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 June 30, 2000


                           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  ___
                                                    --

     THE  NUMBER OF SHARES OUTSTANDING OF THE REGISTRANTS COMMON STOCK ON AUGUST
15,  2000  WAS  AS  FOLLOWS:

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


<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                      INDEX




                                                                    Page
                                                                  Number(s)
                                                                  ---------
<S>                                                               <C>
Part I - Financial Information

      Balance Sheet (Unaudited) -
      June 30, 2000 and December 31, 1999. . . . . . . . . . . .          3

      Statement of Income and Comprehensive Income (Unaudited)-
      Three Months and Six Months Ended June 30, 2000 and 1999 .          4

      Statement of Cash Flows (Unaudited) -
      Six Months Ended June 30, 2000 and 1999. . . . . . . . . .        5-6

      Notes to Financial Statements (Unaudited). . . . . . . . .          7

      Management's Discussion and Analysis of Financial
      Condition and Results of Operations. . . . . . . . . . . .       8-21

      Quantitative and Qualitative Disclosures About Market
      Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .         22

Part II - Other Information. . . . . . . . . . . . . . . . . . .         23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                           FIRST SUNAMERICA LIFE INSURANCE COMPANY
                                        BALANCE SHEET
                                         (Unaudited)

                                                   June  30,    December  31,
                                                        2000             1999
                                             ---------------  ---------------
<S>                                          <C>              <C>              <C>

ASSETS

Investments:
  Cash and short-term investments . . . . .  $   16,203,000   $   29,350,000
  Bonds, notes and redeemable preferred
    stocks available for sale, at fair
    value (amortized cost: June 2000,
    $1,404,776,000; December 1999,
    $1,587,116,000)                           1,318,499,000     1,522,921,000
  Mortgage loans. . . . . . . . . . . . . .     198,757,000      211,867,000
  Other invested assets . . . . . . . . . .      40,847,000       42,604,000
                                             ---------------  ---------------

  Total investments . . . . . . . . . . . .   1,574,306,000    1,806,742,000

Variable annuity assets held in separate
  accounts. . . . . . . . . . . . . . . . .     609,184,000      558,605,000
Accrued investment income . . . . . . . . .      20,875,000       24,076,000
Deferred acquisition costs. . . . . . . . .     129,847,000      137,637,000
Current income taxes. . . . . . . . . . . .      10,292,000        6,638,000
Deferred income taxes . . . . . . . . . . .      21,744,000       18,275,000
Other assets. . . . . . . . . . . . . . . .       3,028,000        3,539,000
                                             ---------------  ---------------

TOTAL ASSETS. . . . . . . . . . . . . . . .  $2,369,276,000   $2,555,512,000
                                             ===============  ===============

LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts. . .  $1,334,930,000   $1,523,641,000
  Reserves for universal life insurance
    contracts . . . . . . . . . . . . . . .     263,978,000      277,250,000
  Other liabilities . . . . . . . . . . . .       7,134,000       34,776,000
                                             ---------------  ---------------

  Total reserves, payable and accrued
    liabilities . . . . . . . . . . . . . .   1,606,042,000    1,835,667,000
                                             ---------------  ---------------

Variable annuity liabilities related to
  separate accounts . . . . . . . . . . . .     609,184,000      558,605,000
                                             ---------------  ---------------

Shareholder's equity:
  Common Stock. . . . . . . . . . . . . . .       3,000,000        3,000,000
  Additional paid-in capital. . . . . . . .     144,428,000      144,428,000
  Retained earnings . . . . . . . . . . . .      51,262,000       42,409,000
  Accumulated other comprehensive loss. . .     (44,640,000)     (28,597,000)
                                             ---------------  ---------------

  Total shareholder's equity. . . . . . . .     154,050,000      161,240,000
                                             ---------------  ---------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.  $2,369,276,000   $2,555,512,000
                                             ===============  ===============
</TABLE>

                 See accompanying notes to financial statements

                                        3
<PAGE>
<TABLE>
<CAPTION>

                                FIRST SUNAMERICA LIFE INSURANCE COMPANY
                              STATEMENT OF INCOME AND COMPREHENSIVE INCOME
                    For the three months and six months ended June 30, 2000 and 1999
                                              (Unaudited)

                                                           Three  Months                   Six  Months
                                            ----------------------------  ----------------------------
                                                     2000           1999           2000           1999
                                            -------------  -------------  -------------  -------------
<S>                                          <C>            <C>            <C>            <C>
Investment income . . . . . . . . . . . . .  $ 32,165,000   $ 26,359,000   $ 65,495,000   $ 54,406,000

Interest expense on:
  Fixed annuity contracts . . . . . . . . .   (16,164,000)   (17,365,000)   (34,469,000)   (34,898,000)
  Universal life insurance contracts           (3,087,000)           ---     (6,219,000)           ---
                                             -------------  -------------  -------------  -------------

  Total interest expense. . . . . . . . . .   (19,251,000)   (17,365,000)   (40,688,000)   (34,898,000)
                                             -------------  -------------  -------------  -------------

NET INVESTMENT INCOME . . . . . . . . . . .    12,914,000      8,994,000     24,807,000     19,508,000
                                             -------------  -------------  -------------  -------------

NET REALIZED INVESTMENT LOSSES. . . . . . .    (2,231,000)      (730,000)    (3,744,000)      (577,000)
                                             -------------  -------------  -------------  -------------

Fee income:
  Variable annuity fees . . . . . . . . . .     2,263,000      1,522,000      4,467,000      2,891,000
  Surrender charges . . . . . . . . . . . .     1,242,000        805,000      2,014,000      1,448,000
  Universal life insurance fees                   110,000            ---        610,000            ---
                                             -------------  -------------  -------------  -------------

TOTAL FEE INCOME. . . . . . . . . . . . . .     3,615,000      2,327,000      7,091,000      4,339,000
                                             -------------  -------------  -------------  -------------

GENERAL AND ADMINISTRATIVE EXPENSES . . . .    (1,694,000)    (1,243,000)    (3,142,000)    (2,253,000)
                                             -------------  -------------  -------------  -------------

AMORTIZATION OF DEFERRED
  ACQUISITION COSTS . . . . . . . . . . . .    (4,809,000)    (5,700,000)    (9,618,000)   (10,800,000)
                                             -------------  -------------  -------------  -------------

ANNUAL COMMISSIONS. . . . . . . . . . . . .       (94,000)       (86,000)      (267,000)      (168,000)
                                             -------------  -------------  -------------  -------------

PRETAX INCOME . . . . . . . . . . . . . . .     7,701,000      3,562,000     15,127,000     10,049,000

Income tax expense. . . . . . . . . . . . .    (3,395,000)    (1,489,000)    (6,274,000)    (4,155,000)
                                             -------------  -------------  -------------  -------------

NET INCOME. . . . . . . . . . . . . . . . .     4,306,000      2,073,000      8,853,000      5,894,000

OTHER COMPREHENSIVE LOSS, NET OF TAX:
  Net unrealized losses on debt and
    equity securities available for
    sale identified in the current
    period (net of income tax benefit
    of $5,673,000 and $1,897,000 for the
    second quarter of 2000 and 1999,
    respectively, and $9,601,000 and
    $3,355,000 for the six months of
    2000 and 1999, respectively). . . . . .   (10,535,000)    (3,520,000)   (17,831,000)    (6,231,000)
  Less reclassification adjustment
    for net realized losses included in
    net income (net of income tax expense
    of $642,000 and $29,000 for the second
    quarter of 2000 and 1999, respectively
    and $963,000 and $35,000 for the six
    months of 2000 and 1999, respectively).     1,192,000         51,000      1,788,000         66,000
                                             -------------  -------------  -------------  -------------

  OTHER COMPREHENSIVE LOSS. . . . . . . . .    (9,343,000)    (3,469,000)   (16,043,000)    (6,165,000)
                                             -------------  -------------  -------------  -------------

COMPREHENSIVE LOSS. . . . . . . . . . . . .  $ (5,037,000)  $ (1,396,000)  $ (7,190,000)  $   (271,000)
                                             =============  =============  =============  =============
</TABLE>

                 See accompanying notes to financial statements

                                        4
<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                             STATEMENT OF CASH FLOWS
                 For the six months ended June 30, 2000 and 1999
                                   (Unaudited)


                                                         2000            1999
                                                 ------------  --------------
<S>                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . .  $  8,853,000   $   5,894,000
Adjustments to reconcile net income to get
  cash provided by operating activities:
    Interest credited to:
      Fixed annuity contracts . . . . . . . . .    34,469,000      34,899,000
      Universal life insurance contracts            6,219,000             ---
      Net realized investment losses. . . . . .     3,744,000         577,000
      Accretion of net discounts on
        investments . . . . . . . . . . . . . .    (2,090,000)     (1,566,000)
    Amortization of goodwill                              ---          29,000
    Provision for deferred income taxes . . . .     5,170,000        (473,000)
Change in:
  Accrued investment income . . . . . . . . . .     3,201,000        (514,000)
  Deferred acquisition costs. . . . . . . . . .     5,190,000       2,487,000
  Income taxes currently payable. . . . . . . .    (3,654,000)        774,000
  Other liabilities . . . . . . . . . . . . . .    (5,568,000)      8,582,000
Other, net. . . . . . . . . . . . . . . . . . .       280,000         117,000
                                                 -------------  --------------

NET CASH PROVIDED BY OPERATING ACTIVITIES . . .    55,814,000      50,806,000
                                                 -------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of:
  Bonds, notes and redeemable preferred stocks.   (10,333,000)   (198,798,000)
  Mortgage loans. . . . . . . . . . . . . . . .    (6,352,000)    (48,438,000)
Sales of:
  Bonds, notes and redeemable preferred stocks.   146,538,000     207,356,000
  Other investments, excluding short-term
    investments . . . . . . . . . . . . . . . .       485,000         914,000
Redemptions and maturities of:
  Bonds, notes and redeemable preferred stocks.    44,135,000      37,562,000
  Mortgage loans. . . . . . . . . . . . . . . .    19,723,000      20,588,000
  Other investments, excluding short-term
    investments . . . . . . . . . . . . . . . .     1,358,000         430,000
Short-term investments transferred to Anchor
  National Life Insurance Company in assumption
  reinsurance transaction with MBL Life
  Assurance Corporation                           (16,741,000)            ---
                                                 -------------  --------------

NET CASH PROVIDED BY INVESTING ACTIVITIES . . .   178,813,000      19,614,000
                                                 -------------  --------------
</TABLE>

                 See accompanying notes to financial statements

                                        5

<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                       STATEMENT OF CASH FLOWS (Continued)
                 For the six months ended June 30, 2000 and 1999
                                   (Unaudited)


                                                2000           1999
                                       -------------  -------------
<S>                                    <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Premium receipts on:
  Fixed annuity contracts . . . . . .  $  19,690,000   $ 34,505,000
  Universal life insurance contracts       6,323,000            ---
Net exchanges from the fixed accounts
  of variable annuity contracts . . .    (27,782,000)   (19,133,000)
Withdrawal payments on:
  Fixed annuity contracts . . . . . .   (177,042,000)   (77,434,000)
  Universal life insurance contracts     (17,754,000)           ---
Claims and annuity payments on fixed
  annuity contracts . . . . . . . . .    (29,135,000)   (13,189,000)
Net payments on short-term financings    (22,074,000)      (195,000)
                                       --------------  -------------

NET CASH USED BY FINANCING ACTIVITIES   (247,774,000)   (75,446,000)
                                       --------------  -------------

NET DECREASE IN CASH AND SHORT-TERM
  INVESTMENTS . . . . . . . . . . . .    (13,147,000)    (5,026,000)

CASH AND SHORT-TERM INVESTMENTS AT
  BEGINNING OF PERIOD . . . . . . . .     29,350,000     18,466,000
                                       --------------  -------------

CASH AND SHORT-TERM INVESTMENTS AT
  END OF PERIOD . . . . . . . . . . .  $  16,203,000   $ 13,440,000
                                       ==============  =============


SUPPLEMENTAL CASH FLOW INFORMATION:

Net income taxes paid . . . . . . . .  $   5,681,000   $  4,833,000
                                       ==============  =============
</TABLE>

                 See accompanying notes to financial statements

                                        6

<PAGE>

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

1.     BASIS  OF  PRESENTATION
       -----------------------

     First  SunAmerica  Life  Insurance  Company  (the "Company") is an indirect
wholly  owned  subsidiary  of  American  International  Group,  Inc. ("AIG"), an
international insurance and financial services holding company. The Company is a
New  York-domiciled  life insurance company engaged primarily in the business of
selling  and  administering  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 to present fairly the Company's
financial position as of June 30, 2000 and December 31, 1999, the results of its
operations  for the three months and six months ended June 30, 2000 and 1999 and
its  cash flows for the six months ended June 30, 2000 and 1999.  The results of
operations  for  the  three  months  and  six months ended June 30, 2000 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, 1999, contained
in  the  Company's  1999  Annual  Report  on Form 10-K.  Certain items have been
reclassified  to  conform  to  the  current  period's  presentation.

2.     RECENTLY  ISSUED  ACCOUNTING  STANDARD
       --------------------------------------

     In  June  1998, the FASB issued Statement of Financial Accounting Standards
No.  133,  "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133").  SFAS  133 addresses the accounting for derivative instruments, including
certain  derivative  instruments  embedded  in  other  contracts,  and  hedging
activities.  SFAS  133  was postponed by SFAS 137, and now will be effective for
the  Company  as  of  January  1,  2001.  Therefore,  it  is not included in the
accompanying  financial  statements.  The Company has not completed its analysis
of  the  effect  of  SFAS  133,  but management believes that it will not have a
material  impact  on the Company's results of operations, financial condition or
liquidity.

                                        7
<PAGE>
                     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  and  six  months  ended  June 30, 2000 and June 30, 1999 follows.

     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.

RESULTS  OF  OPERATIONS

     NET  INCOME  totaled  $4.3  million in the second quarter of 2000, compared
with $2.1 million in the second quarter of 1999.  For the six months, net income
amounted  to  $8.9 million in 2000 compared to $5.9 million in 1999.  On July 1,
1999, the Company acquired the New York individual life and individual and group
annuity  business  of  MBL  Life Assurance Corporation (the "Acquisition").  The
Acquisition  was  accounted  for  under  the purchase method of accounting, and,
therefore  results  of operations include those of the Acquisition only from its
date  of acquisition.  Consequently, the operating results for 2000 and 1999 are
not  comparable.  On  a  pro  forma  basis,  using  the  historical  financial
information  of  the  acquired  business

                                        8

<PAGE>
and  assuming  that the Acquisition had been consummated on January 1, 1999, the
beginning of the prior-year periods discussed herein, net income would have been
$2.8 million and $7.3 million for the three months and six months ended June 30,
1999,  respectively.

     PRETAX  INCOME  totaled $7.7 million in the second quarter of 2000 and $3.6
million  in  the  second  quarter  of  1999.  For  the six months, pretax income
totaled  $15.1  million  in  2000,  compared  with  $10.0  million  in 1999. The
significant  improvements  in 2000 over 1999 primarily resulted from an increase
in  net  investment  income,  increased  variable  annuity  and  universal  life
insurance  fees  and  decreased  deferred acquisition costs, partially offset by
increases  in  net  realized  investment  losses  and general and administrative
expenses.

     NET  INVESTMENT  INCOME,  which  is the spread between the income earned on
invested  assets  and  the  interest  paid  on  fixed  annuities  and  other
interest-bearing  liabilities,  increased to $12.9 million in the second quarter
of  2000  from  $9.0 million in the second quarter of 1999.  These amounts equal
2.98% on average invested assets (computed on a daily basis) of $1.73 billion in
the second quarter of 2000 and 2.43% on average invested assets of $1.48 billion
in  the  second  quarter  of  1999.  For  the  six months, net investment income
increased to $24.8 million in 2000 from $19.5 million in 1999, equaling 2.79% of
average  invested  assets of $1.78 billion in 2000 and 2.62% of average invested
assets of $1.49 billion in 1999.  On a pro forma basis, assuming the Acquisition
had  been  consummated  on  January  1,  1999,  net investment income on related
average  invested  assets  would have been 1.72% and 1.85% in the second quarter
and  six  months  of 1999, respectively.  The improvement in 2000 net investment
yields  over both actual and pro forma 1999 amounts reflects the redeployment of
lower  yielding  assets  received  in  the  Acquisition  into  higher  yielding
investment  categories.

     Net investment spreads include the effect of income earned on the excess of
average  invested  assets  over  average  interest-bearing  liabilities. Average
invested  assets  exceeded average interest-bearing liabilities by $77.3 million
in  the  second quarter of 2000 and $78.0 million in the second quarter of 1999.
For  the  six  months, average invested assets exceeded average interest-bearing
liabilities  by $72.0 million in 2000 and $74.6 million in 1999.  The difference
between  the  Company's  yield  on  average invested assets and the rate paid on
average  interest-bearing liabilities (the "Spread Difference") was 2.78% in the
second  quarter  of  2000  and 2.17% in the second quarter of 1999.  For the six
months,  the  spread  difference  was 2.59% in 2000 and 2.38% in 1999.  On a pro
forma  basis,  assuming the Acquisition had been consummated on January 1, 1999,
the  spread difference would have been 1.59% and 1.72% in the second quarter and
six  months  of 1999, respectively, reflecting primarily the effect of the lower
yielding  assets  received  in  the Acquisition.  The invested assets associated
with  the  Acquisition  included  high-grade  corporate,  government  and
government/agency  bonds,  which are generally lower yielding than a significant
portion  of  the  invested  assets  that comprise the remainder of the Company's
portfolio.

     Investment  income  (and  the  related  yield  on  average invested assets)
totaled  $32.2  million  (7.43%)  in  the  second  quarter  of  2000  and  $26.4

                                        9

<PAGE>
million  (7.12%) in the second quarter of 1999, $65.5 million (7.36%) in the six
months of 2000 and $54.4 million (7.32%) in the six months of 1999. The increase
in  the  investment  yield  in  2000 as compared with 1999 is primarily due to a
generally  increasing interest rate environment.  On a pro forma basis, assuming
the  Acquisition  had  been consummated on January 1, 1999, the yield on related
average  invested  assets  would have been 6.61% and 6.74% in the second quarter
and  six  months  of  1999,  respectively.

     Total interest expense equaled $19.3 million in the second quarter of 2000,
compared  with $17.4 million in the second quarter of 1999.  For the six months,
interest  expense  aggregated $40.7 million in 2000, compared with $34.9 million
in 1999.  The average rate paid on all interest-bearing liabilities was 4.65% in
the  second  quarter  of 2000 compared with 4.95% in the second quarter of 1999.
For  the  six  months, the average rate paid on all interest-bearing liabilities
was  4.77%  for  2000  and 4.94% for 1999. Interest-bearing liabilities averaged
$1.65 billion during the second quarter of 2000, $1.40 billion during the second
quarter  of  1999,  $1.71 billion during the six months of 2000 and $1.41 during
the six months of 1999.  On a pro forma basis, assuming the Acquisition had been
consummated  on  January  1, 1999, the average rate paid on all interest-bearing
liabilities  would  have been 5.02% in both the second quarter and six months of
1999  and  interest-bearing  liabilities  would  have averaged $2.24 billion and
$2.25  billion  during  the second quarter and six months of 1999, respectively.
The  decrease  in  the  overall  rates  paid  in 2000 results primarily from the
continued  reduction of crediting rates on certain closed blocks of business and
the  effects  of  the  Acquisition.

     GROWTH IN AVERAGE INVESTED ASSETS for both the quarter and six months ended
June  30,  2000  largely resulted from the impact of the Acquisition, from which
the  Company  acquired  $678.3  million  of invested assets.  Changes in average
invested  assets  also  reflect  sales  of fixed annuities and the fixed account
options  of  the Company's variable annuity products ("Fixed Annuity Premiums"),
and  renewal  premiums on its universal life product ("UL Premiums") acquired in
the  Acquisition,  partially  offset by net exchanges from fixed accounts to the
separate  accounts  of variable annuity contracts. Fixed Annuity Premiums and UL
Premiums  totaled  $16.8 million in the second quarter of 2000, $18.3 million in
the second quarter of 1999, $26.0 million in the six months of 2000 and $34.5 in
the  six  months  of  1999  and  are  largely premiums for the fixed accounts of
variable  annuities.  Such  premiums  have  decreased,  in  part, as a result of
regulatory  changes  in  the  state  of  New York relating to non-taxable policy
exchange requirements.  On an annualized basis, these premiums represent 4%, 5%,
3% and 5%, respectively, of the related reserve balances at the beginning of the
respective  periods.

     NET  REALIZED  INVESTMENT LOSSES totaled $2.2 million in the second quarter
of  2000,  compared  with $0.7 million in the second quarter of 1999 and include
impairment  writedowns  of $2.2 million and $3.2 million, respectively.  For the
six  months,  net  realized  investment  losses  amount  to $3.7 million in 2000
compared  with  $0.6  million  in 1999 and include impairment writedowns of $3.4
million  and  $3.8  million,  respectively.  Thus,  net  losses  from  sales and
redemptions  of  investments  totaled  $79,000  and  $347,000  in  the  second
quarter  and  six  months  of  2000,  respectively,

                                       10

<PAGE>
compared to net gains from  sales and redemptions of investments of $2.5 million
and  $3.2  million  in  the second quarter and six months of 1999, respectively.

     The  Company sold or redeemed invested assets, principally bonds and notes,
aggregating  $99.0  million  in the second quarter of 2000, $74.4 million in the
second  quarter  of  1999,  $212.6  million in the six months of 2000 and $233.0
million  in the six months of 1999.  Sales of investments result from the active
management  of  the Company's investment portfolio, including assets received as
part  of  the  Acquisition.  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 0.02%, 0.66%, 0.04%
and  0.44%  of average invested assets in the second quarter of 2000, the second
quarter  of  1999,  the  six  months  of  2000  and  the  six  months  of  1999,
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.

     Impairment  writedowns  represent  provisions  applied to bonds in 2000 and
1999.  On  an  annualized  basis,  impairment  writedowns represent 0.50%, 0.86%
0.38%  and  0.51%  of average invested assets in the second quarter of 2000, the
second  quarter  of  1999,  the  six months of 2000, and the six months of 1999,
respectively.  For  the  twenty  quarters  beginning  July  1,  1995, impairment
writedowns  as  a percent of average invested assets have ranged up to 0.86% and
have  averaged  0.19%.  Such  writedowns  are  based  upon  estimates of the net
realizable value of the applicable assets.  Actual realization will be dependent
upon  future  events.

     VARIABLE  ANNUITY  FEES are based on the market value of assets in separate
accounts  supporting variable annuity contracts.  Such fees totaled $2.3 million
in  the second quarter of 2000, compared with $1.5 million in the second quarter
of  1999.  For  the  six  months,  variable annuity fees totaled $4.5 million in
2000,  compared  with  $2.9 million in 1999.  The increased fees in 2000 reflect
growth  in  average variable annuity assets, principally due to increased market
values,  net  exchanges  into  the  separate accounts from the fixed accounts of
variable  annuity  contracts  and  the  receipt  of  variable  annuity premiums,
partially  offset  by surrenders.  On an annualized basis, variable annuity fees
represent 1.5% of average variable annuity assets in both the second quarter and
six  months  of 2000 and 1999.  Variable annuity assets averaged $589.5 million,
$394.3  million, $581.7 million and $376.2 million during the second quarters of
2000  and  1999  and  the  six  months of 2000 and 1999, respectively.  Variable
annuity  premiums,  which  exclude  premiums  allocated to the fixed accounts of
variable  annuity products, totaled $8.9 million and $17.2 million in the second
quarters of 2000 and 1999, and $18.9 million and $29.4 million in the six months
of  2000 and 1999, respectively. On an annualized basis, these amounts represent
6%,  18%  7% and 17%, respectively of variable annuity reserves at the beginning
of  the  respective  periods.   Transfers  from  the  fixed  accounts  of  the

                                       11
Company's  variable  annuity  products  to the separate accounts (see "Growth in
Average  Invested  Assets")  are not classified in variable annuity premiums (in
accordance with generally accepted accounting principles).  Accordingly, changes
in  variable  annuity  premiums  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 premiums allocated to the
fixed accounts) ("Variable Annuity Product Sales") amounted to $18.2 million and
$33.3  million  in  the second quarter of 2000 and 1999, respectively, and $35.2
million  and  $59.5  million  in  the six months of 2000 and 1999, respectively.
Variable annuity product sales primarily reflect sales of the Company's flagship
variable annuity line, Polaris.  Polaris is a multimanager variable annuity that
offers  investors  a  choice  of  more  than  25  variable funds and a number of
guaranteed  fixed-rate  funds.  Variable Annuity Product Sales have decreased in
2000,  principally  as  a  result of regulatory changes in the State of New York
relating  to  non-taxable  policy  exchange  requirements.

     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 variable annuities
and  annuities  generally  (See  "Regulation").

     UNIVERSAL  LIFE  INSURANCE  FEES  result  from the universal life insurance
contract reserves acquired in the Acquisition and the ongoing receipt of renewal
premiums  on  such  contracts,  and  consist of mortality charges, up-front fees
earned  on  premiums  received  and  administrative fees net of excess mortality
expense on these contracts.  The Company does not actively market universal life
insurance  contracts.  Universal  life  insurance  fees amounted to $110,000 and
$610,000  in the second quarter and six months of 2000, respectively.  Such fees
annualized  represent  0.17%  and  0.47%  of average reserves for universal life
insurance  contracts  for  the second quarter and six months of 2000.  Since the
Acquisition  occurred  on  July  1,  1999,  no  such  fees  were earned in 1999.

     SURRENDER  CHARGES  on  fixed  and variable annuity contracts and universal
life  contracts  totaled  $1.2  million  in  the second quarter of 2000 and $0.8
million  in  the  second  quarter  of  1999.  For the six months, such surrender
charges  totaled  $2.0  million  in  2000  compared  with  $1.4 million in 1999.
Surrender  charges  generally  are  assessed  on  withdrawals at declining rates
during  the first seven years of a contract.  Withdrawal payments, which include
surrenders  and  lump-sum annuity benefits, totaled $110.4 million in the second
quarter  of  2000  (including  $8.0  million  attributable  to  the Acquisition)
compared  to  $47.4  million  in the second quarter of 1999. For the six months,
such withdrawal payments totaled $181.9 million in 2000 (including $29.7 million
attributable  to  the  Acquisition)  and $89.2 million in 1999. Annualized, when
expressed  as  a  percentage  of  fixed  and variable annuity and universal life
reserves, these payments represent 21.6% (1.5% attributable to the Acquisition),
10.8%,  19.0%  (1.3%  attributable  to the Acquisition) and 10.2% for the second
quarter  of  2000  and  1999  and the six months of 2000 and 1999, respectively.

                                       12
<PAGE>

The increase in withdrawal rates in 2000 as compared to 1999 is due primarily to
increased  surrenders  on  certain  closed  blocks  of  fixed  annuity business.
Withdrawals  include  variable  annuity  payments  from  the  separate  accounts
totaling  $8.6 million (5.9% of average variable annuity reserves), $6.5 million
(6.6%  of  average  variable  annuity  reserves), $16.9 million (5.8% of average
variable  annuity  reserves) and $11.8 million (6.3% of average variable annuity
reserves) in the second quarters of 2000 and 1999 and the six months of 2000 and
1999,  respectively.  Management  anticipates  that withdrawal rates will remain
relatively  stable  for  the  foreseeable  future.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES  totaled  $1.7 million in the second
quarter  of  2000  and  $1.2  million  in 1999.  For the six months, general and
administrative  expenses  totaled $3.1 million in 2000 and $2.3 million in 1999.
The increases in 2000 over 1999 principally reflect both increased costs related
to  the  business  acquired in the Acquisition and expenses related to servicing
the  Company's  growing  block  of  variable  annuity  policies.  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 $4.8 million in the
second  quarter  of  2000,  compared  with $5.7 million in the second quarter of
1999.  For  the  six  months, amortization of deferred acquisition costs totaled
$9.6  million  in  2000  compared  with  $10.8  million  in  1999.

     ANNUAL COMMISSIONS represent renewal commissions, paid quarterly in arrears
to  maintain  the  persistency  of  certain  of the Company's fixed and variable
annuity  contracts.  Annual commissions totaled $94,000 in the second quarter of
2000  and  $86,000  in  the  second  quarter of 1999. For the six months, annual
commissions  totaled  $267,000  in  2000  and  $168,000  in  1999.

     INCOME  TAX  EXPENSE  totaled  $3.4  million in the second quarter of 2000,
compared with $1.5 million in the second quarter of 1999, representing effective
annualized  tax  rates  of  44% and 42%, respectively.  For the six months, such
expenses  totaled $6.3 million in 2000 and $4.2 million in 1999, representing an
effective  annualized  tax  rate  of  41%  for  both  2000  and  1999.

FINANCIAL  CONDITION  AND  LIQUIDITY

     SHAREHOLDER'S  EQUITY  decreased  to  $154.1  million at June 30, 2000 from
$161.2  million  at December 31, 1999, primarily due to a $16.0 million increase
in  accumulated other comprehensive loss, partially offset by net income of $8.9
million  recorded  in  2000.

     INVESTED  ASSETS at June 30, 2000 totaled $1.57 billion compared with $1.81
billion  at  December 31, 1999.  The Company manages most of its invested assets
internally.  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

                                       13
<PAGE>
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 84% of the Company's total investment
portfolio at June 30, 2000, had an amortized cost that was $86.3 million greater
than  its  aggregate  fair value at June 30, 2000 and $64.2 million greater than
its  aggregated  fair  value at December 31, 1999.  The net unrealized losses on
the  Bond  Portfolio  in  2000  principally  reflect  the  recent  increases  in
prevailing  interest rates and the corresponding effect on the fair value of the
Bond  Portfolio  at  June  30,  2000.

     At  June  30,  2000  the  Bond  Portfolio (excluding $180,000 of redeemable
preferred  stocks)  included  $1.31  billion of bonds rated by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service ("Moody's"), Duff & Phelps Credit
Rating  Co.  ("DCR"),  Fitch  Investors  Service, L.P. ("Fitch") or the National
Association  of  Insurance  Commissioners  ("NAIC"),  and $12.5 million of bonds
rated by the Company pursuant to statutory ratings guidelines established by the
NAIC.  At  June  30, 2000, approximately $1.20 billion of the Bond Portfolio was
investment  grade, including $537.7 million of U.S. government/agency securities
and  mortgage-backed  securities  ("MBSs").

     At  June 30, 2000, the Bond Portfolio included $121.3 million of bonds that
were  not investment grade.  These non-investment-grade bonds accounted for 5.1%
of  the  Company's  total  assets  and  7.7%  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.  The
Company had no material issuer concentrations of non-investment-grade securities
at  June  30,  2000.

     The  table  on  the  following page summarizes the Company's rated bonds by
rating  classification  as  of  June  30,  2000.


                                       14

<PAGE>
<TABLE>
<CAPTION>

                                        RATED BONDS BY RATING CLASSIFICATION
                                               (Dollars in thousands)

                                           Issues  not  rated  by  S&P/Moody's
   Issues  Rated  by  S&P/Moody's/DCR/Fitch     DCR/Fitch,  by  NAIC  Category                                Total
-------------------------------------------------------------------------------------------------------------------


S&P/(Moody's)                     Estimated       NAIC               Estimated               Estimated   Percent of
[DCR] {Fitch}         Amortized        fair   category   Amortized        fair   Amortized        fair     invested
 category (1)              cost       value        (2)        cost       value        cost       value       assets
-------------------  ----------  ----------  ---------  ----------  ----------  ----------  ----------  -----------
<S>                  <C>         <C>         <C>        <C>         <C>         <C>         <C>         <C>
AAA+ to A-
  (A11 to A3)
  [AAA to A-]
  {AAA to A-} . . .  $  952,888  $  910,357         1   $   55,086  $   54,754  $1,007,974  $  965,111       61.30%

BBB+ to BBB-
  (Baa1 to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}. .     202,836     194,735         2       38,897      37,155     241,733     231,890       14.73

BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}           13,087       9,911         3          ---         ---      13,087       9,911        0.63

B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}. . . .      87,871      75,996         4       22,550      20,694     110,421      96,690        6.14

CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}. . .      24,201       8,345         5        5,795       5,507      29,996      13,852        0.88

CI to D
  [DD]
  {D}                       ---         ---         6        1,385         865       1,385         865        0.05
                     ----------  ----------             ----------  ----------  ----------  ----------

TOTAL RATED ISSUES.  $1,280,883  $1,199,344             $  123,713  $  118,975  $1,404,596  $1,318,319
                     ==========  ==========             ==========  ==========  ==========  ==========
<FN>

Footnotes  appear  on  the  following  page.
</TABLE>

                                       15
<PAGE>

     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.  DCR  rates  debt  securities  in rating categories ranging from AAA (the
highest)  to  DD  (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.  Issues  are categorized based on the
highest  of  the  S&P,  Moody's,  DCR  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/DCR/Fitch rating groups listed
above, with categories 1 and 2 considered investment grade.  The NAIC categories
include  $12.5  million  of  assets  that  were rated by the Company pursuant to
applicable  NAIC  rating  guidelines.

                                       16

<PAGE>
     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and  aggregated  $74.6  million  at  June 30, 2000.  Secured Loans are senior to
subordinated  debt and equity, and are secured by assets of the issuer.  At June
30,  2000,  Secured  Loans  consisted  of  $56.4  million  of  privately  traded
securities  and $18.2 million of publicly traded securities. These Secured Loans
are  composed  of  loans  to  borrowers spanning 9 industries, with 19% of these
assets  concentrated  in  utilities,  8%  concentrated  in  technology  and  7%
concentrated  in  energy.  No other industry concentration constituted more than
6%  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,  DCR,  Fitch,  the NAIC or by the Company,
pursuant  to  comparable  statutory  ratings guidelines established by the NAIC.

     MORTGAGE  LOANS aggregated $198.8 million at June 30, 2000 and consisted of
137  commercial  first  mortgage  loans  with  an  average  loan  balance  of
approximately  $1.5  million, collateralized by properties located in 32 states.
Approximately  37%  of  this  portfolio  was  office,  24%  was  retail, 15% was
industrial,  12%  was  multifamily residential and 12% was other types.  At June
30,  2000, approximately 32% of this portfolio was secured by properties located
in  California,  approximately  11%  by  properties  located  in  Michigan,
approximately  9%  by properties located in New York and no more than 5% of this
portfolio  was secured by properties located in any other single state.  At June
30, 2000, one mortgage loan had an outstanding balance of $10.0 million or more,
which  represented  approximately 5% of this portfolio, and approximately 31% of
the  mortgage loan portfolio consisted of loans with balloon payments due before
July  1,  2003.  During  2000  and  1999, 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  June  30,  2000,  approximately 55% 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  utilized,  the  Company  believes that it has prudently
managed  the  risk attributable to its mortgage loan portfolio while maintaining
attractive  yields.

                                       17
<PAGE>
     ASSET-LIABILITY  MATCHING  is utilized by the Company to minimize the risks
of  interest rate fluctuations and disintermediation.  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 81% of the Company's fixed annuity and universal life reserves had
surrender  penalties  or  other  restrictions  at  June  30,  2000.

     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; and mortgage loans.  At June 30, 2000, these assets
had  an  aggregate  fair  value  of  $1.57  billion with a duration of 3.8.  The
Company's  fixed-rate  liabilities  are  its  fixed  annuity  and universal life
insurance  contracts.  At June 30, 2000, these liabilities had an aggregate fair
value (determined by discounting future contractual cash flows by related market
rates  of  interest)  of  $1.52  billion  with a duration of 3.6.  The Company's
potential  exposure  due to a relative 10% increase in prevailing interest rates
from  their  June  30,  2000  levels  is  a  loss of approximately $2.9 million,
representing an increase in the fair value of its fixed-rate liabilities that is
not  offset  by an increase in the 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.

     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,  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

                                       18

<PAGE>
different  from  the  actual  changes  experienced  under  given  interest  rate
scenarios,  and  the  differences  may  be  material.

     The  Company  also  seeks  to  provide liquidity from time to time by using
reverse  repurchase  agreements  ("Reverse Repos"), and by investing in MBSs. It
also  seeks  to enhance its spread income by using Reverse Repos.  Reverse Repos
involve  a sale of securities and an agreement to repurchase the same securities
at  a  later date at an agreed upon price and are generally over-collateralized.
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 the Company's Reverse Repos is
counterparty  risk.  The  Company  believes, however, that the counterparties to
its  Reverse  Repos  are  financially responsible and that the counterparty risk
associated  with those transactions is minimal.  It is the Company's policy that
these  agreements are entered into with counterparties who have a debt rating of
A/A2  or better from both S&P and Moody's.  The Company continually monitors its
credit  exposure  with respect to these agreements.  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

                                       19

<PAGE>
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.

     DEFAULTED INVESTMENTS, comprising all investments that are in default as to
the  payment  of  principal  or interest, totaled $14.4 million ($3.4 million of
mortgage  loans  and  $11.0  million of bonds) at June 30, 2000, and constituted
0.9%  of  total  invested  assets.  At  December  31, 1999 defaulted investments
totaled  $1.8  million  of mortgage loans and constituted 0.1% 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, Reverse
Repo  capacity on invested assets and, if required, proceeds from invested asset
sales.  At  June  30,  2000,  approximately  $1.10 billion of the Company's Bond
Portfolio had an aggregate unrealized loss of $89.8 million, while approximately
$214.0  million  of  the Bond Portfolio had an aggregate unrealized gain of $3.5
million.  In  addition,  the  Company's  investment portfolio currently provides
approximately  $16.7  million  of monthly cash flow from scheduled principal and
interest  payments.  Historically, cash flows from operations and from the sales
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 or Reverse Repos
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.

REGULATION

     The  Company,  in  common with other insurers, is subject to regulation and
supervision  by the states and by 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 an
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

                                       20
<PAGE>
limitations  on  investments,  restrictions  on  the  size of risks which may be
insured  under  a  single  policy,  deposits  of  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 RBC standards consist of formulas that establish capital
requirements  relating  to  insurance,  business, asset and interest rate risks.
The  standards  are  intended  to  help  identify  companies  which  are
under-capitalized  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 statutory capital
and  surplus  of  the  Company  exceeded  its RBC requirements by a considerable
margin  as  of  June  30,  2000.

     Federal legislation has been recently enacted allowing combinations between
insurance  companies, banks and other entities.  It is not yet known what effect
this  legislation  will  have on insurance companies.  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 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.

                                       21

<PAGE>
           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 19 and 20
herein.

                                       22

<PAGE>
                           PART II - OTHER INFORMATION

Item  1.     Legal  Proceedings
             ------------------

     Not  applicable.

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


Exhibit
  No.                  Description
-----                  -----------

     27          Financial  Data  Schedule


REPORTS  ON  FORM  8-K

No  Current  Reports  on  Form  8-K  were  filed by the Company during the first
quarter  ended  June  30,  2000.

                                       23
<PAGE>
                                   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:  August  15,  2000     /s/  N.  SCOTT  GILLIS
------------------------     ----------------------
                             N.  Scott  Gillis
                             Senior  Vice  President
                             (Principal  Financial  Officer)



Date:  August  15,  2000     /s/  MAURICE  S.  HEBERT
------------------------     ------------------------
                             Maurice  S.  Hebert
                             Vice  President  and  Controller
                             (Principal  Accounting  Officer)



                                       24
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                             LIST OF EXHIBITS FILED

Exhibit
  No.                   Description
-----                   -----------

     27          Financial  Data  Schedule.


                                       25