ASSETS. STATEMENT AS OF SEPTEMBER 30, 2017 OF THE Genworth Life and Annuity Insurance Company. Current Statement Date 4 December 31

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2 ASSETS 1 Assets Current Statement Date December 31 Net Admitted Assets Prior Year Net Nonadmitted Assets (Cols. 1-2) Admitted Assets 1. Bonds 11,353,674, ,353,674,148 11,290,522, Stocks: 2.1 Preferred stocks 46,953, ,000 46,453,970 36,569, Common stocks 277,950,403 5, ,945, ,764, Mortgage loans on real estate: 3.1 First liens 1,764,343, ,764,343,806 1,622,626, Other than first liens Real estate: 4.1 Properties occupied by the company (less $ encumbrances) 10,786, ,786,874 10,307, Properties held for the production of income (less $ encumbrances) Properties held for sale (less $ encumbrances) Cash ($ (69,954,438)), cash equivalents ($ 0 ) and short-term investments ($ 301,062,187 ) 231,107, ,107, ,286, Contract loans (including $ premium notes) 537,030,732 9,226, ,804, ,891, Derivatives 81,037, ,037,889 76,968, Other invested assets 83,043, ,043,556 91,308, Receivables for securities 15,204, ,204,376 8,570, Securities lending reinvested collateral assets 96,242, ,242,894 89,056, Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines 1 to 11) 14,497,376,397 9,731,057 14,487,645,340 14,325,873, Title plants less $ charged off (for Title insurers only) Investment income due and accrued 135,382, ,382, ,804, Premiums and considerations: 15.1 Uncollected premiums and agents' balances in the course of collection 61,106, ,106,145 47,012, Deferred premiums, agents' balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums) 502,041, , ,901, ,827, Accrued retrospective premiums ($ ) and 16. Reinsurance: contracts subject to redetermination ($ ) Amounts recoverable from reinsurers 50,891,413 26,305 50,865,108 48,460, Funds held by or deposited with reinsured companies 386,662, ,662, ,662, Other amounts receivable under reinsurance contracts 30,160, ,160,371 21,630, Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon 799, ,116 19,472, Net deferred tax asset 431,357, ,570, ,786, ,733, Guaranty funds receivable or on deposit 6,999, ,999,275 6,921, Electronic data processing equipment and software 12,177,759 12,162,399 15,360 60, Furniture and equipment, including health care delivery assets ($ ) 634, , Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates Health care ($ ) and other amounts receivable Aggregate write-ins for other than invested assets 26,566, ,200 25,941,349 26,076, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines 12 to 25) 16,142,155, ,890,583 15,875,265,293 15,677,536, From Separate Accounts, Segregated Accounts and Protected Cell Accounts 6,741,551, ,741,551,918 6,770,217, Total (Lines 26 and 27) 22,883,707, ,890,583 22,616,817,211 22,447,754,567 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 11 from overflow page Totals (Lines 1101 through 1103 plus 1198)(Line 11 above) Miscellaneous receivables 16,027, ,391 15,816,911 14,975, Premium tax refunds receivable 7,508,567 67,439 7,441,128 8,273, Business services agreement receivable 2,683, ,683,310 2,827, Summary of remaining write-ins for Line 25 from overflow page 347, , Totals (Lines 2501 through 2503 plus 2598)(Line 25 above) 26,566, ,200 25,941,349 26,076,008 2

3 LIABILITIES, SURPLUS AND OTHER FUNDS 1 Current Statement Date 2 December 31 Prior Year 1. Aggregate reserve for life contracts $ 11,884,078,611 less $ included in Line 6.3 (including $ 979,196,320 Modco Reserve) 11,884,078,611 11,794,982, Aggregate reserve for accident and health contracts (including $ 0 Modco Reserve) 1,547,816 1,833, Liability for deposit-type contracts (including $ 0 Modco Reserve) 636,880, ,845, Contract claims: 4.1 Life 82,665,131 87,428, Accident and health 13,711 49, Policyholders dividends $ 0 and coupons $ 0 due and unpaid 334, , Provision for policyholders dividends and coupons payable in following calendar year - estimated amounts: 6.1 Dividends apportioned for payment (including $ Modco) 6.2 Dividends not yet apportioned (including $ 0 Modco) 6.3 Coupons and similar benefits (including $ 0 Modco) 7. Amount provisionally held for deferred dividend policies not included in Line 6 8. Premiums and annuity considerations for life and accident and health contracts received in advance less $ 0 discount; including $ 10,857 accident and health premiums 8,133,537 8,283, Contract liabilities not included elsewhere: 9.1 Surrender values on canceled contracts 9.2 Provision for experience rating refunds, including the liability of $ 0 accident and health experience rating refunds of which $ 0 is for medical loss ratio rebate per the Public Health Service Act 9.3 Other amounts payable on reinsurance, including $ 5,269,883 assumed and $ 130,236,671 ceded 135,506, ,885, Interest Maintenance Reserve 34,257,754 32,551, Commissions to agents due or accrued-life and annuity contracts $ 138,928, accident and health $ 8,400 and deposit-type contract funds $ 0 147, , Commissions and expense allowances payable on reinsurance assumed 284, , General expenses due or accrued 1,273,900 2,857, Transfers to Separate Accounts due or accrued (net) (including $ (16,295,519) accrued for expense allowances recognized in reserves, net of reinsured allowances) (35,385,185) (42,695,006) 14. Taxes, licenses and fees due or accrued, excluding federal income taxes 9,839,804 10,689, Current federal and foreign income taxes, including $ 7,896,365 on realized capital gains (losses) 214, Net deferred tax liability Unearned investment income 7,697,277 8,306, Amounts withheld or retained by company as agent or trustee 11,849,216 14,559, Amounts held for agents' account, including $ 0 agents' credit balances 19. Remittances and items not allocated 23,550,452 25,298, Net adjustment in assets and liabilities due to foreign exchange rates 21. Liability for benefits for employees and agents if not included above 22. Borrowed money $ 0 and interest thereon $ Dividends to stockholders declared and unpaid 24. Miscellaneous liabilities: Asset valuation reserve 101,107, ,505, Reinsurance in unauthorized and certified ($ 0 ) companies 4, , Funds held under reinsurance treaties with unauthorized and certified ($ 0 ) reinsurers 1,120,871,615 1,087,790, Payable to parent, subsidiaries and affiliates 3,054,199 3,382, Drafts outstanding Liability for amounts held under uninsured plans Funds held under coinsurance 124,533, ,322, Derivatives 1,819,813 1,151, Payable for securities 18,257,246 3,932, Payable for securities lending 96,242,894 89,056, Capital notes $ 0 and interest thereon $ Aggregate write-ins for liabilities 19,883,366 22,629, Total liabilities excluding Separate Accounts business (Lines 1 to 25) 14,288,665,091 14,190,086, From Separate Accounts Statement 6,741,551,918 6,770,217, Total liabilities (Lines 26 and 27) 21,030,217,009 20,960,304, Common capital stock 25,651,000 25,651, Preferred capital stock 31. Aggregate write-ins for other than special surplus funds Surplus notes 33. Gross paid in and contributed surplus 1,456,618,456 1,456,618, Aggregate write-ins for special surplus funds Unassigned funds (surplus) 104,330,746 5,181, Less treasury stock, at cost: shares common (value included in Line 29 $ 0 ) shares preferred (value included in Line 30 $ 0 ) 37. Surplus (Total Lines ) (including $ 0 in Separate Accounts Statement) 1,560,949,202 1,461,799, Totals of Lines 29, 30 and 37 1,586,600,202 1,487,450, Totals of Lines 28 and 38 (Page 2, Line 28, Col. 3) 22,616,817,211 22,447,754,567 DETAILS OF WRITE-INS Derivatives collateral and interest payable 19,883,366 22,629, Summary of remaining write-ins for Line 25 from overflow page Totals (Lines 2501 through 2503 plus 2598)(Line 25 above) 19,883,366 22,629, Summary of remaining write-ins for Line 31 from overflow page Totals (Lines 3101 through 3103 plus 3198)(Line 31 above) Summary of remaining write-ins for Line 34 from overflow page Totals (Lines 3401 through 3403 plus 3498)(Line 34 above) 0 0 3

4 SUMMARY OF OPERATIONS 1 Current Year 2 Prior Year To Date 3 Prior Year Ended December 31 To Date 1. Premiums and annuity considerations for life and accident and health contracts 9,547,342,899 (2,443,006,378) (2,356,561,164) 2. Considerations for supplementary contracts with life contingencies 177,926,288 14,721,169 18,072, Net investment income 474,330, ,010, ,589, Amortization of Interest Maintenance Reserve (IMR) 44,787 (2,425,164) (2,846,853) 5. Separate Accounts net gain from operations excluding unrealized gains or losses 6. Commissions and expense allowances on reinsurance ceded 109,279,256 3,291,164,275 3,325,320, Reserve adjustments on reinsurance ceded (60,763,059) (387,648,303) (404,556,569) 8. Miscellaneous Income: 8.1 Income from fees associated with investment management, administration and contract guarantees from Separate Accounts 93,973,778 95,679, ,237, Charges and fees for deposit-type contracts , Aggregate write-ins for miscellaneous income 21,170,023 19,659,911 26,103, Totals (Lines 1 to 8.3) 10,363,305,428 1,176,156,522 1,474,372, Death benefits 337,116, ,294, ,198, Matured endowments (excluding guaranteed annual pure endowments) 1,995, ,546 1,376, Annuity benefits 427,367, ,719, ,885, Disability benefits and benefits under accident and health contracts 3,079,939 3,530,376 4,483, Coupons, guaranteed annual pure endowments and similar benefits 15. Surrender benefits and withdrawals for life contracts 736,195, ,879, ,743, Group conversions 17. Interest and adjustments on contract or deposit-type contract funds (321,634,924) 19,138,768 25,208, Payments on supplementary contracts with life contingencies 16,086,837 8,704,176 12,097, Increase in aggregate reserves for life and accident and health contracts 88,809,932 (382,929,902) (333,393,358) 20. Totals (Lines 10 to 19) 1,289,017, ,233,675 1,277,601, Commissions on premiums, annuity considerations, and deposit-type contract funds (direct business only) 54,396,580 78,343,126 97,876, Commissions and expense allowances on reinsurance assumed 169,763, ,124, ,810, General insurance expenses 104,420, ,384, ,609, Insurance taxes, licenses and fees, excluding federal income taxes 20,730,080 31,967,431 33,018, Increase in loading on deferred and uncollected premiums (29,090,949) 66,014,537 85,331, Net transfers to or (from) Separate Accounts net of reinsurance (455,161,686) (441,890,639) (575,783,873) 27. Aggregate write-ins for deductions 9,084,487, ,442 (170,319) 28. Totals (Lines 20 to 27) 10,238,563,171 1,171,005,321 1,547,294, Net gain from operations before dividends to policyholders and federal income taxes (Line 9 minus Line 28) 124,742,257 5,151,201 (72,921,656) 30. Dividends to policyholders Net gain from operations after dividends to policyholders and before federal income taxes (Line 29 minus Line 30) 124,742,257 5,151,201 (72,921,656) 32. Federal and foreign income taxes incurred (excluding tax on capital gains) 12,665, ,783, ,469, Net gain from operations after dividends to policyholders and federal income taxes and before realized capital gains or (losses) (Line 31 minus Line 32) 112,076,589 (171,632,238) (193,391,410) 34. Net realized capital gains (losses) (excluding gains (losses) transferred to the IMR) less capital gains tax of $ (7,794,110) (excluding taxes of $ 1,858,489 transferred to the IMR) 33,145,621 (1,321,610) (107,854,148) 35. Net income (Line 33 plus Line 34) 145,222,210 (172,953,848) (301,245,558) CAPITAL AND SURPLUS ACCOUNT 36. Capital and surplus, December 31, prior year 1,487,450,560 1,668,780,174 1,668,780, Net income (Line 35) 145,222,210 (172,953,848) (301,245,558) 38. Change in net unrealized capital gains (losses) less capital gains tax of $ (6,402,002) (7,463,345) 45,369,350 34,055, Change in net unrealized foreign exchange capital gain (loss) 40. Change in net deferred income tax (24,072,990) (239,751,433) (209,492,423) 41. Change in nonadmitted assets 13,328, ,939, ,940, Change in liability for reinsurance in unauthorized and certified companies 298,167 59,944,728 59,664, Change in reserve on account of change in valuation basis, (increase) or decrease Change in asset valuation reserve (601,521) (11,147,527) (10,898,899) 45. Change in treasury stock Surplus (contributed to) withdrawn from Separate Accounts during period 47. Other changes in surplus in Separate Accounts Statement 48. Change in surplus notes 49. Cumulative effect of changes in accounting principles 50. Capital changes: 50.1 Paid in 50.2 Transferred from surplus (Stock Dividend) 50.3 Transferred to surplus 51. Surplus adjustment: 51.1 Paid in 0 (28,553,975) (28,553,975) 51.2 Transferred to capital (Stock Dividend) 51.3 Transferred from capital 51.4 Change in surplus as a result of reinsurance (27,561,369) 80,793,716 68,744, Dividends to stockholders 53. Aggregate write-ins for gains and losses in surplus 0 (7,544,610) (7,544,610) 54. Net change in capital and surplus for the year (Lines 37 through 53) 99,149,642 (51,903,717) (181,329,614) 55. Capital and surplus, as of statement date (Lines ) 1,586,600,202 1,616,876,457 1,487,450,560 DETAILS OF WRITE-INS Fund manager rebates 12,965,122 13,452,964 17,912, Interest income on funds withheld 7,666,753 5,704,879 7,522, Miscellaneous income 538, , , Summary of remaining write-ins for Line 8.3 from overflow page Totals (Lines through plus ) (Line 8.3 above) 21,170,023 19,659,911 26,103, Modco adjustment on reinsurance assumed 9,058,008,369 (40,546,965) (50,281,125) Interest expense on funds withheld 28,180,098 25,091,302 33,827, IMR transfer (1,700,578) 16,283,105 16,283, Summary of remaining write-ins for Line 27 from overflow page Totals (Lines 2701 through 2703 plus 2798)(Line 27 above) 9,084,487, ,442 (170,319) Reclassification of taxes between unassigned surplus and paid in capital 0 (7,544,610) (7,544,610) Summary of remaining write-ins for Line 53 from overflow page Totals (Lines 5301 through 5303 plus 5398)(Line 53 above) 0 (7,544,610) (7,544,610) 4

5 Cash from Operations CASH FLOW 1 Current Year To Date 2 Prior Year To Date 3 Prior Year Ended December Premiums collected net of reinsurance 395,349, ,526, ,386, Net investment income 441,968, ,483, ,384, Miscellaneous income 131,099, ,516, ,594, Total (Lines 1 to 3) 968,418,054 1,142,526,215 1,124,365, Benefit and loss related payments 1,484,088,785 1,175,866,149 1,145,294, Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts (462,471,507) (436,517,331) (570,277,443) 7. Commissions, expenses paid and aggregate write-ins for deductions (36,400,624) 256,170, ,123, Dividends paid to policyholders 13,022 9,338 10, Federal and foreign income taxes paid (recovered) net of $ tax on capital gains (losses) (17,403,555) 139,302, ,711, Total (Lines 5 through 9) 967,826,121 1,134,831,046 1,026,863, Net cash from operations (Line 4 minus Line 10) 591,933 7,695,169 97,502,496 Cash from Investments 12. Proceeds from investments sold, matured or repaid: 12.1 Bonds 1,171,998,255 1,142,966,147 1,704,238, Stocks 9,180, ,824, ,069, Mortgage loans 113,029, ,932, ,828, Real estate 0 17,768,752 17,768, Other invested assets 7,254,755 8,010,226 10,135, Net gains or (losses) on cash, cash equivalents and short-term investments Miscellaneous proceeds 51,393,749 9,310,322 6,694, Total investment proceeds (Lines 12.1 to 12.7) 1,352,856,484 1,655,812,500 2,263,735, Cost of investments acquired (long-term only): 13.1 Bonds 1,044,888,298 1,117,259,050 1,683,006, Stocks 17,010, ,637, ,548, Mortgage loans 206,258, ,475, ,102, Real estate 792,345 25,000 56, Other invested assets 44,011 1,450,705 1,450, Miscellaneous applications 33,521,550 70,313, ,403, Total investments acquired (Lines 13.1 to 13.6) 1,302,516,139 1,442,161,004 2,097,567, Net increase (or decrease) in contract loans and premium notes (6,990,752) 36,554,654 30,908, Net cash from investments (Line 12.8 minus Line 13.7 and Line 14) 57,331, ,096, ,259, Cash provided (applied): Cash from Financing and Miscellaneous Sources 16.1 Surplus notes, capital notes Capital and paid in surplus, less treasury stock 0 (28,553,975) (28,553,975) 16.3 Borrowed funds Net deposits on deposit-type contracts and other insurance liabilities (142,702,853) (154,937,546) (213,437,220) 16.5 Dividends to stockholders Other cash provided (applied) 14,601, ,540, ,819, Net cash from financing and miscellaneous sources (Line 16.1 through Line 16.4 minus Line 16.5 plus Line 16.6) (128,101,585) (75,951,199) (130,172,185) RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 18. Net change in cash, cash equivalents and short-term investments (Line 11, plus Lines 15 and 17) (70,178,555) 108,840, ,589, Cash, cash equivalents and short-term investments: 19.1 Beginning of year 301,286, ,696, ,696, End of period (Line 18 plus Line 19.1) 231,107, ,537, ,286,304 Note: Supplemental disclosures of cash flow information for non-cash transactions: Securities exchanges bond proceeds (Line 12.1) (56,344,448) (51,780,657) (123,519,030) Securities exchanges bonds acquired (Line 13.1) (56,344,448) (51,780,657) (123,519,030) Tax sharing agreement transfer of taxes payable (Line 9) (5,244,749) (3,283,732) (3,915,323) Tax sharing agreement transfer of taxes payable (Line 12.2) (5,244,749) (3,283,732) (3,915,323) Interest capitalization (Line 2) (13,543,719) (16,168,113) (21,157,979) Interest capitalization (Line 13.1) (13,543,719) (16,168,113) (21,157,979) Reinsurance treaties non-cash transaction GLIC Term (Line 1) (64,459,927) Reinsurance treaties non-cash transaction GLIC Term (Line 7) 48,600, Reinsurance treaties non-cash transaction GLIC Term (Line 13.1) (7,666,806) Reinsurance treaties non-cash transaction GLIC Term (Line 13.3) (8,193,121) 5

6 Note: Supplemental disclosures of cash flow information for non-cash transactions: Reinsurance treaties non-cash transaction GLIC UL (Line 1) (100,791,870) Reinsurance treaties non-cash transaction GLIC UL (Line 7) 4,900, Reinsurance treaties non-cash transaction GLIC UL (Line 13.1) (79,789,704) Reinsurance treaties non-cash transaction GLIC UL (Line 13.3) (14,415,946) Reinsurance treaties non-cash transaction GLIC SPWL (Line 1) (134,258,373) Reinsurance treaties non-cash transaction GLIC SPWL (Line 7) 2,800, Reinsurance treaties non-cash transaction GLIC SPWL (Line 13.1) (89,773,876) Reinsurance treaties non-cash transaction GLIC SPWL (Line 13.3) (26,077,973) Reinsurance treaties non-cash transaction GLIC SPWL (Line 14) 14,903, Reinsurance treaties non-cash transaction GLIC FDA Modco (Line 1) (7,760,407,556) Reinsurance treaties non-cash transaction GLIC FPA Modco (Line 5) (361,050,646) Reinsurance treaties non-cash transaction GLIC FDA and FPA Modco (Line 7) 8,121,458, Reinsurance treaties non-cash transaction GLIC Recapture FDA Modco (Line 1) 263,392, Reinsurance treaties non-cash transaction GLIC Recapture FDA Modco (Line 7) (263,392,546) Reinsurance treaties non-cash transaction GLIC COLI (Line 1) (1,523,119,871) Reinsurance treaties non-cash transaction GLIC COLI (Line 7) 1,523,119, Reinsurance treaties non-cash transaction (Line 1) 2,919,268,394 2,919,268, Reinsurance treaties non-cash transaction (Line 3) (2,919,268,394) (2,919,268,394) Reinsurance treaties non-cash transaction UL Recapture (Line 1) (318,134,583) (318,134,583) Reinsurance treaties non-cash transaction UL Recapture (Line 5) 318,134, ,134, Reinsurance treaties non-cash transaction TLC-UL Recapture (Line 3) (99,999,694) (99,999,694) Reinsurance treaties non-cash transaction TLC-UL Recapture (Line 7) 376,065, ,065, Transfer of bonds to affiliates (Line 12.1) (273,037,764) (276,065,807) Transfer of bonds to affiliates (Line 12.3) (1,336,638) (1,336,638) Transfer of bonds to affiliates (Line 16.6) 1,336,638 1,336, Transfer of bonds to Separate Accounts (Line 12.1) (8,265,316) Transfer of bonds from Separate Accounts (Line 13.1) 7,525, Transfer of bonds to Separate Accounts (Line 16.6) (8,265,316) Transfer of bonds from Separate Accounts (Line 16.6) 7,525,

7 EXHIBIT 1 DIRECT PREMIUMS AND DEPOSIT-TYPE CONTRACTS 1 Current Year To Date 2 Prior Year To Date 3 Prior Year Ended December Industrial life 58,216 65,102 78, Ordinary life insurance 924,183, ,361,333 1,271,163, Ordinary individual annuities 23,094, ,986, ,396, Credit life (group and individual) 0 5. Group life insurance 1,976,542 2,283,800 3,352, Group annuities 1,357,809 1,561,154 2,154, A & H - group 40 23,739 23, A & H - credit (group and individual) 0 9. A & H - other 37,596,502 38,255,580 51,078, Aggregate of all other lines of business Subtotal 988,266,892 1,138,536,784 1,464,248, Deposit-type contracts 0 2,507,742 2,507, Total 988,266,892 1,141,044,526 1,466,755,979 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 10 from overflow page Totals (Lines 1001 through 1003 plus 1098)(Line 10 above)

8 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS Note# Description Page # 1 Summary of Significant Accounting Policies and Going Concern... 2 Accounting Changes and Corrections of Errors... 3 Business Combinations and Goodwill... 4 Discontinued Operations... 5 Investments... 6 Joint Ventures, Partnerships and Limited Liability Companies... 7 Investment Income... 8 Derivative Instruments... 9 Income Taxes Information Concerning Parent, Subsidiaries, Affiliates and Other Related Parties Debt Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans Capital and Surplus, Shareholders Dividend Restrictions and Quasi-Reorganizations Liabilities, Contingencies and Assessments Leases Information About Financial Instruments With Off-Balance Sheet Risk And Financial Instruments With Concentrations of Credit Risk Sale, Transfer and Servicing of Financial Assets and Extinguishments of Liabilities Gain or Loss to the Reporting Entity from Uninsured Plans and the Uninsured Portion of Partially Insured Plans Direct Premium Written/Produced by Managing General Agents/Third Party Administrators Fair Value Measurements Other Items Events Subsequent Reinsurance Retrospectively Rated Contracts & Contracts Subject to Redetermination Change in Incurred Losses and Loss Adjustment Expenses Intercompany Pooling Arrangements Structured Settlements Health Care Receivables Participating Policies Premium Deficiency Reserves Reserves for Life Contracts and Annuity Contracts Analysis of Annuity Actuarial Reserves and Deposit Type Liabilities by Withdrawal Characteristics Premiums and Annuity Considerations Deferred and Uncollected Separate Accounts Loss/Claim Adjustment Expenses

9 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies and Going Concern A. Accounting Practices The accompanying statutory financial statements of Genworth Life and Annuity Insurance Company (the Company ) have been prepared on the basis of accounting practices prescribed or permitted by the Bureau of Insurance of the Commonwealth of Virginia (the "Virginia Bureau"). The Virginia Bureau requires insurance companies domiciled in the state to prepare their statutory financial statements in accordance with the National Association of Insurance Commissioners ( NAIC ) Accounting Practices and Procedures Manual ( NAIC SAP ) subject to any deviations prescribed or permitted by the Virginia Bureau. A reconciliation of the Company s net income (loss) and capital and surplus between NAIC SAP and practices prescribed or permitted by the Virginia Bureau is shown below: NET INCOME (LOSS) (1) Company state basis (Page 4, Line 35, Columns 1&2) (2) State Prescribed Practices that increase/(decrease) NAIC SAP: (3) State Permitted Practices that increase/(decrease) NAIC SAP: (4) NAIC SAP (1-2-3=4) SURPLUS (5) Company state basis (Page 3, Line 38, Columns 1&2) (6) State Prescribed Practices that increase/(decrease) NAIC SAP: (7) State Permitted Practices that increase/(decrease) NAIC SAP: (8) NAIC SAP (5-6-7=8) SSAP # F/S Page F/S Line # September 30, 2017 December 31, 2016 XXX XXX XXX $ 145,222,210 $ (301,245,558) XXX XXX XXX $ 145,222,210 $ (301,245,558) XXX XXX XXX $1,586,600,202 $ 1,487,450,560 XXX XXX XXX $1,586,600,202 $ 1,487,450,560 C. Accounting Policy (6) Loan-backed bonds and structured securities ( LBaSS ) other than non-agency residential mortgage-backed securities are stated at amortized cost using the scientific method except where the NAIC designation has fallen to 6 and the fair value has fallen below amortized cost, in which case they are carried at fair value. Amortization of LBaSS is based on prepayment assumptions that are updated at least annually. Significant changes of estimated cash flows from original purchase assumptions are accounted for using the retrospective adjustment method for all such securities except for securities for which the Company recorded other-than-temporary impairment ( OTTI ) charges. In such instances, the prospective method is used. D. Going Concern As of September 30, 2017, the Company's management has not raised any doubts about the entity's ability to continue as a going concern. Note 2 - Accounting Changes and Corrections of Errors No significant change. Note 3 - Business Combinations and Goodwill No significant change. Note 4 - Discontinued Operations No significant change. Note 5 - Investments D. Loan-Backed Securities (1) Prepayment assumptions for mortgage-backed/asset-backed structured securities were obtained from third-party providers, broker dealer research reports or internal estimates. (2) The Company had no loaned-backed securities with recognized OTTI where the Company had the intent to sell or does not have the intent and ability to retain the investment for a period of time sufficient to recover the amortized cost basis as of September 30, (3) The Company had no loan-backed securities which recognized OTTI as of September 30,

10 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS (4) All impaired securities (fair value is less than cost or amortized cost) for which an OTTI has not been recognized in earnings as a realized loss (including securities with a recognized OTTI for non-interest related declines when a nonrecognized interest related impairment remains) as of September 30, 2017: a. The aggregate amount of unrealized losses: 1. Less than 12 months $ 7,603, months or longer 4,275,147 b. The aggregate related fair value of securities with unrealized losses: 1. Less than 12 months $ 389,414, months or longer 82,870,394 (5) The Company regularly evaluates securities in an unrealized loss position for OTTI. For debt securities, the Company considers all available information relevant to the collectability of the security, including information about past events, current conditions, and reasonable and supportable forecasts, when developing the estimate of cash flows expected to be collected. More specifically for mortgage-backed and asset-backed securities, the Company also utilizes performance indicators of the underlying assets including defaults or delinquency rates, loans to collateral value ratio, third-party credit enhancements, current levels of subordination, vintage and other relevant characteristics of the security or underlying assets to develop the Company s estimate of cash flows. Estimating the cash flows expected to be collected is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral. Where possible, this data is benchmarked against third-party sources. E. Repurchase Agreements and/or Securities Lending Transactions (3) Collateral received as of September 30, 2017: b. The fair value of that collateral and of the portion of that collateral that it has sold or repledged. $ 96,242,894 Collateral received as of December 31, 2016: b. The fair value of that collateral and of the portion of that collateral that it has sold or repledged. $ 89,056,030 I. Working Capital Finance Investments The Company does not have any working capital finance investments as of September 30, J. Offsetting and Netting of Assets and Liabilities The Company did not have any derivatives, repurchase and reverse repurchase, and securities borrowing and securities lending assets and liabilities that were offset and reported net during the reporting period. Note 6 - Joint Ventures, Partnerships and Limited Liability Companies No significant change. Note 7 - Investment Income No significant change. Note 8 - Derivative Instruments A. Discussion of the market risk, credit risk and cash requirements of the derivative Following the downgrades of the Company in September 2017 and October 2017, the Company actively responded to the risk in its derivatives portfolio arising from the right of the Company s counterparties to terminate their bilateral overthe-counter derivatives transactions with the Company as a result of the downgrade. The Company notified its counterparties of the downgrades to determine whether they would exercise their rights to terminate the transactions, agree to maintain the transactions with it under revised terms or permit the Company to move the transactions to clearing. Although some counterparties have indicated that they reserve their rights to take action against the Company, only one counterparty has done so. During October 2017, this counterparty terminated approximately $800,000,000 notional with the Company, which was re-hedged using financial futures. The Company continues to discuss the downgrades with the other counterparties. Note 9 - Income Taxes The Company has special tax agreements with its subsidiaries, River Lake Insurance Company VII ("RLIC VII") and River Lake Insurance Company VIII ("RLIC VIII"). The agreements obligate the Company to receive or make payments on behalf of RLIC VII and RLIC VIII for Federal income tax amounts receivable or payable by RLIC VII and RLIC VIII under a separate Tax Allocation Agreement. The Company accounts for these payments as additional investment in common stock of affiliates. As of September 30, 2017, the Company has recorded a tax receivable and decrease in investment in common stock of affiliates of $1,956,275 and $3,288,474 for RLIC VII and RLIC VIII, respectively. 7. 2

11 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS Note 10 - Information Concerning Parent, Subsidiaries, Affiliates and Other Related Parties In April 2017, the Company received bonds and mortgage loans from Genworth Life Insurance Company ("GLIC") under various reinsurance transactions discussed in Note 23. On June 26, 2017, one security with a book value of $7,084,550 and accrued interest of $1,244 was sold by the Company to Genworth Mortgage Insurance Corporation in exchange for cash. Note 11 - Debt B. Federal Home Loan Bank ("FHLB") Agreements (1) The Company is a member of FHLB Atlanta. Through its membership, the Company has periodically issued funding agreements to FHLB Atlanta. There were no outstanding liabilities as of September 30, 2017 or December 31, When active, the Company uses these funds for asset-liability management in an investment spread strategy, consistent with its other investment spread programs. The Company records the funds under Statements of Statutory Accounting Principles ("SSAP") No. 52, Deposit Type Contracts, consistent with its accounting for other deposit type contracts. It is not part of the Company s strategy to utilize these funds for operations, and any funds obtained from the FHLB Atlanta for use in general operations would be accounted for under SSAP No. 15, Debt and Holding Company Obligations, as borrowed money. The Company has a Letter of Credit ("LoC") with FHLB Atlanta in the amount of $28,214,806, none of which has been drawn upon as of September 30, The table below indicates the amount of FHLB Atlanta stock purchased, collateral pledged, assets and liabilities related to the agreement with FHLB Atlanta as of September 30, 2017 and December 31, The Company s borrowing capacity, including an issuance of a LoC, is subject to a broad regulatory restriction that limits an insurer from pledging more than 7.0% of its net admitted assets. (2) The tables below indicate the amount of FHLB Atlanta stock purchased, collateral pledged, assets and liabilities related to the agreement with FHLB Atlanta as of September 30, 2017 and December 31, FHLB Capital Stock a. Aggregate totals 1. As of September 30, 2017: 1 Total (2+3) 2 General account 3 Separate account (a) Membership stock Class A $ $ $ (b) Membership stock Class B 15,000,000 15,000,000 (c) Activity stock (d) Excess stock (e) Aggregate total (a+b+c+d) 15,000,000 15,000,000 (f) Actual or estimated borrowing capacity as determined by the insurer 1,000,000,000 XXX XXX 2. As of December 31, 2016: 1 Total (2+3) 2 General account 3 Separate account (a) Membership stock Class A $ $ $ (b) Membership stock Class B 15,000,000 15,000,000 (c) Activity stock (d) Excess stock (e) Aggregate total (a+b+c+d) 15,000,000 15,000,000 (f) Actual or estimated borrowing capacity as determined by the insurer 1,000,000,000 XXX XXX b. Membership stock (Class A and B) eligible and not eligible for redemption as of September 30, 2017: Eligible for redemption Membership stock 1 Current year total ( ) 2 Not eligible for redemption 3 Less than 6 months 4 6 months to less than 1 year 5 1 to less than 3 years 6 3 to 5 years 1. Class A $ $ $ $ $ $ 2. Class B 15,000,000 15,000,

12 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS (3) Collateral Pledged to FHLB a. Amount pledged as of September 30, 2017 and December 31, 2016: Fair value Carrying value Aggregate total borrowing 1.Current year total general and separate accounts total collateral pledged (Lines 2+3) $ 47,297,436 $ 35,772,060 $ 2. Current year general account total collateral pledged 47,297,436 35,772, Current year separate accounts total collateral pledged 4. Prior year-end year total general and separate accounts total collateral pledged 45,142,534 35,412,667 b. Maximum amount pledged during reporting period ending September 30, 2017 and December 31, 2016: Fair value Carrying value Amount borrowed at time of maximum collateral 1. Current year total general and separate accounts maximum collateral pledged (Lines 2+3) $ 47,297,436 $ 35,772,060 $ 2. Current year general account maximum collateral pledged 47,297,436 35,772, Current year separate accounts maximum collateral pledged 4. Prior year-end year total general and separate accounts maximum collateral pledged 646,630, ,395,374 (4) The Company does not have any outstanding borrowings as of September 30, Note 12 - Retirement Plans, Deferred Compensation, Postemployment Benefits and Compensated Absences and Other Postretirement Benefit Plans The Company has no employees, however, it is allocated costs for services provided by employees of affiliated companies. A. Defined Benefit Plan The Company does not have any employees. Note 13 - Capital and Surplus, Shareholders Dividend Restrictions and Quasi-Reorganizations No significant change. 7. 4

13 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS Note 14 - Liabilities, Contingencies and Assessments F. All Other Contingencies In April 2017, the Company was named as a defendant in a putative class action lawsuit captioned Avazian, et al v. Genworth Life and Annuity Insurance Company, et al, in the United States District Court for the Central District of California. Plaintiff alleges breach of contract and breach of the covenant of good faith and fair dealing based upon the Company's termination of plaintiff's life insurance policy for nonpayment of premium. Plaintiff alleges that the termination for nonpayment of premium failed to comply with certain notice requirements of the California Insurance Code and seeks certification as a California class action on behalf of all insureds and beneficiaries of life insurance policies issued or delivered by the Company in California before January 1, 2013 who lost either their coverage or their ability to make a claim because of the termination of their policies by the Company for nonpayment of premium, and further seeks unspecified damages, prejudgment and post-judgment interest, punitive damages, fees, costs and such other relief as the court deems just and proper. On June 23, 2017, the Company filed a motion to dismiss the complaint. On July 10, 2017, the plaintiff filed a notice of voluntary dismissal without prejudice. On July 12, 2017, the court ordered that this action and all claims therein, are dismissed in their entirety without prejudice. In August 2017, plaintiff re-filed a similar putative class action lawsuit, along with another plaintiff, Michael Torres, captioned Avazian, et al v. Genworth Life and Annuity Insurance Company, et al, in the Superior Court for the State of California, County of Los Angeles, naming the Company as a defendant. Plaintiffs allege similar causes of action as the previously dismissed lawsuit, and have added a claim for alleged violation of California Business and Professions Code. On August 31, 2017, the Company filed notice of the removal of this matter to the United States District Court for the Central District of California. See Note 22 for additional information. Note 15 - Leases No significant change. Note 16 - Information About Financial Instruments With Off-Balance Sheet Risk And Financial Instruments With Concentrations of Credit Risk No significant change. Note 17 - Sale, Transfer and Servicing of Financial Assets and Extinguishments of Liabilities B. Transfer and Servicing of Financial Assets (2) The Company does not have any servicing assets or liabilities. (4) The Company did not have any securitizations, asset-based financing arrangements or similar transfers during the reporting period. C. Wash Sales The Company did not have any wash sales in the statement period. Note 18 - Gain or Loss to the Reporting Entity from Uninsured Plans and the Uninsured Portion of Partially Insured Plans No significant change. Note 19 - Direct Premium Written/Produced by Managing General Agents/Third Party Administrators No significant change. 7. 5

14 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS Note 20 - Fair Value Measurements All assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 Quoted prices for identical instruments in active markets. Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Instruments whose significant value drivers are unobservable. Refer to No. 4 below for discussion of valuation techniques. A. Fair Value Classifications (1) The following table sets forth the Company s assets and liabilities that were measured at fair value as of September 30, 2017: Description for each class of asset or liability Level 1 Level 2 Level 3 Total a. Assets at fair value Bonds Commercial Mortgage-Backed $ $ 167,534 $ $ 167,534 Total Bonds 167, ,534 Common stocks Industrial and miscellaneous 15,000,000 15,000,000 Total common stocks 15,000,000 15,000,000 Derivative assets Equity index options 80,946,464 80,946,464 Interest rate swaps 68,707 68,707 Credit default swaps 22,717 22,717 Total derivatives 91,424 80,946,464 81,037,888 Separate account assets 6,687,007,466 41,176,475 4,397,887 6,732,581,828 Total assets at fair value $ 6,687,007,466 $ 41,435,433 $ 100,344,351 $ 6,828,787,250 b. Liabilities at fair value Derivative liabilities Equity return swaps $ $ 1,819,813 $ $ 1,819,813 Total derivative liabilities 1,819,813 1,819,813 Total liabilities at fair value $ $ 1,819,813 $ $ 1,819,

15 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS The following table sets forth the Company s assets and liabilities that were measured at fair value as of December 31, 2016: Description for each class of asset or liability Level 1 Level 2 Level 3 Total a. Assets at fair value Bonds Commercial Mortgage-Backed $ $ 164,577 $ $ 164,577 Total Bonds 164, ,577 Common stocks Industrial and miscellaneous 15,000,000 15,000,000 Total common stocks 15,000,000 15,000,000 Derivative assets Equity index options 71,959,074 71,959,074 Interest rate swaps 176, ,608 Credit default swaps 58,057 58,057 Total derivatives 234,665 71,959,074 72,193,739 Separate account assets 6,712,359,610 43,330,781 5,050,882 6,760,741,273 Total assets at fair value $ 6,712,359,610 $ 43,730,023 $ 92,009,956 $ 6,848,099,589 b. Liabilities at fair value Derivative liabilities Equity index options $ $ $ 14,262 $ 14,262 Equity return swaps 1,137,697 1,137,697 Total derivative liabilities 1,137,697 14,262 1,151,959 Total liabilities at fair value $ $ 1,137,697 $ 14,262 $ 1,151,959 (2) Level 3 Classifications The following table presents additional information about assets and liabilities measured at fair value for which the Company has utilized significant unobservable (Level 3) inputs to determine fair value as of September 30, 2017: Description a. Assets: Beginning balance as of July 1, 2017 Transfers into Level 3 Transfers out of Level 3 Total gains and (losses) included in net income(loss) Total gains and (losses) included in surplus Purchases Issuances Sales Settlements Ending balance as of September 30, 2017 Common stocks $ 15,000,000 $ $ $ $ $ $ $ $ $ 15,000,000 Derivatives 80,787,922 15,917, ,778 14,965,553 (31,081,638) 80,946,464 Separate account assets 4,633,366 (14,845) (42,466) (178,168) 4,397,887 Total Assets $ 100,421,288 $ $ $ 15,917,849 $ 341,933 $ 14,965,553 $ $ (31,124,104) $ (178,168) $ 100,344,351 b. Liabilities: Derivatives $ 11,411 $ $ $ $ (11,411) $ $ $ $ $ Total Liabilities $ 11,411 $ $ $ $ (11,411) $ $ $ $ $ The following table presents additional information about assets and liabilities measured at fair value for which the Company has utilized significant unobservable (Level 3) inputs to determine fair value as of December 31, 2016: Description a. Assets: Beginning balance as of January 1, 2016 Transfers into Level 3(a) Transfers out of Level 3(b) Total gains and (losses) included in net income(loss) Total gains and (losses) included in surplus Purchases Issuances Sales Settlements Ending balance as of December 31, 2016 Loan-backed and structured securities (NAIC 3-6) $ $ 170,361 $ (170,361) $ $ $ $ $ $ $ Derivatives 28,277,391 (3,162,470) 15,333,330 74,232,422 (43,638,610) 917,011 71,959,074 Preferred and common stocks 15,000,000 15,000,000 Separate account assets 6,017,345 (139,641) (826,822) 5,050,882 Total Assets $ 49,294,736 $ 170,361 $ (170,361) $ (3,162,470) $ 15,193,689 $ 74,232,422 $ $ (43,638,610) $ 90,189 $ 92,009,956 b. Liabilities: Derivatives $ 337,958 $ $ $ 249,484 $ (509,349) $ (74,283) $ 10,452 $ $ $ 14,262 Total Liabilities $ 337,958 $ $ $ 249,484 $ (509,349) $ (74,283) $ 10,452 $ $ $ 14,262 (a) Transferred from Level 2 to Level 3 because of lack of observable market data due to decrease in market activity for these securities or movement from amortized cost reporting to fair value. (b) Transferred from Level 3 to Level 2 because of observable market data became available for these securities or movement from fair value reporting to amortized cost. 7. 7

16 STATEMENT AS OF SEPTEMBER 30, 2017 OF THE GENWORTH LIFE AND ANNUITY INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS Realized and unrealized gains (losses) on Level 3 assets and liabilities are primarily reported in either net income (loss) or change in net unrealized capital gains (losses) based on the appropriate accounting treatment for the instrument. Purchases, sales, issuances and settlements represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period. Such activity primarily consists of purchases and settlements of derivative instruments. There were no gains or losses for the year included in net income (loss) attributable to unrealized gains (losses) related to assets still held as of the reporting date. (2) Transfers Between Levels The Company reviews the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period. (3) Valuation Techniques and Inputs The vast majority of long-term bonds use Level 2 inputs for the determination of fair value. These fair values are obtained primarily from industry-standard pricing methodologies based on market observable information. Certain structured securities valued using industry-standard pricing methodologies utilize significant unobservable inputs to estimate fair value, resulting in the fair value measurements being classified as Level 3. The Company also utilizes internally developed pricing models to produce estimates of fair value primarily utilizing Level 2 inputs along with certain Level 3 inputs. The internally developed models include matrix pricing where the Company discounts expected cash flows utilizing market interest rates obtained from market sources based on the credit quality and duration of the instrument to determine fair value. For securities that may not be reliably priced using internally developed pricing models, fair value is estimated using indicative market prices. These prices are indicative of an exit price, but the assumptions used to establish the fair value may not be observable, or corroborated by market observable information, and represent Level 3 inputs. The valuation of interest rate swaps is determined using an income approach. The primary input into the valuation represents the forward interest rate swap curve, which is generally considered an observable input, and results in the derivative being classified as Level 2. For certain interest rate swaps, the inputs into the valuation also include the total returns of certain bonds that would primarily be considered an observable input and result in the derivative being classified as Level 2. For certain other swaps, there are features that provide an option to the counterparty to terminate the swap at specified dates and would be considered a significant unobservable input and results in the fair value measurement of the derivative being classified as Level 3. For single name credit default swaps, an income approach is used to determine fair value based on using current market information for the credit spreads of the reference entity, which is considered observable inputs based on the reference entities of derivatives and results in these derivatives being classified as Level 2. The valuation of equity index options is determined using an income approach. The primary inputs into the valuation represent forward interest rate volatility and time value component associated with the optionality in the derivative, which are considered significant unobservable inputs in most instances. The equity index volatility surface is determined based on market information that is not readily observable and is developed based upon inputs received from several third-party sources. Accordingly, these options are classified as Level 3. The valuation of equity return swaps is determined using an income approach. The primary inputs into the valuation represent the forward interest rate swap curve and underlying equity index values, which are generally considered observable inputs, and results in the derivative being classified as Level 2. The fair value of the majority of separate account assets is based on the quoted prices of the underlying fund investments and, therefore represents Level 1 pricing. The remaining separate account assets represent Level 2 and 3 pricing, as defined above. 7. 8