1.15)       3,091.986   8.83   27,302
Qualified X (1.25)       20,388.572   8.80   179,419
Qualified XII (0.05)       35,740.556   8.88   317,376
Qualified XII (0.10)       24.493   8.86   217
Qualified XII (0.25)       395.885   8.80   3,484
Qualified XII (0.30)       54,767.712   8.78   480,861
Qualified XII (0.40)       21,375.568   8.74   186,822
Qualified XII (0.50)       153,558.144   8.70   1,335,956
Qualified XII (0.55)       18,327.425   8.68   159,082
Qualified XII (0.60)       8,507.469   8.66   73,675
Qualified XII (0.65)       29,735.608   8.64   256,916
Qualified XII (0.70)       45,113.014   8.62   388,874
Qualified XII (0.75)       73,553.576   8.60   632,561
Qualified XII (0.80)       13,156.703   8.58   112,885
Qualified XII (0.85)       115,161.562   8.56   985,783
Qualified XII (0.90)       4,954.343   8.54   42,310
Qualified XII (0.95)       59,082.892   8.52   503,386
Qualified XII (1.00)       495,853.629   8.50   4,214,756
Qualified XII (1.05)       4,083.737   8.48   34,630
Qualified XII (1.10)       15,976.338   8.46   135,160
Qualified XII (1.15)       13,781.547   8.44   116,316
 
 
 
    367            

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

Division/Contract       Units   Unit Value   Extended Value
Wanger USA (continued)                
Qualified XII (1.20)       1,032.163   $ 8.42   $ 8,691
Qualified XII (1.25)       32,657.238   8.40   274,321
Qualified XII (1.30)       488.768   8.38   4,096
Qualified XII (1.35)       52.798   8.36   441
Qualified XII (1.40)       4,340.306   8.34   36,198
Qualified XII (1.45)       4,831.669   8.32   40,199
Qualified XII (1.50)       275.460   8.30   2,286
Qualified XV       386.681   8.52   3,295
Qualified XVI       13,763.243   8.30   114,235
Qualified XVIII       63.115   8.89   561
Qualified XXI       10,212.293   8.58   87,621
Qualified XXV       11,246.883   8.61   96,836
Qualified XXVI       2,498.564   8.56   21,388
Qualified XXXVIII       8,653.795   5.84   50,538
Qualified XLIII       87.961   5.83   513
Qualified LIII       681.175   7.89   5,374
Qualified LIV       16,919.389   7.84   132,648
Qualified LVI       2,888.854   7.93   22,909
        1,727,355.638       $ 14,699,178
Washington Mutual Investors FundSM, Inc. -                
Class R-3                
Contracts in accumulation period:                
ING MAP PLUS NP1       21,121.234   $ 9.05   $ 191,147
ING MAP PLUS NP6       2,059.829   8.94   18,415
ING MAP PLUS NP8       5,313.444   8.90   47,290
ING MAP PLUS NP9       43,421.249   8.87   385,146
ING MAP PLUS NP11       42,506.890   8.83   375,336
ING MAP PLUS NP12       5,536.141   8.81   48,773
ING MAP PLUS NP13       87.601   8.79   770
ING MAP PLUS NP14       79,788.009   8.77   699,741
ING MAP PLUS NP15       64,539.288   8.74   564,073
ING MAP PLUS NP16       16,867.487   8.72   147,084
ING MAP PLUS NP17       15,133.078   8.70   131,658
ING MAP PLUS NP18       9,234.194   8.68   80,153
ING MAP PLUS NP19       6,315.890   8.66   54,696
ING MAP PLUS NP20       78,929.421   8.64   681,950
ING MAP PLUS NP21       17,697.422   8.62   152,552
ING MAP PLUS NP22       13,865.781   8.59   119,107
ING MAP PLUS NP23       20.480   8.57   176
ING MAP PLUS NP24       405.843   8.55   3,470
ING MAP PLUS NP26       744.865   8.51   6,339
ING MAP PLUS NP27       444.664   8.49   3,775
ING MAP PLUS NP28       7,888.630   8.47   66,817
ING MAP PLUS NP29       12,694.854   8.45   107,272
ING MAP PLUS NP30       2,677.539   8.43   22,572
ING MAP PLUS NP32       307.486   8.39   2,580
        447,601.319       $ 3,910,892
 
 
 
 
    368            

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

Division/Contract       Units   Unit Value   Extended Value
Washington Mutual Investors FundSM, Inc. -                
Class R-4                
Contracts in accumulation period:                
ING Custom Choice 62       7,367.138   $ 8.91   $ 65,641
Qualified V       3,320.319   8.66   28,754
Qualified VI       1,928,971.628   8.72   16,820,633
Qualified XII (0.00)       1,205.842   9.25   11,154
Qualified XII (0.25)       183.979   9.14   1,682
Qualified XII (0.30)       154,598.736   9.12   1,409,940
Qualified XII (0.40)       52,508.841   9.07   476,255
Qualified XII (0.50)       58,253.539   9.03   526,029
Qualified XII (0.55)       36,208.913   9.01   326,242
Qualified XII (0.60)       66,476.825   8.99   597,627
Qualified XII (0.65)       40,223.375   8.97   360,804
Qualified XII (0.70)       86,039.924   8.95   770,057
Qualified XII (0.75)       284,358.058   8.93   2,539,317
Qualified XII (0.80)       841,888.490   8.91   7,501,226
Qualified XII (0.85)       342,968.343   8.89   3,048,989
Qualified XII (0.90)       73,847.947   8.86   654,293
Qualified XII (0.95)       317,989.005   8.84   2,811,023
Qualified XII (1.00)       1,086,016.528   8.82   9,578,666
Qualified XII (1.05)       41,856.664   8.80   368,339
Qualified XII (1.10)       74,632.902   8.78   655,277
Qualified XII (1.15)       60,152.830   8.76   526,939
Qualified XII (1.20)       29,780.406   8.74   260,281
Qualified XII (1.25)       169,986.133   8.72   1,482,279
Qualified XII (1.35)       5,578.145   8.68   48,418
Qualified XII (1.40)       18,178.268   8.66   157,424
Qualified XII (1.45)       1,528.828   8.64   13,209
Qualified XII (1.50)       148.666   8.62   1,282
Qualified XIII       104.201   8.84   921
Qualified XV       4,706.114   8.84   41,602
Qualified XVI       40,290.491   8.62   347,304
Qualified XVII       12,502.889   8.79   109,900
Qualified XXV       15,865.566   8.94   141,838
Qualified XXVI       1,126.332   8.89   10,013
Qualified XXVII       1,016,204.626   8.43   8,566,605
Qualified XXXVIII       22,899.963   6.45   147,705
Qualified XLIII       176.966   6.43   1,138
Qualified LIII       5,644.562   8.68   48,995
Qualified LIV       48,155.350   8.62   415,099
Qualified LVI       8,135.106   8.72   70,938
Qualified LIX       18.334   9.10   167
        6,960,100.772       $ 60,944,005
Wells Fargo Advantage Small Cap Value Fund -                
Class A                
Contracts in accumulation period:                
Qualified XII (1.00)       6,502.914   $ 7.12   $ 46,301
 
 
 
 
    369            

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

ING MAP PLUS

Group contracts issued in connection with ING MAP Plus NP, shown separately for
differing daily asset charges.

Qualified I

Individual Contracts issued prior to May 1, 1975 in connection with "Qualified Corporate
Retirement Plans" established pursuant to Section 401 of the Internal Revenue Code
("Code"); tax-deferred annuity plans established by the public school systems and tax-
exempt organizations pursuant to Section 403(b) of the Code, and certain individual
retirement annuity plans established by or on behalf of individuals pursuant to Section
408(b) of the Code; individual Contracts issued prior to November 1, 1975 in connection
with "H.R. 10 Plans" established by persons entitled to the benefits of the Self-Employed
Individuals Tax Retirement Act of 1962, as amended; allocated group Contracts issued
prior to May 1, 1975 in connection with qualified corporate retirement plans; and group
Contracts issued prior to October 1, 1978 in connection with tax-deferred annuity plans.

Qualified V

Certain group AetnaPlus Contracts issued since August 28, 1992 in connection with
"Optional Retirement Plans" established pursuant to Section 403(b) or 401(a) of the
Internal Revenue Code.

Qualified VI

Certain group AetnaPlus Contracts issued in connection with tax-deferred annuity plans,
Retirement Plus plans and deferred compensation plans since August 28, 1992.

Qualified VII

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

Qualified VIII

Group AetnaPlus Contracts issued in connection with Tax-Deferred Annuity Plans and
Deferred Compensation Plans adopted by state and local governments since June 30,
1993.

Qualified IX

Certain large group Contracts (Jumbo) that were converted to ACES, an administrative
system (previously valued under Qualified VI).

                                                          370

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

Qualified X

Individual retirement annuity and Simplified Employee Pension (“SEP”) plans issued or
converted to ACES, an administrative system.

Qualified XII

Group Retirement Plus and Voluntary TDA Contracts issued since 1996 in connection
with plans established pursuant to Section 403(b) or 401(a) of the Internal Revenue Code,
shown separately by applicable daily charge; and Contracts issued since October 1, 1996
in connection with optional retirement plans established pursuant to Section 403(b) or
403(a) of the Internal Revenue Code.

Qualified XV

Certain existing Contracts issued in connection with deferred compensation plans issued
through product exchange on December 16, 1996 (previously valued under Qualified VI),
and new Contracts issued after that date in connection with certain deferred compensation
plans.

Qualified XVI

Group AetnaPlus Contracts assessing an administrative expense charge effective April 7,
1997 issued in connection with tax-deferred annuity plans, Retirement Plus plans and
deferred compensation plans.

Qualified XVII

Group AetnaPlus Contracts containing contractual limits on fees issued in connection
with tax-deferred annuity plans and deferred compensation plans, which resulted in
reduced daily charges for certain funding options effective May 29, 1997.

Qualified XVIII

Individual retirement annuity and SEP plan Contracts containing contractual limits on
fees, which resulted in reduced daily charges for certain funding options effective May
29, 1997.

Qualified XIX

Group Corporate 401 Contracts containing contractual limits on fees, which resulted in
reduced daily charges for certain funding options effective May 29, 1997.

                                                          371

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

Qualified XX

Group HR 10 Contracts containing contractual limits on fees, which resulted in reduced
daily charges for certain funding options effective May 29, 1997.

Qualified XXI

Certain existing Contracts issued in connection with deferred compensation plans having
Contract modifications effective May 20, 1999.

Qualified XXII

Certain existing Contracts issued in connection with deferred compensation plans having
Contract modifications effective May 20, 1999.

Qualified XXV

Group Contracts issued in connection with Aetna Government Custom Choice plans
having Contract modifications effective October 2000 to lower mortality and expense fee.

Qualified XXVI

Group Contracts issued in connection with Aetna Government Custom Choice plans
having Contract modifications effective October 2000 to lower mortality and expense fee.

Qualified XXVII

Group Contracts issued in connection with tax deferred annuity plans having Contract
modifications effective February 2000 to lower mortality and expense fee.

Qualified XXVIII

Group Contracts issued in connection with optional retirement plans having Contract
modifications effective February 2000 to lower mortality and expense fee.

Qualified XXIX

Individual Contracts issued in connection with tax-deferred annuity plans and individual
retirement annuity plans since May 1, 1975, H.R. 10 Plans since November 1, 1975,
group Contracts issued since October 1, 1978 in connection with tax-deferred annuity
plans and group Contracts issued since May 1, 1979 in connection with deferred
compensation plans adopted by state and local governments and H.R. 10 Plans.

                                                          372

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

Qualified XXX

Individual Contracts issued in connection with tax-deferred annuity plans and individual
retirement annuity plans since May 1, 1975, H.R. 10 Plans since November 1, 1975,
group Contracts issued since October 1, 1978 in connection with tax-deferred annuity
plans and group Contracts issued since May 1, 1979 in connection with deferred
compensation plans adopted by state and local governments and H.R. 10 Plans.

Qualified XXXI

Group Contracts issued in connection with the San Bernadino 457(f) Plan at a zero basis
point charge, effective in 2004.

Qualified XXXII

Individual Contracts issued in connection with the 1992/1994 Pension IRA at 125 basis
points, effective in 2004.

Qualified XXXIII

Group Contracts issued in connection with Multiple Sponsored Retirement Options
product at 40 and 65 basis points.

Qualified XXXV

Group Contracts issued in connection with Multiple Sponsored Retirement Options
product at 35 basis points.

Qualified XXXVI

Group Contracts issued in connection with Multiple Sponsored Retirement Options
product at 55 and 80 basis points.

Qualified XXXVII

Group Contracts issued in connection with ING Retirement Plus and ING Voluntary TDA
products at a zero basis point charge.

Qualified L

Group Contracts issued in connection with Education Custom Choice 457, ING
Retirement Plus and ING Voluntary TDA products at a zero basis point charge.

                                                          373

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

Qualified LIII

Group Contracts issued in connection with ING Custom Choice Original and Value
product at 45 basis point charge.

Qualified LIV

Group Contracts issued in connection with ING Custom Choice Original and Value
product at 80 basis point charge.

Qualified LV

Group Contracts issued in connection with ING Custom Choice Original and Value
product at 30 basis point charge.

Qualified LVI

Group Contracts issued in connection with ING Custom Choice Original and Value
product at 25 basis point charge.







                                                          374

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

10.      Financial Highlights
 
  A summary of unit values, units outstanding and net assets for variable annuity Contracts, expense ratios, excluding expenses of underlying funds, investment income ratios, and total return for the years ended December 31, 2008, 2007, 2006, 2005 and 2004, follows:
 
                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
AIM Mid Cap Core Equity Fund - Class A                                                
2008   23   $9.81   to   $11.62   $232   0.80%   0.30%   to   1.60%   -28.60%   to   -27.91%
2007   19   $13.74   to   $16.18   $270   1.19%   0.65%   to   1.60%   8.75%   to   9.19%
2006   18   $12.67   to   $14.87   $234   0.76%   0.65%   to   1.70%   9.99%   to   10.40%
2005   16   $11.62   to   $13.52   $188   -   0.65%   to   1.60%   5.73%   to   6.77%
2004   18   $10.99   to   $11.08   $196   (a)   0.65%   to   1.60%       (a)    
AIM Small Cap Growth Fund - Class A                                                
2008   2       $8.69       $20   -       1.00%       -39.40%
2007   2       $14.34       $34   -       1.00%       10.22%
2006   1       $13.01       $17   -       1.00%       13.23%
2005   1       $11.49       $8   0.25%       1.00%           7.18%
2004   -       $10.72       -   -       1.00%           -    
AIM Global Health Care Fund - Investor Class                                                
2008   5   $24.42   to   $25.33   $122   -   0.55%   to   1.60%   -29.52%   to   -28.79%
2007   4   $34.39   to   $35.57   $144   -   0.65%   to   2.00%   9.62%   to   10.12%
2006   4   $31.61   to   $31.99   $114   -   0.90%   to   1.70%   3.36%   to   3.43%
2005   2   $30.81   to   $30.93   $68   (b)   0.90%   to   1.65%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
AIM V.I. Capital Appreciation Fund - Series I Shares                                                
2008   2,795   $4.01   to   $8.14   $17,871   -   0.00%   to   1.50%   -43.39%   to   -42.52%
2007   2,976   $7.08   to   $14.33   $33,456   -   0.00%   to   1.50%   10.28%   to   11.95%
2006   3,257   $6.42   to   $12.36   $32,996   0.07%   0.00%   to   1.50%   4.72%   to   6.35%
2005   2,001   $6.22   to   $11.61   $19,374   0.06%   0.00%   to   1.50%   0.10%   to   8.80%
2004   2,282   $5.77   to   $10.80   $20,524   -   0.00%   to   1.50%   4.97%   to   14.62%
 
 
 
 
            375                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
AIM V.I. Core Equity Fund - Series I Shares                                                
2008   4,319   $5.93   to   $10.25   $31,654   2.26%   0.00%   to   1.95%   -31.20%   to   -30.12%
2007   4,536   $8.58   to   $14.75   $48,225   1.11%   0.00%   to   1.50%   6.45%   to   8.04%
2006   5,005   $8.01   to   $13.60   $49,719   0.66%   0.00%   to   1.50%   15.02%   to   16.80%
2005   3,691   $6.93   to   $11.81   $31,783   1.36%   0.00%   to   1.50%   3.66%   to   5.23%
2004   4,620   $6.65   to   $11.18   $38,313   0.91%   0.00%   to   1.50%   7.32%   to   38.44%
AllianceBernstein Growth and Income Fund, Inc. -                                                
Class A                                                
2008   19   $7.62   to   $7.94   $146   2.26%   0.70%   to   1.55%   -41.57%   to   -41.19%
2007   9   $13.01   to   $13.50   $120   1.08%   0.70%   to   1.65%   3.75%   to   4.39%
2006   5   $12.54   to   $12.76   $65   1.35%   1.05%   to   1.65%   15.48%   to   15.48%
2005   4   $10.98   to   $10.99   $42   (f)   1.20%   to   1.25%       (f)    
2004   2       $10.75       $22   (a)       0.95%           (a)    
AllianceBernstein Growth and Income Portfolio -                                                
Class A                                                
2008   45   $8.20   to   $8.30   $371   2.17%   1.00%   to   1.25%   -41.39%   to   -41.18%
2007   46   $13.99   to   $14.11   $645   1.66%   1.00%   to   1.25%   3.78%   to   4.06%
2006   41   $13.48   to   $13.56   $557   1.74%   1.00%   to   1.25%   15.91%   to   15.97%
2005   22   $11.63   to   $11.65   $260   1.29%   1.15%   to   1.25%       3.56%
2004   4       $11.23       $50   (a)       1.25%           (a)    
Allianz NFJ Large-Cap Value Fund - Institutional                                                
Class                                                
2008   95   $6.09   to   $6.14   $580   (e)   0.00%   to   1.25%       (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
Allianz NFJ Small-Cap Value Fund - Class A                                                
2008   29   $11.64   to   $12.02   $336   1.27%   0.55%   to   1.20%   -27.34%   to   -27.09%
2007   28   $16.02   to   $16.30   $454   1.93%   0.75%   to   1.20%   4.84%   to   5.30%
2006   31   $15.28   to   $15.50   $477   1.87%   0.70%   to   1.20%   17.18%   to   17.59%
2005   30   $13.04   to   $13.14   $398   3.10%   0.80%   to   1.20%       9.33%
2004   4       $12.00       $53   (a)       0.90%           (a)    
 
 
 
            376                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Amana Growth Fund                                                
2008   5       $7.36       $36   (e)       0.05%           (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
Amana Income Fund                                                
2008   6       $8.12       $46   (e)       0.05%           (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
American Balanced Fund® - Class R-3                                                
2008   439   $8.96   to   $9.59   $4,066   2.93%   0.00%   to   1.40%   -26.93%   to   -25.95%
2007   506   $12.24   to   $12.95   $6,361   2.43%   0.00%   to   1.45%   4.70%   to   5.95%
2006   422   $11.66   to   $12.12   $5,014   2.18%   0.20%   to   1.55%   9.69%   to   11.20%
2005   340   $10.63   to   $10.89   $3,656   2.07%   0.25%   to   1.55%   1.43%   to   2.54%
2004   120   $10.50   to   $10.61   $1,269   (a)   0.30%   to   1.45%       (a)    
American Century Income & Growth Fund - A Class                                                
2008   484   $7.64   to   $23.62   $3,705   1.55%       1.00%       -35.46%   to   -35.42%
2007   471   $11.83   to   $36.60   $5,597   1.28%   1.00%   to   1.10%   -1.62%   to   -1.50%
2006   495   $12.01   to   $37.17   $5,990   1.59%   1.00%   to   1.10%   15.59%   to   15.70%
2005   539   $10.38   to   $31.95   $5,629   1.78%   1.00%   to   1.10%   3.36%   to   3.49%
2004   433   $10.03   to   $30.91   $4,389   1.83%   1.00%   to   1.10%   11.51%   to   11.57%
Ariel Appreciation Fund                                                
2008   57   $6.63   to   $7.09   $395   0.62%   0.75%   to   2.10%   -41.99%   to   -41.32%
2007   49   $11.43   to   $11.96   $578   0.50%   0.95%   to   2.10%   -3.27%   to   -2.29%
2006   52   $11.91   to   $12.24   $629   0.05%   0.95%   to   1.90%   8.87%   to   9.87%
2005   35   $10.94   to   $11.16   $394   0.34%   0.85%   to   1.90%   1.47%   to   2.01%
2004   18   $10.88   to   $10.94   $192   (a)   0.85%   to   1.40%       (a)    
 
 
 
 
            377                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Ariel Fund                                                
       2008   101   $6.14   to   $6.51   $638   1.36%   0.60%   to   1.80%   -49.17%   to   -48.54%
       2007   68   $11.93   to   $12.65   $838   0.40%   0.60%   to   2.10%   -3.52%   to   -2.40%
       2006   52   $12.51   to   $12.91   $660   -   0.70%   to   1.80%   8.48%   to   9.22%
       2005   46   $11.56   to   $11.73   $537   0.58%   0.95%   to   1.70%   -0.43%   to   -0.34%
       2004   13   $11.66   to   $11.70   $154   (a)   1.25%   to   1.60%       (a)    
Artisan International Fund - Investor Shares                                                
       2008   57   $5.55   to   $5.82   $324   (e)   0.00%   to   1.50%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
The Bond Fund of AmericaSM, Inc. - Class R-4                                                
       2008   222   $8.68   to   $8.77   $1,929   (e)   0.00%   to   1.50%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
Calvert Social Balanced Portfolio                                                
       2008   2,367   $6.80   to   $22.80   $35,890   2.51%   0.00%   to   1.95%   -32.37%   to   -31.38%
       2007   2,618   $12.00   to   $33.54   $59,468   2.34%   0.00%   to   1.50%   1.21%   to   2.75%
       2006   2,925   $11.75   to   $32.97   $65,397   2.25%   0.00%   to   1.50%   7.14%   to   8.80%
       2005   3,274   $11.39   to   $30.61   $66,533   1.77%   0.00%   to   1.50%   4.07%   to   5.61%
       2004   3,412   $10.91   to   $29.27   $66,170   1.71%   0.00%   to   1.50%   6.63%   to   8.01%
ColumbiaSM Acorn Fund® - Class Z                                                
       2008   126   $6.34   to   $6.39   $807   (e)   0.00%   to   1.25%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
 
 
 
 
            378                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Columbia Mid Cap Value Fund - Class A                                            
2008   258   $6.07   to   $6.13   $1,575   (e)   0.00%   to   1.55%   (e)    
2007   (e)       (e)       (e)   (e)       (e)       (e)    
2006   (e)       (e)       (e)   (e)       (e)       (e)    
2005   (e)       (e)       (e)   (e)       (e)       (e)    
2004   (e)       (e)       (e)   (e)       (e)       (e)    
Columbia Mid Cap Value Fund - Class Z                                            
2008   91   $6.11   to   $6.14   $561   (e)   0.00%   to   0.80%   (e)    
2007   (e)       (e)       (e)   (e)       (e)       (e)    
2006   (e)       (e)       (e)   (e)       (e)       (e)    
2005   (e)       (e)       (e)   (e)       (e)       (e)    
2004   (e)       (e)       (e)   (e)       (e)       (e)    
DWS Equity 500 Index Fund - Class S                                            
2008   18       $9.51       $168   2.02%       1.00%       -37.72%
2007   15       $15.27       $228   2.03%       1.00%       4.30%
2006   11       $14.64       $167   1.85%       1.00%       14.46%
2005   5       $12.79       $66   -       1.00%       3.65%
2004   -       $12.34       $2   (a)       1.00%       (a)    
EuroPacific Growth Fund® - Class R-3                                            
2008   622   $10.99   to   $11.98   $7,252   1.89%   0.00%   to   1.75%   -41.76% to   -40.69%
2007   486   $18.87   to   $20.20   $9,594   2.23%   0.00%   to   1.75%   16.70% to   18.27%
2006   225   $16.29   to   $16.91   $3,767   1.95%   0.25%   to   1.55%   19.60% to   21.13%
2005   87   $13.62   to   $13.96   $1,208   1.93%   0.25%   to   1.55%   19.09% to   20.14%
2004   48   $11.47   to   $11.58   $553   (a)   0.40%   to   1.40%   (a)    
EuroPacific Growth Fund® - Class R-4                                            
2008   13,832   $5.88   to   $12.16   $155,758   2.22%   0.00%   to   1.50%   -41.44% to   -40.56%
2007   11,118   $9.92   to   $20.24   $212,894   2.15%   0.00%   to   1.50%   17.11% to   18.85%
2006   8,654   $14.58   to   $17.16   $141,230   2.13%   0.00%   to   1.50%   20.03% to   21.40%
2005   4,523   $12.09   to   $14.26   $61,647   2.63%   0.40%   to   1.50%   19.25% to   20.43%
2004   1,426   $11.43   to   $11.96   $16,360   (a)   0.55%   to   1.50%   (a)    
 
 
 
 
            379                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Evergreen Special Values Fund - Class A                                                
2008   4,235   $6.42   to   $16.03   $62,156   1.09%   0.00%   to   1.55%   -32.80%   to   -31.95%
2007   4,354   $12.72   to   $23.16   $94,562   1.21%   0.30%   to   1.55%   -9.51%   to   -8.57%
2006   4,425   $15.03   to   $24.96   $105,934   0.42%   0.50%   to   1.55%   19.54%   to   20.78%
2005   3,781   $12.57   to   $20.60   $75,301   0.93%   0.55%   to   1.55%   8.74%   to   9.85%
2004   2,610   $11.56   to   $18.76   $47,554   0.96%   0.55%   to   1.55%   18.85%   to   18.90%
Fidelity® VIP Equity-Income Portfolio - Initial Class                                                
2008   16,023   $5.46   to   $19.17   $213,311   2.47%   0.00%   to   2.15%   -43.84%   to   -42.62%
2007   17,821   $13.07   to   $33.82   $426,528   1.84%   0.00%   to   2.15%   -0.38%   to   1.55%
2006   18,954   $13.23   to   $33.70   $455,731   3.30%   0.00%   to   1.95%   17.81%   to   20.16%
2005   19,555   $11.23   to   $28.36   $401,206   1.61%   0.00%   to   1.95%   4.15%   to   5.90%
2004   21,024   $10.84   to   $27.10   $405,088   1.43%   0.00%   to   1.95%   9.88%   to   11.29%
Fidelity® VIP Growth Portfolio - Initial Class                                                
2008   14,257   $5.14   to   $17.49   $159,095   0.83%   0.00%   to   1.85%   -48.12%   to   -47.17%
2007   15,005   $13.28   to   $33.50   $329,714   0.83%   0.00%   to   1.85%   24.81%   to   26.93%
2006   16,905   $10.60   to   $26.69   $295,822   0.40%   0.00%   to   1.65%   5.20%   to   6.89%
2005   19,931   $9.98   to   $25.27   $329,184   0.51%   0.00%   to   1.80%   3.98%   to   5.79%
2004   24,025   $9.50   to   $24.16   $377,338   0.26%   0.00%   to   1.65%   1.80%   to   3.11%
Fidelity® VIP High Income Portfolio - Initial Class                                                
2008   657   $7.58   to   $8.31   $5,016   8.83%   0.95%   to   1.50%   -26.13%   to   -25.69%
2007   735   $10.20   to   $11.25   $7,556   8.27%   1.00%   to   1.50%   1.26%   to   1.78%
2006   767   $10.04   to   $11.11   $7,752   8.35%   1.00%   to   1.50%   9.57%   to   10.12%
2005   647   $9.12   to   $9.19   $6,022   14.48%   1.00%   to   1.10%   1.56%   to   1.77%
2004   568   $8.98   to   $9.03   $5,210   9.10%   1.00%   to   1.50%   8.40%   to   8.45%
Fidelity® VIP Overseas Portfolio - Initial Class                                                
2008   2,600   $5.50   to   $14.49   $29,665   2.56%   0.00%   to   1.50%   -44.66%   to   -43.84%
2007   2,877   $13.33   to   $25.80   $60,698   3.37%   0.00%   to   1.50%   15.56%   to   17.27%
2006   2,821   $11.47   to   $22.00   $51,710   0.89%   0.00%   to   1.50%   16.32%   to   18.09%
2005   2,828   $9.82   to   $18.63   $44,759   0.65%   0.00%   to   1.50%   5.21%   to   19.04%
2004   3,036   $8.33   to   $15.65   $41,057   1.10%   0.00%   to   1.50%   11.91%   to   27.00%
 
 
 
 
            380                                    

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Fidelity® VIP Contrafund® Portfolio - Initial Class                                                
2008   39,866   $5.64   to   $24.16   $722,264   1.02%   0.00%   to   2.15%   -43.75%   to   -29.20%
2007   40,117   $14.19   to   $42.45   $1,311,557   0.95%   0.00%   to   2.15%   -6.90%   to   17.56%
2006   40,979   $12.07   to   $36.46   $1,176,582   1.31%   0.00%   to   1.95%   9.57%   to   11.73%
2005   37,845   $12.96   to   $32.97   $1,008,057   0.26%   0.00%   to   1.95%   14.84%   to   16.95%
2004   32,399   $11.31   to   $28.47   $743,262   0.31%   0.00%   to   1.85%   13.73%   to   15.24%
Fidelity® VIP Index 500 Portfolio - Initial Class                                                
2008   4,127   $18.05   to   $18.22   $75,139   2.23%   0.95%   to   1.00%   -37.63%   to   -37.62%
2007   4,341   $28.94   to   $29.21   $126,698   3.67%   1.00%   to   1.10%   4.29%   to   4.40%
2006   4,609   $27.75   to   $27.98   $128,845   1.65%   1.00%   to   1.10%   14.43%   to   14.58%
2005   4,779   $24.25   to   $24.42   $116,615   1.72%   1.00%   to   1.10%   3.72%   to   3.78%
2004   4,966   $23.38   to   $23.53   $116,763   1.24%   1.00%   to   1.10%   9.41%   to   9.49%
Fidelity® VIP Mid Cap Portfolio - Initial Class                                                
2008   935       $8.56       $8,006   0.55%       -       -39.42%
2007   706       $14.13       $9,972   0.92%       -       15.63%
2006   446       $12.22       $5,451   (c)       -           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
Fidelity® VIP Asset ManagerSM Portfolio - Initial Class                                                
2008   968   $15.95   to   $16.10   $15,560   3.00%   0.95%   to   1.00%   -29.42%
2007   889   $22.60   to   $22.81   $20,260   6.08%   1.00%   to   1.10%   14.20%   to   14.34%
2006   921   $19.79   to   $19.95   $18,360   2.71%   1.00%   to   1.10%   6.17%   to   6.29%
2005   994   $18.64   to   $18.77   $18,646   2.68%   1.00%   to   1.10%   2.93%   to   2.96%
2004   1,116   $18.11   to   $18.23   $20,327   2.80%   1.00%   to   1.10%   4.32%   to   4.47%
Mutual Discovery Fund - Class R                                                
2008   160   $12.35   to   $13.10   $2,067   1.20%   0.35%   to   1.55%   -28.07%   to   -27.22%
2007   138   $17.17   to   $18.00   $2,445   2.27%   0.35%   to   1.55%   9.02%   to   10.43%
2006   89   $15.75   to   $16.30   $1,438   2.06%   0.35%   to   1.55%   20.97%   to   22.16%
2005   51   $13.02   to   $13.27   $667   1.41%   0.55%   to   1.55%   13.95%
2004   16   $11.54   to   $11.60   $186   (a)   0.45%   to   1.05%       (a)    
 
 
 
 
            381                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Franklin Small-Mid Cap Growth Fund - Class A                                                
2008   49   $7.70   to   $8.27   $396   0.17%   0.30%   to   1.75%   -43.55%   to   -43.03%
2007   55   $13.64   to   $14.24   $767   -   0.65%   to   1.75%   9.73%   to   10.99%
2006   44   $12.43   to   $12.83   $556   -   0.65%   to   1.75%   5.76%   to   6.60%
2005   27   $11.80   to   $11.98   $318   -   0.80%   to   1.60%       8.86%
2004   6   $10.84   to   $10.91   $70   (a)   0.90%   to   1.60%       (a)    
Franklin Small Cap Value Securities Fund - Class 2                                                
2008   5,364   $6.33   to   $13.05   $63,473   1.21%   0.00%   to   1.90%   -34.15%   to   -32.98%
2007   5,150   $12.76   to   $19.69   $91,636   0.69%   0.00%   to   1.95%   -4.10%   to   -2.71%
2006   4,814   $13.16   to   $20.37   $88,521   0.64%   0.15%   to   1.75%   15.05%   to   16.53%
2005   4,489   $12.96   to   $17.59   $72,308   0.78%   0.35%   to   1.65%   7.02%   to   8.16%
2004   3,359   $12.11   to   $16.33   $50,132   0.13%   0.00%   to   1.65%   21.91%   to   23.12%
Fundamental Investors, Inc. - Class R-3                                                
2008   2   $6.08   to   $6.12   $13   (e)   0.40%   to   1.35%       (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
Fundamental Investors, Inc. - Class R-4                                                
2008   1,355   $6.09   to   $6.15   $8,280   (e)   0.00%   to   1.50%       (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
The Growth Fund of America® - Class R-3                                                
2008   1,082   $7.03   to   $9.22   $9,558   0.68%   0.00%   to   1.75%   -40.25%   to   -39.22%
2007   848   $11.68   to   $15.17   $12,442   0.92%   0.00%   to   1.75%   8.85%   to   10.36%
2006   584   $10.67   to   $13.63   $7,813   0.76%   0.20%   to   1.55%   8.89%   to   10.29%
2005   319   $12.04   to   $12.34   $3,894   0.65%   0.25%   to   1.55%   12.28%   to   13.54%
2004   122   $10.74   to   $10.86   $1,320   (a)   0.30%   to   1.45%       (a)    
 
 
 
 
            382                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
The Growth Fund of America® - Class R-4                                                
2008   20,363   $5.91   to   $9.34   $181,120   0.98%   0.00%   to   1.50%   -40.00%   to   -39.03%
2007   16,882   $9.72   to   $15.32   $248,778   1.08%   0.00%   to   1.50%   9.19%   to   10.52%
2006   14,655   $12.90   to   $13.73   $196,584   0.91%   0.30%   to   1.50%   9.29%   to   10.56%
2005   11,850   $11.74   to   $12.54   $145,130   0.93%   0.00%   to   1.50%   12.50%   to   13.63%
2004   4,738   $10.80   to   $11.14   $51,341   (a)   0.45%   to   1.50%       (a)    
The Income Fund of America® - Class R-3                                                
2008   158   $9.22   to   $10.05   $1,535   4.57%   0.00%   to   1.75%   -30.42%   to   -29.18%
2007   121   $13.25   to   $14.19   $1,660   3.34%   0.00%   to   1.75%   1.83%   to   3.08%
2006   77   $13.12   to   $13.65   $1,032   3.12%   0.20%   to   1.55%   18.13%   to   19.60%
2005   26   $11.14   to   $11.38   $295   3.46%   0.30%   to   1.45%   1.73%   to   2.71%
2004   10   $10.97   to   $11.08   $110   (a)   0.30%   to   1.40%       (a)    
ING Financial Services Fund - Class A                                                
2008   15   $6.52   to   $6.86   $101   1.69%   0.40%   to   1.45%   -42.35%   to   -41.77%
2007   12   $11.17   to   $11.78   $136   1.82%   0.40%   to   1.75%   -14.51%   to   -13.79%
2006   6   $13.23   to   $13.56   $84   1.20%   0.60%   to   1.45%   16.42%
2005   4   $11.63   to   $11.66   $51   -   0.50%   to   0.65%       7.27%    
2004   1       $10.87       $9   (a)       0.50%           (a)    
ING Real Estate Fund - Class A                                                
2008   133   $9.86   to   $10.59   $1,357   3.35%   0.00%   to   1.45%   -36.10%   to   -35.15%
2007   121   $15.25   to   $16.33   $1,923   2.75%   0.00%   to   1.75%   -17.75%   to   -16.74%
2006   124   $18.70   to   $19.45   $2,373   2.49%   0.20%   to   1.55%   34.10%   to   35.71%
2005   67   $13.99   to   $14.31   $954   4.05%   0.25%   to   1.45%   10.59%   to   11.47%
2004   22   $12.65   to   $12.76   $282   (a)   0.45%   to   1.45%       (a)    
ING GNMA Income Fund - Class A                                                
2008   238   $11.46   to   $12.37   $2,835   3.54%   0.00%   to   1.55%   5.23%   to   6.91%
2007   126   $10.89   to   $11.57   $1,405   3.87%   0.00%   to   1.55%   4.11%   to   5.37%
2006   91   $10.44   to   $10.87   $973   5.45%   0.20%   to   1.55%   2.75%   to   3.93%
2005   69   $10.11   to   $10.44   $712   4.48%   0.25%   to   1.55%   0.99%   to   2.25%
2004   40   $10.10   to   $10.20   $404   (a)   0.30%   to   1.45%       (a)    
 
 
 
 
            383                                    

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Intermediate Bond Fund - Class A                                                
       2008   342   $9.72   to   $10.48   $3,481   4.43%   0.00%   to   1.55%   -11.39%   to   -10.04%
       2007   269   $10.97   to   $11.65   $3,064   4.22%   0.00%   to   1.55%   4.18%   to   5.34%
       2006   151   $10.53   to   $10.95   $1,633   4.65%   0.20%   to   1.55%   2.13%   to   3.33%
       2005   79   $10.31   to   $10.52   $829   3.96%   0.45%   to   1.55%   1.66%   to   2.24%
       2004   52   $10.20   to   $10.29   $535   (a)   0.40%   to   1.40%       (a)    
ING AllianceBernstein Mid Cap Growth Portfolio -                                                
   Service Class                                                
       2008   277   $4.97   to   $7.60   $2,033   -   0.00%   to   1.50%   -47.25%   to   -46.44%
       2007   282   $13.63   to   $14.19   $3,891   -   0.00%   to   1.50%   9.21%   to   10.32%
       2006   262   $12.48   to   $12.69   $3,286   -   0.50%   to   1.50%   0.24%   to   1.20%
       2005   88   $12.45   to   $12.54   $1,096   (b)   0.50%   to   1.50%       (b)    
       2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING BlackRock Large Cap Growth Portfolio -                                                
   Institutional Class                                                
       2008   10,055   $5.87   to   $6.43   $63,303   0.20%   0.00%   to   1.50%   -39.90%   to   -39.03%
       2007   11,126   $9.76   to   $10.53   $115,938   (d)   0.00%   to   1.50%       (d)    
       2006   (d)       (d)       (d)   (d)       (d)           (d)    
       2005   (d)       (d)       (d)   (d)       (d)           (d)    
       2004   (d)       (d)       (d)   (d)       (d)           (d)    
ING BlackRock Large Cap Growth Portfolio - Service                                                
   Class                                                
       2008   12   $7.33   to   $7.41   $86   -   0.00%   to   0.50%   -39.32%   to   -39.11%
       2007   4   $12.08   to   $12.17   $43   -   0.00%   to   0.50%       6.75%
       2006   -       $11.40       -   (c)       -           (c)    
       2005   (c)       (c)       (c)   (c)       (c)           (c)    
       2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING BlackRock Large Cap Growth Portfolio -                                                
   Service 2 Class                                                
       2008   12       $6.33       $79   -       0.35%       -39.43%
       2007   14       $10.45       $147   (d)       0.35%           (d)    
       2006   (d)       (d)       (d)   (d)       (d)           (d)    
       2005   (d)       (d)       (d)   (d)       (d)           (d)    
       2004   (d)       (d)       (d)   (d)       (d)           (d)    
 
 
            384                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Evergreen Health Sciences Portfolio - Service                                            
   Class                                            
       2008   749   $7.07   to   $9.97   $7,198   0.15%   0.00%   to   1.50%   -29.73% to   -28.63%
       2007   460   $13.42   to   $13.97   $6,256   0.13%   0.00%   to   1.50%   6.93% to   8.55%
       2006   351   $12.55   to   $12.87   $4,440   -   0.00%   to   1.50%   12.15% to   13.32%
       2005   129   $11.19   to   $11.29   $1,446   (b)   0.50%   to   1.50%   (b)    
       2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Evergreen Omega Portfolio - Service Class                                            
       2008   4   $9.28   to   $9.40   $35   -   0.00%   to   0.50%   -27.53%
       2007   -       $12.97       -   (d)       -       (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
ING FMRSM Diversified Mid Cap Portfolio - Service                                            
   Class                                            
       2008   2,384   $5.92   to   $9.30   $21,437   0.94%   0.00%   to   1.50%   -40.11% to   -39.14%
       2007   1,307   $9.76   to   $15.28   $19,443   0.12%   0.00%   to   1.85%   12.77% to   14.09%
       2006   1,115   $13.00   to   $13.31   $14,604   -   0.35%   to   1.55%   10.25% to   11.36%
       2005   390   $11.80   to   $11.88   $4,611   (b)   0.50%   to   1.50%   (b)    
       2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Global Real Estate Portfolio - Institutional Class                                            
       2008   5,361   $6.69   to   $6.73   $35,967   (e)   0.00%   to   1.50%   (e)    
       2007   (e)       (e)       (e)   (e)       (e)       (e)    
       2006   (e)       (e)       (e)   (e)       (e)       (e)    
       2005   (e)       (e)       (e)   (e)       (e)       (e)    
       2004   (e)       (e)       (e)   (e)       (e)       (e)    
ING Global Resources Portfolio - Institutional Class                                            
       2008   3       $8.22       $25   2.90%       0.20%       -40.95%
       2007   3       $13.92       $44   (d)       0.20%       (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
 
 
 
            385                            

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Global Resources Portfolio - Service Class                                            
       2008   9,325   $6.00   to   $8.06   $73,573   2.08%   0.00%   to   1.50%   -41.88% to   -41.03%
       2007   8,097   $13.42   to   $13.65   $109,431   (d)   0.00%   to   1.50%   (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
ING Janus Contrarian Portfolio - Service Class                                            
       2008   1,285   $5.32   to   $5.86   $7,405   0.72%   0.00%   to   1.50%   -49.21% to   -49.00%
       2007   403   $11.44   to   $11.49   $4,611   (d)   0.00%   to   0.50%   (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
ING JPMorgan Emerging Markets Equity Portfolio -                                            
   Adviser Class                                            
       2008   18       $9.76       $171   3.71%       0.35%       -51.61%
       2007   18       $20.17       $368   0.94%       0.35%       37.49%
       2006   4       $14.67       $57   (c)       0.35%       (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING JPMorgan Emerging Markets Equity Portfolio -                                            
   Institutional Class                                            
       2008   1,808   $10.20   to   $10.21   $18,447   2.65%   0.95%   to   1.00%   -51.66% to   -51.61%
       2007   2,077       $21.10       $43,831   1.12%       1.00%       37.46%
       2006   1,901       $15.35       $29,171   0.67%       1.00%       34.77%
       2005   1,396       $11.39       $15,902   (b)       1.00%       (b)    
       2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING JPMorgan Emerging Markets Equity Portfolio -                                            
   Service Class                                            
       2008   1,357   $4.89   to   $12.39   $15,725   2.46%   0.00%   to   1.50%   -52.01% to   -51.32%
       2007   1,642   $15.61   to   $25.32   $40,173   0.95%   0.10%   to   1.50%   36.42% to   37.80%
       2006   1,200   $11.43   to   $18.30   $21,610   0.43%   0.40%   to   1.50%   33.78% to   35.12%
       2005   512   $13.38   to   $13.50   $6,873   (b)   0.50%   to   1.50%   (b)    
       2004   (b)       (b)       (b)   (b)       (b)       (b)    
 
 
 
            386                            

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING JPMorgan Small Cap Core Equity Portfolio -                                            
Service Class                                            
2008   241   $6.57   to   $9.15   $2,129   0.48%   0.00%   to   1.50%   -31.00% to   -29.94%
2007   194   $12.55   to   $13.06   $2,468   0.15%   0.00%   to   1.50%   -3.16% to   -2.13%
2006   126   $12.96   to   $13.25   $1,643   -   0.40%   to   1.50%   15.07% to   16.04%
2005   25   $11.28   to   $11.38   $282   (b)   0.50%   to   1.40%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING JPMorgan Value Opportunities Portfolio -                                            
Institutional Class                                            
2008   4   $6.62   to   $6.64   $28   4.00%   1.15%   to   1.25%   -40.09% to   -40.02%
2007   6   $11.05   to   $11.07   $72   4.08%   1.15%   to   1.25%   -2.13% to   -2.04%
2006   2   $11.29   to   $11.30   $26   (c)   1.15%   to   1.25%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING JPMorgan Value Opportunities Portfolio -                                            
Service Class                                            
2008   170   $5.76   to   $6.79   $1,126   3.04%   0.00%   to   1.50%   -40.46% to   -39.54%
2007   166   $10.95   to   $11.23   $1,839   1.80%   0.00%   to   1.50%   -2.58% to   -1.68%
2006   73   $11.24   to   $11.32   $824   (c)   0.50%   to   1.50%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Julius Baer Foreign Portfolio - Service Class                                            
2008   3,034   $5.58   to   $11.53   $33,338   -   0.00%   to   1.50%   -44.46% to   -43.62%
2007   3,036   $17.69   to   $20.46   $59,851   0.08%   0.00%   to   1.50%   14.70% to   16.46%
2006   1,766   $15.30   to   $17.79   $30,166   (c)   0.00%   to   1.50%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Legg Mason Value Portfolio - Service Class                                            
2008   291   $4.12   to   $5.16   $1,448   -   0.00%   to   1.50%   -56.13% to   -55.48%
2007   390   $11.03   to   $11.59   $4,394   -   0.00%   to   1.85%   -7.49% to   -6.28%
2006   282   $12.02   to   $12.30   $3,415   -   0.30%   to   1.55%   4.97% to   5.98%
2005   148   $11.46   to   $11.57   $1,700   (b)   0.50%   to   1.50%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
 
 
 
            387                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Lord Abbett Affiliated Portfolio - Institutional                                            
   Class                                            
       2008   10,392   $6.17   to   $7.22   $73,160   3.25%   0.00%   to   1.95%   -37.67% to   -36.48%
       2007   11,800   $10.99   to   $11.33   $131,763   0.05%   0.20%   to   1.95%   2.79% to   3.78%
       2006   99   $10.77   to   $10.85   $1,068   (c)   0.50%   to   1.50%   (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Lord Abbett Affiliated Portfolio - Service Class                                            
       2008   72   $6.93   to   $7.06   $506   3.33%   0.65%   to   1.35%   -37.45% to   -37.15%
       2007   46   $11.08   to   $11.17   $516   (d)   0.85%   to   1.35%   (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
ING Marsico Growth Portfolio - Institutional Class                                            
       2008   797   $6.45   to   $6.62   $5,214   (e)   0.00%   to   1.50%   (e)    
       2007   (e)       (e)       (e)   (e)       (e)       (e)    
       2006   (e)       (e)       (e)   (e)       (e)       (e)    
       2005   (e)       (e)       (e)   (e)       (e)       (e)    
       2004   (e)       (e)       (e)   (e)       (e)       (e)    
ING Marsico Growth Portfolio - Service Class                                            
       2008   39   $6.59   to   $8.08   $306   0.09%   0.35%   to   1.20%   -40.94% to   -40.60%
       2007   325   $11.39   to   $13.76   $4,327   -   0.00%   to   1.50%   12.43% to   14.19%
       2006   233   $10.11   to   $12.05   $2,747   -   0.00%   to   1.50%   3.34% to   4.46%
       2005   102   $11.37   to   $11.47   $1,159   (b)   0.50%   to   1.50%   (b)    
       2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Marsico International Opportunities Portfolio -                                            
   Adviser Class                                            
       2008   11       $5.68       $65   -       0.35%       -49.87%
       2007   6       $11.33       $64   (d)       0.35%       (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
 
 
 
            388                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Marsico International Opportunities Portfolio -                                                
Service Class                                                
2008   705   $4.93   to   $9.46   $6,408   1.08%   0.00%   to   1.50%   -50.25%   to   -49.52%
2007   688   $18.01   to   $18.74   $12,551   0.95%   0.00%   to   1.50%   18.80%   to   19.97%
2006   478   $15.16   to   $15.50   $7,306   0.03%   0.40%   to   1.50%   22.16%   to   23.16%
2005   108   $12.41   to   $12.48   $1,348   (b)   0.70%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING MFS Total Return Portfolio - Adviser Class                                                
2008   55       $8.99       $497   4.89%       0.35%       -22.90%
2007   49       $11.66       $567   1.31%       0.35%           3.19%
2006   4       $11.30       $45   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING MFS Total Return Portfolio - Institutional Class                                                
2008   6,024   $8.57   to   $8.58   $51,654   6.26%   0.95%   to   1.00%   -23.00%   to   -22.91%
2007   7,291       $11.13       $81,146   0.11%       1.00%           3.25%
2006   25       $10.78       $269   (c)       1.00%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING MFS Total Return Portfolio - Service Class                                                
2008   1,955   $7.60   to   $12.47   $22,350   5.97%   0.00%   to   1.55%   -23.51%   to   -22.41%
2007   2,252   $12.08   to   $15.88   $33,604   2.95%   0.10%   to   1.55%   2.44%   to   3.61%
2006   2,514   $11.69   to   $15.23   $36,559   2.23%   0.30%   to   1.65%   10.26%   to   11.49%
2005   3,132   $10.95   to   $13.66   $41,280   2.59%   0.40%   to   1.50%   1.38%   to   2.33%
2004   2,236   $10.84   to   $13.30   $29,119   2.74%   0.55%   to   1.50%   9.45%   to   10.56%
ING MFS Utilities Portfolio - Service Class                                                
2008   2,158   $6.29   to   $11.94   $24,775   3.58%   0.00%   to   1.50%   -38.65%   to   -37.72%
2007   2,012   $18.42   to   $19.17   $37,523   1.01%   0.00%   to   1.50%   25.48%   to   26.89%
2006   881   $14.68   to   $15.01   $13,022   0.04%   0.40%   to   1.50%   28.88%   to   30.08%
2005   104   $11.39   to   $11.47   $1,191   (b)   0.50%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
 
 
 
 
            389                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Oppenheimer Main Street Portfolio® - Service                                                
Class                                                
2008   176   $6.64   to   $8.14   $1,342   2.99%   0.00%   to   1.65%   -39.69%   to   -38.66%
2007   159   $11.01   to   $13.27   $2,004   0.78%   0.00%   to   1.65%   2.74%   to   3.72%
2006   66   $10.73   to   $12.62   $825   0.82%   0.50%   to   1.50%   13.23%   to   14.16%
2005   19   $10.96   to   $11.02   $214   (b)   0.70%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING PIMCO High Yield Portfolio - Institutional Class                                                
2008   73   $8.30   to   $8.31   $609   8.94%   0.95%   to   1.00%   -23.15%   to   -23.06%
2007   74       $10.80       $800   6.11%       1.00%           2.08%    
2006   23       $10.58       $247   (c)       1.00%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING PIMCO High Yield Portfolio - Service Class                                                
2008   505   $7.67   to   $9.18   $4,462   8.96%   0.00%   to   1.50%   -23.68%   to   -22.53%
2007   497   $10.71   to   $11.85   $5,722   7.27%   0.00%   to   1.50%   1.34%   to   2.86%
2006   448   $10.56   to   $11.52   $5,070   6.48%   0.00%   to   1.50%   7.36%   to   8.35%
2005   135   $10.46   to   $10.56   $1,418   (b)   0.50%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Pioneer Equity Income Portfolio - Institutional                                                
Class                                                
2008   17,559   $6.20   to   $6.74   $111,368   3.16%   0.00%   to   1.95%   -31.49%   to   -30.28%
2007   17,096   $9.05   to   $9.31   $156,482   (d)   0.20%   to   1.95%       (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
ING Pioneer Fund Portfolio - Institutional Class                                                
2008   1,578   $6.37   to   $8.11   $11,631   3.79%   0.00%   to   1.60%   -35.59%   to   -34.52%
2007   1,454   $11.18   to   $12.51   $16,489   0.44%   0.00%   to   1.70%   3.71%   to   5.42%
2006   232   $10.78   to   $11.98   $2,509   (c)   0.00%   to   1.50%       (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
 
 
 
            390                                    

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

                    Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Pioneer Fund Portfolio - Service Class                                        
       2008   15   $7.22 to   $7.33   $109   3.64%   0.70%   to   1.30%   -35.54% to   -35.41%
       2007   10   $11.20 to   $11.24   $111   -   1.00%   to   1.30%   4.07%
       2006   2   $10.80       $25   (c)       1.00%       (c)    
       2005   (c)   (c)       (c)   (c)       (c)       (c)    
       2004   (c)   (c)       (c)   (c)       (c)       (c)    
ING Pioneer Mid Cap Value Portfolio - Adviser Class                                        
       2008   -   $7.14       $2   (e)       0.35%       (e)    
       2007   (e)   (e)       (e)   (e)       (e)       (e)    
       2006   (e)   (e)       (e)   (e)       (e)       (e)    
       2005   (e)   (e)       (e)   (e)       (e)       (e)    
       2004   (e)   (e)       (e)   (e)       (e)       (e)    
ING Pioneer Mid Cap Value Portfolio - Institutional                                        
   Class                                        
       2008   8,859   $6.37 to   $7.58   $65,464   2.18%   0.00%   to   1.80%   -34.09% to   -32.92%
       2007   8,727   $11.02 to   $11.30   $96,991   0.08%   0.00%   to   1.80%   4.16% to   5.26%
       2006   74   $10.54 to   $10.65   $783   (c)   0.50%   to   1.50%   (c)    
       2005   (c)   (c)       (c)   (c)       (c)       (c)    
       2004   (c)   (c)       (c)   (c)       (c)       (c)    
ING Pioneer Mid Cap Value Portfolio - Service Class                                        
       2008   28   $7.27 to   $7.52   $204   3.64%   0.10%   to   1.35%   -34.03% to   -33.30%
       2007   1   $11.02 to   $11.20   $16   (h)   0.35%   to   1.35%   (h)    
       2006   1   $10.61       $6   (c)       0.80%       (c)    
       2005   (c)   (c)       (c)   (c)       (c)       (c)    
       2004   (c)   (c)       (c)   (c)       (c)       (c)    
ING Stock Index Portfolio - Institutional Class                                        
       2008   269   $8.44 to   $8.84   $2,372   3.86%   0.00%   to   1.25%   -37.92% to   -37.13%
       2007   256   $13.55 to   $14.03   $3,588   1.50%   0.05%   to   1.25%   4.04% to   4.51%
       2006   273   $13.00 to   $13.30   $3,625   3.36%   0.15%   to   1.25%   14.55%
       2005   2,166   $11.41 to   $11.56   $25,037   (b)   0.00%   to   0.80%   (b)    
       2004   (b)   (b)       (b)   (b)       (b)       (b)    
 
 
 
 
        391                            

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING T. Rowe Price Capital Appreciation Portfolio -                                            
Service Class                                            
2008   17,181   $7.12   to   $9.57   $158,868   4.79%   0.00%   to   1.55%   -28.63% to   -27.50%
2007   13,148   $12.66   to   $13.20   $168,990   1.82%   0.00%   to   1.55%   2.76% to   4.05%
2006   7,004   $12.32   to   $12.60   $86,924   1.22%   0.30%   to   1.55%   13.00% to   14.01%
2005   1,752   $10.91   to   $11.01   $19,163   (b)   0.50%   to   1.50%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING T. Rowe Price Equity Income Portfolio - Adviser                                            
Class                                            
2008   116       $7.90       $918   3.48%       0.35%       -36.19%
2007   93       $12.38       $1,151   1.02%       0.35%       2.40%
2006   18       $12.09       $215   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING T. Rowe Price Equity Income Portfolio - Service                                            
Class                                            
2008   6,475   $6.23   to   $12.30   $74,508   4.58%   0.00%   to   1.65%   -36.69% to   -35.67%
2007   5,633   $13.02   to   $19.12   $101,704   1.42%   0.00%   to   1.65%   1.35% to   2.78%
2006   4,956   $12.72   to   $18.46   $87,796   1.34%   0.15%   to   1.65%   17.21% to   18.68%
2005   3,660   $11.39   to   $15.47   $54,938   1.28%   0.30%   to   1.55%   2.34% to   3.36%
2004   2,052   $11.13   to   $14.87   $30,123   1.48%   0.50%   to   1.55%   13.15% to   14.30%
ING Templeton Global Growth Portfolio - Institutional                                            
Class                                            
2008   77   $9.86   to   $10.17   $774   1.43%   0.60%   to   1.75%   -40.67% to   -39.96%
2007   71   $16.62   to   $16.94   $1,186   -   0.75%   to   1.90%   1.70%
2006   -       $16.50       -   (c)       1.00%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Templeton Global Growth Portfolio - Service Class                                            
2008   315   $5.90   to   $6.89   $2,110   1.09%   0.00%   to   1.50%   -40.57% to   -39.86%
2007   253   $11.14   to   $11.39   $2,833   1.27%   0.30%   to   1.50%   0.91% to   1.98%
2006   128   $11.04   to   $11.11   $1,421   (c)   0.50%   to   1.50%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
 
 
            392                            

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Van Kampen Capital Growth Portfolio -                                            
   Institutional Class                                            
       2008   66   $5.36   to   $5.56   $362   (e)   0.00%   to   1.50%   (e)    
       2007   (e)       (e)       (e)   (e)       (e)       (e)    
       2006   (e)       (e)       (e)   (e)       (e)       (e)    
       2005   (e)       (e)       (e)   (e)       (e)       (e)    
       2004   (e)       (e)       (e)   (e)       (e)       (e)    
ING Van Kampen Capital Growth Portfolio - Service                                            
   Class                                            
       2008   21   $5.49   to   $6.98   $145   -   0.00%   to   1.45%   -49.60% to   -49.27%
       2007   6   $13.67   to   $13.76   $87   -   0.00%   to   0.50%   20.76%
       2006   1       $11.32       $14   (c)       0.50%       (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Van Kampen Growth and Income Portfolio -                                            
   Service Class                                            
       2008   1,513   $6.57   to   $8.98   $13,111   4.08%   0.00%   to   1.50%   -33.23% to   -32.23%
       2007   1,338   $12.73   to   $13.25   $17,288   1.68%   0.00%   to   1.50%   1.03% to   2.11%
       2006   1,237   $12.60   to   $12.88   $15,704   1.19%   0.40%   to   1.50%   14.34% to   15.41%
       2005   759   $11.02   to   $11.12   $8,388   (b)   0.50%   to   1.50%   (b)    
       2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Van Kampen Real Estate Portfolio - Institutional                                            
   Class                                            
       2008   117       $6.16       $724   1.92%       0.95%       -38.89%
       2007   94   $9.91   to   $10.08   $942   (h)   0.95%   to   1.95%   (h)    
       2006   61       $12.34       $754   (c)       0.95%       (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Van Kampen Real Estate Portfolio - Service Class                                            
       2008   2,819   $5.33   to   $6.27   $17,289   1.39%   0.00%   to   1.50%   -39.46% to   -38.53%
       2007   2,072   $9.95   to   $10.20   $20,838   1.31%   0.00%   to   1.50%   -18.97% to   -18.11%
       2006   1,372   $12.28   to   $12.39   $16,905   (c)   0.35%   to   1.50%   (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
 
 
            393                            

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING VP Index Plus International Equity Portfolio -                                            
Institutional Class                                            
2008   1,952   $5.22   to   $6.11   $11,371   6.69%   0.00%   to   1.50%   -50.88% to   -43.74%
2007   2,140   $9.41   to   $10.86   $22,362   (d)   0.00%   to   1.50%   (d)    
2006   (d)       (d)       (d)   (d)       (d)       (d)    
2005   (d)       (d)       (d)   (d)       (d)       (d)    
2004   (d)       (d)       (d)   (d)       (d)       (d)    
ING VP Index Plus International Equity Portfolio -                                            
Service Class                                            
2008   454   $5.37   to   $6.66   $2,933   6.11%   0.00%   to   1.50%   -44.65% to   -43.98%
2007   612   $10.84   to   $11.88   $7,116   -   0.25%   to   1.50%   6.54% to   7.60%
2006   232   $10.85   to   $11.10   $2,537   (c)   0.40%   to   1.50%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Wells Fargo Small Cap Disciplined Portfolio -                                            
Service Class                                            
2008   142   $6.44   to   $6.86   $947   0.71%   0.00%   to   1.50%   -33.77% to   -33.04%
2007   102   $9.94   to   $10.16   $1,022   -   0.40%   to   1.50%   -5.15% to   -4.17%
2006   109   $10.42   to   $10.56   $1,141   (c)   0.50%   to   1.50%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING International Growth Opportunities Fund - Class Q                                            
2008   1   $7.78   to   $7.92   $7   -   1.05%   to   1.40%   -55.11% to   -54.92%
2007   1   $17.33   to   $17.57   $11   -   1.05%   to   1.40%   17.02%
2006   -   $14.81   to   $14.88   $7   1.16%   1.25%   to   1.40%   18.47%
2005   -       $12.56       $2   (b)       1.25%       (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING International SmallCap Multi-Manager Fund -                                            
Class A                                            
2008   131   $9.05   to   $9.84   $1,261   2.18%   0.00%   to   1.70%   -52.54% to   -51.81%
2007   111   $19.07   to   $20.42   $2,221   0.85%   0.00%   to   1.75%   8.61% to   9.75%
2006   46   $17.77   to   $18.40   $837   0.79%   0.25%   to   1.45%   24.53%
2005   20   $14.35   to   $14.52   $283   (b)   0.60%   to   1.25%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
 
 
            394                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING American Century Large Company Value                                            
Portfolio - Adviser Class                                            
2008   11       $7.36       $78   12.20%       0.35%       -37.41%
2007   7       $11.76       $86   -       0.35%       -2.49%
2006   1       $12.06       $9   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING American Century Large Company Value                                            
Portfolio - Service Class                                            
2008   298   $6.03   to   $10.54   $2,817   14.21%   0.00%   to   1.50%   -51.68% to   -37.15%
2007   287   $12.32   to   $16.77   $4,430   1.28%   0.25%   to   1.50%   -3.48% to   24.57%
2006   338   $12.66   to   $16.94   $5,290   0.25%   0.40%   to   1.50%   17.53% to   18.71%
2005   330   $10.74   to   $14.47   $4,395   0.98%   0.50%   to   1.50%   -0.22% to   0.71%
2004   427   $10.74   to   $14.14   $5,760   0.92%   0.55%   to   1.50%   8.37% to   9.44%
ING American Century Small-Mid Cap Value                                            
Portfolio - Adviser Class                                            
2008   5       $8.28       $39   2.63%       0.35%       -26.92%
2007   3       $11.33       $37   -       0.35%       -3.49%
2006   2       $11.74       $22   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING American Century Small-Mid Cap Value                                            
Portfolio - Service Class                                            
2008   1,988   $7.00   to   $11.90   $22,075   0.80%   0.00%   to   1.50%   -27.69% to   -26.54%
2007   1,876   $12.60   to   $16.20   $28,635   0.41%   0.00%   to   1.50%   -4.31% to   -2.91%
2006   2,128   $13.07   to   $16.49   $33,826   0.02%   0.00%   to   1.50%   13.67% to   15.48%
2005   2,244   $12.37   to   $14.45   $31,597   0.19%   0.00%   to   1.50%   6.27% to   7.85%
2004   1,961   $11.64   to   $13.29   $25,577   0.04%   0.00%   to   1.50%   19.50% to   20.75%
ING Baron Asset Portfolio - Service Class                                            
2008   333   $5.75   to   $6.53   $2,126   -   0.00%   to   1.55%   -42.00% to   -41.06%
2007   294   $10.76   to   $11.08   $3,217   -   0.00%   to   1.75%   7.35% to   8.38%
2006   30   $10.07   to   $10.14   $306   (c)   0.50%   to   1.50%   (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
 
 
            395                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Baron Small Cap Growth Portfolio - Adviser                                                
Class                                                
2008   30       $7.25       $216   -       0.35%       -41.58%
2007   21       $12.41       $257   -       0.35%           5.44%
2006   5       $11.77       $63   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING Baron Small Cap Growth Portfolio - Service Class                                                
2008   6,207   $5.66   to   $12.23   $66,236   -   0.00%   to   1.55%   -42.18%   to   -41.24%
2007   5,880   $9.67   to   $21.03   $108,700   -   0.00%   to   1.55%   4.48%   to   6.07%
2006   5,135   $12.61   to   $20.02   $91,451   -   0.00%   to   1.55%   13.49%   to   15.25%
2005   5,042   $12.81   to   $17.55   $79,169   -   0.00%   to   1.50%   5.78%   to   7.37%
2004   3,951   $12.10   to   $16.51   $58,317   -   0.00%   to   1.50%   26.05%   to   27.38%
ING Columbia Small Cap Value II Portfolio - Service                                                
Class                                                
2008   142   $6.62   to   $6.89   $953   0.11%   0.00%   to   1.50%   -35.06%   to   -34.36%
2007   77   $10.19   to   $10.42   $796   -   0.25%   to   1.50%   1.39%   to   2.47%
2006   4   $10.05   to   $10.11   $39   (c)   0.55%   to   1.50%       (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING Davis New York Venture Portfolio - Service Class                                                
2008   735   $5.94   to   $13.79   $8,589   0.78%   0.00%   to   1.50%   -40.12%   to   -39.39%
2007   575   $12.23   to   $22.34   $11,313   0.25%   0.25%   to   1.50%   2.63%   to   3.63%
2006   485   $11.91   to   $21.23   $9,468   0.01%   0.40%   to   1.50%   12.12%   to   13.29%
2005   418   $10.64   to   $19.00   $7,330   -   0.50%   to   1.50%   2.39%   to   3.31%
2004   602   $11.12   to   $18.10   $10,359   -   0.55%   to   1.50%   6.81%   to   7.87%
ING Fidelity® VIP Mid Cap Portfolio - Service Class                                                
2008   911   $7.36   to   $7.45   $6,707   0.37%   0.00%   to   0.50%   -40.11%   to   -39.77%
2007   329   $12.29   to   $12.37   $4,044   0.05%   0.00%   to   0.50%   14.43%
2006   10       $10.74       $110   (c)       0.50%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
 
 
 
            396                                

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

                Investment        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Index Solution 2015 Portfolio - Adviser Class                        
       2008   5   $7.91 to $7.95   $37   (e)   0.70% to 1.35%   (e)
       2007   (e)   (e)   (e)   (e)   (e)   (e)
       2006   (e)   (e)   (e)   (e)   (e)   (e)
       2005   (e)   (e)   (e)   (e)   (e)   (e)
       2004   (e)   (e)   (e)   (e)   (e)   (e)
ING Index Solution 2025 Portfolio - Adviser Class                        
       2008   11   $7.19   $81   (e)   1.35%   (e)
       2007   (e)   (e)   (e)   (e)   (e)   (e)
       2006   (e)   (e)   (e)   (e)   (e)   (e)
       2005   (e)   (e)   (e)   (e)   (e)   (e)
       2004   (e)   (e)   (e)   (e)   (e)   (e)
ING Index Solution 2035 Portfolio - Adviser Class                        
       2008   7   $6.81   $51   (e)   1.35%   (e)
       2007   (e)   (e)   (e)   (e)   (e)   (e)
       2006   (e)   (e)   (e)   (e)   (e)   (e)
       2005   (e)   (e)   (e)   (e)   (e)   (e)
       2004   (e)   (e)   (e)   (e)   (e)   (e)
ING Index Solution 2045 Portfolio - Adviser Class                        
       2008   1   $6.43   $6   (e)   1.35%   (e)
       2007   (e)   (e)   (e)   (e)   (e)   (e)
       2006   (e)   (e)   (e)   (e)   (e)   (e)
       2005   (e)   (e)   (e)   (e)   (e)   (e)
       2004   (e)   (e)   (e)   (e)   (e)   (e)
ING Index Solution Income Portfolio - Adviser Class                        
       2008   -   $8.90   $1   (e)   0.70%   (e)
       2007   (e)   (e)   (e)   (e)   (e)   (e)
       2006   (e)   (e)   (e)   (e)   (e)   (e)
       2005   (e)   (e)   (e)   (e)   (e)   (e)
       2004   (e)   (e)   (e)   (e)   (e)   (e)
 
 
 
 
        397                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING JPMorgan Mid Cap Value Portfolio - Adviser                                            
Class                                            
2008   30       $8.08       $245   1.58%       0.35%       -33.44%
2007   32       $12.14       $386   0.42%       0.35%       1.76%
2006   8       $11.93       $91   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING JPMorgan Mid Cap Value Portfolio - Service                                            
Class                                            
2008   1,843   $6.51   to   $12.56   $21,120   2.10%   0.00%   to   1.55%   -34.08% to   -33.01%
2007   2,021   $9.76   to   $18.54   $34,984   0.57%   0.00%   to   1.55%   0.77% to   2.37%
2006   1,892   $12.72   to   $18.11   $32,578   0.01%   0.00%   to   1.55%   14.78% to   16.46%
2005   1,597   $12.54   to   $15.64   $24,333   0.34%   0.00%   to   1.50%   6.89% to   8.51%
2004   1,022   $11.71   to   $14.33   $14,426   0.22%   0.00%   to   1.50%   18.76% to   20.12%
ING Legg Mason Partners Aggressive Growth                                            
Portfolio - Adviser Class                                            
2008   9       $6.57       $60   -       0.35%       -39.72%
2007   9       $10.90       $96   -       0.35%       -2.50%
2006   2       $11.18       $17   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Legg Mason Partners Aggressive Growth                                            
Portfolio - Initial Class                                            
2008   10,314   $5.85   to   $10.74   $84,378   -   0.00%   to   1.50%   -40.13% to   -9.45%
2007   11,836   $9.78   to   $17.67   $161,023   -   0.00%   to   1.50%   -35.62% to   -1.59%
2006   14,531   $10.02   to   $17.96   $203,807   -   0.00%   to   1.50%   8.64% to   10.32%
2005   16,715   $9.15   to   $16.28   $213,925   -   0.00%   to   1.50%   9.77% to   11.43%
2004   19,676   $8.28   to   $14.64   $228,353   -   0.00%   to   1.50%   7.99% to   26.50%
ING Legg Mason Partners Aggressive Growth                                            
Portfolio - Service Class                                            
2008   16   $7.11   to   $7.56   $120   -   0.00%   to   1.25%   -40.10% to   -39.33%
2007   7   $11.87   to   $12.46   $87   -   0.00%   to   1.25%   -3.10% to   -2.39%
2006   7   $12.25   to   $12.63   $82   -   0.20%   to   1.25%   8.70% to   9.15%
2005   3   $11.27   to   $11.37   $36   (f)   0.80%   to   1.25%   (f)    
2004   2       $10.32       $16   (a)       0.70%       (a)    
 
            398                            

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

                    Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Neuberger Berman Partners Portfolio - Service                                        
Class                                        
2008   360   $4.85 to   $5.59   $1,966   -   0.00%   to   1.50%   -52.01% to   -51.49%
2007   201   $11.19 to   $11.44   $2,266   0.24%   0.30%   to   1.50%   7.16% to   8.07%
2006   22   $10.47 to   $10.53   $232   (c)   0.50%   to   1.30%   (c)    
2005   (c)   (c)       (c)   (c)       (c)       (c)    
2004   (c)   (c)       (c)   (c)       (c)       (c)    
ING Oppenheimer Global Portfolio - Adviser Class                                        
2008   31   $7.66       $238   2.32%       0.35%       -40.85%
2007   28   $12.95       $365   0.43%       0.35%       5.63%
2006   8   $12.26       $96   (c)       0.35%       (c)    
2005   (c)   (c)       (c)   (c)       (c)       (c)    
2004   (c)   (c)       (c)   (c)       (c)       (c)    
ING Oppenheimer Global Portfolio - Initial Class                                        
2008   49,538   $5.74 to   $9.22   $423,940   2.29%   0.00%   to   1.95%   -43.34% to   -38.16%
2007   57,612   $14.09 to   $15.45   $840,722   1.09%   0.00%   to   1.80%   1.35% to   11.82%
2006   67,277   $13.46 to   $14.50   $921,330   0.07%   0.00%   to   1.80%   10.53% to   17.98%
2005   74,501   $11.62 to   $12.29   $881,737   (b)   0.00%   to   1.80%   (b)    
2004   (b)   (b)       (b)   (b)       (b)       (b)    
ING Oppenheimer Global Portfolio - Service Class                                        
2008   27   $9.87 to   $10.03   $267   1.98%   1.00%   to   1.25%   -41.18% to   -41.07%
2007   26   $16.78 to   $17.02   $439   1.20%   1.00%   to   1.25%   5.01% to   5.26%
2006   11   $15.98 to   $16.17   $180   0.09%   1.00%   to   1.25%   16.13% to   16.13%
2005   1   $13.76       $20   -       1.25%       11.87%
2004   182   $12.22 to   $12.52   $2,264   -   0.60%   to   1.50%   13.36% to   14.26%
ING Oppenheimer Strategic Income Portfolio - Adviser                                        
Class                                        
2008   26   $9.84       $258   6.75%       0.35%       -16.26%
2007   23   $11.75       $275   4.98%       0.35%       8.00%
2006   12   $10.88       $127   (c)       0.35%       (c)    
2005   (c)   (c)       (c)   (c)       (c)       (c)    
2004   (c)   (c)       (c)   (c)       (c)       (c)    
 
 
 
        399                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Oppenheimer Strategic Income Portfolio - Initial                                                
Class                                                
2008   11,204   $8.50   to   $10.20   $109,367   5.72%   0.00%   to   1.95%   -17.26%   to   -14.92%
2007   10,776   $11.42   to   $12.08   $125,688   4.51%   0.00%   to   1.95%   5.82%   to   10.12%
2006   10,430   $10.67   to   $11.11   $112,893   0.39%   0.00%   to   1.95%   6.22%   to   8.39%
2005   11,390   $9.99   to   $10.25   $116,350   (b)   0.00%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Oppenheimer Strategic Income Portfolio - Service                                                
Class                                                
2008   25   $8.59   to   $9.50   $216   0.40%   0.40%   to   1.50%   -17.03%
2007   330   $11.45   to   $11.58   $3,826   (d)   0.95%   to   1.50%       (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
ING PIMCO Total Return Portfolio - Adviser Class                                                
2008   77       $11.34       $870   5.48%       0.35%       -0.79%
2007   48       $11.43       $554   4.13%       0.35%           8.75%
2006   26       $10.51       $269   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING PIMCO Total Return Portfolio - Service Class                                                
2008   8,434   $10.17   to   $13.60   $104,849   5.43%   0.00%   to   1.95%   -1.87%   to   -0.25%
2007   6,608   $10.22   to   $13.44   $83,010   3.25%   0.00%   to   1.75%   7.71%   to   9.17%
2006   5,395   $10.50   to   $12.26   $62,923   1.70%   0.20%   to   1.55%   2.47%   to   3.64%
2005   4,813   $10.27   to   $11.91   $54,953   1.68%   0.35%   to   1.50%   0.53%   to   1.72%
2004   3,872   $10.21   to   $11.64   $43,692   -   0.40%   to   1.50%   2.73%   to   3.93%
ING Pioneer High Yield Portfolio - Initial Class                                                
2008   508   $6.96   to   $7.99   $3,967   8.59%   0.00%   to   1.50%   -30.43%   to   -29.42%
2007   465   $11.04   to   $11.32   $5,184   6.31%   0.00%   to   1.50%   4.55%   to   6.19%
2006   94   $10.56   to   $10.66   $1,000   (c)   0.00%   to   1.50%       (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
 
 
 
            400                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Pioneer High Yield Portfolio - Service Class                                                
2008   11   $7.65   to   $7.79   $81   7.95%   0.70%   to   1.40%   -30.49%   to   -30.32%
2007   9   $11.02   to   $11.11   $95   5.94%   0.85%   to   1.35%       4.82%    
2006   1   $10.56   to   $10.60   $6   (c)   0.70%   to   1.20%       (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING Solution 2015 Portfolio - Adviser Class                                                
2008   1,203   $8.52   to   $9.03   $10,621   1.79%   0.00%   to   1.55%   -28.20%   to   -27.06%
2007   800   $11.72   to   $12.38   $9,750   0.70%   0.00%   to   1.55%   2.68%   to   4.06%
2006   243   $11.27   to   $11.83   $2,850   0.17%   0.20%   to   1.55%   9.47%   to   10.26%
2005   41   $10.66   to   $10.72   $440   (b)   0.25%   to   1.05%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Solution 2015 Portfolio - Service Class                                                
2008   3,218   $7.17   to   $9.13   $28,425   1.76%   0.00%   to   1.50%   -27.98%   to   -26.84%
2007   2,485   $11.99   to   $12.48   $30,299   0.55%   0.00%   to   1.50%   3.01%   to   4.61%
2006   1,294   $11.64   to   $11.93   $15,208   0.16%   0.00%   to   1.50%   9.18%   to   10.25%
2005   185   $10.66   to   $10.76   $1,980   (b)   0.50%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Solution 2025 Portfolio - Adviser Class                                                
2008   1,449   $7.86   to   $8.49   $12,028   1.43%   0.00%   to   1.55%   -34.96%   to   -33.93%
2007   957   $11.94   to   $12.85   $12,103   0.50%   0.00%   to   1.55%   2.66%   to   3.99%
2006   360   $12.01   to   $12.29   $4,390   0.22%   0.20%   to   1.55%   11.19%   to   12.15%
2005   24   $10.89   to   $10.95   $266   (b)   0.25%   to   1.05%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Solution 2025 Portfolio - Service Class                                                
2008   4,569   $6.43   to   $8.57   $37,936   1.41%   0.00%   to   1.50%   -34.86%   to   -33.95%
2007   3,127   $9.87   to   $12.96   $39,563   0.41%   0.00%   to   1.50%   3.06%   to   4.31%
2006   1,488   $12.08   to   $12.38   $18,183   0.24%   0.00%   to   1.50%   10.93%   to   12.04%
2005   176   $10.89   to   $10.99   $1,918   (b)   0.50%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
 
 
 
 
            401                                    

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Solution 2035 Portfolio - Adviser Class                                            
2008   1,196   $7.66   to   $8.36   $9,767   1.45%   0.00%   to   1.55%   -38.14% to   -37.24%
2007   750   $12.24   to   $13.32   $9,830   0.44%   0.00%   to   1.55%   3.40% to   4.75%
2006   307   $11.69   to   $12.64   $3,854   0.11%   0.20%   to   1.55%   12.75% to   13.68%
2005   40   $11.05   to   $11.11   $440   (b)   0.25%   to   1.05%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Solution 2035 Portfolio - Service Class                                            
2008   3,386   $6.11   to   $8.45   $27,711   1.40%   0.00%   to   1.50%   -37.97% to   -36.99%
2007   2,101   $12.88   to   $13.41   $27,544   0.44%   0.00%   to   1.50%   3.70% to   4.98%
2006   956   $12.42   to   $12.74   $12,006   0.11%   0.00%   to   1.50%   12.40% to   13.58%
2005   106   $11.05   to   $11.15   $1,176   (b)   0.50%   to   1.50%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Solution 2045 Portfolio - Adviser Class                                            
2008   797   $7.43   to   $8.26   $6,465   1.10%   0.00%   to   1.55%   -40.86% to   -39.93%
2007   579   $12.42   to   $13.75   $7,858   0.24%   0.00%   to   1.55%   3.86% to   5.24%
2006   174   $12.70   to   $12.99   $2,250   0.03%   0.20%   to   1.55%   13.66% to   14.56%
2005   23   $11.27   to   $11.33   $256   (b)   0.25%   to   1.05%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Solution 2045 Portfolio - Service Class                                            
2008   2,197   $5.82   to   $8.32   $17,688   1.13%   0.00%   to   1.50%   -40.72% to   -39.88%
2007   1,293   $9.89   to   $13.84   $17,462   0.25%   0.00%   to   1.50%   4.15% to   5.38%
2006   589   $12.76   to   $13.08   $7,586   0.03%   0.00%   to   1.50%   13.32% to   14.47%
2005   52   $11.26   to   $11.36   $586   (b)   0.50%   to   1.50%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING Solution Growth and Income Portfolio - Service                                            
Class                                            
2008   82   $7.63   to   $7.69   $625   (e)   0.25%   to   1.40%   (e)    
2007   (e)       (e)       (e)   (e)       (e)       (e)    
2006   (e)       (e)       (e)   (e)       (e)       (e)    
2005   (e)       (e)       (e)   (e)       (e)       (e)    
2004   (e)       (e)       (e)   (e)       (e)       (e)    
 
 
 
 
            402                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Solution Growth Portfolio - Service Class                                                
       2008   25   $6.91   to   $6.96   $174   (e)   0.25%   to   1.25%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
ING Solution Income Portfolio - Adviser Class                                                
       2008   854   $9.19   to   $9.68   $8,109   1.98%   0.00%   to   1.40%   -18.09%   to   -16.91%
       2007   646   $11.22   to   $11.65   $7,427   0.90%   0.00%   to   1.40%   3.41%   to   4.70%
       2006   150   $10.85   to   $11.07   $1,657   0.10%   0.20%   to   1.40%   6.12%   to   6.50%
       2005   4   $10.29   to   $10.31   $40   (b)   0.70%   to   1.00%       (b)    
       2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Solution Income Portfolio - Service Class                                                
       2008   733   $8.35   to   $9.78   $6,949   2.09%   0.00%   to   1.50%   -17.91%   to   -16.70%
       2007   644   $11.28   to   $11.74   $7,385   0.65%   0.00%   to   1.50%   3.68%   to   4.87%
       2006   250   $10.88   to   $11.13   $2,746   0.16%   0.15%   to   1.50%   5.73%   to   6.76%
       2005   33   $10.29   to   $10.36   $341   (b)   0.50%   to   1.50%       (b)    
       2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING T. Rowe Price Diversified Mid Cap Growth                                                
   Portfolio - Adviser Class                                                
       2008   30       $7.17       $212   -       0.35%       -43.54%
       2007   29       $12.70       $365   -       0.35%       12.29%
       2006   3       $11.31       $39   (c)       0.35%           (c)    
       2005   (c)       (c)       (c)   (c)       (c)           (c)    
       2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING T. Rowe Price Diversified Mid Cap Growth                                                
   Portfolio - Initial Class                                                
       2008   26,223   $5.53   to   $8.17   $200,073   0.48%   0.00%   to   1.50%   -45.52%   to   -41.84%
       2007   28,669   $11.84   to   $14.41   $389,300   0.19%   0.00%   to   1.50%   6.13%   to   16.20%
       2006   33,002   $10.59   to   $12.72   $397,287   -   0.00%   to   1.50%   3.11%   to   9.05%
       2005   38,267   $11.07   to   $11.60   $429,422   (b)   0.00%   to   1.50%       (b)    
       2004   (b)       (b)       (b)   (b)       (b)           (b)    
 
 
 
            403                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING T. Rowe Price Diversified Mid Cap Growth                                                
Portfolio - Service Class                                                
2008   37   $5.56   to   $7.91   $272   -   0.00%   to   1.25%   -44.01%   to   -43.26%
2007   39   $9.93   to   $13.94   $514   -   0.00%   to   1.25%   11.57%   to   12.61%
2006   35   $8.90   to   $12.27   $425   -   0.20%   to   1.25%   7.62%   to   8.39%
2005   22   $8.27   to   $11.20   $230   -   0.55%   to   1.25%   7.59%   to   7.88%
2004   1,207   $7.62   to   $11.27   $9,594   -   0.45%   to   1.50%   6.87%   to   8.09%
ING T. Rowe Price Growth Equity Portfolio - Adviser                                                
Class                                                
2008   103       $7.20       $743   0.32%       0.35%       -42.72%
2007   92       $12.57       $1,155   -       0.35%           9.02%
2006   12       $11.53       $143   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING T. Rowe Price Growth Equity Portfolio - Initial                                                
Class                                                
2008   10,195   $5.63   to   $17.48   $141,775   1.37%   0.00%   to   1.50%   -43.12%   to   -30.59%
2007   11,199   $10.39   to   $30.54   $275,025   0.48%   0.00%   to   1.50%   -10.73%   to   9.89%
2006   12,312   $9.60   to   $28.07   $281,531   0.24%   0.00%   to   1.50%   11.63%   to   13.33%
2005   13,745   $11.71   to   $25.03   $282,041   0.48%   0.00%   to   1.50%   4.59%   to   6.15%
2004   14,985   $11.28   to   $23.81   $291,385   0.16%   0.00%   to   1.50%   8.36%   to   10.00%
ING T. Rowe Price Growth Equity Portfolio - Service                                                
Class                                                
2008   126   $7.55   to   $8.84   $1,018   1.15%   0.00%   to   1.55%   -43.28%   to   -42.36%
2007   88   $13.31   to   $15.48   $1,234   0.19%   0.00%   to   1.55%   7.95%   to   9.11%
2006   67   $12.33   to   $14.27   $867   -   0.20%   to   1.55%   11.59%   to   12.56%
2005   39   $11.13   to   $12.75   $446   0.60%   0.45%   to   1.30%   4.60%   to   5.23%
2004   20   $10.64   to   $12.16   $219   (a)   0.40%   to   1.30%       (a)    
ING Templeton Foreign Equity Portfolio - Adviser Class                                            
2008   23       $6.31       $143   (e)       0.35%           (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
 
 
            404                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Templeton Foreign Equity Portfolio - Initial Class                                            
       2008   12,039   $6.23 to $6.34   $75,608   (e)   0.00%   to   1.50%   (e)    
       2007   (e)       (e)       (e)   (e)       (e)       (e)    
       2006   (e)       (e)       (e)   (e)       (e)       (e)    
       2005   (e)       (e)       (e)   (e)       (e)       (e)    
       2004   (e)       (e)       (e)   (e)       (e)       (e)    
ING Templeton Foreign Equity Portfolio - Service Class                                            
       2008   5   $7.43   to   $7.71   $40   0.04%   0.00%   to   1.40%   -41.32%
       2007   425   $12.66   to   $12.99   $5,433   1.43%   0.00%   to   1.50%   13.44% to   14.69%
       2006   27   $11.16   to   $11.23   $302   (c)   0.50%   to   1.50%   (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Thornburg Value Portfolio - Adviser Class                                            
       2008   39       $7.53       $295   0.25%       0.35%       -40.24%
       2007   41       $12.60       $521   -       0.35%       6.33%
       2006   5       $11.85       $54   (c)       0.35%       (c)    
       2005   (c)       (c)       (c)   (c)       (c)       (c)    
       2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Thornburg Value Portfolio - Initial Class                                            
       2008   4,224   $4.48   to   $21.60   $61,486   0.54%   0.00%   to   1.50%   -40.74% to   -39.78%
       2007   4,540   $7.56   to   $36.21   $113,433   0.45%   0.00%   to   1.50%   5.60% to   7.23%
       2006   5,003   $7.15   to   $34.10   $117,356   0.47%   0.00%   to   1.50%   15.11% to   16.85%
       2005   5,863   $9.90   to   $29.48   $118,725   0.78%   0.00%   to   1.50%   0.00% to   1.56%
       2004   7,187   $9.80   to   $29.32   $143,585   0.44%   0.00%   to   1.50%   11.16% to   12.65%
ING UBS U.S. Large Cap Equity Portfolio - Adviser                                            
   Class                                            
       2008   6       $6.75       $43   3.57%       0.35%       -40.27%
       2007   1       $11.30       $13   (d)       0.35%       (d)    
       2006   (d)       (d)       (d)   (d)       (d)       (d)    
       2005   (d)       (d)       (d)   (d)       (d)       (d)    
       2004   (d)       (d)       (d)   (d)       (d)       (d)    
 
 
 
 
            405                            

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING UBS U.S. Large Cap Equity Portfolio - Initial                                            
Class                                            
2008   6,593   $5.74   to   $12.52   $64,277   2.42%   0.00%   to   1.95%   -40.95% to   -5.47%
2007   7,798   $11.71   to   $20.79   $126,472   0.72%   0.00%   to   1.95%   -37.09% to   1.17%
2006   8,239   $11.75   to   $20.55   $135,280   0.80%   0.00%   to   1.95%   12.23% to   14.55%
2005   9,161   $10.42   to   $17.94   $134,490   0.87%   0.00%   to   1.50%   7.49% to   9.39%
2004   10,068   $9.67   to   $16.40   $135,468   0.78%   0.00%   to   1.50%   13.00% to   15.41%
ING UBS U.S. Large Cap Equity Portfolio - Service                                            
Class                                            
2008   1       $6.56       $6   -       1.00%       -40.58%
2007   1       $11.04       $6   -       1.00%       -0.09%
2006   -       $11.05       $3   (c)       1.00%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Van Kampen Comstock Portfolio - Adviser Class                                            
2008   28       $7.35       $206   3.06%       0.35%       -36.80%
2007   33       $11.63       $382   1.50%       0.35%       -2.92%
2006   13       $11.98       $151   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
ING Van Kampen Comstock Portfolio - Service Class                                            
2008   4,775   $6.03   to   $10.31   $42,974   3.72%   0.00%   to   1.95%   -37.70% to   -36.68%
2007   5,857   $12.01   to   $16.39   $83,912   1.24%   0.25%   to   1.95%   -3.74% to   -2.54%
2006   6,763   $12.38   to   $16.94   $100,241   0.74%   0.30%   to   1.95%   13.56% to   15.52%
2005   7,429   $11.46   to   $14.77   $98,136   0.60%   0.00%   to   1.50%   1.97% to   3.10%
2004   5,605   $11.21   to   $14.42   $71,730   -   0.40%   to   1.95%   15.01% to   16.27%
ING Van Kampen Equity and Income Portfolio -                                            
Adviser Class                                            
2008   35       $8.88       $308   7.05%       0.35%       -24.04%
2007   17       $11.69       $203   2.68%       0.35%       2.72%
2006   2       $11.38       $21   (c)       0.35%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
 
 
 
            406                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Van Kampen Equity and Income Portfolio -                                                
Initial Class                                                
2008   23,075   $7.48   to   $10.03   $216,996   5.17%   0.00%   to   1.95%   -30.76%   to   -21.09%
2007   26,353   $11.95   to   $13.08   $325,269   2.45%   0.00%   to   1.95%   -1.13%   to   8.09%
2006   31,545   $11.77   to   $12.63   $378,557   1.93%   0.00%   to   1.95%   6.18%   to   12.67%
2005   31,676   $10.66   to   $11.21   $344,729   (b)   0.00%   to   1.50%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING Van Kampen Equity and Income Portfolio -                                                
Service Class                                                
2008   5   $29.41   to   $30.80   $157   5.22%   0.60%   to   1.25%   -24.51%   to   -24.03%
2007   5   $12.58   to   $40.54   $188   2.88%   0.60%   to   1.25%   2.02%   to   2.66%
2006   3   $12.33   to   $39.49   $90   2.00%   0.60%   to   1.25%   10.98%   to   11.31%
2005   -   $11.11   to   $34.76   $13   -   1.00%   to   1.25%   6.42%   to   6.69%
2004   105   $10.44   to   $33.04   $2,372   0.37%   0.55%   to   1.50%   8.97%   to   9.99%
ING VP Strategic Allocation Conservative Portfolio -                                                
Class I                                                
2008   1,959   $7.64   to   $16.17   $25,840   4.38%   0.00%   to   1.95%   -25.08%   to   -23.58%
2007   2,130   $11.88   to   $21.16   $37,661   3.11%   0.00%   to   1.95%   4.12%   to   5.81%
2006   2,335   $11.41   to   $20.00   $39,520   2.61%   0.00%   to   1.95%   6.22%   to   8.40%
2005   4,513   $10.97   to   $18.82   $73,683   1.50%   0.00%   to   1.70%   3.09%   to   4.67%
2004   4,481   $10.67   to   $18.08   $70,666   1.25%   0.00%   to   1.55%   8.56%   to   9.97%
ING VP Strategic Allocation Growth Portfolio - Class I                                                
2008   4,099   $6.30   to   $15.01   $48,875   2.56%   0.00%   to   1.95%   -37.31%   to   -26.13%
2007   4,414   $11.45   to   $23.47   $84,589   1.70%   0.00%   to   1.95%   -11.33%   to   5.05%
2006   4,732   $11.07   to   $22.35   $88,592   1.35%   0.00%   to   1.95%   11.01%   to   13.22%
2005   4,786   $11.29   to   $19.77   $81,185   1.18%   0.00%   to   1.70%   2.45%   to   6.19%
2004   5,143   $10.83   to   $18.78   $81,653   1.05%   0.00%   to   1.55%   10.31%   to   14.79%
ING VP Strategic Allocation Moderate Portfolio - Class I                                                
2008   3,902   $6.91   to   $15.34   $46,525   3.19%   0.00%   to   1.60%   -31.57%   to   -30.47%
2007   4,075   $11.78   to   $22.07   $73,150   2.16%   0.00%   to   1.60%   3.82%   to   5.49%
2006   4,726   $11.34   to   $20.93   $82,807   1.80%   0.00%   to   1.60%   9.37%   to   11.21%
2005   2,405   $10.68   to   $18.45   $39,166   2.10%   0.00%   to   1.70%   2.19%   to   3.83%
2004   2,282   $10.48   to   $17.77   $36,460   1.81%   0.00%   to   1.55%   6.38%   to   7.76%
 
 
 
            407                                    

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING VP Growth and Income Portfolio - Class A                                                
2008   56       $6.67       $371   1.89%       0.35%       -38.18%
2007   15       $10.79   $158   (d)       0.35%           (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
ING VP Growth and Income Portfolio - Class I                                                
2008   59,428   $6.10   to   $213.96   $926,638   1.44%   0.00%   to   1.95%   -38.89%   to   -6.86%
2007   70,409   $10.98   to   $346.30   $1,758,568   1.34%   0.00%   to   1.95%   -29.85%   to   7.42%
2006   80,060   $10.30   to   $325.50   $1,940,188   1.15%   0.00%   to   1.95%   12.51%   to   14.17%
2005   91,075   $9.09   to   $287.09   $1,975,255   1.00%   0.00%   to   1.50%   6.51%   to   8.13%
2004   108,588   $8.47   to   $267.99   $2,182,323   2.32%   0.00%   to   1.50%   6.78%   to   21.16%
ING VP Growth and Income Portfolio - Class S                                                
2008   46   $6.66   to   $6.70   $305   2.96%   0.30%   to   0.75%   -38.22%   to   -37.96%
2007   9   $10.78   to   $10.80   $101   (d)   0.30%   to   0.75%       (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
ING GET U.S. Core Portfolio - Series 3                                                
2008   1,716   $10.09   to   $10.46   $17,658   2.17%   1.00%   to   1.75%   -5.17%   to   -4.14%
2007   2,154   $10.63   to   $10.94   $23,204   2.54%   1.00%   to   1.75%   2.61%   to   3.99%
2006   2,678   $10.30   to   $10.52   $27,885   2.54%   1.00%   to   1.75%   4.46%   to   5.31%
2005   3,740   $9.86   to   $9.99   $37,121   2.01%   1.00%   to   1.75%   -1.00%   to   -0.20%
2004   5,300   $9.95   to   $10.02   $52,924   -   1.00%   to   1.75%   -0.40%   to   0.20%
ING GET U.S. Core Portfolio - Series 5                                                
2008   46   $10.55   to   $10.56   $481   1.40%       1.75%       -8.97%
2007   57   $11.59   to   $11.60   $660   1.78%       1.75%       0.35%   to   0.43%
2006   59       $11.55   $685   1.94%       1.75%           9.27%
2005   61       $10.57   $645   0.89%       1.75%           0.96%
2004   66       $10.47   $696   (a)       1.75%           (a)    
 
 
 
 
            408                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING GET U.S. Core Portfolio - Series 6                                                
2008   216   $10.33   to   $10.34   $2,235   1.82%       1.75%       -7.85%   to   -7.76%
2007   260   $11.20   to   $11.21   $2,918   2.25%       1.75%       1.45%   to   1.54%
2006   356   $11.04   to   $11.05   $3,931   2.33%       1.75%       8.55%   to   8.65%
2005   454       $10.17       $4,616   0.39%       1.75%           0.89%    
2004   556       $10.08       $5,605   (a)       1.75%           (a)    
ING GET U.S. Core Portfolio - Series 7                                                
2008   195   $10.33   to   $10.63   $2,036   1.98%   1.00%   to   1.75%   -6.68%   to   -5.93%
2007   226   $11.06   to   $11.30   $2,516   2.37%   1.00%   to   1.75%   1.47%   to   2.26%
2006   325   $10.90   to   $11.05   $3,556   2.41%   1.00%   to   1.75%   8.35%   to   9.19%
2005   391   $10.06   to   $10.12   $3,939   0.05%   1.00%   to   1.75%   0.60%   to   1.10%
2004   402       $10.00       $4,017   (a)   1.00%   to   1.25%       (a)    
ING GET U.S. Core Portfolio - Series 8                                                
2008   75   $10.28   to   $10.29   $774   1.95%       1.75%       -8.13%   to   -8.04%
2007   87   $11.18   to   $11.19   $969   1.94%       1.75%           1.82%    
2006   137   $10.98   to   $10.99   $1,507   1.77%       1.75%       8.71%   to   8.81%
2005   154       $10.10       $1,556   (b)       1.75%           (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING GET U.S. Core Portfolio - Series 9                                                
2008   14       $10.27       $142   1.96%       1.75%           -6.81%    
2007   15       $11.02       $164   2.41%       1.75%       2.04%   to   2.13%
2006   16   $10.79   to   $10.80   $168   1.48%       1.75%           8.22%    
2005   22   $9.97   to   $9.98   $220   (b)       1.75%           (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
ING GET U.S. Core Portfolio - Series 10                                                
2008   7       $10.35       $70   2.74%       1.75%           -5.48%    
2007   7       $10.95       $76   1.32%       1.75%           1.77%    
2006   7       $10.76       $76   0.84%       1.75%           7.82%    
2005   11       $9.98       $107   (b)       1.75%           (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
 
 
 
 
            409                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING GET U.S. Core Portfolio - Series 11                                            
2008   3       $10.52       $32   2.53%       1.75%       -1.22%
2007   4       $10.65       $47   4.26%       1.75%       0.28%
2006   4       $10.62       $47   0.08%       1.75%       5.99% to   6.09%
2005   8   $10.01   to   $10.02   $80   (b)   1.15%   to   1.25%   (b)    
2004   (b)       (b)       (b)   (b)       (b)       (b)    
ING BlackRock Global Science and Technology                                            
Portfolio - Class I                                            
2008   7,555   $2.88   to   $9.65   $23,396   -   0.00%   to   1.60%   -40.75% to   -39.74%
2007   8,355   $4.86   to   $16.07   $42,834   -   0.00%   to   1.90%   17.02% to   19.06%
2006   8,763   $4.14   to   $13.50   $37,594   -   0.00%   to   1.60%   5.60% to   7.21%
2005   10,034   $3.92   to   $11.04   $40,552   -   0.00%   to   1.50%   10.06% to   11.83%
2004   11,027   $3.56   to   $10.00   $40,737   -   0.00%   to   1.50%   -2.73% to   132.01%
ING International Index Portfolio - Class I                                            
2008   37   $5.92 to $5.95   $220   (e)   0.30%   to   1.25%   (e)    
2007   (e)       (e)       (e)   (e)       (e)       (e)    
2006   (e)       (e)       (e)   (e)       (e)       (e)    
2005   (e)       (e)       (e)   (e)       (e)       (e)    
2004   (e)       (e)       (e)   (e)       (e)       (e)    
ING Lehman Brothers U.S. Aggregate Bond Index®                                            
Portfolio - Class I                                            
2008   153   $10.17   to   $10.27   $1,559   (e)   0.00%   to   1.50%   (e)    
2007   (e)       (e)       (e)   (e)       (e)       (e)    
2006   (e)       (e)       (e)   (e)       (e)       (e)    
2005   (e)       (e)       (e)   (e)       (e)       (e)    
2004   (e)       (e)       (e)   (e)       (e)       (e)    
ING Opportunistic Large Cap Growth Portfolio -                                            
Class I                                            
2008   3,372   $3.76   to   $11.05   $30,414   0.81%   0.00%   to   1.50%   -44.90% to   -44.08%
2007   3,772   $6.82   to   $19.80   $62,321   0.17%   0.00%   to   1.50%   15.99% to   17.83%
2006   4,698   $5.88   to   $16.86   $67,837   0.06%   0.00%   to   1.50%   1.12% to   2.69%
2005   5,519   $5.81   to   $16.49   $78,900   0.68%   0.00%   to   1.50%   7.77% to   9.38%
2004   6,937   $5.37   to   $15.14   $89,883   0.12%   0.00%   to   1.50%   5.63% to   6.92%
 
 
 
            410                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING Opportunistic Large Cap Value Portfolio - Class I                                                
       2008   3,555   $6.24   to   $15.47   $44,326   2.10%   0.00%   to   1.85%   -36.59%   to   -35.65%
       2007   4,155   $12.12   to   $24.08   $82,179   1.70%   0.00%   to   1.60%   1.40%   to   3.00%
       2006   4,980   $11.84   to   $23.34   $96,810   1.42%   0.00%   to   1.60%   14.29%   to   16.06%
       2005   5,822   $10.27   to   $20.11   $97,980   1.77%   0.00%   to   1.50%   5.44%   to   7.03%
       2004   6,985   $9.66   to   $18.79   $110,369   0.80%   0.00%   to   1.50%   8.48%   to   9.86%
ING Russell™ Large Cap Index Portfolio - Class I                                                
       2008   403   $6.62   to   $6.68   $2,675   (e)   0.00%   to   1.45%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
ING Russell™ Mid Cap Index Portfolio - Class I                                                
       2008   224   $5.91   to   $5.96   $1,329   (e)   0.00%   to   1.25%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
ING Russell™ Small Cap Index Portfolio - Class I                                                
       2008   91   $6.94   to   $6.99   $635   (e)   0.25%   to   1.40%       (e)    
       2007   (e)       (e)       (e)   (e)       (e)           (e)    
       2006   (e)       (e)       (e)   (e)       (e)           (e)    
       2005   (e)       (e)       (e)   (e)       (e)           (e)    
       2004   (e)       (e)       (e)   (e)       (e)           (e)    
ING VP Index Plus LargeCap Portfolio - Class I                                                
       2008   19,363   $5.99   to   $15.43   $247,468   2.11%   0.00%   to   1.95%   -38.41%   to   -37.20%
       2007   22,182   $9.68   to   $24.64   $469,092   1.25%   0.00%   to   1.95%   2.98%   to   5.00%
       2006   26,449   $9.36   to   $23.55   $539,452   1.08%   0.00%   to   1.95%   12.29%   to   14.59%
       2005   29,222   $11.05   to   $20.64   $532,133   1.22%   0.00%   to   1.85%   3.46%   to   5.37%
       2004   32,461   $10.67   to   $19.66   $562,520   0.99%   0.00%   to   1.95%   8.92%   to   10.32%
 
 
 
 
            411                                

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

                    Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING VP Index Plus LargeCap Portfolio - Class S                                            
2008   43   $7.58       $325   1.52%       0.35%       -37.56%
2007   28   $12.14       $334   -       0.35%           4.39%
2006   1   $11.63       $7   (c)       0.35%           (c)    
2005   (c)   (c)       (c)   (c)       (c)           (c)    
2004   (c)   (c)       (c)   (c)       (c)           (c)    
ING VP Index Plus MidCap Portfolio - Class I                                            
2008   14,637   $6.03 to   $16.74   $212,512   1.44%   0.00%   to   2.10%   -38.76%   to   -37.58%
2007   16,185   $13.29 to   $26.82   $381,531   0.81%   0.00%   to   1.95%   3.51%   to   5.23%
2006   18,518   $12.68 to   $25.09   $421,728   0.62%   0.00%   to   1.95%   7.28%   to   9.43%
2005   19,654   $12.22 to   $23.22   $416,465   0.44%   0.00%   to   1.95%   9.08%   to   11.15%
2004   18,764   $11.22 to   $20.56   $361,470   0.40%   0.00%   to   1.85%   14.85%   to   16.29%
ING VP Index Plus MidCap Portfolio - Class S                                            
2008   36   $7.29       $260   1.33%       0.35%       -37.90%
2007   29   $11.74       $343   0.52%       0.35%           4.92%
2006   4   $11.19       $43   (c)       0.35%           (c)    
2005   (c)   (c)       (c)   (c)       (c)           (c)    
2004   (c)   (c)       (c)   (c)       (c)           (c)    
ING VP Index Plus SmallCap Portfolio - Class I                                            
2008   7,836   $6.19 to   $12.68   $85,771   0.96%   0.00%   to   2.10%   -34.86%   to   -33.54%
2007   9,070   $12.14 to   $19.08   $151,310   0.48%   0.00%   to   2.15%   -8.00%   to   -6.48%
2006   10,525   $13.03 to   $20.09   $189,877   0.41%   0.00%   to   1.95%   11.75%   to   13.78%
2005   11,258   $12.34 to   $17.88   $182,246   0.30%   0.00%   to   1.85%   5.65%   to   7.65%
2004   10,466   $11.68 to   $16.34   $158,486   0.15%   0.00%   to   1.85%   20.22%   to   21.76%
ING VP Index Plus SmallCap Portfolio - Class S                                            
2008   8   $7.05       $58   -       0.35%       -33.86%
2007   8   $10.66       $90   -       0.35%       -6.82%
2006   5   $11.44       $52   (c)       0.35%           (c)    
2005   (c)   (c)       (c)   (c)       (c)           (c)    
2004   (c)   (c)       (c)   (c)       (c)           (c)    
 
 
 
 
        412                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING VP Small Company Portfolio - Class I                                                
2008   5,178   $6.59   to   $21.76   $86,261   1.08%   0.00%   to   1.50%   -32.09%   to   -31.10%
2007   5,336   $14.34   to   $31.63   $135,138   0.19%   0.00%   to   1.50%   4.29%   to   5.90%
2006   6,886   $13.75   to   $29.99   $169,087   0.39%   0.00%   to   1.50%   15.06%   to   16.80%
2005   7,440   $12.03   to   $25.78   $158,729   0.14%   0.00%   to   1.50%   8.64%   to   10.28%
2004   9,070   $11.02   to   $23.47   $175,779   0.28%   0.00%   to   1.50%   12.69%   to   14.09%
ING VP Small Company Portfolio - Class S                                                
2008   12       $8.52       $100   1.07%       0.35%       -31.46%
2007   7       $12.43       $87   -       0.35%           5.34%
2006   1       $11.80       $11   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING VP International Value Portfolio - Class I                                                
2008   7,918   $5.67   to   $11.79   $84,985   2.94%   0.00%   to   1.70%   -43.63%   to   -42.79%
2007   8,365   $16.66   to   $20.79   $158,131   1.78%   0.00%   to   1.55%   11.69%   to   13.15%
2006   7,376   $14.78   to   $18.51   $123,753   2.42%   0.30%   to   1.55%   27.45%   to   29.01%
2005   5,941   $12.35   to   $14.45   $78,444   2.43%   0.00%   to   1.55%   7.82%   to   9.15%
2004   4,834   $11.49   to   $13.33   $58,379   1.23%   0.30%   to   1.50%   15.63%   to   16.94%
ING VP International Value Portfolio - Class S                                                
2008   29       $8.65       $248   3.02%       0.35%       -42.52%
2007   32       $15.05       $480   1.48%       0.35%       12.65%
2006   5       $13.36       $60   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING VP MidCap Opportunities Portfolio - Class I                                                
2008   935   $6.36   to   $10.69   $8,648   -   0.00%   to   1.50%   -38.51%   to   -37.84%
2007   649   $14.57   to   $17.22   $9,758   -   0.20%   to   1.50%   23.79%   to   25.10%
2006   509   $11.77   to   $12.55   $6,141   -   0.40%   to   1.50%   6.21%   to   7.25%
2005   467   $11.08   to   $12.83   $5,277   -   0.50%   to   1.50%   0.87%   to   9.78%
2004   536   $10.19   to   $11.43   $5,546   -   0.55%   to   1.50%   9.81%   to   20.57%
 
 
 
 
            413                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING VP MidCap Opportunities Portfolio - Class S                                                
2008   12       $8.69       $108   -       0.35%       -37.93%
2007   5       $14.00       $70   -       0.35%       25.00%
2006   -       $11.20       $3   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING VP SmallCap Opportunities Portfolio - Class I                                                
2008   1,290   $6.14   to   $9.68   $8,367   -   0.00%   to   1.50%   -35.44%   to   -34.62%
2007   1,200   $9.51   to   $15.30   $11,915   -   0.20%   to   1.50%   8.44%   to   9.67%
2006   1,122   $8.77   to   $13.46   $10,191   -   0.40%   to   1.50%   10.87%   to   12.17%
2005   1,146   $7.91   to   $8.97   $9,331   -   0.40%   to   1.50%   1.86%   to   8.64%
2004   1,087   $7.36   to   $8.08   $8,178   -   0.40%   to   1.50%   8.53%   to   16.59%
ING VP SmallCap Opportunities Portfolio - Class S                                                
2008   6       $8.20       $47   -       0.35%       -34.82%
2007   1       $12.58       $17   -       0.35%           9.39%
2006   1       $11.50       $10   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING VP Balanced Portfolio - Class I                                                
2008   17,863   $7.13   to   $28.80   $314,926   3.72%   0.00%   to   1.95%   -29.49%   to   1.49%
2007   21,542   $12.24   to   $40.44   $528,434   2.68%   0.00%   to   1.95%   -27.07%   to   5.54%
2006   24,020   $11.74   to   $38.67   $588,364   2.43%   0.00%   to   1.95%   7.84%   to   9.99%
2005   27,567   $11.37   to   $35.49   $637,454   2.34%   0.00%   to   1.50%   2.69%   to   4.25%
2004   30,971   $11.05   to   $34.36   $692,148   1.99%   0.00%   to   1.50%   7.78%   to   9.12%
ING VP Intermediate Bond Portfolio - Class I                                                
2008   18,571   $9.22   to   $83.76   $350,384   5.64%   0.00%   to   2.05%   -10.25%   to   6.66%
2007   19,947   $11.00   to   $92.31   $421,252   3.81%   0.00%   to   1.95%   -11.31%   to   5.99%
2006   19,472   $10.56   to   $87.81   $400,146   3.99%   0.00%   to   1.95%   2.02%   to   4.12%
2005   19,951   $10.32   to   $76.25   $405,018   3.79%   0.00%   to   1.90%   1.37%   to   3.16%
2004   20,579   $10.21   to   $74.70   $407,745   1.50%   0.00%   to   1.95%   3.31%   to   4.59%
 
 
 
 
            414                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
ING VP Intermediate Bond Portfolio - Class S                                                
2008   22       $9.64       $212   5.64%       0.35%       -8.88%
2007   23       $10.58       $249   6.90%       0.35%           5.27%
2006   1       $10.05       $12   (c)       0.35%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
ING VP Money Market Portfolio - Class I                                                
2008   32,012   $10.33   to   $57.58   $541,019   5.05%   0.00%   to   1.95%   0.93%   to   13.38%
2007   26,790   $10.73   to   $56.29   $520,246   3.62%   0.00%   to   1.70%   -7.17%   to   5.16%
2006   19,298   $10.51   to   $53.71   $362,772   2.23%   0.00%   to   1.50%   3.32%   to   4.92%
2005   14,234   $10.15   to   $51.39   $210,711   1.20%   0.00%   to   1.50%   1.47%   to   3.03%
2004   14,934   $9.98   to   $50.07   $216,952   1.09%   0.00%   to   1.50%   -0.49%   to   0.76%
Janus Aspen Series Balanced Portfolio - Institutional                                                
Shares                                                
2008   9   $16.64   to   $26.71   $236   2.32%   0.50%   to   1.45%   -17.06%   to   -16.23%
2007   13   $13.48   to   $32.14   $367   2.63%   0.30%   to   1.45%   8.96%   to   9.95%
2006   14   $12.22   to   $29.45   $394   1.90%   0.40%   to   1.45%   9.10%   to   10.17%
2005   20   $12.45   to   $26.93   $508   0.01%   0.50%   to   1.50%   6.38%   to   7.28%
2004   16,735   $10.06   to   $26.46   $356,943   2.17%   0.00%   to   1.95%   6.91%   to   8.29%
Janus Aspen Series Flexible Bond Portfolio -                                                
Institutional Shares                                                
2008   5   $15.77   to   $23.44   $98   4.06%   0.50%   to   1.50%   4.71%   to   5.53%
2007   5   $15.06   to   $22.38   $99   4.67%   0.50%   to   1.25%   5.67%   to   6.47%
2006   6   $14.25   to   $21.18   $114   4.37%   0.50%   to   1.25%   2.97%   to   3.71%
2005   7   $14.34   to   $20.57   $146   0.02%   0.55%   to   1.25%   0.73%   to   1.39%
2004   4,497   $10.30   to   $21.35   $78,169   5.55%   0.00%   to   1.50%   2.39%   to   3.69%
Janus Aspen Series Large Cap Growth Portfolio -                                                
Institutional Shares                                                
2008   7   $8.17   to   $14.72   $75   0.89%   0.50%   to   1.40%   -40.58%   to   -40.01%
2007   7   $13.66   to   $25.03   $150   0.67%   0.50%   to   1.40%   13.50%   to   14.51%
2006   8   $11.96   to   $22.00   $148   0.43%   0.50%   to   1.40%   9.82%   to   10.86%
2005   11   $9.95   to   $18.49   $185   -   0.30%   to   1.40%   2.84%   to   3.90%
2004   12,324   $9.60   to   $19.79   $199,501   0.13%   0.00%   to   1.50%   2.98%   to   4.25%
 
 
 
            415                                

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Janus Aspen Series Mid Cap Growth Portfolio -                                            
Institutional Shares                                            
2008   15   $10.77   to   $17.72   $240   0.27%   0.30%   to   1.50%   -44.52% to   -43.95%
2007   17   $19.37   to   $31.89   $490   0.21%   0.45%   to   1.45%   20.28% to   21.49%
2006   19   $15.92   to   $26.46   $466   -   0.25%   to   1.45%   11.97% to   13.37%
2005   22   $14.12   to   $23.58   $489   -   0.25%   to   1.50%   10.59% to   11.99%
2004   25,472   $10.94   to   $24.72   $458,336   -   0.00%   to   1.50%   18.99% to   20.42%
Janus Aspen Series Worldwide Growth Portfolio -                                            
Institutional Shares                                            
2008   12   $7.49   to   $14.85   $154   1.27%   0.45%   to   1.50%   -45.34% to   -44.94%
2007   13   $13.70   to   $30.90   $317   0.90%   0.45%   to   1.25%   8.25% to   9.18%
2006   15   $12.54   to   $28.51   $353   1.61%   0.45%   to   1.25%   16.74% to   17.68%
2005   19   $10.68   to   $21.50   $381   -   0.30%   to   1.25%   4.57% to   5.53%
2004   24,107   $9.48   to   $23.32   $425,591   0.95%   0.00%   to   1.50%   3.20% to   4.47%
Lazard U.S. Mid Cap Equity Portfolio - Open Shares                                            
2008   73   $5.30   to   $5.42   $388   2.24%   0.00%   to   1.25%   -39.36% to   -38.48%
2007   37   $8.74   to   $8.81   $326   (d)   0.00%   to   1.25%   (d)    
2006   (d)       (d)       (d)   (d)       (d)       (d)    
2005   (d)       (d)       (d)   (d)       (d)       (d)    
2004   (d)       (d)       (d)   (d)       (d)       (d)    
LKCM Aquinas Growth Fund                                            
2008   26       $8.01       $206   -       1.05%       -33.80%
2007   19       $12.10       $236   -       1.05%       0.08%
2006   17       $10.87       $183   (c)       0.90%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    
Loomis Sayles Small Cap Value Fund - Retail Class                                            
2008   126   $7.14   to   $7.20   $905   (e)   0.25%   to   1.50%   (e)    
2007   (e)       (e)       (e)   (e)       (e)       (e)    
2006   (e)       (e)       (e)   (e)       (e)       (e)    
2005   (e)       (e)       (e)   (e)       (e)       (e)    
2004   (e)       (e)       (e)   (e)       (e)       (e)    
 
 
 
            416                            

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Lord Abbett Mid-Cap Value Fund, Inc. - Class A                                                
2008   85   $8.15   to   $10.13   $739   1.80%   0.55%   to   1.90%   -40.51%   to   -39.78%
2007   87   $13.80   to   $16.89   $1,257   0.51%   0.50%   to   1.75%   -1.15%   to   0.07%
2006   75   $13.96   to   $16.97   $1,081   0.56%   0.50%   to   1.75%   10.36%   to   11.81%
2005   63   $12.65   to   $15.26   $818   0.54%   0.50%   to   1.75%   6.47%   to   7.65%
2004   24   $11.91   to   $14.25   $290   (a)   0.50%   to   1.60%       (a)    
Lord Abbett Small-Cap Value Fund - Class A                                                
2008   91   $11.40   to   $12.03   $1,074   0.22%   0.55%   to   1.65%   -32.18%   to   -31.45%
2007   96   $16.81   to   $17.52   $1,648   0.13%   0.60%   to   1.65%   8.59%   to   9.68%
2006   88   $15.44   to   $15.91   $1,379   -   0.70%   to   1.75%   18.40%   to   19.56%
2005   74   $13.04   to   $13.31   $980   -   0.70%   to   1.75%   11.41%   to   12.42%
2004   45   $11.74   to   $11.84   $530   (a)   0.65%   to   1.60%       (a)    
Lord Abbett Series Fund - Mid-Cap Value Portfolio -                                                
Class VC                                                
2008   8,061   $5.71   to   $11.16   $75,150   1.22%   0.00%   to   1.50%   -40.23%   to   -39.51%
2007   9,441   $12.71   to   $18.59   $146,234   0.44%   0.20%   to   1.50%   -0.95%   to   0.38%
2006   10,067   $12.72   to   $18.67   $156,234   0.50%   0.25%   to   1.50%   10.54%   to   11.88%
2005   10,499   $12.93   to   $16.80   $147,309   0.51%   0.30%   to   1.50%   6.67%   to   7.94%
2004   7,424   $12.45   to   $15.68   $96,241   0.40%   0.00%   to   1.50%   22.18%   to   36.28%
Massachusetts Investors Growth Stock Fund - Class A                                                
2008   46   $7.88   to   $8.09   $364   0.36%   0.65%   to   1.20%   -37.66%   to   -37.38%
2007   58   $12.55   to   $12.92   $737   0.45%   0.65%   to   1.40%   10.10%   to   10.59%
2006   52   $11.38   to   $11.61   $596   -   0.80%   to   1.50%   6.37%   to   6.61%
2005   39   $10.79   to   $10.89   $421   (f)   0.80%   to   1.30%       (f)    
2004   17   $10.55   to   $10.58   $180   (a)   0.70%   to   0.95%       (a)    
Morgan Stanley U.S. Small Cap Value Portfolio -                                                
Class I                                                
2008   114       $7.40       $841   (e)       -           (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
 
 
 
            417                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Neuberger Berman Socially Responsive Fund® -                                                
Trust Class                                                
2008   318   $6.12   to   $7.07   $2,187   0.72%   0.00%   to   1.60%   -39.86%   to   -39.08%
2007   175   $11.28   to   $11.54   $1,985   0.80%   0.25%   to   1.55%   5.62%   to   6.79%
2006   48   $10.68   to   $10.77   $519   (c)   0.40%   to   1.50%       (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
New Perspective Fund®, Inc. - Class R-3                                                
2008   254   $9.89   to   $10.62   $2,657   1.79%   0.00%   to   1.45%   -38.99%   to   -38.08%
2007   238   $16.21   to   $17.15   $4,038   2.44%   0.00%   to   1.45%   14.34%   to   15.34%
2006   83   $14.18   to   $14.75   $1,204   1.64%   0.20%   to   1.55%   18.17%   to   19.17%
2005   40   $12.16   to   $12.36   $486   1.45%   0.25%   to   1.10%   9.98%   to   10.56%
2004   18   $11.12   to   $11.17   $204   (a)   0.30%   to   0.80%       (a)    
New Perspective Fund®, Inc. - Class R-4                                                
2008   3,763   $6.11   to   $10.97   $39,040   2.60%   0.00%   to   1.50%   -38.80%   to   -37.81%
2007   2,456   $15.58   to   $17.64   $41,461   2.12%   0.00%   to   1.50%   14.23%   to   15.56%
2006   1,896   $13.57   to   $15.13   $27,925   1.55%   0.30%   to   1.50%   18.09%   to   19.46%
2005   1,760   $11.44   to   $12.78   $22,033   1.87%   0.00%   to   1.50%   9.56%   to   10.64%
2004   762   $11.30   to   $11.66   $8,638   (a)   0.55%   to   1.50%       (a)    
Oppenheimer Capital Appreciation Fund - Class A                                                
2008   53   $6.69   to   $7.03   $363   -   0.55%   to   1.55%   -46.74%   to   -46.17%
2007   47   $12.56   to   $13.06   $597   -   0.55%   to   1.55%   12.19%   to   13.17%
2006   36   $11.24   to   $11.54   $414   -   0.55%   to   1.45%   6.62%   to   6.79%
2005   30   $10.65   to   $10.76   $316   0.75%   0.70%   to   1.25%   3.40%   to   3.96%
2004   21   $10.27   to   $10.36   $217   (a)   0.65%   to   1.60%       (a)    
Oppenheimer Developing Markets Fund - Class A                                                
2008   3,873   $5.11   to   $37.41   $114,355   1.45%   0.00%   to   1.65%   -48.87%   to   -48.03%
2007   4,018   $23.12   to   $71.98   $230,998   0.96%   0.00%   to   1.95%   31.54%   to   33.43%
2006   3,743   $17.39   to   $52.76   $163,882   1.30%   0.30%   to   1.75%   23.14%   to   24.56%
2005   3,268   $17.98   to   $41.82   $115,468   1.74%   0.50%   to   1.65%   38.95%   to   40.45%
2004   1,557   $12.94   to   $29.69   $37,377   2.10%   0.55%   to   1.65%   31.71%
 
 
 
 
            418                                    

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Oppenheimer Global Securities/VA                                                
2008   17   $9.06   to   $15.97   $247   1.70%   0.45%   to   1.75%   -41.25%   to   -40.45%
2007   23   $15.42   to   $26.82   $578   1.49%   0.45%   to   1.75%   4.87%   to   5.84%
2006   32   $14.74   to   $25.34   $765   1.02%   0.45%   to   1.80%   16.01%   to   17.15%
2005   35   $12.74   to   $21.63   $711   2.11%   0.45%   to   1.85%   12.61%   to   13.78%
2004   22,250   $11.36   to   $19.26   $410,368   1.10%   0.00%   to   1.80%   17.37%   to   18.89%
Oppenheimer Main Street Fund®/VA                                                
2008   10   $5.99   to   $6.76   $63   1.12%   1.25%   to   1.50%   -39.37%   to   -39.21%
2007   11   $9.88   to   $11.12   $115   0.84%   1.25%   to   1.50%   2.92%   to   3.15%
2006   13   $9.60   to   $10.78   $123   1.67%   1.25%   to   1.50%   13.34%   to   13.59%
2005   -       -       $41   -       -           -    
2004   -       -       $43   -   1.25%   to   1.50%       -    
Oppenheimer Main Street Small Cap Fund®/VA                                                
2008   578   $5.85   to   $9.19   $4,655   0.52%   0.00%   to   1.50%   -38.76%   to   -38.01%
2007   531   $12.90   to   $14.92   $6,971   0.31%   0.25%   to   1.50%   -2.71%   to   -1.48%
2006   351   $13.26   to   $15.26   $4,722   0.10%   0.30%   to   1.50%   13.33%   to   14.43%
2005   89   $11.70   to   $13.40   $1,052   2.38%   0.50%   to   1.50%       8.62%    
2004   -       $12.30       $5   (a)       1.25%           (a)    
Oppenheimer MidCap Fund/VA                                                
2008   4   $2.76   to   $5.50   $13   -   1.25%   to   1.50%   -49.91%   to   -49.73%
2007   4   $5.51   to   $10.94   $31   -   1.25%   to   1.50%       4.99%    
2006   -       $10.42       $1   -       1.25%           1.66%    
2005   -       -       $3   -       -           -    
2004   -       -       $3   -       1.25%           -    
Oppenheimer Strategic Bond Fund/VA                                                
2008   7   $13.54   to   $14.99   $105   5.22%   0.50%   to   1.45%   -15.43%   to   -14.70%
2007   7   $16.01   to   $17.48   $125   3.94%   0.55%   to   1.45%   8.10%   to   9.11%
2006   8   $14.81   to   $16.02   $128   3.91%   0.55%   to   1.45%   5.94%   to   6.87%
2005   11   $13.98   to   $15.10   $154   9.58%   0.45%   to   1.45%   1.16%   to   2.17%
2004   3,306   $10.88   to   $14.98   $47,078   4.44%   0.00%   to   1.95%   7.08%   to   8.47%
 
 
 
 
            419                                    

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Pax World Balanced Fund                                                
2008   4,896   $6.89   to   $9.87   $44,509   1.99%   0.00%   to   1.75%   -31.93%   to   -30.74%
2007   4,498   $12.75   to   $14.25   $59,458   1.79%   0.00%   to   1.75%   7.49%   to   9.16%
2006   4,112   $11.83   to   $12.90   $50,097   1.66%   0.30%   to   1.75%   9.03%   to   10.07%
2005   4,818   $10.85   to   $11.76   $54,353   1.65%   0.00%   to   1.65%   3.72%   to   4.87%
2004   1,550   $10.45   to   $11.12   $16,523   0.96%   0.55%   to   1.65%   11.98%   to   12.45%
PIMCO Real Return Portfolio - Administrative Class                                                
2008   6,215   $9.53   to   $11.50   $67,423   4.31%   0.00%   to   1.65%   -8.45%   to   -7.03%
2007   2,861   $10.72   to   $12.37   $34,027   4.42%   0.00%   to   1.50%   8.91%   to   10.55%
2006   2,338   $10.15   to   $11.19   $25,436   4.36%   0.00%   to   1.50%   -0.74%   to   0.36%
2005   2,096   $10.52   to   $11.10   $22,843   3.20%   0.40%   to   1.50%   0.56%   to   1.48%
2004   882   $10.43   to   $10.83   $9,519   (a)   0.60%   to   1.50%       (a)    
Pioneer High Yield Fund - Class A                                                
2008   328   $7.37   to   $7.95   $2,557   7.36%   0.20%   to   1.75%   -38.07%   to   -37.15%
2007   273   $11.81   to   $12.65   $3,394   4.89%   0.20%   to   1.95%   5.03%   to   6.37%
2006   161   $11.33   to   $11.78   $1,880   4.89%   0.40%   to   1.75%   8.63%   to   10.10%
2005   70   $10.43   to   $10.69   $742   4.75%   0.45%   to   1.75%   0.67%   to   1.72%
2004   42   $10.38   to   $10.48   $437   (a)   0.60%   to   1.65%       (a)    
Pioneer Emerging Markets VCT Portfolio - Class I                                                
2008   2,224   $4.12   to   $5.36   $11,735   0.43%   0.00%   to   1.55%   -58.85%   to   -58.26%
2007   2,280   $12.71   to   $12.84   $29,074   (d)   0.00%   to   1.50%       (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
Pioneer Equity Income VCT Portfolio - Class I                                                
2008   -       $10.36       -   2.69%       0.65%       -30.79%
2007   79   $13.98   to   $14.97   $1,189   2.95%   0.65%   to   1.25%   -0.43%   to   0.20%
2006   8,116   $13.06   to   $17.75   $119,307   2.59%   0.35%   to   1.95%   20.07%   to   22.02%
2005   5,640   $11.48   to   $14.64   $69,926   2.66%   0.30%   to   1.60%   3.28%   to   5.40%
2004   2,471   $11.02   to   $13.99   $28,279   2.17%   0.00%   to   1.95%   14.64%   to   17.70%
 
 
 
 
            420                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Pioneer High Yield VCT Portfolio - Class I                                                
2008   1,510   $6.35   to   $8.12   $11,678   9.26%   0.00%   to   1.50%   -36.41%   to   -35.58%
2007   1,598   $11.89   to   $12.45   $19,319   5.55%   0.25%   to   1.50%   3.99%   to   5.36%
2006   1,065   $11.36   to   $11.75   $12,297   5.72%   0.40%   to   1.50%   6.92%   to   8.10%
2005   646   $10.67   to   $10.94   $6,949   5.69%   0.00%   to   1.50%   0.38%   to   1.31%
2004   419   $10.63   to   $11.03   $4,468   (a)   0.65%   to   1.50%       (a)    
Premier VIT OpCap Mid Cap Portfolio                                                
2008   437   $5.62   to   $5.76   $2,476   0.42%   0.00%   to   1.50%   -42.54%   to   -41.83%
2007   40   $9.78   to   $9.85   $393   (d)   0.30%   to   1.50%       (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
RiverSource Diversified Equity Income Fund -                                                
Class R-4                                                
2008   237   $6.16   to   $6.21   $1,464   (e)   0.25%   to   1.50%       (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
SMALLCAP World Fund® - Class R-4                                                
2008   80   $5.44   to   $5.48   $434   (e)   0.25%   to   1.50%       (e)    
2007   (e)       (e)       (e)   (e)       (e)           (e)    
2006   (e)       (e)       (e)   (e)       (e)           (e)    
2005   (e)       (e)       (e)   (e)       (e)           (e)    
2004   (e)       (e)       (e)   (e)       (e)           (e)    
T. Rowe Price Mid-Cap Value Fund - R Class                                                
2008   74   $9.16   to   $9.62   $699   0.47%   0.35%   to   1.35%   -35.71%   to   -35.09%
2007   68   $14.14   to   $14.82   $991   1.80%   0.35%   to   1.55%   -1.39%   to   -0.20%
2006   69   $14.34   to   $14.85   $1,010   0.61%   0.35%   to   1.55%   18.15%   to   19.08%
2005   63   $12.20   to   $12.42   $775   0.29%   0.50%   to   1.45%   5.72%   to   6.70%
2004   53   $11.54   to   $11.64   $619   (a)   0.50%   to   1.45%       (a)    
 
 
 
 
            421                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
T. Rowe Price Value Fund - Advisor Class                                                
2008   6       $6.79       $44   1.90%       1.00%       -40.44%
2007   5       $11.40       $61   2.20%       1.00%       -0.44%
2006   3       $11.45       $30   (c)       1.00%           (c)    
2005   (c)       (c)       (c)   (c)       (c)           (c)    
2004   (c)       (c)       (c)   (c)       (c)           (c)    
Templeton Foreign Fund - Class A                                                
2008   71   $8.88   to   $9.41   $658   3.00%   0.55%   to   1.75%   -46.99%   to   -46.40%
2007   82   $16.75   to   $17.56   $1,410   1.84%   0.55%   to   1.75%   15.20%   to   16.60%
2006   59   $14.54   to   $15.06   $876   2.28%   0.55%   to   1.75%   18.01%   to   19.06%
2005   51   $12.36   to   $12.59   $637   1.84%   0.70%   to   1.65%   8.80%   to   9.86%
2004   39   $11.36   to   $11.46   $450   (a)   0.65%   to   1.65%       (a)    
Templeton Global Bond Fund - Class A                                                
2008   6,885   $10.59   to   $23.17   $110,722   9.04%   0.00%   to   1.50%   4.73%   to   6.28%
2007   4,997   $12.26   to   $21.80   $72,664   7.52%   0.00%   to   1.50%   9.14%   to   10.83%
2006   2,522   $11.13   to   $19.67   $33,054   5.57%   0.00%   to   1.50%   11.73%   to   12.85%
2005   1,327   $11.07   to   $16.96   $15,341   5.36%   0.50%   to   1.50%   -3.59%   to   -4.49%
2004   572   $11.59   to   $17.55   $6,775   (a)   0.55%   to   1.50%       (a)    
Diversified Value Portfolio                                                
2008   9   $9.01   to   $9.44   $80   3.09%   0.95%   to   1.95%   -37.34%   to   -36.73%
2007   8   $14.38   to   $14.92   $114   1.87%   0.95%   to   1.95%       2.97%
2006   7   $14.09   to   $14.49   $100   (g)   0.95%   to   2.00%       (g)    
2005   5   $12.09   to   $12.25   $63   (b)   1.25%   to   2.05%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
Equity Income Portfolio                                                
2008   17   $9.38   to   $9.76   $165   3.84%   1.10%   to   1.95%   -32.23%   to   -31.65%
2007   21   $13.84   to   $14.28   $304   2.23%   1.10%   to   1.95%       3.40%
2006   17   $13.48   to   $13.81   $235   1.93%   1.10%   to   2.00%   19.36%   to   19.36%
2005   21   $11.39   to   $11.57   $240   2.23%   1.10%   to   2.05%   2.41%   to   3.03%
2004   18   $11.19   to   $11.23   $208   (a)   1.10%   to   1.65%       (a)    
 
 
 
 
            422                                

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

                        Investment                        
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Small Company Growth Portfolio                                                
2008   8   $7.57   to   $7.93   $64   -   0.95%   to   1.95%   -40.63%   to   -40.02%
2007   7   $12.75   to   $13.22   $86   -   0.95%   to   1.95%       2.80%    
2006   1   $12.51   to   $12.86   $18   (g)   0.95%   to   2.00%       (g)    
2005   -   $11.57   to   $11.72   -   (b)   1.25%   to   2.05%       (b)    
2004   (b)       (b)       (b)   (b)       (b)           (b)    
Wanger International                                                
2008   1,203   $5.11   to   $5.75   $6,819   1.00%   0.00%   to   1.50%   -46.37%   to   -45.60%
2007   916   $10.46   to   $10.57   $9,623   (d)   0.00%   to   1.50%       (d)    
2006   (d)       (d)       (d)   (d)       (d)           (d)    
2005   (d)       (d)       (d)   (d)       (d)           (d)    
2004   (d)       (d)       (d)   (d)       (d)           (d)    
Wanger Select                                                
2008   4,338   $4.80   to   $8.48   $35,288   -   0.00%   to   1.50%   -49.84%   to   -49.04%
2007   4,150   $15.70   to   $16.65   $66,892   -   0.00%   to   1.50%   7.73%   to   9.02%
2006   1,756   $14.45   to   $15.37   $26,052   0.25%   0.15%   to   1.50%   17.90%   to   19.00%
2005   559   $12.40   to   $12.94   $6,985   -   0.60%   to   1.50%   8.87%   to   9.69%
2004   195   $11.39   to   $11.85   $2,227   (a)   0.70%   to   1.50%       (a)    
Wanger USA                                                
2008   1,727   $5.83   to   $8.89   $14,699   -   0.00%   to   1.50%   -40.59%   to   -37.59%
2007   1,512   $13.11   to   $14.89   $21,526   -   0.05%   to   1.50%   -0.63%   to   4.86%
2006   1,254   $12.52   to   $14.27   $17,111   0.22%   0.15%   to   1.50%   6.31%   to   7.30%
2005   725   $12.66   to   $13.34   $9,257   -   0.00%   to   1.50%   9.61%   to   10.66%
2004   186   $11.55   to   $12.12   $2,155   (a)   0.55%   to   1.50%       (a)    
Washington Mutual Investors FundSM, Inc. - Class R-3                                                
2008   448   $8.39   to   $9.05   $3,911   2.30%   0.00%   to   1.55%   -34.35%   to   -33.31%
2007   395   $12.78   to   $13.57   $5,204   1.77%   0.00%   to   1.55%   2.08%   to   3.38%
2006   301   $12.52   to   $13.02   $3,858   1.62%   0.20%   to   1.55%   15.82%   to   17.24%
2005   198   $10.81   to   $11.09   $2,177   1.64%   0.25%   to   1.55%   1.78%   to   2.88%
2004   115   $10.66   to   $10.77   $1,232   (a)   0.30%   to   1.40%       (a)    
 
 
 
 
            423                                    

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

                        Investment                    
    Units*   Unit Fair Value   Net Assets   Income   Expense RatioB   Total ReturnC
    (000's)   (lowest to highest)   (000's)   RatioA   (lowest to highest)   (lowest to highest)
Washington Mutual Investors FundSM, Inc. - Class R-4                                            
2008   6,960   $6.43   to   $9.25   $60,944   2.56%   0.00%   to   1.50%   -34.15% to   -33.33%
2007   6,883   $12.73   to   $13.71   $91,248   1.97%   0.25%   to   1.50%   2.34% to   3.56%
2006   6,828   $12.38   to   $13.21   $88,156   1.90%   0.30%   to   1.50%   16.17% to   17.48%
2005   5,985   $10.60   to   $11.29   $66,271   2.09%   0.40%   to   1.50%   1.94% to   2.95%
2004   3,309   $10.80   to   $11.08   $35,859   (a)   0.55%   to   1.50%   (a)    
Wells Fargo Advantage Small Cap Value Fund - Class A                                            
2008   7       $7.12       $46   -       1.00%       -39.04%
2007   4       $11.68       $47   -       1.00%       9.16%
2006   2       $10.70       $21   (c)       1.00%       (c)    
2005   (c)       (c)       (c)   (c)       (c)       (c)    
2004   (c)       (c)       (c)   (c)       (c)       (c)    

(a) As this investment Division was not available until 2004, this data is not meaningful and therefore is not presented.
(b) As this investment Division was not available until 2005, this data is not meaningful and therefore is not presented.
(c) As this investment Division was not available until 2006, this data is not meaningful and therefore is not presented.
(d) As this investment Division was not available until 2007, this data is not meaningful and therefore is not presented.
(e) As this investment Division was not available until 2008, this data is not meaningful and therefore is not presented.
(f) As this investment Division is wholly comprised of new contract bands at December 31, 2005, this data is not meaningful and therefore is not presented.
(g) As this investment Division is wholly comprised of new contract bands at December 31, 2006, this data is not meaningful and therefore is not presented.
(h) As this investment Division is wholly comprised of new contract bands at December 31, 2007, this data is not meaningful and therefore is not presented.

A The Investment Income Ratio represents dividends received by the Division, excluding capital gains distributions divided by the average net assets.
    The recognition of investment income is determined by the timing of the declaration of dividends by the underlying fund in which the Division invests.
B The Expense Ratio considers only the expenses borne directly by the Account and is equal to the mortality and expense, administrative and other charges,
    as defined in Note 5. Certain items in this table are presented as a range of minimum and maximum values; however, such information is calculated 
    independently for each column in the table.
C Total Return is calculated as the change in unit value for each Contract presented in the Statements of Assets and Liabilities. Certain items in this
    table are presented as a range of minimum and maximum values; however, such information is calculated independently for each column in the table.

* Includes units for annuity contracts in payout beginning in 2006.

                                                                                                                  424

 

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, 2008, 2007, and 2006

C-3

 

 

 

 

 

Consolidated Balance Sheets as of

 

 

 

December 31, 2008 and 2007

C-4

 

 

 

 

 

Consolidated Statements of Changes in Shareholder's Equity 

 

 

 

For the years ended December 31, 2008, 2007, and 2006

C-6

 

 

 

 

 

Consolidated Statements of Cash Flows for the years ended

 

 

 

December 31, 2008, 2007, and 2006

C-7

 

 

 

 

Notes to Consolidated Financial Statements

C-9

 

 

 

 

 

 

C-1

 

 

Report of Independent Registered Public Accounting Firm

 

 

The Board of Directors

ING Life Insurance and Annuity Company

 

We have audited the accompanying consolidated balance sheets of ING Life Insurance and Annuity Company and subsidiaries as of December 31, 2008 and 2007, 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, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ING Life Insurance and Annuity Company and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

 

 

 

/s/ Ernst & Young LLP

 

 

Atlanta, Georgia

March 26, 2009

 

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,

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2006

Revenue:

 

 

 

 

 

 

 

 

 

 

Net investment income

$

1,083.7 

 

$

1,054.7 

 

$

1,029.7 

 

Fee income

 

612.9 

 

 

769.9 

 

 

714.8 

 

Premiums

 

46.9 

 

 

46.8 

 

 

37.5 

 

Broker-dealer commission revenue

 

622.5 

 

 

568.4 

 

 

429.2 

 

Net realized capital (losses) gains 

 

(653.1)

 

 

(27.6)

 

 

3.0 

 

Other income

 

21.3 

 

 

20.3 

 

 

15.7 

Total revenue

 

1,734.2 

 

 

2,432.5 

 

 

2,229.9 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

Interest credited and other benefits 

 

 

 

 

 

 

 

 

 

 

to contractowners

 

1,432.4 

 

 

802.8 

 

 

783.7 

 

Operating expenses

 

687.5 

 

 

652.2 

 

 

568.3 

 

Broker-dealer commission expense

 

622.5 

 

 

568.4 

 

 

429.2 

 

Net amortization of deferred policy acquisition 

 

 

 

 

 

 

 

 

 

 

cost and value of business acquired

 

128.9 

 

 

129.2 

 

 

21.3 

 

Interest expense

 

1.4 

 

 

5.5 

 

 

2.9 

Total benefits and expenses

 

2,872.7 

 

 

2,158.1 

 

 

1,805.4 

(Loss) income before income taxes 

 

(1,138.5)

 

 

274.4 

 

 

424.5 

Income tax (benefit) expense

 

(108.3)

 

 

56.0 

 

 

122.7 

Net (loss) income

$

(1,030.2)

 

$

218.4 

 

$

301.8 

 

 

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

 

C-3

 

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

 

Consolidated Balance Sheets

(In millions, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 

 

 

 

 

 

 

2008

 

 

2007

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Fixed maturities, available-for-sale, at fair value 

 

 

 

 

 

 

 

(amortized cost of $14,632.6 at 2008 and $13,374.7 at 2007)

$

13,252.2 

 

$

13,316.3 

 

Equity securities, available-for-sale, at fair value

 

 

 

 

 

 

 

(cost of $247.7 at 2008 and $440.1 at 2007)

 

240.3 

 

 

446.4 

 

Short-term investments

 

41.9 

 

 

167.9 

 

Mortgage loans on real estate

 

2,107.8 

 

 

2,089.4 

 

Policy loans

 

267.8 

 

 

273.4 

 

Limited partnerships/corporations

 

513.9 

 

 

636.1 

 

Other investments

 

235.2 

 

 

34.8 

 

Securities pledged (amortized cost of $1,160.5 at 2008 and $940.2 at 2007)

 

1,225.4 

 

 

934.1 

Total investments

 

17,884.5 

 

 

17,898.4 

Cash and cash equivalents

 

203.5 

 

 

252.3 

Short-term investments under securities loan agreement, 

 

 

 

 

 

 

including collateral delivered

 

483.9 

 

 

202.7 

Accrued investment income

 

205.8 

 

 

168.3 

Receivables for securities sold

 

5.5 

 

 

5.6 

Reinsurance recoverable

 

2,505.6 

 

 

2,594.4 

Deferred policy acquisition costs

 

865.5 

 

 

728.6 

Value of business acquired

 

1,832.5 

 

 

1,253.2 

Notes receivable from affiliate

 

175.0 

 

 

175.0 

Due from affiliates

 

13.8 

 

 

10.6 

Current income tax recoverable

 

38.6 

 

 

-  

Property and equipment

 

114.7 

 

 

147.4 

Other assets

 

233.3 

 

 

112.1 

Assets held in separate accounts

 

35,927.7 

 

 

48,091.2 

Total assets

$

60,489.9 

 

$

71,639.8 

 

 

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

 

C-4

 

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

 

Consolidated Balance Sheets

(In millions, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

 

 

 

2008

 

 

2007

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholder's Equity

 

 

 

 

 

Future policy benefits and claims reserves

$

20,782.1 

 

$

18,569.1 

Payables for securities purchased

 

1.6 

 

 

0.2 

Payables under securities loan agreement, including collateral held

 

488.3 

 

 

183.9 

Notes payable

 

17.9 

 

 

9.9 

Borrowed money

 

615.3 

 

 

738.4 

Due to affiliates

 

116.7 

 

 

130.7 

Current income taxes

 

-  

 

 

56.8 

Deferred income taxes

 

101.1 

 

 

275.9 

Other liabilities

 

874.7 

 

 

542.7 

Liabilities related to separate accounts

 

35,927.7 

 

 

48,091.2 

Total liabilities

 

58,925.4 

 

 

68,598.8 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

 

 

 

 

Common stock (100,000 shares authorized; 55,000 

 

 

 

 

 

 

 

issued and outstanding; $50 per share value)

 

2.8 

 

 

2.8 

 

Additional paid-in capital

 

4,161.3 

 

 

4,159.3 

 

Accumulated other comprehensive loss

 

(482.1)

 

 

(33.8)

 

Retained earnings (deficit)

 

(2,117.5)

 

 

(1,087.3)

Total shareholder's equity

 

1,564.5 

 

 

3,041.0 

Total liabilities and shareholder's equity

$

60,489.9 

 

$

71,639.8 

 

 

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

 

C-5

 

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

 

Consolidated Statements of Changes in Shareholder’s Equity

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Other

 

 

Retained

 

Total

 

 

 

 

 

 

 

 

Common

 

 

Paid-In

 

Comprehensive

 

 

Earnings

 

Shareholder's

 

 

 

 

 

 

 

 

Stock

 

 

Capital

 

Income (Loss)

 

 

(Deficit)

 

Equity

Balance at December 31, 2005

$

2.8 

 

$

4,549.6 

 

$

(5.3)

 

$

(1,576.4)

 

$

2,970.7 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

-  

 

 

-  

 

 

-  

 

 

301.8 

 

 

301.8 

 

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net unrealized capital gains (losses) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

on securities ($(23.4) pretax)

 

-  

 

 

-  

 

 

(10.7)

 

 

-  

 

 

(10.7)

 

 

 

Pension liability and FAS No. 158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

transition adjustment ($3.9 pretax)

 

-  

 

 

-  

 

 

2.5 

 

 

-  

 

 

2.5 

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

293.6 

 

Cumulative effect of change in accounting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

principle ($(0.8) pretax)

 

 

 

 

 

 

 

(0.5)

 

 

-  

 

 

(0.5)

 

Dividends paid

 

-  

 

 

(256.0)

 

 

-  

 

 

-  

 

 

(256.0)

 

Employee share-based payments

 

-  

 

 

5.9 

 

 

-  

 

 

-  

 

 

5.9 

Balance at December 31, 2006

 

2.8 

 

 

4,299.5 

 

 

(14.0)

 

 

(1,274.6)

   

 

3,013.7 

 

Cumulative effect of change in 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

accounting principle 

 

-  

 

 

-  

 

 

-  

 

 

(31.1)

 

 

(31.1)

Balance at January 1, 2007

 

2.8 

 

 

4,299.5 

 

 

(14.0)

 

 

(1,305.7)

 

 

2,982.6 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

-  

 

 

-  

 

 

-  

 

 

218.4 

 

 

218.4 

 

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net unrealized capital gains (losses) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

on securities ($(27.7) pretax), including 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

tax valuation allowance of $(6.4)

 

-  

 

 

-  

 

 

(24.4)

 

 

-  

 

 

(24.4)

 

 

 

Pension liability ($7.1 pretax) 

 

-  

 

 

-  

 

 

4.6 

 

 

-  

 

 

4.6 

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

198.6 

 

Dividends paid

 

-  

 

 

(145.0)

 

 

-  

 

 

-  

 

 

(145.0)

 

Employee share-based payments

 

-  

 

 

4.8 

 

 

-  

 

 

-  

 

 

4.8 

Balance at December 31, 2007

 

2.8 

 

 

4,159.3 

 

 

(33.8)

 

 

(1,087.3)

 

 

3,041.0 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-  

 

 

-  

 

 

-  

 

 

(1,030.2)

 

 

(1,030.2)

 

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net unrealized capital gains (losses) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

on securities ($(635.4) pretax), including 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

tax valuation allowance of $6.4

 

-  

 

 

-  

 

 

(435.3)

 

 

-  

 

 

(435.3)

 

 

 

Pension liability ($18.7 pretax) 

 

-  

 

 

-  

 

 

(13.0)

 

 

-  

 

 

(13.0)

 

Total comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,478.5)

 

Dividends paid

 

-  

 

 

-  

 

 

-  

 

 

-  

 

 

-  

 

Employee share-based payments

 

-  

 

 

2.0 

 

 

-  

 

 

-  

 

 

2.0 

Balance at December 31, 2008

$

2.8 

 

$

4,161.3 

 

$

(482.1)

 

$

(2,117.5)

 

$

1,564.5 

 

 

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,

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2006

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(1,030.2)

 

$

218.4 

 

$

301.8 

 

Adjustments to reconcile net income to 

 

 

 

 

 

 

 

 

 

 

net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Capitalization of deferred policy acquisition costs, value

 

 

 

 

 

 

 

 

 

 

 

 

of business acquired, and sales inducements

 

(205.1)

 

 

(193.4)

 

 

(191.0)

 

 

 

Net amortization of deferred policy acquisition costs,

 

 

 

 

 

 

 

 

 

 

 

 

value of business acquired, and sales inducements

 

128.3 

 

 

133.9 

 

 

25.9 

 

 

 

Net accretion/decretion of discount/premium

 

87.1 

 

 

72.7 

 

 

83.8 

 

 

 

Future policy benefits, claims reserves, and

 

 

 

 

 

 

 

 

 

 

 

 

interest credited

 

1,296.8 

 

 

579.6 

 

 

662.5 

 

 

 

Provision for deferred income taxes

 

25.3 

 

 

30.4 

 

 

75.6 

 

 

 

Net realized capital losses (gains)

 

653.1 

 

 

27.6 

 

 

(3.0)

 

 

 

Depreciation

 

56.7 

 

 

18.2 

 

 

12.6 

 

 

 

Change in:

 

 

 

 

 

 

 

 

 

 

 

 

Accrued investment income

 

(37.5)

 

 

12.1 

 

 

23.2 

 

 

 

 

Reinsurance recoverable

 

88.8 

 

 

121.0 

 

 

81.3 

 

 

 

 

Other receivable and assets accruals

 

(115.3)

 

 

(37.0)

 

 

(20.1)

 

 

 

 

Due to/from affiliates

 

(17.2)

 

 

46.4 

 

 

20.4 

 

 

 

 

Other payables and accruals

 

(120.3)

 

 

17.8 

 

 

86.3 

 

 

 

Other, net

 

(44.0)

 

 

(16.4)

 

 

5.9 

Net cash provided by operating activities

 

766.5 

 

 

1,031.3 

 

 

1,165.2 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

Proceeds from the sale, maturity, or redemption of:

 

 

 

 

 

 

 

 

 

 

Fixed maturities, available-for-sale

 

9,039.7 

 

 

10,235.6 

 

 

10,355.2 

 

 

Equity securities, available-for-sale

 

135.0 

 

 

113.8 

 

 

91.7 

 

 

Mortgage loans on real estate 

 

146.5 

 

 

205.4 

 

 

197.0 

 

Acquisition of:

 

 

 

 

 

 

 

 

 

 

Fixed maturities, available-for-sale

 

(11,593.4)

 

 

(8,425.5)

 

 

(8,802.1)

 

 

Equity securities, available-for-sale

 

(54.8)

 

 

(243.9)

 

 

(149.1)

 

 

Mortgage loans on real estate

 

(168.0)

 

 

(415.1)

 

 

(680.3)

 

Policy loans, net

 

5.6 

 

 

(4.5)

 

 

(6.5)

 

Derivatives, net

 

52.6 

 

 

32.2 

 

 

1.4 

 

Limited partnerships, net

 

81.5 

 

 

(279.5)

 

 

(237.6)

 

Short-term investments, net

 

126.0 

 

 

(163.3)

 

 

-  

 

Purchases of property and equipment, net

 

(24.0)

 

 

(90.5)

 

 

(54.5)

 

Collateral received (paid)

 

23.2 

 

 

(18.8)

 

 

-  

 

Other investments

 

0.7 

 

 

-  

 

 

(4.0)

Net cash (used in) provided by investing activities

 

(2,229.4)

 

 

945.9 

 

 

711.2 

 

 

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,

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2006

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

Deposits received for investment contracts

 

3,836.4 

 

 

1,600.0 

 

 

1,875.7 

 

Maturities and withdrawals from investment contracts

 

(2,312.2)

 

 

(3,451.2)

 

 

(3,420.7)

 

Short-term loans to affiliates

 

13.0 

 

 

45.0 

 

 

86.0 

 

Short-term repayments

 

(123.1)

 

 

(94.8)

 

 

(107.9)

 

Notes payable

 

-  

 

 

9.9 

 

 

-  

 

Dividends to Parent

 

-  

 

 

(145.0)

 

 

(256.0)

Net cash provided by (used in) financing activities

 

1,414.1 

 

 

(2,036.1)

 

 

(1,822.9)

Net (decrease) increase in cash and cash equivalents

 

(48.8)

 

 

(58.9)

 

 

53.5 

Cash and cash equivalents, beginning of year

 

252.3 

 

 

311.2 

 

 

257.7 

Cash and cash equivalents, end of year

$

203.5 

 

$

252.3 

 

$

311.2 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Income taxes (received) paid, net

$

(44.1)

 

$

45.1 

 

$

37.6 

 

Interest paid

$

23.6 

 

$

44.6 

 

$

40.8 

 

 

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 amount in millions, unless otherwise stated)

 

1.

Organization and Significant Accounting Policies

Basis of Presentation

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

 

The consolidated financial statements include ILIAC and its wholly-owned subsidiaries, ING Financial Advisers, LLC (“IFA”) and Directed Services LLC (“DSL”). ILIAC is a direct, wholly-owned subsidiary of Lion Connecticut Holdings Inc. (“Lion” or “Parent”), which is an indirect, wholly-owned subsidiary of ING Groep N.V. (“ING”). ING is a global financial services holding company based in The Netherlands, with American Depository Shares listed on the New York Stock Exchange under the symbol “ING.”

 

On December 1, 2006, Lion contributed to ILIAC, Directed Services, Inc. (“DSI”), a New York corporation registered as a broker-dealer under the Securities Exchange Act of 1934 and as an investment advisor under the Investment Advisors Act of 1940, whose primary functions were the distribution of variable insurance products and investment advisory services for open-end mutual funds. Additionally, on December 12, 2006, ILIAC organized DSL as a wholly-owned Delaware limited liability company. On December 31, 2006, DSI merged with and into DSL and ceased to exist. Upon merger, the operations and broker-dealer and investment advisor registrations of DSI were consolidated into DSL, the surviving company. Effective January 1, 2007, ILIAC’s investment advisory agreement with certain variable funds offered in Company products was assigned to DSL.

 

On May 11, 2006, ILIAC organized NWL as a wholly-owned subsidiary for the purpose of purchasing, constructing, developing, leasing, and managing a new corporate office facility to be located at One Orange Way, Windsor, Connecticut (the “Windsor Property”). Effective October 1, 2007, the principal executive office of ILIAC was changed to One Orange Way, Windsor, Connecticut.

 

On October 31, 2007, ILIAC’s subsidiary, NWL merged with and into ILIAC. As of the merger date, NWL ceased to exist, and ILIAC became the surviving corporation. The merger did not have an impact on ILIAC’s consolidated results of operations and financial position, as NWL was a wholly-owned subsidiary and already included in the consolidated financial statements for all periods presented since its formation.

 

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 and related services. The Company’s products

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

are offered primarily to individuals, pension plans, small businesses, and employer-sponsored groups in the health care, government, and education markets (collectively “not-for-profit” organizations) and corporate markets. The Company’s products are generally distributed through pension professionals, independent agents and brokers, third party administrators, banks, dedicated career agents, and financial planners.

 

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

 

The Company has one operating segment.

 

Recently Adopted Accounting Standards

Fair Value Measurements

 

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“FAS”) No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 provides guidance for using fair value to measure assets and liabilities whenever other standards require (or permit) assets or liabilities to be measured at fair value. FAS 157 does not expand the use of fair value to any new circumstances.

 

Under FAS 157, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, FAS 157 establishes a fair value hierarchy that prioritizes the information used to develop such assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. FAS 157 also requires separate disclosure of fair value measurements by level within the hierarchy and expanded disclosure of the effect on earnings for items measured using unobservable data.

 

FAS 157 was adopted by the Company on January 1, 2008. As a result of implementing FAS 157, the Company recognized $1.7, before tax, as an increase to Net income on the date of adoption related to the fair value measurements of the reserves for product guarantees. The impact of implementation was included in Interest credited and other benefits to contractholders on the Consolidated Statements of Operations.

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

In October 2008, the FASB issued FASB Staff Position (“FSP”) FAS No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (“FSP FAS 157-3”), which provides clarifying guidance on the application of FAS 157 to financial assets in a market that is not active and was effective upon issuance. FSP FAS 157-3 had no effect on the Company’s financial condition, results of operations, or cash flows upon adoption, as its guidance is consistent with that applied by the Company upon adoption of FAS 157.

 

The Company recognized no other adjustments to its financial statements related to the adoption of FAS 157, and new disclosures are included in the Financial Instruments footnote.

 

The Fair Value Option for Financial Assets and Financial Liabilities

 

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“FAS 159”), which allows a company to make an irrevocable election, on specific election dates, to measure eligible items at fair value with unrealized gains and losses recognized in earnings at each subsequent reporting date. The election to measure an item at fair value may be determined on an instrument by instrument basis, with certain exceptions. If the fair value option is elected, any upfront costs and fees related to the item will be recognized in earnings as incurred. Items eligible for the fair value option include:

 

 

§

Certain recognized financial assets and liabilities;

 

§

Rights and obligations under certain insurance contracts that are not financial instruments;

 

§

Host financial instruments resulting from the separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument; and

 

§

Certain commitments.

 

FAS 159 was adopted by the Company on January 1, 2008. In implementing FAS 159, the Company elected not to take the fair value option for any eligible assets or liabilities in existence on January 1, 2008, or in existence at the date of these Consolidated Financial Statements.

 

Offsetting of Amounts Related to Certain Contracts

 

On April 30, 2007, the FASB issued a FSP on FASB Interpretation (“FIN”) No. 39, “Offsetting of Amounts Related to Certain Contracts” (“FSP FIN 39-1”), which permits a reporting entity to offset fair value amounts recognized for the right to reclaim or the obligation to return cash collateral against fair value amounts recognized for derivative instruments under master netting arrangements. FSP FIN 39-1 had no effect on the financial condition, results of operations, or cash flows upon adoption by the Company on January 1, 2008, as it is the Company’s accounting policy not to offset such fair value amounts.

 

C-11

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Accounting for Uncertainty in Income Taxes

 

In June 2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which creates a single model to address the accounting for the uncertainty in income tax positions recognized in a company’s financial statements. FIN 48 prescribes a recognition threshold and measurement criteria that must be satisfied to recognize a financial statement benefit of tax positions taken, or expected to be taken, on an income tax return. Additionally, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

 

FIN 48 was adopted by the Company on January 1, 2007. As a result of implementing FIN 48, the Company recognized a cumulative effect of change in accounting principle of $2.9 as a reduction to January 1, 2007 Retained earnings (deficit).

 

Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts

 

In September 2005, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position ("SOP") 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts” (“SOP 05-1”), which states that when an internal replacement transaction results in a substantially changed contract, the unamortized deferred acquisition costs, unearned revenue liabilities, and deferred sales inducement assets, related to the replaced contract should not be deferred in connection with the new contract. Contract modifications that meet various conditions defined by SOP 05-1 and result in a new contract that is substantially unchanged from the replaced contract, however, should be accounted for as a continuation of the replaced contract.

 

SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights, or coverage that occurs by the exchange of a contract for a new contract, by amendment, endorsement, or rider, to a contract, or by the election of a feature or coverage within a contract. SOP 05-1 applies to internal replacements made primarily to contracts defined by FAS No. 60, “Accounting and Reporting by Insurance Enterprises” (“FAS 60”), as short-duration and long-duration insurance contracts, and by FAS No. 97, “Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments” (“FAS 97”), as investment contracts.

 

C-12

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

SOP 05-1 was adopted by the Company on January 1, 2007, and is effective for internal replacements occurring on or after that date. As a result of implementing SOP 05-1, the Company recognized a cumulative effect of change in accounting principle of $43.4, before tax, or $28.2, net of $15.2 of income taxes, as a reduction to January 1, 2007 Retained earnings (deficit). In addition, the Company revised its accounting policy on the amortization of deferred policy acquisition costs ("DAC") and value of business acquired ("VOBA") to include internal replacements.

 

Disclosures about Credit Derivatives and Certain Guarantees

 

In September 2008, the FASB issued FSP FAS No. 133-1 and FIN No. 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161” (“FSP FAS 133-1 and FIN 45-4”), which does the following:

 

 

§

Amends FAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”), requiring additional disclosures by sellers of credit derivatives;

 

§

Amends FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”), requiring additional disclosure about the current status of the payment/performance risk of a guarantee; and

 

§

Clarifies the effective date of FAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”).

 

FSP FAS 133-1 and FIN 45-4 was adopted by the Company on December 31, 2008. In implementing FSP FAS 133-1 and FIN 45-4, the Company determined that its adoption had no financial statement impact. New disclosures are included in the Financial Instruments and Commitments and Contingent Liabilities footnotes.

 

The clarification in the FSP of the effective date of FAS 161 is consistent with the guidance in FAS 161 and the Company’s disclosure provided herein.

 

Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities

 

In December, 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities” (“FSP FAS 140-4 and FIN 46(R)-8”), which requires additional disclosures regarding a transferor’s continuing involvement with financial assets transferred in a securitization or asset-backed financing arrangement and an enterprise’s involvement with variable interest entities (“VIEs”) and qualifying special purpose entities (“QSPEs”).

 

C-13

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

FSP FAS 140-4 and FIN 46(R)-8 was adopted by the Company on December 31, 2008. In implementing FSP FAS 140-4 and FIN 46(R)-8, the Company determined that its adoption has no financial statement impact. The Company does not have any QSPEs or continuing involvement with financial assets transferred in a securitization or asset-backed financing arrangement.

 

Amendments to Impairment Guidance

 

In January 2009, the FASB issued FSP Emerging Issues Task Force (“EITF”) 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20” (“FSP EITF 99-20-1”), which amends EITF 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets” (“EITF 99-20”). FSP EITF 99-20-1 requires that an other-than-temporary impairment on investments that meet the criteria of EITF 99-20 be recognized as a realized loss through earnings when it is probable there has been an adverse change in the holder’s estimated cash flow, consistent with the impairment model in FAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

 

FSP EITF 99-20-1 was adopted by the Company on December 31, 2008, prospectively. In implementing FSP EITF 99-20-1, the Company determined there was a minimal effect on financial position, results of operations, and cash flows, as the structured securities held by the Company were highly rated at issue.

 

New Accounting Pronouncements

 

Disclosures about Derivative Instruments and Hedging Activities

 

In March 2008, the FASB issued FAS 161, which requires enhanced disclosures about objectives and strategies for using derivatives, fair value amounts of and gains and losses on derivative instruments, and credit-risk-related contingent features in derivative agreements, including:

 

 

§

How and why derivative instruments are used;

 

§

How derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations; and

 

§

How derivative instruments and related hedged items affect an entity’s financial statements.

 

The provisions of FAS 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently in the process of determining the impact of adoption of FAS 161 on its disclosures; however, as the pronouncement only pertains to additional disclosures, the Company has determined that the adoption of FAS 161 will have no financial statement impact. In addition, the Company’s derivatives are generally

 

C-14

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

not accounted for using hedge accounting treatment under FAS 133, as the Company has not historically sought hedge accounting treatment.

 

Business Combinations

 

In December 2007, the FASB issued FAS No. 141 (revised 2007), “Business Combinations” (“FAS 141R”), which replaces FAS No. 141, “Business Combinations,” as issued in 2001. FAS 141R requires most identifiable assets, liabilities, noncontrolling interest, and goodwill acquired in a business combination to be recorded at full fair value as of the acquisition date, even for acquisitions achieved in stages. In addition, the statement requires:

 

 

§

Acquisition-related costs to be recognized separately and generally expensed;

 

§

Non-obligatory restructuring costs to be recognized separately when the liability is incurred;

 

§

Contractual contingencies acquired to be recorded at acquisition-date fair values;

 

§

A bargain purchase, which occurs when the fair value of net assets acquired exceeds the consideration transferred plus any non-controlling interest in the acquiree, to be recognized as a gain; and

 

§

The nature and financial effects of the business combination to be disclosed.

 

FAS 141R also amends or eliminates various other authoritative literature.

 

The provisions of FAS 141R are effective for fiscal years beginning on or after December 15, 2008 for all business combinations occurring on or after that date. As such, this standard will impact any Company acquisitions that occur on or after January 1, 2009.

 

Equity Method Investment Accounting

 

In November 2008, the EITF reached consensus on EITF 08-6, “Equity Method Investment Accounting Considerations” (“EITF 08-6”), which requires, among other provisions, that:

 

 

§

Equity method investments be initially measured at cost;

 

§

Contingent consideration only be included in the initial measurement;

 

§

An investor recognize its share of any impairment charge recorded by the equity investee; and

 

§

An investor account for a share issuance by an equity investee as if the investor had sold a proportionate share of its investment;

 

The provisions of EITF 08-6 are effective in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. As such, this standard will impact Company acquisitions or changes in ownership with regards to equity investments that occur on or after January 1, 2009. The Company is currently in the process of determining the impact of the other-than-temporary impairment provisions.

 

C-15

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from reported results using those estimates.

 

Reclassifications

 

Certain reclassifications have been made to prior year financial information to conform to the current year classifications.

 

Cash and Cash Equivalents

 

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

 

Investments

 

All of the Company’s fixed maturities and equity securities are currently designated as available-for-sale. Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities are recorded directly in Shareholder’s equity, after adjustment, if any, for related changes in experience-rated contract allocations, DAC, VOBA, and deferred income taxes.

 

Other-Than-Temporary Impairments

The Company analyzes the general account investments to determine whether there has been an other-than-temporary decline in fair value below the amortized cost basis. Management considers the length of time and the extent to which fair value has been less than amortized cost, the issuer’s financial condition and near-term prospects, future economic conditions and market forecasts, and the Company’s intent and ability to retain the investment for a period of time sufficient to allow for recovery in fair value. If it is probable that all amounts due according to the contractual terms of a debt security will not be collected, an other-than-temporary impairment is considered to have occurred.

 

In addition, the Company invests in structured securities that meet the criteria of the EITF 99-20. Under EITF 99-20, a further determination of the required impairment is based on credit risk and the possibility of significant prepayment risk that restricts the Company’s ability to recover the investment. An impairment is recognized if the fair value of the security is less than amortized cost and there has been adverse change in cash flow since the last remeasurement date.

 

C-16

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

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 change in Net realized capital gains (losses).

 

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 capital gains (losses) on the sale of and unrealized capital gains (losses) on investments supporting these products are included in Future policy benefits and claims reserves on the Consolidated Balance Sheets. Net realized capital gains (losses) on all other investments were reflected in the Consolidated Statements of Operations. Unrealized capital gains (losses) on all other investments were reflected in Accumulated other comprehensive income (loss) in Shareholder’s equity, net of DAC and VOBA adjustments for unrealized capital gains (losses), and related income taxes. During 2008, due to the current economic environment, which resulted in significant realized and unrealized losses associated with assets supporting experience-rated contracts, the Company accelerated the amortization of realized losses and recorded such amounts in Interest credited and other benefits to contractowners in the Consolidated Statements of Operations and recorded unrealized losses in Accumulated other comprehensive income (loss) in Shareholder’s equity rather than Future policy benefits and claims reserves.

 

Purchases and Sales

Purchases and sales of fixed maturities and equity securities, excluding private placements, are recorded on the trade date. Purchases and sales of private placements and mortgage loans are recorded on the closing date.

 

Valuation

The fair values for the actively traded marketable fixed maturities are determined based upon the quoted market prices or dealer quotes. The fair values for marketable bonds without an active market are obtained through several commercial pricing services, which provide the estimated fair values. These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data. Valuations obtained from third party commercial pricing services are non-binding and are validated monthly through comparisons to internal pricing models, back testing to recent trades, and monitoring of trading volumes.

 

C-17

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Fair values of privately placed bonds are determined using a matrix-based pricing model. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer, and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees, and the Company’s evaluation of the borrower’s ability to compete in their relevant market. Using this data, the model generates estimated market values, which the Company considers reflective of the fair value of each privately placed bond.

 

The fair values for certain collateralized mortgage obligations (“CMO-Bs”) are determined by taking the average of broker quotes when more than one broker quote is provided. A few of the CMO-Bs are priced by the originating broker due to the complexity and unique characteristics of the asset.

 

The fair values for actively traded equity securities are based on quoted market prices.

 

Mortgage loans on real estate are reported at amortized cost, less impairment write-downs. If the value of any mortgage loan is determined to be impaired (i.e., when it is probable 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 fair value of the collateral. If the loan is in foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell. The carrying value of the impaired loans is reduced by establishing a permanent write-down recorded in Net realized capital gains (losses).

 

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

 

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

 

Derivative instruments are reported at fair value primarily using the Company’s derivative accounting system. The system uses key financial data, such as yield curves, exchange rates, Standard & Poor’s (“S&P”) 500 Index prices, and London Inter Bank Offered Rates (“LIBOR”), which are obtained from third party sources and uploaded into the system. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes values established by third party brokers. Embedded derivative instruments are reported at fair value based upon internally established valuations that are consistent with external valuation models or market quotations.

 

C-18

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Repurchase Agreements

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

 

The Company also enters into reverse repurchase agreements. These transactions involve a purchase of securities and an agreement to sell substantially the same securities as those purchased. Company policies require a minimum of 102% of the fair value of securities pledged under reverse repurchase agreements to be pledged as collateral. Reverse repurchase agreements are included in Cash and cash equivalents on the Consolidated Balance Sheets.

 

Securities Lending

The Company engages in securities lending whereby certain securities from its portfolio are loaned to other institutions for short periods of time. Initial collateral, primarily cash, is required at a rate of 102% of the market value of the loaned domestic securities. The collateral is deposited by the borrower with a lending agent, and retained and invested by the lending agent according to the Company’s guidelines to generate additional income. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates.

 

Derivatives

The Company’s use of derivatives is limited mainly to hedging purposes to reduce the Company’s exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, and market risk. Generally, derivatives are not accounted for using hedge accounting treatment under FAS 133, as the Company has not historically sought hedge accounting treatment.

 

The Company enters into interest rate, equity market, credit default, and currency contracts, including swaps, caps, floors, and options, to reduce and manage risks associated with changes in value, yield, price, cash flow, or exchange rates of assets or liabilities held or intended to be held, or to assume or reduce credit exposure associated with a referenced asset, index, or pool. The Company also utilizes options and futures on equity indices to reduce and manage risks associated with its annuity products. Open derivative contracts are reported as either Other investments or Other liabilities, as appropriate, on the Consolidated Balance Sheets. Changes in the fair value of such

 

C-19

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

derivatives are recorded in Net realized capital gains (losses) in the Consolidated Statements of Operations.

 

The Company also has investments in certain fixed maturity instruments, and has issued certain products with guarantees, that contain embedded derivatives whose market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short- or long-term), exchange rates, prepayment rates, equity markets, or credit ratings/spreads.

 

Embedded derivatives within fixed maturity instruments are included in Fixed maturities, available-for-sale, on the Consolidated Balance Sheets, and changes in fair value are recorded in Net realized capital gains (losses) in the Consolidated Statements of Operations.

 

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

 

Deferred Policy Acquisition Costs and Value of Business Acquired

 

General

 

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

 

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

 

FAS 97 applies to universal life and investment-type products, such as fixed and variable deferred annuities. Under FAS 97, DAC and VOBA are amortized, with interest, over the life of the related contracts in relation to the present value of estimated future gross profits from investment, mortality, and expense margins, plus surrender charges.

 

Internal Replacements

 

Contractowners may periodically exchange one contract for another, or make modifications to an existing contract. Beginning January 1, 2007, these transactions are identified as internal replacements and are accounted for in accordance with SOP 05-1.

 

C-20

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Internal replacements that are determined to result in substantially unchanged contracts are accounted for as continuations of the replaced contracts. Any costs associated with the issuance of the new contracts are considered maintenance costs and expensed as incurred. Unamortized DAC and VOBA related to the replaced contracts continue to be deferred and amortized in connection with the new contracts. For deferred annuities, the estimated future gross profits of the new contracts are treated as revisions to the estimated future gross profits of the replaced contracts in the determination of amortization.

 

Internal replacements that are determined to result in contracts that are substantially changed are accounted for as extinguishments of the replaced contracts, and any unamortized DAC and VOBA related to the replaced contracts are written off to Net amortization of deferred policy acquisition costs and value of business acquired in the Consolidated Statements of Operations.

 

Unlocking

 

Changes in assumptions can have a significant impact on DAC and VOBA balances and amortization rates. Several assumptions are considered significant in the estimation of future gross profits associated with variable deferred annuity products. One of the most significant assumptions involved in the estimation of future gross profits is the assumed return associated with the variable account performance. To reflect the volatility in the equity markets, this assumption involves a combination of near-term expectations and long-term assumptions regarding market performance. The overall return on the variable account is dependent on multiple factors, including the relative mix of the underlying sub-accounts among bond funds and equity funds, as well as equity sector weightings. Other significant assumptions include surrender and lapse rates, estimated interest spread, and estimated mortality.

 

Due to the relative size and sensitivity to minor changes in underlying assumptions of DAC and VOBA balances, the Company performs quarterly and annual analyses of DAC and VOBA. The DAC and VOBA balances are evaluated for recoverability.

 

At each evaluation date, actual historical gross profits are reflected, and estimated future gross profits and related assumptions are evaluated for continued reasonableness. Any adjustment in estimated future gross profits requires that the amortization rate be revised (“unlocking”), retroactively to the date of the policy or contract issuance. The cumulative unlocking adjustment is recognized as a component of current period amortization. In general, sustained increases in investment, mortality, and expense margins, and thus estimated future gross profits, lower the rate of amortization. Sustained decreases in investment, mortality, and expense margins, and thus estimated future gross profits, however, increase the rate of amortization.

 

C-21

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Property and Equipment

 

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

 

At December 31, 2008 and 2007, total accumulated depreciation and amortization was $103.0 and $120.7, respectively. Depreciation on property and equipment is provided on a straight-line basis over the estimated useful lives of the assets with the exception of land and artwork, which are not depreciated or amortized. The Company’s property and equipment are depreciated using the following estimated useful lives.

 

 

Estimated Useful Lives

Buildings

40 years

Furniture and fixtures

5 years

Leasehold improvements

10 years, or the life of the lease, whichever is shorter

Equipment

3 years

Software

3 years

 

Reserves

 

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

 

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

 

Reserves for individual and group deferred annuity investment contracts and individual immediate annuities without life contingent payouts are equal to cumulative deposits, less charges and withdrawals, plus credited interest thereon, net of adjustments for investment experience that the Company is entitled to reflect in future credited interest. Credited interest rates vary by product and ranged from 1.6% to 7.8% for the years 2008, 2007, and 2006. Certain reserves may also include net unrealized gains and losses related to investments and unamortized net realized gains and losses on investments for experience-rated contracts. Reserves on experienced-rated contracts reflect the rights of contractowners, plan participants, and the Company. During 2008, given the current economic environment, which resulted in significant net realized and unrealized losses, the Company did not include net unrealized and unamortized realized losses associated with experience-rated contracts in Future policy benefits and claims reserves. The net unrealized losses are reflected in Accumulated other comprehensive (loss) income, and the amortization of the unamortized realized losses have been recorded in Interest credited and other benefits to contractholders. Reserves for group immediate annuities without life contingent payouts are equal to the discount value of the payment at the implied break-even rate.

 

C-22

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Reserves for individual immediate annuities with life contingent payout benefits are computed on the basis of assumed interest discount rates, mortality, and expenses, including a margin for adverse deviations. Such assumptions generally vary by annuity type plan, year of issue, and policy duration. For the years 2008, 2007, and 2006, reserve interest rates ranged from 5.3% to 5.9%.

 

The Company records reserves for product guarantees, which can be either assets or liabilities, for annuity contracts containing guaranteed credited rates. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The fair value of the obligation is calculated based on the income approach. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of risk neutral scenarios and other best estimate assumptions. Explicit risk margins in the actuarial assumptions underlying valuations are included, as well as an explicit recognition of all nonperformance risks beginning January 1, 2008 with the adoption of FAS 157. Nonperformance risk for product guarantees contains adjustments to the fair values of these contract liabilities related to the current credit standing of ING and the Company based on credit default swaps with similar term to maturity and priority of payment. The ING credit default spread is applied to the discount factors for product guarantees in the Company’s valuation model in order to incorporate credit risk into the fair values of these product guarantees.

 

The Company has a significant concentration of reinsurance arising from the disposition of its individual life insurance business. In 1998, the Company entered into an indemnity reinsurance arrangement with certain subsidiaries of Lincoln National Corporation (“Lincoln”). Effective March 1, 2007, the reinsurance agreements were assigned to a single subsidiary of Lincoln, and that subsidiary established a trust to secure its obligations to the Company under the reinsurance transaction. The Company includes an amount in Reinsurance recoverable on the Consolidated Balance Sheets, which equals the Company’s total individual life reserves. Individual life reserves are included in Future policy benefits and claims reserves on the Consolidated Balance Sheets.

 

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

 

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

(Dollar amount in millions, unless otherwise stated)

 

 

Revenue Recognition

 

For most annuity contracts, charges assessed against contractowner funds for the cost of insurance, surrenders, expenses, and other fees are recorded as revenue as charges are assessed. Other amounts received for these contracts are reflected as deposits and are not recorded as premiums or revenue. When annuity payments with life contingencies begin under contracts that were initially investment contracts, the accumulated balance in the account is treated as a single premium for the purchase of an annuity and reflected in both Premiums and Interest credited and other benefits to contractowners in the Consolidated Statements of Operations.

 

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

 

Separate Accounts

 

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

 

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

 

Separate account assets and liabilities are carried at fair value and shown as separate captions in the Consolidated Balance Sheets. Deposits, investment income, and net realized and unrealized capital gains (losses) of the separate accounts, however, are not reflected in the Consolidated Statements of Operations (with the exception of realized and unrealized capital gains (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 for separate presentation in the Consolidated Balance Sheets (primarily the guaranteed interest option), and revenue and expenses related to such arrangements, are consolidated in the financial statements with the general account. At December 31, 2008 and 2007, unrealized capital losses of $53.2 and $11.0, respectively, after taxes, on assets supporting a guaranteed interest option are reflected in Shareholder’s equity.

 

C-24

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Reinsurance

 

The Company utilizes indemnity reinsurance agreements to reduce its exposure to losses from GMDBs in its annuity insurance business. Reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge the Company’s primary liability as the direct insurer of the risks. The Company evaluates the financial strength of potential reinsurers and continually monitors the financial strength and credit ratings of its reinsurers. Only those reinsurance recoverable balances deemed probable of recovery are reflected as assets on the Company’s Consolidated Balance Sheets.

 

Of the Reinsurance recoverable on the Consolidated Balance Sheets, $2.5 billion and $2.6 billion at December 31, 2008 and 2007, respectively, is related to the reinsurance recoverable from certain subsidiaries of Lincoln arising from the disposal of the Company’s individual life insurance business in 1998 (see the Reinsurance footnote). Effective March 1, 2007, the reinsurance agreements were assigned to a single subsidiary of Lincoln, and that subsidiary established a trust to secure its obligations to the Company under the reinsurance transaction.

 

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-25

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

2.

Investments

Fixed Maturities and Equity Securities

 

Fixed maturities and equity securities, available-for-sale, were as follows as of December 31, 2008.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized

 

 

Capital

 

 

Capital

 

 

Fair

 

 

 

 

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

$

1,391.4 

 

$

84.5 

 

$

0.9 

 

$

1,475.0 

 

U.S. government agencies and authorities

 

797.1 

 

 

77.2 

 

 

1.2 

 

 

873.1 

 

State, municipalities, and political subdivisions

 

72.9 

 

 

0.3 

 

 

17.7 

 

 

55.5 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Public utilities

 

1,112.4 

 

 

4.4 

 

 

117.6 

 

 

999.2 

 

 

Other corporate securities

 

3,986.2 

 

 

85.6 

 

 

436.6 

 

 

3,635.2 

 

Total U.S. corporate securities

 

5,098.6 

 

 

90.0 

 

 

554.2 

 

 

4,634.4 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign securities(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

 

 

397.8 

 

 

4.3 

 

 

61.4 

 

 

340.7 

 

 

Other

 

 

 

 

 

2,188.5 

 

 

27.0 

 

 

274.0 

 

 

1,941.5 

 

Total foreign securities

 

2,586.3 

 

 

31.3 

 

 

335.4 

 

 

2,282.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

3,412.6 

 

 

153.6 

 

 

266.7 

 

 

3,299.5 

 

Commercial mortgage-backed securities

 

1,604.0 

 

 

0.1 

 

 

370.5 

 

 

1,233.6 

 

Other asset-backed securities

 

830.2 

 

 

9.0 

 

 

214.9 

 

 

624.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed maturities, including 

 

 

 

 

 

 

 

 

 

 

 

 

 

securities pledged

 

15,793.1 

 

 

446.0 

 

 

1,761.5 

 

 

14,477.6 

 

Less: securities pledged

 

1,160.5 

 

 

72.7 

 

 

7.8 

 

 

1,225.4 

Total fixed maturities

 

14,632.6 

 

 

373.3 

 

 

1,753.7 

 

 

13,252.2 

Equity securities

 

 

247.7 

 

 

1.0 

 

 

8.4 

 

 

240.3 

Total investments, available-for-sale

$

14,880.3 

 

$

374.3 

 

$

1,762.1 

 

$

13,492.5 

(1) Primarily U.S. dollar denominated.

 

 

 

 

 

 

 

 

 

 

 

 

 

C-26

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Fixed maturities and equity securities, available-for-sale, were as follows as of December 31, 2007.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized

 

 

Capital

 

 

Capital

 

 

Fair

 

 

 

 

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

$

11.2 

 

$

0.7 

 

$

-  

 

$

11.9 

 

U.S. government agencies and authorities

 

0.6 

 

 

-  

 

 

-  

 

 

0.6 

 

State, municipalities, and political subdivisions

 

66.1 

 

 

0.1 

 

 

2.2 

 

 

64.0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Public utilities

 

1,049.1 

 

 

10.8 

 

 

15.6 

 

 

1,044.3 

 

 

Other corporate securities

 

3,855.1 

 

 

46.1 

 

 

65.2 

 

 

3,836.0 

 

Total U.S. corporate securities

 

4,904.2 

 

 

56.9 

 

 

80.8 

 

 

4,880.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign securities(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Government

 

 

379.3 

 

 

17.1 

 

 

6.6 

 

 

389.8 

 

 

Other

 

 

 

 

 

1,955.8 

 

 

29.9 

 

 

40.3 

 

 

1,945.4 

 

Total foreign securities

 

2,335.1 

 

 

47.0 

 

 

46.9 

 

 

2,335.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

4,146.1 

 

 

101.8 

 

 

63.5 

 

 

4,184.4 

 

Commercial mortgage-backed securities

 

1,927.3 

 

 

10.7 

 

 

52.3 

 

 

1,885.7 

 

Other asset-backed securities

 

924.3 

 

 

5.5 

 

 

41.5 

 

 

888.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fixed maturities, including 

 

 

 

 

 

 

 

 

 

 

 

 

 

securities pledged

 

14,314.9 

 

 

222.7 

 

 

287.2 

 

 

14,250.4 

 

Less: securities pledged

 

940.2 

 

 

8.0 

 

 

14.1 

 

 

934.1 

Total fixed maturities

 

13,374.7 

 

 

214.7 

 

 

273.1 

 

 

13,316.3 

Equity securities

 

 

440.1 

 

 

13.8 

 

 

7.5 

 

 

446.4 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total investments, available-for-sale

$

13,814.8 

 

$

228.5 

 

$

280.6 

 

$

13,762.7 

(1) Primarily U.S. dollar denominated.

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2008 and 2007, net unrealized losses were $1,322.9 and $58.2, respectively, on total fixed maturities, including securities pledged to creditors, and equity securities. During 2008, as a result of the current economic environment, which resulted in significant losses on investments supporting experience-rated contracts, the Company reflected all unrealized losses in Shareholder’s equity rather than Future policy benefits and claims reserves. At December 31, 2007, $16.4 of net unrealized capital gains (losses) was related to experience-rated contracts and was not reflected in Shareholder’s equity but in Future policy benefits and claim reserves.

 

C-27

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

The amortized cost and fair value of total fixed maturities as of December 31, 2008, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called, or prepaid.

 

 

 

 

Amortized

 

 

Fair

 

 

 

Cost

 

 

Value

Due to mature:

 

 

 

 

 

 

One year or less

$

273.3 

 

$

271.5 

 

After one year through five years

 

3,751.8 

 

 

3,576.2 

 

After five years through ten years

 

3,546.6 

 

 

3,344.4 

 

After ten years

 

2,374.6 

 

 

2,128.1 

 

Mortgage-backed securities

 

5,016.6 

 

 

4,533.1 

 

Other asset-backed securities

 

830.2 

 

 

624.3 

Less: securities pledged

 

1,160.5 

 

 

1,225.4 

Fixed maturities, excluding securities pledged

$

14,632.6 

 

$

13,252.2 

 

The Company did not have any investments in a single issuer, other than obligations of the U.S. government and government agencies, with a carrying value in excess of 10% of the Company’s Shareholder’s equity at December 31, 2008 or 2007.

 

At December 31, 2008 and 2007, fixed maturities with fair values of $14.2 and $13.9, respectively, were on deposit as required by regulatory authorities.

 

The Company invests in various categories of collateralized mortgage obligations (“CMOs”) that are subject to different degrees of risk from changes in interest rates and, for CMOs that are not agency-backed, defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to dramatic decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. At December 31, 2008 and 2007, approximately 13.0% and 11.3%, respectively, of the Company’s CMO holdings were invested in those types of CMOs which are subject to more prepayment and extension risk than traditional CMOs, such as interest-only or principal-only strips.

 

Transfer of Alt-A RMBS Participation Interest

 

On January 26, 2009, ING announced it reached an agreement, for itself and on behalf of certain ING affiliates including the Company, with the Dutch State on an Illiquid Assets Back-up Facility (the “Back-up Facility”) covering 80% of ING’s Alt-A residential mortgage-backed securities (“Alt-A RMBS”). Under the terms of the Back-up Facility, a full credit risk transfer to the Dutch State will be realized on 80% of ING’s Alt-A RMBS owned by ING Bank, FSB and ING affiliates within ING Insurance Americas with a book value of $36.0 billion portfolio, including book value of $775.1 of the Alt-A RMBS portfolio owned by the Company (with respect to the Company’s portfolio, the “Designated Securities Portfolio”) (the “ING-Dutch State Transaction”). As a result of the risk transfer, the Dutch State will participate in 80% of any results of the ING Alt-A RMBS portfolio. The risk transfer to the Dutch State will take place at a discount of approximately 10% of par value. In addition, under the Back-up Facility, other fees will

 

C-28

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

be paid both by the Company and the Dutch State. Each ING company participating in the ING-Dutch State Transaction, including the Company will remain the legal owner of 100% of its Alt-A RMBS portfolio and will remain exposed to 20% of any results on the portfolio. Subject to documentation and regulatory approvals, the ING-Dutch State Transaction is expected to close by the end of March 2009, with the affiliate participation conveyance and risk transfer to the Dutch State described in the succeeding paragraph to take effect as of January 26, 2009.

 

In order to implement that portion of the ING-Dutch State Transaction related to the Company’s Designated Securities Portfolio, the Company will enter into a participation agreement with its affiliates, ING Support Holding B.V. (“ING Support Holding”) and ING pursuant to which the Company will convey to ING Support Holding an 80% participation interest in its Designated Securities Portfolio and pay a periodic transaction fee, and will receive, as consideration for the participation, an assignment by ING Support Holding of its right to receive payments from the Dutch State under the Illiquid Assets Back-Up Facility related to the Company’s Designated Securities Portfolio among, ING, ING Support Holding and the Dutch State (the “Company Back-Up Facility”). Under the Company Back-Up Facility, the Dutch State will be obligated to pay certain periodic fees and make certain periodic payments with respect to the Company’s Designated Securities Portfolio, and ING Support Holding will be obligated to pay a periodic guarantee fee and make periodic payments to the Dutch State equal to the distributions it receives with respect to the 80% participation interest in the Company’s Designated Securities Portfolio.

 

In a second transaction, known as the Step 1 Cash Transfer, a portion of the Company’s Alt-A RMBS which has a book value of $4.2 will be sold for cash to an affiliate, Lion II Custom Investments LLC (“Lion II”). Immediately thereafter, Lion II will sell to ING Direct Bancorp the purchased securities (the “Step 2 Cash Transfer”). Contemporaneous with the Step 2 Cash Transfer, ING Direct Bancorp will include such purchased securities as part of its Alt-A RMBS portfolio sale to the Dutch State. Subject to documentation and regulatory approval, the Step 1 Cash Transfer is expected to close by the end of March 2009 contemporaneous with the closing of the ING-Dutch State Transaction.

 

Since the Company had the intent to sell a portion of its Alt-A RMBS through the 80% participation interest in its Designated Securities Portfolio or as part of the Step 1 Cash Transfer as of December 31, 2008, the Company recognized $253.2 in other-than-temporary impairments with respect to the 80% participation interest in its Designated Securities Portfolio that it expects to convey as part of the ING-Dutch State Transaction and the Step 1 Cash Transfer. The Company expects to recognize a gain in the estimated range of $220.0 to $240.0 upon the closing of the ING-Dutch State Transaction and the Step 1 Cash Transfer.

 

C-29

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Equity Securities

 

Equity securities, available-for-sale, included investments with fair values of $141.0 and $279.5 in ING proprietary funds as of December 31, 2008 and 2007, respectively.

 

Repurchase Agreements

 

The Company engages in dollar repurchase agreements (“dollar rolls”) and repurchase agreements to increase its return on investments and improve liquidity. These transactions involve a sale of securities and an agreement to repurchase substantially the same securities as those sold. Company policies require a minimum of 95% of the fair value of securities pledged under dollar rolls and repurchase agreement transactions to be maintained as collateral. Cash collateral received is invested in fixed maturities, and the offsetting collateral liability is included in Borrowed money on the Consolidated Balance Sheets. At December 31, 2008 and 2007, the carrying value of the securities pledged in dollar rolls and repurchase agreement transactions was $657.2 and $757.6, respectively. The carrying value of the securities pledged in dollar rolls and repurchase agreement transactions is included in Securities pledged on the Consolidated Balance Sheets. The repurchase obligation related to dollar rolls and repurchase agreements totaled $613.9 and $734.8 at December 31, 2008 and 2007, respectively. The repurchase obligation related to dollar rolls and repurchase agreements is included in Borrowed money on the Consolidated Balance Sheets.

 

The Company also engages in reverse repurchase agreements. At December 31, 2008 and 2007, the Company did not have any reverse repurchase agreements.

 

The primary risk associated with short-term collateralized borrowings is that the counterparty will be unable to perform under the terms of the contract. The Company’s exposure is limited to the excess of the net replacement cost of the securities over the value of the short-term investments, an amount that was immaterial at December 31, 2008 and 2007. The Company believes the counterparties to the dollar rolls, repurchase, and reverse repurchase agreements are financially responsible and that the counterparty risk is minimal.

 

Securities Lending

 

The Company engages in securities lending whereby certain securities from its portfolio are loaned to other institutions for short periods of time. Initial collateral, primarily cash, is required at a rate of 102% of the market value of the loaned domestic securities. The collateral is deposited by the borrower with a lending agent, and retained and invested by the lending agent according to the Company’s guidelines to generate additional income. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates. At December 31, 2008 and 2007, the fair value of loan securities was $474.8 and $176.5, respectively.

 

C-30

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Unrealized Capital Losses

 

Unrealized capital losses in fixed maturities at December 31, 2008 and 2007, were primarily related to the effects of interest rate movement or spread widening on mortgage and other asset-backed securities. Mortgage and other asset-backed securities include U.S. government-backed securities, principal protected securities, and structured securities, which did not have an adverse change in cash flows. The following table summarizes the unrealized capital losses by duration and reason, along with the fair value of fixed maturities, including securities pledged, in unrealized capital loss positions at December 31, 2008 and 2007.

 

 

 

 

Less than

 

 

More than

 

 

More than

 

 

 

 

 

 

Six

 

 

Six Months

 

 

Twelve

 

 

 

 

 

 

Months

 

 

and less than

 

 

Months

 

 

Total

 

 

 

Below

 

 

Twelve Months

 

 

Below

 

 

Unrealized

 

 

 

Amortized

 

 

Below Amortized

 

 

Amortized

 

 

Capital

2008

 

Cost

 

 

Cost

 

 

Costs

 

 

Loss

Interest rate or spread widening

$

144.2 

 

$

381.7 

 

$

383.5 

 

$

909.4 

Mortgage and other 

 

 

 

 

 

 

 

 

 

 

 

 

asset-backed securities

 

65.3 

 

 

188.5 

 

 

598.3 

 

 

852.1 

Total unrealized capital losses

$

209.5 

 

$

570.2 

 

$

981.8 

 

$

1,761.5 

Fair value

$

2,999.6 

 

$

3,446.7 

 

$

2,964.2 

 

$

9,410.5 

 

 

 

 

Less than

 

 

More than

 

 

More than

 

 

 

 

 

 

Six

 

 

Six Months

 

 

Twelve

 

 

 

 

 

 

Months

 

 

and less than

 

 

Months

 

 

Total

 

 

 

Below

 

 

Twelve Months

 

 

Below

 

 

Unrealized

 

 

 

Amortized

 

 

Below Amortized

 

 

Amortized

 

 

Capital

2007

 

Cost

 

 

Cost

 

 

Costs

 

 

Loss

Interest rate or spread widening

$

18.8 

 

$

62.3 

 

$

48.8 

 

$

129.9 

Mortgage and other 

 

 

 

 

 

 

 

 

 

 

 

 

asset-backed securities

 

30.1 

 

 

69.0 

 

 

58.2 

 

 

157.3 

Total unrealized capital losses

$

48.9 

 

$

131.3 

 

$

107.0 

 

$

287.2 

Fair value

$

2,256.2 

 

$

2,217.7 

 

$

3,612.1 

 

$

8,086.0 

 

Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities is 79.2% of the average book value. In addition, this category includes 1,243 securities, which have an average quality rating of AA-. No other-than-temporary impairment loss was considered necessary for these fixed maturities as of December 31, 2008. The value of the Company’s fixed maturities declined $534.2, before tax and DAC, from December 31, 2008 though February 28, 2009, due to further widening of credit spreads. This decline in fair value includes $81.7 related to the Company’s investments in commercial mortgage-backed securities.

 

C-31

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Other-Than-Temporary Impairments

 

The following table identifies the Company’s other-than-temporary impairments by type for the years ended December 31, 2008, 2007, and 2006.

 

 

 

 

2008

 

 

2007

 

 

2006

 

 

 

 

 

No. of

 

 

 

 

No. of

 

 

 

 

No. of

 

 

 

Impairment

 

Securities

 

 

Impairment

 

Securities

 

 

Impairment

 

Securities

U.S. Treasuries

$

-  

 

- 

 

$

-  

 

- 

 

$

6.4 

 

4 

U.S. corporate

 

283.2 

 

233 

 

 

36.3 

 

113 

 

 

24.4 

 

67 

Foreign

 

108.9 

 

94 

 

 

19.1 

 

54 

 

 

4.2 

 

10 

Residential mortgage-backed

 

349.3 

 

194 

 

 

7.1 

 

30 

 

 

16.6 

 

76 

Other asset-backed

 

245.6 

 

64 

 

 

10.5 

 

21 

 

 

7.0 

 

1 

Equity securities

 

55.1 

 

17 

 

 

-  

 

- 

 

 

0.1 

 

3 

Limited partnerships

 

6.6 

 

6 

 

 

3.0 

 

1 

 

 

-  

 

- 

Mortgage loans on real estate

 

3.8 

 

1 

 

 

-  

 

- 

 

 

-  

 

- 

Total

$

1,052.5 

 

609 

 

$

76.0 

 

219 

 

$

58.7 

 

161 

 

The above schedule includes $235.8, $16.4, and $16.1 for the years ended December 31, 2008, 2007, and 2006, respectively, in other-than-temporary write-downs related to the analysis of credit-risk and the possibility of significant prepayment risk. The remaining $816.7, $59.6, and $42.6 in write-downs for the years ended December 31, 2008, 2007, and 2006, respectively, are related to investments that the Company does not have the intent to retain for a period of time sufficient to allow for recovery in fair value.

 

The following table summarizes these write-downs recognized by type for the years ended December 31, 2008, 2007, and 2006.

 

 

 

 

2008

 

 

2007

 

 

2006

 

 

 

 

 

No. of

 

 

 

 

No. of

 

 

 

 

No. of

 

 

 

Impairment

 

Securities

 

 

Impairment

 

Securities

 

 

Impairment

 

Securities

U.S. Treasuries

$

-  

 

- 

 

$

-  

 

- 

 

$

6.4 

 

4 

U.S. corporate

 

204.5 

 

180 

 

 

31.6 

 

102 

 

 

24.4 

 

67 

Foreign

 

81.3 

 

78 

 

 

19.1 

 

54 

 

 

4.2 

 

10 

Residential mortgage-backed

 

291.8 

 

128 

 

 

2.6 

 

2 

 

 

0.6 

 

1 

Other asset-backed

 

239.1 

 

43 

 

 

6.3 

 

16 

 

 

7.0 

 

1 

Total

$

816.7 

 

429 

 

$

59.6 

 

174 

 

$

42.6 

 

83 

 

The remaining fair value of the fixed maturities with other-than-temporary impairments at December 31, 2008, 2007, and 2006 was $2,136.5, $1,210.8, and $704.4, respectively.

 

The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities or cost for equity securities. In certain situations new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security.

 

C-32

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Net Investment Income

Sources of Net investment income were as follows for the years ended December 31, 2008, 2007, and 2006.

 

 

 

 

2008

 

 

2007

 

 

2006

Fixed maturities, available-for-sale

$

1,020.6 

 

$

895.5 

 

$

969.0 

Equity securities, available-for-sale

 

(13.2)

 

 

38.5 

 

 

10.5 

Mortgage loans on real estate

 

116.0 

 

 

118.5 

 

 

93.6 

Real estate

 

9.0 

 

 

-  

 

 

-  

Policy loans

 

14.2 

 

 

14.1 

 

 

13.2 

Short-term investments and cash equivalents

 

4.5 

 

 

2.2 

 

 

2.4 

Other

 

12.7 

 

 

88.3 

 

 

44.5 

Gross investment income

 

1,163.8 

 

 

1,157.1 

 

 

1,133.2 

Less: investment expenses

 

80.1 

 

 

102.4 

 

 

103.5 

Net investment income

$

1,083.7 

 

$

1,054.7 

 

$

1,029.7 

 

Net Realized Capital Gains (Losses)

Net realized capital gains (losses) are comprised of the difference between the amortized cost of investments and proceeds from sale and redemption, as well as losses incurred due to other-than-temporary impairment of investments and changes in fair value of derivatives. The cost of the investments on disposal is determined based on specific identification of securities. Net realized capital gains (losses) on investments were as follows for the years ended December 31, 2008, 2007, and 2006.

 

 

 

 

2008

 

 

2007

 

 

2006

Fixed maturities, available-for-sale

$

(990.8)

 

$

(50.3)

 

$

(67.0)

Equity securities, available-for-sale

 

(81.0)

 

 

6.4 

 

 

9.3 

Derivatives

 

(187.0)

 

 

(123.0)

 

 

(3.9)

Other

 

(18.7)

 

 

(2.6)

 

 

-  

Less: allocation to experience-rated contracts

 

624.4 

 

 

141.9 

 

 

(64.6)

Net realized capital (loss) gains

$

(653.1)

 

$

(27.6)

 

$

3.0 

After-tax net realized capital (loss) gains

$

(424.5)

 

$

(17.9)

 

$

2.0 

 

The increase in Net realized capital losses for the year ended December 31, 2008, was primarily due to higher credit and intent related impairments of fixed maturities driven by the widening of credit spreads. In addition, the Company experienced losses on equity securities mainly due to the poor market performance and losses on interest rate swaps due to lower LIBOR rates in 2008.

 

Net realized capital gains (losses) allocated to experience-rated contracts are deducted from Net realized capital gains (losses) and an offsetting amount was reflected in Future policy benefits and claim reserves on the Consolidated Balance Sheets. During 2008, as a result of the current economic environment, which resulted in significant realized losses associated with experience-rated contracts, the Company accelerated amortization of

 

C-33

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

realized losses rather than reflect those losses in Future policy benefits and claims reserves. During 2008, the Company fully amortized $624.4 of net unamortized realized capital losses allocated to experience-rated contractowners, which are reflected in Interest credited and other benefits to contractowners in the Consolidated Statements of Operations. Net unamortized realized capital gains allocated to experienced-rated contractowners were $53.8 and $164.5 at December 31, 2007 and 2006, respectively, and were reflected in Future policy benefits and claims reserves.

 

Proceeds from the sale of fixed maturities and equity securities, available-for-sale, and the related gross realized gains and losses, excluding those related to experience-related contracts, as appropriate, were as follows for the years ended December 31, 2008, 2007, and 2006.

 

 

 

2008

 

 

2007

 

 

2006

Proceeds on sales

$

12,649.0 

 

$

5,738.8 

 

$

6,481.2 

Gross gains

 

120.0 

 

 

66.4 

 

 

109.0 

Gross losses

 

(234.4)

 

 

(101.2)

 

 

110.9 

 

 

3.

Financial Instruments

Fair Value Measurements

 

FAS 157 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

 

Fair Value Hierarchy

 

The Company has categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique.

 

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

 

Financial assets and liabilities recorded at fair value on the Consolidated Balance Sheets are categorized as follows:

 

 

§

Level 1 - Unadjusted quoted prices for identical assets or liabilities in an active market.

 

§

Level 2 - Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

 

C-34

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

 

a)

Quoted prices for similar assets or liabilities in active markets;

 

b)

Quoted prices for identical or similar assets or liabilities in non-active markets;

 

c)

Inputs other than quoted market prices that are observable; and

 

d)

Inputs that are derived principally from or corroborated by observable market data through correlation or other means.

 

§

Level 3 - Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These valuations, whether derived internally or obtained from a third party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability.

 

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2008.

 

 

 

 

 

 

 

 

Level 1

 

 

Level 2

 

 

Level 3(1)

 

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities, available-for-sale, including

 

 

 

 

 

 

 

 

 

 

 

 

 

securities pledged

$

1,481.7 

 

$

10,704.3 

 

$

2,291.6 

 

$

14,477.6 

 

Equity securities, available-for-sale

 

240.3 

 

 

-  

 

 

-  

 

 

240.3 

 

Other investments (primarily derivatives)

 

-  

 

 

235.2 

 

 

-  

 

 

235.2 

 

Cash and cash equivalents, short-term

 

 

 

 

 

 

 

 

 

 

 

 

 

investments, and short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

under securities loan agreement

 

729.3 

 

 

-  

 

 

-  

 

 

729.3 

 

Assets held in separate accounts

 

30,547.6 

 

 

5,380.1 

 

 

-  

 

 

35,927.7 

Total

 

 

 

$

32,998.9 

 

$ 

16,319.6 

 

$ 

2,291.6 

 

$ 

51,610.1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Product guarantees

$

-  

 

$

-  

 

$

220.0 

 

$

220.0 

 

Other liabilities (primarily derivatives)

 

-  

 

 

470.5 

 

 

73.6 

 

 

544.1 

Total

 

 

 

$

-  

 

$

470.5 

 

$

293.6 

 

$

764.1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Level 3 net assets and liabilities accounted for 3.9% of total net assets and liabilities measured at fair value on a recurring 

 

basis.  Excluding separate accounts assets for which the policyholder bears the risk, the Level 3 net assets and liabilities 

 

in relation to total net assets and liabilities measured at fair value on a recurring basis totaled 13.4%.

 

 

 

 

Valuation of Financial Assets and Liabilities

 

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in FAS 157. Valuations are obtained from third party commercial pricing services, brokers and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from the brokers are non-binding. The valuations are reviewed and validated monthly through comparisons to internal pricing models, back testing to recent trades, and monitoring of trading volumes.

 

C-35

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values.

 

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

 

Fixed maturities, available-for-sale: The fair values for the actively traded marketable bonds are determined based upon the quoted market prices or dealer quotes and are classified as Level 1 assets. The fair values for marketable bonds without an active market, excluding subprime and Alt-A mortgage-backed securities, are obtained through several commercial pricing services, which provide the estimated fair values, and are classified as Level 2 assets. These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, offers and other reference data. Valuations obtained from third party commercial pricing services are non-binding and are validated monthly through comparisons to internal pricing models, back testing to recent trades, and monitoring of trading volumes.

 

Fair values of privately placed bonds are determined using a matrix-based pricing model and are classified as Level 2 assets. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer, and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees, and the Company’s evaluation of the borrower’s ability to compete in 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.

 

The fair values for certain collateralized mortgage obligations (“CMO-Bs”) are determined by taking the average of broker quotes when more than one broker quote is provided. A few of the CMO-Bs are priced by the originating broker due to the complexity and unique characteristics of the asset. Due to the lack of corroborating evidence to support a higher level, these bonds are classified as Level 3 assets.

 

Trading activity for the Company’s Residential Mortgage-backed Securities (“RMBS”), particularly subprime and Alt-A mortgage-backed securities, has been declining during 2008 as a result of the dislocation of the credit markets. During 2008, the Company continued to obtain pricing information from commercial pricing services and brokers. However, the pricing for subprime and Alt-A mortgage-backed securities did not represent regularly occurring market transactions since the trading activity declined significantly in the second half of 2008. As a result, the Company concluded in the second half of 2008 that the market for subprime and Alt-A mortgage-backed securities was inactive. The Company did not change its valuation procedures, which are consistent with those used for Level 2 marketable bonds without an active market, as a result of determining that the market was inactive. However, the Company determined that the

 

C-36

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

classification within the valuation hierarchy should be transferred to Level 3 due to market inactivity.

 

At December 31, 2008, the fixed maturities valued using unadjusted broker quotes totaled $9,069.0.

 

Equity securities, available-for-sale: Fair values of these securities are based upon quoted market price and are classified as Level 1 assets.

 

Cash and cash equivalents, Short-term investments, and Short-term investments under securities loan agreement: The carrying amounts for cash reflect the assets’ fair values. The fair values for cash equivalents and short-term investments are determined based on quoted market prices. These assets are classified as Level 1.

 

Assets held in separate accounts: Assets held in separate accounts are reported at the quoted fair values of the underlying investments in the separate accounts. Mutual funds, short-term investments and cash are based upon a quoted market price and are included in Level 1. Bond valuations are obtained from third party commercial pricing services and brokers and are included in Level 2. The valuations obtained from brokers are non-binding. Valuations are validated monthly through comparisons to internal pricing models, back testing to recent trades, and monitoring of trading volumes.

 

Other financial instruments reported as assets and liabilities: The carrying amounts for these financial instruments (primarily derivatives) reflect the fair value of the assets and liabilities. Derivatives are carried at fair value (on the Consolidated Balance Sheets), which is determined using the Company’s derivative accounting system in conjunction with observable key financial data from third party sources or through values established by third party brokers. Counterparty credit risk is considered and incorporated in the Company’s valuation process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company’s policy to deal only with investment grade counterparties with a credit rating of A- or better. These assets and liabilities are classified as Level 2.

 

Product guarantees: The Company records reserves for product guarantees, which can be either assets or liabilities, for annuity contracts containing guaranteed credited rates in accordance with FAS 133. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The fair value of the obligation is calculated based on the income approach as described in FAS 157. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of risk neutral scenarios and other best estimate assumptions. Explicit risk margins in the actuarial assumptions underlying valuations are included, as well as an explicit recognition of all nonperformance risks as required by FAS 157. Nonperformance risk for product guarantees contains adjustments to the fair values of these contract liabilities related to

 

C-37

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

the current credit standing of ING and the Company based on credit default swaps with similar term to maturity and priority of payment. The ING credit default spread is applied to the discount factors for product guarantees in the Company’s valuation model in order to incorporate credit risk into the fair values of these product guarantees. As of December 31, 2008, the credit ratings of ING and the Company changed in relation to prior periods, which resulted in substantial changes in the valuation of the reserves for product guarantees.

 

The following disclosures are made in accordance with the requirements of FAS No. 107, “Disclosures about Fair Value of Financial Instruments” (“FAS 107”). FAS 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 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:

 

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.

 

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

 

Investment contract liabilities (included in Future policy benefits and 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 contractowner upon demand. However, the Company has the right under such contracts to delay payment of withdrawals, which may ultimately result in paying an amount different than that determined to be payable on demand.

 

C-38

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

The carrying values and estimated fair values of certain of the Company’s financial instruments were as follows at December 31, 2008 and 2007.

 

 

 

 

 

 

 

 

 

 

2008

 

 

 

2007

 

 

 

 

 

 

 

 

 

Carrying

 

 

Fair

 

 

 

Carrying

 

 

Fair

 

 

 

 

 

 

 

 

 

Value

 

 

Value

 

 

 

Value

 

 

Value

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities, available-for-sale,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

including securities pledged

 

$

14,477.6 

 

$

14,477.6 

 

 

$

14,250.4 

 

$

14,250.4 

 

Equity securities, available-for-sale

 

 

240.3 

 

 

240.3 

 

 

 

446.4 

 

 

446.4 

 

Mortgage loans on real estate

 

 

2,107.8 

 

 

2,027.9 

 

 

 

2,089.4 

 

 

2,099.3 

 

Policy loans

 

 

267.8 

 

 

267.8 

 

 

 

273.4 

 

 

273.4 

 

Cash, cash equivalents, short-term 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

investments, and short-term

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

investments under securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

loan agreement

 

 

729.3 

 

 

729.3 

 

 

 

622.9 

 

 

622.9 

 

Other investments

 

 

749.1 

 

 

749.1 

 

 

 

670.9 

 

 

670.9 

 

Assets held in separate accounts

 

 

35,927.7 

 

 

35,927.7 

 

 

 

48,091.2 

 

 

48,091.2 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment contract liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With a fixed maturity

 

 

1,529.4 

 

 

1,610.6 

 

 

 

1,251.1 

 

 

1,308.7 

 

 

Without a fixed maturity

 

 

15,611.8 

 

 

17,237.9 

 

 

 

13,421.9 

 

 

13,379.1 

 

Derivatives

 

 

 

544.1 

 

 

544.1 

 

 

 

200.3 

 

 

200.3 

 

Fair value estimates are made at a specific point in time, based on available market information and judgments about various financial instruments, such as estimates of timing and amounts of future cash flows. Such estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized capital gains (losses). In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments. In evaluating the Company’s management of interest rate, price, and liquidity risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.

 

Level 3 Financial Instruments

 

The fair values of certain assets and liabilities are determined using prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (i.e., Level 3 as defined by FAS 157). These valuations, whether derived internally or obtained from a third party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In light of the methodologies employed to obtain the fair value of financial assets and liabilities classified as Level 3, additional information is presented below, with particular attention addressed to the reserves for product guarantees due to the impact on the Company’s results of operations.

 

C-39

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

The following table summarizes the change in fair value of the Company’s Level 3 assets and liabilities for the year ended December 31, 2008.

 

 

 

 

 

 

 

 

 

 

 

Fixed

 

 

 

 

 

Product

 

 

 

 

 

 

 

 

 

 

 

Maturities

 

 

Derivatives

 

 

Guarantees

 

Balance at January 1, 2008

$

1,737.6 

 

$

-  

 

$

(76.4)

 

 

Capital gains (losses):

 

 

 

 

 

 

 

 

 

 

 

Net realized capital gains (losses)

 

(72.6)

(1)

 

(29.3)

 

 

(139.6)

(3)

 

 

Net unrealized capital (losses) gains(2)

 

71.8 

 

 

-  

 

 

-  

 

 

Total net realized and unrealized capital losses

 

(0.8)

 

 

(29.3)

 

 

(139.6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases, sales, issuances, and settlements, net

 

(171.7)

 

 

21.5 

 

 

(4.0)

 

 

 

Transfer in (out) of Level 3

 

726.5 

 

 

(65.8)

 

 

-  

 

Balance at December 31, 2008

$

2,291.6 

 

$

(73.6)

 

$

(220.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

This amount is included in Net realized capital gains (losses) on the Consolidated Statements of Operations.

 

(2)

The amounts in this line are included in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

(3)

This amount is included in Interest credited and other benefits to contractowners on the Consolidated Statements of 

 

 

Operations. All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this 

 

 

disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis.

 

For the year ended December 31, 2008, the value of the liability increased due to increased credit spreads, increased interest rate volatility and decreased interest rates. As of December 31, 2008, the net realized gains attributable to credit risk were $107.9. The unrealized capital losses on fixed maturities were driven by the widening of credit spreads.

 

During 2008, the Company determined that the classification within the valuation hierarchy related to the subprime and Alt-A mortgage-backed securities within the RMBS portfolio should be changed due to market inactivity. This change is presented as transfers into Level 3 in the table above and discussed in more detail in the previous disclosure regarding RMBS.

 

C-40

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Derivative Financial Instruments

 

 

 

 

 

 

 

 

Notional Amount

 

 

Fair Value

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

Interest Rate Swaps

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps are used to manage the interest

 

 

 

 

 

 

 

 

 

 

 

 

 

rate risk in the Company’s fixed maturities portfolio, 

 

 

 

 

 

 

 

 

 

 

 

 

 

as well as the Company’s liabilities.  Interest rate 

 

 

 

 

 

 

 

 

 

 

 

 

 

swaps represent contracts that require the exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

of cash flows at regular interim periods, typically

 

 

 

 

 

 

 

 

 

 

 

 

 

monthly or quarterly.

 

7,207.2 

 

 

7,680.0 

 

$

(232.0)

 

$

(111.6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Exchange Swaps

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange swaps are used to reduce the risk

 

 

 

 

 

 

 

 

 

 

 

 

 

of a change in the value, yield, or cash flow with 

 

 

 

 

 

 

 

 

 

 

 

 

 

respect to invested assets.  Foreign exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

swaps represent contracts that require the 

 

 

 

 

 

 

 

 

 

 

 

 

 

exchange of foreign currency cash flows for

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. dollar cash flows at regular interim periods, 

 

 

 

 

 

 

 

 

 

 

 

 

 

typically quarterly or semi-annually.

 

199.5 

 

 

224.5 

 

 

(18.6)

 

 

(45.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Default Swaps

 

 

 

 

 

 

 

 

 

 

 

 

Credit default swaps are used to reduce the credit loss

 

 

 

 

 

 

 

 

 

 

 

 

 

exposure with respect to certain assets that the 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company owns, or to assume credit exposure to

 

 

 

 

 

 

 

 

 

 

 

 

 

certain assets that the Company does not own.  

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments are made to or received from the 

 

 

 

 

 

 

 

 

 

 

 

 

 

counterparty at specified intervals and amounts

 

 

 

 

 

 

 

 

 

 

 

 

 

for the purchase or sale of credit protection.

 

 

 

 

 

 

 

 

 

 

 

 

 

In the event of a default on the underlying credit

 

 

 

 

 

 

 

 

 

 

 

 

 

exposure, the Company will either receive 

 

 

 

 

 

 

 

 

 

 

 

 

 

an additional payment (purchased credit 

 

 

 

 

 

 

 

 

 

 

 

 

 

protection) or will be required to make an additional 

 

 

 

 

 

 

 

 

 

 

 

 

 

payment (sold credit protection) equal to the notional 

 

 

 

 

 

 

 

 

 

 

 

 

 

value of the swap contract.

 

341.1 

 

 

335.9 

 

 

(58.9)

 

 

(8.8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forwards

 

 

 

 

 

 

 

 

 

 

 

 

 

Forwards are acquired to hedge the Company's

 

 

 

 

 

 

 

 

 

 

 

 

 

inverse portfolio against movements in interest

 

 

 

 

 

 

 

 

 

 

 

 

 

rates, particularly mortgage rates. On the 

 

 

 

 

 

 

 

 

 

 

 

 

 

settlement date, the Company will either receive

 

 

 

 

 

 

 

 

 

 

 

 

 

a payment (interest rate drops on owned forwards

 

 

 

 

 

 

 

 

 

 

 

 

 

or interest rate rises on purchased forwards) or

 

 

 

 

 

 

 

 

 

 

 

 

 

will be required to make a payment (interest rate

 

 

 

 

 

 

 

 

 

 

 

 

 

rises on owned forwards or interest rate drops

 

 

 

 

 

 

 

 

 

 

 

 

 

on purchased forwards).

 

263.0 

 

 

-  

 

 

3.3 

 

 

-  

 

 

C-41

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

 

 

 

 

 

 

 

Notional Amount

 

 

Fair Value

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

Swaptions

 

 

 

 

 

 

 

 

 

 

 

 

 

Swaptions are used to manage interest rate risk in the

 

 

 

 

 

 

 

 

 

 

 

 

 

Company’s collateralized mortgage obligation portfolio.  

 

 

 

 

 

 

 

 

 

 

 

 

Swaptions are contracts that give the Company the 

 

 

 

 

 

 

 

 

 

 

 

 

 

option to enter into an interest rate swap at a specific

 

 

 

 

 

 

 

 

 

 

 

 

 

future date.

 

2,521.5 

 

 

542.3 

 

$

5.1 

 

$

0.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Futures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Futures contracts are used to hedge against a decrease

 

 

 

 

 

 

 

 

 

 

 

 

 

in certain equity indices.  Such decrease may result

 

 

 

 

 

 

 

 

 

 

 

 

 

in a decrease in variable annuity account values,

 

 

 

 

 

 

 

 

 

 

 

 

 

which would increase the possibility of the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

incurring an expense for guaranteed benefits in

 

 

 

 

 

 

 

 

 

 

 

 

 

excess of account values.  A decrease in variable 

 

 

 

 

 

 

 

 

 

 

 

 

 

annuity account values would also result in lower

 

 

 

 

 

 

 

 

 

 

 

 

 

fee income.  A decrease in equity markets may also

 

 

 

 

 

 

 

 

 

 

 

 

 

negatively impact the Company's investment in

 

 

 

 

 

 

 

 

 

 

 

 

 

equity securities.  The futures income would 

 

 

 

 

 

 

 

 

 

 

 

 

 

serve to offset these effects. Futures contracts 

 

 

 

 

 

 

 

 

 

 

 

 

 

are also used to hedge against an increase

 

 

 

 

 

 

 

 

 

 

 

 

 

in certain equity indices.  Such increase may result

 

 

 

 

 

 

 

 

 

 

 

 

 

in increased payments to contract holders of fixed

 

 

 

 

 

 

 

 

 

 

 

 

 

indexed annuity contracts, and the futures income

 

 

 

 

 

 

 

 

 

 

 

 

 

would serve to offset this increased expense.  The

 

 

 

 

 

 

 

 

 

 

 

 

 

underlying reserve liabilities are valued under 

 

 

 

 

 

 

 

 

 

 

 

 

 

FAS 133 and FAS 157 (see discussion under 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Reserves” section) and the change in reserve 

 

 

 

 

 

 

 

 

 

 

 

 

 

liability is recorded in Interest credited and other 

 

 

 

 

 

 

 

 

 

 

 

 

 

benefits to contractowners.  The gain or loss on

 

 

 

 

 

 

 

 

 

 

 

 

 

futures is recorded in Net realized capital gains

 

 

 

 

 

 

 

 

 

 

 

 

 

(losses).

 

580.6 

 

 

-  

 

 

(7.8)

 

 

-  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Embedded Derivatives

 

 

 

 

 

 

 

 

 

 

 

 

The Company also has investments in certain fixed

 

 

 

 

 

 

 

 

 

 

 

 

 

maturity instruments, and has issued certain retail 

 

 

 

 

 

 

 

 

 

 

 

 

 

annuity products, that contain embedded derivatives

 

 

 

 

 

 

 

 

 

 

 

 

 

whose market value is at least partially determined by,

 

 

 

 

 

 

 

 

 

 

 

 

 

among other things, levels of or changes in domestic

 

 

 

 

 

 

 

 

 

 

 

 

 

and/or foreign interest rates (short- or long-term),

 

 

 

 

 

 

 

 

 

 

 

 

 

exchange rates, prepayment rates, equity rates, or

 

 

 

 

 

 

 

 

 

 

 

 

 

credit ratings/spreads.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Within securities

 

N/A* 

 

 

N/A* 

 

 

123.7 

 

 

40.8 

 

 

 

Within annuity products

 

N/A* 

 

 

N/A* 

 

 

180.0 

 

 

78.1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* N/A - not applicable.

 

 

 

 

 

 

 

 

 

 

 

 

 

C-42

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Credit Default Swaps

 

The Company has entered into various credit default swaps to assume credit exposure to certain assets that the Company does not own. Credit default swaps involve a transfer of credit risk from one party to another in exchange for periodic payments. These instruments are typically written for a maturity period of five years and do not contain recourse provisions, which would enable the seller to recover from third parties. The Company’s collateral positions are tracked by the International Swaps and Derivatives Associations, Inc. (“ISDA”). To the extent cash collateral was received, it was included in the Collateral held, including payables under securities loan agreement on the Balance Sheets and was reinvested in short-term investments. The source of non-cash collateral posted was investment grade bonds of the entity. Collateral held is used in accordance with the Credit Support Annex (“CSA”) to satisfy any obligations. In the event of a default on the underlying credit exposure, the Company will either receive an additional payment (purchased credit protection) or will be required to make an additional payment (sold credit protection) equal to the notional value of the swap contract. At December 31, 2008, the fair value of credit default swaps of $16.1 and $75.0 was included in Other investments and Other liabilities, respectively, on the Consolidated Balance Sheets. As of December 2008, the maximum potential future exposure to the Company on the sale of credit protection under credit default swaps was $161.0.

 

Embedded Derivative in Credit-Linked Note

 

The Company owns a 3-year credit-linked note arrangement, whereby the Company agrees to reimburse the guaranteed party upon payment default of the referenced obligation. Upon such default, the Company reimburses the guaranteed party for the loss under the reference obligation, and the Company receives that reference obligation in settlement. The Company can then seek recovery of any losses under the agreement by sale or collection of the received reference obligation. As of December 31, 2008, the maximum potential future exposure to the Company under the guarantee was $30.0.

 

Variable Interest Entities

 

The Company holds VIEs for investment purposes in the form of private placement securities, structured securities, securitization transactions, and limited partnerships. 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. Rather, the VIEs are accounted for using the cost or equity method of accounting. Investments in limited partnerships are included in Limited partnerships/corporations on the Consolidated Balance Sheets.

 

C-43

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

4.

Deferred Policy Acquisition Costs and Value of Business Acquired

Activity within DAC was as follows for the years ended December 31, 2008, 2007, and 2006.

 

Balance at January 1, 2006

$

511.4 

 

Deferrals of commissions and expenses

 

136.0 

 

Amortization:

 

 

 

 

Amortization

 

(62.1)

 

 

Interest accrued at 6% to 7%

 

37.5 

 

Net amortization included in the Consolidated Statements of Operations

 

(24.6)

 

Change in unrealized capital gains (losses) on available-for-sale securities

 

(0.2)

Balance at December 31, 2006

 

622.6 

 

Deferrals of commissions and expenses

 

147.1 

 

Amortization:

 

 

 

 

Amortization

 

(80.9)

 

 

Interest accrued at 5% to 7%

 

44.8 

 

Net amortization included in the Consolidated Statements of Operations

 

(36.1)

 

Change in unrealized capital gains (losses) on available-for-sale securities

 

1.0 

 

Implementation of SOP 05-1

 

(6.0)

Balance at December 31, 2007

 

728.6 

 

Deferrals of commissions and expenses

 

168.7 

 

Amortization:

 

 

 

 

Amortization

 

(112.5)

 

 

Interest accrued at 5% to 7%

 

50.6 

 

Net amortization included in the Consolidated Statements of Operations

 

(61.9)

 

Change in unrealized capital gains (losses) on available-for-sale securities

 

30.1 

Balance at December 31, 2008

$

865.5 

 

The estimated amount of DAC to be amortized, net of interest, is $50.8, $59.0, $61.7, $59.6, and $58.5, for the years 2009, 2010, 2011, 2012 and 2013, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

 

C-44

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Activity within VOBA was as follows for the years ended December 31, 2008, 2007, and 2006.

 

Balance at January 1, 2006

$

1,291.7 

 

Deferrals of commissions and expenses

 

46.2 

 

Amortization:

 

 

 

 

Amortization

 

(82.4)

 

 

Interest accrued at 5% to 7%

 

85.7 

 

Net amortization included in the Consolidated Statements of Operations

 

3.3 

 

Change in unrealized capital gains (losses) on available-for-sale securities

 

(1.0)

Balance at December 31, 2006

 

1,340.2 

 

Deferrals of commissions and expenses

 

40.5 

 

Amortization:

 

 

 

 

Amortization

 

(177.3)

 

 

Interest accrued at 5% to 7%

 

84.2 

 

Net amortization included in the Consolidated Statements of Operations

 

(93.1)

 

Change in unrealized capital gains (losses) on available-for-sale securities

 

2.9 

 

Implementation of SOP 05-1

 

(37.3)

Balance at December 31, 2007

 

1,253.2 

 

Deferrals of commissions and expenses

 

33.3 

 

Amortization:

 

 

 

 

Amortization

 

(144.2)

 

 

Interest accrued at 5% to 7%

 

77.2 

 

Net amortization included in the Consolidated Statements of Operations

 

(67.0)

 

Change in unrealized capital gains (losses) on available-for-sale securities

 

613.0 

Balance at December 31, 2008

$

1,832.5 

 

The estimated amount of VOBA to be amortized, net of interest, is $59.9, $69.9, $75.7, $73.7, and $71.8, for the years 2009, 2010, 2011, 2012 and 2013, respectively. Actual amortization incurred during these years may vary as assumptions are modified to incorporate actual results.

 

Analysis of DAC and VOBA

 

The increase in Net amortization of DAC and VOBA for the year ended December 31, 2008, was primarily driven by unfavorable unlocking of $63.0 resulting from unfavorable equity market performance and the revisions of certain assumptions used in the estimation of gross profits. The increase in Net amortization of DAC and VOBA for the year ended December 31, 2007, was primarily driven by unfavorable unlocking of $131.3 attributable to an increase in actual gross profits related to higher fee income and fixed margins in 2007.

 

The decrease in Net amortization of DAC and VOBA in 2006 is primarily driven by favorable unlocking of $83.3, resulting from the refinements of the Company’s estimates of persistency, expenses and other assumptions. In addition, the decrease in amortization reflects lower actual gross profits, primarily due to a legal settlement incurred in 2006.

 

C-45

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

5.

Dividend Restrictions and Shareholder’s Equity

ILIAC’s ability to pay dividends to its parent is subject to the prior approval of insurance regulatory authorities of the State of Connecticut for payment of any dividend, which, when combined with other dividends paid within the preceding 12 months, exceeds the greater of (1) ten percent (10%) of ILIAC’s statutory surplus at the prior year end or (2) ILIAC’s prior year statutory net gain from operations.

 

During 2008, ILIAC did not pay any dividends to its Parent. During 2007 and 2006, ILIAC paid $145.0, and $256.0, respectively, in dividends on its common stock to its Parent.

 

During 2006, Lion contributed to ILIAC, DSI, which had $50.5 in equity on the date of contribution and was accounted for in a manner similar to a pooling-of-interests. During 2008, 2007, and 2006, ILIAC did not receive any cash capital contributions from its Parent.

 

On November 12, 2008, ING issued to the Dutch State non-voting Tier 1 securities for a total consideration of Euro 10 billion. On February 24, 2009, $2.2 billion was contributed to direct and indirect insurance company subsidiaries of ING America Insurance Holdings, Inc. (“ING AIH”), of which $365.0 was contributed to the Company. The contribution was comprised of the proceeds from the investment by the Dutch government and the redistribution of currently existing capital within ING.

 

The State of Connecticut Insurance Department (the “Department”) recognizes as net income and capital and surplus those amounts determined in conformity with statutory accounting practices prescribed or permitted by the Department, which differ in certain respects from accounting principles generally accepted in the United States. Statutory net (loss) income was $(428.4), $245.5, and $138.3, for the years ended December 31, 2008, 2007, and 2006, respectively. Statutory capital and surplus was $1,524.6 and $1,388.0 as of December 31, 2008 and 2007, respectively. As specifically permitted by statutory accounting policies, statutory surplus as of December 31, 2008 included the impact of the $365.0 capital contribution received on February 24, 2009.

 

During 2008, the Company received a permitted practice regarding deferred income taxes, which modified the accounting prescribed by the National Association of Insurance Commissioners by increasing the realization period for deferred tax assets from one year to three years and increasing the asset recognition limit from 10% to 15% of adjusted statutory capital and surplus. This permitted practice expires on December 15, 2009. This permitted practice increased admitted assets and statutory surplus by $58.4 for the year ended December 31, 2008. The benefits of this permitted practice may not be considered by the Company when determining surplus available for dividends.

 

C-46

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

The Department also has the ability to revise certain reserving requirements at its discretion. Due to the financial crisis and related federal government interest rate actions, the Department provided the Company and other domestic life insurers the opportunity to elect to use a formula for the discount rate for statutory reserve and reserve related calculations that resulted in the discount rate being floored at 3.25% for December 31, 2008; the formula stipulated by the Department was such that the discount rate was to equal the greater of 3.25% or 105% of the otherwise applicable spot rate; this reserve relief reduces statutory reserves and increases surplus by approximately $700.0. This reserve relief is available for the period from December 31, 2008 through September 30, 2009 and is not a permitted practice. The Company also discloses that, as in prior years, its asset adequacy analysis associated with these reserves is favorable.

 

6.

Additional Insurance Benefits and Minimum Guarantees

The Company calculates an additional liability for certain GMDBs and other minimum guarantees in order to recognize the expected value of these benefits in excess of the projected account balance over the accumulation period based on total expected assessments.

 

The Company regularly evaluates estimates used to adjust the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised.

 

As of December 31, 2008, the separate account liability for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees were $6.5 billion and $181.2, respectively. As of December 31, 2007, the separate account liability for guaranteed minimum benefits and the additional liability recognized related to minimum guarantees were $7.1 billion and $80.4, 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, 2008 and 2007, was $6.5 billion and $7.1 billion, respectively.

 

7.

Income Taxes

Effective January 1, 2006, ILIAC files a consolidated federal income tax return with ING AIH and certain other subsidiaries of ING AIH that are eligible corporations qualified to file consolidated federal income tax returns as part of the ING AIH affiliated group. Effective January 1, 2006, ILIAC is party to a federal tax allocation agreement with ING AIH and its subsidiaries that are part of the group whereby ING AIH charges its subsidiaries for federal taxes each subsidiary would have incurred were it not a member of the consolidated group and credits each subsidiary for losses at the statutory federal tax rate.

 

C-47

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

 

 

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2006

Current tax expense (benefit):

 

 

 

 

 

 

 

 

 

Federal

 

 

 

$

(121.8)

 

$

28.6 

 

$

23.3 

 

State

 

 

 

 

 

(18.1)

 

 

(9.0)

 

 

20.0 

 

 

 

Total current tax (benefit) expense

 

(139.9)

 

 

19.6 

 

 

43.3 

Deferred tax expense:

 

 

 

 

 

 

 

 

 

Federal

 

 

 

 

31.6 

 

 

36.4 

 

 

79.4 

 

 

 

Total deferred tax expense

 

31.6 

 

 

36.4 

 

 

79.4 

Total income tax (benefit) expense

$

(108.3)

 

$

56.0 

 

$

122.7 

 

Income taxes were different from the amount computed by applying the federal income tax rate to income before income taxes for the following reasons for the years ended December 31, 2008, 2007 and 2006:

 

 

 

 

 

 

 

 

 

 

2008

 

 

2007

 

 

2006

(Loss) income before income taxes

$

(1,138.5)

 

$

274.4 

 

$

424.5 

Tax rate

 

 

 

 

 

35.0%

 

 

35.0%

 

 

35.0%

Income tax (benefit) expense at federal statutory rate

 

(398.5)

 

 

96.0 

 

 

148.6 

Tax effect of:

 

 

 

 

 

 

 

 

 

 

Dividend received deduction

 

(15.5)

 

 

(26.2)

 

 

(36.5)

 

IRS audit settlement

 

(10.1)

 

 

-  

 

 

-  

 

State audit settlement

 

(12.6)

 

 

(21.8)

 

 

-  

 

State tax expense

 

1.3 

 

 

-  

 

 

13.0 

 

Tax valuation allowance

 

333.0 

 

 

-  

 

 

-  

 

Other

 

 

 

 

 

(5.9)

 

 

8.0 

 

 

(2.4)

Income tax (benefit) expense 

$

(108.3)

 

$

56.0 

 

$

122.7 

 

 

C-48

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Temporary Differences

 

The tax effects of temporary differences that give rise to Deferred tax assets and Deferred tax liabilities at December 31, 2008 and 2007, are presented below.

 

 

 

 

 

 

 

 

 

 

2008

 

 

2007

Deferred tax assets:

 

 

 

 

 

 

Insurance reserves

$

217.2 

 

$

216.6 

 

Net unrealized capital loss

 

503.8 

 

 

8.5 

 

Unrealized losses allocable to experience-rated contracts

 

-  

 

 

5.7 

 

Investments

 

 

294.7 

 

 

6.7 

 

Postemployment benefits

 

67.4 

 

 

65.5 

 

Compensation

 

42.5 

 

 

37.7 

 

Other

 

 

 

 

 

3.9 

 

 

32.9 

 

 

 

Total gross assets before valuation allowance

 

1,129.5 

 

 

373.6 

 

 

 

 

Less: valuation allowance

 

(333.0)

 

 

(6.4)

 

 

 

Assets, net of valuation allowance

 

796.5 

 

 

367.2 

Deferred tax liabilities: 

 

 

 

 

 

 

Value of business acquired

 

(653.3)

 

 

(438.5)

 

Deferred policy acquisition costs

 

(244.3)

 

 

(204.6)

 

 

 

 

Total gross liabilities

 

(897.6)

 

 

(643.1)

Net deferred income tax asset (liability)

$

(101.1)

 

$

(275.9)

 

Net unrealized capital gains and losses are presented as a component of other comprehensive income (loss) in Shareholder’s equity, net of deferred taxes. Due to changes in classification during 2008, the amount for the 2007 table above were reclassified in order to allow for more effective comparison.

 

Valuation allowances are provided when it is considered unlikely that deferred tax assets will be realized. As of December 31, 2008 and 2007, the Company had a tax valuation allowance of $328.0 and $0, respectively, related to realized capital losses, which is included in Net (loss) income. The valuation allowance includes $106.7 related to impairments of securities designated in the ING-Dutch State Transaction, which has established pending uncertainties regarding the closing of the transaction. As of December 31, 2008 and 2007, the Company had a valuation allowance of $0 and $6.4, respectively, related to unrealized capital losses on investments, which is included in Accumulated Other Comprehensive Income (Loss). In 2008, the Company has also established a $5.0 tax valuation allowance against foreign tax credits, the benefit of which is uncertain.

 

Tax Sharing Agreement

 

ILIAC had a receivable of $38.6 and payable $56.8 to ING AIH at December 31, 2008 and 2007, respectively, for federal income taxes under the inter-company tax sharing agreement.

 

C-49

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

See Related Party Transactions footnote for more information.

 

Unrecognized Tax Benefits

 

Reconciliations of the change in the unrecognized income tax benefits for the years ended December 31, 2008 and 2007 are as follows:

 

 

 

 

 

 

 

 

 

 

 

2008

 

 

2007

Balance at January 1

 

$

47.4 

 

$

68.0 

Additions for tax positions related to current year

 

 

2.4 

 

 

2.9 

Additions for tax positions related to prior years

 

 

2.2 

 

 

-  

Reductions for tax positions related to prior years

 

 

(20.7)

 

 

(23.5)

Reductions for settlements with taxing authorities

 

 

(9.2)

 

 

-  

Balance at December 31

 

$

22.1 

 

$

47.4 

 

The Company had $23.1 and $42.6 of unrecognized tax benefits as of December 31, 2008 and 2007, respectively, that would affect the Company’s effective tax rate if recognized.

 

Interest and Penalties

 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in Current income taxes and Income tax expense on the Consolidated Balance Sheets and the Consolidated Statements of Operations, respectively. The Company had accrued interest of $3.8 and $16.9 as of December 31, 2008 and 2007, respectively. The decrease in accrued interest during the year ended December 31, 2008 primarily related to the settlement of the 2002 and 2003 IRS audit and the 1995 through 2000 New York state audit.

 

Tax Regulatory Matters

 

The Company is under audit by the IRS for tax years 2004 through 2008, and is subject to state audit in New York for years 2001 through 2006. It is anticipated that the IRS audit of tax years 2004 through 2008 will be finalized within the next twelve months. Upon finalization of the IRS and New York examinations, it is reasonably possible that the unrecognized tax benefits will decrease by up to $7.6. The timing of the payment of the remaining allowance of $14.5 can not be reliably estimated.

 

On September 25, 2007, the IRS issued Revenue Ruling 2007-61, which announced its intention to issue regulations with respect to certain computational aspects of the dividend received deduction (“DRD”) on separate account assets held in connection with variable annuity and life insurance contracts. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 issued in August 2007 that purported to change accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other members of the public will have the opportunity to raise legal and practical questions about the

 

C-50

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

content, scope and application of such regulations. As a result, the ultimate timing, substance, and effective date of any such regulations are unknown, but they could result in the elimination of some or all of the separate account DRD tax benefit that the Company receives.

 

Under prior law, life insurance companies were allowed to defer from taxation a portion of income. Deferred income of $17.2 was accumulated in the Policyholders Surplus Account and would only become taxable under certain conditions, which management believed to be remote. In 2004, Congress passed the American Jobs Creation Act of 2004 allowing certain tax-free distributions from the Policyholders’ Surplus Account during 2005 and 2006. During 2006, the Company made a dividend distribution of $256.0, which eliminated the $17.2 balance in the Policyholders Surplus Account and, therefore, any potential tax on the accumulated balance.

 

8.

Benefit Plans

Defined Benefit Plan

 

ING North America Insurance Corporation (“ING North America”) sponsors the ING Americas Retirement Plan (the “Retirement Plan”), effective as of December 31, 2001. Substantially all employees of ING North America and its affiliates (excluding certain employees) are eligible to participate, including the Company’s employees other than Company agents. However, effective January 1, 2009, the Retirement Plan was amended to provide that anyone hired or rehired by the Company on or after January 1, 2009, would not be eligible to participate in the Plan. The Retirement Plan was amended and restated effective July 1, 2008 related to the admission of the employees from the acquisition of CitiStreet LLC (“CitiStreet”) by Lion, and ING North America filed a request for a determination letter on the qualified status of the Plan. The Retirement Plan is a tax-qualified defined benefit plan, the benefits of which are guaranteed (within certain specified legal limits) by the Pension Benefit Guaranty Corporation (“PBGC”). As of January 1, 2002, each participant in the Retirement Plan earns a benefit under a final average compensation formula. Subsequent to December 31, 2001, ING North America is responsible for all Retirement Plan liabilities. The costs allocated to the Company for its employees’ participation in the Retirement Plan were $14.0, $17.2, and $23.8, for 2008, 2007, and 2006, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

 

Defined Contribution Plan

 

ING North America sponsors the ING Americas Savings Plan and ESOP (the “Savings Plan”). Substantially all employees of ING North America and its affiliates (excluding certain employees, including but not limited to Career Agents) are eligible to participate, including the Company’s employees other than Company agents. Career Agents are certain, full-time insurance salespeople who have entered into a career agent agreement with the Company and certain other individuals who meet specified eligibility criteria. The Savings Plan is a tax-qualified defined contribution retirement plan, which includes

 

C-51

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

an employee stock ownership plan (“ESOP”) component. The Savings Plan was amended and restated effective July 1, 2008 related to the admission of the employees from the acquisition of CitiStreet by Lion, and ING North America filed a request for a determination letter on the qualified status of the Plan. 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. Matching contributions are subject to a 4-year graded vesting schedule (although certain specified participants are subject to a 5-year graded vesting schedule). All contributions made to the Savings Plan are subject to certain limits imposed by applicable law. Pre-tax charges to operations of the Company for the Savings Plan were $10.3, $10.1, and $9.7, for the years ended December 31, 2008, 2007, and 2006, respectively, and are included in Operating expenses in the Consolidated Statements of Operations.

 

Non-Qualified Retirement Plans

 

Through December 31, 2001, the Company, in conjunction with ING North America, offered certain eligible employees (other than Career Agents) a Supplemental Executive Retirement Plan and an Excess Plan (collectively, the “SERPs”). Benefit accruals under the SERPs ceased, effective as of December 31, 2001. Benefits under the SERPs are determined based on an eligible employee’s years of service and average annual compensation for the highest five years during the last ten years of employment.

 

The Company, in conjunction with ING North America, sponsors the Pension Plan for Certain Producers of ING Life Insurance and Annuity Company (formerly the Pension Plan for Certain Producers of Aetna Life Insurance and Annuity Company) (the “Agents Non-Qualified Plan”). This plan covers certain full-time insurance salespeople who have entered into a career agent agreement with the Company and certain other individuals who meet the eligibility criteria specified in the plan (“Career Agents”). The Agents Non-Qualified Plan was terminated effective January 1, 2002. In connection with the termination, all benefit accruals ceased and all accrued benefits were frozen.

 

The SERPs and Agents Non-Qualified Plan, are non-qualified defined benefit pension plans, which means all the SERPs benefits are payable from the general assets of the Company and Agents Non-Qualified Plan benefits are payable from the general assets of the Company and ING North America. These non-qualified defined benefit pension plans are not guaranteed by the PBGC.

 

Obligations and Funded Status

 

The following tables summarize the benefit obligations, fair value of plan assets, and funded status, for the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2008 and 2007.

 

C-52

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

 

 

 

 

2008

 

 

2007

Change in Projected Benefit Obligation:

 

 

 

 

 

 

Projected benefit obligation, January 1

$

85.6 

 

$

97.7 

 

Interest cost

 

5.2 

 

 

5.4 

 

Benefits paid

 

(11.6)

 

 

(9.3)

 

Post service cost-unrecognized

 

0.2 

 

 

-  

 

Actuarial gain (loss) on obligation

 

15.5 

 

 

(8.2)

 

Projected benefit obligation, December 31

$

94.9 

 

$

85.6 

 

 

 

 

 

 

 

 

Fair Value of Plan Assets:

 

 

 

 

 

 

Fair value of plan assets, December 31

$

-  

 

$

-  

 

Amounts recognized in the Consolidated Balance Sheets consist of:

 

 

 

 

 

2008

 

 

2007

Accrued benefit cost

$

(94.9)

 

$

(85.6)

Intangible assets

 

-  

 

 

-  

Accumulated other comprehensive income

 

20.0 

 

 

4.9 

Net amount recognized

$

(74.9)

 

$

(80.7)

 

At December 31, 2008 and 2007, the projected benefit obligation was $94.9 and $85.6, respectively.

 

Assumptions

 

The weighted-average assumptions used in the measurement of the December 31, 2008 and 2007 benefit obligation for the SERPs and Agents Non-Qualified Plan, were as follows:

 

 

2008

 

2007

Discount rate at end of period

6.50%

 

6.50%

Rate of compensation increase

4.00%

 

4.20%

 

In determining the discount rate assumption, the Company utilizes current market information provided by its plan actuaries (particularly the Citigroup Pension Discount Curve Liability Index), including a discounted cash flow analysis of the Company’s pension obligation and general movements in the current market environment. The discount rate modeling process involves selecting a portfolio of high quality, noncallable bonds that will match the cash flows of the Retirement Plan. Based upon all available information, it was determined that 6.0% was the appropriate discount rate as of December 31, 2008, to calculate the Company’s accrued benefit liability. Accordingly, as prescribed by FAS No. 87, “Employers’ Accounting for Pensions”, the 6.5% discount rate will also be used to determine the Company’s 2008 pension expense. December 31 is the measurement date for the SERP’s and Agents Non-Qualified Plan.

 

C-53

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

The weighted-average assumptions used in calculating the net pension cost were as follows:

 

 

2008

 

2007

 

2006

Discount rate

6.50%

 

5.90%

 

6.00%

Rate of increase in compensation levels

4.00%

 

4.20%

 

4.00%

 

The weighted average assumptions used in calculating the net pension cost for 2008 were, as indicated above, a 6.0% discount rate and a 4.0% rate of compensation increase. Since the benefit plans of the Company are unfunded, an assumption for return on plan assets is not required.

 

Net Periodic Benefit Costs

Net periodic benefit costs for the SERPs and Agents Non-Qualified Plan, for the years ended December 31, 2008, 2007, and 2006, were as follows:

 

 

 

 

2008

 

 

2007

 

 

2006

Interest cost

$

5.2 

 

$

5.4 

 

$

5.5 

Net actuarial loss recognized in the year

 

-  

 

 

0.7 

 

 

2.0 

Unrecognized past service cost recognized in the year

 

-  

 

 

-  

 

 

0.2 

The effect of any curtailment or settlement

 

0.5 

 

 

0.4 

 

 

0.4 

Net periodic benefit cost

$

5.7 

 

$

6.5 

 

$

8.1 

 

Cash Flows

In 2009, the employer is expected to contribute $4.3 to the SERPs and Agents Non-Qualified Plan. Future expected benefit payments related to the SERPs, and Agents Non-Qualified Plan, for the years ended December 31, 2009 through 2013, and thereafter through 2018, are estimated to be $4.3, $4.4, $5.0, $5.1, $5.1, and $26.4, respectively.

 

Other

 

On October 4, 2004, the President signed into law The Jobs Creation Act (“Jobs Act”). The Jobs Act affects nonqualified deferred compensation plans, such as the Agents Nonqualified Plan. ING North America has made changes to impacted nonqualified deferred compensation plans, as necessary to comply with the requirements of the Jobs Act.

 

Stock Option and Share Plans

 

ING sponsors the ING Group Long Term Equity Ownership Plan (“leo”), which provides employees of the Company who are selected by the ING Board of Directors to be granted options and/or performance shares. The terms applicable to an award under leo are set out in an award agreement, which is signed by the participant when he or she accepts the award.

 

C-54

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Options granted under leo are nonqualified options on ING shares in the form of American Depository Receipts (“ADRs”). Leo options have a ten (10) year term and vest three years from the grant date. Options awarded under leo may vest earlier in the event of the participant’s death, permanent disability or retirement. Retirement for purposes of leo means a participant terminates service after attaining age 55 and completing 5 years of service. Early vesting in all or a portion of a grant of options may also occur in the event the participant is terminated due to redundancy or business divestiture. Unvested options are generally subject to forfeiture when a participant voluntarily terminates employment or is terminated for cause (as defined in leo). Upon vesting, participants generally have up to seven years in which to exercise their vested options. A shorter exercise period applies in the event of termination due to redundancy, business divestiture, voluntary termination or termination for cause. An option gives the recipient the right to purchase an ING share in the form of ADRs at a price equal to the fair market value of one ING share on the date of grant. On exercise, participant’s have three options (i) retain the shares and remit a check for applicable taxes due on exercise, (ii) request the administrator to remit a cash payment for the value of the options being exercised, less applicable taxes, or (iii) retain some of the shares and have the administrator liquidate sufficient shares to satisfy the participant’s tax obligation. The share price is in Euros and converted to U.S. dollars, as determined by ING.

 

Awards of performance shares may also be made under leo. Performance shares are a contingent grant of ING stock, and, on vesting, the participant has the right to receive a cash amount equal to the closing price per ING share on the Euronext Amsterdam Stock Market on the vesting date times the number of vested Plan shares. Performance shares generally vest three years from the date of grant, with the amount payable based on ING’s share price on the vesting date. Payments made to participants on vesting are based on the performance targets established in connection with leo and payments can range from 0% to 200% of target. Performance is based on ING’s total shareholder return relative to a peer group as determined at the end of the vesting period. To vest, a participant must be actively employed on the vesting date, although vesting will continue to occur in the event of the participant’s death, disability or retirement. If a participant is terminated due to redundancy or business divestiture, vesting will occur but in only a portion of the award. Unvested shares are generally subject to forfeiture when an employee voluntarily terminates employment or is terminated for cause (as defined in leo). Upon vesting, participants have three options (i) retain the shares and remit a check for applicable taxes due on exercise, (ii) request the administrator to remit a cash payment for the value of the shares, less applicable taxes, or (iii) retain some of the shares and have the administrator liquidate sufficient shares to satisfy the participant’s tax obligation. The amount is converted from Euros to U.S. dollars based on the daily average exchange rate between the Euro and the U.S. dollar, as determined by ING.

 

The Company recognized compensation expense for the leo options and performance shares of $4.1, $4.5, and $10.1, for the years ended December 31, 2008, 2007, and 2006 respectively.

 

C-55

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

For leo, the Company recognized tax benefits of $0.7, $3.2, and $0.1, in 2008, 2007, and 2006, respectively.

 

Other Benefit Plans

 

In addition, the Company, in conjunction with ING North America, sponsors the following benefit plans:

 

 

§

The ING 401(k) Plan for ILIAC Agents, which allows participants to defer a specified percentage of eligible compensation on a pre-tax basis. Effective January 1, 2006, the Company match equals 60% of a participant’s pre-tax deferral contribution, with a maximum of 6% of the participant’s eligible pay.

 

§

The Producers’ Incentive Savings Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis. The Company matches such pre-tax contributions at specified amounts.

 

§

The Producers’ Deferred Compensation Plan, which allows participants to defer up to a specified portion of their eligible compensation on a pre-tax basis.

 

§

Certain health care and life insurance benefits for retired employees and their eligible dependents. The post retirement health care plan is contributory, with retiree contribution levels adjusted annually. The life insurance plan provides a flat amount of noncontributory coverage and optional contributory coverage.

 

§

The ING Americas Supplemental Executive Retirement Plan, which is a non-qualified defined benefit restoration pension plan.

 

§

The ING Americas Deferred Compensation Savings Plan, which is a deferred compensation plan that includes a 401(k) excess component.

 

The benefit charges allocated to the Company related to these plans for the years ended December 31, 2008, 2007, and 2006, were $1.4, $0.4, and $1.4, respectively.

 

9.

Related Party Transactions

Operating Agreements

ILIAC has certain agreements whereby it generates revenues and expenses with affiliated entities, as follows:

 

 

§

Investment Advisory agreement with ING Investment Management LLC (“IIM”), an affiliate, in which IIM provides asset management, administrative, and accounting services for ILIAC’s general account. ILIAC incurs a fee, which is paid quarterly, based on the value of the assets under management. For the years ended December 31, 2008, 2007, and 2006, expenses were incurred in the amounts of $58.4, $60.5, and $62.2, respectively.

 

C-56

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

 

§

Services agreement with ING North America for administrative, management, financial, and information technology services, dated January 1, 2001 and amended effective January 1, 2002. For the years ended December 31, 2008, 2007, and 2006, expenses were incurred in the amounts of $175.3, $167.9, and $175.3, respectively.

 

§

Services agreement between ILIAC and its U.S. insurance company affiliates dated January 1, 2001, and amended effective January 1, 2002 and December 31, 2007. For the years ended December 31, 2008, 2007, and 2006, net expenses related to the agreement were incurred in the amount of $19.6, $21.7, and $12.4, 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.

 

DSL has certain agreements whereby it generates revenues and expenses with affiliated entities, as follows:

 

 

§

Underwriting and distribution agreements with ING USA Annuity and Life Insurance Company (“ING USA”) and ReliaStar Life Insurance Company of New York (“RLNY”), affiliated companies, whereby DSL serves as the principal underwriter for variable insurance products. In addition, DSL is authorized to enter into agreements with broker-dealers to distribute the variable insurance products and appoint representatives of the broker-dealers as agents. For the years ended December 31, 2008, 2007, and 2006, commissions were collected in the amount of $622.5, $568.4, and $429.2. Such commissions are, in turn, paid to broker-dealers.

 

§

Services agreements with ING USA and RLNY, whereby DSL receives managerial and supervisory services and incurs a fee that is calculated as a percentage of average assets of each company’s variable separate accounts deposited in ING Investors Trust. On August 9, 2007, DSL and ING USA entered into an amendment to the service agreement effective July 31, 2007 to modify the method for calculating the compensation owed to ING USA under the service agreement. As a result of this amendment, DSL pays ING USA the total net revenue associated with ING USA deposits into ING Investors Trust. For the years ended December 31, 2008, 2007, and 2006, expenses were incurred under these services agreements in the amount of $156.2, $124.4, and $70.8, respectively.

 

§

Administrative and advisory services agreements with ING Investment LLC and IIM, affiliated companies, in which DSL receives certain services for a fee. The fee for these services is calculated as a percentage of average assets of ING Investors Trust. For the years ended December 31, 2008, 2007, and 2006, expenses were incurred in the amounts of $14.9, $13.1, and $8.8, respectively.

 

C-57

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Investment Advisory and Other Fees

During 2006, ILIAC served as investment advisor to certain variable funds offered in Company products (collectively, the “Company Funds”). The Company Funds paid ILIAC, as investment advisor, daily fees that, 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 were subadvised by investment advisors, in which case ILIAC paid a subadvisory fee to the investment advisors, which included affiliates. Effective January 1, 2007, ILIAC’s investment advisory agreement with the Company Funds was assigned to DSL. ILIAC is also compensated by the separate accounts for bearing mortality and expense risks pertaining to variable life and annuity contracts. Under the insurance and annuity contracts, the separate accounts pay ILIAC daily fees that, on an annual basis are, depending on the product, up to 3.4% of their average daily net assets. The total amount of compensation and fees received by the Company from the Company Funds and separate accounts totaled $245.1, $312.7, and $289.9, (excludes fees paid to ING Investment Management Co.) in 2008, 2007, and 2006, respectively.

 

DSL has been retained by ING Investors Trust (the “Trust”), an affiliate, pursuant to a management agreement to provide advisory, management, administrative and other services to the Trust. Under the management agreement, DSL provides or arranges for the provision of all services necessary for the ordinary operations of the Trust. DSL earns a monthly fee based on a percentage of average daily net assets of the Trust. DSL has entered into an administrative services subcontract with ING Fund Services, LLC, an affiliate, pursuant to which ING Fund Services, LLC, provides certain management, administrative and other services to the Trust and is compensated a portion of the fees received by DSL under the management agreement. For the years ended December 31, 2008, 2007, and 2006, revenue received by DSL under the management agreement (exclusive of fees paid to affiliates) was $323.8, $343.8, and $233.9, respectively. At December 31, 2008 and 2007, DSL had $18.6 and $26.7, respectively, receivable from the Trust under the management agreement.

 

Financing Agreements

ILIAC maintains a reciprocal loan agreement with ING AIH, an affiliate, to facilitate the handling of unanticipated short-term cash requirements that arise in the ordinary course of business. Under this agreement, which became effective in June 2001 and expires on April 1, 2011, either party can borrow from the other up to 3% of ILIAC’s statutory admitted assets as of the preceding December 31. Interest on any ILIAC borrowing is charged at the rate of ING AIH’s cost of funds for the interest period, plus 0.15%. Interest on any ING AIH borrowings is charged at a rate based on the prevailing interest rate of U.S. commercial paper available for purchase with a similar duration.

 

C-58

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Under this agreement, ILIAC incurred interest expense of $0.2, $3.9, and $1.8, for the years ended December 31, 2008, 2007, and 2006, respectively, and earned interest income of $4.8, $1.7, and $3.3, for the years ended December 31, 2008, 2007, and 2006, respectively. Interest expense and income are included in Interest expense and Net investment income, respectively, on the Consolidated Statements of Operations. As of December 31, 2008, ILIAC had $13.0 due to ING AIH under the reciprocal loan agreement and no amounts due as of December 31, 2007. At December 31, 2008 and 2007, ILIAC had no amount due from ING AIH under the reciprocal loan agreement.

 

As of June 1, 2007, the State of Connecticut, acting by the Department of Economic and Community Development (“DECD”), loaned ILIAC $9.9 (the “DECD Loan”) in connection with the development of the Windsor Property. The loan has a term of twenty years and bears an annual interest rate of 1.00%. As long as no defaults have occurred under the loan, no payments of principal or interest are due for the initial ten years of the loan. For the second ten years of the DECD Loan term, ILIAC is obligated to make monthly payments of principal and interest.

 

The DECD Loan provides for loan forgiveness at varying amounts up to $5.0 if ILIAC and its affiliates meet certain employment thresholds at the Windsor Property during the term of the loan. ILIAC’s obligations under the DECD Loan are secured by an unlimited recourse guaranty from its affiliate, ING North America Insurance Corporation.

 

On December 1, 2008, the DECD determined that the Company met the employment thresholds for loan forgiveness and, accordingly, forgave $5.0 of the DECD Loan to the Company in accordance with the terms of the DECD Loan.

 

At December 31, 2008 and 2007, the amount of the loan outstanding was $4.9 and $9.9, which was reflected in Notes payable on the Consolidated Balance Sheets.

 

Note with Affiliate

On December 29, 2004, ING USA issued a surplus note in the principal amount of $175.0 (the “Note”) scheduled to mature on December 29, 2034, to ILIAC, in an offering that was exempt from the registration requirements of the Securities Act of 1933. ILIAC’s $175.0 Note from ING USA bears interest at a rate of 6.26% per year. Any payment of principal and/or interest is subject to the prior approval of the Iowa Insurance Commissioner. Interest is scheduled to be paid semi-annually in arrears on June 29 and December 29 of each year, commencing on June 29, 2005. Interest income for the years ended December 31, 2008, 2007, and 2006 was $11.1.

 

C-59

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Tax Sharing Agreements

Effective January 1, 2006, ILIAC is a party to a federal tax allocation agreement with ING AIH and its subsidiaries that are part of the ING AIH consolidated group. Under the federal tax allocation agreement, ING AIH charges its subsidiaries for federal taxes each subsidiary would have incurred were it not a member of the consolidated group and credits each subsidiary for losses at the statutory federal tax rate.

 

For the years ended December 31, 2006 and 2005, DSI, which merged with and into DSL on December 31, 2006, was party to the ING AIH federal tax allocation agreement, as described above. Income from DSL, a single member limited liability company, is taxed at the member level (ILIAC).

 

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.

 

10.

Financing Agreements

ILIAC maintains a $50.0 uncommitted, perpetual revolving note facility with the Bank of New York ("BONY"). Interest on any of ILIAC’s borrowing accrues at an annual rate equal to a rate quoted by BONY to ILIAC for the borrowing. Under this agreement, ILIAC incurred no interest expense for the year ended December 31, 2008, and minimal interest expense for the years ended December 31, 2007 and 2006. At December 31, 2008 and 2007, ILIAC had no amounts outstanding under the revolving note facility.

 

ILIAC also maintains a $100.0 uncommitted line-of-credit agreement with PNC Bank (“PNC”), effective December 19, 2005. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to ING AIH and its affiliates of $100.0. Interest on any of ILIAC’s borrowing accrues at an annual rate equal to a rate quoted by PNC to ILIAC for the borrowing. Under this agreement, ILIAC incurred no interest expense for the year ended December 31, 2008, and minimal interest expense for the years ended December 31, 2007 and 2006. At December 31, 2008 and 2007, ILIAC had no amounts outstanding under the line-of-credit agreement. As of October 31, 2008, the Company had not formally renewed this line-of-credit, which subsequently expired on this date.

 

C-60

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

ILIAC also maintains $100.0 uncommitted line-of-credit agreement with Svenska Handelsbanken AB (Publ.), effective June 2, 2006. Borrowings are guaranteed by ING AIH, with maximum aggregate borrowings outstanding at anytime to ING AIH and its affiliates of $100.0. Interest on any of the Company’s borrowing accrues at an annual rate equal to the rate quoted by Svenska to the Company for the borrowing. Under this agreement, the Company incurred no interest expense for the year ended December 31, 2008, and minimal interest expense for the years ended December 31, 2007 and 2006. At December 31, 2007, ILIAC had no amounts outstanding under the line-of-credit agreement. Effective November 19, 2008, the Company discontinued this line-of-credit.

 

Also see Financing Agreements in the Related Party Transactions footnote.

 

11.

Reinsurance

At December 31, 2008, the Company had reinsurance treaties with 7 unaffiliated reinsurers covering a significant portion of the mortality risks and guaranteed death benefits under its variable contracts. At December 31, 2008, the Company did not have any outstanding cessions under any reinsurance treaties with affiliated reinsurers. The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements.

 

On, October 1, 1998, the Company disposed of its individual life insurance business under an indemnity reinsurance arrangement with certain subsidiaries of Lincoln for $1.0 billion in cash. Under the agreement, Lincoln contractually assumed from the Company certain policyholder liabilities and obligations, although the Company remains obligated to contractowners. Effective March 1, 2007, the reinsurance agreements were assigned to a single subsidiary of Lincoln, and that subsidiary established a trust to secure its obligations to the Company under the reinsurance transaction.

 

The Company assumed $25.0 of premium revenue from Aetna Life, for the purchase and administration of a life contingent single premium variable payout annuity contract. In addition, the Company is also responsible for administering fixed annuity payments that are made to annuitants receiving variable payments. Reserves of $11.0 and $16.1 were maintained for this contract as of December 31, 2008 and 2007, respectively.

 

Reinsurance ceded in force for life mortality risks were $19.6 billion and $20.9 billion at December 31, 2008 and 2007, respectively. At December 31, 2008 and 2007, net receivables were comprised of the following:

 

C-61

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

 

 

 

2008

 

 

2007

Claims recoverable from reinsurers

 

$

2,506.6 

 

$

2,595.2 

Payable for reinsurance premiums

 

 

(0.9)

 

 

(0.9)

Reinsured amounts due to reinsurer

 

 

(0.4)

 

 

(5.9)

Reserve credits

 

 

-  

 

 

0.1 

Other

 

 

0.3 

 

 

5.9 

Total

 

$

2,505.6 

 

$

2,594.4 

 

Premiums and Interest credited and other benefits to contractowners were reduced by the following amounts for reinsurance ceded for the years ended December 31, 2008, 2007, and 2006.

 

 

 

2008

 

 

2007

 

 

2006

Deposits ceded under reinsurance

$

174.4 

 

$

188.5 

 

$

199.0 

Premiums ceded under reinsurance

 

0.3 

 

 

0.4 

 

 

0.5 

Reinsurance recoveries

 

309.0 

 

 

419.7 

 

 

359.0 

 

 

12.

Commitments and Contingent Liabilities

Leases

 

Prior to December 31, 2008, the Company leased certain office space and certain equipment under various operating leases, the longest term of which expires in 2014. However, all operating leases were terminated or consolidated by ING AIH during the fourth quarter of 2008, which resulted in the Company no longer being party to any operating leases.

 

For the years ended December 31, 2008, 2007, and 2006, rent expense for leases was $6.1, $17.7, and $17.8, respectively. 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. As of December 31, 2008, the Company’s expenses will be paid for by an affiliate and allocated back to the Company.

 

For more information on the lease terminations, see the Restructuring Charges footnote.

 

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.

 

C-62

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

At December 31, 2008, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $353.3, $253.7 of which was with related parties. At December 31, 2007, the Company had off-balance sheet commitments to purchase investments equal to their fair value of $357.8, $226.6 of which was with related parties. During 2008 and 2007, $81.3 and $87.3, respectively, was funded to related parties under off-balance sheet commitments.

 

Financial Guarantees

 

The Company owns a 3-year credit-linked note arrangement, whereby the Company will reimburse the guaranteed party upon payment default of the referenced obligation. Upon such default, the Company reimburses the guaranteed party for the loss under the reference obligation, and the Company receives that reference obligation in settlement. The Company can then seek recovery of any losses under the agreement by sale or collection of the received reference obligation. As of December 31, 2008, the maximum liability to the Company under the guarantee was $30.0.

 

Cash Collateral

 

Under the terms of the Company’s Over-The-Counter Derivative ISDA Agreements (“ISDA Agreements”), the Company may receive from, or deliver to, counterparties, collateral to assure that all terms of the ISDA Agreements will be met with regard to the CSA. The terms of the CSA call for the Company to pay interest on any cash received equal to the Federal Funds rate. As of December 31, 2008, the Company held $4.4 of cash collateral, which was included in Collateral held, including payables under securities loan agreement. As of December 31, 2007, the Company delivered $18.8 of cash collateral, which was included in Short-term investments under securities loan agreement, including collateral delivered, on the Consolidated Balance Sheets.

 

Litigation

 

The Company is involved in threatened or pending lawsuits/arbitrations arising from the normal conduct of business. Due to the climate in insurance and business litigation/arbitrations, suits against the Company sometimes include claims for substantial compensatory, consequential, or punitive damages, and other types of relief. Moreover, certain claims are asserted as class actions, purporting to represent a group of similarly situated individuals. While it is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance, and established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a materially adverse effect on the Company’s operations or financial position.

 

C-63

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Other Regulatory Matters

 

Regulatory Matters

 

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

 

Insurance and Retirement Plan Products and Other Regulatory Matters

 

Federal and state regulators, and self-regulatory agencies, are conducting broad inquiries and investigations involving the insurance and retirement industries. These initiatives currently focus on, among other things, compensation, revenue sharing, and other sales incentives; potential conflicts of interest; sales and marketing practices (including sales to seniors); specific product types (including group annuities and indexed annuities); and disclosure. The Company and certain of its U.S. affiliates have received formal and informal requests in connection with such investigations, and have cooperated and are cooperating fully with each request for information. Some of these matters could result in regulatory action involving the Company. These initiatives also may result in new legislation and regulation that could significantly affect the financial services industry, including businesses in which the Company is engaged. In light of these and other developments, U.S. affiliates of ING, including the Company, periodically review whether modifications to their business practices are appropriate.

 

Investment Product Regulatory Issues

 

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

 

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

 

C-64

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

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.

 

Action has been or may be taken with respect to certain ING affiliates before investigations relating to fund trading are completed. The potential outcome of such action is difficult to predict but could subject certain affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It is not currently anticipated, however, that the actual outcome of any such action will have a material adverse effect on ING or ING’s U.S.-based operations, including the Company.

 

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

 

13.

Restructuring Charges

2008 CitiStreet Integration

 

During the third quarter, integration initiatives related to the acquisition of CitiStreet by Lion, which provided significant operational and information technology efficiencies to ING’s U.S. retirement services businesses, including the Company, resulted in the recognition of integration and restructuring costs. In addition, the Company implemented an expense reduction program for the purpose of streamlining its overall operations. The restructuring charges related to these expense reduction and integration initiatives include severance and other employee benefits and lease abandonment costs, which are included in Operating Expenses on the Consolidated Statements of Operations.

 

C-65

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

The following table illustrates the restructuring reserves and charges for the period ended December 31, 2008.

 

Restructuring reserve at inception

$

-  

 

 

Restructuring charges:

 

 

 

 

 

Employee severance and termination benefits

 

11.2 

(1)

 

 

Future rent on non-cancelable leases

 

1.5 

(2)

 

Total restructuring charges

 

12.7 

 

 

Other charges

 

-  

 

 

Intercompany charges and payments

 

(2.5)

(3)

 

Payments applied against reserve

 

(1.9)

(4)

Restructuring reserve at December 31, 2008

$

8.3 

 

 

 

 

 

(1)

Amounts represent charges to the Company for all severed employees that support the Company, including those 

 

 

within affiliates.

 

(2) 

Amounts represent intercompany expense allocations from ING AIH.  The expenses were allocated to the Company 

 

 

based upon the department that used the space, and the cash settlement occurred in January 2009.

 

(3) 

Amounts represent payments to ING affiliates for severance incurred by another ING entity for employees that supported 

 

 

the Company.  Payments were made through ING's intercompany cash settlement process.

 

(4) 

Amounts represent payments to employees of the Company, as well as reversals of severance reserves.

 

 

The Company estimates the completion of these integration and restructuring activities by January 30, 2010.

 

2009 Expense and Staff Reductions

 

On January 12, 2009, ING announced expense and staff reductions across all U.S. operations, which resulted in the elimination of 87 current and open positions in the Company. Due to the staff reductions, curtailment of pension benefits shall occur during the first quarter of 2009, which will result in the recognition of a loss related to unrecognized prior service costs. The effect of the curtailment on the Company’s earnings is anticipated to be less than $0.1. The Company anticipates that these restructuring activities in regards to its operations will be complete by February 10, 2010 with total estimated costs of $5.8.

 

C-66

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

14.

Accumulated Other Comprehensive Income (Loss)

Shareholder’s equity included the following components of Accumulated other comprehensive income (loss) as of December 31, 2008, 2007, and 2006.

 

 

 

 

 

2008

 

 

2007

 

 

2006

Net unrealized capital gains (losses):

 

 

 

 

 

 

 

 

 

Fixed maturities, available-for-sale

$

(1,315.5)

 

$

(64.5)

 

$

(44.6)

 

Equity securities, available-for-sale

 

(7.4)

 

 

6.3 

 

 

18.1 

 

DAC/VOBA adjustment on 

 

 

 

 

 

 

 

 

 

 

available-for-sale securities

 

650.9 

 

 

7.8 

 

 

3.9 

 

Sales inducements adjustment on 

 

 

 

 

 

 

 

 

 

 

available-for-sale securities

 

2.4 

 

 

0.2 

 

 

0.1 

 

Premium deficiency reserve adjustment

 

-  

 

 

-  

 

 

(37.5)

 

Other investments

 

(0.3)

 

 

(0.7)

 

 

0.8 

 

Less: allocation to experience-rated contracts

 

-  

 

 

(16.4)

 

 

(52.4)

Unrealized capital gains (losses), before tax

 

(669.9)

 

 

(34.5)

 

 

(6.8)

Deferred income tax asset (liability)

 

205.8 

 

 

12.1 

 

 

2.4 

Asset valuation allowance

 

-  

 

 

(6.4)

 

 

-  

Net unrealized capital gains (losses)

 

(464.1)

 

 

(28.8)

 

 

(4.4)

Pension liability, net of tax

 

(18.0)

 

 

(5.0)

 

 

(9.6)

Accumulated other comprehensive

 

 

 

 

 

 

 

 

 

(loss) income 

$

(482.1)

 

$

(33.8)

 

$

(14.0)

 

During 2008, as a result of the current market conditions, the Company reflected net unrealized capital losses allocated to experience-rated contracts in Shareholder’s equity on the Consolidated Balance Sheets rather than Future policy benefits and claims reserves. At December 31, 2008, there are no net unrealized losses allocated to experience-rated contracts. Net unrealized capital gains (losses) allocated to experience-rated contracts of $(16.4) at December 31, 2007, are reflected on the Consolidated Balance Sheets in Future policy benefits and claims reserves and are not included in Shareholder’s equity.

 

C-67

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

 

Changes in Accumulated other comprehensive income (loss), net of DAC, VOBA, and tax (excluding the tax valuation allowance), related to changes in unrealized capital gains (losses) on securities, including securities pledged and excluding those related to experience-rated contracts, as appropriate, were as follows for the years ended December 31, 2008, 2007, and 2006.

 

 

 

 

 

2008

 

 

2007

 

 

2006

Fixed maturities, available-for-sale

$

(1,251.0)

 

$

(19.9)

 

$

(26.6)

Equity securities, available-for-sale

 

(13.7)

 

 

(11.8)

 

 

14.9 

DAC/VOBA adjustment on 

 

 

 

 

 

 

 

 

 

available-for-sale securities

 

643.1 

 

 

3.9 

 

 

(1.2)

Sales inducements adjustment on 

 

 

 

 

 

 

 

 

 

available-for-sale securities

 

2.2 

 

 

0.1 

 

 

-  

Premium deficiency reserve adjustment

 

-  

 

 

37.5 

 

 

(13.9)

Other investments

 

0.4 

 

 

(1.5)

 

 

(0.4)

Less: allocation to experience-rated contracts

 

16.4 

 

 

36.0 

 

 

(3.8)

Unrealized capital gains (losses), before tax

 

(635.4)

 

 

(27.7)

 

 

(23.4)

Deferred income tax asset (liability)

 

193.7 

 

 

9.7 

 

 

12.7 

Net change in unrealized capital gains (losses)

$

(441.7)

 

$

(18.0)

 

$

(10.7)

 

 

 

 

 

2008

 

 

2007

 

 

2006

Net unrealized capital holding gains (losses) arising 

 

 

 

 

 

 

 

 

 

during the year (1)

$

(1,192.0)

 

$

(66.9)

 

$

(43.6)

Less: reclassification adjustment for gains (losses) 

 

 

 

 

 

 

 

 

 

and other items included in Net (loss) income(2)

 

(750.3)

 

 

(48.9)

 

 

(32.9)

Net change in unrealized capital gains (losses) on securities

$

(441.7)

 

$

(18.0)

 

$

(10.7)

 

 

 

(1)

Pretax unrealized holding gains (losses) arising during the year were $(1,714.8), $(102.9), and $(95.4), for the years ended December 31, 2008, 2007, and 2006, respectively.

 

(2)

Pretax reclassification adjustments for gains (losses) and other items included in Net (loss) income were and $(1,079.4), $(75.2), and $(72.0), for the years ended December 31, 2008, 2007, and 2006, respectively.
 

 

 

 

C-68

 

 

ING Life Insurance and Annuity Company and Subsidiaries

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

Notes to Consolidated Financial Statements

(Dollar amount in millions, unless otherwise stated)

 

15.

Changes to Prior Years Presentation

Consolidated Statements of Operations Presentational Changes

 

During 2008, certain changes were made to the Consolidated Statements of Operations for the year ended 2007 to more accurately reflect the correct balances, primarily related to surrenders on market value adjusted contracts. As the Company has determined these changes to be immaterial, the Consolidated Statements of Operations for the year ended December 31, 2007, has not been labeled as restated. The following table summarizes the adjustments:

 

 

 

 

 

 

 

 

 

 

 

Previously

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

 

Reclassification

 

 

Adjusted

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee income

 

 

 

$

789.3 

 

$

(19.4)

 

$

769.9 

Net realized capital gains (losses)

 

(8.2)

 

 

(19.4)

 

 

(27.6)

Other income

 

 

 

0.9 

 

 

19.4 

 

 

20.3 

Total revenue

 

 

 

2,451.9 

 

 

(19.4)

 

 

2,432.5 

Interest credited and other benefits to contractowners

 

822.2 

 

 

(19.4)

 

 

802.8 

Total benefits and expenses

 

2,177.5 

 

 

(19.4)

 

 

2,158.1 

 

 

C-69

 

 

 

QUARTERLY DATA (UNAUDITED)

(Dollar amounts in millions, unless otherwise stated)

 

 

 

 

 

First

 

 

 

 

 

 

 

 

 

2008

 

 

 

(Restated)*

 

 

Second

 

 

Third

 

 

Fourth

Total revenue

$

560.4 

 

$

538.4 

 

$

469.3 

 

$

166.1 

Income (loss) before income taxes 

 

(98.4)

 

 

25.1 

 

 

(391.3)

 

 

(673.9)

Income tax expense (benefit)

 

(53.8)

 

 

1.9 

 

 

(25.1)

 

 

(31.3)

Net income

$

(44.6)

 

$

23.2 

 

$

(366.2)

 

$

(642.6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2007

 

 

 

First

 

 

Second

 

 

Third

 

 

Fourth

Total revenue

$

579.1 

 

$

594.9 

 

$

601.4 

 

$

657.1 

Income (loss) before income taxes 

 

100.7 

 

 

115.8 

 

 

85.8 

 

 

(27.9)

Income tax expense (benefit)

 

28.5 

 

 

33.6 

 

 

22.3 

 

 

(28.4)

Net income

$

72.2 

 

$

82.2 

 

$

63.5 

 

$

0.5 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*The Company has restated its previously issued unaudited interim financial statements for the three months 

 

ended March 31, 2008 due to an error in the calculation of the fair value of the reserves for product guarantees

 

for annuity contracts containing guaranteed credited rates.  The effect of the restatement on these prior period 

 

interim financial statements for the three months ended March 31, 2008 was to increase the net loss by $18.9. 

 

 

 

C-70

 

 

 

Form No. SAI.75962-09 ILIAC Ed. May 2009

VARIABLE ANNUITY ACCOUNT C
PART C - OTHER INFORMATION

Item 24.  Financial Statements and Exhibits
     (a) Financial Statements:
  (1)   Included in Part A:
      Condensed Financial Information
  (2)   Included in Part B:
    Financial Statements of Variable Annuity Account C:
             -    Report of Independent Registered Public Accounting Firm
    -    Statements of Assets and Liabilities as of December 31, 2008
  -     Statements of Operations for the year ended December 31, 2008
  -     Statements of Changes in Net Assets for the years ended December 31, 2008
       and 2007
       -     Notes to Financial Statements
    Consolidated Financial Statements of ING Life Insurance and Annuity
    Company:
          -     Report of Independent Registered Public Accounting Firm
    -     Consolidated Statements of Operations for the years ended December 31,
     2008, 2007 and 2006
    -    Consolidated Balance Sheets as of December 31, 2008 and 2007
    -    Consolidated Statements of Changes in Shareholder’s Equity for the years
     ended December 31, 2008, 2007 and 2006
                 -    Consolidated Statements of Cash Flows for the years ended December 31,
     2008, 2007 and 2006
    -    Notes to Consolidated Financial Statements
 
     (b) Exhibits  
  (1) Resolution establishing Variable Annuity Account C • Incorporated by reference to
    Post-Effective Amendment No. 6 to Registration Statement on Form N-4 (File No.
    033-75986), as filed on April 22, 1996.
  (2) Not Applicable
  (3.1) Standard Form of Broker-Dealer Agreement • Incorporated by reference to Post-
    Effective Amendment No. 32 to Registration Statement on Form N-4 (File No. 033-
    81216), as filed on April 11, 2006.
  (3.2) Underwriting Agreement dated November 17, 2006 between ING Life Insurance and
    Annuity Company and ING Financial Advisers, LLC • Incorporated by reference to
    Post-Effective Amendment No. 34 to Registration Statement on Form N-4 (File No.
    033-75996), as filed on December 20, 2006.
  (4.1) Variable Annuity Contract (G-TDA-HH(XC/M)) • Incorporated by reference to Post-
    Effective Amendment No. 6 to Registration Statement on Form N-4 (File No. 033-
    75962), as filed on April 17, 1996.
  (4.2) Variable Annuity Contract (G-TDA-HH(XC/S)) • Incorporated by reference to Post-
    Effective Amendment No. 6 to Registration Statement on Form N-4 (File No. 033-
    75962), as filed on April 17, 1996.

(4.3) Variable Annuity Certification (GTCC-HH(XC/M)) • Incorporated by reference to
  Post-Effective Amendment No. 14 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on April 17, 1998.
(4.4) Endorsement E-403bR-09 to Contracts G-TDA-HH(XC/M) and G-TDA-HH(XC/S)
  and Certificate GTCC-HH(XC/M)
(4.5) Endorsement E-403bTERM-08 to Contracts G-TDA-HH(XC/M) and G-TDA-
  HH(XC/S) and Certificate GTCC-HH(XC/M)
(4.6) Variable Annuity Certificate (GTCC-HH(XC/S)) • Incorporated by reference to Post-
  Effective Amendment No. 14 to Registration Statement on Form N-4 (File No. 033-
  75962), as filed on April 17, 1998.
(4.7) Variable Annuity Contract GAGOV-98(NY) • Incorporated by reference to Post-
  Effective Amendment No. 39 to Registration Statement on Form N-4 (File No. 033-
  75962), as filed on December 17, 2004.
(4.8) Endorsement (EGET-IC(R)NY) to Contracts G-TDA-HH(XC/M) and
  G-TDA-HH(XC/S) • Incorporated by reference to Post-Effective Amendment No. 5
  to Registration Statement on Form N-4 (File No. 033-75986), as filed on April 12,
  1996.
(4.9) Endorsement (ENYSUTMF97) to Contract G-TDA-HH(XC/M) • Incorporated by
  reference to Post-Effective Amendment No. 11 to Registration Statement on Form
  N-4 (File No. 033-75962), as filed on April 14, 1997.
(4.10) Endorsement (ENYSUTMF97(S)) to Contract G-TDA-HH(XC/S) • Incorporated by
  reference to Post-Effective Amendment No. 11 to Registration Statement on Form
  N-4 (File No. 033-75962), as filed on April 14, 1997.
(4.11) Endorsement (EGAA(5/98) NY) to Contracts G-TDA-HH(XC/M) and G-TDA-
  HH(XC/S) and Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) • Incorporated
  by reference to Post-Effective Amendment No. 14 to Registration Statement on Form
  N-4 (File No. 033-75962), as filed on April 17, 1998.
(4.12) Endorsement (EG403-GIE-98)-XC to Contract G-TDA-HH(XC/M) and Certificate
  GTCC-HH(XC/M) • Incorporated by reference to Post-Effective Amendment No. 11
  to Registration Statement on Form N-4 (File No. 333-01107), as filed on September
  10, 1998.
(4.13) Endorsement (EG403-GI-98) to Contract G-TDA-HH(XC/M) and Certificate GTCC-
  HH(XC/M) • Incorporated by reference to Post-Effective Amendment No. 15 to
  Registration Statement on Form N-4 (File No. 033-75962), as filed on September 15,
  1998.
(4.14) Endorsement (EGET-99) to Contracts G-TDA-HH(XC/M) and G-TDA-HH(XC/S) •
  Incorporated by reference to Post-Effective Amendment No. 13 to Registration
  Statement on Form N-4 (File No. 333-01107), as filed on April 7, 1999.
(4.15) Endorsement (ENYS-XC/M-00) to Contract G-TDA-HH(XC/M) and Certificate
  G-TDA-HH(XC/M) • Incorporated by reference to Post-Effective Amendment No. 22
  to Registration Statement on Form S-1 (File No. 033-75962), as filed on April 13,
  2000.

(4.16) Endorsement (ENYS-XC/S-00) to Contract G-TDA-HH(XC/S) and Certificate
  G-TDA-HH(XC/S) • Incorporated by reference to Post-Effective Amendment No. 22
  to Registration Statement on Form S-1 (File No. 033-75962), as filed on April 13,
  2000.
(4.17) Endorsement (EGSF-IB(XC/M)) to Contract G-TDA-HH(XC/M) and Certificate
  GTCC-HH(XC/M) • Incorporated by reference to Post-Effective Amendment No. 25
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on December 6,
  2000.
(4.18) Endorsement (EGAA-ID(XC)) to Contract G-TDA-HH(XC/S) and Certificate
  GTCC-HH(XC/S) • Incorporated by reference to Post-Effective Amendment No. 25
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on December 6,
  2000.
(4.19) Endorsement EDSC-94(XC/M) to Contract G-TDA-HH(XC/M) and Certificate
  GTCC-HH(XC/M) • Incorporated by reference to Post-Effective Amendment No. 26
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on December
  13, 2000.
(4.20) Endorsement (ENYS-AR-01) to Contracts G-TDA-HH(XC/M) and
  G-TDA-HH(XC/S) and Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) •
  Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.
(4.21) Endorsement EEGTRRA-HEG(01) to Contracts G-TDA-HH(XC/M) and G-TDA-
  HH(XC/S) and Contract Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) •
  Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.
(4.22) Endorsement E-LOANSBA(1/02) to Contracts G-TDA-HH(XC/M) and G-TDA-
  HH(XC/S) and Contract Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) •
  Incorporated by reference to Post-Effective Amendment No. 39 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on December 17, 2004.
(4.23) Contract Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) • Incorporated by
  reference to Post-Effective Amendment No. 39 to Registration Statement on Form N-
  4 (File No. 033-75962), as filed on December 17, 2004.
(4.24) Endorsements ENMCHG(05/02) and ENMCHG1(05/02) for name change •
  Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.
(4.25) Variable Annuity Contract Certificate GAGOVC-98(NY) • Incorporated by reference
  to Post-Effective Amendment No. 39 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on December 17, 2004.
(4.26) Endorsement EGOVCC-NYS-03 to Contract GAGOV-98(NY) and Contract
  Certificate GAGOVC-98(NY) • Incorporated by reference to Post-Effective
  Amendment No. 39 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on December 17, 2004.

(4.27) Roth 403(b) Endorsement - E-ROTH403B-M-05 to Contract G-TDA-HH(XC/M) and
  Certificate GTCC-HH(XC/M) • Incorporated by reference to Post-Effective
  Amendment No. 43 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on April 11, 2006.
(4.28) Roth 403(b) Endorsement - E-ROTH403B-S-05 to Contract G-TDA-HH(XC/S) and
  Certificate GTCC-HH(XC/S) • Incorporated by reference to Post-Effective
  Amendment No. 43 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on April 11, 2006.
(4.29) Endorsement E-NYSUT-DSC-08 • Incorporated by reference to Post-Effective
  Amendment No. 52 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on April 10, 2008.
(4.30) Endorsement E-NYSUTDB-06 • Incorporated by reference to Post-Effective
  Amendment No. 46 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on September 27, 2006.
(4.31) Endorsement E-LNDFLT (1/04) to Contracts G-TDA-HH(XC/M) and G-TDA-
  HH(XC/S) and Contract Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) •
  Incorporated by reference to Post-Effective Amendment No. 48 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 10, 2007.
(4.32) Endorsement ENYSTINTM (9/04) to Contract G-TDA-HH(XC/M) and Contract
  Certificate GTCC-HH(XC/M) • Incorporated by reference to Post-Effective
  Amendment No. 48 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on April 10, 2007.
(4.33) Endorsement ENYSTINTS (9/04) to Contract G-TDA-HH(XC/S) and Contract
  Certificate GTCC-HH(XC/S) • Incorporated by reference to Post-Effective
  Amendment No. 48 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on April 10, 2007.
(4.34) Endorsement ENYSUTBEN 97 to Contracts G-TDA-HH(XC/M) and G-TDA-
  HH(XC/S) and Contract Certificate GTCC-HH(XC/S) • Incorporated by reference to
  Post-Effective Amendment No. 48 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on April 10, 2007.
(4.35 Minimum Guaranteed Withdrawal Benefit Rider with Reset Option (MGWB)-(E-
  MGWB-07) to Contracts G-TDA-HH(XC/M) and G-TDA-HH(XC/S) and Contract
  Certificates GTCC-HH(XC/M) and GTCC-HH(XC/S) • Incorporated by reference to
  Post-Effective Amendment No. 51 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on July 27, 2007.
(4.36) Rider Schedule to Minimum Guaranteed Withdrawal Benefit (E-MGWB-07 SCH) to
  Contracts G-TDA-HH(XC/M) and G-TDA-HH(XC/S) and Contract Certificates
  GTCC-HH(XC/M) and GTCC-HH(XC/S) • Incorporated by reference to Post-
  Effective Amendment No. 50 to Registration Statement on Form N-4 (File No. 033-
  75962), as filed on June 15, 2007.
(5.1) Variable Annuity Contract Application (300-GTD-NY(5/98)) • Incorporated by
  reference to Post-Effective Amendment No. 15 to Registration Statement on Form N-
  4 (File No. 033-75962), as filed on September 15, 1998.

(5.2) Variable Annuity Contract Application (300-AD457-98(X)) to Contract GAGOV-
  98(NY) and Contract Certificate GAGOVC-98(NY) • Incorporated by reference to
  Post-Effective Amendment No. 39 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on December 17, 2004.
(6.1) Restated Certificate of Incorporation (amended and restated as of October 1, 2007) of
  ING Life Insurance and Annuity Company • Incorporated by reference to ING Life
  Insurance and Annuity Company Annual Report on Form 10-K (File No. 033-23376),
  as filed on March 3, 2008.
(6.2) Amended and Restated By-Laws of ING Life Insurance and Annuity Company,
  effective October 1, 2007 • Incorporated by reference to the ING Life Insurance and
  Annuity Company annual report on Form 10K (File No. 033-23376), as filed on
  March 31, 2008.
(7) Not Applicable
(8.1) (Retail) Participation Agreement dated as of October 1, 2000 by and among AIM
  Equity Funds, AIM Distributors, Inc., and Aetna Life Insurance and Annuity
  Company • Incorporated by reference to Registration Statement on Form N-4 (File
  No. 333-105479), as filed on May 22, 2003.
(8.2) (Retail) Amendment No. 1 dated January 1, 2003 to Participation Agreement dated as
  of October 1, 2000 by and among AIM Equity Funds, AIM Distributors, Inc., and
  ING Life Insurance and Annuity Company (f/k/a Aetna Life Insurance and Annuity
  Company) • Incorporated by reference to Post-Effective Amendment No. 2 to
  Registration Statement on Form N-4 (File No. 333-105479), as filed on April 21,
  2004.
(8.3) Fund Participation Agreement dated June 30, 1998 by and among AIM Variable
  Insurance Funds, Inc., A I M Distributors, Inc. and Aetna Life Insurance and Annuity
  Company • Incorporated by reference to Pre-Effective Amendment No. 1 to
  Registration Statement on Form N-4 (File No. 333-56297), as filed on August 4, 1998.
(8.4) Amendment No. 1 dated October 1, 2000 to Participation Agreement dated June 30,
  1998 by and among AIM Variable Insurance Funds (formerly AIM Variable
  Insurance Funds, Inc.), A I M Distributors, Inc. and Aetna Life Insurance and Annuity
  Company • Incorporated by reference to Post-Effective Amendment No. 24 to
  Registration Statement on Form N-4 (File No. 333-01107), as filed on April 13, 2001.
(8.5) First Amendment dated November 17, 2000 to Participation Agreement dated June
  30, 1998 by and among AIM Variable Insurance Funds, (formerly AIM Variable
  Insurance Funds, Inc.), A I M Distributors, Inc. and Aetna Life Insurance and Annuity
  Company • Incorporated by reference to Post-Effective Amendment No. 24 to
  Registration Statement on Form N-4 (File No. 333-01107), as filed on April 13, 2001.
(8.6) Amendment dated as of July 12, 2002 to Participation Agreement dated as of June 30,
  1998, as amended on October 1, 2000 and November 17, 2000 by and among AIM
  Variable Insurance Funds, A I M Distributors, Inc., Aetna Life Insurance and Annuity
  Company and Aetna Investment Services, LLC • Incorporated by reference to Post-
  Effective Amendment No. 32 to Registration Statement on Form N-4 (File No. 033-
  75988), as filed on April 13, 2004.

(8.7) Service Agreement effective June 30, 1998 between Aetna Life Insurance and
  Annuity Company and AIM Advisors, Inc. • Incorporated by reference to Pre-
  Effective Amendment No. 1 to Registration Statement on Form N-4 (File No. 333-
  56297), as filed on August 4, 1998.
(8.8) First Amendment dated October 1, 2000 to the Service Agreement dated June 30,
  1998 between Aetna Life Insurance and Annuity Company and AIM Advisors, Inc. •
  Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
  Statement on Form N-4 (File No. 333-49176), as filed on November 30, 2000.
(8.9) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
  October 16, 2007 between AIM Investment Services, Inc., ING Life Insurance and
  Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
  Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
  New York, Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.
(8.10) (Retail) Amended and Restated Selling and Services Agreement and Fund
  Participation Agreement entered into as of May 1, 2008 between ING Life Insurance
  and Annuity Company, ING Financial Advisers, LLC and Fred Alger & Company,
  Incorporated
(8.11) (Retail) First Amendment dated February 5, 2009 to the Amended and Restated
  Selling and Services Agreement and Fund Participation Agreement dated as of May 1,
  2008 between ING Life Insurance and Annuity Company, ING Financial Advisers,
  LLC and Fred Alger & Company, Incorporated
(8.12) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
  October 16, 2007 between Fred Alger & Company, Incorporated, ING Life Insurance
  and Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
  Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
  New York, Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc.
(8.13) (Retail) Selling and Services Agreement and Fund Participation Agreement between
  ING Life Insurance and Annuity Company and Saturna Brokerage Services Inc.
  (Amana Funds) • Incorporated by reference to Post-Effective Amendment No. 53 to
  Registration Statement on Form N-4 (File No. 333-01107), as filed on August 18,
  2008.
(8.14) Rule 22c-2 Agreement dated May 1, 2008 between Saturna Brokerage Services, Inc.
  (Amana Funds), ING Life Insurance and Annuity Company, ING National Trust, ING
  USA Annuity and Life Insurance Company, ReliaStar Life Insurance Company,
  ReliaStar Life Insurance Company of New York, Security Life of Denver Insurance
  Company and Systematized Benefits Administrators Inc. • Incorporated by reference
  to Post-Effective Amendment No. 53 to Registration Statement on Form N-4 (File No.
  333-01107), as filed on August 18, 2008.

(8.15) (Retail) Fund Participation Agreement dated as of July 1, 2000 between Aetna Life
  Insurance and Annuity Company, American Century Services Corporation and
  American Century Investment Services, Inc. • Incorporated by reference to Post-
  Effective Amendment No. 23 to Registration Statement on Form N-4 (File No. 333-
  01107), as filed on December 13, 2000.
(8.16) (Retail) Amendment No. 1 effective November 7, 2003 to Fund Participation
  Agreement dated as of July 1, 2000 between ING Life Insurance and Annuity
  Company and American Century Investment Services, Inc. • Incorporated by
  reference to Post-Effective Amendment No. 37 to Registration Statement on Form N-
  4 (File No. 033-75962), as filed on April 13, 2004.
(8.17) (Retail) Amendment No. 2 effective October 1, 2004 to Fund Participation Agreement
  between ING Life Insurance and Annuity Company and American Century
  Investment Services • Incorporated by reference to Post-Effective Amendment No. 48
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on April 10,
  2007.
(8.18) (Retail) Amendment No. 3 effective April 1, 2007 to Fund Participation Agreement
  between ING Life Insurance and Annuity Company, American Century Investment
  Services, Inc. and American Century Services, LLC • Incorporated by reference to
  Post-Effective Amendment No. 10 to Registration Statement on Form N-4 (File No.
  333-105479), as filed on April 11, 2008.
(8.19) (Retail) Selling and Services Agreement dated July 1, 2000 by and among Aetna
  Investment Services, Inc., Aetna Life Insurance and Annuity Company and American
  Century Investment Services • Incorporated by reference to Post-Effective
  Amendment No. 48 to Registration Statement on Form N-4 (File No. 033-75962), as
  filed on April 10, 2007.
(8.20) (Retail) Amendment No. 1 effective November 7, 2003 to the Selling and Services
  Agreement dated July 1, 2000 by and among ING Financial Advisers, LLC (formerly
  known as Aetna Investment Services, Inc.), ING Life Insurance and Annuity
  Company (formerly known as Aetna Life Insurance and Annuity Company) and
  American Century Investment Services, Inc. • Incorporated by reference to Post-
  Effective Amendment No. 48 to Registration Statement on Form N-4 (File No. 033-
  75962), as filed on April 10, 2007.
(8.21) (Retail) Amendment No. 2 effective October 1, 2004 to the Selling and Services
  Agreement dated July 1, 2000 and amended on November 7, 2003 by and among ING
  Financial Advisers, LLC (formerly known as Aetna Investment Services, Inc.), ING
  Life Insurance and Annuity Company (formerly known as Aetna Life Insurance and
  Annuity Company) and American Century Investment Services, Inc. • Incorporated
  by reference to Post-Effective Amendment No. 48 to Registration Statement on Form
  N-4 (File No. 033-75962), as filed on April 10, 2007.

(8.22) (Retail) Amendment No. 3 effective April 1, 2007 to the Selling and Services
  Agreement dated July 1, 2000 and amended on November 7, 2003 and October 1,
  2004 by and among ING Financial Advisers, LLC (formerly known as Aetna
  Investment Services, Inc.), ING Life Insurance and Annuity Company (formerly
  known as Aetna Life Insurance and Annuity Company), American Century
  Investment Services, Inc. and American Century Services, LLC • Incorporated by
  reference to Post-Effective Amendment No. 10 to Registration Statement on Form N-
  4 (File No. 333-105479), as filed on April 11, 2008.
(8.23) Rule 22c-2 Agreement dated April 4, 2007 and is effective as of October 16, 2007
  between American Century Investment Services, Inc., ING Life Insurance and
  Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
  Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
  New York, Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.
(8.24) (Retail) Selling and Services Agreement and Fund Participation Agreement dated
  October 5, 2006 among ING Life Insurance and Annuity Company, ING Financial
  Advisers, LLC and BlackRock Distributors, Inc.
(8.25) Rule 22c-2 Agreement dated April 16, 2007 and is effective as of October 16, 2007
  between BlackRock Distributors, Inc., ING Life Insurance and Annuity Company,
  ING National Trust, ING USA Annuity and Life Insurance Company, ReliaStar Life
  Insurance Company, ReliaStar Life Insurance Company of New York, Security Life
  of Denver Insurance Company and Systematized Benefits Administrators Inc.
(8.26) Fund Participation Agreement dated December 1, 1997 among Calvert Responsibly
  Invested Balanced Portfolio, Calvert Asset Management Company, Inc. and Aetna
  Life Insurance and Annuity Company • Incorporated by reference to Post-Effective
  Amendment No. 8 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on February 19, 1998.
(8.27) Service Agreement dated December 1, 1997 between Calvert Asset Management
  Company, Inc. and Aetna Life Insurance and Annuity Company • Incorporated by
  reference to Post-Effective Amendment No. 8 to Registration Statement on Form N-4
  (File No. 333-01107), as filed on February 19, 1998.
(8.28) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
  October 16, 2007 between Calvert Distributors, Inc., ING Life Insurance and Annuity
  Company, ING National Trust, ING USA Annuity and Life Insurance Company,
  ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of New York,
  Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.

(8.29) (Retail) Participation Agreement dated as of January 1, 2003 by and among ING Life
  Insurance and Annuity Company, ReliaStar Life Insurance Company, ReliaStar Life
  Insurance Company of New York, American Funds Distributors, Inc. and American
  Funds Service Company • Incorporated by reference to Post-Effective Amendment
  No. 42 to Registration Statement on Form N-4 (File No. 333-01107), as filed on
  December 16, 2005.
(8.30) (Retail) First Amendment is made and entered into as of January 3, 2006 to the
  Participation Agreement dated January 1, 2003 by and among ING Life Insurance and
  Annuity Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance
  Company of New York, American Funds Distributors, Inc. and American Funds
  Service Company • Incorporated by reference to Post-Effective Amendment No. 47 to
  Registration Statement on Form N-4 (File No. 033-75962), as filed on November 21,
  2006.
(8.31) (Retail) Second Amendment effective as of November 1, 2006 to Participation
  Agreement dated January 1, 2003, and as amended on January 3, 2006, by and among
  American Funds Distributors, Inc., American Funds Service Company, ING Life
  Insurance and Annuity Company, ReliaStar Life Insurance Company and ReliaStar
  Life Insurance Company of New York • Incorporated by reference to Post-Effective
  Amendment No. 46 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on February 15, 2008.
(8.32) (Retail) Third Amendment effective as of February 1, 2007 to the Participation
  Agreement dated January 1, 2003, and as amended on January 3, 2006 and on
  November 1, 2006, by and among American Funds Distributors, Inc., American Funds
  Service Company, ING Life Insurance and Annuity Company, ReliaStar Life
  Insurance Company and ReliaStar Life Insurance Company of New York •
  Incorporated by reference to Post-Effective Amendment No. 46 to Registration
  Statement on Form N-4 (File No. 333-01107), as filed on February 15, 2008.
(8.33) (Retail) Fourth Amendment effective as of October 1, 2008 to the Participation
  Agreement dated January 1, 2003, and as amended on January 3, 2006, November 1,
  2006 and February 1, 2007, by and among American Funds Distributors, Inc.,
  American Funds Service Company, ING Life Insurance and Annuity Company,
  ReliaStar Life Insurance Company and ReliaStar Life Insurance Company of New
  York • Incorporated by reference to Post-Effective Amendment No. 54 to Registration
  Statement on Form N-4 (File No. 333-01107), as filed on November 18, 2008.
(8.34) (Retail) Fifth Amendment effective as of January 30, 2009 to the Participation
  Agreement dated January 1, 2003, and as amended on January 3, 2006, November 1,
  2006, February 1, 2007 and October 1, 2008, by and among American Funds
  Distributors, Inc., American Funds Service Company, ING Life Insurance and
  Annuity Company, ReliaStar Life Insurance Company and ReliaStar Life Insurance
  Company of New York

(8.35) (Retail) Selling Group Agreement among American Funds Distributors, Inc. and
  Aetna Investment Services, Inc. dated June 30, 2000 • Incorporated by reference to
  Post-Effective Amendment No. 42 to Registration Statement on Form N-4 (File No.
  333-01107), as filed on December 16, 2005.
(8.36) (Retail) Supplemental Selling Group Agreement by and among American Funds
  Distributors, Inc. and Aetna Investment Services, Inc. dated June 30, 2000 •
  Incorporated by reference to Post-Effective Amendment No. 42 to Registration
  Statement on Form N-4 (File No. 333-01107), as filed on December 16, 2005.
(8.37) (Retail) Omnibus addendum (R shares) dated February 6, 2004 to the Selling Group
  Agreement dated June 30, 2000 and effective January 1, 2003 between American
  Funds Distributors, Inc. and ING Financial Advisers, LLC • Incorporated by reference
  to Post-Effective Amendment No. 42 to Registration Statement on Form N-4 (File No.
  333-01107), as filed on December 16, 2005.
(8.38) Rule 22c-2 Agreement dated and effective as of April 16, 2007 and operational on
  October 16, 2007 between American Funds Service Company, ING Life Insurance
  and Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
  Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
  New York, Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.
(8.39) (Retail) Fund Participation Agreement dated as of August 15, 2000 by and between
  Federated Services Company, Federated Securities Corp., Wachovia Bank, N.A. and
  Aetna Life Insurance and Annuity Company • Incorporated by reference to Post-
  Effective Amendment No. 23 to Registration Statement on Form N-4 (File No. 333-
  01107), as filed on December 13, 2000.
(8.40) (Retail) Shareholder Services Agreement dated October 4, 1999 between Federated
  Administrative Services for The Wachovia Funds and The Wachovia Municipal Funds
  and Aetna Investment Services, Inc. • Incorporated by reference to Post-Effective
  Amendment No. 23 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on December 13, 2000.
(8.41) (Retail) Rule 22c-2 Agreement dated April 16, 2007 and effective October 16, 2007
  among Evergreen Service Company, LLC, ING Life Insurance and Annuity
  Company, ING National Trust, ING USA Annuity and Life Insurance Company,
  ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of New York,
  Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.

(8.42) Fund Participation Agreement dated February 1, 1994 and amended on December 15,
  1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1, 1996 between
  Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund and
  Fidelity Distributors Corporation • Incorporated by reference to Post-Effective
  Amendment No. 12 to Registration Statement on Form N-4 (File No. 033-75964), as
  filed on February 11, 1997.
(8.43) Fifth Amendment dated as of May 1, 1997 to the Fund Participation Agreement dated
  February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1,
  1995, January 1, 1996 and March 1, 1996 between Aetna Life Insurance and Annuity
  Company, Variable Insurance Products Fund and Fidelity Distributors Corporation •
  Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-34370), as filed on September 29, 1997.
(8.44) Sixth Amendment dated as of November 6, 1997 to the Fund Participation Agreement
  dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May
  1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997 between Aetna Life
  Insurance and Annuity Company, Variable Insurance Products Fund and Fidelity
  Distributors Corporation • Incorporated by reference to Post-Effective Amendment
  No. 16 to Registration Statement on Form N-4 (File No. 033-75964), as filed on
  February 9, 1998.
(8.45) Seventh Amendment dated as of May 1, 1998 to the Fund Participation Agreement
  dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May
  1, 1995, January 1, 1996, March 1, 1996, May 1, 1997 and November 6, 1997
  between Aetna Life Insurance and Annuity Company, Variable Insurance Products
  Fund and Fidelity Distributors Corporation • Incorporated by reference to Registration
  Statement on Form N-4 (File No. 333-56297), as filed on June 8, 1998.
(8.46) Eighth Amendment dated as of December 1, 1999 to the Fund Participation
  Agreement dated February 1, 1994 and amended on December 15, 1994, February 1,
  1995, May 1, 1995, January 1, 1996, March 1, 1996, May 1, 1997, November 6, 1997
  and May 1, 1998 between Aetna Life Insurance and Annuity Company, Variable
  Insurance Products Fund and Fidelity Distributors Corporation • Incorporated by
  reference to Post-Effective Amendment No. 19 to Registration Statement on Form N-
  4 (File No. 333-01107), as filed on February 16, 2000.
(8.47) Ninth Amendment dated as of August 15, 2007 to the Fund Participation Agreement
  dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May
  1, 1995, January 1, 1996, March 1, 1996, May 1, 1997, November 6, 1997 and May 1,
  1998 between ING Life Insurance and Annuity Company (formerly known as Aetna
  Life Insurance and Annuity Company), Variable Insurance Products Fund and Fidelity
  Distributors Corporation • Incorporated by reference to Post-Effective Amendment
  No. 46 to Registration Statement on Form N-4 (File No. 333-01107), as filed on
  February 15, 2008.

(8.48) Fund Participation Agreement dated February 1, 1994 and amended on December 15,
  1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1, 1996 between
  Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II and
  Fidelity Distributors Corporation • Incorporated by reference to Post-Effective
  Amendment No. 12 to Registration Statement on Form N-4 (File No. 033-75964), as
  filed on February 11, 1997.
(8.49) Fifth Amendment dated as of May 1, 1997 to the Fund Participation Agreement dated
  February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1,
  1995, January 1, 1996 and March 1, 1996 between Aetna Life Insurance and Annuity
  Company, Variable Insurance Products Fund II and Fidelity Distributors Corporation
  • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-34370), as filed on September 29, 1997.
(8.50) Sixth Amendment dated as of January 20, 1998 to the Fund Participation Agreement
  dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May
  1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997 between Aetna Life
  Insurance and Annuity Company, Variable Insurance Products Fund II and Fidelity
  Distributors Corporation • Incorporated by reference to Post-Effective Amendment
  No. 7 to Registration Statement on Form S-6 (File No. 033-75248), as filed on
  February 24, 1998.
(8.51) Seventh Amendment dated as of May 1, 1998 to the Fund Participation Agreement
  dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May
  1, 1995, January 1, 1996, March 1, 1996, May 1, 1997 and January 20, 1998 between
  Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II and
  Fidelity Distributors Corporation • Incorporated by reference to Registration
  Statement on Form N-4 (File No. 333-56297), as filed on June 8, 1998.
(8.52) Eighth Amendment dated December 1, 1999 to Fund Participation Agreement dated
  February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1,
  1995, January 1, 1996, March 1, 1996, May 1, 1997, January 20, 1998 and May 1,
  1998 between Aetna Life Insurance and Annuity Company, Variable Insurance
  Products Fund II and Fidelity Distributors Corporation • Incorporated by reference to
  Post-Effective Amendment No. 19 to Registration Statement on Form N-4 (File No.
  333-01107), as filed on February 16, 2000.
(8.53) Ninth Amendment dated as of August 15, 2007 to the Fund Participation Agreement
  dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May
  1, 1995, January 1, 1996, March 1, 1996, May 1, 1997, January 20, 1998 and May 1,
  1998 between ING Life Insurance and Annuity Company (formerly known as Aetna
  Life Insurance and Annuity Company), Variable Insurance Products Fund II and
  Fidelity Distributors Corporation • Incorporated by reference to Post-Effective
  Amendment No. 46 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on February 15, 2008.

(8.54) Letter Agreement dated May 16, 2007 and effective July 2, 2007 between ING Life
  Insurance and Annuity Company, Variable Insurance Products Fund, Variable
  Insurance Products Fund I, Variable Insurance Products Fund II, Variable Insurance
  Product Fund V and Fidelity Distributors Corporation • Incorporated by reference to
  Post-Effective Amendment No. 51 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on July 27, 2007.
(8.55) Service Agreement effective as of June 1, 2002 by and between Fidelity Investments
  Institutional Operations Company, Inc. and ING Financial Advisers, LLC •
  Incorporated by reference to Post-Effective Amendment No. 33 to Registration
  Statement on Form N-4 (File No. 033-75988), as filed on August 5, 2004.
(8.56) Service Contract effective as of June 1, 2002 and amended on June 20, 2003 by and
  between Directed Services, Inc., ING Financial Advisers, LLC, and Fidelity
  Distributors Corporation • Incorporated by reference to Post-Effective Amendment
  No. 33 to Registration Statement on Form N-4 (File No. 033-75988), as filed on
  August 5, 2004.
(8.57) First Amendment effective April 1, 2005 to Service Contract between Fidelity
  Distributors Corporation and ING Financial Advisers, Inc. dated June 1, 2002 and
  amended on June 20, 2003 • Incorporated by reference to Post-Effective Amendment
  No. 47 to Registration Statement on Form N-4 (File No. 033-75962), as filed on
  November 21, 2006.
(8.58) Second Amendment effective April 1, 2006 to Service Contract between Fidelity
  Distributors Corporation and ING Financial Advisers, Inc. dated June 1, 2002 and
  amended on June 20, 2003 and April 1, 2005 • Incorporated by reference to Post-
  Effective Amendment No. 47 to Registration Statement on Form N-4 (File No. 033-
  75962), as filed on November 21, 2006.
(8.59) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
  October 16, 2007 between Fidelity Distributors Corporation, ING Life Insurance and
  Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
  Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
  New York, Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.
(8.60) Amended and Restated Participation Agreement as of December 30, 2005 by and
  among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton
  Distributors, Inc., ING Life Insurance and Annuity Company, ING USA Annuity and
  Life Insurance Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance
  Company of New York and Directed Services, Inc. • Incorporated by reference to
  Post-Effective Amendment No. 17 to Registration Statement on Form N-4 (File No.
  333-85618), as filed on February 1, 2007.

(8.61) Amendment effective June 5, 2007 to Amended and Restated Participation Agreement
  as of December 30, 2005 by and among Franklin Templeton Variable Insurance
  Products Trust, Franklin/Templeton Distributors, Inc., ING Life Insurance and
  Annuity Company, ING USA Annuity and Life Insurance Company, ReliaStar Life
  Insurance Company, ReliaStar Life Insurance Company of New York and Directed
  Services, LLC • Incorporated by reference to Pre-Effective Amendment No. 1 to
  Registration Statement on Form N-4 (File No. 333-139695), as filed on July 6, 2007.
(8.62) Amended and Restated Administrative Services Agreement executed as of October 3,
  2005 between Franklin Templeton Services, LLC, ING Life Insurance and Annuity
  Company, ING Insurance Company of America, ING USA Annuity and Life
  Insurance Company and ReliaStar Life Insurance Company • Incorporated by
  reference to Post-Effective Amendment No. 32 to Registration Statement on Form N-
  4 (File No. 033-81216), as filed on April 11, 2006.
(8.63) Rule 22c-2 Shareholder Information Agreement (Franklin Templeton Variable
  Insurance Products Trust) entered into as of April 16, 2007 among
  Franklin/Templeton Distributors, Inc., ING Life Insurance and Annuity Company,
  ING USA Annuity and Life Insurance Company, ReliaStar Life Insurance Company
  and ReliaStar Life Insurance Company of New York • Incorporated by reference to
  Post-Effective Amendment No. 50 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on June 15, 2007.
(8.64) Participation Agreement dated April 30, 2003 among ING Life Insurance and Annuity
  Company, The GCG Trust (renamed effective May 1, 2003, ING Investors Trust) and
  Directed Services, Inc. • Incorporated by reference to Post-Effective Amendment No.
  54 to Registration Statement on Form N-1A (File No. 033-23512), as filed on August
  1, 2003.
(8.65) Amendment dated October 9, 2006 to the Participation Agreement dated April 30,
  2003 among ING Life Insurance and Annuity Company, ING Investors Trust and
  Directed Services, Inc. • Incorporated by reference to Post-Effective Amendment No.
  47 to Registration Statement on Form N-4 (File No. 033-75962), as filed on
  November 21, 2006.
(8.66) Participation Agreement dated as of November 28, 2001 among Portfolio Partners,
  Inc., Aetna Life Insurance and Annuity Company and Aetna Investment Services,
  LLC • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.
(8.67) Amendment dated March 5, 2002 between Portfolio Partners, Inc. (to be renamed ING
  Partners, Inc. effective May 1, 2002), Aetna Life Insurance and Annuity Company (to
  be renamed ING Life Insurance and Annuity Company effective May 1, 2002) and
  Aetna Investment Services, LLC (to be renamed ING Financial Advisers, LLC) to
  Participation Agreement dated November 28, 2001 • Incorporated by reference to
  Post-Effective Amendment No. 30 to Registration Statement on Form N-4 (File No.
  033-75962), as filed on April 8, 2002.

(8.68) Amendment dated May 1, 2003 between ING Partners, Inc., ING Life Insurance and
  Annuity Company and ING Financial Advisers, LLC to the Participation Agreement
  dated as of November 28, 2001 and subsequently amended on March 5, 2002 •
  Incorporated by reference to Post-Effective Amendment No. 28 to Registration
  Statement on Form N-4 (File No. 033-75988), as filed on April 10, 2003.
(8.69) Amendment dated November 1, 2004 to the Participation Agreement between ING
  Partners, Inc., ING Life Insurance and Annuity Company and ING Financial
  Advisers, LLC dated as of November 28, 2001 and subsequently amended on March
  5, 2002 and May 1, 2003 • Incorporated by reference to Post-Effective Amendment
  No. 20 to Registration Statement on Form N-1A (File No. 333-32575), as filed on
  April 1, 2005.
(8.70) Amendment dated April 29, 2005 to the Participation Agreement between ING
  Partners, Inc., ING Life Insurance and Annuity Company and ING Financial
  Advisers, LLC dated as of November 28, 2001 and subsequently amended on March
  5, 2002, May 1, 2003 and November 1, 2004 • Incorporated by reference to Post-
  Effective Amendment No. 32 to Registration Statement on Form N-4 (File No. 033-
  81216), as filed on April 11, 2006.
(8.71) Amendment dated August 31, 2005 to the Participation Agreement between ING
  Partners, Inc., ING Life Insurance and Annuity Company and ING Financial
  Advisers, LLC dated November 28, 2001 and subsequently amended on March 5,
  2002, May 1, 2003, November 1, 2004 and April 29, 2005 • Incorporated by reference
  to Post-Effective Amendment No. 32 to Registration Statement on Form N-4 (File No.
  033-81216), as filed on April 11, 2006.
(8.72) Amendment dated December 7, 2005 to the Participation Agreement between ING
  Partners, Inc., ING Life Insurance and Annuity Company and ING Financial
  Advisers, LLC dated as of November 28, 2001 and subsequently amended on March
  5, 2002, May 1, 2003, November 1, 2004, April 29, 2005, and August 31, 2005 •
  Incorporated by reference to Post-Effective Amendment No. 32 to Registration
  Statement on Form N-4 (File No. 033-81216), as filed on April 11, 2006.
(8.73) Amendment dated April 28, 2006 to the Participation Agreement between ING
  Partners, Inc., ING Life Insurance and Annuity Company and ING Financial
  Advisers, LLC dated as of November 28, 2001 and subsequently amended on March
  5, 2002, May 1, 2003, November 1, 2004, April 29, 2005, August 31, 2005 and
  December 7, 2005 • Incorporated by reference to Registration Statement on Form N-4
  (File No. 333-134760), as filed on June 6, 2006.
(8.74) Shareholder Servicing Agreement (Service Class Shares) dated as of November 27,
  2001 between Portfolio Partners, Inc. and Aetna Life Insurance and Annuity Company
  • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.

(8.75) Amendment dated March 5, 2002 between Portfolio Partners, Inc. (to be renamed ING
  Partners, Inc. effective May 1, 2002) and Aetna Life Insurance and Annuity Company
  (to be renamed ING Life Insurance and Annuity Company effective May 1, 2002) to
  the Shareholder Servicing Agreement (Service Class Shares) dated November 27,
  2001 • Incorporated by reference to Post-Effective Amendment No. 30 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on April 8, 2002.
(8.76) Amendment dated May 1, 2003 to the Shareholder Servicing Agreement (Service
  Class Shares) by and between ING Partners, Inc. and ING Life Insurance and Annuity
  Company dated November 27, 2001, as amended on March 5, 2002 • Incorporated by
  reference to Post-Effective Amendment No. 28 to Registration Statement on Form N-
  4 (File No. 033-75988), as filed on April 10, 2003.
(8.77) Amendment dated November 1, 2004 to the Shareholder Servicing Agreement
  (Service Class Shares) by and between ING Partners, Inc. and ING Life Insurance and
  Annuity Company dated November 27, 2001, as amended on March 5, 2002 and May
  1, 2003 • Incorporated by reference to Initial Registration Statement on Form N-4
  (File No. 333-134760), as filed on June 6, 2006.
(8.78) Amendment dated April 29, 2005 to the Shareholder Servicing Agreement (Service
  Class Shares) by and between ING Partners, Inc. and ING Life Insurance and Annuity
  Company dated November 27, 2001, and amended on March 5, 2002, May 1, 2003
  and November 1, 2004 • Incorporated by reference to Post-Effective Amendment No.
  32 to Registration Statement on Form N-4 (File No. 033-81216), as filed on April 11,
  2006.
(8.79) Amendment dated December 7, 2005 to the Shareholder Servicing Agreement
  (Service Class Shares) by and between ING Partners, Inc. and ING Life Insurance and
  Annuity Company dated November 27, 2001, and amended on March 5, 2002, May 1,
  2003, November 1, 2004 and April 29, 2005 • Incorporated by reference to Initial
  Registration Statement on Form N-4 (File No. 333-134760), as filed on June 6, 2006.
(8.80) Amendment dated April 28, 2006 to the Shareholder Servicing Agreement (Service
  Class Shares) by and between ING Partners, Inc. and ING Life Insurance and Annuity
  Company dated November 27, 2001, and amended on March 5, 2002, May 1, 2003,
  November 1, 2004, April 29, 2005 and December 7, 2005 • Incorporated by reference
  to Registration Statement on Form N-4 (File No. 333-134760), as filed on June 6,
  2006.
(8.81) Fund Participation Agreement dated as of May 1, 1998 by and among Aetna Life
  Insurance and Annuity Company and Aetna Variable Fund, Aetna Variable Encore
  Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of
  each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series,
  Aetna Variable Portfolios, Inc. on behalf of each of its series and Aeltus Investment
  Management, Inc. • Incorporated by reference to Registration Statement on Form N-4
  (File No. 333-56297), as filed on June 8, 1998.

(8.82) Amendment dated November 9, 1998 to Fund Participation Agreement dated as of
  May 1, 1998 by and among Aetna Life Insurance and Annuity Company and Aetna
  Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced
  VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios,
  Inc. on behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each of
  its series, and Aeltus Investment Management, Inc. • Incorporated by reference to
  Post-Effective Amendment No. 2 to Registration Statement on Form N-4 (File No.
  333-56297), as filed on December 14, 1998.
(8.83) Second Amendment dated December 31, 1999 to Fund Participation Agreement dated
  as of May 1, 1998 and amended on November 9, 1998 by and among Aetna Life
  Insurance and Annuity Company and Aetna Variable Fund, Aetna Variable Encore
  Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of
  each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series,
  Aetna Variable Portfolios, Inc. on behalf of each of its series and Aeltus Investment
  Management, Inc. • Incorporated by reference to Post-Effective Amendment No. 19
  to Registration Statement on Form N-4 (File No. 333-01107), as filed on February 16,
  2000.
(8.84) Third Amendment dated February 11, 2000 to Fund Participation Agreement dated as
  of May 1, 1998 and amended on November 9, 1998 and December 31, 1999 by and
  among Aetna Life Insurance and Annuity Company and Aetna Variable Fund, Aetna
  Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET
  Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of
  each of its series, Aetna Variable Portfolios, Inc. on behalf of each of its series, and
  Aeltus Investment Management, Inc. • Incorporated by reference to Post-Effective
  Amendment No. 20 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on April 4, 2000.
(8.85) Fourth Amendment dated May 1, 2000 to Fund Participation Agreement dated as of
  May 1, 1998 and amended on November 9, 1998, December 31, 1999 and February
  11, 2000 by and among Aetna Life Insurance and Annuity Company and Aetna
  Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced
  VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios,
  Inc. on behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each of
  its series, and Aeltus Investment Management, Inc. • Incorporated by reference to
  Post-Effective Amendment No. 20 to Registration Statement on Form N-4 (File No.
  333-01107), as filed on April 4, 2000.

(8.86) Fifth Amendment dated February 27, 2001 to Fund Participation Agreement dated as
  of May 1, 1998 and amended on November 9, 1998, December 31, 1999, February 11,
  2000 and May 1, 2000 by and among Aetna Life Insurance and Annuity Company and
  Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna
  Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation
  Portfolios, Inc. on behalf of each of its series, Aetna Variable Portfolios, Inc. on
  behalf of each of its series, and Aeltus Investment Management, Inc. • Incorporated
  by reference to Post-Effective Amendment No. 24 to Registration Statement on Form
  N-4 (File No. 333-01107), as filed on April 13, 2001.
(8.87) Sixth Amendment dated June 19, 2001 to Fund Participation Agreement dated as of
  May 1, 1998 and amended on November 9, 1998, December 31, 1999, February 11,
  2000, May 1, 2000 and February 27, 2001 among Aetna Life Insurance and Annuity
  Company, Aeltus Investment Management, Inc. and Aetna Variable Fund, Aetna
  Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET
  Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of
  each of its series, and Aetna Variable Portfolios, Inc. on behalf of each of its series •
  Incorporated by reference to Post-Effective Amendment No. 32 to Registration
  Statement on Form N-4 (File No. 033-75988), as filed on April 13, 2004.
(8.88) Service Agreement effective as of May 1, 1998 between Aeltus Investment
  Management, Inc. and Aetna Life Insurance and Annuity Company in connection with
  the sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income
  Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series,
  Aetna Generation Portfolios, Inc. on behalf of each of its series, and Aetna Variable
  Portfolios, Inc. on behalf of each of its series • Incorporated by reference to
  Registration Statement on Form N-4 (File No. 333-56297), as filed on June 8, 1998.
(8.89) Amendment dated November 4, 1998 and effective as of October 15, 1998 to Service
  Agreement effective as of May 1, 1998 between Aeltus Investment Management, Inc.
  and Aetna Life Insurance and Annuity Company in connection with the sale of shares
  of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna
  Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation
  Portfolios, Inc. on behalf of each of its series, and Aetna Variable Portfolios, Inc. on
  behalf of each of its series • Incorporated by reference to Post-Effective Amendment
  No. 2 to Registration Statement on Form N-4 (File No. 333-56297), as filed on
  December 14, 1998.
(8.90) Second Amendment dated February 11, 2000 to Service Agreement effective as of
  May 1, 1998 and amended on November 4, 1998 between Aeltus Investment
  Management, Inc. and Aetna Life Insurance and Annuity Company in connection with
  the sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income
  Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series,
  Aetna Generation Portfolios, Inc. on behalf of each of its series and Aetna Variable
  Portfolios, Inc. on behalf of each of its series • Incorporated by reference to Post-
  Effective Amendment No. 20 to Registration Statement on Form N-4 (File No. 333-
  01107), as filed on April 4, 2000.

(8.91) Third Amendment dated May 1, 2000 to Service Agreement effective as of May 1,
  1998 and amended on November 4, 1998 and February 11, 2000 between Aeltus
  Investment Management, Inc. and Aetna Life Insurance and Annuity Company in
  connection with the sale of shares of Aetna Variable Fund, Aetna Variable Encore
  Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of
  each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series and
  Aetna Variable Portfolios, Inc. on behalf of each of its series • Incorporated by
  reference to Post-Effective Amendment No. 20 to Registration Statement on Form N-
  4 (File No. 333-01107), as filed on April 4, 2000.
(8.92) Fourth Amendment dated as of June 26, 2001 to Service Agreement with Investment
  Advisor effective as of May 1, 1998, as amended on November 4, 1998, February 11,
  2000 and May 1, 2000 between Aeltus Investment Management, Inc. and Aetna Life
  Insurance and Annuity Company in connection with the sale of shares of Aetna
  Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced
  VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios,
  Inc. on behalf of each of its series and Aetna Variable Portfolios, Inc. on behalf of
  each of its series • Incorporated by reference to Post-Effective Amendment No. 32 to
  Registration Statement on Form N-4 (File No. 033-75988), as filed on April 13, 2004.
(8.93) Fund Participation Agreement dated as of May 1, 2001 among Pilgrim Variable
  Products Trust, Aetna Life Insurance and Annuity Company and ING Pilgrim
  Securities, Inc. • Incorporated by reference to Post-Effective Amendment No. 26 to
  Registration Statement on Form N-4 (File No. 333-01107), as filed on July 13, 2001.
(8.94) Amendment dated August 30, 2002 between ING Life Insurance and Annuity
  Company, ING Variable Products Trust (formerly known as Pilgrim Variable
  Products Trust) and ING Funds Distributor to Fund Participation Agreement dated
  May 1, 2001 • Incorporated by reference to Post-Effective Amendment No. 28 to
  Registration Statement on Form N-4 (File No. 033-75988), as filed on April 10, 2003.
(8.95) Administrative and Shareholder Services Agreement dated April 1, 2001 between
  ING Funds Services, LLC and ING Life Insurance and Annuity Company
  (Administrator for ING Variable Products Trust) • Incorporated by reference to Post-
  Effective Amendment No. 28 to Registration Statement on Form N-4 (File No. 033-
  75988), as filed on April 10, 2003.
(8.96) Rule 22c-2 Agreement dated no later than April 16, 2007 is effective October 16,
  2007 between ING Funds Services, LLC, ING Life Insurance and Annuity Company,
  ING National Trust, ING USA Annuity and Life Insurance Company, ReliaStar Life
  Insurance Company, ReliaStar Life Insurance Company of New York, Security Life
  of Denver Insurance Company and Systematized Benefits Administrators Inc. •
  Incorporated by reference to Post-Effective Amendment No. 50 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on June 15, 2007.
(8.97) Fund Participation Agreement dated as of July 20, 2001 between Lord Abbett Series
  Fund, Inc. and Aetna Life Insurance and Annuity Company • Incorporated by
  reference to Post-Effective Amendment No. 27 to Registration Statement on Form N-
  4 (File No. 333-01107), as filed on October 26, 2001.

(8.98) Service Agreement dated as of July 20, 2001 between Lord Abbett & Co. and Aetna
  Life Insurance and Annuity Company • Incorporated by reference to Post-Effective
  Amendment No. 27 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on October 26, 2001.
(8.99) Rule 22c-2 Agreement effective April 16, 2007 and operational on October 16, 2007
  among Lord Abbett Distributor LLC, ING Life Insurance and Annuity Company, ING
  National Trust, ING USA Annuity and Life Insurance Company, ReliaStar Life
  Insurance Company, ReliaStar Life Insurance Company of New York, Security Life
  of Denver Insurance Company and Systematized Benefits Administrators Inc. •
  Incorporated by reference to Post-Effective Amendment No. 50 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on June 15, 2007.
(8.100) (Retail) Fund Participation Agreement dated August 15, 2000 between Oppenheimer
  and Aetna Life Insurance and Annuity Company • Incorporated by reference to Post-
  Effective Amendment No. 23 to Registration Statement on Form N-4 (File No. 333-
  01107), as filed on December 13, 2000.
(8.101) (Retail) Rule 22c-2 Agreement dated no later than April 16, 2007 and is effective as of
  October 16, 2007 between Oppenheimer Funds Services, ING Life Insurance and
  Annuity Company, ING National Trust, ING USA Annuity and Life Insurance
  Company, ReliaStar Life Insurance Company, ReliaStar Life Insurance Company of
  New York, Security Life of Denver Insurance Company and Systematized Benefits
  Administrators Inc. • Incorporated by reference to Post-Effective Amendment No. 50
  to Registration Statement on Form N-4 (File No. 033-75962), as filed on June 15,
  2007.
(8.102) First Amendment dated June 30, 2008 to Fund Participation Agreement dated as of
  August 8, 2000 by and between Pax World Funds Series Trust I (formerly PAX Word
  Balanced Fund, Inc.) and ING Life Insurance and Annuity Company (formerly Aetna
  Life Insurance and Annuity Company) • Incorporated by reference to Post-Effective
  Amendment No. 53 to Registration Statement on Form N-4 (File No. 333-01107), as
  filed on August 18, 2008.
(8.103) (Retail) Fund Participation Agreement dated as of August 8, 2000 by and between
  PAX World Balanced Fund, Inc. and Aetna Life Insurance and Annuity Company •
  Incorporated by reference to Post-Effective Amendment No. 23 to Registration
  Statement on Form N-4 (File No. 333-01107), as filed on December 13, 2000.
(8.104) (Retail) Rule 22c-2 Agreement dated April 5, 2007 and is effective October 16, 2007
  between PFPC Distributors, Inc., ING Life Insurance and Annuity Company, ING
  National Trust, ING USA Annuity and Life Insurance Company, ReliaStar Life
  Insurance Company, ReliaStar Life Insurance Company of New York, Security Life
  of Denver Insurance Company and Systematized Benefits Administrators Inc. •
  Incorporated by reference to Post-Effective Amendment No. 50 to Registration
  Statement on Form N-4 (File No. 033-75962), as filed on June 15, 2007.

(9) Opinion and Consent of Counsel
(10) Consent of Independent Registered Public Accounting Firm
(11) Not applicable
(12) Not applicable
(13.1) Powers of Attorney
(13.2) Authorization for Signatures • Incorporated by reference to Post-Effective
  Amendment No. 5 to Registration Statement on Form N-4 (File No. 033-75986), as
  filed on April 12, 1996.

Item 25. Directors and Officers of the Depositor*

Name and Principal 		Positions and Offices with
Business Address Depositor

Richard T. Mason1 		President

Thomas J. McInerney1 		Director and Chairman

Catherine H. Smith1 		Director and Senior Vice President

Bridget M. Healy2 		Director

Robert G. Leary2 		Director

David A. Wheat3 		Director, Executive Vice President and Chief
  Financial Officer

Steven T. Pierson3 		Senior Vice President and Chief Accounting Officer

Sue A. Collins1 		Senior Vice President and Chief Actuary

Boyd G. Combs3 		Senior Vice President, Tax

Valerie G. Brown3 		Senior Vice President

Brian D. Comer1 		Senior Vice President

Daniel H. Hanlon1 		Senior Vice President

Shaun P. Mathews4 		Senior Vice President

David S. Pendergrass3 		Senior Vice President and Treasurer

Stephen J. Preston5 		Senior Vice President

Louis E Bachetti 		Vice President
581 Main Street, 4th Fl.  
Woodbridge, NJ 07095  

Pamela Mulvey Barcia1 		Vice President

Ronald R. Barhorst1 		Vice President

Bradley E. Barks3 		Vice President

M. Bishop Bastien Vice President
980 Ninth Street  
Sacramento, CA 95814  

Jeoffrey A. Block6 		Vice President

Dianne Bogoian1 		Vice President

Mary A. Broesch5 		Vice President and Actuary

Kevin P. Brown1 		Vice President

Robert P. Browne3 		Vice President, Investments

Anthony V. Camp1 		Vice President

Kevin L. Christensen6 		Vice President

Nancy D. Clifford1 		Vice President

Monte J. Combe7 		Vice President

Patricia M. Corbett6 		Vice President

Kimberly Curley7 		Vice President and Actuary

Karen Czizik7 		Vice President

William Delahanty3 		Vice President

J. Randolph Dobo7 		Vice President

Joseph Elmy3 		Vice President, Tax

Patricia L. Engelhardt1 		Vice President

William A. Evans4 		Vice President

Ronald E. Falkner1 		Vice President, Corporate Real Estate

John P. Foley3 		Vice President, Investments

Molly A. Garrett1 		Vice President

Robert A. Garrey1 		Vice President

Lisa S. Gilarde1 		Vice President

Brian K. Haendiges1 		Vice President

Terry D. Harrell Vice President
7695 N. High Street  
Columbus, OH 43235  

Steven J. Haun6 		Vice President

June P. Howard3 		Vice President

Mark E. Jackowitz 		Vice President
22 Century Hill Drive, Suite 101  
Latham, NY 12110  

William S. Jasien 		Vice President
12701 Fair Lakes Circle, Ste. 470  
Fairfax, VA 22033  

James B. Kauffmann3 		Vice President, Investments

David A. Kelsey1 		Vice President

Kenneth E. Lacy3 		Vice President

Richard K. Lau5 		Vice President and Actuary

William H. Leslie, IV1 		Vice President and Actuary

Frederick C. Litow3 		Vice President

Laurie A. Lombardo1 		Vice President

William L. Lowe1 		Vice President

Alan S. Lurty5 		Vice President

Christopher P. Lyons3 		Vice President, Investments

Gilbert E. Mathis3 		Vice President, Investments

Gregory R. Michaud3 		Vice President, Investments

Gregory J. Miller1 		Vice President

Paul L. Mistretta3 		Vice President

Maurice M. Moore3 		Vice President, Investments

Brian J. Murphy1 		Vice President

Michael J. Murphy5 Vice President

Todd E. Nevenhoven6 		Vice President

Deborah J. Prickett6 		Vice President

Robert A. Richard1 		Vice President

Linda E. Senker5 		Vice President, Compliance

Spencer T. Shell3 		Vice President, Assistant Treasurer and Assistant
  Secretary

Frank W. Snodgrass 		Vice President
9020 Overlook Blvd.  
Brentwood, TN 37027  

Libby J. Soong1 		Vice President and Chief Compliance Officer

Christina M. Starks 		Vice President
2000 21st Avenue NW  
Minot, North Dakota 58703  

Carl P. Steinhilber1 		Vice President

Sandra L. Stokley6 		Vice President

Alice Su5 		Vice President and Actuary

Lisa A. Thomas1 		Vice President and Appointed Actuary

Eugene M. Trovato1 		Vice President

Mary A. Tuttle7 		Vice President

William J. Wagner7 		Vice President

Kurt W. Wassenar3 		Vice President, Investments

Christopher R. Welp6 		Vice President

Michellen A. Wildin7 		Vice President

Matthew L. Condos1 		Actuary

Scott N. Shepherd1 		Actuary

Joy M. Benner8 		Secretary

Edward Attarian5 Assistant Secretary

Eric G. Banta7 		Assistant Secretary

Jane A. Boyle1 		Assistant Secretary

Diana R. Cavender8 		Assistant Secretary

Linda H. Freitag3 		Assistant Secretary

Daniel F. Hinkel3 		Assistant Secretary

Joseph D. Horan3 		Assistant Secretary

Megan A. Huddleston1 		Assistant Secretary

Rita J. Kummer3 		Assistant Secretary

Susan A. Masse1 		Assistant Secretary

Terri W. Maxwell3 		Assistant Secretary

James M. May, III3 		Assistant Secretary

Tina M. Nelson8 		Assistant Secretary

Melissa A. O’Donnell8 		Assistant Secretary

Randall K. Price7 		Assistant Secretary

Patricia M. Smith1 		Assistant Secretary

John F. Todd1 		Assistant Secretary

Susan M. Vega8 		Assistant Secretary

Diane I. Yell 		Assistant Secretary
100 Washington Square  
Minneapolis, MN 55401  

Glenn A. Black3 		Tax Officer

Terry L. Owens3 		Tax Officer

James H. Taylor3 		Tax Officer

*      These individuals may also be directors and/or officers of other affiliates of the Company.

1      The principal business address of these directors and these officers is One Orange Way
Windsor, Connecticut 06095.
2      The principal business address of these directors is 230 Park Avenue, New York, New York
10169.
3      The principal business address of these directors and these officers is 5780 Powers Ferry
Road, N.W., Atlanta, Georgia 30327.
4      The principal business address of these officers is 10 State House Square, Hartford,
Connecticut 06103.
5      The principal business address of these officers is 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380-1478.
6      The principal business address of these officers is 909 Locust Street, Des Moines, Iowa
50309.
7      The principal business address of these officers is 1290 Broadway, Denver, Colorado
80203.
8      The principal business address of these officers is 20 Washington Avenue South,
Minneapolis, Minnesota 55401.

Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant

Incorporated herein by reference to Item 28 in Post Effective Amendment No. 26 to Registration
Statement on Form N-6 for Select*Life Variable Account of ReliaStar Life Insurance Company
as filed with the Securities and Exchange Commission on April 7, 2009 (File Nos. 033-57244,
811-04208).

Item 27. Number of Contract Owners

As of February 27, 2009, there were 639,661 individuals holding interests in variable annuity
contracts funded through Variable Annuity Account C of ING Life Insurance and Annuity
Company.

Item 28. Indemnification

Section 33-779 of the Connecticut General Statutes (“CGS”) provides that a corporation may
provide indemnification of or advance expenses to a director, officer, employee or agent only as
permitted by Sections 33-770 to 33-778, inclusive, of the CGS. Reference is hereby made to
Section 33-771(e) of the CGS regarding indemnification of directors and Section 33-776(d) of
CGS regarding indemnification of officers, employees and agents of Connecticut corporations.
These statutes provide in general that Connecticut corporations incorporated prior to January 1,
1997 shall, except to the extent that their certificate of incorporation expressly provides
otherwise, indemnify their directors, officers, employees and agents against “liability” (defined
as the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed
with respect to an employee benefit plan, or reasonable expenses incurred with respect to a
proceeding) when (1) a determination is made pursuant to Section 33-775 that the party seeking
indemnification has met the standard of conduct set forth in Section 33-771 or (2) a court has
determined that indemnification is appropriate pursuant to Section 33-774.

Under Section 33-775, the determination of and the authorization for indemnification are made
(a) by two or more disinterested directors, as defined in Section 33-770(3); (b) by special legal
counsel; (c) by the shareholders; or (d) in the case of indemnification of an officer, agent or
employee of the corporation, by the general counsel of the corporation or such other officer(s) as
the board of directors may specify. Also, Section 33-772 with Section 33-776 provide that a
corporation shall indemnify an individual who was wholly successful on the merits or otherwise
against reasonable expenses incurred by him in connection with a proceeding to which he was a
party because he is or was a director, officer, employee, or agent of the corporation. Pursuant to
Section 33-771(d), in the case of a proceeding by or in the right of the corporation or with
respect to conduct for which the director, officer, agent or employee was adjudged liable on the
basis that he received a financial benefit to which he was not entitled, indemnification is limited
to reasonable expenses incurred in connection with the proceeding against the corporation to
which the individual was named a party.

A corporation may procure indemnification insurance on behalf of an individual who is or was a
director of the corporation. Consistent with the laws of the State of Connecticut, ING America
Insurance Holdings, Inc. maintains a Professional Liability and fidelity bond insurance policy
issued by an international insurer. The policy covers ING America Insurance Holdings, Inc. and
any company in which ING America Insurance Holdings, Inc. has a controlling financial interest
of 50% or more. These policies include the principal underwriter, as well as the depositor.
Additionally, the parent company of ING America Insurance Holdings, Inc., ING Groep N.V.,
maintains excess umbrella coverage with limits in excess of €125,000,000. The policies provide
for the following types of coverage: errors and omissions/professional liability, directors and
officers, employment practices, fiduciary and fidelity.

Section 20 of the ING Financial Advisers, LLC Limited Liability Company Agreement executed
as of November 28, 2000 provides that ING Financial Advisers, LLC will indemnify certain
persons against any loss, damage, claim or expenses (including legal fees) incurred by such
person if he is made a party or is threatened to be made a party to a suit or proceeding because he
was a member, officer, director, employee or agent of ING Financial Advisers, LLC, as long as
he acted in good faith on behalf of ING Financial Advisers, LLC and in a manner reasonably
believed to be within the scope of his authority. An additional condition requires that no person
shall be entitled to indemnity if his loss, damage, claim or expense was incurred by reason of his
gross negligence or willful misconduct. This indemnity provision is authorized by and is
consistent with Title 8, Section 145 of the General Corporation Law of the State of Delaware.

Item 29. Principal Underwriter

(a)    In addition to serving as the principal underwriter for the Registrant, ING Financial
Advisers, LLC also acts as the principal underwriter for ING Partners, Inc. (a management
investment company registered under the Investment Company Act of 1940 (1940 Act)).
Additionally, ING Financial Advisers, LLC acts as the principal underwriter for Variable
Life Account B of ING Life Insurance and Annuity Company (ILIAC), Variable Annuity
Account B of ILIAC, Variable Annuity Account I of ILIAC and Variable Annuity Account
G of ILIAC (separate accounts of ILIAC registered as unit investment trusts under the 1940 A
ct). ING Financial Advisers, LLC is also the principal underwriter for (i) Separate
 
  Account N of ReliaStar Life Insurance Company (RLIC) (a separate account of RLIC
registered as a unit investment trust under the 1940 Act.), (ii) ReliaStar Select Variable
Account of ReliaStar Life Insurance Company (a separate account of RLIC registered as a
unit investment trusts under the 1940 Act), (iii) MFS ReliaStar Variable Account (a
separate account of RLIC registered as a unit investment trusts under the 1940 Act), (iv)
Northstar Variable Account (a separate account of RLIC registered as a unit investment
trusts under the 1940 Act) (v) ReliaStar Life Insurance Company of New York Variable
Annuity Funds A, B, C (a management investment company registered under the 1940
Act), (vi) ReliaStar Life Insurance Company of New York Variable Annuity Funds D, E, F,
G, H, I (a management investment company registered under the 1940 Act), (vii) ReliaStar
Life Insurance Company of New York Variable Annuity Funds M, P, and Q (a
management investment company registered under the1940 Act), and (viii) ReliaStar Life
Insurance Company of New York Variable Annuity Funds M P (a management investment
company registered under the1940 Act).
 
(b)    The following are the directors and officers of the Principal Underwriter:
 
Name and Principal Positions and Offices with
Business Address Principal Underwriter

Ronald R. Barhorst 		Director and President
4225 Executive Square  
La Jolla, California 92037  

Brian D. Comer1 		Director and Senior Vice President

Randall L. Ciccati1 		Director

Boyd G. Combs2 		Senior Vice President, Tax

Daniel P. Hanlon1 		Senior Vice President

William Jasien3 		Senior Vice President

Louis E. Bachetti 		Senior Vice President
581 Main Street, 4th Fl.  
Woodbridge, NJ 07095  

Pamela Mulvey Barcia1 		Vice President

Robert H. Barley1 		Vice President

M. Bishop Bastien 		Vice President
980 Ninth Street  
Sacramento, CA 95814  

Nancy B. Bocella1 		Vice President

Dianne Bogoian1 		Vice President

J. Robert Bolchoz Vice President
Columbia, South Carolina  

David A. Brounley1 		Vice President

Anthony V. Camp, Jr.1 		Vice President

Mary Kathleen Carey-Reid1 		Vice President

Nancy D. Clifford1 		Vice President

William P. Elmslie 		Vice President
New York, New York  

Joseph J. Elmy2 		Vice President, Tax

Brian K. Haendiges1 		Vice President

Bernard P. Heffernon 		Vice President
10740 Nall Ave., Ste. 120  
Overland Park, KS 66211  

David Kelsey1 		Vice President

Christina Lareau1 		Vice President

George D. Lessner 		Vice President
Richardson, Texas  

Katherine E. Lewis 		Vice President
2675 N Mayfair Road, Ste. 501  
Milwaukee, WI 53226  

David J. Linney 		Vice President
2900 N. Loop W., Ste. 180  
Houston, TX 77092  

Frederick C. Litow2 		Vice President

Mark R. Luckinbill 		Vice President
2841 Plaza Place, Ste. 210  
Raleigh, NC 27612  

Richard T. Mason1 		Vice President

Scott T. Neeb 		Vice President
4600 Ulster Street  
Denver, CO 80237  

David Pendergrass2 		Vice President and Treasurer

Ethel Pippin1 		Vice President

Michael J. Pise1 Vice President

Deborah Rubin3 		Vice President

Todd Smiser 		Vice President
Lisle, Illinois  

Frank W. Snodgrass 		Vice President
150 4th Ave., N., Ste. 410  
Nashville, TN 37219  

Christina M. Starks 		Vice President
2000 21st Avenue NW  
Minot, North Dakota 58703  

S. Bradford Vaughan, Jr. 		Vice President
601 Union St., Ste. 810  
Seattle, WA 98101  

Forrest R. Wilson 		Vice President
2202 N. Westshore Blvd.  
Tampa, Florida 33607  

Judeen T. Wrinn1 		Vice President

Nancy S. Stillman 		Assistant Vice President

Libby J. Soong1 		Chief Compliance Officer

Kristin H. Hultgren1 		Chief Financial Officer

Joy M. Benner4 		Secretary

Randall K. Price4 		Assistant Secretary

Todd Smiser 		Assistant Secretary
2525 Cabot Drive, Suite 100  
Lisle, IL 60532  

John F. Todd1 		Assistant Secretary

Susan M. Vega4 		Assistant Secretary

Glenn A. Black2 		Tax Officer

Terry L. Owens2 		Tax Officer

James H. Taylor2 		Tax Officer

1      The principal business address of these directors and these officers is One Orange Way,
Windsor, Connecticut 06095-4774.
 
2      The principal business address of these officers is 5780 Powers Ferry Road, N.W., Atlanta,
Georgia 30327.
3      The principal business address of these officers is 12701 Fair Lakes Circle, Suite 470,
Fairfax, Virginia 22033.
4      The principal business address of these officers is 20 Washington Avenue South,
Minneapolis, Minnesota 55401.
 
(c) Compensation to Principal Underwriter during last fiscal year:
 
(1) (2) (3) (4) (5)
 
Name of Net Underwriting Compensation    
Principal Discounts and on Redemption Brokerage  
Underwriter Commissions or Annuitization Commissions Compensation*
 
ING Financial          $43,901,529.15
Advisers, LLC        

*      Reflects 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 C of ING Life Insurance and Annuity
Company during 2008.
 
Item 30. Location of Accounts and Records
 
All accounts, books and other documents required to be maintained by Section 31(a) of the 1940
Act and the rules under it relating to the securities described in and issued under this Registration
Statement are maintained by ING Life Insurance and Annuity Company at One Orange Way,
Windsor, Connecticut 06095-4774 and at ING Americas at 5780 Powers Ferry Road, Atlanta,
Georgia 30327-4390.
 
All accounts, books and other documents required to be maintained by Section 31(a) of the 1940
Act and the rules under it relating to the securities described in and issued under this Registration
Statement are located at the offices of the Depositor as follows:
 
                                                 ING Life Insurance and Annuity Company
                                                 One Orange Way, C1S
                                                 Windsor, CT 06095-4774
 
and
 
                                                 Opportunity Plus Service Center
                                                 22 Century Hill Drive
                                                 Suite 101
                                                 Latham, NY 12110-2455
 
                                                 ING Americas
                                                 5780 Powers Ferry Road
                                                 Atlanta, GA 30327-4390

                         ING Americas
                         20 Washington Avenue South
                         Minneapolis, MN 55401
 
Item 31.   Management Services
 
Not applicable
 
Item 32.   Undertakings
 
Registrant hereby undertakes:
 
         (a) to file a post-effective amendment to this registration statement on Form N-4 as
  frequently as is necessary to ensure that the audited financial statements in the
  registration statement are never more than sixteen months old for as long as payments
  under the variable annuity contracts may be accepted;
 
         (b) to include as part of any application to purchase a contract offered by a prospectus
  which is part of this registration statement on Form N-4, a space that an applicant can
  check to request a Statement of Additional Information; and
 
         (c) to deliver any Statement of Additional Information and any financial statements
  required to be made available under this Form N-4 promptly upon written or oral
  request.
 
The Company hereby represents that it is relying upon and complies with the provisions of
Paragraphs (1) through (4) of the SEC Staff’s No-Action Letter dated November 28, 1988 with
respect to language concerning withdrawal restrictions applicable to plans established pursuant
to Section 403(b) of the Internal Revenue Code. See American Council of Life Insurance; SEC
No-Action letter, [1988 WL 1235221 *13 (S.E.C.)].
 
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
 
ING Life Insurance and Annuity Company represents that the fees and charges deducted under
the contracts covered by this registration statement, in the aggregate, are reasonable in relation to
the services rendered, the expenses expected to be incurred, and the risks assumed by the
insurance company.

SIGNATURES
 
As required by the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant,
Variable Annuity Account C of ING Life Insurance and Annuity Company, certifies that it meets the
requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment to its
Registration Statement on Form N-4 (File No. 033-75962) and has duly caused this Post-Effective
Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of
Windsor, State of Connecticut, on the 9th day of April, 2009.
 
                                                                    VARIABLE ANNUITY ACCOUNT C OF
                                                                    ING LIFE INSURANCE AND ANNUITY COMPANY
                                                                            (Registrant)
 
                                                                    By: ING LIFE INSURANCE AND ANNUITY
  COMPANY
  (Depositor)
 
                                                                    By: Richard T. Mason*
  Richard T. Mason
  President
  (principal executive officer)

As required by the Securities Act of 1933, this Post-Effective Amendment No. 54 to the
Registration Statement has been signed by the following persons in the capacities and on the date
indicated.

Signature Title       Date
 
Richard T. Mason* President )
Richard T. Mason (principal executive officer) )
    )
Thomas J. McInerney* Director and Chairman )    April
Thomas J. McInerney   )    9, 2009
    )
Catherine H. Smith* Director and Senior Vice President )
Catherine H. Smith   )
    )
Bridget M. Healy* Director )
Bridget M. Healy   )
    )
Robert G. Leary* Director )
Robert G. Leary   )
    )
David A. Wheat* Director, Executive Vice President and Chief Financial )
David A. Wheat Officer )
    )

Steven T. Pierson*          Senior Vice President and Chief Accounting Officer )
Steven T. Pierson   )

By: /s/ Michael A. Pignatella
  Michael A. Pignatella
*Attorney-in-Fact  

  VARIABLE ANNUITY ACCOUNT C  
  EXHIBIT INDEX
 
Exhibit No. Exhibit
 
99-B.4.4 Endorsement E-403bR-09 to Contracts G-TDA-HH(XC/M) and
  G-TDA-HH(XC/S) and Certificate GTCC-HH(XC/M) ________
 
99-B.4.5 Endorsement E-403bTERM-08 to Contracts G-TDA-HH(XC/M)
  and G-TDA-HH(XC/S) and Certificate GTCC-HH(XC/M) ________
 
99-B.8.10 (Retail) Amended and Restated Selling and Services Agreement
  and Fund Participation Agreement entered into as of May 1, 2008
  between ING Life Insurance and Annuity Company, ING
  Financial Advises, LLC and Fred Alger & Company,
  Incorporated ________
 
99-B.8.11 (Retail) First Amendment dated February 5, 2009 to the
  Amended and Restated Selling and Services Agreement and Fund
  Participation Agreement dated as of May 1, 2008 between ING
  Life Insurance and Annuity Company, ING Financial Advises,
LLC and Fred Alger & Company, Incorporated   ________
 
99-B.8.12 Rule 22c-2 Agreement dated no later than April 16, 2007 and is
  effective as of October 16, 2007 between Fred Alger &
  Company, Incorporated, ING Life Insurance and Annuity
  Company, ING National Trust, ING USA Annuity and Life
  Insurance Company, ReliaStar Life Insurance Company,
  ReliaStar Life Insurance Company of New York, Security Life of
  Denver Insurance Company and Systematized Benefits
  Administrators Inc. ________
 
99-B.8.24 (Retail) Selling and Services Agreement and Fund Participation
  Agreement dated October 5, 2006 among ING Life Insurance and
  Annuity Company, ING Financial Advisers, LLC and BlackRock
  Distributors, Inc. ________
 
99-B.8.25 Rule 22c-2 Agreement dated April 16, 2007 and is effective as of
  October 16, 2007 between BlackRock Distributors, Inc., ING
  Life Insurance and Annuity Company, ING National Trust, ING
  USA Annuity and Life Insurance Company, ReliaStar Life
  Insurance Company, ReliaStar Life Insurance Company of New
  York, Security Life of Denver Insurance Company and
  Systematized Benefits Administrators Inc. ________

Exhibit No. Exhibit  
 
99-B.8.34 (Retail) Fifth Amendment effective as of January 30, 2009 to the
  Participation Agreement dated January 1, 2003, and as amended
  on January 3, 2006, November 1, 2006, February 1, 2007 and
  October 1, 2008, by and among American Funds Distributors,
  Inc., American Funds Service Company, ING Life Insurance and
  Annuity Company, ReliaStar Life Insurance Company and
  ReliaStar Life Insurance Company of New York ________
 
99-B.9 Opinion and Consent of Counsel ________
 
99-B.10 Consent of Independent Registered Public Accounting Firm ________
 
99-B.13.1 Powers of Attorney ________