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

For the quarterly period ended December 31, 1997

                                     OR

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

      For the transition period from                   to                  
                                                

                      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 registrant's common stock on
February 13, 1998 was as follows:

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










                   FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                    INDEX



                                                                    Page
                                                                  Number(s)
                                                                  ---------
Part I - Financial Information

      Balance Sheet (Unaudited) - 
      December 31, 1997 and September 30, 1997                       3 - 4


      Income Statement (Unaudited) -
      Three Months Ended December 31, 1997 and 1996                      5


      Statement of Cash Flows (Unaudited) -
      Three Months Ended December 31, 1997 and 1996                  6 - 7


      Notes to Financial Statements (Unaudited)                          8


      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                           9 - 19


Part II - Other Information                                             20
























<TABLE>
                    FIRST SUNAMERICA LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                         ITEM 1 - FINANCIAL STATEMENTS
<CAPTION>
                                 BALANCE SHEET
                                  (Unaudited)


                                                 December 31,    September 30,
                                                         1997             1997
                                               --------------   --------------
<S>                                           <C>              <C>            
ASSETS

Investments:
  Cash and short-term investments             $    71,060,000  $    50,585,000
  Bonds and notes available for sale,
    at fair value (amortized cost:
    December 1997, $1,368,509,000;
    September 1997, $1,459,112,000)             1,407,942,000    1,499,253,000
  Mortgage loans                                  130,023,000      131,117,000
  Other invested assets                             7,982,000        9,277,000
                                               --------------   --------------
  Total investments                             1,617,007,000    1,690,232,000

Variable annuity assets                           194,892,000      171,475,000
Accrued investment income                          19,524,000       22,243,000
Deferred acquisition costs                         93,087,000       96,516,000
Other assets                                        1,700,000        4,024,000
                                               --------------   --------------
TOTAL ASSETS                                  $ 1,926,210,000  $ 1,984,490,000
                                               ==============   ==============
















</TABLE>

                            See accompanying notes

                                       3

<TABLE>
                    FIRST SUNAMERICA LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                         ITEM 1 - FINANCIAL STATEMENTS
<CAPTION>
                           BALANCE SHEET (Continued)
                                  (Unaudited)

                                                 December 31,    September 30,
                                                         1997             1997
                                               --------------   --------------
<S>                                          <C>               <C>            
LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts       $  1,534,514,000  $ 1,556,656,000
  Payable to brokers for purchases of 
    securities                                            ---       12,460,000
  Income taxes payable                              4,395,000        2,236,000
  Other liabilities                                13,933,000       68,601,000
                                               --------------   --------------
  Total reserves, payables                                   
    and accrued liabilities                     1,552,842,000    1,639,953,000
                                               --------------   --------------
Variable annuity liabilities                      194,892,000      171,475,000
                                               --------------   --------------
Deferred income taxes                               5,878,000        4,984,000
                                               --------------   --------------
Shareholder's equity:
  Common Stock                                      3,000,000        3,000,000
  Additional paid-in capital                      144,428,000      144,428,000
  Retained earnings                                19,099,000       14,826,000
  Net unrealized gains on debt and
    equity securities available for sale            6,071,000        5,824,000
                                               --------------   --------------
  Total shareholder's equity                      172,598,000      168,078,000
                                               --------------   --------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY   $  1,926,210,000  $ 1,984,490,000
                                               ==============   ==============










</TABLE>

                            See accompanying notes

                                       4

<TABLE>
                    FIRST SUNAMERICA LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (Continued)
<CAPTION>
                               INCOME STATEMENT
                                  (Unaudited)

                                                     Three Months Ended December 31,
                                                     -------------------------------
                                                              1997              1996
                                                     -------------     -------------
        <S>                                         <C>                <C>          
        Investment income                           $   29,882,000     $   2,893,000
                                                     -------------     -------------
        Interest expense on:                                                        
          Fixed annuity contracts                      (21,307,000)       (2,257,000)
          Senior indebtedness                              (28,000)              ---
                                                     -------------     -------------
        Total interest expense                         (21,335,000)       (2,257,000)
                                                     -------------     -------------
        NET INVESTMENT INCOME                            8,547,000           636,000
                                                     -------------     -------------
        NET REALIZED INVESTMENT GAINS                    2,075,000           459,000
                                                     -------------     -------------
        Fee income:                                                                 
          Variable annuity fees                            699,000           292,000
          Surrender charges                                954,000            56,000
                                                     -------------     -------------
        TOTAL FEE INCOME                                 1,653,000           348,000
                                                     -------------     -------------
        GENERAL AND ADMINISTRATIVE
          EXPENSES                                        (944,000)         (357,000)
                                                     -------------     -------------
        AMORTIZATION OF DEFERRED 
          ACQUISITION COSTS                             (4,026,000)         (302,000)
                                                     -------------------------------
        ANNUAL COMMISSIONS                                (112,000)           (4,000)
                                                     -------------     -------------
  
        PRETAX INCOME                                    7,193,000           780,000

        Income tax expense                              (2,919,000)         (316,000)
                                                     -------------     -------------

        NET INCOME                                  $    4,274,000     $     464,000
                                                     =============     =============


        </TABLE>

                                     See accompanying notes

                                       5

<TABLE>
                    FIRST SUNAMERICA LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (Continued)
<CAPTION>
                            STATEMENT OF CASH FLOWS
                                  (Unaudited)


                                              Three Months Ended December 31,
                                              -------------------------------
                                                      1997               1996
                                              ------------       ------------
<S>                                         <C>                  <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                  $    4,274,000       $    464,000
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Interest credited to fixed annuity 
      contracts                                 21,307,000          2,257,000
    Net realized investment gains               (2,075,000)          (459,000)
    Accretion of net discounts on 
      investments                                 (543,000)           (55,000)
    Amortization of goodwill                        14,000             15,000
    Provision for deferred income taxes            761,000            276,000
Change in:
  Deferred acquisition costs                      (471,000)        (2,700,000)
  Income taxes currently payable                 2,159,000             40,000
Other, net                                       4,701,000           (192,000)
                                              ------------       ------------
NET CASH PROVIDED (USED) BY 
  OPERATING ACTIVITIES                          30,127,000           (354,000)
                                              ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of:                                           
    Bonds and notes                           (173,754,000)       (32,592,000)
    Common stock                                   (11,000)               ---
  Sales of:
    Bonds and notes                            230,398,000          7,227,000
    Common stock                                       ---            139,000
  Redemptions and maturities of:
    Bonds and notes                             23,953,000            608,000
    Mortgage loans                               1,258,000                ---
                                              ------------       ------------
NET CASH PROVIDED (USED) BY
  INVESTING ACTIVITIES                          81,844,000        (24,618,000)
                                              ------------       ------------




</TABLE>

                            See accompanying notes

                                       6

<TABLE>
                    FIRST SUNAMERICA LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (Continued)
<CAPTION>
                      STATEMENT OF CASH FLOWS (Continued)
                                  (Unaudited)


                                              Three Months Ended December 31,
                                              -------------------------------
                                                      1997               1996
                                              ------------       ------------
<S>                                           <C>                <C>         
CASH FLOWS FROM FINANCING ACTIVITIES:
  Premium receipts on fixed annuity 
    contracts                                 $ 30,790,000       $ 25,828,000
  Net exchanges from the fixed accounts                                      
    of variable annuity contracts              (11,632,000)        (2,551,000)
  Withdrawal payments on fixed annuity 
    contracts                                  (55,669,000)        (2,451,000)
  Claims and annuity payments on fixed
    annuity contracts                           (6,925,000)          (932,000)
  Net repayments of other short-term
    financings                                 (13,284,000)            (1,000)
  Cession of non-annuity product lines         (34,776,000)               ---
                                              ------------       ------------
  
NET CASH PROVIDED (USED) BY 
  FINANCING ACTIVITIES                         (91,496,000)        19,893,000
                                              ------------       ------------
NET INCREASE (DECREASE) IN CASH AND
  SHORT-TERM INVESTMENTS                        20,475,000         (5,079,000)

CASH AND SHORT-TERM INVESTMENTS AT 
  BEGINNING OF PERIOD                           50,585,000          6,707,000
                                              ------------       ------------
CASH AND SHORT-TERM INVESTMENTS AT 
  END OF PERIOD                               $ 71,060,000       $  1,628,000
                                              ============       ============

Supplemental cash flow information:

  Interest paid on indebtedness               $     28,000       $        ---
                                              ============       ============

  Income taxes paid                           $      1,000       $        ---
                                              ============       ============






</TABLE>

                            See accompanying notes

                                       7

                    FIRST SUNAMERICA LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (continued)

                        NOTES TO FINANCIAL STATEMENTS
                                 (Unaudited)



1.    Basis of Presentation
      ---------------------

      First SunAmerica Life Insurance Company (the "Company") is an indirect
      wholly owned subsidiary of SunAmerica Inc. (the "Parent").  In the
      opinion of the Company, the accompanying unaudited financial statements
      contain all adjustments (consisting of only normal recurring accruals)
      necessary to present fairly the Company's financial position as of
      December 31, 1997 and September 30, 1997, and the results of its
      operations and its cash flows for the three months ended December 31,
      1997 and 1996.  The results of operations for the three months ended
      December 31, 1997 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 fiscal year ended September 30, 1997, contained in the
      Company's Annual Report on Form 10-K. The September 30, 1997 balance
      sheet has been restated from that included in the Annual Report on Form
      10-K to reflect the merger with John Alden Life Insurance Company of New
      York (see Note 2).  Certain items have been reclassified to conform to
      the current period's presentation.  

2.    Business Combination
      ---------------------

      On March 31, 1997, SunAmerica Life Insurance Company, the direct parent
      of the Company, completed the acquisition of all of the outstanding stock
      of John Alden Life Insurance Company of New York ("JANY").  On October
      31, 1997, JANY was merged with and into the Company.  The income
      statement for the three months ended December 31, 1997 includes the
      results of JANY's operations for the full period between October 1, 1997
      and December 31, 1997.  On a pro forma basis, assuming the acquisition
      and merger had occurred on October 1, 1996, the beginning of the three-
      month period ended December 31, 1996, revenues (investment income, net
      realized investment losses and fee income) would have been $29.5 million
      and net income would have been $2.5 million for the three months ended
      December 31, 1996. 

      











                                      8

                   FIRST SUNAMERICA LIFE INSURANCE COMPANY
                       PART I - FINANCIAL INFORMATION
                ITEM 2 - 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 December 31, 1997 ("Fiscal 1998") and December 31, 1996
("Fiscal 1997") 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 or projected levels of
sales and redemptions of the Company's products, investment spreads or 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 Fiscal 1998, compared with net income
of $0.5 million in Fiscal 1997.  On October 31, 1997, John Alden Insurance
Company of New York ("JANY") was merged with and into the Company.  JANY was
acquired by SunAmerica Life Insurance Company, the Company's parent, on March
31, 1997 in a transaction accounted for under the purchase method of
accounting, and, accordingly, the results of operations include those of JANY
only from its date of acquisition.  The income statement for the three months
ended December 31, 1997 includes the results of JANY's operations for the full
period between October 1, 1997 and December 31, 1997, and the income statement
for the three months ended December 31, 1996 does not include JANY's operating
results.  Consequently, operating results for Fiscal 1998 and Fiscal 1997 are
not comparable.  On a pro forma basis, using the historical operating results
of JANY and assuming the merger had been consummated on October 1, 1996, the
beginning of the prior-year period discussed herein, net income would have been
$2.5 million for the quarter ended December 31, 1996.


                                      9
      PRETAX INCOME totaled $7.2 million in Fiscal 1998, compared with pretax
income of $0.8 million in Fiscal 1997.  This $6.4 million improvement primarily
resulted from increased net investment income, net realized investment gains
and variable annuity fees, partially offset by increased amortization  of 
deferred  acquisition costs, which are primarily related to the operations of
JANY.

      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 $8.5 million in Fiscal 1998 from $0.6 million
in Fiscal 1997.  These amounts equal 2.17% on average invested assets (computed
on a daily basis) of $1.58 billion in Fiscal 1998 and 1.58% on average invested
assets of $160.5 million in Fiscal 1997.  As a result of the merger, net
investment income as a percent of average invested assets has increased.  On
a pro forma basis, assuming the merger had been consummated on October 1, 1996,
net investment income on related average invested assets would have totaled
$7.7 million, representing 1.96% on pro forma average invested assets of $1.56
billion, for the three months ended December 31, 1996.

      Net investment spreads include the effect of income earned on the excess
of average invested assets over average interest-bearing liabilities.  This
excess amounted to $30.9 million in Fiscal 1998 and $10.8 million in Fiscal
1997.  The difference between the Company's yield on average invested assets
and the rate paid on average interest-bearing liabilities (the "Spread
Difference") was 2.06% in Fiscal 1998 and 1.18% in Fiscal 1997.  On a pro forma
basis, assuming the merger had been consummated on October 1, 1996, the Spread
Difference would have been 1.78% for the three months ended December 31, 1996. 
 
      Investment income (and the related yields on average invested assets)
totaled $29.9 million (7.57%) in Fiscal 1998, compared with $2.9 million
(7.21%) in Fiscal 1997.  Investment income increased primarily because of the
higher levels of average invested assets resulting from the merger of JANY with
the Company.  On a pro forma basis, assuming the merger had been consummated
on October 1, 1996, investment income would have been $28.8 million (7.37%) for
the three months ended December 31, 1996. Investment yields were higher in
Fiscal 1998 because a reapportionment of the portfolio resulted in the
acquisition of higher-yielding bonds.

      Total interest expense equalled $21.3 million in Fiscal 1998 and $2.3
million in Fiscal 1997.  The average rate paid on all interest-bearing
liabilities was 5.51% in Fiscal 1998 and 6.03% in Fiscal 1997.  Interest-
bearing liabilities averaged $1.55 billion in Fiscal 1998 and $149.7 million
in Fiscal 1997.  On a pro forma basis, assuming the merger had been consummated
on October 1, 1996, the average rate paid on interest-bearing liabilities would
have been 5.59% for the three months ended December 31, 1996. 

      NET REALIZED INVESTMENT GAINS totaled $2.1 million in Fiscal 1998,
compared with $0.5 million in Fiscal 1997. Such gains primarily comprise net
gains and losses on sales of bonds which were generally made to maximize total
return.

      VARIABLE ANNUITY FEES are based on the market value of assets in separate
accounts supporting variable annuity contracts.  Such fees totaled $0.7 million
in Fiscal 1998 and $0.3 million in Fiscal 1997.  These increased fees reflect
growth in  average  variable  annuity  assets,  principally  due to the receipt
of variable annuity premiums, increased market values and net exchanges into
the  separate  accounts  from the fixed accounts of variable annuity contracts,

                                     10
partially offset by surrenders.  Variable annuity assets averaged $180.9
million during Fiscal 1998 and $77.6 million during Fiscal 1997.  Sales of
variable annuity products (which include premiums allocated to the fixed
accounts) ("Variable Annuity Product Sales") amounted to $23.6 million in
Fiscal 1998 and $37.1 million in Fiscal 1997.  The decline in Variable Annuity
Product Sales may be attributed to more restrictive fixed-rate promotions in
Fiscal 1998 than in Fiscal 1997.  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, recent administration budget proposals include the proposed
taxation of exchanges involving variable annuity contracts and reallocation
within variable annuity contracts and certain other proposals relating to
annuities (see "Regulation").

      SURRENDER CHARGES on fixed and variable annuities totaled $1.0 million
in Fiscal 1998, compared with $56,000 in Fiscal 1997.  Surrender charges
generally are assessed on annuity withdrawals at declining rates during the
first seven years of an annuity contract.  Withdrawal payments, which include
surrenders and lump-sum annuity benefits, totaled $57.7 million (including
$51.5 million attributable to the merger) in Fiscal 1998 and $3.8 million in
Fiscal 1997.  These payments represent 13.6% (15.3% of average fixed annuity
reserves associated with the merger) and 7.0%, respectively, of the aggregate
of average fixed and variable annuity reserves.  Withdrawals include variable
annuity payments from the separate accounts totaling $2.0 million in Fiscal
1998 and $1.3 million in Fiscal 1997, and represent 4.4% and 7.0%,
respectively, of average variable annuity liabilities.  Management anticipates
that withdrawal rates will gradually increase in the foreseeable future.

      GENERAL AND ADMINISTRATIVE EXPENSES totaled $0.9 million in Fiscal 1998
and $0.3 million in Fiscal 1997.  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 $4.0 million in Fiscal
1998, compared with $0.3 million in Fiscal 1997.  The increase in amortization
primarily reflects the amortization of the deferred acquisition costs
attributable to the merger, which aggregated $3.5 million.  Amortization has
also increased due to additional fixed and variable annuity sales and the
subsequent amortization of related deferred commissions and other direct
selling costs.

      ANNUAL COMMISSIONS represent renewal commissions, including those paid
quarterly in arrears to maintain the persistency of certain of the Company's
annuity contracts.  Annual commissions totaled $112,000 in Fiscal 1998 and
$4,000 in Fiscal 1997.  This increase is primarily attributable to the annuity
contracts acquired in the merger.  Based on current sales, the Company
estimates that such annual commissions will increase in future periods.

      INCOME TAX EXPENSE totaled $2.9 million in Fiscal 1998, compared with
$0.3 million in Fiscal 1997, representing effective annualized tax rates of 41%
in both periods.  







                                     11
FINANCIAL CONDITION AND LIQUIDITY

      SHAREHOLDER'S EQUITY increased 2.7% to $172.6 million at December 31,
1997 from $168.1  million  at  September 30, 1997,  primarily  due  to the $4.3
million of net income recorded in Fiscal 1998 and the $0.2 million increase in
net unrealized gains on debt and equity securities available for sale.

      TOTAL ASSETS decreased by 2.9% to $1.93 billion at December 31, 1997 from
$1.98 billion at September 30, 1997, principally due to a $73.2 million
decrease in invested assets, partially offset by a $23.4 million increase in
variable annuity assets.  

      INVESTED ASSETS at December 31, 1997 totaled $1.62 billion, compared with
$1.69 billion at September 30, 1997.  This 4.3% decrease primarily resulted
from the $34.8 million payment to Bankers Life Insurance Company in connection
with the sale of JANY's life and accident and health business and from a $22.4
million decline in the reserve for fixed annuities.

      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 and notes (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 comprises 87% of the Company's total investment
portfolio (at amortized cost), had an aggregate fair value that exceeded its
amortized cost by $39.4 million at December 31, 1997.  At September 30, 1997,
the fair value of the Bond Portfolio exceeded its amortized cost by $40.1
million.  

      At December 31, 1997, the Bond Portfolio (at amortized cost) included
$1.34 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 under comparable statutory rating
guidelines established by the National Association of Insurance Commissioners
("NAIC"), and $28.1 million of bonds rated by the Company pursuant to statutory
ratings guidelines established by the NAIC.  At December 31, 1997,
approximately $1.28 billion of the Bond Portfolio (at amortized cost) was 
investment grade, including $484.0 million of U.S. government/agency securities
and mortgage-backed securities ("MBSs").

      At December 31, 1997, the Bond Portfolio included $93.0 million (at
amortized cost with a fair value of $95.7 million) of bonds that were not rated
investment grade. Based on their December 31, 1997 amortized cost, these non-
investment-grade bonds accounted for 4.8% of the Company's total assets and
5.9% of 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 concentrations of non-investment-grade securities
at December 31, 1997.

                                     12

      The following table summarizes the Company's rated bonds by rating
 classification as of December 31, 1997:


<TABLE> 
                                          RATED BONDS BY RATING CLASSIFICATION
                                                 (Dollars in thousands)
<CAPTION>
                                                   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               Percent of   Estimated
  [DCR]/{Fitch}         Amortized          fair    category  Amortized           fair   Amortized     invested        fair
    category (1)             cost         value         (2)       cost          value        cost    assets(3)       value
----------------       -----------   ----------  ----------  ---------    -----------  ----------   ---------- ----------- 
<S>                   <C>          <C>           <C>        <C>           <C>          <C>          <C>        <C>        
AAA to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-}         $   855,550  $   883,313       1    $   153,008   $  158,542  $  1,008,558     63.93% $  1,041,855
BBB+ to BBB-
  (Baa1 to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}          229,843      232,136       2         37,114       38,205       266,957     16.92       270,341
BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}                993        1,008       3              0            0           993      0.06         1,008
B+ to B- 
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}               87,512       90,238       4          4,489        4,500        92,001      5.83        94,738
CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}                  0            0       5              0            0             0      0.00             0
C1 to D
  [DD]
  {D}                           0            0       6              0            0             0      0.00             0
                       ----------   ----------             ----------   ----------    ----------              ----------
TOTAL RATED ISSUES    $ 1,173,898  $ 1,206,695            $   194,611   $  201,247  $  1,368,509            $  1,407,942
                       ==========   ==========             ==========   ==========    ==========              ==========

Footnotes appear on the following page.

</TABLE>

                                                           13
      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 $28.1 million (at amortized cost) of
      assets that were rated by the Company pursuant to applicable NAIC rating
      guidelines.

(3)   At amortized cost.





























                                      14

      Senior secured loans ("Secured Loans") are included in the Bond Portfolio
and their amortized cost aggregated $131.4 million at December 31, 1997. 
Secured Loans are senior to subordinated debt and equity, and are secured by
assets of the issuer.  At December 31, 1997, Secured Loans consisted of $118.6
million of publicly traded securities and $12.8 million of privately traded
securities.  These secured loans are composed of loans to 66 borrowers spanning
19 industries, with 19% of these assets (at amortized cost) concentrated in
utilities, 13% concentrated in financial institutions, 12% concentrated in
aerospace-defense and 11% concentrated in technology.  No other industry
constituted more than 8% 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 $130.0 million at December 31, 1997 and
consisted of 123 commercial first mortgage loans with an average loan balance
of approximately $1.1 million, collateralized by properties located in 29
states.  Approximately 57.6% of this portfolio was retail, 21.1% was office,
9.5% was industrial and 11.8% was other types.  At December 31, 1997,
approximately 13% and 12% of this portfolio were secured by properties located
in Florida and New York, respectively, and no more than 10% of this portfolio
was secured by properties located in any other single state.  At December 31,
1997, there were no mortgage loans with outstanding balances of $10 million or
more, and approximately 14.2% of the mortgage loan portfolio consisted of loans
with balloon payments due before January 1, 2001.  During the three months
ended December 31, 1997, 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 December 31, 1997, all 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.  

      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 maturities 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 maturities are priced over the
yield curve 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 92% of the
Company's fixed annuity reserves had surrender penalties or other restrictions
at December 31, 1997.

                                     15
      As part of its asset-liability matching discipline, the Company conducts
detailed computer simulations that model its fixed-maturity 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 and notes; and mortgage loans.  At December 31, 1997, these
assets had an aggregate fair value of $1.62 billion with a duration of 3.9. 
At December 31, 1997, the Company's fixed annuity liabilities had an aggregate
fair value (determined by discounting future contractual cash flows by related
market rates of interest) of $1.47 billion with a duration of 3.4.  The
Company's potential exposure due to a relative 10% increase in interest rates
prevalent at December 31, 1997 is a loss of approximately $7.9 million in fair
value of its fixed-rate assets that is not offset by an increase in the fair
value of its fixed-rate liabilities.  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 market value
of a portfolio if interest rates change by 100 basis points, recognizing the
changes in portfolio cash flows resulting from embedded options such as
prepayments and bond calls.

      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 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.  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 routinely includes a review by the Company of
its portfolio of debt securities.  Management identifies monthly those
investments  that  require  additional  monitoring  and  carefully  reviews the


                                     16
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 bonds that are determined to have declines
in value that are other than temporary are reduced to net realizable value and
no further accruals of interest are made.  The valuation allowances 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.

      DEFAULTED INVESTMENTS, comprising all investments that are in default as
to the payment of principal or interest, totaled $2.3 million at December 31,
1997 and September 30, 1997 (at amortized cost, with a fair value of $2.3
million), 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 December 31, 1997, approximately $1.30 billion of the Company's Bond
Portfolio had an aggregate unrealized gain of $44.2 million, while
approximately $67.2 million of the Bond Portfolio had an aggregate unrealized 
loss of $4.8 million.  In addition, the Company's investment portfolio
currently provides approximately $15.1 million of monthly cash flow from
scheduled principal and interest payments.

      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.





                                     17

     The Company relies significantly on computer systems and applications in
its daily operations.  Many of these systems are not presently year 2000
compliant.  The Company's business, financial condition and results of
operations could be materially and adversely affected by the failure of the
Company's systems and applications (and those operated by third parties
interfacing with the Company's systems and applications) to properly operate
or manage dates beyond the year 1999.  The Company's Parent has a coordinated
plan to repair or replace these noncompliant systems, and to obtain similar
assurances from third parties interfacing with the Company's systems and
applications, and expects to significantly complete its plan by the end of
calendar year 1998.  The cost of these changes will be substantially borne by
the Company's affiliates and will not have a material impact on the Company's
results of operations. 


REGULATION

      The Company is subject to regulation and supervision by the States of New
York, New Mexico and Nebraska, the states in which the Company is authorized
to transact business.  State insurance laws establish supervisory agencies with
broad administrative and supervisory powers.  Principal among these powers are
granting and revoking licenses to transact business, regulating marketing and
other trade practices, operating guaranty associations, licensing agents,
approving policy forms, regulating certain premium rates, regulating insurance
company holding systems, establishing reserve requirements, prescribing the
form and content of required financial statements and reports, performing
financial, market conduct and other examinations, determining the
reasonableness and adequacy of statutory capital and surplus, defining
acceptable accounting principles, regulating the type, valuation and amount of
investments permitted, and limiting the amount of dividends that can be paid
and the size of transactions that can be consummated without first obtaining
regulatory approval.
                                      
      During the last decade, the insurance regulatory framework has been
placed under increased scrutiny by various states, the federal government and
the NAIC.  Various  states have considered or enacted legislation that changes,
and in many cases increases, the states' authority to regulate insurance
companies.  Legislation has been introduced from time to time in Congress that
could result in the federal government assuming some role in the regulation of
insurance companies or allowing combinations between insurance companies, banks
and other entities.  In recent years, the NAIC has approved and recommended to
the states for adoption and implementation several regulatory initiatives
designed to reduce the risk of insurance company insolvencies and market
conduct violations.  These initiatives include investment reserve requirements,
risk-based capital standards, codification of insurance accounting principles,
new investment standards and restrictions on an insurance company's ability to
pay dividends to its stockholders.  The NAIC is also currently developing model
laws and regulations relating to product design, actuarial standards and
illustrations for annuity products.  Current proposals are still being debated
and the Company is monitoring developments in this area and the effects any 
changes would have on the Company.

      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 products.  Recent administration budget
proposals include the proposed taxation of exchanges involving variable annuity

                                     18
contracts and reallocations within variable annuity contracts and certain other
proposals relating to annuities.  The Company believes these proposals have a
small likelihood of being enacted, because they would discourage retirement
savings and there is strong popular and industry opposition to them.  Other
proposals made in recent years to limit the tax deferral of annuities have not
been enacted.  The Company believes that certain of the proposals, if
implemented, would have an adverse effect on the Company's ability to sell
variable annuities, and, consequently, on its results of operations.  However,
the Company would not expect this to materially impact earnings in the near
term because the Company believes that adoption of the administration
proposals, however unlikely, would reduce annuity surrenders on the existing
block of variable annuity contracts and the ongoing earnings potential arising
from that block would offset the near-term economic impact of the potential
decrease in sales.












































                                     19
                         PART II - OTHER INFORMATION



Item 1.  Legal Proceedings
         -----------------
  Not applicable.

Item 2.  Changes in Securities
         ---------------------
  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
-------                            -----------
  2(a)      Agreement and Plan of Merger of John Alden Life Insurance Company
            of New York and First SunAmerica Life Insurance Company Into First
            SunAmerica Life Insurance Company is incorporated herein by
            reference to Exhibit 3(a) of the Company's 1997 Annual Report on
            Form 10-K, filed December 23, 1997.

  27        Financial Data Schedule



CURRENT REPORTS ON FORM 8-K      

No Current Report on Form 8-K was filed during the three months ended
December 31, 1997.










                                     20
                                 SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                             FIRST SUNAMERICA LIFE INSURANCE COMPANY

Date:  February 17, 1998     By:  SCOTT L. ROBINSON                
                             ------------------------
                             Scott L. Robinson
                             Senior Vice President, Treasurer and Director

      Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated:

Signature                  Title                          Date
---------                  -----                          ----

/s/   SCOTT L. ROBINSON    Senior Vice President,          February 17, 1998
------------------------    Treasurer and Director         -----------------
      Scott L. Robinson     (Principal Financial
                            Officer)

/s/   N. SCOTT GILLIS      Senior Vice President and       February 17, 1998
------------------------    Controller (Principal          -----------------
      N. Scott Gillis       Accounting Officer)
                            
                                     



























                                          21

                   FIRST SUNAMERICA LIFE INSURANCE COMPANY
                           LIST OF EXHIBITS FILED



Exhibit
  No.                   Description
-------                 -----------       
  27              Financial Data Schedule.

















































                                     22