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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



|/X/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

OR



|/   / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|----- | -----------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2003

Commission File No. 33-5014

FIRST SUNAMERICA LIFE INSURANCE COMPANY

|                         |  |                                           
|------------------------ |  | ------------------------------------------
|Incorporated in New York |  | 06-0992729
IRS Employer
Identification No.

733 Third Avenue, 4th Floor, New York, New York 10017
Registrants telephone number, including area code: (800) 272-3007

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS Yes [X] No [   ]

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Yes [   ] No [X]

THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANTS COMMON STOCK ON MAY
14, 2003 WAS AS FOLLOWS:

|                                              |  |                       
|--------------------------------------------- |  | ----------------------
|Common Stock (par value $10,000.00 per share) |  | 300 shares outstanding

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TABLE OF CONTENTS



|                                                                                      |  |                                              |  |  |  |  |  | 
|------------------------------------------------------------------------------------- |  | -------------------------------------------- |  |  |  |  |  | 
|                                                                                      |  | BALANCE SHEET                               
|                                                                                      |  | STATEMENT OF INCOME AND COMPREHENSIVE INCOME
|                                                                                      |  | STATEMENT OF CASH FLOWS                     
|                                                                                      |  | NOTES TO FINANCIAL STATEMENTS               
|MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|CONTROLS & PROCEDURES                                                                
|PART II  OTHER INFORMATION                                                          
|SIGNATURES                                                                           



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FIRST SUNAMERICA LIFE INSURANCE COMPANY

INDEX

|                               |                                                                                                      |  |           |      | 
|------------------------------ | ---------------------------------------------------------------------------------------------------- |  | --------- | ---- | 
|                               |                                                                                                      |  | Page     
|                               |                                                                                                      |  | Number(s)
|                               |                                                                                                      |  |          
|Part I  Financial Information |                                                                                                      |  |           |     
|                              
|                               | Balance Sheet (Unaudited) -
March 31, 2003 and December 31, 2002                                     |  |           | 3    | 
|                              
|                               | Statement of Income and Comprehensive Income (Unaudited)-
Three Months Ended March 31, 2003 and 2002 |  |           | 4    | 
|                              
|                               | Statement of Cash Flows (Unaudited) -
Three Months Ended March 31, 2003 and 2002                     |  |           | 5-6  | 
|                              
|                               | Notes to Financial Statements (Unaudited)                                                            |  |           | 7    | 
|                              
|                               | Managements Discussion and Analysis of Financial
Condition and Results of Operations                |  |           | 8-25 | 
|                              
|                               | Quantitative and Qualitative Disclosures About Market
Risk                                           |  |           | 26   | 
|                              
|                               | Controls & Procedures                                                                                |  |           | 26   | 
|                              
|Part II  Other Information    |                                                                                                      |  | 27-30     |     

2



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FIRST SUNAMERICA LIFE INSURANCE COMPANY
BALANCE SHEET
(Unaudited)

|                                                          |                                                                                                      |                                                            |           |                |           |              |           |           |           | 
|--------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------- | -------------- | --------- | ------------ | --------- | --------- | --------- | 
|                                                          |                                                                                                      |                                                            |           | March 31,      |           | December 31,
|                                                          |                                                                                                      |                                                            |           | 2003           |           | 2002        
|                                                          |                                                                                                      |                                                            |           |                |           |             
|                                                          |                                                                                                      |                                                            |           | (In thousands)
|ASSETS                                                    |                                                                                                      |                                                            |           |                |           |              |           |          
|Investments and cash:                                     |                                                                                                      |                                                            |           |                |           |              |           |          
|                                                          | Cash and short-term investments                                                                      |                                                            | $         | 80,900         |           |              | $         | 37,955    |          
|                                                          | Bonds, notes and redeemable
preferred stocks available for sale,
at fair value (amortized cost:      |                                                            |           |                |           |              |           |           |          
|                                                          |                                                                                                      | March 31, 2003, $1,492,628;
December 31, 2002, $1,375,026) |           |                | 1,529,554 |              |           |           | 1,410,053 | 
|                                                          | Mortgage loans                                                                                       |                                                            |           | 197,384        |           |              |           | 193,035   |          
|                                                          | Policy loans                                                                                         |                                                            |           | 35,293         |           |              |           | 36,052    |          
|                                                          | Common stocks available for sale, at
fair value (cost: March 31, 2003 and
December 31, 2001, $1,629) |                                                            |           | 964            |           |              |           | 1,140     |          
|                                                          | Securities lending collateral                                                                        |                                                            |           | 59,080         |           |              |           | 29,569    |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|                                                          | Total investments and cash                                                                           |                                                            |           | 1,903,175      |           |              |           | 1,707,804 |          
|                                                         
|Variable annuity assets held in separate
accounts         |                                                                                                      |                                                            | 379,107   |                |           |              | 399,017   |          
|Accrued investment income                                 |                                                                                                      |                                                            | 15,800    |                |           |              | 15,849    |          
|Deferred acquisition costs                                |                                                                                                      |                                                            | 111,814   |                |           |              | 104,459   |          
|Income taxes currently receivable from Parent             |                                                                                                      |                                                            | 11,859    |                |           |              | 9,831     |          
|Receivable from brokers                                   |                                                                                                      |                                                            |          |                |           |              | 1,025     |          
|Other assets                                              |                                                                                                      |                                                            | 1,986     |                |           |              | 1,401     |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|TOTAL ASSETS                                              |                                                                                                      | $                                                          | 2,423,741 |                |           | $            | 2,239,386 |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|LIABILITIES AND SHAREHOLDERS EQUITY                      |                                                                                                      |                                                            |           |                |           |              |           |          
|Reserves, payables and accrued liabilities:               |                                                                                                      |                                                            |           |                |           |              |           |          
|                                                          | Reserves for fixed annuity contracts                                                                 |                                                            | $         | 1,436,705      |           |              | $         | 1,290,702 |          
|                                                          | Reserves for universal life insurance
contracts                                                      |                                                            |           | 235,094        |           |              |           | 237,862   |          
|                                                          | Payable to brokers                                                                                   |                                                            |           | 37,030         |           |              |           |          |          
|                                                          | Securities lending payable                                                                           |                                                            |           | 59,080         |           |              |           | 29,569    |          
|                                                          | Other liabilities                                                                                    |                                                            |           | 25,102         |           |              |           | 38,804    |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|Total reserves, payables and accrued liabilities          |                                                                                                      |                                                            | 1,793,011 |                |           |              | 1,596,937 |          
|                                                         
|Variable annuity liabilities related to
separate accounts |                                                                                                      |                                                            | 379,107   |                |           |              | 399,017   |          
|Deferred income taxes                                     |                                                                                                      |                                                            | 34,816    |                |           |              | 30,394    |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|Total liabilities                                         |                                                                                                      |                                                            | 2,206,934 |                |           |              | 2,026,348 |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|Shareholders equity:                                     |                                                                                                      |                                                            |           |                |           |              |           |          
|                                                          | Common stock                                                                                         |                                                            |           | 3,000          |           |              |           | 3,000     |          
|                                                          | Additional paid-in capital                                                                           |                                                            |           | 144,428        |           |              |           | 144,428   |          
|                                                          | Retained earnings                                                                                    |                                                            |           | 54,194         |           |              |           | 51,740    |          
|                                                          | Accumulated other comprehensive income                                                               |                                                            |           | 15,185         |           |              |           | 13,870    |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|                                                          | Total shareholders equity                                                                           |                                                            |           | 216,807        |           |              |           | 213,038   |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                |                                                                                                      | $                                                          | 2,423,741 |                |           | $            | 2,239,386 |          
|                                                          |                                                                                                      |                                                            |           |                |           |              |           |          

See accompanying notes to financial statements.

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FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF INCOME AND COMPREHENSIVE INCOME
For the three months ended March 31, 2003 and 2002
(Unaudited)

|                                               |                                                                                                                 |                                                         |        |                |        |      |        |        |        | 
|---------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------ | -------------- | ------ | ---- | ------ | ------ | ------ | 
|                                               |                                                                                                                 |                                                         |        | 2003           |        | 2002
|                                               |                                                                                                                 |                                                         |        |                |        |     
|                                               |                                                                                                                 |                                                         |        | (In thousands)
|REVENUES                                       |                                                                                                                 |                                                         |        |                |        |      |        |       
|                                               | Fee income:                                                                                                     |                                                         |        |                |        |      |        |        |       
|                                               |                                                                                                                 | Variable annuity policy fees                            |        | $              | 1,890  |      |        | $      | 1,929  | 
|                                               |                                                                                                                 | Universal life insurance policy fees                    |        |                | 1,385  |      |        |        | 1,485  | 
|                                               |                                                                                                                 | Surrender charges                                       |        |                | 481    |      |        |        | 389    | 
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|                                               | Total fee income                                                                                                |                                                         |        | 3,756          |        |      |        | 3,803  |       
|                                              
|                                               | Investment income                                                                                               |                                                         |        | 25,016         |        |      |        | 23,654 |       
|                                               | Net realized investment gains (losses)                                                                          |                                                         |        | 1,155          |        |      |        | (1,231 | )     
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|Total revenues                                 |                                                                                                                 |                                                         | 29,927 |                |        |      | 26,226 |       
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|BENEFITS AND EXPENSES                          |                                                                                                                 |                                                         |        |                |        |      |        |       
|                                               | Interest expense:                                                                                               |                                                         |        |                |        |      |        |        |       
|                                               |                                                                                                                 | Interest credited to fixed annuity contracts            |        |                | 13,520 |      |        |        | 11,245 | 
|                                               |                                                                                                                 | Interest credited to universal life
insurance contracts |        |                | 2,742  |      |        |        | 2,874  | 
|                                               |                                                                                                                 | Interest expense on securities lending
agreements       |        |                | 130    |      |        |        |       | 
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|                                               | Total interest expense                                                                                          |                                                         |        | 16,392         |        |      |        | 14,119 |       
|                                              
|                                               | General and administrative expenses                                                                             |                                                         |        | 2,472          |        |      |        | 2,407  |       
|                                               | Amortization of deferred acquisition costs                                                                      |                                                         |        | 5,250          |        |      |        | 4,018  |       
|                                               | Annual commissions                                                                                              |                                                         |        | 182            |        |      |        | 225    |       
|                                               | Claims on universal life contracts, net of
reinsurance recoveries                                               |                                                         |        | 1,276          |        |      |        | 1,078  |       
|                                               | Guaranteed minimum death benefits                                                                               |                                                         |        | 215            |        |      |        | 236    |       
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|Total benefits and expenses                    |                                                                                                                 |                                                         | 25,787 |                |        |      | 22,083 |       
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|PRETAX INCOME                                  |                                                                                                                 |                                                         | 4,140  |                |        |      | 4,143  |       
|                                              
|Income tax expense                             |                                                                                                                 |                                                         | 1,686  |                |        |      | 1,682  |       
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|NET INCOME                                     |                                                                                                                 |                                                         | 2,454  |                |        |      | 2,461  |       
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: |                                                                                                                 |                                                         |        |                |        |      |        |       
|                                               | Net unrealized gains (losses) on debt and
equity securities available for sale
identified in the current period |                                                         |        | 2,606          |        |      |        | (6,804 | )     
|                                               | Less reclassification adjustment for net
realized (gains) losses included in net income                         |                                                         |        | (582           | )      |      |        | 440    |       
|                                               | Income tax (expense) benefit                                                                                    |                                                         |        | (709           | )      |      |        | 2,228  |       
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|                                               | OTHER COMPREHENSIVE INCOME (LOSS)                                                                               |                                                         |        | 1,315          |        |      |        | (4,136 | )     
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       
|COMPREHENSIVE INCOME (LOSS)                    |                                                                                                                 | $                                                       | 3,769  |                |        | $    | (1,675 | )     
|                                               |                                                                                                                 |                                                         |        |                |        |      |        |       

See accompanying notes to financial statements.

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FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
For the three months ended March 31, 2003 and 2002
(Unaudited)

|                                                                                          |  |                                                                |                                            |   |                |        |        |  |         |        | 
|----------------------------------------------------------------------------------------- |  | -------------------------------------------------------------- | ------------------------------------------ | - | -------------- | ------ | ------ |  | ------- | ------ | 
|                                                                                          |  |                                                                |                                            |   | 2003           |        | 2002  
|                                                                                          |  |                                                                |                                            |   |                |        |       
|                                                                                          |  |                                                                |                                            |   | (In thousands)
|CASH FLOWS
        FROM OPERATING ACTIVITIES:                                             |  |                                                                |                                            |   |                |        |        | 
|Net income                                                                                |  | $                                                              | 2,454                                      |   |                | $      | 2,461  | 
|Adjustments
        to reconcile net income to net cash provided by operating activities: |  |                                                                |                                            |   |                |        |        | 
|                                                                                          |  | Interest
        credited to:                                  |                                            |   |                |        |        |  |         |       
|                                                                                          |  |                                                                | Fixed annuity
        contracts            |   |                | 13,520 |        |  |         | 11,245 | 
|                                                                                          |  |                                                                | Universal
        life insurance contracts |   |                | 2,742  |        |  |         | 2,874  | 
|                                                                                          |  | Net realized
        investment (gains) losses                 |                                            |   | (1,155         | )      |        |  | 1,231   |       
|                                                                                          |  | Accretion
        of net discounts on investments              |                                            |   | 508            |        |        |  | (857    | )     
|                                                                                          |  | Amortization
        of deferred acquisition costs             |                                            |   | 5,250          |        |        |  | 4,018   |       
|                                                                                          |  | Acquisition
        costs deferred                             |                                            |   | (12,305        | )      |        |  | (3,969  | )     
|                                                                                          |  | Provision
        for deferred income taxes                    |                                            |   | 3,714          |        |        |  | 1,412   |       
|Change in:                                                                                |  |                                                                |                                            |   |                |        |        | 
|                                                                                          |  | Accrued investment income                                      |                                            |   | 49             |        |        |  | 1,658   |       
|                                                                                          |  | Income taxes currently receivable from/payable
      to Parent |                                            |   | (2,028         | )      |        |  | 270     |       
|                                                                                          |  | Other liabilities                                              |                                            |   | 641            |        |        |  | 4,763   |       
|                                                                                          |  | Other, net                                                     |                                            |   | 979            |        |        |  | (60     | )     
|                                                                                          |  |                                                                |                                            |   |                |        |        | 
|NET CASH
        PROVIDED BY OPERATING ACTIVITIES                                         |  |                                                                | 14,369                                     |   |                |        | 25,046 | 
|                                                                                          |  |                                                                |                                            |   |                |        |        | 
|CASH FLOWS
        FROM INVESTING ACTIVITIES:                                             |  |                                                                |                                            |   |                |        |        | 
|Purchases
        of:                                                                     |  |                                                                |                                            |   |                |        |        | 
|                                                                                          |  | Bonds, notes
        and redeemable preferred stocks           |                                            |   | (212,422       | )      |        |  | (69,265 | )     
|                                                                                          |  | Mortgage
        loans                                         |                                            |   | (7,454         | )      |        |  | (281    | )     
|                                                                                          |  | Other investments,
        excluding short-term investments    |                                            |   | (3             | )      |        |  | (88     | )     
|Sales of:                                                                                 |  |                                                                |                                            |   |                |        |        | 
|                                                                                          |  | Bonds, notes
        and redeemable preferred stocks           |                                            |   | 104,288        |        |        |  | 47,620  |       
|Redemptions
        and maturities of:                                                    |  |                                                                |                                            |   |                |        |        | 
|                                                                                          |  | Bonds, notes
        and redeemable preferred stocks           |                                            |   | 38,738         |        |        |  | 17,984  |       
|                                                                                          |  | Mortgage
        loans                                         |                                            |   | 3,167          |        |        |  | 8,769   |       
|                                                                                          |  | Other investments,
        excluding short-term investments    |                                            |   | 763            |        |        |  | 574     |       
|                                                                                          |  |                                                                |                                            |   |                |        |        | 
|NET CASH
        (USED IN) PROVIDED BY INVESTING ACTIVITIES                               |  | $                                                              | (72,923                                    | ) |                | $      | 5,313  | 
|                                                                                          |  |                                                                |                                            |   |                |        |        | 

See accompanying notes to financial statements.

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FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS (Continued)
For the three months ended March 31, 2003 and 2002
(Unaudited)

|                                                                            |                                               |   |         |         |                |   |        |         |   |  |  | 
|--------------------------------------------------------------------------- | --------------------------------------------- | - | ------- | ------- | -------------- | - | ------ | ------- | - |  |  | 
|                                                                            |                                               |   |         |         | 2003           |   | 2002  
|                                                                            |                                               |   |         |         |                |   |       
|                                                                            |                                               |   |         |         | (In thousands)
|CASH FLOWS
        FROM FINANCING ACTIVITIES:                               |                                               |   |         |         |                |   |        |        
|Premium
        receipts on:                                                |                                               |   |         |         |                |   |        |        
|                                                                            | Fixed annuity
        contracts               |   | $       | 138,770 |                |   | $      | 43,126  |  
|                                                                            | Universal
        life insurance contracts    |   |         | 7,489   |                |   |        | 2,095   |  
|Net exchanges
        to the fixed accounts from variable annuity contracts |                                               |   | 3,712   |         |                |   | 907    |        
|Withdrawal
        payments on:                                             |                                               |   |         |         |                |   |        |        
|                                                                            | Fixed annuity
        contracts               |   |         | (32,409 | )              |   |        | (33,607 | )
|                                                                            | Universal
        life insurance contracts    |   |         | (2,678  | )              |   |        | (2,743  | )
|Claims and
        annuity payments on:                                     |                                               |   |         |         |                |   |        |        
|                                                                            | Fixed annuity
        contracts               |   |         | (6,590  | )              |   |        | (6,558  | )
|                                                                            | Universal
        life insurance contracts    |   |         | (4,603  | )              |   |        | (4,813  | )
|Net repayments
        of other short term financings                       |                                               |   | (2,192  | )       |                |   | (4,022 | )      
|                                                                            |                                               |   |         |         |                |   |        |        
|NET CASH
        PROVIDED BY (USED IN) FINANCING ACTIVITIES                 |                                               |   | 101,499 |         |                |   | (5,615 | )      
|                                                                            |                                               |   |         |         |                |   |        |        
|NET INCREASE
        IN CASH AND SHORT-TERM INVESTMENTS                     |                                               |   | 42,945  |         |                |   | 24,744 |        
|CASH AND
        SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD              |                                               |   | 37,955  |         |                |   | 28,982 |        
|                                                                            |                                               |   |         |         |                |   |        |        
|CASH AND
        SHORT-TERM INVESTMENTS AT END OF PERIOD                    |                                               | $ | 80,900  |         |                | $ | 53,726 |        
|                                                                            |                                               |   |         |         |                |   |        |        
|SUPPLEMENTAL
        CASH FLOW INFORMATION:                                 |                                               |   |         |         |                |   |        |        
|                                                                           
|                                                                            | Interest paid on indebtedness                 |   | $       | 130     |                |   | $      |        |  
|                                                                            |                                               |   |         |         |                |   |        |        
|                                                                            | Net income taxes refunded by (paid to) Parent |   | $       |        |                |   | $      |        |  
|                                                                            |                                               |   |         |         |                |   |        |        

See accompanying notes to financial statements.

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FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)



|1. |  | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | First SunAmerica Life Insurance Company (the Company) is a direct
wholly owned subsidiary of SunAmerica Life Insurance Company (the
Parent), which is an indirect wholly owned subsidiary of American
International Group, Inc. (AIG). AIG is a holding company which
through its subsidiaries is engaged in a broad range of insurance and
insurance-related activities, financial services, retirement services and
asset management. The Company is a New York-domiciled life insurance
company engaged primarily in the sale and administration of deposit type
insurance contracts, including fixed and variable annuities and universal
life contracts in the State of New York.                                                                                                                                                                                               
|  
|   |  | In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments necessary, consisting of normal
recurring items, to present fairly the Companys financial position as of
March 31, 2003 and December 31, 2002, the results of its operations for
the three months ended March 31, 2003 and 2002 and its cash flows for the
three months ended March 31, 2003 and 2002. The results of operations
for the three months ended March 31, 2003 are not necessarily indicative
of the results to be expected for the full year. The accompanying
unaudited financial statements should be read in conjunction with the
audited financial statements for the year ended December 31, 2002,
contained in the Companys 2002 Annual Report on Form 10-K. Certain
prior period items have been reclassified to conform to the current
periods presentation.
|  
|2. |  | CONTINGENT LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |  | Various lawsuits against the Company have arisen in the ordinary course
of business. Contingent liabilities arising from litigation, income
taxes and other matters are not considered material in relation to the
financial position, results of operations or cash flows of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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FIRST SUNAMERICA LIFE INSURANCE COMPANY
MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Managements discussion and analysis of financial condition and results of
operations of First SunAmerica Life Insurance Company (the Company) for the
three months ended March 31, 2003 (2003) and March 31, 2002 (2002) follows.
Certain prior period amounts have been reclassified to conform to the current
periods presentation.

In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company cautions readers regarding certain
forward-looking statements contained in this report and in any other statements
made by, or on behalf of, the Company, whether or not in future filings with
the Securities and Exchange Commission (the SEC). Forward-looking statements
are statements not based on historical information and which relate to future
operations, strategies, financial results, or other developments. Statements
using verbs such as expect, anticipate, believe or words of similar
import generally involve forward-looking statements. Without limiting the
foregoing, forward-looking statements include statements which represent the
Companys beliefs concerning future levels of sales and redemptions of the
Companys products, investment spreads and yields, or the earnings or
profitability of the Companys activities.

Forward-looking statements are necessarily based on estimates and
assumptions that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond the
Companys control and many of which are subject to change. These uncertainties
and contingencies could cause actual results to differ materially from those
expressed in any forward-looking statements made by, or on behalf of, the
Company. Whether or not actual results differ materially from forward-looking
statements may depend on numerous foreseeable and unforeseeable developments.
Some may be national in scope, such as general economic conditions, changes in
tax law and changes in interest rates. Some may be related to the insurance
industry generally, such as pricing competition, regulatory developments and
industry consolidation. Others may relate to the Company specifically, such as
credit, volatility and other risks associated with the Companys investment
portfolio. Investors are also directed to consider other risks and
uncertainties discussed in documents filed by the Company with the SEC. The
Company disclaims any obligation to update forward-looking information.

The Company has one business segment, annuity operations, which consists
of the sale and administration of deposit-type insurance contracts, such as
fixed and variable annuities and universal life insurance contracts. The
Company focuses primarily on the marketing of fixed and variable annuity
products. The variable annuity products offer investors a broad spectrum of
fund alternatives, with a choice of investment managers, as well as guaranteed
fixed-rate account options. The Company earns fee income on investments in the
variable account options and net investment income on the fixed-rate account
options.

CRITICAL ACCOUNTING POLICIES

The Company considers among its most critical accounting policies those
policies with respect to valuation of certain financial instruments

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and amortization of deferred acquisition costs. In the implementation of each
of the aforementioned policies, management is required to exercise its judgment
on both a quantitative and qualitative basis. Further explanation of how
management exercises that judgment follows:

VALUATION OF CERTAIN FINANCIAL INSTRUMENTS: Gross unrealized losses on the
debt and equity securities available for sale amounted to $30.9 million at
March 31, 2003. In determining if and when a decline in fair value below
amortized cost is other-than-temporary, the Company evaluates at each reporting
period the market conditions, offering prices, trends of earnings, price
multiples, and other key measures for our investments in debt and marketable
equity securities. In particular, for debt securities, the Company assesses the
probability that all amounts due are collectible according to the contractual
terms of the obligation. When such a decline in value is deemed to be
other-than-temporary, the Company recognizes an impairment loss in the current
period operating results to the extent of the decline.

Securities in our portfolio with a carrying value of approximately $374.6
million at March 31, 2003 do not have readily determinable market prices. For
these securities, we estimate their fair value with internally prepared
valuations (including those based on estimates of future profitability).
Otherwise, we use our most recent purchases and sales of similar unquoted
securities, independent broker quotes or comparison to similar securities with
quoted prices when possible to estimate the fair value of those securities. All
such securities are classified as available for sale. Our ability to liquidate
our positions in these securities will be impacted to a significant degree by
the lack of an actively traded market, and we may not be able to dispose of
these investments in a timely manner. Although we believe our estimates
reasonably reflect the fair value of those securities, our key assumptions
about the risk-free interest rates, risk premiums, performance of underlying
collateral, if any, and other factors may not reflect those of an active
market.

AMORTIZATION OF DEFERRED ACQUISITION COSTS: We amortize our deferred
acquisition costs (DAC) based on a percentage of expected gross profits
(EGPs) over the life of the underlying policies. EGPs are computed based on
assumptions related to the underlying policies written, including their
anticipated duration, the growth rate of the separate account assets (with
respect to variable annuities) or general account assets (with respect to fixed
annuities) supporting the annuity obligations, the anticipated value of
guaranteed minimum death benefits to be paid, and the level of expenses
necessary to maintain the policies. The Company adjusts DAC amortization (a
DAC unlocking) when estimates of current or future gross profits to be
realized from its annuity policies are revised. Approximately 64% of the
Companys DAC balance at March 31, 2003 related to fixed annuity products and
36% related to variable annuity products.

DAC amortization is sensitive to surrender rates and the actual and
assumed future growth rate of the assets supporting the Companys obligations
under annuity policies. With respect to fixed annuities, the growth rate
depends on the yield on the general account assets supporting those annuities.
With respect to variable annuities, the growth rate depends on the performance
of the investment options available under the annuity contract and the
allocation of assets among these various investment options.

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The assumption we use for the long-term annual net growth of the separate
account assets in the determination of DAC amortization with respect to our
variable annuity policies is 10% (the long-term growth rate assumption). We
use a reversion to the mean methodology which allows us to maintain this 10%
long-term growth rate assumption, while also giving consideration to the effect
of short-term swings in the equity markets. For example, if performance were
15% during the first year following the introduction of a product, the DAC
model would assume that market returns for the following five years (the
short-term growth rate assumption) would approximate 9%, resulting in an
average annual growth rate of 10% during the life of the product. Similarly,
following periods of below 10% performance, the model will assume a short-term
growth rate higher than 10%. A DAC unlocking will occur if management deems
the short-term growth rate assumption (i.e., the growth rate required to revert
to the mean 10% growth rate over a five-year period) to be unreasonable. The
use of a reversion to the mean assumption is common within the industry;
however, the parameters used in the methodology are subject to judgment and
vary within the industry.

On December 9, 2002, the Company entered into a profit sharing agreement
with AIG SunAmerica Asset Management Corp. (SAAMCO), whereby SAAMCO will pay
its profits earned through servicing the Companys variable annuity contracts
to the Company (SAAMCO Agreement). SAAMCO is the investment adviser or
business manager for certain trusts that hold deposits from the Companys
variable annuity products. Pursuant to the SAAMCO Agreement, SAAMCO will pay
to the Company variable annuity fee income earned from acting as the investment
adviser or business manager for certain trusts that hold deposits from the
Companys variable annuity products. The SAAMCO Agreement is retroactive to
January 1, 2002. Amounts paid to or accrued by the Company under this
agreement totaled $0.4 million for 2003.

RESULTS OF OPERATIONS

NET INCOME totaled $2.5 million in 2003 and 2002. The operating results
for 2003 include $0.4 million of fees earned by the Company pursuant to the
SAAMCO Agreement.

PRETAX INCOME totaled $4.1 million in 2003 and 2002.

NET INVESTMENT SPREAD, which is the spread between the income earned on
invested assets and the interest paid on fixed annuities and other
interest-bearing liabilities, totaled $8.6 million in 2003 and $9.5 million in
2002. These amounts equal 1.95% on average invested assets (computed on a
daily basis) of $1.77 billion in 2003 and 2.79% on average invested assets of
$1.37 billion in 2002.

Growth in average
invested assets largely resulted from increased sales in the latter
half of 2002 and 2003 relating to the marketing of fixed annuities
through new distribution relationships. Changes in average invested
assets also reflect net exchanges to fixed accounts from the separate accounts
of variable annuity contracts, sales of fixed account
options of the Companys variable annuity products,
and renewal deposits on its universal life products (UL
Deposits). Sales of fixed annuities and fixed account options
(Fixed Annuity Deposits) and UL Deposits totaled $168.0 million in 2003 and $45.7
million in 2002, and are largely deposits for the fixed annuities and the fixed
options of variable annuities. On an annualized basis, these deposits
represents 44% and 14%, respectively, of the related reserve balances at the
beginning of 2003 and 2002.

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Under generally accepted accounting principles, deposits collected on
non-traditional life and annuity insurance products, such as those sold by the
Company, are not reflected as revenues in the Companys statement of income, as
they are recorded directly to reserves for fixed and universal life
contracts upon receipt. The
increase in Fixed Annuity Deposits in 2003 is due primarily to increased sales
relating to the marketing of fixed annuities through new distribution
relationships. The environment for fixed annuity sales remains very favorable,
with alternative fixed income products at very low rates (e.g., bank CDs) and
very low surrender rates as investors continue to seek safety and quality away
from the equity markets.

The following table shows the Companys investment results for 2003 and
2002.

|                                                                                     |  |                         |           |      |  |   |           |  
|------------------------------------------------------------------------------------ |  | ----------------------- | --------- | ---- |  | - | --------- | -
|                                                                                     |  | 2003                    |           | 2002
|                                                                                     |  |                         |           |     
|                                                                                     |  | (in thousands,         
|                                                                                     |  | except for percentages)
|Average invested assets                                                              |  | $                       | 1,766,486 |      |  | $ | 1,368,288 |  
|                                                                                     |  |                         |           |      |  |   |           |  
|Average annuity reserves and other
interest-bearing liabilities                      |  | $                       | 1,643,253 |      |  | $ | 1,272,102 |  
|                                                                                     |  |                         |           |      |  |   |           |  
|Average yield on average invested assets                                             |  |                         | 5.66      | %    |  |   | 6.91      | %
|Weighted average rate paid on fixed
annuities and other interest-bearing
liabilities |  |                         | 3.99      | %    |  |   | 4.44      | %
|                                                                                     |  |                         |           |      |  |   |           |  
|Yield spread                                                                         |  |                         | 1.67      | %    |  |   | 2.47      | %
|                                                                                     |  |                         |           |      |  |   |           |  

Net investment spreads include the effect of income earned or interest
paid on the difference between average invested assets and average
interest-bearing liabilities. Average invested assets exceeded average
interest-bearing liabilities by $123.2 million in 2003, compared with $96.2
million in 2002. The difference between the Companys yield on average
invested assets and the rate paid on average interest-bearing liabilities (the
Spread Difference) was 1.67% in 2003 and 2.47% in 2002.

Investment income (and the related yields on average invested assets)
totaled $25.0 million (5.66%) in 2003, compared with $23.7 million (6.91%) in
2002. The decrease in the investment yield in 2003 compared to 2002 primarily
reflects a lower prevailing interest rate environment. Expenses incurred to
manage the investment portfolio amounted to $0.1 million in both periods.
These expenses are included as a reduction of investment income in the
statement of income and comprehensive income.

Interest expense totaled $16.4 million in 2003 and $14.1 million in 2002.
The average rate paid on all interest-bearing liabilities was 3.99% in 2003,
compared with 4.44% in 2002. Interest-bearing liabilities averaged $1.64
billion during 2003 and $1.27 billion during 2002. The decline in overall rates
paid in 2003 compared to 2002 resulted primarily from the impact of a declining
interest rate environment, the continued reduction of crediting rates on
certain closed blocks of business and the impact of securities lending in 2003
at short-term rates.

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NET REALIZED INVESTMENT GAINS totaled $1.2 million in 2003, compared with
net realized investment losses of $1.2 million in 2002.

The Company sold or redeemed invested assets, principally bonds and notes,
aggregating $145.1 million in 2003 and $76.1 million in 2002. Sales of
investments result from the active management of the Companys investment
portfolio. Because redemptions of investments are generally involuntary and
sales of investments are made in both rising and falling interest rate
environments, net gains and losses from sales and redemptions of investments
fluctuate from period to period, and represent 0.26% and 0.36% of average
invested assets for 2003 and 2002, respectively. Active portfolio management
involves the ongoing evaluation of asset sectors, individual securities within
the investment portfolio and the reallocation of investments from sectors that
are perceived to be relatively overvalued to sectors that are perceived to be
relatively undervalued. The intent of the Companys active portfolio
management is to maximize total returns on the investment portfolio, taking
into account credit, option, liquidity and interest-rate risk.

There were no impairment writedowns in either 2003 or 2002. For the
twenty quarters ended March 31, 2003, impairment writedowns, as an annualized
percentage of average invested assets, have ranged up to 3.99% and have
averaged 0.78%. Such writedowns are based upon estimates of the net realizable
value of invested assets and recorded when declines in the value of such assets
are considered to be other than temporary. Actual realization will be
dependent upon future events.

VARIABLE ANNUITY POLICY FEES are based on the market value of assets in
separate accounts supporting variable annuity contracts. Such fees totaled
$1.9 million in 2003 (including $0.4 million attributable to the SAAMCO
Agreement) and $1.9 million in 2002. Excluding the impact of the SAAMCO
Agreement, variable annuity fees would have been $1.5 million in 2003. The
decreased fees in 2003 as compared to 2002 reflect the unfavorable equity
market conditions in 2003, and the resulting unfavorable impact on market
values of assets in the separate accounts and additionally from net exchanges
from the separate accounts to the fixed accounts of variable annuity contracts.
On an annualized basis, variable annuity fees represent 1.9% and 1.5% of
average variable annuity assets in 2003 and 2002, respectively. Excluding the
impact of the SAAMCO Agreement, variable annuity fees would have represented
1.6% of average variable annuity assets in 2003. Variable annuity assets
averaged $389.3 million in 2003 and $503.6 million in 2002. Variable annuity
deposits, which exclude deposits allocated to the fixed accounts of variable
annuity products, totaled $6.0 million in 2003 and $16.6 million in 2002. On
an annualized basis, these amounts represent 6% and 13% of separate account
liabilities at the beginning of 2003 and 2002. The decrease in variable
annuity deposits reflected lower demand for the variable account options of the
Companys variable annuity products due to unfavorable equity market
conditions. Transfers from the fixed accounts of the Companys variable
annuity products to the separate accounts are not classified as variable
annuity deposits. Accordingly, changes in variable annuity deposits are not
necessarily indicative of the ultimate allocation by customers among fixed and
variable account options of the Companys variable annuity products.

Sales of variable annuity products (which include deposits allocated to
the fixed accounts) (Variable Annuity Product Sales) amounted to $15.8
million in 2003 and $25.7 million in 2002. Current year sales primarily reflect the

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Companys flagship variable annuity line,
Polaris, while approximately half the prior year sales were related
to FSA Advisor which was initially marketed in January 2001. Polaris is a multimanager
variable annuity that offers investors a choice of 31 variable funds and a
number of guaranteed fixed-rate funds. Variable Annuity Product Sales have
decreased in 2003 primarily due to decreased demand for the new product, FSA
Advisor, from 2002. FSA Advisor product sales were approximately $1.8 million
in 2003 as compared to $12.1 million in 2002.

The Company has encountered increased competition in the variable annuity
marketplace during recent years and anticipates that the market will remain
highly competitive for the foreseeable future. Also, from time to time,
Federal initiatives are proposed that could affect the taxation of annuities
(see Regulation).

UNIVERSAL LIFE INSURANCE POLICY FEES amounted to $1.4 million in 2003 and
$1.5 million in 2002. Universal life insurance policy fees consist of
mortality charges, up-front fees earned on deposits received and administrative
fees, net of reinsurance premiums. The administrative fees are assessed based
on the number of policies in force as of the end of each month. The Company
acquired its universal life contracts as part of the acquisition of business
from MBL Life Assurance Corporation which occurred on July 1, 1999 and does not
actively market such contracts. Such fees annualized represent 2.3% and 2.4%
of average reserves for universal life insurance contracts in the respective
periods.

SURRENDER CHARGES on fixed annuity, variable annuity and universal life
contracts totaled $0.5 million in 2003 and $0.4 million in 2002. Surrender
charges generally are assessed on withdrawals at declining rates during the
first seven years of a contract. Withdrawal payments, which exclude claims and
lump-sum annuity benefits, totaled $48.5 million in 2003, compared to $44.7
million in 2002. Annualized, these payments, when expressed as a percentage of
average related reserves, represent 9.9% for 2003 and 10.3% for 2002.

GENERAL AND ADMINISTRATIVE EXPENSES totaled $2.5 million in 2003 and $2.4
million in 2002. General and administrative expenses remain closely controlled
through a company-wide cost containment program and continue to represent less
than 1% of average total assets.

AMORTIZATION OF DEFERRED ACQUISITION COSTS totaled $5.3 million in 2003,
compared to $4.0 million in 2002. The increase in amortization in 2003 was
primarily related to the increase in fixed annuity deposits and the impact of
decreased net investment losses.

ANNUAL COMMISSIONS totaled $0.2 million in 2003 and 2002. Annual
commissions represent renewal commissions paid quarterly in arrears to maintain
the persistency of certain of the Companys variable annuity contracts.
Substantially all of the Companys currently available variable

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annuity products allow for an annual commission payment option in return for a
lower immediate commission. The Company estimates that approximately 10% of the
average balances of its variable annuity products is currently subject to such
annual commissions. Based on current sales, this percentage is expected to
increase in future periods.

CLAIMS ON UNIVERSAL LIFE INSURANCE CONTRACTS, NET OF REINSURANCE
RECOVERIES totaled $1.3 million in 2003, compared to $1.1 million in 2002 (net
of reinsurance recoveries of $1.6 million in 2003 and 2002).

GUARANTEED MINIMUM DEATH BENEFITS totaled $0.2 million in 2003 and 2002.
Further downturns in the equity markets could increase these expenses.

A majority of the Companys variable annuity products are issued with a
death benefit feature which provides that, upon the death of a contractholder,
the contractholders beneficiary will receive the greater of (1) the
contractholders account value, or (2) a guaranteed minimum death benefit that
varies by product (the GMDB). Depending on the product, the GMDB may equal
the principal invested, adjusted for withdrawals; or an amount equal to the
highest account value in effect on any anniversary date under the contract.
These benefits have issue age and other restrictions to reduce mortality risk
exposure. The Company bears the risk that death claims following a decline in
the financial markets may exceed contractholder account balances, and that the
fees collected under the contract are insufficient to cover the costs of the
benefit to be provided. In accordance with Generally Accepted Accounting
Principles, the Company expenses such benefits in the period incurred, and
therefore does not provide reserves for future benefits.

INCOME TAX EXPENSE totaled $1.7 million in 2003 and 2002, representing
effective tax rates of 41% for both periods.

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CAPITAL RESOURCES AND LIQUIDITY

SHAREHOLDERS EQUITY increased to $216.8 million at March 31, 2003 from
$213.0 million at December 31, 2002, due to $2.5 million of net income recorded
in 2003 and $1.3 million in other comprehensive income.

INVESTED ASSETS at March 31, 2003 totaled $1.90 billion, compared with
$1.71 billion at December 31, 2002. The following table summarizes the
Companys investment portfolio at March 31, 2003 and December 31, 2002.

|                                                   |  |                                        |           |                   |  |          |       |            |  |   |           |  |  |  |       |  
|-------------------------------------------------- |  | -------------------------------------- | --------- | ----------------- |  | -------- | ----- | ---------- |  | - | --------- |  |  |  | ----- | -
|                                                   |  | March 31, 2003                         |           | December 31, 2002
|                                                   |  |                                        |           |                  
|                                                   |  | Carrying                               |           | Percent of        |  | Carrying |       | Percent of
|                                                   |  | Value                                  |           | Portfolio         |  | Value    |       | Portfolio 
|                                                   |  |                                        |           |                   |  |          |       |           
|                                                   |  | (in thousands, except for percentages)
|BOND PORTFOLIO:                                    |  |                                        |           |                   |  |          |       |            |  |   |           |  |  |  |       |  
|U.S. government securities                         |  | $                                      | 3,324     |                   |  |          | 0.2   | %          |  | $ | 3,208     |  |  |  | 0.2   | %
|Mortgage-backed securities                         |  |                                        | 435,013   |                   |  |          | 22.9  |            |  |   | 471,065   |  |  |  | 27.6  |  
|Other bonds, notes and
Redeemable preferred
stocks |  |                                        | 1,091,217 |                   |  |          | 57.3  |            |  |   | 935,780   |  |  |  | 54.8  |  
|                                                   |  |                                        |           |                   |  |          |       |            |  |   |           |  |  |  |       |  
|Total bond Portfolio                               |  |                                        | 1,529,554 |                   |  |          | 80.4  |            |  |   | 1,410,053 |  |  |  | 82.6  |  
|Mortgage loans                                     |  |                                        | 197,384   |                   |  |          | 10.4  |            |  |   | 193,035   |  |  |  | 11.3  |  
|Common stocks                                      |  |                                        | 964       |                   |  |          | 0.1   |            |  |   | 1,140     |  |  |  | 0.1   |  
|Cash and short-term
investments                    |  |                                        | 80,900    |                   |  |          | 4.2   |            |  |   | 37,955    |  |  |  | 2.2   |  
|Other                                              |  |                                        | 94,373    |                   |  |          | 4.9   |            |  |   | 65,621    |  |  |  | 3.8   |  
|                                                   |  |                                        |           |                   |  |          |       |            |  |   |           |  |  |  |       |  
|Total investments and cash                         |  | $                                      | 1,903,175 |                   |  |          | 100.0 | %          |  | $ | 1,707,804 |  |  |  | 100.0 | %
|                                                   |  |                                        |           |                   |  |          |       |            |  |   |           |  |  |  |       |  

The majority of the Companys invested assets are managed by an affiliate.
The Companys general investment philosophy is to hold fixed-rate assets for
long-term investment. Thus, it does not have a trading portfolio. However,
the Company has determined that all of its portfolio of bonds, notes and
redeemable preferred stocks (the Bond Portfolio) is available to be sold in
response to changes in market interest rates, changes in relative value of
asset sectors and individual securities, changes in prepayment risk, changes in
the credit quality outlook for certain securities, the Companys need for
liquidity and other similar factors.

THE BOND PORTFOLIO, which constituted 81% of the Companys total
investment portfolio at March 31, 2003, had an aggregate fair value that was
$36.9 million greater than its amortized cost at March 31, 2003, compared with
$35.0 million at December 31, 2002.

At March 31, 2003, the Bond Portfolio included $1.38 billion of bonds
rated by Standard & Poors (S&P), Moodys Investors Services (Moodys),
Fitch (Fitch) or the Securities Valuation Office of the National Association
of Insurance Commissioners (NAIC), and $150.2 million of bonds rated by the
Company pursuant to statutory ratings guidelines established by the NAIC. At
March 31, 2003, approximately $1.45 billion of the Bond Portfolio was
investment grade, including $277.1 million of U.S. government/agency securities
and mortgage-backed securities (MBS).

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At March 31, 2003, the Bond Portfolio included $77.6 million of bonds that
were not investment grade. These non-investment-grade bonds accounted for
approximately 3.2% of the Companys total assets and approximately 4.1% of its
invested assets. Non-investment-grade securities generally provide higher
yields and involve greater risks than investment-grade securities because their
issuers typically are more highly leveraged and more vulnerable to adverse
economic conditions than investment-grade issuers. In addition, the trading
market for these securities is usually more limited than for investment-grade
securities. These non-investment-grade securities are comprised of bonds
spanning 20 industries with 26% of these assets concentrated in energy. No
other industry concentration constituted more than 10% of these assets.

The table on the following page summarizes the Companys rated bonds by
rating classification as of March 31, 2003.

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RATED BONDS BY RATING CLASSIFICATION
(Dollars in thousands)

|                                           |  |                         |           |       |  |           |           |           |  |                                  |   |           |  |           |         |          |  |   |         |           |  |          |           |  |  |   |           |  |  |         |       |  
|------------------------------------------ |  | ----------------------- | --------- | ----- |  | --------- | --------- | --------- |  | -------------------------------- | - | --------- |  | --------- | ------- | -------- |  | - | ------- | --------- |  | -------- | --------- |  |  | - | --------- |  |  | ------- | ----- | -
|                                           |  |                         |           |       |  |           |           |           |  | Issues not rated by S&P/Moody's/ |   |           |  |           |         |          |  |   |         |           |  |         
|Issues rated by S&P/Moody's/Fitch          |  | Fitch, by NAIC category |           | Total
|                                           |  |                         |           |      
|                                           |  |                         |           |       |  |           |           |           |  |                                  |   |           |  |           |         |          |  |   |         |           |  |          |           |  |  |   |           |  |  | Percent
|                                           |  |                         |           |       |  | Estimated |           | NAIC      |  |                                  |   |           |  | Estimated |         |          |  |   |         | Estimated |  | of total
|S&P/Moody's/Fitch                          |  | Amortized               |           | fair  |  | category  |           | Amortized |  | fair                             |   | Amortized |  | fair      |         | invested
|Category (1)                               |  | cost                    |           | value |  | (2)       |           | cost      |  | value                            |   | cost      |  | value     |         | assets  
|                                           |  |                         |           |       |  |           |           |           |  |                                  |   |           |  |           |         |         
|AAA+ to A-
(Aaa to
A3)
[AAA to A-]         |  | $                       | 860,119   |       |  | $         | 895,079   |           |  |                                  | 1 |           |  | $         | 208,884 |          |  | $ | 219,849 |           |  | $        | 1,069,003 |  |  | $ | 1,114,928 |  |  |         | 59.00 | %
|BBB+ to BBB-
(Baa1 to
Baa3)
[BBB+ to BBB-] |  |                         | 260,255   |       |  |           | 261,524   |           |  |                                  | 2 |           |  |           | 77,353  |          |  |   | 75,528  |           |  |          | 337,608   |  |  |   | 337,052   |  |  |         | 17.84 | %
|BB+ to BB-
(Ba1 to
Ba3)
[BB+ to BB-]       |  |                         | 42,711    |       |  |           | 39,951    |           |  |                                  | 3 |           |  |           | 1,000   |          |  |   | 1,000   |           |  |          | 43,711    |  |  |   | 40,951    |  |  |         | 2.17  | %
|B+ to B-
(B1 to B3)
[B+ to B-]             |  |                         | 23,023    |       |  |           | 18,038    |           |  |                                  | 4 |           |  |           | 2,000   |          |  |   | 2,046   |           |  |          | 25,023    |  |  |   | 20,084    |  |  |         | 1.06  | %
|CCC+ to C
(Caa to C)
[CCC]                 |  |                         | 4,992     |       |  |           | 2,494     |           |  |                                  | 5 |           |  |           | 9,534   |          |  |   | 9,088   |           |  |          | 14,526    |  |  |   | 11,582    |  |  |         | 0.61  | %
|C1 to D
[DD]
{D}                           |  |                         |          |       |  |           |          |           |  |                                  | 6 |           |  |           | 2,757   |          |  |   | 4,957   |           |  |          | 2,757     |  |  |   | 4,957     |  |  |         | 0.26  | %
|                                           |  |                         |           |       |  |           |           |           |  |                                  |   |           |  |           |         |          |  |   |         |           |  |          |           |  |  |   |           |  |  |         |       |  
|TOTAL RATED
ISSUES                         |  | $                       | 1,191,100 |       |  | $         | 1,217,086 |           |  |                                  |   |           |  | $         | 301,528 |          |  | $ | 312,468 |           |  | $        | 1,492,628 |  |  | $ | 1,529,554 |  |  |         |       |  
|                                           |  |                         |           |       |  |           |           |           |  |                                  |   |           |  |           |         |          |  |   |         |           |  |          |           |  |  |   |           |  |  |         |       |  

Footnotes appear on the following page.

17



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##### Table of Contents





|    |  | Footnotes to the table of Rated Bonds by Rating Classification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) |  | S&P and Fitch rate debt securities in rating categories ranging from AAA
(the highest) to D (in payment default). A plus (+) or minus (-)
indicates the debts relative standing within the rating category. A
security rated BBB- or higher is considered investment grade. Moodys
rates debt securities in rating categories ranging from Aaa (the highest)
to C (extremely poor prospects of ever attaining any real investment
standing). The number 1, 2 or 3 (with 1 the highest and 3 the lowest)
indicates the debts relative standing within the rating category. A
security rated Baa3 or higher is considered investment grade. Issues are
categorized based on the highest of the S&P, Moodys, and Fitch ratings if
rated by multiple agencies.
|   
|(2) |  | Bonds and short-term promissory instruments are divided into six quality
categories for NAIC rating purposes, ranging from 1 (highest) to 5
(lowest) for nondefaulted bonds plus one category, 6, for bonds in or near
default. These six categories correspond with the S&P/Moodys/Fitch
rating groups listed above, with categories 1 and 2 considered investment
grade. The NAIC categories include $150.2 million of assets that were
rated by the Company pursuant to applicable NAIC rating guidelines.                                                                                                                                                                                                                                                

18



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##### Table of Contents



At March 31, 2003, approximately $182.5 million of the Bond Portfolio had
an aggregate unrealized loss of $30.2 million. The gross unrealized losses in
the bond portfolio included the following concentrations:

|                                      |  |                   |       | 
|------------------------------------- |  | ----------------- | ----- | 
|                                      |  | Gross            
|Concentration                         |  | Unrealized Losses
|                                      |  |                  
|                                      |  | (In thousands)   
|Investment Grade:                     |  |                   |       | 
|Chemicals                             |  | $                 |      | 
|Media Cable                           |  |                   |      | 
|Airlines                              |  |                   | 3,375 | 
|Public Utility                        |  |                   | 83    | 
|Energy                                |  |                   | 37    | 
|ABS and Securitizations               |  |                   | 876   | 
|                                     
|Not rated and Below Investment Grade: |  |                   |       | 
|Chemicals                             |  |                   | 974   | 
|Media Cable                           |  |                   | 2,641 | 
|Airlines                              |  |                   |      | 
|Public Utility                        |  |                   | 1,036 | 
|Energy                                |  |                   | 1,490 | 
|ABS and Securitizations               |  |                   | 1,013 | 

The amortized cost of the Bond Portfolio in an unrealized loss position at
March 31, 2003, by contractual maturity, is shown below.

|                                       |  |                |         | 
|-------------------------------------- |  | -------------- | ------- | 
|                                       |  | Amortized Cost
|                                       |  |               
|                                       |  | (In thousands)
|Due in one year or less                |  | $              | 6,577   | 
|Due after one year through five years  |  |                | 56,375  | 
|Due after five years through ten years |  |                | 143,509 | 
|Due after ten years                    |  |                | 6,320   | 
|                                       |  |                |         | 
|Total                                  |  | $              | 212,781 | 
|                                       |  |                |         | 

The aging of pre-tax unrealized loss positions at March 31, 2003 as shown
below:

|                                        |      |      |           |         |            |       |                |        |  |  |  |    | 
|--------------------------------------- | ---- | ---- | --------- | ------- | ---------- | ----- | -------------- | ------ |  |  |  | -- | 
|                                        |      |      | Amortized |         | Unrealized |       | Number of     
|Number of Months                        |      | Cost |           | Losses  |            | Items
|                                        |      |      |           |         |            |      
|                                        |      |      |           |         |            |       | (In thousands) |        |  |  | 
|Investment
          Grade Bonds:       |      |      |           |         |            |       |                |        |  |  |  |   
|                                        | 0-6  |      | $         | 63,435  |            |       | $              | 2,162  |  |  |  | 21 | 
|                                        | 7-12 |      |           | 18,137  |            |       |                | 2,846  |  |  |  | 8  | 
|                                        | >12  |      |           | 71,285  |            |       |                | 14,091 |  |  |  | 17 | 
|Below
          Investment Grade Bonds: |      |      |           |         |            |       |                |        |  |  |  |   
|                                        | 0-6  |      | $         | 15,791  |            |       | $              | 284    |  |  |  | 4  | 
|                                        | 7-12 |      |           | 11,798  |            |       |                | 1,229  |  |  |  | 10 | 
|                                        | >12  |      |           | 32,335  |            |       |                | 9,624  |  |  |  | 21 | 
|Total
          Bonds:                  |      |      |           |         |            |       |                |        |  |  |  |   
|                                        | 0-6  |      | $         | 79,226  |            |       | $              | 2,446  |  |  |  | 25 | 
|                                        | 7-12 |      |           | 29,935  |            |       |                | 4,075  |  |  |  | 18 | 
|                                        | >12  |      |           | 103,620 |            |       |                | 23,715 |  |  |  | 38 | 

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Senior secured loans (Secured Loans) are included in the Bond Portfolio
and aggregated $33.7 million at March 31, 2003. Secured Loans are senior to
subordinated debt and equity and are secured by assets of the issuer. At March
31, 2003, Secured Loans consisted of $33.3 million of privately traded
securities and $0.4 million of publicly traded securities. These Secured Loans
are composed of loans to borrowers spanning 5 industries, with 74% of these
assets concentrated in energy. No other industry concentration constituted more
than 10% of these assets.

While the trading market for the Companys privately traded Secured Loans
is more limited than for publicly traded issues, management believes that
participation in these transactions has enabled the Company to improve its
investment yield. As a result of restrictive financial covenants, these
Secured Loans involve greater risk of technical default than do publicly traded
investment-grade securities. However, management believes that the risk of
loss upon default for these Secured Loans is mitigated by such financial
covenants and the collateral values underlying the Secured Loans. The Companys
Secured Loans are rated by S&P, Moodys, Fitch, the NAIC or by the Company,
pursuant to comparable statutory ratings guidelines established by the NAIC.

MORTGAGE LOANS aggregated $197.4 million at March 31, 2003 and consisted
of 85 commercial first mortgage loans with an average loan balance of
approximately $2.3 million, collateralized by properties located in 29 states.
Approximately 39% of this portfolio was office, 19% was multifamily
residential, 16% was retail, 13% was industrial and 13% was other types. At
March 31, 2003, approximately 30% of this portfolio was secured by properties
located in California, approximately 13% by properties located in Texas,
approximately 11% by properties located in Michigan and no more than 10% of
this portfolio was secured by properties located in any other single state. At
March 31, 2003, two mortgage loans have an outstanding balance of $10.0 million
or more, which collectively aggregated approximately 19% of this portfolio. At
March 31, 2003, approximately 26% of the mortgage loan portfolio consisted of
loans with balloon payments due before April 1, 2007. During 2003 and 2002,
loans delinquent by more than 90 days, foreclosed loans and restructured loans
have not been significant in relation to the total mortgage loan portfolio.

At March 31, 2003, approximately 27% of the mortgage loans were seasoned
loans underwritten to the Companys standards and purchased at or near par from
other financial institutions. Such loans generally have higher average
interest rates than loans that could be originated today. The balance of the
mortgage loan portfolio has been originated by the Company under strict
underwriting standards. Commercial mortgage loans on properties such as
offices, hotels and shopping centers generally represent a higher level of risk
than do mortgage loans secured by multifamily residences. This greater risk is
due to several factors, including the larger size of such loans and the more
immediate effects of general economic conditions on these commercial property
types. However, due to the seasoned nature of the Companys mortgage loan
portfolio and its strict underwriting standards, the Company believes that it
has prudently managed the risk attributable to its mortgage loan portfolio
while maintaining attractive yields.

POLICY LOANS totaled $35.3 million at March 31, 2003, compared to $36.1
million at December 31, 2002, and primarily represent loans taken against
universal life insurance policies.

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SECURITIES LENDING COLLATERAL aggregated $59.1 million at March 31, 2003
and $29.6 million at December 31, 2002 and include collateral held under a
securities lending agreement with an affiliated agent. The Company has entered
into such agreement with an affiliated lending agent, which authorizes the
agent to lend securities held in the Companys portfolio to a list of
authorized borrowers. The Company receives primarily cash collateral in an
amount in excess of the market value of the securities loaned. The affiliated
lending agent monitors the daily market value of securities loaned with respect
to the collateral value and obtains additional collateral when necessary to
ensure that collateral is maintained at a minimum of 102% of the value of the
loaned securities. Such collateral is not available for the general use of the
Company.

ASSET-LIABILITY MATCHING is utilized by the Company to minimize the risks
of interest rate fluctuations and disintermediation (i.e. the risk of being
forced to sell investments during unfavorable market conditions). The Company
believes that its fixed-rate liabilities should be backed by a portfolio
principally composed of fixed-rate investments that generate predictable rates
of return. The Company does not have a specific target rate of return.
Instead, its rates of return vary over time depending on the current interest
rate environment, the slope of the yield curve, the spread at which fixed-rate
investments are priced over the yield curve, default rates, and general
economic conditions. Its portfolio strategy is constructed with a view to
achieve adequate risk-adjusted returns consistent with its investment
objectives of effective asset-liability matching, liquidity and safety. The
Companys fixed-rate products incorporate surrender charges or other
restrictions in order to encourage persistency. Approximately 68% of the
Companys fixed annuity and universal life reserves had surrender penalties or
other restrictions at March 31, 2003.

As part of its asset-liability matching discipline, the Company conducts
detailed computer simulations that model its fixed-rate assets and liabilities
under commonly used stress-test interest rate scenarios. With the results of
these computer simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect
its economic value and achieve a predictable spread between what it earns on
its invested assets and what it pays on its liabilities by designing its
fixed-rate products and conducting its investment operations to closely match
the duration of the fixed-rate assets to that of its fixed-rate liabilities.
The Companys fixed-rate assets include: cash and short-term investments;
bonds, notes and redeemable preferred stocks; mortgage loans; and policy loans.
At March 31, 2003, these assets had an aggregate fair value of $1.93 billion
with a duration of 3.7. The Companys fixed-rate liabilities include fixed
annuity and universal life insurance contracts. At March 31, 2003, these
liabilities had an aggregate fair value (determined by discounting future
contractual cash flows by related market rates of interest) of $1.74 billion
with a duration of 4.0. The Companys potential exposure due to a relative 10%
decrease in prevailing interest rates from their March 31, 2003 levels is a
loss of approximately $0.3 million, representing an increase in fair value of
its fixed-rate liabilities that is not offset by an increase in fair value of
its fixed-rate assets. Because the Company actively manages its assets and
liabilities and has strategies in place to minimize its exposure to loss as
interest rate changes occur, it expects that actual losses would be less than
the estimated potential loss.

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##### Table of Contents



Duration is a common option-adjusted measure for the price sensitivity of
a fixed-maturity portfolio to changes in interest rates. It measures the
approximate percentage change in the market value of a portfolio if interest
rates change by 100 basis points (i.e. 1%), recognizing the changes in cash
flows resulting from embedded options such as policy surrenders, investment
prepayments and bond calls. It also incorporates the assumption that the
Company will continue to utilize its existing strategies of pricing its fixed
annuity and universal life products, allocating its available cash flow amongst
its various investment portfolio sectors and maintaining sufficient levels of
liquidity. Because the calculation of duration involves estimation and
incorporates assumptions, potential changes in portfolio value indicated by the
portfolios duration will likely be different from the actual changes
experienced under given interest rate scenarios, and the differences may be
material.

The Company seeks to provide liquidity by investing in MBSs. MBSs are
generally investment-grade securities collateralized by large pools of mortgage
loans. MBSs generally pay principal and interest monthly. The amount of
principal and interest payments may fluctuate as a result of prepayments of the
underlying mortgage loans.

There are risks associated with some of the techniques the Company uses to
provide liquidity, enhance its spread income and match its assets and
liabilities. The primary risk associated with MBSs is that a changing interest
rate environment might cause prepayment of the underlying obligations at speeds
slower or faster than anticipated at the time of their purchase. As part of
its decision to purchase an MBS, the Company assesses the risk of prepayment by
analyzing the securitys projected performance over an array of interest-rate
scenarios. Once an MBS is purchased, the Company monitors its actual
prepayment experience monthly to reassess the relative attractiveness of the
security with the intent to maximize total return.

INVESTED ASSETS EVALUATION is routinely conducted by the Company.
Management identifies monthly those investments that require additional
monitoring and carefully reviews the carrying values of such investments at
least quarterly to determine whether specific investments should be placed on a
nonaccrual basis and to determine declines in value that may be other than
temporary. In making these reviews for bonds, management principally considers
the adequacy of any collateral, compliance with contractual covenants, the
borrowers recent financial performance, news reports and other externally
generated information concerning the creditors affairs. In the case of
publicly traded bonds, management also considers market value quotations, if
available. For mortgage loans, management generally considers information
concerning the mortgaged property and, among other things, factors impacting
the current and expected payment status of the loan and, if available, the
current fair value of the underlying collateral.

The carrying values of investments that are determined to have declines in
value that are other than temporary are reduced to net realizable value and, in
the case of bonds, no further accruals of interest are made. The provisions
for impairment on mortgage loans are based on losses expected by management to
be realized on transfers of mortgage loans to real estate, on the disposition
and settlement of mortgage loans and on mortgage loans that management believes
may not be collectible in full. Accrual of interest is suspended when principal
and interest payments on mortgage loans are past due more than 90 days.
Impairment losses on securitized assets are recognized if the fair value of the
security is less than its book value, and the net

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present value of expected future cash flows is less than the net present
value of expected future cash flows at the most recent (prior) estimation date.

DEFAULTED INVESTMENTS, comprising all investments that are in default as
to the payment of principal or interest, totaled $5.9 million of bonds at March
31, 2003, and constituted approximately 0.3% of total invested assets. At
December 31, 2002, defaulted investments totaled $7.6 million of bonds and
constituted less than 0.4% of total invested assets.

SOURCES OF LIQUIDITY are readily available to the Company in the form of
the Companys existing portfolio of cash and short-term investments, and if
required, proceeds from invested asset sales. The Companys liquidity is
primarily derived from operating cash flows. At March 31, 2003, approximately
$1.35 billion of the Bond Portfolio had an aggregate unrealized gain of $67.2
million while approximately $182.5 million of the Companys Bond Portfolio had
an aggregate unrealized loss of $30.2 million. In addition, the Companys
investment portfolio currently provides approximately $13.9 million of monthly
cash flow from scheduled principal and interest payments. Historically, cash
flows from operations and from the sale of the Companys annuity products have
been more than sufficient in amount to satisfy the Companys liquidity needs.

Management is aware that prevailing market interest rates may shift
significantly and has strategies in place to manage either an increase or
decrease in prevailing rates. In a rising interest rate environment, the
Companys average cost of funds would increase over time as it prices its new
and renewing annuities to maintain a generally competitive market rate.
Management would seek to place new funds in investments that were matched in
duration to, and higher yielding than, the liabilities assumed. The Company
believes that liquidity to fund withdrawals would be available through incoming
cash flow, the sale of short-term or floating-rate instruments on the Companys
substantial MBS segment of the Bond Portfolio, thereby avoiding the sale of
fixed-rate assets in an unfavorable bond market.

In a declining rate environment, the Companys cost of funds would
decrease over time, reflecting lower interest crediting rates on its fixed
annuities. Should increased liquidity be required for withdrawals, the Company
believes that a significant portion of its investments could be sold without
adverse consequences in light of the general strengthening that would be
expected in the bond market.

If a substantial portion of the Companys bond portfolio diminished
significantly in value and/or defaulted, the Company would need to liquidate
other portions of its investment portfolio and/or arrange financing. Such
events that may cause such a liquidity strain could be the result of economic
collapse or terrorist acts.

REGULATION

The Company, in common with other insurers, is subject to regulation and
supervision by the states and other jurisdictions in which it does business.
Within the United States, the method of such regulation varies but generally
has its source in statutes that delegate regulatory and supervisory powers to a
state insurance official. The regulation and supervision relate primarily to
approval of policy forms and rates, the standards of solvency that must be met
and maintained, including risk based capital measurements, the licensing of
insurers and their agents, the nature of and limitations on investments,
restrictions on the size of risks which may be insured under a

23



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##### Table of Contents



single policy, deposits on securities for the benefit of policyholders, methods
of accounting, periodic examinations of the affairs of insurance companies, the
form and content of reports of financial condition required to be filed, and
reserves for unearned premiums, losses and other purposes. In general, such
regulation is for the protection of policyholders rather than security holders.

Risk based capital (RBC) standards are designed to measure the adequacy
of an insurers statutory capital and surplus in relation to the risks inherent
in its business. The standards are intended to help identify inadequately
capitalized companies and require specific regulatory actions in the event an
insurers RBC is deficient. The RBC formula develops a risk adjusted target
level of adjusted statutory capital and surplus by applying certain factors to
various asset, premium and reserve items. Higher factors are applied to more
risky items and lower factors are applied to less risky items. Thus, the
target level of statutory surplus varies not only as a result of the insurers
size, but also on the risk profile of the insurers operations. The RBC Model
Law provides four incremental levels of regulatory attention for insurers whose
surplus is below the calculated RBC target. These levels of attention range
in severity from requiring the insurer to submit a plan for corrective action
to actually placing the insurer under regulatory control. The statutory
capital and surplus of the Company exceeded its RBC requirements by a
considerable margin as of December 31, 2002.

In 1998, the NAIC adopted the codification of statutory accounting
principles (Codification) which replaced the NAICs previous primary guidance
on statutory accounting, which became effective January 1, 2001. Codification
changes prescribed statutory accounting practices and has resulted in changes
to the accounting practices that the Company uses to prepare its statutory
basis financial statements. Codification has been adopted by all fifty states
as the prescribed basis of accounting. New York, however, has made certain
modifications (e.g., no deferred taxes will be recorded prior to January 1,
2002 for companies domiciled in the State of New York). The adoption of
Codification resulted in a decrease to the Companys statutory surplus of
approximately $14.2 million and was recorded as a cumulative effect of changes
in accounting principles in 2001. For periods beginning as of January 1, 2002,
the State of New York conformed to NAIC codification relating to deferred
income taxes. Accordingly, the Company recorded a charge to surplus of $4.9
million during 2002 relating to a change in accounting principle.

Privacy provisions of the Gramm-Leach-Bliley Act became fully effective in
2001 and establish new consumer protections regarding the security,
confidentiality, and uses of nonpublic personal information of individuals. The
law also requires financial institutions to disclose their privacy policies to
their customers. Additional privacy legislation pending in the United States
Congress and several states is designed to provide further privacy protections
to consumers of financial products and services. These statutes and
regulations may result in additional regulatory compliance costs, may limit the
Companys ability to market its products, and may otherwise constrain the
nature or scope of the Companys insurance and financial services operations.
The Gramm-Leach-Bliley Act also allows combinations between insurance
companies, banks, and other entities. In addition, from time to time, Federal
initiatives are proposed that could affect the Companys businesses. Such
initiatives include employee benefit plan regulations and tax law changes
affecting the taxation of insurance

24



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##### Table of Contents



companies and the tax treatment of insurance and other investment products.
Proposals made in recent years to limit the tax deferral of annuities or
otherwise modify the tax rules related to the treatment of annuities have not
been enacted. While certain of such proposals, if implemented, could have an
adverse effect on the Companys sales of affected products, and, consequently,
on its results of operations, the Company believes these proposals have a small
likelihood of being enacted, because they would discourage retirement savings
and there is strong public and industry opposition to them.

25



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##### Table of Contents






QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The quantitative and qualitative disclosures about market risk are
contained in the Asset-Liability Matching section of Managements Discussion
and Analysis of Financial Condition and Results of Operations on pages 20 and
21 herein.




CONTROLS & PROCEDURES

The Companys
disclosure controls and procedures are designed to ensure that
information required to be disclosed in the reports that the Company
files or submits under the Securities Exchange Act of 1934, as
amended (Exchange Act), is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of
the Securities and Exchange Commission. Disclosure controls and
procedures include controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and
communicated to the Companys management, including the
Companys Chief Executive Officer and Principal Financial
Officer, as appropriate to allow timely decisions regarding required
disclosure. The Companys Chief Executive Officer and the
Principal Financial Officer have reviewed the effectiveness of its
disclosure controls and procedures within 90 days of the filing date
of this Quarterly Report on Form 10-Q and have concluded that the
disclosure controls and procedures are effective. There were no
significant changes in the Companys internal controls or in
other factors that could significantly affect these controls
subsequent to the most recent date of evaluation by the
Companys Chief Executive Officer and Principal Financial
Officer.

26



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##### Table of Contents






PART II  OTHER INFORMATION

Item 1. Legal Proceedings

Various lawsuits against the Company have arisen in the ordinary course of
business. Contingent liabilities arising from litigation, income taxes and
other matters are not considered material in relation to the financial
position, results of operations or cash flows of the Company.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submissions of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

EXHIBITS

None.

REPORTS ON FORM 8-K

No Current Report on Form 8-K were filed by the Company during the three months
ended March 31, 2003.

27



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                   |  |                                                                               
|------------------ |  | ------------------------------------------------------------------------------
|                   |  | FIRST SUNAMERICA LIFE INSURANCE COMPANY
Registrant                            
|                   |  |                                                                               
|Date: May 14, 2003 |  | /s/   N. SCOTT GILLIS                                                         
|                   |  |                                                                               
|                   |  | N. Scott Gillis
Senior Vice President
(Principal Financial Officer)           
|                   |  |                                                                               
|Date: May 14, 2003 |  | /s/   MAURICE S. HEBERT                                                       
|                   |  |                                                                               
|                   |  | Maurice S. Hebert
Vice President and Controller
(Principal Accounting Officer)

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##### Table of Contents



Certifications

I, Jay S. Wintrob, Chief Executive Officer of First SunAmerica Life Insurance
Company, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of First
SunAmerica Life Insurance Company;                                                                                                                                                                                                                                         
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;                            
|
| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                               



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant is
made known to us by others within the entity, particularly during
the period in which this quarterly report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                    
|
| | c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                          



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
to the audit committee of registrants board of directors:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                             |  |              |  | 
|------------------------------------------------------------ |  | ------------ |  | 
|Date:                                                        |  | May 14, 2003 |  | 
|                                                             |  |              |  | 
|                                                             |  |              |  | 
|/s/   JAY S. WINTROB

Jay S. Wintrob
Chief Executive Officer |  |             

29



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##### Table of Contents



Certifications

I, N. Scott Gillis, Senior Vice President (Principal Financial Officer) of
First SunAmerica Life Insurance Company, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of First
SunAmerica Life Insurance Company;                                                                                                                                                                                                                                         
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;                            
|
| | 4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                               



| | a. |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant is
made known to us by others within the entity, particularly during
the period in which this quarterly report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                    
|
| | c. |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                          



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
to the audit committee of registrants board of directors:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                            |  |             |  | 
|------------------------------------------------------------------------------------------- |  | ----------- |  | 
|Date:                                                                                       |  | May 14 2003 |  | 
|                                                                                            |  |             |  | 
|                                                                                            |  |             |  | 
|/s/   N. SCOTT GILLIS

N. Scott Gillis,
Senior Vice President
(Principal Financial Officer) |  |            

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