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, 1999


                           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
16,  1999  WAS  AS  FOLLOWS:

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






















































<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                      INDEX




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

      Balance Sheet (Unaudited) -
      June 30, 1999 and December 31, 1998                                  3

      Statement of Income and Comprehensive Income (Unaudited) -
      Three Months and Six Months Ended June 30, 1999 and 1998             4

      Statement of Cash Flows (Unaudited) -
      Six Months Ended June 30, 1999 and 1998                            5-6

      Notes to Financial Statements (Unaudited)                         7-10

      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                              11-23

      Quantitative and Qualitative Disclosures About Market
      Risk                                                                24

Part II - Other Information                                               25
</TABLE>






























































<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                                  BALANCE SHEET
                                   (Unaudited)



                                                     June 30,     December 31,
                                                         1999             1998
                                              ---------------  ---------------
<S>                                           <C>              <C>
ASSETS

Investments:
  Cash and short-term investments             $   13,440,000   $    18,466,000
  Bonds and notes available for sale,
    at fair value (amortized cost:
    June 1999, $1,286,301,000,
    December 1998, $1,293,637,000)             1,260,273,000     1,313,390,000
  Mortgage loans                                 204,303,000       176,737,000
  Other invested assets                            5,756,000         6,539,000
                                              ---------------  ---------------

  Total investments                            1,483,772,000     1,515,132,000

Variable annuity assets held in separate
  accounts                                       418,196,000       344,619,000
Accrued investment income                         18,683,000        18,169,000
Deferred acquisition costs                       130,731,000        96,918,000
Receivable from brokers for sales of
  securities                                             ---        30,597,000
Other assets                                       2,511,000         2,247,000
                                              ---------------  ---------------

TOTAL ASSETS                                  $2,053,893,000   $ 2,007,682,000
                                              ===============  ===============

LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts        $1,392,618,000   $ 1,432,558,000
  Income taxes currently payable                  10,918,000        10,144,000
  Payable to brokers for purchases
    of securities                                 27,282,000        19,806,000
  Other liabilities                               20,475,000        12,088,000
                                              ---------------  ---------------

  Total reserves, payables
    and accrued liabilities                    1,451,293,000     1,474,596,000
                                              ---------------  ---------------

Variable annuity liabilities related
  to separate accounts                           418,196,000       344,619,000
                                              ---------------  ---------------

Deferred income taxes                                    ---         3,792,000
                                              ---------------  ---------------

Shareholder's equity:
  Common Stock                                     3,000,000         3,000,000
  Additional paid-in capital                     144,428,000       144,428,000
  Retained earnings                               40,631,000        34,737,000
  Accumulated other comprehensive
    income (loss)                                 (3,655,000)        2,510,000
                                              ---------------  ---------------

  Total shareholder's equity                     184,404,000       184,675,000
                                              ---------------  ---------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY    $2,053,893,000   $ 2,007,682,000
                                              ===============  ===============
</TABLE>




















                             See accompanying notes

                                        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, 1999 and 1998
                                          (Unaudited)


                                             Three  Months                 Six  Months
                                     ---------------------------    ---------------------------
                                             1999           1998           1999            1998
                                     ------------   ------------   ------------    ------------


<S>                                  <C>            <C>            <C>            <C>
Investment income                    $ 26,359,000   $ 29,212,000   $ 54,406,000   $ 58,781,000
                                     -------------  -------------  -------------  -------------

Interest expense on:
  Fixed annuity contracts             (17,365,000)   (19,875,000)   (34,898,000)   (40,190,000)
  Senior indebtedness                         ---        (10,000)           ---        (10,000)
                                     -------------  -------------  -------------  -------------

  Total interest expense              (17,365,000)   (19,885,000)   (34,898,000)   (40,200,000)
                                     -------------  -------------  -------------  -------------

NET INVESTMENT INCOME                   8,994,000      9,327,000     19,508,000     18,581,000
                                     -------------  -------------  -------------  -------------

NET REALIZED INVESTMENT
  GAINS (LOSSES)                         (730,000)     2,060,000       (577,000)     2,455,000
                                     -------------  -------------  -------------  -------------

Fee income:
  Variable annuity fees                 1,522,000      1,002,000      2,891,000      1,823,000
  Surrender charges                       805,000      1,345,000      1,448,000      2,483,000
                                     -------------  -------------  -------------  -------------

TOTAL FEE INCOME                        2,327,000      2,347,000      4,339,000      4,306,000
                                     -------------  -------------  -------------  -------------

GENERAL AND ADMINISTRATIVE
  EXPENSES                             (1,243,000)      (115,000)    (2,253,000)    (1,201,000)
                                     -------------  -------------  -------------  -------------

AMORTIZATION OF DEFERRED
  ACQUISITION COSTS                    (5,700,000)    (4,360,000)   (10,800,000)    (8,554,000)
                                     -------------  -------------  -------------  -------------

ANNUAL COMMISSIONS                        (86,000)      (131,000)      (168,000)      (158,000)
                                     -------------  -------------  -------------  -------------

PRETAX INCOME                           3,562,000      9,128,000     10,049,000     15,429,000

Income tax expense                     (1,489,000)    (3,785,000)    (4,155,000)    (6,399,000)
                                     -------------  -------------  -------------  -------------


NET INCOME                              2,073,000      5,343,000      5,894,000      9,030,000


OTHER COMPREHENSIVE INCOME (LOSS),
  NET OF TAX:
  Net unrealized gains (losses)
    on debt and equity securities
    available for sale identified
    in the current period              (3,520,000)       (94,000)    (6,238,000)       584,000
                                     -------------  -------------  -------------  -------------
  Less reclassification
    adjustment for net
    realized losses (gains)
    included in net income                 51,000       (328,000)        73,000       (378,000)
                                     -------------  -------------  -------------  -------------

  OTHER COMPREHENSIVE INCOME (LOSS)    (3,469,000)      (422,000)    (6,165,000)       206,000
                                     -------------  -------------  -------------  -------------

COMPREHENSIVE INCOME (LOSS)          $ (1,396,000)  $  4,921,000   $   (271,000)  $  9,236,000
                                     =============  =============  =============  =============
</TABLE>













                             See accompanying notes

                                        4
<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                             STATEMENT OF CASH FLOWS
                 For the six months ended June 30, 1999 and 1998
                                   (Unaudited)



                                                      1999             1998
                                            --------------   --------------
<S>                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                   $   5,894,000   $   9,030,000
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Interest credited to fixed annuity
      contracts                                 34,898,000      40,190,000
    Net realized investment losses (gains)         577,000      (2,455,000)
    Accretion of net discounts on
      investments                               (1,566,000)       (241,000)
    Amortization of goodwill                        29,000          29,000
    Provision for deferred income taxes           (473,000)       (890,000)
Change in:
  Deferred acquisition costs                     2,487,000       4,043,000
  Income taxes currently payable                   774,000       3,669,000
Other, net                                       7,991,000       9,562,000
                                             --------------  --------------

NET CASH PROVIDED BY OPERATING ACTIVITIES       50,611,000      62,937,000
                                             --------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
  Bonds and notes                             (198,798,000)   (367,637,000)
  Mortgage loans                               (48,438,000)    (80,354,000)
  Other investments, excluding short-term
    investments                                        ---         225,000
Sales of:
  Bonds and notes                              207,356,000     434,257,000
  Other investments, excluding short-term
    investments                                    914,000         472,000
Redemptions and maturities of:
  Bonds and notes                               37,562,000      24,741,000
  Mortgage loans                                20,588,000      14,330,000
  Other investments, excluding short-term
    investments                                    430,000             ---
                                             --------------  --------------

NET CASH PROVIDED BY INVESTING ACTIVITIES       19,614,000      26,034,000
                                             --------------  --------------
</TABLE>








































                             See accompanying notes

                                        5

<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                       STATEMENT OF CASH FLOWS (Continued)
                 For the six months ended June 30, 1999 and 1998
                                   (Unaudited)



                                                1999             1998
                                      --------------   --------------
<S>                                    <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Premium receipts on fixed annuity
  contracts                            $  34,505,000   $  68,845,000
Net exchanges from the fixed accounts
  of variable annuity contracts          (19,133,000)    (25,488,000)
Withdrawal payments on fixed annuity
  contracts                              (77,434,000)   (120,516,000)
Claims and annuity payments on fixed
  annuity contracts                      (13,189,000)    (19,913,000)
Net repayments of other short-term
  financings                                     ---      (7,457,000)
                                       --------------  --------------

NET CASH USED BY FINANCING ACTIVITIES    (75,251,000)   (104,529,000)
                                       --------------  --------------

NET DECREASE IN CASH AND SHORT-TERM
  INVESTMENTS                             (5,026,000)    (15,558,000)

CASH AND SHORT-TERM INVESTMENTS AT
  BEGINNING OF PERIOD                     18,466,000      71,060,000
                                       --------------  --------------

CASH AND SHORT-TERM INVESTMENTS AT
  END OF PERIOD                        $  13,440,000   $  55,502,000
                                       ==============  ==============


SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid on indebtedness          $         ---   $      10,000
                                       ==============  ==============

Net income taxes paid                  $   4,833,000   $   3,619,000
                                       ==============  ==============
</TABLE>













































                             See accompanying notes

                                        6
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

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

     At  December  31,  1998,  First  SunAmerica  Life  Insurance  Company  (the
"Company") was an indirect wholly owned subsidiary of SunAmerica Inc. On January
1, 1999, SunAmerica Inc. merged with and into American International Group, Inc.
("AIG")  in  a  tax-free  reorganization  that  has been treated as a pooling of
interests for accounting purposes. Thus, SunAmerica Inc. ceased to exist on that
date.  However,  on  the  date of merger, substantially all of the net assets of
SunAmerica  Inc.  were  contributed  to  a  newly formed subsidiary of AIG named
SunAmerica  Inc.  ("SunAmerica").

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 June 30, 1999 and
December  31, 1998, and the results of its operations and its cash flows for the
three  months  and  six  months  ended  June  30, 1999 and 1998.  The results of
operations  for  the  three  months  and  six months ended June 30, 1999 are not
necessarily  indicative  of  the  results  to  be  expected  for  the full year.

The  Company  has  changed its fiscal year end from September 30 to December 31.
The  accompanying  unaudited  financial statements should be read in conjunction
with  the  audited  financial statements for the fiscal year ended September 30,
1998,  contained  in the Company's Annual Report on Form 10-K, and the unaudited
financial  statements  as  of  and for the three months ended December 31, 1998,
contained  in  the Company's Transition Report on Form 10-Q.  Certain items have
been  reclassified  to  conform  to  the  current  period's  presentation.

2.     Reinsurance
       -----------

On  December  31,  1998,  Anchor  National  Life Insurance Company ("ANLIC"), an
affiliate  of  the  Company,  acquired  the  individual  life  business  and the
individual  and  group  annuity business of MBL Life Assurance Corporation ("MBL
Life"),  via  a  100%  coinsurance  transaction,  for  a  cash purchase price of
$128,420,000.  As  part  of  this  transaction,  ANLIC acquired assets having an
aggregate  fair  value  of $5,718,227,000, composed primarily of invested assets
totaling  $5,715,010,000.  Liabilities  assumed  by  ANLIC  in  this acquisition
totaled  $5,831,266,000,  including  $3,460,503,000  of  fixed annuity reserves,
$2,317,365,000  of universal life reserves (based on fund value) and $24,011,000
of  guaranteed  investment  contract  reserves.

     This  business  was  assumed  from MBL Life subject to existing reinsurance
ceded  agreements.  At  December  31,  1998, the maximum retention on any single
life was $2 million, and a total credit of $5,057,000 was taken against the life
insurance  reserves,  representing  predominantly  yearly  renewable  term
reinsurance.  In  order to limit even further the exposure to loss on any single
insured  and  to  recover  an  additional portion of the benefits paid over such
limits,  ANLIC entered into a reinsurance treaty effective January 1, 1999 under
which  it  retains  no more than $100,000 of risk on any one insured life.  With
respect  to  these  coinsurance  agreements,  ANLIC  could become liable for all
obligations of the reinsured policies if the reinsurers were to become unable to
meet  the  obligations  assumed  under  the  respective  reinsurance agreements.







































                                        7
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

2.     Reinsurance  (continued)
       -----------

     Included  in  the  block  of  business  acquired by ANLIC from MBL Life was
$282,946,000  of  individual  life  business  and  $404,563,000 of group annuity
business  whose  contract  owners are residents of New York State ("the New York
Business").

On  July  1,  1999,  the  New  York  Business was acquired by the Company via an
assumption  reinsurance  agreement,  and  the  remainder  of  the  business  was
converted  to  assumption  reinsurance,  which  superseded  the  coinsurance
arrangement.

The  $128,420,000  purchase  price will be allocated between the Company and its
affiliate  based  on  the  estimated  future  gross profits of the two blocks of
business.  The  portion  to  be  allocated  to the Company will be approximately
$10,000,000.

3.     Adoption  of  New  Accounting  Standard
       ---------------------------------------

     Effective  October  1,  1998,  the  Company  adopted Statement of Financial
Accounting  Standards  No.  130,  "Reporting  Comprehensive Income" ("SFAS 130")
which  requires  the reporting of comprehensive income in addition to net income
from  operations.  Comprehensive  income is a more inclusive financial reporting
methodology  that  includes  disclosure  of  certain  financial information that
historically  has  not  been  recognized  in the calculation of net income.  The
adoption  of  SFAS  130  did  not  have  an  impact  on the Company's results of
operations,  financial condition or liquidity.  Comprehensive income amounts for
the prior year are disclosed to conform to the current year's presentation.  Net
unrealized  losses on debt and equity securities available for sale increased by
$3,469,000,  $422,000 and $6,165,000 during the three months ended June 30, 1999
and  1998, and the six months ended June 30, 1999.  Net unrealized gains on debt
and equity securities decreased by $206,000 during the six months ended June 30,
1998.

























































                                        8
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

3.     Adoption  of  New  Accounting  Standard  (continued)
       ---------------------------------------

The  before tax, after tax, and tax benefit (expense) amounts for each component
of  the increase (decrease) in unrealized gains on bonds and notes available for
sale  for  both  the  current  and  prior  periods  are  summarized  below:

<TABLE>
<CAPTION>

                                                  Tax  Benefit
                                    Before  Tax     (Expense)    Net  of  Tax
                                   -------------   -----------   -------------

THREE  MONTHS  ENDED  JUNE  30,
1999:
<S>                                 <C>            <C>           <C>
  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period                    $(24,067,000)  $ 8,423,000   $(15,644,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period                18,652,000    (6,528,000)    12,124,000
                                    -------------  ------------  -------------

  Subtotal                            (5,415,000)    1,895,000     (3,520,000)
                                    -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized losses included
      in net income                      730,000      (256,000)       474,000
  Related change in deferred
    acquisition costs                   (651,000)      228,000       (423,000)
                                    -------------  ------------  -------------
    Total reclassification
      adjustment                          79,000       (28,000)        51,000
                                    -------------  ------------  -------------

  Total other comprehensive loss    $ (5,336,000)  $ 1,867,000   $ (3,469,000)
                                    =============  ============  =============

  THREE MONTHS ENDED JUNE 30,
  1998:

  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period                    $ (2,690,000)  $   942,000   $ (1,748,000)

  Decrease in deferred acquisition
    cost adjustment identified in
    the current period                 2,544,000      (890,000)     1,654,000
                                    -------------  ------------  -------------

  Subtotal                              (146,000)       52,000        (94,000)
                                    -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized losses included
      in net income                   (2,060,000)      721,000     (1,339,000)
  Related change in deferred
    acquisition costs                  1,557,000      (546,000)     1,011,000
                                    -------------  ------------  -------------
    Total reclassification
      adjustment                        (503,000)      175,000       (328,000)
                                    -------------  ------------  -------------

  Total other comprehensive loss    $   (649,000)  $   227,000   $   (422,000)
                                    =============  ============  =============

















</TABLE>


                                        9

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

3.     Adoption  of  New  Accounting  Standard  (continued)
       ---------------------------------------

The  before tax, after tax, and tax benefit (expense) amounts for each component
of  the  increase  (decrease)  in unrealized gains on debt and equity securities
available  for sale for both the current and prior periods are summarized below:
<TABLE>
<CAPTION>

                                                  Tax  Benefit
                                     Before  Tax    (Expense)      Net  of  Tax
                                    -------------  -----------    -------------

     SIX  MONTHS  ENDED  JUNE  30,

1999:
<S>                                 <C>            <C>            <C>
  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period                    $(46,362,000)  $ 16,227,000   $ (30,135,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period                36,764,000    (12,867,000)     23,897,000
                                    -------------  -------------  --------------

  Subtotal                            (9,598,000)     3,360,000      (6,238,000)
                                    -------------  -------------  --------------

  Reclassification adjustment for:
    Net realized losses included
      in net income                      577,000       (202,000)        375,000
    Related change in deferred
      acquisition costs                 (464,000)       162,000        (302,000)
                                    -------------  -------------  --------------
    Total reclassification
      adjustment                         113,000        (40,000)         73,000
                                    -------------  -------------  --------------

  Total other comprehensive loss    $ (9,485,000)  $  3,320,000   $  (6,165,000)
                                    =============  =============  ==============

  SIX MONTHS ENDED JUNE 30,
  1998:

  Net unrealized gains on debt
  and equity securities available
  for sale identified in the
  current period                    $    471,000   $   (165,000)  $     306,000

  Decrease in deferred acquisition
    cost adjustment identified in
    the current period                   427,000       (149,000)        278,000
                                    -------------  -------------  --------------

  Subtotal                               898,000       (314,000)        584,000
                                    -------------  -------------  --------------

  Reclassification adjustment for:
    Net realized gains included
      in net income                   (2,455,000)       859,000      (1,596,000)
    Related change in deferred
      acquisition costs                1,874,000       (656,000)      1,218,000
                                    -------------  -------------  --------------
    Total reclassification
      adjustment                        (581,000)       203,000        (378,000)
                                    -------------  -------------  --------------

  Total other comprehensive income  $    317,000   $   (111,000)  $     206,000
                                    =============  =============  ==============
</TABLE>



















                                       10

<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, 1999 and June 30, 1998 follows.  The
Company  has  changed  its  fiscal  year  end  to December 31.  Accordingly, the
quarter  ended  December  31,  1998  was  a  transition  period.

     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  $2.1  million in the second quarter of 1999, compared
with $5.3 million in the second quarter of 1998.  For the six months, net income
amounted  to  $5.9  million  in  1999,  compared  with  $9.0  million  in  1998.

     PRETAX  INCOME  totaled $3.6 million in the second quarter of 1999 and $9.1
million  in  the  second  quarter  of  1998.  For  the six months, pretax income
totaled  $10.0  million  in  1999,  compared  with  $15.4  million  in 1998. The
decreases  in 1999 resulted primarily from a decrease in net realized investment
gains, increased general and administrative expenses, and increased amortization
of deferred acquisition costs, which were partially offset by increased variable
annuity  fees.

     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,  decreased  to $9.0 million in the second quarter
of  1999  from  $9.3  million  in  the  second  quarter  of  1998.  These





































                                       11
<PAGE>
amounts  equal  2.43%  on average invested assets (computed on a daily basis) of
$1.48 billion in the second quarter of 1999 and 2.42% on average invested assets
of  $1.54  billion  in  the  second  quarter  of  1998.  For the six months, net
investment income increased to $19.5 million in 1999 from $18.6 million in 1998,
equaling  2.63% of average invested assets of $1.49 billion in 1999 and 2.39% of
average  invested  assets  of  $1.55  billion  in  1998.

     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  $78.0  million in the second quarter of 1999, $52.3 million in the
second  quarter  of  1998,  $74.6  million  in  the six months of 1999 and $51.1
million  in  the six months of 1998.  The difference between the Company's yield
on  average  invested  assets  and  the  rate  paid  on average interest-bearing
liabilities  (the  "Spread Difference") was 2.17% in the second quarter of 1999,
2.24%  in  the second quarter of 1998, 2.38% in the six months of 1999 and 2.22%
in  the  six  months  of  1998.

     Investment  income  (and  the  related  yields  on average invested assets)
totaled  $26.4  million  (7.12%)  in  the  second quarter of 1999, $29.2 million
(7.59%)  in  the second quarter of 1998, $54.4 million (7.32%) in the six months
of  1999  and $58.8 million (7.57%) in the six months of 1998. Investment yields
were  lower  in  1999  primarily  because of a generally declining interest rate
environment.

     Total interest expense equaled $17.4 million in the second quarter of 1999,
compared  with $19.9 million in the second quarter of 1998.  For the six months,
total  interest  expense  aggregated  $34.9 million in 1999 and $40.2 million in
1998.  The  average  rate  paid on all interest-bearing liabilities was 4.95% in
the  second  quarter  of 1999, 5.35% in the second quarter of 1998, 4.94% in the
six  months  of  1999  and  5.35%  in  the six months of 1998.  Interest-bearing
liabilities  averaged $1.40 billion in the second quarter of 1999, $1.49 billion
in the second quarter of 1998, $1.41 billion in the six months of 1999 and $1.50
billion  in  the  six months of 1998. The decreases in the overall rates paid in
1999  also  result  from  a  generally  declining  interest  rate  environment.

     The  modest  declines  in  average  invested assets in 1999 reflect similar
modest  declines  in average interest-bearing liabilities, which result from the
combined  effect of decreased sales of the Company's fixed rate products and net
exchanges  from  fixed  accounts  into the separate accounts of variable annuity
contracts.  Fixed  annuity  premiums totaled $18.3 million in the second quarter
of  1999,  $35.8 million in the second quarter of 1998, $34.5 million in the six
months  of  1999  and  $68.8  million  in the six months of 1998.  Fixed annuity
premiums  are  largely  premiums  for  the  fixed  accounts  of variable annuity
products  and,  annualized,  represent  5%,  5%, 5% and 9%, respectively, of the
fixed  annuity  reserve  balances  at  the  beginning of the respective periods.

     NET  REALIZED  INVESTMENT LOSSES totaled $0.7 million in the second quarter
of  1999,  compared  with  net  realized investment gains of $2.1 million in the
second  quarter  of  1998.  For  the  six months, net realized investment losses
amounted to $0.6 million in 1999, compared with net realized investment gains of
$2.5  million  in 1998.  Net realized investment losses in the second quarter of
1999 include impairment writedowns of $3.2 million and in the six months of 1999
include  impairment writedowns of $3.8 million. The impairment writedowns in the
second  quarter  and six months of 1998 were $0.4 million.  Thus, net gains from
sales  and redemptions of investments totaled $2.5 million in the second quarter
of  1999,  $2.4  million  in the second quarter of 1998, $3.2 million in the six
months  of  1999  and  $2.8  million  in  the  six  months  of  1998.







































                                       12
<PAGE>
     The  Company sold or redeemed invested assets, principally bonds and notes,
aggregating  $74.4  million in the second quarter of 1999, $280.1 million in the
second  quarter  of  1998,  $233.0  million in the six months of 1999 and $472.7
million  in the six months of 1998.  Sales of investments result from the active
management  of  the  Company's  investment  portfolio.  Because  redemptions  of
investments  are generally involuntary and sales of investments are made in both
rising  and  falling interest rate environments, net gains and losses from sales
and  redemptions  of  investments fluctuate from period to period, and represent
0.66%,  0.63%,  0.44% and 0.36% of average invested assets in the second quarter
of  1999,  the second quarter of 1998, the six months of 1999 and the six months
of  1998,  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 the six
months  of  1999  which,  on  an  annualized basis, represent 0.86% and 0.51% of
related  average  invested  assets  in  1999  and  1998,  respectively.  For the
nineteen  fiscal  quarters beginning October 1, 1994, impairment writedowns as a
percent  of  average  invested  assets have ranged up to 0.86% and have averaged
0.12%.  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 $1.5 million
in  the  second  quarter of 1999 and $1.0 million in the second quarter of 1998.
For the six months, variable annuity fees totaled $2.9 million in 1999, compared
with $1.8 million in 1998.  The increased fees in 1999 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, partially offset by
surrenders.  On  an  annualized  basis, variable annuity fees as a percentage of
average  variable  annuity  assets  represent 1.5% in the second quarter and six
months of 1999 and 1998. Variable annuity assets averaged $394.3 million, $261.1
million,  $376.2  million and $238.0 million, during the second quarter of 1999,
the  second  quarter of 1998, the six months of 1999 and the six months of 1998,
respectively.  Variable  annuity  premiums,  which exclude premiums allocated to
the fixed accounts of variable annuity products, aggregated $17.2 million in the
second  quarter  of  1999,  $23.3  million  in the second quarter of 1998, $29.4
million  in  the six months of 1999 and $42.4 million in the six months of 1998.
On  an  annualized  basis,  these  amounts  represent  18%,  38%, 17% and 43% of
variable  annuity  reserves  at  the  beginning  of  the  respective  periods.

     Sales of variable annuity products (which include premiums allocated to the
fixed accounts) ("Variable Annuity Product Sales") amounted to $33.3 million and
$50.0  million  in the second quarters of 1999 and 1998, respectively, and $59.5
million  and $88.0 million in the six months of 1999 and 1998, respectively, and
primarily  reflect  sales  of  the Company's flagship variable annuity, Polaris.
Polaris  is a multimanager variable annuity that offers investors a choice of 26
variable  funds  and  6  guaranteed  fixed-rate funds.  Variable Annuity Product
Sales  have  decreased in 1999, principally as a result of regulatory changes in
the  State  of  New  York  relating to non-taxable policy exchange requirements.









































                                       13
<PAGE>
     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").

     SURRENDER  CHARGES  on fixed and variable annuities totaled $0.8 million in
the  second quarter of 1999 and $1.3 million in the second quarter 1998. For the
six months, such surrender charges totaled $1.4 million in 1999 and $2.5 million
in  1998.  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 $47.4
million  in  the  second quarter of 1999, $64.4 million in the second quarter of
1998,  $89.2  million  in  the  six months of 1999 and $133.7 million in the six
months  of  1998.  These payments, annualized, represent 10.8%, 15.0%, 10.2% and
15.7%,  respectively,  of  average  fixed  and  variable  annuity  reserves.
Withdrawals  include  variable  annuity  payments  from  the  separate  accounts
totaling  $6.5 million (6.6% of average variable annuity reserves) in the second
quarter of 1999, $3.1 million (4.8% of average variable annuity reserves) in the
second  quarter  of  1998,  $11.8  million  (6.3%  of  average  variable annuity
reserves)  in  the six months of 1999 and $7.3 million (6.2% of average variable
annuity  reserves)  in  the  six months of 1998.  The decreases in fixed annuity
withdrawals  during 1999 principally resulted from the high withdrawal levels in
1998 on the then recently acquired annuity business of John Alden Life Insurance
Company  of  New  York,  and  from  regulatory  changes in the State of New York
relating  to  non-taxable  policy  exchange  requirements.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES  totaled  $1.2 million in the second
quarter  of  1999  and  $0.1 million in the second quarter of 1998.  For the six
months,  general  and  administrative  expenses totaled $2.3 million in 1999 and
$1.2  million  in 1998.  Expenses in 1998 include a credit of approximately $1.2
million  relating  to  expense  allowances  on  ceded  reinsurance.  General and
administrative  expenses  remain  closely controlled through a company-wide cost
containment  program  and  continue  to  represent less than 1% of average total
assets.

     AMORTIZATION  OF  DEFERRED  ACQUISITION  COSTS  totaled $5.7 million in the
second  quarter  of  1999,  compared  with $4.4 million in the second quarter of
1998.  For  the  six  months, amortization of deferred acquisition costs totaled
$10.8  million  in 1999 and $8.6 million in 1998.  The increases in amortization
during  1999 primarily reflect additional Variable Annuity Product 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
fixed  and  variable annuity contracts.  Annual commissions totaled $0.1 million
in  the  second  quarter of 1999 and $0.1 million in the second quarter of 1998.
For  the  six  months, annual commissions totaled $0.2 million in 1999 and 1998.

     INCOME  TAX  EXPENSE totaled $1.5 million in the second quarter of 1999 and
$3.8 million in the second quarter of 1998, representing an effective annualized
tax rate of 42% and 41%, respectively.  For the six months of 1999 such expenses
totaled  $4.2  million  of  1999  and  $6.4  million  in the six months of 1998,
representing  an  effective  annualized  tax  rate  of  41%  for  each  period.









































                                       14
<PAGE>
FINANCIAL  CONDITION  AND  LIQUIDITY

     SHAREHOLDER'S  EQUITY  decreased  to  $184.4  million at June 30, 1999 from
$184.7 million at December 31, 1998, primarily due to $5.9 million of net income
recorded  in  1999,  offset  by  a  $6.2  million  decrease in accumulated other
comprehensive  income.

     INVESTED ASSETS totaled $1.48 billion at June 30, 1999 and $1.52 billion at
December  31, 1998.  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 constituted 85% of the Company's total investment
portfolio  at  June  30,  1999,  had  an aggregate fair value that was below its
amortized  cost  by  $26.0  million at June 30, 1999, compared with an excess of
$19.8  million  at  December  31,  1998.

     At  June 30, 1999, the Bond Portfolio included $1.22 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 $43.8
million  of  bonds rated by the Company pursuant to statutory ratings guidelines
established  by  the NAIC.  At June 30, 1999, approximately $1.16 billion of the
Bond  Portfolio  was  investment  grade,  including  $497.0  million  of  U.S.
government/agency  securities  and  mortgage-backed  securities  ("MBSs").

     At  June 30, 1999, the Bond Portfolio included $100.8 million of bonds that
were  not investment grade.  These non-investment-grade bonds accounted for 4.9%
of  the  Company's  total  assets  and  6.8%  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  concentrations of non-investment-grade securities at
June  30,  1999.

     The  table  on  the  following page summarizes the Company's rated bonds by
rating  classification  as  of  June  30,  1999.


















































                                       15

<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-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-}        $  868,659  $  857,301         1   $   85,784  $   84,386  $  954,443  $  941,687       63.47%

BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}        173,883     170,728         2       47,520      47,026     221,403     217,754       14.68

BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}            6,790       6,825         3        2,397       2,175       9,187       9,000        0.61

B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}             93,664      85,574         4        5,603       4,653      99,267      90,227        6.08

CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}            1,000         960         5          501         445       1,501       1,405        0.09

CI to D
  [DD]
  {D}                       ---         ---         6          500         200         500         200        0.01
                     ----------  ----------             ----------  ----------  ----------  ----------

TOTAL RATED ISSUES   $1,143,996  $1,121,388             $  142,305  $  138,885  $1,286,301  $1,260,273
                     ==========  ==========             ==========  ==========  ==========  ==========
<FN>

Footnotes  appear  on  the  following  page.









































</TABLE>


                                       16

<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  $43.8  million  of  assets  that  were rated by the Company pursuant to
applicable  NAIC  rating  guidelines.





































































                                       17
<PAGE>
     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and  aggregated  $104.0  million  at June 30, 1999.  Secured Loans are senior to
subordinated  debt and equity, and are secured by assets of the issuer.  At June
30, 1999, Secured Loans consisted of $29.1 million of publicly traded securities
and  $74.9  million  of  privately  traded  securities.  These Secured Loans are
composed  of  loans  to  54  borrowers spanning 13 industries, with 22% of these
assets  concentrated  in  utilities  and  10%  concentrated  in  food.  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 $204.3 million at June 30, 1999 and consisted of
160  commercial  first  mortgage  loans  with  an  average  loan  balance  of
approximately  $1.3  million, collateralized by properties located in 34 states.
Approximately  39%  of  this  portfolio  was  office,  28%  was  retail, 12% was
industrial,  11%  was  multifamily residential and 10% was other types.  At June
30,  1999, approximately 31% of this portfolio was secured by properties located
in  California,  approximately  12%  by  properties  located  in  New  York,
approximately  9%  by properties located in Michigan and no more than 6% of this
portfolio  was secured by properties located in any other single state.  At June
30,  1999,  one mortgage loan had an outstanding balance of $10 million or more,
which  represented  approximately 5% of this portfolio, and approximately 32% of
the  mortgage loan portfolio consisted of loans with balloon payments due before
July  1,  2002.  During  1999  and  1998, 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,  1999,  approximately 62% of the mortgage loans were seasoned
loans  underwritten to the Company's standards and purchased at or near par from
other financial institutions.  Such loans generally have higher average interest
rates  than  loans  that  could be originated today. The balance of the mortgage
loan  portfolio  has  been  originated  by the Company under strict underwriting
standards.  Commercial  mortgage loans on properties such as offices, hotels and
shopping  centers  generally  represent  a higher level of risk than do mortgage
loans  secured  by  multifamily residences.  This greater risk is due to several
factors,  including the larger size of such loans and the more immediate effects
of general economic conditions on these commercial property types.  However, due
to  the  seasoned nature of the Company's mortgage loan portfolio and its strict
underwriting  standards,  the Company believes that it has prudently managed the
risk  attributable  to  its mortgage loan portfolio while maintaining attractive
yields.

     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,  and  general  economic





































                                       18
<PAGE>
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  84%  of  the Company's fixed annuity
reserves  had  surrender  penalties  or  other  restrictions  at  June 30, 1999.

     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 and notes;
and  mortgage loans.  At June 30, 1999, these assets had an aggregate fair value
of  $1.48  billion with a duration of 4.0.  The Company's fixed rate liabilities
are  its  fixed  annuity  contracts.  At June 30, 1999, these liabilities had an
aggregate fair value (determined by discounting future contractual cash flows by
related  market rates of interest) of $1.40 billion with a duration of 3.2.  The
Company's  potential  exposure  due  to  a  relative  10% increase in prevailing
interest rates from their June 30, 1999 levels is a loss of $7.9 million in fair
value  of  its  fixed-rate  assets  that is not offset by a decrease 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 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  products, allocating its
available  cash  flow  amongst  its  various  investment  portfolio  sectors and
maintaining sufficient levels of liquidity.  Because the calculation of duration
involves estimation and incorporates assumptions, potential changes in portfolio
value  indicated  by  the portfolio's duration will likely be different from the
actual  changes  experienced  under  given  interest  rate  scenarios,  and  the
differences  may  be  material.

     The  Company  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




































                                       19
<PAGE>
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 those 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 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 $4.1 million at June 30, 1999 and
constituted  0.3%  of  total  invested  assets.  At  December 31, 1998 defaulted
investments  totaled $2.4 million and constituted 0.2% 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,  1999,  approximately $544.6 million of the Company's Bond
Portfolio had an aggregate unrealized gain of $10.5 million, while approximately
$715.7  million  of the Bond Portfolio had an aggregate unrealized loss of $36.5
million.  In  addition,  the  Company's  investment portfolio currently provides
approximately  $14.2  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





































                                       20
<PAGE>

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.

YEAR  2000

     SunAmerica  initiated  its strategy to deal with the year 2000 challenge in
1997.  At  that  time,  many of the computer systems and applications upon which
the  Company  relied in its daily operations were not year 2000 compliant.  This
means  that  because they historically used only two digits to identify the year
in  a  date,  they were unable to distinguish dates in the "2000s" from dates in
the "1900s."  SunAmerica has incurred approximately $20.0 million of programming
costs  to  make necessary repairs of certain specific non-compliant systems.  In
addition,  SunAmerica  has  made  expenditures of approximately $12.3 million to
replace  certain  other  specific non-compliant systems, which expenditures have
been  capitalized  as  software costs and will be amortized over future periods.
To  date,  the  Company  has  not  been allocated any portion of these costs and
expenditures.  SunAmerica  does  not  expect  to incur, and the Company does not
expect to be allocated, significant additional other costs because the repair or
replacement  of  substantially  all  systems,  including  the Company's critical
mainframe  systems, has been completed as of July 31, 1999.  Further, testing of
both  the  repaired  and replaced systems has been substantially completed as of
July  31,  1999.  Nevertheless,  the  Company  will  continue to test all of its
computer  systems  and  applications  throughout  1999  to  ensure  continued
compliance.

     In  addition, SunAmerica has distributed a year 2000 questionnaire to those
third  parties  with  which  it  has  significant  interaction.  These  include
suppliers,  distributors,  facilitators,  fund  managers,  lessors and financial
institutions.  The  questionnaire  is  designed to enable SunAmerica to evaluate
these  third  parties'  year 2000 compliance plans and state of readiness and to
determine  the  extent  to  which  the Company's systems and applications may be
affected  by  the  failure  of  others to remedy their own year 2000 issues.  To
date,  however,  SunAmerica  has  received  only  preliminary feedback from such
parties  and has not independently confirmed any information received from them.
Therefore,  there can be no assurance that such parties will complete their year
2000  conversions  in  a  timely fashion or will not suffer a year 2000 business
disruption  that  may  adversely  affect  the  Company's financial condition and
results  of  operations.

     Although SunAmerica's efforts to remedy year 2000 issues are expected to be
completed  prior  to  any  potential  disruption  to  the  Company's  business,
SunAmerica  is  developing  several  contingency plans to implement in the event
that  the  transition  to  the  year  2000  becomes  difficult.

     The  discussion above contains forward-looking statements.  Such statements
are  based  on the SunAmerica's current estimates, assumptions and opinions, and
are  subject  to  various  uncertainties  that could cause the actual results to
differ  materially  from  it's expectations. Such uncertainties  include,  among
others,  costs  to  be  incurred,  SunAmerica's




































                                       21
<PAGE>

success  in  identifying  systems  and  applications  that  are  not  year  2000
compliant,  the  nature and amount of programming required to upgrade or replace
each  of  the  affected  systems and applications, the availability of qualified
personnel,  consultants  and  other  resources, and the success of the year 2000
conversion  efforts  of  significant  third  parties.

REGULATION

     The  Company  is  subject  to  regulation  and  supervision  by  insurance
regulatory  agencies  of  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  and  valuation  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  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 developed several model laws and regulations designed
to  reduce  the  risk  of  insurance  company  insolvencies  and  market conduct
violations.  These  initiatives  include  investment  reserve  requirements,
risk-based  capital  ("RBC")  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 developing model
laws and regulations relating to product design, product reserving standards and
illustrations  for  annuity products.  The Company is monitoring developments in
this  area  and  the  effects  any  changes  would  have  on  the  Company.

     The  RBC standards consist of formulas which establish capital requirements
relating  to insurance, business, assets and interest rate risks, and which help
to  identify  companies  which are under-capitalized.  In the event an insurer's
RBC  falls  below  specified  levels  certain specific regulatory actions may be
taken.  The  Company  has  more than enough statutory capital to meet the NAIC's
RBC  requirements  as  of  the  most recent calendar year-end.  The state of New
York, in which the Company is domiciled, has adopted these RBC standards and the
Company  is  in  compliance  with  such  laws.  Further, for statutory reporting
purposes,  the annuity reserves of the Company are calculated in accordance with
statutory  requirements and are adequate under current cash-flow testing models.

     From  time  to time, Federal initiatives are proposed that could affect the
Company's  business.  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  the  proposals,  if  implemented,  could



































                                       22
<PAGE>

have  an  adverse  effect  on  the  Company's  sales  of affected products, and,
consequently,  on its results of operations, the Company believes such proposals
have  a  small  likelihood  of  being  enacted,  because  they  would discourage
retirement  savings  and there is strong public and industry opposition to them.



























































































                                       23
<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 16 and 17
herein.


























































































                                       24
<PAGE>
                           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)     Purchase  and Sale Agreement, dated as of July 15, 1998, by and among
the Company, SunAmerica Inc. ("SAI"), Anchor National Life Insurance Company and
MBL  Life  Assurance Corporation, is incorporated herein by reference to Exhibit
2(e)  to  SAI's  1998  Annual  Report  on  Form  10-K,  filed December 21, 1998.

  3(a)     Agreement  and Plan of Merger and Amended and Restated Certificate of
Incorporation  are  incorporated  herein  by  reference  to  Exhibit 3(a) of the
Company's  1997  Annual  Report  on  Form  10-K,  filed  December  23,  1997.

  3(b)     Bylaws,  as  amended  January  1,  1996,  are  incorporated herein by
reference to Exhibit 3(b) of the Company's quarterly report on Form 10-Q for the
quarter  ended  March  31,  1996,  dated  May  14,  1996.

  27     Financial  Data  Schedule



REPORTS  ON  FORM  8-K

No  Current  Reports  on  Form  8-K  were filed by the Company during the second
quarter  ended  June  30,  1999.




































                                       25
<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  16,  1999      /s/  SCOTT  L.  ROBINSON
------------------------        ------------------------
                              Scott  L.  Robinson
                              Senior  Vice  President  and  Director
                              (Principal  Financial  Officer)



Date:  August  16,  1999      /s/  N.  SCOTT  GILLIS
------------------------        ----------------------
                              N.  Scott  Gillis
                              Senior  Vice  President  and  Controller
                              (Principal  Accounting  Officer)






































































                                       26
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY
                             LIST OF EXHIBITS FILED

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

  27                    Financial  Data  Schedule.
























































                                       27