UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q



                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


                  For the Quarterly Period Ended March 31, 1999

                       Commission file numbers: 33-62791,
                     33-62953, 33-88360, 33-89676, 33-89678,
                   33-91400, 333-00995, 333-02867, 333-24989,
                       333-25733, 333-25761 and 333-26695

                   American Skandia Life Assurance Corporation

                    Incorporated in the State of Connecticut

                                   06-1241288
                      (Federal Employer Identification No.)

                               One Corporate Drive
                           Shelton, Connecticut 06484

                         Telephone Number (203) 926-1888




Indicate by check mark whether the  registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the  Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes x No __


As of May 14, 1999, there were 25,000 shares of outstanding  common stock,  par
value $80 per share, of the  registrant, consisting of 100 shares of voting and
24,900  shares of non-voting  common stock, all of which were owned by American
Skandia Investment  Holding  Corporation, a wholly-owned  subsidiary of Skandia
Insurance Company Ltd., a Swedish corporation.










<PAGE>


           AMERICAN SKANDIA LIFE ASSURANCE CORPORATION (a wholly-owned
                  subsidiary of Skandia Insurance Company Ltd.)


                                TABLE OF CONTENTS


                                                                          Page
PART I.  FINANCIAL INFORMATION:

  Item 1.  Financial Statements:

           Consolidated Statements of Financial Condition -
             March 31, 1999 (unaudited)
             and December 31, 1998                                           3

           Consolidated Statements of Income (unaudited) -
             Three months ended March 31, 1999
             and March 31, 1998                                              4

           Consolidated  Statements of Shareholder's  Equity 
             Three months ended March 31, 1999 (unaudited)
             and December 31, 1998                                           5

           Consolidated Statements of Cash Flows (unaudited) 
             Three months ended March 31, 1999
             and March 31, 1998                                              6

           Notes to Unaudited Consolidated Financial Statements              7


  Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations 
             - Three months ended March 31, 1999                             9


  Item 3.  Quantitive and Qualitative Disclosures about Market Risk         13


PART II.   OTHER INFORMATION:

  Item 6.  Exhibits and Reports on Form 8-K                                 13

             Signatures                                                     14

             Exhibit Index                                                  16




<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
         (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                         March 31,            December 31,
                                                                            1999                  1998
                                                                        (unaudited)
                                                                       ---------------       ---------------
                                                                       ---------------       ---------------
ASSETS
<S>                                                                <C>                   <C>   

Investments:
   Fixed maturities - at amortized cost                              $          8,281      $          8,289
   Fixed maturities - at fair value                                           137,852               141,195
   Mutual funds                                                                 9,926                 8,210
   Policy loans                                                                   609                   569
                                                                       ---------------       ---------------
      Total investments                                              $        156,668      $        158,263

Cash and cash equivalents                                                      69,750                77,525
Accrued investment income                                                       2,541                 2,880
Fixed assets                                                                      335                   328
Deferred acquisition costs                                                    785,974               721,507
Reinsurance receivable                                                          8,228                 4,191
Receivable from affiliates                                                          -                 1,161
Income tax receivable - deferred                                               41,485                38,861
State insurance licenses                                                        4,375                 4,413
Other assets                                                                    4,239                 3,744
Separate account assets                                                    19,900,125            17,835,400
                                                                       ---------------       ---------------
      Total assets                                                   $     20,973,720      $     18,848,273
                                                                       ===============       ===============

LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
  Reserve for future contractowner benefits                          $         38,833      $         37,508
  Policy reserves                                                              30,852                25,545
  Drafts outstanding                                                           30,183                28,941
  Accounts payable and accrued expenses                                        92,150                91,827
  Income tax payable                                                            6,609                 6,657
  Payable to affiliates                                                        51,949                     -
  Future fees payable to parent                                               356,879               368,978
  Short-term borrowing                                                         10,000                10,000
  Surplus notes                                                               193,000               193,000
  Separate account liabilities                                             19,900,125            17,835,400
                                                                       ---------------       ---------------
      Total liabilities                                              $     20,710,580      $     18,597,856
                                                                       ---------------       ---------------
 SHAREHOLDER'S EQUITY:
  Common stock, $80 par, 25,000 shares
   authorized, issued and outstanding                                $          2,000      $          2,000
  Additional paid-in capital                                                  181,089               179,889
  Retained earnings                                                            78,403                64,993
  Accumulated other comprehensive income                                        1,648                 3,535
                                                                       ---------------       ---------------
      Total shareholder's equity                                              263,140               250,417
                                                                       ---------------       ---------------
       Total liabilities and shareholder's equity                     $     20,973,720      $     18,848,273
                                                                       ===============       ===============
</TABLE>

            See notes to unaudited consolidated financial statements.

                                 3


<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
         (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)

                        CONSOLIDATED STATEMENTS OF INCOME
                              (unaudited)
                             (in thousands)

<TABLE>
<CAPTION>
                                                                               Three Months Ended March 31,
                                                                                 1999               1998
                                                                             -------------      -------------
REVENUES
<S>                                                                      <C>                <C> 

Annuity and life insurance charges & fees                                  $       60,418     $       39,786
Fee income                                                                         16,977             10,688
Net investment income                                                               2,654              3,261
Premium income                                                                        749                 50
Net realized capital gains                                                            295                156
Other                                                                                 365                 70
                                                                             -------------      -------------
    Total Revenues                                                                 81,458             54,011
                                                                             -------------      -------------

BENEFITS AND EXPENSES

Benefits:
  Annuity benefits                                                                    221                366
  Change in annuity policy reserves                                                   757                238
  Cost of minimum death benefit reinsurance                                         1,749              1,369
  Return credited to contractowners                                                (4,226)             1,667
                                                                             -------------      -------------
                                                                                   (1,499)             3,640
                                                                             -------------      -------------

Expenses:
  Underwriting, acquisition and other insurance expenses                           51,878             34,293
  Interest expense                                                                 13,825              8,831
                                                                             -------------      -------------
                                                                                   65,703             43,124
                                                                             -------------      -------------

     Total Benefits and Expenses                                                   64,204             46,764
                                                                             -------------      -------------

Income from operations before income taxes                                         17,254              7,247

     Income tax expense                                                             3,844              1,175
                                                                             -------------      -------------

        Net income                                                         $       13,410     $        6,072
                                                                             =============      =============
</TABLE>
 

         See notes to unaudited consolidated financial statements.

                                   4
               

<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
         (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)

                 CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                         March 31,            December 31,
                                                                            1999                  1998
                                                                        (unaudited)
                                                                       ---------------       ---------------
<S>                                                                <C>                   <C>
Common stock:
   Beginning and ending balance                                      $          2,000      $          2,000

Additional paid in capital:
  Beginning balance                                                           179,889               151,527
    Additional contributions                                                    1,200                28,362
                                                                       ---------------       ---------------
       Ending balance                                                         181,089               179,889

Retained earnings:
   Beginning balance                                                           64,993                30,226
      Net income                                                               13,410                34,767
                                                                       ---------------       ---------------
         Ending balance                                                        78,403                64,993

Accumulated other comprehensive income:
   Beginning balance                                                            3,535                   668
      Other comprehensive income                                               (1,887)                2,867
                                                                       ---------------       ---------------
          Ending balance                                                         1,648                 3,535
                                                                       ---------------       ---------------

            Total shareholder's equity                               $        263,140      $        250,417
                                                                       ===============       ===============
</TABLE>







            See notes to unaudited consolidated financial statements.

                                 5
                   


<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
         (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                         Three Months Ended March 31,
                                                                           1999                1998
                                                                       -------------       -------------
Cash Flow from operating activities:

<S>                                                                 <C>                  <C>           
Net income                                                          $        13,410      $        6,072
Adjustments to reconcile net income to net cash
  (used in)/provided by operating activities:
    Increase/(decrease) in policy reserves                                    5,307              (3,299)
    Amortization of bond discount                                                30                  20
    Amortization of insurance licenses                                           38                  38
    Change in receivable from/payable to affiliates                          53,110               4,012
    (Decrease)/increase in income tax payable                                   (48)              1,580
    Increase in other assets                                                   (502)             (1,700)
    Decrease/(increase) in accrued investment income                            339                 (89)
    (Increase)/decrease in reinsurance receivable                            (4,037)              2,387
    Increase in deferred acquisition costs, net                             (64,467)            (41,508)
    Increase in income tax receivable - deferred                             (1,782)               (519)
    Increase in accounts payable and accrued expenses                           323              24,295
    Increase in drafts outstanding                                            1,242              11,964
    Change in foreign currency translation, net                                 204                   9
    Realized gain on sale of investments                                       (295)               (156)
                                                                       -------------       -------------
        Net cash provided by operating activities                             2,872               3,106
                                                                       -------------       -------------
Cash flow from investing activities:

    Purchase of fixed maturity investments                                        -             (17,736)
    Proceeds from sale and maturity of fixed maturity investments                 -                  50
    Purchase of shares in mutual funds                                      (12,491)             (3,833)
    Proceeds from sale of shares in mutual funds                             11,458               4,606
    Increase in policy loans                                                    (40)               (168)
                                                                       -------------       -------------
        Net cash used in investing activities                                (1,073)            (17,081)
                                                                       -------------       -------------
Cash flow from financing activities:

    Capital contributions from parent                                         1,200               1,063
    Increase in future fees payable to parent                               (12,099)             (6,532)
    Net (withdrawals from)/deposits to contractowner accounts                 1,325                (461)
                                                                       -------------       -------------

    Net cash used in financing activities                                    (9,574)             (5,930)
                                                                       -------------       -------------

    Net decrease in cash and cash equivalents                                (7,775)            (19,905)

Cash and cash equivalents at beginning of period                             77,525              81,974
                                                                       -------------       -------------

Cash and cash equivalents at end of period                           $       69,750      $       62,069
                                                                      =============       =============

Supplemental cash flow disclosure:
    Income taxes paid                                                $        4,901      $            -
                                                                       =============       =============

    Interest paid                                                    $       17,361      $        8,281
                                                                       =============       =============
</TABLE>


           See notes to unaudited consolidated financial statements.
                                 6
  

<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
         (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                 March 31, 1999


1.  BASIS OF PRESENTATION

    The  accompanying   unaudited  consolidated  financial  statements  of
    American  Skandia Life  Assurance Corporation  (the Company) have been
    prepared in accordance with generally accepted  accounting  principles
    for interim  financial  information and with the  instructions to Form
    10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
    all of the  information  and footnotes  required by generally  accepted
    accounting principles for complete financial statements. In the opinion
    of  management,   all  adjustments   (consisting  of  normal  recurring
    accruals)  considered  necessary  for a  fair  presentation  have  been
    included.  Operating results for the three month period ended March 31,
    1999 are not necessarily indicative of the results that may be expected
    for the year ending December 31, 1999. For further  information,  refer
    to the consolidated  financial  statements and footnotes thereto in the
    Company's audited consolidated  financial statements for the year ended
    December 31, 1998.

    Certain  reclassifications  have been made to prior  period  amounts to
    conform with the current period presentation.

2.  NEW ACCOUNTING PRONOUNCEMENT

    In March 1998, the American  Institute of Certified Public  Accountants
    issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of
    Software  Developed  or Obtained  for  Internal  Use,"  which  provides
    guidance for determining when computer  software  developed or obtained
    for internal use should be  capitalized.  It also provides  guidance on
    the   amortization   of  capitalized   costs  and  the  recognition  of
    impairment.  The Company has  identified  and  capitalized  $543,000 of
    costs  associated  with  internal use software  through the first three
    months of 1999.

3.  SEGMENT REPORTING

    In June 1997, the FASB issued SFAS 131,  "Disclosures about Segments of
    an Enterprise and Related  Information." SFAS 131 establishes standards
    for the way that public  enterprises report information about operating
    segments  in  annual  financial  statements  and  requires  that  those
    enterprises  report selected  information  about operating  segments in
    interim financial  reports issued to shareholders.  It also establishes
    standards   related  to   disclosures   about  products  and  services,
    geographic  areas  and  major  customers.  SFAS  131 is  effective  for
    financial statement periods beginning after December 15, 1997.

    During 1998, to complement its annuity  products,  the Company launched
    specific  marketing and operational  activities  towards the release of
    variable life insurance and qualified retirement plan annuity products.
    As of March 31, 1999, sales were not significant enough to warrant full
    segment  disclosures.  Sales, as measured by premium received,  for the
    year ended March 31, 1999 and assets under  management  as of March 31,
    1999, for the respective segments were as follows:

<TABLE>
<CAPTION>
           (in thousands)          Variable       Variable    Qualified
                                    Annuity         Life        Plans           Total
                                 ------------      ------      -------     ------------

<S>                              <C>               <C>         <C>         <C>         
    Sales                        $  1,414,854      $1,208      $13,764     $  1,429,826
                                 ============      ======      =======     ============

    Assets under management      $ 19,832,584      $2,583      $63,596     $ 19,898,763
                                 ============      ======      =======     ============
</TABLE>


<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
          (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)


        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                 March 31, 1999


4.  COMPREHENSIVE INCOME

    As of  January  1, 1998 the  Company  adopted  Statement  of  Financial
    Accounting  Standards ("SFAS") 130, "Reporting  Comprehensive  Income".
    SFAS 130 sets standards for the reporting and display of  comprehensive
    income and its components;  however, the adoption of this Statement had
    no impact on the Company's  financial position or net income.  SFAS 130
    requires    unrealized    gains   and    losses   on   the    Company's
    available-for-sale   securities   and  foreign   currency   translation
    adjustments,  which  prior to  adoption  were  reported  separately  in
    shareholder's equity to be included in other comprehensive income.

    The  components  of  comprehensive  income,  net of tax,  for the three
    months ended March 31, 1999 and 1998 were as follows:

     (in thousands)                                     1999             1998
                                                        ----             ----

    Net income                                        $13,410           $6,072
    Other comprehensive income:
      Net unrealized gains/(losses) on securities      (2,024)             305
      Foreign currency translation                        137                6
                                                      --------          ------

    Other comprehensive income                         (1,887)             311
                                                      --------          ------

    Comprehensive income                              $11,523           $6,383
                                                      =======           ======

    The components of accumulated other  comprehensive  income, net of tax,
    as of March 31, 1999 and December 31, 1998 were as follows:

                  (in thousands)                        1999             1998
                                                        ----             ----

    Unrealized investment gains                       $ 1,819           $3,843
    Foreign currency translation                         (171)            (308)
                                                      -------           ------

    Accumulated other comprehensive income            $ 1,648           $3,535
                                                      =======           ======


5.  FOREIGN ENTITY

    The  Company  has a 99.9%  ownership  in  Skandia  Vida,  S.A.  de C.V.
    ("Skandia Vida") which is a life insurance company domiciled in Mexico,
    selling  long term savings  products  within  Mexico.  Skandia Vida had
    total  shareholders'  equity of  $5,563,000  as of March  31,  1999 and
    $4,724,000 as of December 31, 1998 and has generated losses of $565,000
    and  $264,000  for the three  months  ended  March  31,  1999 and 1998,
    respectively.





<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
          (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                        Three months ended March 31, 1999


American  Skandia Life  Assurance Corporation  (the  "Company") is a stock life
insurance company domiciled in Connecticut with licenses in all 50 states.  It 
is a wholly-owned subsidiary of American Skandia Investment Holding Corporation
(the  "Parent"), whose  ultimate  parent is Skandia  Insurance Company Ltd., a
Swedish company.

The  Company is  primarily in the  business  of issuing  long-term  savings and
retirement  products to individuals, groups and qualified pension plans.  Since
its  business  inception  in 1988,  the Company  has  offered  a wide  array of
annuities, including: a) certain deferred annuities that are registered with the
Securities  and Exchange Commission,  including  variable  annuities  and fixed
interest  rate  annuities that include a market value  adjustment  feature;  b)
certain  other  fixed  deferred annuities  that  are not  registered  with  the
Securities and Exchange  Commission; c) non-registered group variable annuities
designed as funding vehicles for various types of qualified  retirement  plans;
and d) fixed and adjustable immediate annuities.

In April 1998,  the Company  began  offering a term life  insurance  product in
support of an  affiliate's  mutual  fund  products.  In May 1998,  the  Company
launched a single premium variable life  insurance  product and in January 1999
the Company launched its second variable life product,  which was designed as a
flexible premium product.

The  Company  markets  its  products  to  independent  financial  planners  and
broker-dealers  through an internal  field  marketing staff.  In addition,  the
Company markets through and in conjunction with financial institutions  such as
banks that are permitted directly, or through affiliates, to sell annuities and
life insurance.


RESULTS OF OPERATIONS

Annuity and life insurance  sales  volume for the three  months ended March 31,
1999 and 1998 was $1,429,826,000 and $848,826,000, respectively, an increase of
68%. This increase was the result of innovative product development activities,
favorable market conditions, the recruitment and retention of top producers, and
the continued success of the Company's  highly rated  customer  service  teams.
Assets grew $2,125,447,000  or 11% since December 31, 1998.  This increase is a
direct result of the strong  performance  of the stock  markets  over the first
quarter of 1999, which has contributed to the growth in separate account assets,
combined  with  increases in separate  account assets and deferred  acquisition
costs over the same period due to sales volume. Liabilities grew $2,112,724,000
or 11% since December 31, 1998 as a result of an increase in additional reserves
required for the market and  sales-related growth of separate account assets as
well as an increase in advances from the Parent.

The  Company  experienced  a net gain of  $13,410,000 after tax for the current
period compared with $6,072,000 for the same period last year. The increase was
the result of greater than expected sales levels and tremendous growth in assets
under mangement, which generated higher amounts of annuity charges and fees and
transfer agency type fee income,  combined with expense levels  consistent with
the level of sales volume.


REVENUES

Due to strong market conditions  and as a result of the  significant  growth in
sales and assets  under management,  contract  owner fees and  charges and fees
generated from transfer agency type activities increased  $26,921,000 or 53% in
the first quarterof 1999 over the first quarter of 1998. This is compared to an
increase of 69% for the three months ended March 31, 1998.



<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
          (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)


Net investment income decreased 19% as compared with an increase of 36% in 1998.
In the first three months of 1998 the Company held a large amount of short-term
investments, resulting in an unusually high amount of investment income for a
three month period. Additionally, the Company experienced a significant cash
drain from the high sales volume during the first quarter of 1999, limiting
growth in invested assets. In the first quarter of 1998, the increase was a
result of income generated from bond holdings, which were increased in 1998 and
1997 to meet risk based capital goals,which in turn, have increased as a result
of the growth in business.

Premium income represents premiums earned on sales of immediate  annuities with
life contingencies, supplementary contracts with life contingencies and certain
life  insurance  products. There  have been  minimal  sales of these  ancillary
products during 1999 and 1998.


BENEFITS

Annuity  benefits and the change in annuity policy  reserves  relate to
annuity contracts with mortality risks, these being immediate annuity contracts
with life contingencies and supplementary contracts with life contingencies.Due
to the age of these policies in force and the relative  insignificance of these
products to the Company's overall  portfolio of products, fluctuations in these
benefits were of marginal importance to the Company's total operations.

The Company  reinsures the guaranteed minimum death benefit exposure on most of
the variable  annuity  contracts.  The costs (minimum  guaranteed  death benefit
premium per  reinsurance  contracts) associated  with reinsuring the guaranteed
minimum  death benefit reserve  exceeded the change in the  guaranteed  minimum
death benefit reserve during the first three months of 1999 and 1998. This cost
increased by 28% in 1999 and 56% in 1998.

Return credited to contractowners includes  primarily  revenues on the variable
and market value adjusted annuities and variable life insurance,  offset by the
benefit payments and change in reserves  required on this business.  The return
credited to contractowners  for the three months  ended March 31, 1999,  in the
amount  of ($4,226,000),   represented   slightly  favorable  Separate  Account
investment returns on the market  value  adjusted  contracts  in support of the
benefits and required reserves. This compares with $1,667,000 at March 31, 1998
which  represented  a lower than  expected  return  on  market  value  adjusted
contracts, along with a timing difference (loss) related to March 31, 1998 bond
market fluctuations.


EXPENSES

Underwriting, acquisition and other insurance expenses for the three months
ended March 31, 1999 and 1998 were as follows:

            (in thousands)               March 31,        March 31,
                                           1999             1998

     Commissions                         $81,197          $44,673 
     General expenses                     35,148           31,128 
     Net capitalization of deferred
       acquisition costs                 (64,467)         (41,508)
                                         --------         -------

     Underwriting, acquisition and
       other insurance expenses          $51,878          $34,293
                                         =======          =======

Commissions  increased  with the growth in sales and assets under management.  
General  expenses  increased  with the growth in sales,  along with start up 
costs  associated with the Company's entry into variable life insurance
and qualified plans. The net capitalization of deferred  acquisition costs also
increased with the growth in sales related costs.

<PAGE>

                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
          (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)


Interest expense  increased $4,994,000 or 57% over the three months ended March
31, 1998 as a result of additional financing  transactions,  which consisted of
the sale of future fees to the Parent ("securitization transactions") initiated
throughout  1998.  Surplus  notes as of March 31, 1999 and  December  31,  1998
totaled $193,000,000.

The effective  income tax rates for the periods ended March 31, 1999,  and 1998
were 22% and 16%,  respectively. The effective rate is lower than the corporate
rate of 35% due to permanent differences,  with the most significant item being
the dividend received  deduction. Management believes that based on the taxable
income produced  in 1998 and the first  three  months  of 1999,  as well as the
continued growth in annuity sales, the Company will produce sufficient  taxable
income in the future to realize its deferred tax assets.


LIQUIDITY AND CAPITAL RESOURCES

The Company's first quarter 1999 liquidity requirement was met by cash from 
insurance operations, reinsurance,  investment activities, borrowings from its 
Parent and the November and December 1998 sale of rights to future fees
and charges to its Parent.

Through the first three months of 1999 and 1998 approximately 95% and 97%,  
respectively,  of  sales  were  variable annuity  and life  insurance products.
Most products carry a contingent deferred sales charge, which causes a
temporary cash  strain in that 100% of the  proceeds  are  invested in separate
accounts supporting the product  leaving a cash (but not capital) strain caused
by the acquisition  cost for the new  business.  This cash strain  required the
Company to look beyond the cash made  available  by  insurance  operations  and
investments of the Company to financing in the form of surplus  notes,  capital
contributions,   the sale  of  certain  rights  to  future  fees  and  modified
coinsurance arrangements.

In the first quarter of 1999, the Company received  $52,000,000 from its Parent
in advance  of  planned  securitization transactions  scheduled  for the second
quarter of 1999.

During  1999  the  Company  extended  its reinsurance  agreements  (which  were
initiated  prior to1996).  The reinsurance agreements are modified  coinsurance
arrangements where the reinsurer shares in the experience of a specific book of
business.

The  Company expects  the  continued  use  of  reinsurance  and  securitization
transactions to fund the cash strain anticipated from the acquisition  costs on
the coming years' sales volume.

The Company has long-term surplus notes and short-term borrowings
with its Parent. No dividends have been paid to its Parent.

The  National  Association  of Insurance  Commissioners  ("NAIC")
requires insurance companies to report information regarding minimum Risk Based
Capital ("RBC") requirements.These requirements are intended to allow insurance
regulators to identify companies which may need regulatory  attention.  The RBC
model law requires that insurance  companies  apply  various  factors to asset,
premium  and  reserve items,  all of which have  inherent  risks.  The  formula
includes components for asset risk,  insurance risk, interest risk and business
risk. The Company has complied with the NAIC's RBC reporting  requirements  and
has total adjusted capital well above required capital.

<PAGE>


                   AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
         (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (Continued)


YEAR 2000 COMPLIANCE

The Company is continuing its ongoing assessment of the potential impact of the
Year 2000  issue on various aspects of its  business.  The  Company's  computer
support is provided by its affiliate, American Skandia Information Services and
Technology  Corporation,  which also provides  such  support for the  Company's
affiliated  broker-dealer,  American Skandia  Marketing,  Incorporated  and the
Company's  affiliated  investment advisory firm,  American  Skandia  Investment
Services,  Incorporated. Because of the nature of the Company's  business,  any
assessment of the potential  impact of the Year 2000 issues on the Company must
be an assessment of the potential impact of these issues on all these companies,
which are referred to below as "American Skandia".

Business Partners

Management  believes the area where the Company is most vulnerable to Year 2000
issues is in its  interfaces  with  computer  systems  of investment  managers,
sub-advisors,  third party administrators, vendors and other business partners.
The inability to properly recognize date sensitive  electronic  information and
transfer  data between  systems  could cause errors or even a complete  systems
failure  which would  result in a temporary inability  to process  transactions
correctly or engage in normal business activities.

The American Skandia deferred annuity operational business partners report that
all critical  interfaces are Year 2000  compliant. All investment  managers and
sub-advisors are required by the Securities and Exchange Commission to publicly
disclose their Year 2000 status in December 1998 and June 1999.

American Skandia has initiated formal communications  with parties that provide
third party administration, record keeping and trust services in connection with
its life insurance and qualified retirement plan annuities business. Management
has already  received  several written assurances that these firms will be Year
2000 compliant. The Company expects to have  certifications  from all remaining
parties by July 1999.American Skandia is currently developing contingency plans
in the event that these targets are not met.

Information Technology Systems

American  Skandia is a  relatively  young company  whose  internally  developed
systems  were  designed  from the start with four digit year codes. The Company
engaged  an  external  information  technology  specialist  to  review American
Skandia's operating systems and internally  developed  software. The assessment
was  completed  in  December  1997 and the  results  were  favorable.  Specific
modifications  were  suggested,  evaluated  and  implemented  for  the  annuity
administration system. This project was completed during 1998 and a certificate
of  compliance has  been  received.  Other  non-critical  internally  developed
applications in the client/server  area have already been or will be remediated
during 1999. The costs associated with this aspect of Year 2000 compliance have
not had, and are not expected to have, a  significant  impact on the  Company's
results from operations.

Suppliers and Non-Information Technology Systems

Like most  companies, American  Skandia  is  reliant on  network,  and  desktop
operating systems and software providers to release compliant versions of their
respective  systems.  American Skandia's  network  is  currently  at  the  most
compliant level available. The standard  desktop software will be replaced,  as
fully compliant  versions become available. In addition,  the Company is in the
process  of  contacting  the  non-information  systems  vendors  and  suppliers
regarding their Year 2000 compliance status and will factor the results of these
assessments into its contingency plans.

Management believes  it has an  effective  program in place to resolve the Year
2000 issue in a timely manner. However, should errors or disruptions in computer
service  occur,  the  Company  could  realize  losses.  Given  the  nature  and
uncertainty of such losses, the amounts cannot be reasonably determined.



<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no  material  changes to the  Company's  market risk during the
first quarter of 1999.The Company has provided a discussion of its market risks
in Item 7A of Part II of the December 31, 1998 Form 10-K.


PART II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)      See Exhibit Index
          (b)      None





<PAGE>


                                    SIGNATURE


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



                   American Skandia Life Assurance Corporation
                                  (Registrant)


                           by: /s/Thomas M. Mazzaferro
                               -----------------------
                              Thomas M. Mazzaferro
                          Executive Vice President and
                             Chief Financial Officer



May 14, 1999


<PAGE>


                                    SIGNATURE


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



                   American Skandia Life Assurance Corporation
                                  (Registrant)


                          by: ________________________
                                Thomas M. Mazzaferro
                          Executive Vice President and
                             Chief Financial Officer



May 14, 1999



<PAGE>


                                  EXHIBIT INDEX




  Exhibit
  Number                    Description                               Location


  (2)         Plan of acquisition, reorganization,
              arrangement, liquidation or succession                     None

  (4)         Instruments defining the rights of
              security holders, including indentures                     None

  (10)        Material Contracts                                         None

  (11)        Statement Re:  Computation of per share
              earnings                                                   None

  (15)        Letter Re:  Unaudited interim financial
              information                                                None

  (18)        Letter Re:  Change in accounting
              principles                                                 None

  (19)        Report furnished to security holders                       None

  (22)        Published report regarding matters
              submitted to vote of security holders                      None

  (23)        Consents of experts and counsel                            None

  (24)        Power of attorney                                          None

  (99)        Additional exhibits                                        None