SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[ X ]    Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

For the fiscal year ended December 31, 2000.

Commission file number 333-16279, 333-77385
                       --------------------

            FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           New York                                     13-3919096
---------------------------------           ------------------------------------
   (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)

   230 Park Avenue, Suite 966
       New York, New York                                10169-0999
---------------------------------           ------------------------------------
     (Address of principal                               (Zip Code)
        executive offices)

Registrant's Telephone Number, including area code : (212) 973-9647
                                                     --------------

Securities Registered Pursuant to Section 12(b) of the Act:

      TITLE OF EACH CLASS           NAME OF EACH EXCHANGE ON WHICH REGISTERED
             N/A                                       N/A
--------------------------------------------------------------------------------
Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes   X     No     .
    ----       ----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X].

As of March 28, 2001,  200,000 shares of Common Stock, $10 par value, are issued
and outstanding.

NOTE: WHEREAS FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK MEETS THE
CONDITIONS SET FORTH IN GENERAL  INSTRUCTION I (1)(a) AND (b) OF FORM 10-K, THIS
FORM IS BEING  FILED WITH THE  REDUCED  DISCLOSURE  FORMAT  PURSUANT  TO GENERAL
INSTRUCTIONS I (2).

DOCUMENTS INCORPORATED BY REFERENCE
See exhibit index - page 34.
                                                                    Page 1 of 59


<PAGE>


PART I
ITEM 1. BUSINESS.

OVERVIEW

First Golden  American  Life  Insurance  Company of New York ("First  Golden" or
"Company") is a stock life  insurance  company  organized  under the laws of the
State of New York. The Company was  incorporated on May 24, 1996 and is a wholly
owned life  insurance  subsidiary  of Golden  American  Life  Insurance  Company
("Golden American" or "Parent"). Golden American is a wholly owned subsidiary of
Equitable  of Iowa  Companies,  Inc.  ("EIC").  EIC is an indirect  wholly owned
subsidiary of ING Groep N.V., a global financial  services holding company based
in The Netherlands.

First Golden was capitalized in December 1996. First Golden became licensed as a
life  insurance  company  under the laws of the State of New York on  January 2,
1997 and the State of  Delaware  on  December  23,  1997 and has since  received
regulatory product approvals to sell insurance  products in these states.  First
Golden offers variable annuity products.  See Note 8 of the financial statements
for further information regarding related party transactions.

On October 24,  1997 (the  "merger  date"),  PFHI  Holdings,  Inc.  ("PFHI"),  a
Delaware corporation, acquired all of the outstanding capital stock of Equitable
of Iowa Companies  ("Equitable") according to the terms of an Agreement and Plan
of Merger dated July 7, 1997 among Equitable,  PFHI, and ING Groep N.V. ("ING").
PFHI is a wholly owned  subsidiary of ING, a global  financial  services holding
company based in The Netherlands. As a result of this transaction, Equitable was
merged into PFHI, which was simultaneously  renamed Equitable of Iowa Companies,
Inc. ("EIC"), a Delaware corporation.

PRODUCTS

The Company offers variable annuity products designed to meet customer needs for
tax-advantaged  saving for  retirement and  protection  from death.  The Company
believes longer life expectancies, an aging population, and growing concern over
the  stability  and  availability  of  the  Social  Security  system  have  made
retirement  planning a priority for many  Americans.  The target  market for all
products is consumers and corporations in New York and Delaware.

Variable  annuities  are  long-term  savings  vehicles  in  which  contractowner
premiums  (purchase  payments) are recorded and maintained in a fixed account or
variable  separate  account.  The variable  separate account is established as a
registered unit investment  trust. At December 31, 2000, funds on deposit in the
Company's variable annuity separate and fixed accounts totaled $57.7 million and
$7.1  million,  respectively.  Variable  annuities  provide the Company with fee
based  revenues  in  the  form  of  various  charges  and  fees  charged  to the
contractowner's  account.  Revenues  include  charges for  mortality and expense
risk, contract administration, and surrender charges.

Marketing  of the  variable  products  on  behalf of First  Golden is  primarily
through broker/dealers.

BUSINESS ENVIRONMENT

The current business and regulatory  environment presents many challenges to the
insurance industry. The variable annuity competitive environment remains intense
and is  dominated  by a  number  of  large  highly  rated  insurance  companies.
Increasing  competition from traditional insurance carriers as well as banks and
mutual fund companies offers consumers many choices. However, overall demand for
variable  insurance  products  remains strong for several reasons  including:  a
growing  U.S.  economy,  low levels of  inflation,  and moderate  interest  rate
levels;  an  aging  U.  S.  population  that  is  increasingly  concerned  about
retirement,  estate  planning,  and  maintaining  their  standard  of  living in
retirement;   and  potential  reductions  in  government  and  employer-provided
benefits at  retirement,  as well as lower public  confidence in the adequacy of
those benefits.


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<PAGE>


REGULATION

The  Company's  insurance   operations  are  conducted  in  a  highly  regulated
environment. The primary regulator of First Golden's insurance operations is the
Superintendent  of  Insurance  for the State of New York.  The  Company  is also
regulated by the Securities and Exchange Commission and the National Association
of Securities Dealers, Inc. See Item 7, Management's  Discussion and Analysis of
Results of Operations.

ITEM 2. PROPERTIES.

First Golden's business  operations are housed in leased  facilities  located at
230 Park  Avenue  in New  York,  New  York.  Property  and  equipment  primarily
represent leasehold  improvements,  office furniture,  and equipment and are not
considered to be significant to the Company's overall  operations.  Property and
equipment are reported at cost less allowances for depreciation.

ITEM 3. LEGAL PROCEEDINGS.

The Company, like other insurance companies,  may be named or otherwise involved
in lawsuits,  including  class action lawsuits and  arbitrations.  In some class
action and other  actions  involving  insurers,  substantial  damages  have been
sought and/or material  settlement or award payments have been made. The Company
currently  believes no pending or threatened  lawsuits or actions exist that are
reasonably likely to have a material adverse impact on the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Information called for by this item is omitted pursuant to General Instruction I
(2)(c)of Form 10-K.

PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The  Registrant  is a wholly owned  subsidiary of Golden  American.  There is no
public trading market for the Registrant's common stock.

First Golden is required to maintain a minimum total statutory-basis capital and
surplus of not less than $6 million under the  provisions of the insurance  laws
of the State of New York in which it is  presently  licensed  to sell  insurance
products.

Under the  provisions  of the  insurance  laws of the  State of New York,  First
Golden cannot  distribute  any dividends to its  stockholder,  Golden  American,
unless a notice  of its  intent  to  declare a  dividend  and the  amount of the
dividend has been filed with the New York  Insurance  Department at least thirty
days in advance of the proposed  declaration.  If the  Superintendent of the New
York Insurance Department finds the financial condition of First Golden does not
warrant the distribution,  the Superintendent may disapprove the distribution by
giving written notice to First Golden within thirty days after the filing. First
Golden did not pay common stock dividends during 2000, 1999, or 1998.

ITEM 6. SELECTED FINANCIAL DATA.

Information called for by this item is omitted pursuant to General Instruction I
(2)(a)of Form 10-K.


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<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.

The purpose of this section is to discuss and analyze First Golden's  results of
operations.  In addition, some analysis and information regarding First Golden's
financial  condition  and  liquidity  and capital  resources is  provided.  This
analysis  should be read jointly with the financial  statements,  related notes,
and the Cautionary Statement Regarding Forward-Looking Statements,  which appear
elsewhere in this report.

RESULTS OF OPERATIONS
=====================

PREMIUMS

The Company  reported  variable  annuity  premiums of $17.0 million for the year
ended  December 31, 2000 and $11.7 million for the year ended December 31, 1999.
This increase relates to the increased sales of the Company's products in 2000.

For the Company's  variable  contracts,  premiums  collected are not reported as
revenues, but as deposits to insurance liabilities.  Revenues for these products
are recognized over time in the form of investment spread and product charges.

Premiums,  net of  reinsurance,  for  variable  products  from  two  significant
broker/dealers,  each having at least ten percent of total  sales,  for the year
ended December 31, 2000 totaled $13.5 million,  or 79.2% of premiums compared to
$10.6 million, or 90.6% from three significant broker/dealers for the year ended
December 31, 1999.

REVENUES

Product charges from variable annuities totaled $766,000 in 2000 and $556,000 in
1999.  This  increase  is due to higher  account  balances  associated  with the
Company's  separate account options.  Net investment income was $2.0 million for
the year ended  December 31, 2000.  This was a decrease of 5.8%  compared to net
investment  income of $2.1 million for the year ended December 31, 1999 due to a
shift towards short-term investments.  The Company recognized realized losses of
$689,000  during 2000 compared to realized  losses of $166,000  during 1999 from
the sales of investments.

EXPENSES

The Company  reported total insurance  benefits and expenses of $1.8 million for
the year ended  December 31, 2000 and $1.2  million for the year ended  December
31,  1999.  Insurance  benefits  and  expenses  consist of interest  credited to
account  balances,  benefit  claims  incurred  in  excess of  account  balances,
commissions,  general  expenses,  insurance  taxes,  state  licenses,  and fees,
amortization of deferred policy  acquisition  expenses,  goodwill,  and value of
purchased insurance in force, net of deferred policy acquisition costs. Interest
credited to account  balances  was  $401,000  and  $590,000  for the years ended
December  31,  2000 and  December  31,  1999,  respectively.  This  decrease  is
primarily due to lower average  account  balances  associated with the Company's
fixed account option within the variable  product caused by reallocations to the
separate account.

Commissions,  general expenses,  and insurance taxes,  state licenses,  and fees
were $1.1 million, $1.2 million, and $70,000,  respectively,  for the year ended
December 31, 2000.  For the year ended December 31, 1999,  commissions,  general
expenses, and insurance taxes, state licenses, and fees were $697,000,  $362,000
and  $62,000,  respectively.  Costs  incurred  as the  result of sales have been
deferred,  thus having very little impact on current earnings.  General expenses
increased  in the year ended  December 31, 2000 due to an increase in the volume
of business as well as an increase in expense allocations.

The Company's  deferred policy  acquisition costs ("DPAC") was eliminated and an
asset of $132,000  representing  value of purchased  insurance in force ("VPIF")
was established  for policies in force at the merger date. The Company  deferred
$1.3 million of expenses  associated with the sale of variable annuity contracts
for the year ended December 31, 2000. Expenses of $879,000 were deferred for the
year  ended  December  31,  1999.  These  acquisition  costs  are  amortized  in


                                       4
<PAGE>


proportion to the expected gross profits.  Amortization of DPAC was $322,000 and
$201,000  for the years  ended  December  31, 2000 and 1999,  respectively.  The
amortization  of VPIF was  $(4,000)  for the year ended  December  31,  2000 and
$35,000 for the year ended  December  31, 1999.  During 2000 and 1999,  VPIF was
adjusted  for the effect of  realized  losses by $22,000  and $0,  respectively.
During 2000 and 1999,  VPIF was adjusted to increase  amortization by $4,000 and
$3,000,  respectively,  to  reflect  changes in the  assumptions  related to the
timing of future gross profits.  Based on current  conditions and assumptions as
to the impact of future  events on  acquired  policies  in force,  the  expected
approximate net amortization relating to VPIF as of December 31, 2000 is $11,000
in 2001,  $10,000 in 2002,  $9,000 in 2003,  $7,000 in 2004, and $5,000 in 2005.
Actual amortization may vary based upon changes in assumptions and experience.

INCOME

Net  income  for the year  ended  December  31,  2000 was  $136,000.  This was a
decrease of $675,000 from net income of $811,000 for the year ended December 31,
1999.

Comprehensive  gain for 2000 was  $606,000,  compared to a loss of $452,000  for
1999.

FINANCIAL CONDITION
-------------------

RATINGS

Currently, the Company's ratings are A+ by A.M. Best Company, AA+ by Fitch IBCA,
Duff & Phelps  Credit  Rating  Company,  and AA+ by  Standard  &  Poor's  Rating
Services ("Standard & Poor's").

INVESTMENTS

First Golden's  assets are invested in accordance with  applicable  laws.  These
laws govern the nature and the quality of  investments  that may be made by life
insurance  companies and the percentage of their assets that may be committed to
any particular type of investment.  In general,  these laws permit  investments,
within specified limits subject to certain  qualifications,  in federal,  state,
and municipal  obligations,  corporate bonds,  preferred or common stocks,  real
estate mortgages, real estate, and certain other investments.

First Golden purchases investments in accordance with investment guidelines that
take into account investment quality, liquidity, and diversification and invests
primarily in investment  grade  securities.  All of First Golden's assets except
for variable separate account assets are available to meet its obligations under
the contracts.

All of the  Company's  investments  are  carried at fair value in the  Company's
financial  statements.  The  decrease  in the  carrying  value of the  Company's
investment  portfolio  was due to changes in  unrealized  depreciation  of fixed
maturities.  The Company manages the growth of insurance  operations in order to
maintain adequate capital ratios.

FIXED MATURITIES: At December 31, 2000, the Company had fixed maturities with an
amortized  cost of $25.8 million and an estimated  fair value of $25.2  million.
The  Company  classifies  100% of its  securities  as  available  for sale.  Net
unrealized  depreciation on fixed  maturities of $566,000 was comprised of gross
appreciation  of $308,000 and gross  depreciation  of $874,000.  At December 31,
1999,  net  unrealized  investment  gains  on  fixed  maturities  designated  as
available for sale totaled $1.1 million.

The  individual  securities  in the  Company's  fixed  maturities  portfolio (at
amortized cost) include  investment grade securities,  which include  securities
issued by the U. S. government, its agencies, and corporations that are rated at
least A- by Standard & Poor's ($13.4  million or 51.9%),  that are rated BBB+ to
BBB- by Standard & Poor's ($4.6 million or 17.8%),  and below  investment  grade
securities which are securities issued by corporations that are rated BB+ to BB-
by Standard & Poor's ($2.0 million or 7.8%).  Securities not rated by Standard &
Poor's had a National Association of Insurance  Commissioners ("NAIC") rating of
1 ($5.8 million or 22.5%).


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<PAGE>


Fixed  maturities rated BBB+ to BBB- may have  speculative  characteristics  and
changes in economic conditions or other circumstances are more likely to lead to
a weakened  capacity of the issuer to make principal and interest  payments than
is the case with higher rated fixed maturities.

The Company estimates the fair value of its below investment grade portfolio was
$1.5 million,  or 73.7% of the amortized  cost value,  at December 31, 2000. The
Company intends to purchase additional below investment grade securities, but it
does not expect the percentage of its portfolio  invested in such  securities to
exceed 10% of its  investment  portfolio.  At December  31,  2000,  the yield at
amortized  cost on the  Company's  below  investment  grade  portfolio  was 7.3%
compared to 6.7% for the Company's investment grade corporate bond portfolio.

Below investment grade securities have different characteristics than investment
grade  corporate debt  securities.  Risk of loss upon default by the borrower is
significantly  greater with respect to below  investment  grade  securities than
with other corporate debt  securities.  Below  investment  grade  securities are
generally unsecured and are often subordinated to other creditors of the issuer.
Also, issuers of below investment grade securities usually have higher levels of
debt and are more sensitive to adverse economic conditions,  such as a recession
or increasing  interest rates,  than are issuers of investment grade securities.
The Company  attempts to reduce the overall risk in its below  investment  grade
portfolio, as in all of its investments, through careful credit analysis, strict
investment policy guidelines, and diversification by company and by industry.

The Company analyzes its investment portfolio,  including below investment grade
securities, at least quarterly in order to determine if the Company's ability to
realize  the  carrying  value  on any  investment  has been  impaired.  For debt
securities,  if impairment  in value is  determined  to be other than  temporary
(i.e.,  if it is probable  the Company will be unable to collect all amounts due
according  to the  contractual  terms of the  security),  the cost  basis of the
impaired  security  is written  down to fair value,  which  becomes the new cost
basis.  The amount of the write-down is included in earnings as a realized loss.
Future events may occur,  or additional or updated  information may be received,
which  may  necessitate  future  write-downs  of  securities  in  the  Company's
portfolio.  Significant  write-downs in the carrying value of investments  could
materially adversely affect the Company's net income in future periods.

During  the year  ended  December  31,  2000,  the  amortized  cost basis of the
Company's fixed maturities portfolio was reduced by $10.5 million as a result of
sales,  maturities,  and scheduled principal  repayments.  In total, net pre-tax
losses from sales, calls, and scheduled principal repayments of fixed maturities
amounted to $689,000 in 2000.

At December 31, 2000, no fixed  maturities  were deemed to have  impairments  in
value that are other than  temporary.  At December 31, 2000,  the Company had no
investments in default.  The Company's fixed maturities portfolio had a combined
yield at amortized cost of 6.5% at December 31, 2000.

OTHER ASSETS

DPAC  represents  certain  deferred  costs of acquiring new insurance  business,
principally  first year  commissions  and  interest  bonuses and other  expenses
related to the production of new business  after the merger.  Any expenses which
vary  directly  with the  sales  of the  Company's  products  are  deferred  and
amortized.  The Company's DPAC was eliminated as of the merger date and an asset
of $132,000  representing  VPIF was established for all policies in force at the
merger date.  VPIF is amortized  into income in proportion to the expected gross
profits  of in force  acquired  in a manner  similar  to DPAC  amortization.  At
December 31, 2000,  the Company had VPIF and DPAC  balances of $113,000 and $4.2
million, respectively.

Due from affiliates decreased by $471,000 to $68,000 due mainly to a decrease in
receivables from Golden American and Directed Services,  Inc. ("DSI") during the
year ended December 31, 2000.

Accrued  investment income decreased $51,000 to $392,000 as of December 31, 2000
from  $443,000 at December 31,  1999.  The change in accrued  investment  income
resulted from a shift towards short-term investments.


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<PAGE>


Goodwill totaling $96,000,  representing the excess of the acquisition cost over
the fair value of net  assets  acquired,  was  established  at the merger  date.
Accumulated  amortization of goodwill as of December 31, 2000 was  approximately
$7,000.

At December 31, 2000,  the Company had $57.7 million of separate  account assets
compared to $47.2 million at December 31, 1999. The increase in separate account
assets resulted from the growth in sales of the Company's variable products, net
of  redemptions,  and from net  policyholder  transfers to the separate  account
options  from the fixed  account  options  within  the  variable  products.  The
increase is partially offset by negative equity market returns.

At December 31, 2000, the Company had total assets of $96.5 million, an increase
of 16.1% over total assets at December 31, 1999.

LIABILITIES

Future policy benefits  decreased  $518,000 during 2000 to $7.1 million,  due to
net  reallocations  to the Company's  separate  account from the Company's fixed
accounts.  Policy  reserves  represent the premiums  received  plus  accumulated
interest  less  administration  charges.  At December 31, 2000,  the Company had
$57.7 million of separate account liabilities. This is an increase of 22.2% over
separate account  liabilities as of December 31, 1999, and is primarily  related
to the growth in sales of the Company's variable  products,  net of redemptions,
and from net  policyholder  transfers to the separate  account  options from the
fixed account  options within the variable  products.  The increase is partially
offset by negative equity market returns.

Due to  affiliates  increased by $955,000 to $987,000.  This was mainly due to a
payable to Golden American who paid taxes of $500,000 on behalf of First Golden.

Other liabilities increased $160,000 during 2000. The increase results primarily
due to an increase in outstanding checks and accounts payable.

The Company's total liabilities  increased $10.7 million,  or 18.9%, during 2000
and totaled  $67.1  million at December 31, 2000.  The increase is primarily the
result of an increase in separate account liabilities.

The effects of inflation and changing prices on the Company's financial position
are not material  since  insurance  assets and  liabilities  are both  primarily
monetary and remain in balance.  An effect of  inflation,  which has been low in
recent years, is a decline in  stockholder's  equity when monetary assets exceed
monetary liabilities.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Liquidity  is the ability of the Company to  generate  sufficient  cash flows to
meet  the  cash  requirements  of  its  operating,   investing,   and  financing
activities.  The  Company's  principal  sources  of cash  are  variable  annuity
premiums and product  charges,  investment  income,  and  maturing  investments.
Primary uses of these funds are payments of commissions and operating  expenses,
investment purchases, as well as withdrawals and surrenders.

Net cash provided by operating  activities  was $1.6 million in 2000 compared to
net cash provided by  operations of $892,000 in 1999.  The increase in operating
cash  flow  results  primarily  from  an  increase  in the  amounts  payable  to
affilates.

Net cash used in investing  activities  was $2.1 million during 2000 as compared
to $1.9 million net cash provided by investing  activities in 1999.  This change
is primarily due to net purchases of short-term  investments  of $4.8 million in
2000  versus  net  sales of  $922,000  in 1999.  Net  sales of fixed  maturities
increased from $1.0 million in 1999 to $2.7 million in 2000.


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<PAGE>


Net cash  provided  by  financing  activities  was $1.1  million  during 2000 as
compared to net cash used in financing  activities  of $3.7  million  during the
prior year. In 2000,  net cash used in financing  activities was impacted by net
fixed account  deposits of $2.5 million compared to $780,000 in 1999. The change
in financing cash flow was also impacted by net  reallocations  to the Company's
separate  account,  which decreased to $3.4 million from $4.6 million during the
prior year.

The Company's  liquidity  position is managed by maintaining  adequate levels of
liquid assets,  such as cash or cash  equivalents  and  short-term  investments.
Additional sources of liquidity include borrowing  facilities to meet short-term
cash requirements.  The Company has a $10.0 million revolving note facility with
SunTrust  Bank,  Atlanta,  which expires on July 30, 2001.  Management  believes
these sources of liquidity are adequate to meet the  Company's  short-term  cash
obligations.

First Golden believes it will be able to fund the capital required for projected
new business  primarily with existing  capital and future capital  contributions
from  its  Parent.   First  Golden  expects  to  continue  to  receive   capital
contributions from Golden American,  if necessary.  It is ING's policy to ensure
adequate  capital  and surplus is provided  for the Company  and, if  necessary,
additional funds will be contributed.

The Golden American Board of Directors has agreed by resolution to provide funds
as needed  for the  Company to  maintain  policyholders'  surplus  that meets or
exceeds the greater of: (1) the minimum capital adequacy standards to maintain a
level of capitalization  necessary to meet A.M. Best Company's  guidelines for a
rating one level less than the one  originally  given to First Golden or (2) the
New York State Insurance  Department  risk-based capital minimum requirements as
determined in  accordance  with New York  statutory  accounting  principles.  In
February 2000,  Golden  American  provided a cash capital  contribution  of $2.1
million to First Golden. No funds were transferred from Golden American in 1999.

First Golden's  principal office is located in New York, New York, where certain
of the Company's  records are maintained.  The 2,568 square feet of office space
is leased through 2001.

First  Golden is required to maintain a minimum  capital and surplus of not less
than $6 million under the  provisions of the insurance  laws of the State of New
York.

Under the  provisions  of the  insurance  laws of the  State of New York,  First
Golden cannot  distribute  any dividends to its  stockholder,  Golden  American,
unless a notice  of its  intent  to  declare a  dividend  and the  amount of the
dividend has been filed with the New York  Insurance  Department at least thirty
days in advance of the proposed  declaration.  If the  Superintendent of the New
York Insurance Department finds the financial condition of First Golden does not
warrant the distribution,  the Superintendent may disapprove the distribution by
giving written  notice to the Company  within thirty days after the filing.  The
management of First Golden does not  anticipate  paying  dividends to its Parent
during 2001.

The NAIC's  risk-based  capital  requirements  require  insurance  companies  to
calculate  and report  information  under a risk-based  capital  formula.  These
requirements  are  intended  to  allow  insurance   regulators  to  monitor  the
capitalization  of insurance  companies based upon the type and mixture of risks
inherent in a company's  operations.  The formula includes  components for asset
risk, liability risk, interest rate exposure, and other factors. The Company has
complied with the NAIC's  risk-based  capital  reporting  requirements.  Amounts
reported indicate the Company has total adjusted capital well above all required
capital levels.

VULNERABILITY  FROM  CONCENTRATIONS:  First Golden's  operations  consist of one
business  segment,  the sale of variable annuity  products.  First Golden is not
dependent upon any single customer,  however, two broker/dealers accounted for a
significant  portion  of its sales  volume in 2000 and three  broker/dealers  in
1999. All premiums are generated from consumers and  corporations  in the states
of New York and Delaware.

REINSURANCE:  At December 31, 2000,  First Golden had two  reinsurance  treaties
with two unaffiliated reinsurers covering a significant portion of the mortality
risks and minimum  death  benefits  under its variable  contracts.  First Golden
remains liable to the extent its reinsurers do not meet their  obligations under
the reinsurance agreements.


                                       8
<PAGE>


On December 29, 2000, First Golden entered a reinsurance treaty with London Life
Reinsurance  Company of Pennsylvania,  an unaffiliated  reinsurer,  covering the
minimum death benefit  guarantees of First Golden's variable annuities issued on
or after January 1, 2000.

MARKET RISK AND RISK MANAGEMENT
-------------------------------

Asset/liability  management  is  integrated  into many aspects of the  Company's
operations,  including investment decisions,  product development, and crediting
rates determination.  As part of its risk management process, different economic
scenarios  are  modeled,  including  cash flow testing  required  for  insurance
regulatory  purposes,  to determine  that  existing  assets are adequate to meet
projected liability cash flows. Key variables include contractowner behavior and
the variable separate account's performance.

Contractowners bear the majority of the investment risks related to the variable
annuity  products.   Therefore,   the  risks  associated  with  the  investments
supporting the variable separate account are assumed by  contractowners,  not by
the Company (subject to, among other things,  certain minimum  guarantees).  The
Company's  products also provide  certain  minimum death benefits that depend on
the  performance  of the variable  separate  account.  Currently the majority of
death  benefit  risks are  reinsured,  which  protects  the Company from adverse
mortality experience and prolonged capital market decline.

A surrender,  partial withdrawal,  transfer,  or annuitization made prior to the
end of a  guarantee  period  from the fixed  account  may be subject to a market
value adjustment.  As the liabilities in the fixed account are subject to market
value  adjustment,  the Company  does not face a material  amount of market risk
volatility.   The  fixed  account  liabilities  are  supported  by  a  portfolio
principally  composed of fixed rate investments  that can generate  predictable,
steady rates of return. The portfolio  management strategy for the fixed account
considers the assets  available for sale. This enables the Company to respond to
changes  in market  interest  rates,  changes  in  prepayment  risk,  changes in
relative values of asset sectors and individual securities and loans, changes in
credit quality outlook,  and other relevant factors.  The objective of portfolio
management is to maximize returns,  taking into account interest rate and credit
risks,  as  well  as  other  risks.  The  Company's  asset/liability  management
discipline  includes  strategies to minimize  exposure to loss as interest rates
and economic and market conditions change.

On the  basis of  these  analyses,  management  believes  there  is no  material
solvency  risk to the Company.  With respect to a 10% drop in equity values from
year end 2000 levels,  variable  separate account funds,  which represent 89% of
the in force,  pass the risk in underlying fund performance to the contractowner
(except for certain minimum guarantees). With respect to interest rate movements
up or down 100 basis points from year end 2000 levels,  the remaining 11% of the
in force are fixed  account  funds and  almost all of these  have  market  value
adjustments  which provide  significant  protection  against changes in interest
rates.


                                       9
<PAGE>


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
---------------------------------------------------------

Any forward-looking  statements contained herein or in any other oral or written
statement  by the Company or any of its  officers,  directors,  or  employees is
qualified by the fact that actual  results of the Company may differ  materially
from such  statement,  among  other  risks  and  uncertainties  inherent  in the
Company's business, due to the following important factors:

1.   Prevailing  interest  rate levels and stock market  performance,  which may
     affect the ability of the Company to sell its  products,  the market  value
     and liquidity of the Company's investments, fee revenue, and the lapse rate
     of the Company's policies, notwithstanding product design features intended
     to enhance persistency of the Company's products.

2.   Changes in the federal  income tax laws and  regulations,  which may affect
     the tax status of the Company's products.

3.   Changes in the regulation of financial  services,  including bank sales and
     underwriting  of  insurance  products,  which may  affect  the  competitive
     environment for the Company's products.

4.   Increasing competition in the sale of the Company's products.

5.   Other factors that could affect the performance of the Company,  including,
     but not limited to, market conduct claims,  litigation,  insurance industry
     insolvencies,  availability  of  competitive  reinsurance  on new business,
     investment  performance  of  the  underlying  portfolios  of  the  variable
     products,  variable product design, and sales volume by significant sellers
     of the Company's variable products.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The matters set forth under the caption  "Market  Risk and Risk  Management"  in
Management's  Discussion  and Analysis of Results of Operations  (Item 7 of this
report) are incorporated herein by reference.


                                       10
<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT AUDITORS

--------------------------------------------------------------------------------

The Board of Directors and Stockholder
First Golden American Life Insurance Company of New York

We have audited the  accompanying  balance sheets of First Golden  American Life
Insurance  Company of New York as of December 31, 2000 and 1999, and the related
statements of operations,  changes in stockholder's  equity,  and cash flows for
each of the three years in the period ended  December 31, 2000.  Our audits also
included the financial  statement  schedules  listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of First Golden  American Life
Insurance  Company of New York at December 31, 2000 and 1999, and the results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  December 31, 2000, in conformity  with  accounting  principles  generally
accepted in the United  States.  Also,  in our  opinion,  the related  financial
statement  schedules,  when  considered  in  relation  to  the  basic  financial
statements  taken  as a whole,  present  fairly  in all  material  respects  the
information set forth therein.


                                        s/Ernst & Young LLP


Atlanta, Georgia
March 12, 2001


                                       11
<PAGE>
<TABLE>
<CAPTION>


                                                           BALANCE SHEETS
                                            (Dollars in thousands, except per share data)





                                                                           December 31, 2000         December 31, 1999
                                                                       ---------------------------------------------------
<S>                                                                              <C>                       <C>
  ASSETS

  Investments:
    Fixed maturities, available for sale, at fair value
       (cost: 2000 - $25,770; 1999 - $29,178).....................               $25,204                   $28,095
    Short-term investments........................................                 7,114                     2,309
                                                                       ---------------------------------------------------
  Total investments...............................................                32,318                    30,404

  Cash and cash equivalents.......................................                 1,541                     1,026

  Due from affiliates.............................................                    68                       539

  Accrued investment income.......................................                   392                       443

  Deferred policy acquisition costs...............................                 4,170                     3,198

  Value of purchased insurance in force...........................                   113                       102

  Property and equipment, less allowances for
     depreciation of $36 in 2000 and $31 in 1999 .................                    30                        41

  Goodwill, less accumulated amortization of
     $7 in 2000 and $5 in 1999....................................                    89                        91

  Current income taxes recoverable................................                    17                        --

  Other assets....................................................                    17                        19

  Separate account assets.........................................                57,703                    47,215
                                                                       ---------------------------------------------------
  Total assets....................................................               $96,458                   $83,078
                                                                       ===================================================















See accompanying notes.

                                                                 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                     BALANCE SHEETS - CONTINUED
                                            (Dollars in thousands, except per share data)





                                                                           December 31, 2000         December 31, 1999
                                                                       ---------------------------------------------------
<S>                                                                               <C>                       <C>
  LIABILITIES AND STOCKHOLDER'S EQUITY

  Policy liabilities and accruals:
     Future policy benefits:
       Annuity products...........................................                 $7,065                    $7,583
  Current income taxes payable....................................                     --                       557
  Deferred income tax liability...................................                    843                       610
  Revolving note payable..........................................                     --                       100
  Due to affiliates...............................................                    987                        32
  Other liabilities...............................................                    483                       323
  Separate account liabilities....................................                 57,703                    47,215
                                                                       ---------------------------------------------------
                                                                                   67,081                    56,420


  Commitments and contingencies

  Stockholder's equity:
     Preferred stock, par value $5,000 per share,
       authorized 6,000 shares....................................                     --                        --
     Common stock, par value $10 per share, authorized,
       issued, and outstanding 200,000 shares.....................                  2,000                     2,000
     Additional paid-in capital...................................                 26,049                    23,936
     Accumulated other comprehensive loss.........................                   (457)                     (927)
     Retained earnings............................................                  1,785                     1,649
                                                                       ---------------------------------------------------
  Total stockholder's equity......................................                 29,377                    26,658
                                                                       ---------------------------------------------------
  Total liabilities and stockholder's equity......................                $96,458                   $83,078
                                                                       ===================================================

















See accompanying notes.


                                                                 13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                      STATEMENTS OF OPERATIONS
                                                       (Dollars in thousands)





  Year Ended December 31                                                  2000              1999              1998
                                                              ------------------------------------------------------
<S>                                                                     <C>                <C>              <C>
  Revenues:
    Annuity product charges...........................                    $766              $556              $239
    Net investment income.............................                   2,022             2,147             1,844
    Realized gains (losses) on investments............                    (689)             (166)               24
    Other income......................................                      29                63                --
                                                              ------------------------------------------------------
                                                                         2,128             2,600             2,107

  Insurance benefits and expenses:
    Annuity benefits:
       Interest credited to account balances..........                     401               590               376
       Benefit claims incurred in excess of account
        balances......................................                       4                72                --
    Underwriting, acquisition, and insurance
     expenses:
       Commissions....................................                   1,115               697             1,754
       General expenses...............................                   1,244               362               834
       Insurance taxes, state licenses, and fees......                      70                62                27
       Policy acquisition costs deferred..............                  (1,349)             (879)           (2,264)
       Amortization:
         Deferred policy acquisition costs............                     322               201                76
         Value of purchased insurance in
           force......................................                      (4)               35                 8
         Goodwill.....................................                       2                 2                 2
                                                              ------------------------------------------------------
                                                                         1,805             1,142               813

  Interest expense....................................                      --                12                --
                                                              ------------------------------------------------------
                                                                         1,805             1,154               813
                                                              ------------------------------------------------------

  Income before income taxes..........................                     323             1,446             1,294

  Income taxes........................................                     187               635               519
                                                              ------------------------------------------------------

  Net income..........................................                    $136              $811              $775
                                                              ======================================================






See accompanying notes.

                                                                 14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                            STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
                                                       (Dollars in thousands)




                                                                                   Accumulated
                                                                  Additional              Other                             Total
                                                      Common         Paid-in      Comprehensive        Retained     Stockholder's
                                                       Stock         Capital      Income (Loss)        Earnings            Equity
                                              -------------------------------------------------------------------------------------
<S>                                                   <C>           <C>                  <C>             <C>              <C>
Balance at January 1, 1998...............             $2,000        $23,936                 $96             $63           $26,095
Comprehensive income:
  Net income.............................                 --             --                  --             775               775
  Change in net unrealized investment
     gains (losses)......................                 --             --                 240              --               240
                                                                                                                  -----------------
Comprehensive income.....................                                                                                   1,015
                                              -------------------------------------------------------------------------------------
Balance at December 31, 1998.............              2,000         23,936                 336             838            27,110
Comprehensive loss:
  Net income.............................                 --             --                  --             811               811
  Change in net unrealized investment
     gains (losses)......................                 --             --              (1,263)             --            (1,263)
                                                                                                                  -----------------
Comprehensive loss.......................                                                                                    (452)
                                              -------------------------------------------------------------------------------------
Balance at December 31, 1999.............              2,000         23,936                (927)          1,649            26,658
Comprehensive income:
  Net income.............................                 --             --                  --             136               136
  Change in net unrealized investment
     gains(losses).......................                 --             --                 470              --               470
                                                                                                                  -----------------
Comprehensive income.....................                                                                                     606
  Contribution of Capital................                 --          2,113                  --              --             2,113
                                              -------------------------------------------------------------------------------------
Balance at December 31, 2000.............             $2,000        $26,049               $(457)         $1,785           $29,377
                                              =====================================================================================





















See accompanying notes.

                                                                 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                      STATEMENTS OF CASH FLOWS
                                                       (Dollars in thousands)





For the Year Ended December 31,                                           2000              1999             1998
                                                               ---------------------------------------------------
<S>                                                                    <C>               <C>               <C>
OPERATING ACTIVITIES
Net income..............................................                  $136             $811              $775
Adjustments to reconcile net income to net cash
  provided by (used in) operations:
  Adjustments related to annuity products:
     Interest credited to account balances..............                   401              590               376
     Charges for mortality and administration...........                    (2)             (11)              (11)
  Decrease (increase) in accrued investment income......                    51              (29)              (38)
  Policy acquisition costs deferred.....................                (1,349)            (879)           (2,264)
  Amortization of deferred policy acquisition costs.....                   322              201                76
  Amortization of value of purchased insurance in
     force..............................................                    (4)              35                 8
  Change in other assets, due to/from affiliates, other
     liabilities, and accrued income taxes..............                 1,063              (32)              248
  Provision for depreciation and amortization...........                    21               90                82
  Provision for deferred income taxes...................                   233              (50)              465
  Realized (gains) losses on investments................                   689              166               (24)
                                                               ---------------------------------------------------
Net cash provided by (used in) operating activities.....                 1,561              892              (307)

INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
  Fixed maturities - available for sale.................                 9,852           10,849             1,644
  Short-term investments - net..........................                    --              922                --
                                                               ---------------------------------------------------
                                                                         9,852           11,771             1,644
Acquisition of investments:
  Fixed maturities - available for sale.................                (7,189)          (9,835)           (5,549)
  Short-term investments - net..........................                (4,805)              --            (2,432)
                                                               ---------------------------------------------------
                                                                       (11,994)          (9,835)           (7,981)

Purchase of property and equipment......................                    --               (8)               (4)
                                                               ---------------------------------------------------
Net cash provided by (used in) investing activities.....                (2,142)           1,928            (6,341)








See accompanying notes.

                                                                 16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                STATEMENTS OF CASH FLOWS - CONTINUED
                                                       (Dollars in thousands)





Year Ended December 31,                                                        2000             1999             1998
                                                                   ----------------------------------------------------
<S>                                                                         <C>              <C>               <C>
FINANCING ACTIVITIES
Proceeds from revolving note payable......................                    $100           $13,000               --
Repayment of revolving note payable.......................                    (200)          (12,900)              --
Receipts from investment contracts credited to account
  balances................................................
                                                                             2,737             1,008           $9,009
Return of account balances on investment contracts........                    (210)             (228)            (178)
Net reallocations to separate account.....................                  (3,444)           (4,606)            (872)
Contribution from parent..................................                   2,113                --               --
                                                                   ----------------------------------------------------
Net cash provided by (used in) financing activities.......                   1,096            (3,726)           7,959
                                                                   ----------------------------------------------------

Increase (decrease) in cash and cash equivalents..........                     515              (906)           1,311

Cash and cash equivalents at beginning of period..........                   1,026             1,932              621
                                                                   ----------------------------------------------------
Cash and cash equivalents at end of period................                  $1,541            $1,026           $1,932
                                                                   ====================================================

SUPPLEMENTAL  DISCLOSURE  OF CASH FLOW  INFORMATION
Cash paid during the period for:
   Interest...............................................                     $10                $1               --
   Income taxes...........................................                     528                --              $99



















See accompanying notes.

                                                                 17
</TABLE>
<PAGE>


                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000

1. SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

ORGANIZATION
First Golden  American  Life  Insurance  Company of New York ("First  Golden" or
"Company"),  a wholly owned subsidiary of Golden American Life Insurance Company
("Golden  American" or  "Parent"),  was  incorporated  on May 24,  1996.  Golden
American is a wholly owned  subsidiary of Equitable of Iowa  Companies,  Inc. On
January 2, 1997 and December 23, 1997,  First Golden  became  licensed as a life
insurance  company  under  the laws of the  states  of New  York  and  Delaware,
respectively.  First  Golden  received  policy  approvals  on March 25, 1997 and
December 23, 1997 in New York and Delaware, respectively. The Company's variable
annuity products are marketed by  broker/dealers,  financial  institutions,  and
insurance   agents.   The   Company's   primary   customers  are  consumers  and
corporations.  See  Note  8 for  further  information  regarding  related  party
transactions.

On October 24,  1997 (the  "merger  date"),  PFHI  Holdings,  Inc.  ("PFHI"),  a
Delaware corporation, acquired all of the outstanding capital stock of Equitable
of Iowa Companies  ("Equitable") according to the terms of an Agreement and Plan
of Merger dated July 7, 1997 among Equitable,  PFHI, and ING Groep N.V. ("ING").
PFHI is a wholly owned  subsidiary of ING, a global  financial  services holding
company based in The Netherlands. As a result of this transaction, Equitable was
merged into PFHI, which was simultaneously  renamed Equitable of Iowa Companies,
Inc. ("EIC"), a Delaware corporation.

INVESTMENTS
FIXED  MATURITIES:  The Company accounts for investments  under the Statement of
Financial  Accounting  Standards  ("SFAS")  No.  115,  "Accounting  for  Certain
Investments in Debt and Equity  Securities,"  which requires fixed maturities to
be  designated  as  either  "available  for  sale,"  "held for  investment,"  or
"trading." Sales of fixed maturities  designated as "available for sale" are not
restricted by SFAS No. 115.  Available for sale  securities are reported at fair
value and unrealized gains and losses on these securities are included  directly
in  stockholder's  equity,  after  adjustment  for  related  changes in value of
purchased  insurance  in  force  ("VPIF"),  deferred  policy  acquisition  costs
("DPAC"),  and deferred  income taxes. At December 31, 2000 and 1999, all of the
Company's  fixed  maturities are designated as available for sale,  although the
Company  is  not  precluded  from  designating  fixed  maturities  as  held  for
investment or trading at some future date.

Securities  determined  to have a decline in value that is other than  temporary
are written down to estimated fair value,  which becomes the new cost basis by a
charge to realized  losses in the Company's  Statements of Operations.  Premiums
and  discounts  are  amortized/accrued  utilizing  a method  which  results in a
constant yield over the  securities'  expected  lives.  Amortization/accrual  of
premiums  and   discounts  on  mortgage   and  other   asset-backed   securities
incorporates a prepayment assumption to estimate the securities' expected lives.

OTHER  INVESTMENTS:  Short-term  investments are reported at cost,  adjusted for
amortization of premiums and accrual of discounts.

REALIZED GAINS AND LOSSES: Realized gains and losses are determined on the basis
of specific identification.

FAIR  VALUES:  Estimated  fair  values,  as  reported  herein,  of  conventional
mortgage-backed  securities not actively traded in a liquid market are estimated
using  a third  party  pricing  process.  This  pricing  process  uses a  matrix
calculation  assuming a spread over U. S. Treasury bonds based upon the expected
average lives of the securities.  Estimated fair values of publicly traded fixed
maturities  are  reported  by an  independent  pricing  service.  Fair values of
private  placement  bonds are  estimated  using a matrix  that  assumes a spread
(based on interest rates and a risk assessment of the bonds) over U. S. Treasury
bonds.

                                       18
<PAGE>


CASH AND CASH EQUIVALENTS
For purposes of the accompanying Statements of Cash Flows, the Company considers
all demand deposits and interest-bearing  accounts not related to the investment
function to be cash equivalents.  All  interest-bearing  accounts  classified as
cash equivalents have original maturities of three months or less.

DEFERRED POLICY ACQUISITION COSTS
Certain  costs of  acquiring  new  insurance  business,  principally  first year
commissions,  interest bonuses,  and other expenses related to the production of
new business, have been deferred ($219,000 during 2000, $38,000 during 1999, and
$532,000 during 1998). Acquisition costs for variable annuity products are being
amortized  generally  in  proportion  to the  present  value  (using the assumed
crediting rate) of expected future gross profits.  This amortization is adjusted
retrospectively when the Company revises its estimate of current or future gross
profits to be realized from a group of products. DPAC is adjusted to reflect the
pro forma impact of unrealized  gains and losses on fixed maturities the Company
has designated as "available for sale" under SFAS No. 115.

VALUE OF PURCHASED INSURANCE IN FORCE
As the result of the merger,  a portion of the purchase  price was  allocated to
the right to receive future cash flows from existing insurance  contracts.  This
allocated  cost  represents  VPIF which  reflects  the value of those  purchased
policies calculated by discounting  actuarially  determined expected future cash
flows at the discount rate determined by the purchaser.  Amortization of VPIF is
charged to expense in  proportion to expected  gross  profits of the  underlying
business. This amortization is adjusted retrospectively when the Company revises
its  estimate  of  current  or future  gross  profits  to be  realized  from the
insurance contracts  acquired.  VPIF is adjusted to reflect the pro forma impact
of unrealized gains and losses on available for sale fixed maturities.

PROPERTY AND EQUIPMENT
Property and equipment  primarily  represent  leasehold  improvements and office
furniture  and  equipment  and  are  not  considered  to be  significant  to the
Company's overall  operations.  Property and equipment are reported at cost less
allowances for depreciation.  Depreciation  expense is computed primarily on the
basis of the straight-line method over the estimated useful lives of the assets.

GOODWILL
Goodwill was  established as a result of the merger and is being  amortized over
40 years on a straight-line basis.

FUTURE POLICY BENEFITS
Future policy benefits for the fixed interest  division of the variable products
are established  utilizing the retrospective  deposit accounting method.  Policy
reserves  represent  the  premiums  received  plus  accumulated  interest,  less
mortality and administration charges. Interest credited to these policies ranged
from 4.00% to 6.75% during 2000,  4.10% to 6.00% during 1999, and 3.95% to 7.10%
during 1998.

SEPARATE ACCOUNT
Assets and  liabilities  of the separate  account  reported in the  accompanying
Balance Sheets represent funds that are separately administered  principally for
variable annuity contracts.  Contractowners,  rather than the Company,  bear the
investment   risk  for  the  variable   products.   At  the   direction  of  the
contractowners,  the  separate  account  invests the  premiums  from the sale of
variable  annuity  products in shares of specified  mutual funds. The assets and
liabilities of the separate  account are clearly  identified and segregated from
other assets and liabilities of the Company. The portion of the separate account
assets equal to the reserves and other liabilities of variable annuity contracts
cannot be charged with liabilities arising out of any other business the Company
may conduct.

Variable  separate  account  assets are carried at fair value of the  underlying
investments and generally represent  contractowner  investment values maintained
in  the  accounts.  Variable  separate  account  liabilities  represent  account
balances for the variable annuity  contracts  invested in the separate  account;
the fair  value of these  liabilities  is equal to their  carrying  amount.  Net
investment  income and realized and unrealized  capital gains and losses related
to separate account assets are not reflected in the  accompanying  Statements of
Operations.


                                       19
<PAGE>


Product charges  recorded by the Company from variable  annuity products consist
of charges applicable to each contract for mortality and expense risk,  contract
administration, and surrender charges.

DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the difference  between
the financial statement and income tax bases of assets and liabilities using the
enacted  marginal tax rate.  Deferred tax assets or liabilities  are adjusted to
reflect the pro forma impact of unrealized  gains and losses on fixed maturities
the Company has designated as available for sale under SFAS No. 115.  Changes in
deferred tax assets or  liabilities  resulting from this SFAS No. 115 adjustment
are charged or credited  directly to stockholder's  equity.  Deferred income tax
expenses or credits  reflected in the Company's  Statements  of  Operations  are
based on the  changes in the  deferred  tax asset or  liability  from  period to
period (excluding the SFAS No. 115 adjustment).

DIVIDEND RESTRICTIONS
Under the  provisions  of the  insurance  laws of the  State of New York,  First
Golden cannot  distribute  any dividends to its  stockholder,  Golden  American,
unless a notice  of its  intent  to  declare a  dividend  and the  amount of the
dividend has been filed with the New York  Insurance  Department at least thirty
days in advance of the proposed  declaration.  If the  Superintendent of the New
York Insurance  Department finds the financial condition of the Company does not
warrant the distribution,  the Superintendent may disapprove the distribution by
giving written notice to the Company within thirty days after the filing.

SEGMENT REPORTING
The Company manages its business as one segment,  the sale of variable  products
designed to meet customer  needs for  tax-advantaged  saving for  retirement and
protection from death.  Variable products are sold to consumers and corporations
throughout New York.

USE OF ESTIMATES
The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  affecting  the amounts  reported in the  financial  statements  and
accompanying notes. Actual results could differ from those estimates.

Management is required to utilize  historical  experience and assumptions  about
future  events and  circumstances  in order to  develop  estimates  of  material
reported  amounts and  disclosures.  Included among the material (or potentially
material)  reported  amounts  and  disclosures  that  require  extensive  use of
estimates and  assumptions  are: (1) estimates of fair values of  investments in
securities  and  other  financial  instruments,   as  well  as  fair  values  of
policyholder  liabilities,  (2)  policyholder  liabilities,  (3) deferred policy
acquisition costs and value of purchased  insurance in force, (4) fair values of
assets and liabilities recorded as a result of the merger transaction, (5) asset
valuation allowances, (6) deferred tax benefits (liabilities), and (7) estimates
for commitments  and  contingencies  including legal matters,  if a liability is
anticipated and can be reasonably estimated. Estimates and assumptions regarding
all of the preceding  items are inherently  subject to change and are reassessed
periodically.  Changes in estimates and assumptions  could materially impact the
financial statements.

PENDING ACCOUNTING STANDARDS: DERIVATIVE FINANCIAL INSTRUMENTS
During 1998, the Financial  Accounting  Standards Board issued Statement No. 133
("SFAS  133"),  Accounting  for  Derivative  Financial  Instruments  and Hedging
Activities. SFAS 133 requires that all derivative instruments, including certain
derivative  instruments embedded in other contracts,  be recorded on the balance
sheet  measured at its fair value.  The change in a  derivative's  fair value is
generally to be  recognized  in current  period  earnings.  However,  if certain
conditions are met, a derivative may be specifically designated as a hedge of an
exposure to changes in fair value, variability of cash flows, or certain foreign
currency  exposures.  When  designated  as a hedge,  the fair  value  should  be
recognized  currently in earnings or other  comprehensive  income,  depending on
whether  such  designation  is  considered a fair value or as a cash flow hedge.
With respect to fair value hedges, the fair value of the derivative,  as well as
changes in the fair value of the hedged item, are reported in earnings. For cash
flow  hedges,  changes  in the  derivatives  fair  value are  reported  in other
comprehensive income and subsequently reclassified into earnings when the hedged


                                       20
<PAGE>


item affects earnings.  The ineffective portion of a derivative's change in fair
value will be immediately  recognized in earnings.  The Company adopted SFAS 133
on  January  1, 2001.  The  cumulative  effect of each  accounting  change  upon
adoption are not material.

RECLASSIFICATIONS
Certain amounts in the 1999 and 1998 financial statements have been reclassified
to conform to the 2000 financial statement presentation.

2. BASIS OF FINANCIAL REPORTING
--------------------------------------------------------------------------------

The  financial  statements  of the Company  differ from related  statutory-basis
financial statements  principally as follows: (1) acquisition costs of acquiring
new business are deferred  and  amortized  over the life of the policies  rather
than charged to operations as incurred;  (2) an asset  representing  the present
value of future cash flows from insurance  contracts acquired was established as
a result of the merger and is  amortized  and  charged  to  expense;  (3) future
policy benefit reserves for the fixed interest division of the variable products
are based on full  account  values,  rather than the  greater of cash  surrender
value or amounts  derived from  discounting  methodologies  utilizing  statutory
interest rates;  (4) reserves are reported before  reduction for reserve credits
related  to  reinsurance  ceded  and a  receivable  is  established,  net  of an
allowance for uncollectible amounts, for these credits rather than presented net
of these credits;  (5) fixed maturity  investments  are designated as "available
for sale" and valued at fair value  with  unrealized  appreciation/depreciation,
net of adjustments  to value of purchased  insurance in force,  deferred  policy
acquisition  costs, and deferred income taxes (if applicable),  credited/charged
directly to  stockholder's  equity rather than valued at amortized cost; (6) the
carrying  value of fixed  maturities  is  reduced  to fair  value by a charge to
realized  losses in the Statements of Operations when declines in carrying value
are judged to be other than temporary,  rather than through the establishment of
a  formula-determined  statutory  investment  reserve  (carried as a liability),
changes in which are charged directly to surplus;  (7) deferred income taxes are
provided for the difference between the financial statement and income tax bases
of assets  and  liabilities;  (8) net  realized  gains or losses  attributed  to
changes in the level of  interest  rates in the market are  recognized  when the
sale is completed  rather than deferred and amortized over the remaining life of
the fixed maturity security;  (9) revenues for variable annuity products consist
of policy  administration  charges and surrender  charges  assessed  rather than
premiums  received;  and (10) assets and liabilities are restated to fair values
when a change in  ownership  occurs,  with  provisions  for  goodwill  and other
intangible assets, rather than continuing to be presented at historical cost.

The National  Association of Insurance  Commissioners has revised the Accounting
Practices and Procedures Manual, the guidance that defines statutory  accounting
principles.  The revised manual will be effective  January 1, 2001, and has been
adopted,  at least in part,  by the  State of New  York,  which is the  state of
domicile  for First  Golden.  The  revised  manual will result in changes to the
accounting  practices  that the Companies  use to prepare their  statutory-basis
financial  statements.  Management believes the impact of these changes to First
Golden's  statutory-basis  capital and surplus as of January 1, 2001 will not be
significant.


                                       21
<PAGE>


A  reconciliation  of  net  income  and  stockholder's  equity  as  reported  to
regulatory  authorities  under  statutory  accounting  principles  to equivalent
amounts reported under generally accepted accounting principles follows:


<TABLE>
<CAPTION>
                                                         Net Income                     |        Stockholder's Equity
                                     ---------------------------------------------------|-----------------------------------
                                                          Year ended December 31,       |                  December 31,
                                                2000              1999             1998 |             2000             1999
                                     ---------------------------------------------------|-----------------------------------
                                                                    (Dollars in thousands)
<S>                                            <C>               <C>              <C>             <C>               <C>
As reported under statutory                                                             |
  accounting principles.........               $(290)            $790             $(966)|         $26,630           $25,082
Interest maintenance reserve....                (250)             (52)               14 |             (12)               --
Asset valuation reserve.........                  --               --                -- |             190               145
Future policy benefits..........                (239)            (681)               45 |            (936)             (697)
Nonadmitted assets..............                  --               --                -- |              30                41
Net unrealized appreciation                                                             |
  (depreciation) of fixed                                                               |
  maturities at fair value......                  --               --                -- |            (565)           (1,083)
Change in investment basis                                                              |
  as result of merger...........                 (78)            (118)              (39)|             122               200
Deferred policy acquisition                                                             |
  costs.........................               1,027              678             2,188 |           4,170             3,198
Value of purchased insurance                                                            |
  in force......................                   4              (35)               (8)|             113               102
Current income taxes                                                                    |
  payable.......................                (104)             193                -- |              89               193
Goodwill........................                  (2)              (2)               (2)|              89                91
Deferred income taxes...........                (233)              50              (465)|            (843)             (610)
Other...........................                 301              (12)                8 |             300                (4)
                                     ---------------------------------------------------|-----------------------------------
As reported herein..............                $136             $811              $775 |         $29,377           $26,658
                                     =======================================================================================
</TABLE>

3. INVESTMENT OPERATIONS
--------------------------------------------------------------------------------

INVESTMENT RESULTS
Major categories of net investment income are summarized below:

Year Ended December 31,                  2000           1999          1998
                                 ------------------------------------------
                                           (Dollars in Thousands)
Fixed maturities................       $1,810        $1,901         $1,726
Short-term investments..........          316           148            157
Other, net......................           (3)          171             --
                                 ------------------------------------------
Gross investment income.........        2,123         2,220          1,883
Less investment expenses........         (101)          (73)           (39)
                                 ------------------------------------------
Net investment income...........       $2,022        $2,147         $1,844
                                 ==========================================

The  change  in  unrealized  appreciation  (depreciation)  on  fixed  maturities
designated as available for sale at fair value for the years ended  December 31,
2000, 1999, and 1998 was $517,000, $(1,646,000), and $412,000, respectively.


                                       22
<PAGE>


At December  31,  2000 and 1999,  amortized  cost,  gross  unrealized  gains and
losses,  and  estimated  fair  values  of fixed  maturities,  all of  which  are
designated as available for sale, follows:

<TABLE>
<CAPTION>
                                                                                  Gross             Gross       Estimated
                                                              Amortized      Unrealized        Unrealized            Fair
                                                                   Cost           Gains            Losses           Value
                                                     ----------------------------------------------------------------------
                                                                             (Dollars in thousands)
<S>                                                             <C>                <C>           <C>              <C>
    December 31, 2000
    -------------------------------------------------
    U.S. government and governmental
       agencies and authorities...................               $6,793            $223             $(13)          $7,003
    Public utilities..............................                2,017               9              (11)           2,015
    Corporate securities..........................               16,412              73             (850)          15,635
    Mortgage-backed securities....................                  548               3               --              551
                                                     ----------------------------------------------------------------------
    Total.........................................              $25,770            $308            $(874)         $25,204
                                                     ======================================================================

    December 31, 1999
    -------------------------------------------------
    U.S. government and governmental
       agencies and authorities...................               $3,486              --             $(88)          $3,398
    Public utilities..............................                2,030              --              (77)           1,953
    Corporate securities..........................               21,994              --             (910)          21,084
    Mortgage-backed securities....................                1,556              --               (8)           1,548
    Other assets-backed securities................                  112              --               --              112
                                                     ----------------------------------------------------------------------
    Total.........................................              $29,178              --          $(1,083)         $28,095
                                                     ======================================================================

</TABLE>
Short-term  investments  with  maturities  of 30 days or less have been excluded
from the above  schedules.  Amortized  cost  approximates  fair values for these
securities.

At December 31,  2000,  net  unrealized  investment  losses on fixed  maturities
designated as available for sale totaled $566,000.  Depreciation of $457,000 was
included in  stockholder's  equity at December 31, 2000 (net of  adjustments  of
$22,000 to VPIF,  $87,000 to DPAC, and $160,000 to deferred  income  taxes).  At
December  31,  1999,  net  unrealized   investment  gains  on  fixed  maturities
designated as available for sale totaled  $1,083,000.  Depreciation  of $603,000
was included in stockholder's equity at December 31, 1999 (net of adjustments of
$16,000 to VPIF, $141,000 to DPAC, and $324,000 to deferred income taxes).

Amortized  cost and  estimated  fair  value of fixed  maturities  designated  as
available  for sale,  by  contractual  maturity,  at December 31, 2000 are shown
below.  Expected  maturities  will differ from  contractual  maturities  because
borrowers may have the right to call or prepay  obligations with or without call
or prepayment penalties.

                                                   Amortized        Estimated
  December 31, 2000                                     Cost       Fair Value
  ----------------------------------------------------------------------------
                                                     (Dollars in thousands)
  Due in one year or less...................          $1,902           $1,892
  Due after one year through five years.....          12,503           11,982
  Due after five years through ten years....          10,817           10,779
                                              --------------------------------
                                                      25,222           24,653
  Mortgage-backed securities................             548              551
                                              --------------------------------
  Total ....................................         $25,770          $25,204
                                              ================================


                                       23
<PAGE>


An analysis of sales,  maturities,  and  principal  repayments  of the Company's
fixed maturities portfolio follows:

<TABLE>
<CAPTION>
                                                                                 Gross              Gross          Proceeds
                                                           Amortized          Realized           Realized              from
                                                                Cost             Gains             Losses              Sale
    ------------------------------------------------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
<S>                                                          <C>                   <C>             <C>              <C>
    For the year ended December 31, 2000:
    Scheduled principal repayments, calls,
      and tenders................................             $2,307                --                --             $2,307
    Sales........................................              8,234               $21             $(710)             7,545
                                                     -----------------------------------------------------------------------
    Total........................................            $10,541               $21             $(710)            $9,852
                                                     =======================================================================

    For the year ended December 31, 1999:
    Scheduled principal repayments, calls,
      and tenders................................             $2,385                --                --             $2,385
    Sales........................................              8,630                $4             $(170)             8,464
                                                     -----------------------------------------------------------------------
    Total........................................            $11,015                $4             $(170)           $10,849
                                                     =======================================================================

    For the year ended December 31, 1998:
    Scheduled principal repayments, calls,
      and tenders................................             $1,080                --                --             $1,080
    Sales........................................                540               $24                --                564
                                                     -----------------------------------------------------------------------
    Total........................................             $1,620               $24                --             $1,644
                                                     =======================================================================
</TABLE>

INVESTMENT VALUATION ANALYSIS:  The Company analyzes its investment portfolio at
least  quarterly in order to determine if the carrying  value of any  investment
has been  impaired.  The carrying  value of fixed  maturities is written down to
fair value by a charge to realized losses when an impairment in value appears to
be other than  temporary.  During 2000,  1999,  and 1998,  no  investments  were
identified as having an impairment other than temporary.

INVESTMENTS  ON DEPOSIT:  At December 31, 2000 and 1999,  affidavits of deposits
covering  bonds with a par value of  $400,000  were on deposit  with  regulatory
authorities pursuant to certain statutory requirements.

INVESTMENT  DIVERSIFICATIONS:  The Company's  investment policies related to its
investment  portfolio  require  diversification  by  asset  type,  company,  and
industry  and set limits on the amount  which can be invested  in an  individual
issuer.  Such  policies  are at  least as  restrictive  as  those  set  forth by
regulatory authorities. The following percentages relate to holdings at December
31, 2000 and  December  31,  1999.  Fixed  maturities  included  investments  in
industrials (33% in 2000, 48% in 1999), financial companies (31% in 2000, 29% in
1999),  and various  government  bonds and government or agency  mortgage-backed
securities (29% in 2000, 14% in 1999).

No  investment  in any person or its  affiliates  (other  than  bonds  issued by
agencies of the United States  government)  exceeds ten percent of stockholder's
equity at December 31, 2000.

4. COMPREHENSIVE INCOME
--------------------------------------------------------------------------------

Comprehensive  income  includes  all changes in  stockholder's  equity  during a
period except those  resulting  from  investments  by and  distributions  to the
stockholder.  Other  comprehensive  income (loss) excludes net investment  gains
(losses) included in net income which merely represent transfers from unrealized
to realized gains and losses. These amounts totaled $(581,000) and $(108,000) in
2000 and 1999, respectively.  Such amounts, which have been measured through the
date of sale, are net of income taxes and  adjustments to VPIF and DPAC totaling
$(108,000) and $(58,000) in 2000 and 1999, respectively.


                                       24
<PAGE>


5. FAIR VALUES OF FINANCIAL INSTRUMENTS
--------------------------------------------------------------------------------

SFAS No. 107, "Disclosures about Fair Value of Financial  Instruments," requires
disclosure of estimated fair value of all financial instruments,  including both
assets and  liabilities  recognized  and not  recognized in a company's  balance
sheet, unless specifically exempted.  SFAS No. 119, "Disclosure about Derivative
Financial  Instruments  and  Fair  Value  of  Financial  Instruments,"  requires
additional  disclosures  about  derivative  financial  instruments.  Most of the
Company's investments,  investment contracts and debt fall within the standards'
definition  of a financial  instrument.  In cases where quoted market prices are
not available,  estimated fair values are based on estimates using present value
or other valuation  techniques.  Those techniques are significantly  affected by
the assumptions  used,  including the discount rate and estimates of future cash
flows. Accounting,  actuarial, and regulatory bodies are continuing to study the
methodologies to be used in developing fair value  information,  particularly as
it relates to such things as liabilities for insurance  contracts.  Accordingly,
care should be exercised in deriving conclusions about the Company's business or
financial condition based on the information presented herein.

The Company closely  monitors the composition and yield of its invested  assets,
the duration  and  interest  credited on  insurance  liabilities  and  resulting
interest  spreads  and  timing of cash  flows.  These  amounts  are  taken  into
consideration in the Company's  overall  management of interest rate risk, which
attempts to minimize exposure to changing interest rates through the matching of
investment cash flows with amounts expected to be due under insurance contracts.
These  assumptions  may not  result in values  consistent  with  those  obtained
through an actuarial  appraisal of the  Company's  business or values that might
arise in a negotiated transaction.

The following compares carrying values as shown for financial reporting purposes
with estimated fair values:
<TABLE>
<CAPTION>

  December 31,                                                                2000                            1999
  ---------------------------------------------------------------------------------------------------------------------------
                                                                     Carrying       Estimated         Carrying      Estimated
                                                                        Value      Fair Value            Value     Fair Value
                                                              ---------------------------------------------------------------
                                                                                   (Dollars in thousands)
<S>                                                                   <C>             <C>              <C>            <C>
  ASSETS
     Fixed maturities, available for sale.................            $25,204         $25,204          $28,095        $28,095
     Short-term investments...............................              7,114           7,114            2,309          2,309
     Cash and cash equivalents............................              1,541           1,541            1,026          1,026
     Separate account assets..............................             57,703          57,703           47,215         47,215

  LIABILITIES
    Annuity products......................................              7,065           6,709            7,583          7,170
    Revolving note payable................................                 --              --              100            100
    Separate account liabilities..........................             57,703          57,703           47,215         47,215

</TABLE>
The  following  methods and  assumptions  were used by the Company in estimating
fair values.

FIXED  MATURITIES:   Estimated  fair  values  of  conventional   mortgage-backed
securities  not actively  traded in a liquid  market and  publicly  traded fixed
maturities  are  estimated  using a third party  pricing  process.  This pricing
process uses a matrix  calculation  assuming a spread over U. S. Treasury  bonds
based upon the expected average lives of the securities.

SHORT-TERM  INVESTMENTS AND CASH AND CASH EQUIVALENTS:  Carrying values reported
in the Company's historical cost basis balance sheet approximate  estimated fair
value for these instruments due to their short-term nature.

SEPARATE ACCOUNT ASSETS: Separate account assets are reported at the quoted fair
values of the individual securities in the separate account.


                                       25
<PAGE>


ANNUITY PRODUCTS:  Estimated fair values of the Company's liabilities for future
policy  benefits for the fixed  interest  division of the variable  products are
stated at cash surrender  value,  the cost the Company would incur to extinguish
the liability.

REVOLVING NOTE PAYABLE: Carrying value reported in the Company's historical cost
basis balance sheet  approximates  estimated fair value for this instrument,  as
the agreement carries a variable interest rate provision.

SEPARATE ACCOUNT LIABILITIES:  Separate account liabilities are reported at full
account value in the Company's  historical  cost balance  sheet.  Estimated fair
values of separate account liabilities are equal to their carrying amount.

6. VALUE OF PURCHASED IN FORCE
--------------------------------------------------------------------------------

As a result of the merger,  a portion of the purchase price was allocated to the
right to receive  future  cash flows from  existing  insurance  contracts.  This
allocated cost  represents  VPIF,  which  reflects the value of those  purchased
policies calculated by discounting  actuarially  determined expected future cash
flows at the discount rate determined by the purchaser.  Interest was accrued at
a rate of 7.32% during 2000 (7.33% during 1999 and 7.29% during 1998).

A reconciliation of the change in the VPIF asset follows:
<TABLE>
<CAPTION>

         Year Ended December 31,                                            2000             1999             1998
                                                                 ---------------------------------------------------
                                                                               (Dollars in thousands)

<S>                                                                         <C>              <C>              <C>
            Beginning balance..............................                 $102             $117             $126
              Accretion of interest........................                    6                8                9
              Amortization of asset........................                   (2)             (43)             (17)
              Adjustment for unrealized gains (losses).....                    7               20               (5)
              Other asset adjustment ......................                   --               --                4
                                                                 ---------------------------------------------------
            Ending balance.................................                 $113             $102             $117
                                                                 ===================================================
</TABLE>



Based on current conditions and assumptions as to the impact of future events on
acquired policies in force, the expected  approximate net amortization  relating
to VPIF as of December 31, 2000 is $11,000 in 2001,  $10,000 in 2002,  $9,000 in
2003,  $7,000 in 2004, and $5,000 in 2005.  Actual  amortization  may vary based
upon changes in assumptions and experience.



7. INCOME TAXES
--------------------------------------------------------------------------------

The Company files a consolidated federal income tax return with Golden American,
also a life insurance company.

INCOME TAX EXPENSE
Income tax expense included in the financial statements follows:

Year Ended December 31,            2000               1999               1998
                         -----------------------------------------------------
                                        (Dollars in thousands)
   Current..............           $(46)              $685                $54
   Deferred.............            233                (50)               465
                         -----------------------------------------------------
                                   $187               $635               $519
                         =====================================================


                                       26
<PAGE>


The  effective  tax rate on income  before  income taxes is  different  from the
prevailing federal income tax rate. A reconciliation of this difference follows:

<TABLE>
<CAPTION>
Year Ended December 31,                                        2000              1999               1998
                                                   -------------------------------------------------------
                                                                      (Dollars in thousands)
<S>                                                            <C>             <C>                <C>
Income before income taxes....................                 $323            $1,446             $1,294
                                                   =======================================================

Income tax at federal statutory rate..........                 $113              $506               $447
Tax effect of:
  Other items.................................                   74               129                 66
                                                   -------------------------------------------------------
Income tax expense............................                 $187              $635               $519
                                                   =======================================================
</TABLE>

DEFERRED INCOME TAXES
The tax effect of temporary  differences  giving rise to the Company's  deferred
income tax assets and liabilities at December 31, 2000 and 1999 follows:
<TABLE>
<CAPTION>

  December 31                                                                        2000                        1999
----------------------------------------------------------------------------------------------------------------------------
                                                                                          (Dollars in thousands)
<S>                                                                                <C>                         <C>
 Deferred tax assets:
    Future policy benefits.........................................                  $747                        $560
    Net unrealized depreciation of available for sale fixed
      maturities...................................................                   160                         324
    Net operating loss carryforwards...............................                    --                          --
                                                                        ----------------------------------------------------
                                                                                      907                         884
 Deferred tax liabilities:
    Net unrealized appreciation of available for sale
      fixed maturities.............................................                     -                          --
    Fixed maturities...............................................                   (68)                        (68)
    Investment income..............................................                  (117)                       (117)
    Deferred policy acquisition costs .............................                (1,171)                       (913)
    Value of purchased insurance in force..........................                   (24)                        (30)
    Other..........................................................                  (210)                        (42)
                                                                        ----------------------------------------------------
                                                                                   (1,590)                     (1,170)
                                                                        ----------------------------------------------------
Valuation allowance................................................                  (160)                       (324)
                                                                        ----------------------------------------------------
Deferred income tax liability......................................                 $(843)                      $(610)
                                                                        ====================================================
</TABLE>

At December 31, 2000, the Company reported,  for financial  statement  purposes,
unrealized losses on certain  investments which have not been recognized for tax
purposes.  Since it is uncertain as to whether capital losses, if ever realized,
could be utilized  to offset  capital  gains,  a  valuation  allowance  has been
established for the tax effect of these financial statement losses.

8. RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

Directed Services, Inc. ("DSI") acts as the principal underwriter (as defined in
the Securities  Act of 1933 and the Investment  Company Act of 1940, as amended)
and distributor of the variable annuity  products issued by the Company.  DSI is
authorized  to enter into  agreements  with  broker/dealers  to  distribute  the
Company's  variable  insurance  products  and  appoint  representatives  of  the
broker/dealers  as agents.  As of December  31,  2000,  the  Company's  variable
annuity products were sold primarily  through  broker/dealer  institutions.  The
Company paid commissions to DSI totaling  $1,115,000,  $697,000,  and $1,754,000
for the years ended December 31, 2000, 1999, and 1998, respectively.

The Company has service  agreements  with Golden  American  and  Equitable  Life
Insurance  Company of Iowa  ("Equitable  Life"),  an affiliate,  in which Golden
American  and  Equitable  Life  provide  administrative  and  financial  related


                                       27
<PAGE>


services.  Under the  agreement  with  Golden  American,  the  Company  incurred
expenses of $412,000, $137,000, $248,000, for the years ended December 31, 2000,
1999 and 1998,  respectively.  Under the  agreement  with  Equitable  Life,  the
Company incurred  expenses of $340,000,  $142,000,  and $165,000,  for the years
ended December 31, 2000, 1999, and 1998, respectively.

The Company provides resources and services to Golden American and DSI. Revenues
for these  services,  which  reduce  general  expenses  incurred by the Company,
totaled  $225,000,  $269,000,  and $210,000 from Golden American,  for the years
ended  December  31,  2000,  1999,  and 1998  respectively.  Revenues  for these
services,  which  reduce  general  expenses  incurred  by the  Company,  totaled
$223,000,  $387,000, and $75,000 from DSI for the years ended December 31, 2000,
1999, and 1998 respectively.

Effective  January 1, 1998, the Company has an asset  management  agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM provides
asset  management and  accounting  services.  Under the  agreement,  the Company
records a fee  based on the value of the  assets  under  management.  The fee is
payable  quarterly.  For the years ended December 31, 2000,  1999, and 1998, the
Company incurred fees of $81,000, $73,000, and $56,000, respectively, under this
agreement.

The Company had premiums, net of reinsurance,  for variable annuity products for
the year ended December 31, 2000, 1999, and 1998, that totaled $27,000,  $2,000,
and $94,000  respectively,  from Locust Street  Securities,  Inc.  ("LSSI"),  an
affiliate.

As at December  31,  2000,  the Company had a payable to Golden  American in the
amount of $500,000 related to a payment for taxes made by Golden American on the
Company's behalf.

The Golden American Board of Directors has agreed by resolution to provide funds
as needed  for the  Company to  maintain  policyholders'  surplus  that meets or
exceeds the greater of: (1) the minimum capital adequacy standards to maintain a
level of capitalization  necessary to meet A.M. Best Company's guidelines or one
level less than the one  originally  given to First Golden,  or (2) the New York
State Insurance Department risk-based capital minimum requirements as determined
in  accordance  with New York  statutory  accounting  principles.  No funds were
transferred from Golden American in 1999 or 1998.  During 2000,  Golden American
provided a cash capital contribution of $2,113,000 to First Golden.

9. COMMITMENTS AND CONTINGENCIES
--------------------------------------------------------------------------------

REINSURANCE:  At December 31, 2000,  First Golden had two  reinsurance  treaties
with two unaffiliated reinsurers covering a significant portion of the mortality
risks and minimum death benefit guarantees under its variable  contracts.  First
Golden remains liable to the extent its reinsurers do not meet their obligations
under the reinsurance agreements.

On December 29, 2000, First Golden entered a reinsurance treaty with London Life
Reinsurance  Company of Pennsylvania,  an unaffiliated  reinsurer,  covering the
minimum death benefit  guarantees of First Golden's variable annuities issued on
or after January 1, 2000.

At December 31, 2000 and December 31, 1999, the Company has a payable of $17,000
and $4,000, respectively, for reinsurance premiums. Included in the accompanying
financial  statements  are  net  considerations  to the  reinsurer  of  $71,000,
$27,000,  and $9,000 for the years ended  December  31,  2000,  1999,  and 1998,
respectively.  In addition,  the accompanying  financial  statements contain net
policy benefits  recoveries of $5,000 and $7000 for the years ended December 31,
2000 and 1999, respectively.

LITIGATION:  The  Company,  like  other  insurance  companies,  may be  named or
otherwise   involved  in  lawsuits,   including   class   action   lawsuits  and
arbitrations.  In some  class  action  and  other  actions  involving  insurers,
substantial  damages  have  been  sought  and/or  material  settlement  or award
payments have been made. The Company currently believes no pending or threatened
lawsuits or actions exist that are reasonably  likely to have a material adverse
impact on the Company.


                                       28
<PAGE>


VULNERABILITY FROM CONCENTRATIONS: The Company has various concentrations in its
investment portfolio (see Note 3 for further  information).  The Company's asset
growth, net investment  income,  and cash flow are primarily  generated from the
sale of variable  annuities and associated  future policy benefits.  Substantial
changes in tax laws would make these  products less  attractive to consumers and
extreme  fluctuations in interest rates or stock market returns which may result
in higher  lapse  experience  than  assumed  could cause a severe  impact to the
Company's financial  condition.  A significant portion of the Company's sales is
generated  by two  broker/dealers,  each  having at least ten  percent  of total
sales.

LEASES: The Company has a lease for its home office space which expires December
31, 2001. The Company also leases certain equipment under operating leases which
expire in 2005.  Rent expense for the years ended  December  31, 2000,  1999 and
1998 was $122,000,  $89,000,  and $95,000,  respectively.  At December 31, 2000,
minimum  rental  payments  due under the  operating  leases are $82,000 in 2001,
$4,000 in 2002, $4,000 in 2003, $4,000 in 2004, and $1,000 in 2005.

REVOLVING NOTE PAYABLE: To enhance short-term liquidity, the Company established
a revolving note payable with SunTrust Bank,  Atlanta (the "Bank") which expires
July 30,  2001.  The note was  approved by the  Company's  Board of Directors on
September  29,  1998.  The total  amount the  Company  may have  outstanding  is
$10,000,000.  The note accrues interest at an annual rate equal to: (1) the cost
of funds for the Bank for the period  applicable  for the advance plus 0.225% or
(2) a rate quoted by the Bank to the Company for the  advance.  The terms of the
agreement  require the Company to maintain the minimum  level of Company  Action
Level Risk Based Capital as established  by applicable  state law or regulation.
Under this  agreement,  the Company did not incur  interest  expense in 2000 and
incurred  interest expense of $12,000 in 1999. At December 31, 2000, the Company
did not have any borrowings under this agreement.  The Company had borrowings of
$100,000 under this agreement at December 31, 1999.


                                       29
<PAGE>


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

None.

PART III.

ITEMS 10 - 13.

Information  called for by items 10 through 13 of this part is omitted  pursuant
to General Instruction I (2) (c) of Form 10-K.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)(1) and (a)(2) Financial statements and schedules

The  following  financial  statements of First Golden  American  Life  Insurance
Company of New York are included in Item 8:

                                                                            PAGE
                                                                            ----
     Balance Sheets - December 31, 2000 and 1999..............................12
     Statements of Operations - For the years ended December 31,
       2000, 1999, and 1998.................................................. 14
     Statements of Changes in Stockholder's Equity - For the years
       ended December 31, 2000, 1999, and 1998................................15
     Statements of Cash Flows - For the years ended December 31,
       2000, 1999, and 1998...................................................16
     Notes to Financial Statements............................................18

The  following  financial  statement  schedules  of First Golden  American  Life
Insurance Company of New York are included in Item 14(d):

                                                                            PAGE
                                                                            ----
     Schedule I - Summary of investments - other than investments
       in related parties.....................................................31
     Schedule III - Supplementary insurance information.......................32

All other schedules listed in Article 7 of Regulation S-X are not required under
the related instructions or are inapplicable and therefore have been omitted.

(a)(3), and (c) Exhibits

Exhibits filed are listed in the attached exhibit index.

(b) No reports on Form 8-K were filed for the quarter ended December 31, 2000.


                                       30
<PAGE>
<TABLE>
<CAPTION>


ITEM 14(d). SCHEDULES.


                                                 SCHEDULE I
                                          SUMMARY OF INVESTMENTS
                                 OTHER THAN INVESTMENTS IN RELATED PARTIES
                                           (Dollars in thousands)

                                                                                                      BALANCE
                                                                                                        SHEET
DECEMBER 31, 2000                                                         COST(1)         VALUE        AMOUNT
----------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>            <C>          <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
  Bonds:
   United States government and governmental
     agencies and authorities..................................            $6,793        $7,003        $7,003
   Public utilities............................................             2,017         2,015         2,015
   Corporate securities........................................            16,412        15,635        15,635
   Mortgage-backed securities..................................               548           551           551
   Other asset-backed securities...............................                --            --            --
                                                                     -------------------------------------------
Total fixed maturities, available for sale.....................            25,770        25,204        25,204

Short-term investments.........................................             7,114                       7,114
                                                                     --------------              ---------------
Total investments..............................................           $32,884                     $32,318
                                                                     ==============              ===============


Note 1: Cost is defined as amortized cost for bonds and short-term investments adjusted for amortization of
        premiums and accrual of discounts.


                                                                 31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                            SCHEDULE III
                                                 SUPPLEMENTARY INSURANCE INFORMATION
                                                       (Dollars in thousands)

COLUMN A            COLUMN B    COLUMN C   COLUMN D   COLUMN E    COLUMN F   COLUMN G   COLUMN H   COLUMN I    COLUMN J  COLUMN K
-----------------------------------------------------------------------------------------------------------------------------------
                                   FUTURE
                                   POLICY                                                           AMORTIZA-
                                BENEFITS,                  OTHER                          BENEFITS    TION OF
                                  LOSSES,                 POLICY                           CLAIMS,   DEFERRED
                      DEFERRED     CLAIMS                 CLAIMS   INSURANCE                LOSSES     POLICY
                        POLICY        AND   UNEARNED         AND    PREMIUMS        NET        AND     ACQUI-     OTHER
                   ACQUISITION       LOSS    REVENUE    BENEFITS         AND INVESTMENT SETTLEMENT     SITION  OPERATING  PREMIUMS
           SEGMENT       COSTS   EXPENSES    RESERVE     PAYABLE     CHARGES     INCOME   EXPENSES      COSTS   EXPENSES   WRITTEN
-----------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>       <C>             <C>         <C>       <C>      <C>          <C>        <C>      <C>           <C>

YEAR ENDED DECEMBER 31, 2000:

  Life insurance        $4,170     $7,065         --          --        $766     $2,022       $401       $322     $1,082        --

YEAR ENDED DECEMBER 31, 1999:

  Life insurance        $3,198     $7,583         --          --        $556     $2,147       $590       $201       $351        --

YEAR ENDED DECEMBER 31, 1998:

  Life insurance        $2,347    $10,830         --          --        $239     $1,844       $376        $76       $361        --













                                                                 32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


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.

                                        FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
                                                            (Registrant)

DATE: MARCH 28, 2001                                                                              BY /S/ Barnett Chernow
                                                                                                     -------------------
                                                                                                       Barnett Chernow
                                                                                                       President

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

                      SIGNATURES                                         TITLE
<S>      <C>                                           <C>
         -----------------------------------           ----------------------------------------------|
                                                                                                     |
         /s/ Barnett Chernow                           President and Director                        |
         -----------------------------------                                                         |
         Barnett Chernow                                                                             |
         (principal executive officer)                                                               |
                                                                                                     |
         /s/ E. Robert Koster                          Senior Vice President and                     |
         -----------------------------------           Chief Financial Officer                       |
         E. Robert Koster                                                                            |
         (principal financial officer)                                                               |
                                                                                                     |
         /s/ Cheryl Price                              Chief Accounting Officer                      |
         -----------------------------------                                                         |
         Cheryl Price                                                                                |
         (principal accounting officer)                                                              |
                                                                                                     |-- March 28, 2001
         /s/ Myles R. Tashman                          Executive Vice President, General             |
         -----------------------------------           Counsel, Secretary and Director               |
         Myles R. Tashman                                                                            |
                                                                                                     |
         /s/ Carol V. Coleman                                                                        |
         -----------------------------------           Director                                      |
         Carol V. Coleman                                                                            |
                                                                                                     |
         /s/ Michael W. Cunningham                                                                   |
         -----------------------------------           Director                                      |
         Michael W. Cunningham                                                                       |
                                                                                                     |
         /s/ Stephen J. Friedman                                                                     |
         -----------------------------------           Director                                      |
         Stephen J. Friedman                                                                         |
                                                                                                     |
         /s/ Andrew J. Kalinowski                                                                    |
         -----------------------------------           Director                                      |
         Andrew J. Kalinowski                                                                        |
                                                                                                     |
         /s/ Bernard Levitt                                                                          |
         -----------------------------------           Director                                      |
         Bernard Levitt                                                                              |
                                                                                                     |
         /s/ P. Randall Lowery                                                                       |
         -----------------------------------           Director                                      |
         P. Randall Lowery                                                                           |
                                                                                                     |
         /s/ Roger A. Martin                                                                         |
         -----------------------------------           Director                                      |
         Roger A. Martin                                                                             |
                                                                                                     |
         /s/ Mark A. Tullis                                                                          |
         -----------------------------------           Director                                      |
         Mark A. Tullis                                                            ------------------|


                                                                 33
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                                INDEX

                                                        Exhibits to Form 10-K
                                                    Year Ended December 31, 2000
                                      FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK

                                                                                                                    Page Number
                                                                                                                    -----------
    <S>                                                                                                                <C>
    2      PLAN OF ACQUISITION
           (a)    Agreement and Plan of Merger dated July 7, 1997, among Equitable of Iowa Companies ("Equitable"),
                  ING Groep N.V. and PFHI Holdings, Inc. (incorporated by reference from Exhibit 2 in Equitable's
                  Form 8-K filed July 11, 1997)......................................................................
                                                                                                                       ------

    3      ARTICLES OF INCORPORATION AND BY-LAWS
           (a)    Articles of Incorporation of First Golden American Life Insurance Company of New York
                  ("Registrant" or "First Golden") (incorporated by reference from Exhibit 3(i) to Amendment No. 1
                  to Registrant's Registration Statement on Form S-1 filed with the Securities and Exchange
                  Commission (the "SEC") on or about March 18, 1997 (File No. 333-16279))...........................
                                                                                                                       ------

           (b)    By-laws of First Golden (incorporated by reference from Exhibit 3(ii) to Amendment No. 1 to
                  Registrant's Registration Statement on Form S-1 filed with the SEC on or about March 18, 1997
                  (File No. 333-16279))..............................................................................
                                                                                                                       ------

    4      INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
           (a)    Individual Deferred Combination Variable and Fixed Annuity Contract (incorporated by reference
                  from Exhibit 4(a) to a Registration Statement for First Golden on Form S-1 filed with the SEC on
                  or about April 23, 1999 (File No. 333-77385))......................................................
                                                                                                                       ------

           (b)    Individual Deferred Combination Variable and Fixed Annuity Contract Application (incorporated by
                  reference from Exhibit 4(b) to a Registration Statement for First Golden on Form S-1 filed with
                  the SEC on or about April 23, 1999 (File No. 333-77385))...........................................
                                                                                                                       ------

           (c)    Schedule Page to the DVA Plus-NY Contract featuring the Galaxy VIP Fund (incorporated by reference
                  from Exhibit 4(f) to Amendment No. 1 to a Registration Statement for First Golden on Form S-1
                  filed with the SEC on or about November 1, 1999 (File No. 333-77385))..............................
                                                                                                                       ------

   10      MATERIAL CONTRACTS
           (a)    Services Agreement, dated November 8, 1996, between Directed Services, Inc. and First Golden
                  (incorporated by reference from Exhibit 10(a) to Amendment No. 1 to Registrant's Registration
                  Statement on Form S-1 filed with the SEC on or about March 18, 1997 (File No. 333-16279))..........
                                                                                                                       ------

           (b)    Administrative Services Agreement, dated November 8, 1996, between First Golden and Golden
                  American Life Insurance Company (incorporated by reference from Exhibit 10(b) to Amendment  No. 1
                  to Registrant's Registration Statement on Form S-1 filed with the SEC on or about March 18, 1997
                  (File No. 333-16279))..............................................................................
                                                                                                                       ------


                                                                 34
</TABLE>
<PAGE>
<TABLE>
<CAPTION>



                                                                INDEX

                                                        Exhibits to Form 10-K
                                                    Year Ended December 31, 2000
                                      FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK

                                                                                                                    Page Number
                                                                                                                    -----------
           <S>                                                                                                         <C>

           (c)    Form of Administrative Services Agreement between First Golden and Equitable Life Insurance
                  Company of Iowa (incorporated by reference from Exhibit 10(c) to Amendment No. 1 to Registrant's
                  Registration Statement on Form S-1 filed with the SEC on or about March 18, 1997 (File No.
                  333-16279))........................................................................................
                                                                                                                       ------

           (d)    Form of Custodial Agreement between Registrant and The Bank of New York (incorporated by reference
                  from Exhibit 10(d) to Amendment No. 1 to Registrant's Registration Statement on Form S-1 filed
                  with the SEC on or about March 18, 1997 (File No. 333-16279))......................................
                                                                                                                       ------

           (e)    Participation Agreement between First Golden and the Travelers Series Fund Inc. (incorporated by
                  reference from Exhibit 10(e) to a Registration Statement for First Golden on Form S-1 filed with
                  the SEC on or about April 29, 1999 (File No. 333-77385))...........................................
                                                                                                                       ------

           (f)    Participation Agreement between First Golden and the Greenwich Street Series Fund Inc.
                  (incorporated by reference from Exhibit 10(f) to a Registration Statement for First Golden on Form
                  S-1 filed with the SEC on or about April 29, 1999 (File No. 333-77385))............................
                                                                                                                       ------

           (g)    Participation Agreement between First Golden and the Smith Barney Concert Allocation Series Inc.
                  (incorporated by reference from Exhibit 10(g) to a Registration Statement for First Golden on Form
                  S-1 filed with the SEC on or about April 29, 1999 (File No. 333-77385))............................
                                                                                                                       ------

           (h)    Participation Agreement between First Golden and PIMCO Variable Insurance Trust (incorporated by
                  reference from Exhibit 10(h) to a Registration Statement for First Golden on Form S-1 filed with
                  the SEC on or about April 29, 1999 (File No. 333-77385))...........................................
                                                                                                                       ------

           (i)    Participation Agreement between First Golden and The Galaxy VIP Fund (incorporated by reference
                  from Exhibit 10(l) to Amendment No. 1 to a Registration Statement for First Golden on Form S-1
                  filed with the SEC on or about April 25, 2000 (File No. 333-77385))................................
                                                                                                                       ------

           (j)    Asset Management Agreement, dated March 30, 1998, between First Golden and ING Investment
                  Management LLC (incorporated by reference from Exhibit 10(g) to First Golden's Form 10-Q filed with
                  the SEC on August 14, 1998 (File No. 333-16279))...................................................
                                                                                                                       ------

           (k)    Underwriting Agreement between First Golden and Directed Services, Inc. (incorporated by reference
                  from Exhibit 1 to Amendment No. 1 to Registrant's Registration Statement on Form S-1 filed with
                  the SEC on or about March 18, 1997 (File No. 333-16279))...........................................
                                                                                                                       ------

           (l)    Revolving Note Payable, dated July 27, 1998, between First Golden and SunTrust Bank, Atlanta
                  (incorporated by reference from Exhibit 10(i) to First Golden's Form 10-Q filed with the SEC on
                  November 12, 1998 (File No. 333-16279))............................................................
                                                                                                                       ------


                                                                 35
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                                                INDEX

                                                        Exhibits to Form 10-K
                                                    Year Ended December 31, 2000
                                      FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK

                                                                                                                    Page Number
                                                                                                                    -----------
           <S>                                                                                                         <C>

           (m)    Revolving Note Payable, dated July 31, 1999, between First Golden and SunTrust Bank, Atlanta
                  (incorporated by reference from Exhibit 10(i) to First Golden's Form 10-Q filed with the SEC on
                  August 13, 1999 (File No. 333-16279))..............................................................
                                                                                                                       ------

           (n)    Participation Agreement between First Golden and ING Variable Insurance Trust (incorporated by
                  reference from Exhibit 10(m) to Amendment No. 2 to a Registration Statement for First Golden on
                  Form S-1 filed with the SEC on or about April 26, 2000 (File No. 333-77385)).......................

                                                                                                                       ------
           (o)    Participation Agreement between First Golden and Prudential Series Fund, Inc. (incorporated by
                  reference from Exhibit 10(n) to Amendment No. 2 to a Registration Statement for First Golden on
                  Form S-1 filed with the SEC on or about April 26, 2000 (File No. 333-77385)).......................
                                                                                                                       ------

           (p)    Renewal of Revolving Note Payable, dated July 31, 2000, between First Golden and SunTrust Bank,
                  Atlanta (incorporated by reference from Exhibit 10(p) to First Golden's Form 10-Q filed with the
                  SEC on August 11, 2000 (File No. 333-16279)).......................................................
                                                                                                                       ------

           (q)    Amended Schedule Page to the Participation Agreement between First Golden and Prudential Series
                  Fund, Inc. (incorporated by reference from Exhibit 10(p) to Amendment No. 3 to a Registration
                  statement for First Golden on Form S-1 filed with the SEC on September 13, 2000 (File No.
                  333-77385))........................................................................................
                                                                                                                       ------

           (r)    Reinsurance Agreement dated December 29, 2000 between First Golden and London Life Reinsurance
                  Company of Pennsylvania............................................................................    37










                                                                 36
</TABLE>