SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                    FORM 10-K

(Mark  One)
/X/    ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE  SECURITIES
       EXCHANGE  ACT  OF  1934  [NO  FEE  REQUIRED,  EFFECTIVE  OCTOBER 7, 1996]

                   For the fiscal year ended December 31, 1999

                                       OR

/  /   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE SECURITIES
       EXCHANGE  ACT  OF  1934  [No  Fee  Required]

       For  the  transition  period  from               to

                         Commission File Number 33-85014

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

       Incorporated  in  New  York                           06-0992729
                                                            IRS  employer
                                                          Identification  No.


              733 Third Avenue, 4th Floor, New York, New York 10017
        Registrant's telephone number, including area code (800) 272-3007

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

        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  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
             --

THE  NUMBER  OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK ON MARCH 29,
1999  WAS  AS  FOLLOWS:

Common  Stock  (par  value  $10,000 per share)            300 shares outstanding


<PAGE>
                                     PART I

ITEM  1.  BUSINESS

GENERAL  DESCRIPTION

     First  SunAmerica  Life  Insurance  Company  (the "Company") is an indirect
wholly  owned  subsidiary  of  American  International  Group,  Inc. ("AIG"), an
international insurance and financial services holding company.  At December 31,
1998,  the  Company was a wholly owned indirect subsidiary of SunAmerica Inc., a
Maryland  Corporation.  On January 1, 1999, SunAmerica Inc. merged with and into
AIG in a tax-free reorganization that has been treated as a pooling of interests
for  accounting  purposes.  Thus,  SunAmerica Inc. ceased to exist on that date.
However,  immediately  prior to the date of merger, substantially all of the net
assets  of  SunAmerica Inc. were contributed to a newly formed subsidiary of AIG
named  SunAmerica  Inc.  ("SunAmerica").  At December 31, 1999, the Company held
$2.56  billion  of  assets.

     The Company is incorporated in New York and maintains its principal offices
at  733  Third  Avenue,  4th  Floor,  New  York, New York 10017, telephone (310)
772-6000.  The  Company  has  no employees; however, employees of the Parent and
its other subsidiaries perform various services for the Company. At December 31,
1999,  SunAmerica  had  approximately 2,500 employees, approximately 900 of whom
perform  services  for  the  Company  as  well as for certain of its affiliates.

     The  Company believes that demographic trends have produced strong consumer
demand  for  long-term,  investment-oriented products.  According to U.S. Census
Bureau  projections, the number of individuals between the ages of 45 to 64 grew
from  46  million  to  60  million  during  the 1990s, making this age group the
fastest-growing  segment  of the U.S. population.  Between 1988 and 1998, annual
industry  premiums from fixed and variable annuities and fund deposits increased
from  $103.87  billion  to  $229.47  billion.

     Benefiting  from  continued strong growth of the retirement savings market,
industry  sales  of tax-deferred savings products have represented, for a number
of  years,  a  significantly  larger  source  of  new premiums for the U.S. life
insurance  industry  than  have traditional life insurance products. Recognizing
the  growth  potential of this market, the Company focuses its operations on the
sale  of  annuities.

     The Company's six affiliated broker-dealers comprise the largest network of
independent  registered  representatives  in  the  nation  and the fifth-largest
securities  sales  force, based on industry data.  Its affiliated broker-dealers
accounted  for  approximately  one-third of the Company's total annuity sales in
fiscal  1999.  The Company also distributes its products and services through an
extensive  network of independent broker-dealers, full-service securities firms,
independent  general  insurance  agents  and  major  financial  institutions.

     The  Company  and  its  affiliates  have  made  significant  investments in
technology  over  the  past  several years in order to lower operating costs and
enhance  its  marketing efforts.  Its use of optical disk imaging and artificial
intelligence  has  substantially eliminated the more traditional paper-intensive
life  insurance processing procedures, reducing annuity processing and servicing
costs and improving customer service.  This has also enabled the Company to more
efficiently  assimilate  acquired  business.  The  Company  has also implemented
technology  to  interface  with its affiliated broker-dealers, which will enable
the  Company  to  more  effectively  market its products and help the affiliated
financial  professionals  to  better  service  their  clients.


                                        1
<PAGE>
     In  recent  years,  the  Company  has  enhanced  its  marketing efforts and
expanded  its offerings of variable annuities through internal growth, resulting
in  increased  fee  income.  The  Company's variable annuity business entails no
portfolio  credit  risk and requires significantly less capital support than its
fixed-rate  business,  which  generates  net  investment  income.  The Company's
fixed-rate  business,  comprised of fixed annuities and universal life insurance
contracts,  has  grown  significantly  in  recent  years  through  acquisitions.

     For  the  year ended December 31, 1999, the Company's net investment income
(including  net  realized  investment  losses) and fee income by primary product
line  or  service  are  as  follows:
<TABLE>
<CAPTION>

                          NET INVESTMENT AND FEE INCOME

                                                             Primary  product  or
                                  Amount      Percent                     service
                                 ------       -------        --------------------
                             (In thousands)
<S>                          <C>              <C>          <C>
Net investment income
  (including net realized
  investment losses). . . .  $        33,509        74.0%  Fixed-rate products
                             ---------------  -----------

Fee income:
  Variable annuity fees . .            6,600        14.6   Variable annuities
  Universal life insurance                                 Fixed-rate
    fees. . . . . . . . . .            1,873         4.1     universal life
  Surrender charges . . . .            3,296         7.3   Fixed - and variable-
                             ---------------  -----------
                                                             rate products
  Total fee income. . . . .           11,769        26.0
                             ---------------  -----------

Total . . . . . . . . . . .  $        45,278       100.0%
                             ===============  ===========
</TABLE>


BUSINESS  COMBINATION

     On  March 31, 1997, SunAmerica Life Insurance Company, the direct parent of
the  Company,  completed the acquisition of all of the outstanding stock of John
Alden  Life  Insurance  Company of New York ("JANY").  On October 31, 1997, JANY
was  merged  with  and  into  the Company.  On the date of acquisition, JANY had
assets  having  an aggregate fair value of $1,536,179,000, composed primarily of
invested  assets  totaling  $1,403,807,000.  Liabilities  assumed  in  this
acquisition  totaled  $1,411,179,000,  including $1,363,764,000 of fixed annuity
reserves.  An  amount  equal  to  the excess of the purchase price over the fair
value  of  the  net  assets acquired, amounting to $103,695,000 at September 30,
1997,  is  included  in  Deferred  Acquisition  Costs in the balance sheet.  The
acquisition was accounted for by using the purchase method of accounting and the
merger by using the pooling method from the date of acquisition through the date
of merger.  The balance sheet at September 30, 1997 and the income statement and
statement of cash flows for the year ended September 30, 1997 have been restated
from  those originally contained in the September 30, 1997 Annual Report on Form
10-K  to  include  the  assets and liabilities of JANY and the results of JANY's
operations  and  cash  flows for the six-month period from April 1, 1997 through
September  30, 1997.  On a pro forma (unaudited) basis, assuming the acquisition
and merger had occurred on October 1, 1996, the beginning of the earliest period
presented  herein, investment income would have been $117,059,000 and net income
would  have  been  $12,434,000  for  the  year  ended  September  30,  1997.

                                        2
<PAGE>
ANNUITY  OPERATIONS

     Founded  in  1978,  the  Company is licensed in the States of New York, New
Mexico  and  Nebraska  and  issues  a  portfolio  of  single-premium  fixed  and
flexible-premium  variable  annuities.  It  has  a  "AAA"  (Extremely  Strong)
financial  strength  rating  from  Standard & Poor's Corporation ("S&P") a "AAA"
(Highest)  rating  from  Duffs  Phelps  Credit  Rating  Co.  ("DCR"),  an  "Aaa"
(Exceptional)  rating  from  Moody's  Investors Service ("Moody's") and an "A++"
(Superior)  rating  from  industry  analyst  A.M.  Best  Company.

     In  addition  to distributing its variable annuity products through its six
affiliated broker-dealers, the Company distributes its products through over 600
other  independent  broker-dealers,  full-service securities firms and financial
institutions as well as through independent general insurance agents.  In total,
more  than  8,500  independent  sales  representatives  are licensed to sell the
Company's  annuity  products  in  three  states.

     On  December 31, 1998, Anchor National Life Insurance Company ("ANLIC"), an
affiliate  of  the  Company,  acquired  the  individual  life  business  and the
individual  and  group  annuity business of MBL Life Assurance Corporation ("MBL
Life"),  via  a  100%  coinsurance  transaction.  ANLIC assumed reserves in this
acquisition  totaling  $5,793,256,000, including $3,460,503,000 of fixed annuity
contracts,  $2,308,742,000 of universal life insurance contracts and $24,011,000
of  guaranteed  investment  contracts.

     Included  in  the  block  of  business acquired from MBL Life were policies
whose owners are residents of New York State ("the New York Business").  On July
1,  1999,  the  New  York Business was acquired by the Company via an assumption
reinsurance  agreement.  As  part  of this acquisition, invested assets equal to
$678,272,000,  universal  life  reserves  equal  to  $282,247,000, group pension
reserves equal to $406,118,000, and other net assets of $10,093,000 were assumed
by  the  Company.  Policyholders  of  MBL Life annuity products were required to
transfer  their  funds  into  an  existing  product of the Company or one of its
affiliates  by December 31, 1999 in order to receive the policy enhancements due
under  the  MBL Life rehabilitation agreement.  Over 95% of the deferred annuity
reserves  had  either  been  transferred  or  surrendered  by December 31, 1999.

ANNUITY  OPERATIONS  -  VARIABLE  ANNUITIES

     The  variable  annuity  products  of  the  Company  offer investors a broad
spectrum  of fund alternatives, with a choice of investment managers, as well as
guaranteed fixed-rate account options.  The Company earns fee income through the
sale,  administration  and  management  of  the  variable account options of its
variable  annuity  products.  The Company also earns investment income on monies
allocated  to  the  fixed-rate  account  options  of  these  products.  Variable
annuities  offer  retirement planning features similar to those offered by fixed
annuities,  but  differ in that the contractholder's rate of return is generally
dependent  upon  the  investment  performance  of  the  particular  equity,
fixed-income,  money  market  or  asset  allocation  fund  selected  by  the
contractholder.  Because the investment risk is borne by the customer in all but
the  fixed-rate  account  options,  these  products  require  significantly less
capital  support  than  fixed  annuities.

     The Company's flagship variable annuity product, Polaris, is a multimanager
variable  annuity  that offers investors a choice of more than 25 variable funds
and  a  number  of  guaranteed  fixed-rate  funds.  Polaris  sales  increased
significantly  in  recent  years leading up to 1999 due to enhanced distribution
efforts  and  growing  consumer  demand for flexible retirement savings products
that  offer  a  variety  of  equity,  fixed-income  and guaranteed fixed account
investment  choices.  The  decrease  in sales growth in 1999 is primarily due to
regulatory  changes  in  the  State of New York (See "Growth in Average Invested
Assets").

                                        3
<PAGE>
     At  December 31, 1999, total variable product reserves were $736.1 million,
of  which  $558.6 million were held in separate accounts. The Company's variable
annuity  products  incorporate  surrender  charges to encourage persistency.  At
December  31,  1999,  99%  of  the  Company's  variable annuity reserves held in
separate  accounts  were subject to surrender penalties.  The Company's variable
annuity  products  also  generally  limit  the  number  of  transfers  made in a
specified  period  between account options without the assessment of a fee.  The
average  size of a new variable annuity contract sold by the Company in 1999 was
approximately  $65,000.

ANNUITY  OPERATIONS  -  FIXED  ANNUITIES

     The  Company's  general  account  obligations  are  fixed-rate  products,
including  fixed-annuity  and universal life contracts issued in prior years and
fixed-rate  options  of  its  variable  annuity  contracts.  The  Company offers
single-premium  and  flexible-premium  deferred  annuities  that  provide  one-,
three-,  five-,  seven-, or ten-year fixed interest rate guarantees. The Company
also  offers  fixed-rate  account options on its variable annuity contracts with
similar guarantees.  Although the Company's contracts remain in force an average
of  seven  to  ten  years,  a  majority (approximately 89% at December 31, 1999)
reprice  annually  at  discretionary  rates  determined  by  the  Company.  In
repricing,  the  Company  takes  into  account  yield  characteristics  of  its
investment  portfolio,  annuity  surrender  assumptions and competitive industry
pricing, among other factors.  Its fixed annuity products offer many of the same
features  as  conventional  certificates of deposit from financial institutions,
giving  investors  a  choice  of interest period and yield as well as additional
advantages  particularly applicable to retirement planning, such as tax-deferred
accumulation  and  flexible  payout options (including the option of payout over
the  life  of  the  annuitant).  The  average size of a new single-premium fixed
annuity  contract  sold  by  the  Company  in  1999  was  approximately $38,000.

     The  Company  designs  its  fixed-rate  annuity  products  and conducts its
investment  operations  in  order to closely match the duration of the assets in
its  investment  portfolio  to its fixed annuity and universal life obligations.
The  Company  seeks to achieve a predictable spread between what it earns on its
assets  and  what  it  pays  on  its  liabilities  by  investing  principally in
fixed-rate  securities.  The Company's fixed annuity and universal life products
incorporate  surrender  charges  or  other  restrictions  in  order to encourage
persistency.  Approximately  85%  of  the  Company's  fixed annuity reserves had
surrender  penalties  or  other  restrictions  at  December  31,  1999.

INVESTMENT  OPERATIONS

     The  Company believes that its fixed-rate liabilities should be backed by a
portfolio  principally  composed  of  fixed-rate  investments  that  generate
predictable  rates  of return.  The Company does not have a specific target rate
of  return.  Instead,  its rates of return vary over time depending on a variety
of  factors,  including  the current interest rate environment, the slope of the
yield  curve,  the  spread  at  which fixed-rate investments are priced over the
yield  curve, default rates and general economic conditions. The Company manages
most  of  its invested assets internally.  Its portfolio strategy is constructed
with  a  view  to  achieve  adequate  risk-adjusted  returns consistent with its
investment  objectives  of  effective  asset-liability  matching,  liquidity and
safety.

     As  part  of  its asset-liability matching discipline, the Company conducts
detailed  computer  simulations that model its fixed-rate assets and liabilities
under  commonly  used  stress-test interest rate scenarios.  With the results of
these  computer  simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect its
economic  value  and  achieve  a  predictable

                                        4
<PAGE>
spread  between  what  it  earns  on its invested assets and what it pays on its
liabilities  by  designing its fixed-rate products and conducting its investment
operations to closely match the duration of the fixed-rate assets to that of its
fixed-rate  liabilities.  The  Company's  fixed-rate  assets  include:  cash and
short-term  investments;  bonds  and notes; and mortgage loans.  At December 31,
1999,  these assets had an aggregate fair value of $1.77 billion with a duration
of  3.7.  At  December  31, 1999, the Company's fixed annuity and universal life
liabilities  had  an  aggregate  fair  value  (determined  by discounting future
contractual  cash  flows  by  related market rates of interest) of $1.68 billion
with  a  duration  of 3.5.  For the years ended December 31, 1999, September 30,
1998 and 1997, the Company's yields on average invested assets were 7.20%, 7.56%
and  7.39%,  respectively;  its  average  rates  paid  on  all  interest-bearing
liabilities  were  4.92%,  5.36%  and  5.35%,  respectively;  it  realized  net
investment spreads of 2.53%, 2.37%, and 2.16%, respectively, on average invested
assets;  and  net  realized  investment  gains  and losses were 0.63%, 0.30% and
0.57%,  respectively,  of  average  invested  assets.

     The  Company's  general  investment philosophy is to hold fixed-rate assets
for long-term investment.  Thus, it does not have a trading portfolio.  However,
the  Company  has  determined  that all of its portfolio of bonds and notes (the
"Bond  Portfolio")  is  available  to  be  sold in response to changes in market
interest  rates,  changes  in  relative  value  of  asset sectors and individual
securities,  changes  in  prepayment risk, changes in credit quality outlook for
certain  securities,  and  the  Company's  need  for liquidity and other similar
factors.

     The  following  table  summarizes  the  Company's  investment  portfolio at
December  31,  1999:
<TABLE>
<CAPTION>

                             SUMMARY OF INVESTMENTS

                                                     Percent
                                    Carrying              of
                                      value        portfolio
                                 ---------------  ----------

                                 (In thousands)
<S>                              <C>              <C>
Cash and short-term investments  $        29,350        1.6%
U.S. government securities. . .            1,347        0.1
Mortgage-backed securities. . .          574,247       31.8
Other bonds and notes . . . . .          947,327       52.4
Mortgage loans. . . . . . . . .          211,867       11.7
Other invested assets . . . . .           42,604        2.4
                                 ---------------  ----------

Total investments . . . . . . .  $     1,806,742      100.0%
                                 ===============  ==========
</TABLE>


     At  December  31,  1999, the Bond Portfolio included $1.48 billion of bonds
rated by S&P, Moody's,  Duff & Phelps Credit Rating Co. ("DCR"), Fitch Investors
Services, L.P. ("Fitch"), or the National Association of Insurance Commissioners
("NAIC"),  and $41.8 million of bonds rated by the Company pursuant to statutory
ratings guidelines established by the NAIC.  At December 31, 1999, approximately
$1.40  billion  of  the  Bond  Portfolio  was investment grade, including $575.6
million  of  U.S.  government/agency  securities and mortgage-backed securities.

     At  December  31, 1999, the Bond Portfolio included $123.8 million of bonds
that  were not investment grade.  These non-investment-grade bonds accounted for
4.8%  of  the  Company's  total  assets  and  6.9%  of  its  invested  assets.

     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and  aggregated  $122.1  million  at  December  31,  1999.  Secured  Loans

                                        5
<PAGE>
are  senior  to  subordinated  debt and equity, and are secured by assets of the
issuer.  These  Secured  Loans are composed of loans to 50 borrowers spanning 14
industries, with 25% of these assets concentrated in utilities, 11% concentrated
in  air  transportation and 8% concentrated in food services.  No other industry
constituted  more  than  5%  of  these  assets.

     Mortgage loans aggregated $211.9 million at December 31, 1999 and consisted
of  152  commercial  first  mortgage  loans  with  an  average  loan  balance of
approximately  $1.4  million, collateralized by properties located in 33 states.
Approximately  41%  of  this  portfolio  was  office,  25%  was  retail, 12% was
industrial,  11%  was  multifamily  residential  and  11%  was  other types.  At
December 31, 1999, approximately 34% of this portfolio was secured by properties
located  in  California, approximately 11% by properties located in New York and
Michigan and no more than 5% of this portfolio was secured by properties located
in  any  other  single  state.

     At  December  31, 1999, the carrying value (after impairment writedowns) of
all  investments  in  default as to the payment of principal or interest totaled
$1.8  million,  which  constituted  0.1%  of  total  invested  assets.

     For  more  information  concerning the Company's investments, including the
risks  inherent  in  such  investments, see Item 7, "Management's Discussion and
Analysis  of Financial Condition and Results of Operations - Financial Condition
and  Liquidity."

REGULATION

     The  Company,  in  common with other insurers, is subject to regulation and
supervision  by the states and by other jurisdictions in which it does business.
Within the United States, the method of such regulation varies but generally has
its  source  in  statutes  that delegate regulatory and supervisory powers to an
insurance official.  The regulation and supervision relate primarily to approval
of  policy  forms  and  rates,  the  standards  of solvency that must be met and
maintained, including risk based capital measurements, the licensing of insurers
and  their agents, the nature of and limitations on investments, restrictions on
the  size  of  risks  which  may  be  insured under a single policy, deposits of
securities  for  the  benefit  of policyholders, methods of accounting, periodic
examinations  of  the  affairs  of  insurance companies, the form and content of
reports  of  financial condition required to be filed, and reserves for unearned
premiums,  losses  and  other  purposes.  In general, such regulation is for the
protection  of  policyholders  rather  than  security  holders.

     Risk  based  capital ("RBC") standards are designed to measure the adequacy
of  an insurer's statutory capital and surplus in relation to the risks inherent
in  its  business.  The RBC standards consist of formulas that establish capital
requirements  relating  to  insurance,  business, asset and interest rate risks.
The  standards  are  intended  to  help  identify  companies  which  are
under-capitalized  and  require  specific  regulatory  actions  in  the event an
insurer's  RBC  is  deficient.  The  RBC formula develops a risk adjusted target
level  of  adjusted statutory capital and surplus by applying certain factors to
various  asset,  premium  and reserve items.  Higher factors are applied to more
risky items and lower factors are applied to less risky items.  Thus, the target
level  of  statutory  surplus varies not only as a result of the insurer's size,
but also on the risk profile of the insurer's operations.  The statutory capital
and  surplus  of  the  Company  exceeded  its RBC requirements by a considerable
margin  as  of  December  31,  1999.

     Federal legislation has been recently enacted allowing combinations between
insurance  companies, banks and other entities.  It is not yet known what effect
this  legislation  will  have on insurance companies.  In addition, from time to
time,  Federal  initiatives  are  proposed  that  could  affect  the  Company's
businesses.   Such  initiatives  include  employee  benefit  plan

                                        6
<PAGE>
regulations  and  tax  law changes affecting the taxation of insurance companies
and the tax treatment of insurance and other investment products. Proposals made
in  recent  years to limit the tax deferral of annuities or otherwise modify the
tax  rules  related  to the treatment of annuities have not been enacted.  While
certain  of  such proposals, if implemented, could have an adverse effect on the
Company's  sales  of  affected  products,  and,  consequently, on its results of
operations,  the  Company  believes  these  proposals have a small likelihood of
being  enacted,  because  they  would discourage retirement savings and there is
strong  public  and  industry  opposition  to  them.

COMPETITION

     The  businesses  conducted  by  the  Company  are  highly competitive.  The
Company  competes  with  other  life  insurers, and also competes for customers'
funds  with  a  variety  of  investment  products  offered by financial services
companies  other  than  life  insurance  companies,  such  as  banks, investment
advisors,  mutual fund companies and other financial institutions.  During 1998,
net  annuity  premiums written among the top 100 companies ranged from less than
$100  million  to approximately $10 billion annually.  The Company itself is not
among  the  largest  writers of annuities; however, the combined SunAmerica life
companies  ranks  in  the  top quartile of this group.  The Company believes the
primary  competitive  factors  among  life  insurance  companies  for
investment-oriented  insurance  products,  such  as  annuities,  include product
flexibility,  net  return  after  fees,  innovation  in  product  design,  the
claims-paying  ability  rating  and the name recognition of the issuing company,
the  availability  of distribution channels and service rendered to the customer
before  and  after  a  contract  is issued.  Other factors affecting the annuity
business  include  the  benefits  (including before-tax and after-tax investment
returns)  and  guarantees  provided  to  the  customer and the commissions paid.

ITEM  2.  PROPERTIES

     The  Company's  executive  offices  and  its principal office are in leased
premises at 733 Third Avenue, New York, New York 10017.  The Company, through an
affiliate,  also  leases  office  space  in  Los  Angeles  and  Woodland  Hills,
California.

     The  Company believes that such properties, including the equipment located
therein,  are  suitable  and  adequate to meet the requirements of its business.

ITEM  3.  LEGAL  PROCEEDINGS

     The  Company  is  involved  in  various  kinds  of litigation common to its
business.  These  cases  are  in  various  stages  of  development and, based on
reports  of  counsel,  management  believes  that  provisions made for potential
losses relating to such litigation are  adequate and any further liabilities and
costs  will  not  have  a  material  adverse impact upon the Company's financial
position,  results  of  operations,  or  cash  flows.

                                        7
<PAGE>
ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY-HOLDERS

     No matters were submitted during the year ended December 31, 1999 to a vote
of  security  holders,  through  the  solicitation  of  proxies  or  otherwise.

                                     PART II

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

     Not  applicable.

                                        8

<PAGE>
<TABLE>
<CAPTION>

ITEM  6.     SELECTED  FINANCIAL  DATA

     The  following  selected  financial  data of the Company should be read in conjunction with the
financial  statements  and  notes  thereto  and  Management's  Discussion  and Analysis of Financial
Condition  and  Results  of  Operations,  both  of  which  are  included  elsewhere  herein.

                        Year  Ended     Three  Months  Ended        Years  Ended  September  30,
                                                                    ----------------------------
                     December 31, 1999 December 31, 1998    1998        1997      1996      1995
      ---------------------------  -------------------  --------  ---------  ---------  --------
<S>                          <C>                  <C>       <C>        <C>        <C>       <C>
                                                        (In thousands)

RESULTS OF OPERATIONS

Net investment income . . .  $           44,687   $ 9,603   $ 36,763   $ 19,205   $ 2,798   $ 2,784
Net realized investment
  gains (losses). . . . . .             (11,178)      797      4,690      5,020      (539)   (1,348)
Fee income. . . . . . . . .              11,769     1,851      7,957      3,521       911       606
General and administrative
  expenses. . . . . . . . .              (7,871)   (1,548)    (3,301)    (3,222)   (1,480)   (1,004)
Amortization of deferred
  acquisition costs . . . .             (22,664)   (5,046)   (17,120)   (10,386)     (500)     (300)
Annual commissions. . . . .                (450)      (90)      (348)      (195)      (19)      (33)
                             -------------------  --------  ---------  ---------  --------  --------

Pretax income . . . . . . .              14,293     5,567     28,641     13,943     1,171       705
Income tax expense. . . . .              (6,621)   (2,191)   (12,106)    (5,090)     (448)     (182)
                             -------------------  --------  ---------  ---------  --------  --------


NET INCOME. . . . . . . . .  $            7,672   $ 3,376   $ 16,535   $  8,853   $   723   $   523
                             ===================  ========  =========  =========  ========  ========
</TABLE>

The results of operations of the Company for 1999 are affected by acquisition of
business from MBL Life on July 1, 1999 (See Note 5 of the accompanying financial
statements).


                                        9

<PAGE>
<TABLE>
<CAPTION>

ITEM  6.  SELECTED  FINANCIAL  DATA  (continued)

                                           At  December  31,                        At  September  30,
                                    ----------------------  ------------------------------------------
                                         1999        1998        1998        1997       1996      1995
                                    ----------  ----------  ----------  ----------  --------  --------
<S>                                <C>         <C>         <C>         <C>         <C>       <C>
                                                           (In thousands)

FINANCIAL POSITION

Investments . . . . . . . . . . .  $1,806,742  $1,515,132  $1,554,316  $1,690,232  $153,237  $121,218
Variable annuity assets held
  in separate accounts. . . . . .     558,605     344,619     271,865     171,475    68,901    32,760
Deferred acquisition costs. . . .     137,637      96,918      87,074      96,516    12,127     6,491
Current income taxes receivable         6,638         ---         ---         ---       ---       ---
Deferred income taxes receivable       18,275         ---         ---         ---       ---       ---
Other assets. . . . . . . . . . .      27,615      51,013      28,965      26,267     2,603     2,688
                                   ----------  ----------  ----------  ----------  --------  --------

TOTAL ASSETS. . . . . . . . . . .  $2,555,512  $2,007,682  $1,942,220  $1,984,490  $236,868  $163,157
                                   ==========  ==========  ==========  ==========  ========  ========

Reserves for fixed annuity
  contracts . . . . . . . . . . .  $1,523,641  $1,432,558  $1,460,856  $1,556,656  $140,613  $106,332
Reserves for universal life
  insurance contracts                 277,250         ---         ---         ---       ---       ---
Variable annuity liabilities
  related to separate accounts. .     558,605     344,619     271,865     171,475    68,901    32,760
Other reserves, payables and
  accrued liabilities . . . . . .      34,776      42,038      18,073      83,297     2,784     2,003
Deferred income taxes payable             ---       3,792       5,371       4,984     1,350       244
Shareholder's equity. . . . . . .     161,240  $  184,675     186,055     168,078    23,220    21,818
                                   ----------  ----------  ----------  ----------  --------  --------

TOTAL LIABILITIES AND
  SHAREHOLDER'S EQUITY. . . . . .  $2,555,512  $2,007,682  $1,942,220  $1,984,490  $236,868  $163,157
                                   ==========  ==========  ==========  ==========  ========  ========
</TABLE>

The financial position of the Company as of December 31, 1999 is affected by the
acquisition  of business from MBL Life (See Note 5 of the accompanying financial
statements).

                                       10

<PAGE>
ITEM  7.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS

     Management's  discussion and analysis of financial condition and results of
operations  of  First  SunAmerica Life Insurance Company (the "Company") for the
three  years  ended  December  31,  1999,  September  30, 1998 and 1997 follows.
Effective  December  31,  1998,  the  Company  changed  its fiscal year end from
September  30 to December 31. Accordingly, the three-month period ended December
31,  1998  was  a  transition  period.

     In  connection  with the "safe harbor" provisions of the Private Securities
Litigation  Reform  Act  of 1995, the Company cautions readers regarding certain
forward-looking  statements contained in this report and in any other statements
made by, or on behalf of, the Company, whether or not in future filings with the
Securities  and  Exchange Commission (the "SEC"). Forward-looking statements are
statements  not  based  on  historical  information  and  which relate to future
operations,  strategies,  financial  results, or other developments.  Statements
using verbs such as "expect," "anticipate," "believe" or words of similar import
generally  involve  forward-looking statements.  Without limiting the foregoing,
forward-looking  statements  include  statements  which  represent the Company's
beliefs  concerning  future  levels  of  sales  and redemptions of the Company's
products,  investment  spreads  and yields, or the earnings and profitability of
the  Company's  activities.

     Forward-looking  statements  are  necessarily  based  on  estimates  and
assumptions  that  are  inherently subject to significant business, economic and
competitive  uncertainties  and  contingencies,  many  of  which  are beyond the
Company's  control and many of which are subject to change.  These uncertainties
and  contingencies  could  cause  actual results to differ materially from those
expressed  in  any  forward-looking  statements  made  by,  or on behalf of, the
Company.  Whether  or  not actual results differ materially from forward-looking
statements  may  depend  on numerous foreseeable and unforeseeable developments.
Some  may  be national in scope, such as general economic conditions, changes in
tax  law  and  changes  in interest rates.  Some may be related to the insurance
industry  generally,  such  as  pricing competition, regulatory developments and
industry  consolidation.  Others may relate to the Company specifically, such as
credit,  volatility  and  other  risks  associated with the Company's investment
portfolio.  Investors  are  also  directed  to  consider  other  risks  and
uncertainties  discussed  in  documents  filed by the Company with the SEC.  The
Company  disclaims  any  obligation  to  update  forward-looking  information.

RESULTS  OF  OPERATIONS

     NET  INCOME  totaled  $7.7  million in 1999, compared with $16.5 million in
1998  and  $8.9  million in 1997.  On July 1, 1999, the Company acquired the New
York  individual  life  and  individual  and  group annuity business of MBL Life
Assurance  Corporation  ("MBL  Life").  Since  the  acquisition  of MBL Life was
accounted for under the purchase method of accounting, the results of operations
include  those  of  MBL  Life only from its date of acquisition.  On October 31,
1997, John Alden Life Insurance Company of New York ("JANY") was merged with and
into  the  Company.  JANY was acquired by SunAmerica Life Insurance Company, the
Company's  parent,  on  March  31, 1997 in a transaction accounted for under the
purchase  method  of  accounting.  Therefore,  the results of operations include
those  of JANY only from the date of acquisition.  The income statement for 1998
and  1999  include the results of JANY's operations for the full period, and the
income  statement for 1997 includes JANY's operating results only for the period
of  April  1,  1997  through  September  30,  1997.  Consequently, the operating
results for 1999, 1998 and 1997 are not comparable.  On a pro forma basis, using
the  historical  financial  information  of the acquired businesses and assuming
that  both  the  MBL  Life  acquisition  and  the  JANY  merger,  collectively

                                       11
<PAGE>
referred  to as the "Acquisitions", had been consummated on October 1, 1996, the
beginning of the prior-year periods discussed herein, net income would have been
$9.4  million,  $19.9  million and $15.8 million for the year ended December 31,
1999  and  the  years  ended  September  30,  1998  and  1997,  respectively.

     PRETAX  INCOME  totaled  $14.3  million  in 1999, $28.6 million in 1998 and
$13.9  million in 1997 and primarily reflects the effect of the Acquisitions and
changes  in  net  realized  investment  gains  and losses.  The decrease in 1999
resulted  primarily  from a decrease in net realized investment gains, increased
general  and  administrative  expenses  and  increased  amortization of deferred
acquisition costs which were partially offset by increased net investment income
and  variable annuity and universal life insurance fees. The improvement in 1998
over  1997  resulted  primarily  from  increased  net  investment income and fee
income,  partially  offset  by  increased  amortization  of deferred acquisition
costs.

     NET  INVESTMENT  INCOME,  which  is the spread between the income earned on
invested  assets  and  the  interest  paid  on  fixed  annuities, universal life
insurance  contracts  and other interest-bearing liabilities, increased to $44.7
million  in  1999  from  $36.8  million in 1998 and $19.2 million in 1997. These
amounts  equal  2.53%  on average invested assets (computed on a daily basis) of
$1.77 billion in 1999, 2.37% on average invested assets of $1.55 billion in 1998
and  2.16% on average invested assets of $887.4 million in 1997.  On a pro forma
basis,  assuming  the  Acquisitions had been consummated on October 1, 1996, net
investment  income  on  related average invested assets would have been 1.87% in
1999,  1.71%  in  1998  and  1.51%  in  1997 on average invested assets of $2.59
billion, $2.37 billion and $2.41 billion, respectively.  The improvement in 1999
net  investment  yields  over these pro forma amounts reflects a redeployment of
assets  received  in  the  MBL  Life acquisition into higher yielding investment
categories.

     Net investment spreads include the effect of income earned on the excess of
average  invested  assets  over  average  interest-bearing  liabilities. Average
invested  assets  exceeded average interest bearing liabilities by $89.0 million
in  1999,  $47.3  million  in  1998  and  $21.4 million in 1997.  The difference
between  the  Company's  yield  on  average invested assets and the rate paid on
average  interest-bearing  liabilities  (the  "Spread  Difference") was 2.28% in
1999,  2.20%  in  1998  and  2.04%  in 1997.  On a pro forma basis, assuming the
Acquisitions  had  been  consummated  on  October 1, 1996, the Spread Difference
would  have  been 1.73% in 1999, 1.64% in 1998 and 1.46% in 1997.  The pro forma
results  primarily  reflect  the effect of the lower yielding assets received in
the  Acquisitions.

     Investment  income  (and  the  related  yields  on average invested assets)
totaled  $127.3  million (7.20%) in 1999 compared with $117.5 million (7.56%) in
1998 and $65.6 million (7.39%) in 1997.  The decrease in the investment yield in
1999  as  compared  with  1998 and 1997 principally reflect the effects of lower
yielding  assets  received  in  the  MBL  Life acquisition.  The invested assets
associated  with  the  MBL  Life  acquisition  included  high-grade  corporate,
government  and government/agency bonds, which are generally lower yielding than
a  significant portion of the invested assets that comprise the remainder of the
Company's  portfolio.  On  a pro forma basis, assuming the Acquisitions had been
consummated  on  October  1,  1996, the yield on related average invested assets
would  have  been  6.72%  in  1999,  6.92%  in  1998  and  6.80%  in  1997.

     Total interest expense equaled $82.6 million in 1999, $80.7 million in 1998
and  $46.4  million  in  1997.  The  average  rate  paid on all interest-bearing
liabilities was 4.92% in 1999, 5.36% in 1998 and 5.35% in 1997. Interest-bearing
liabilities  averaged  $1.68  billion during 1999, $1.51 billion during 1998 and
$866.0  million  during 1997.  On a pro forma basis, assuming  the  Acquisitions
had  been  consummated  on  October  1,  1996,  the

                                       12
<PAGE>
average  rate  paid on all interest-bearing liabilities would have been 4.99% in
1999,  5.28%  in  1998  and 5.34% in 1997 and interest-bearing liabilities would
have  averaged  $2.51 billion, $2.34 billion and $2.38 billion in 1999, 1998 and
1997,  respectively.  The  decreases  in  the  overall rates paid in 1999 result
primarily  from  a  generally  lower interest rate environment and the continued
reduction  of  crediting  rates  on  certain  closed  blocks  of  business.

     GROWTH  IN  AVERAGE INVESTED ASSETS largely resulted from the impact of the
Acquisitions.  The  Company acquired $1.40 billion of invested assets associated
with  the  JANY  merger  on March 31, 1997 and $678.3 million of invested assets
associated  with  the  MBL  Life acquisition at July 1, 1999. Changes in average
invested  assets  also  reflect  sales  of fixed annuities and the fixed account
options  of  the Company's variable annuity products ("Fixed Annuity Premiums"),
and  renewal  premiums on its universal life product ("UL Premiums") acquired in
the  MBL Life acquisition, partially offset by net exchanges from fixed accounts
into  the  separate  accounts  of  variable  annuity  contracts.  Fixed  Annuity
Premiums  and  UL  Premiums  totaled  $41.0 million in 1999 compared with $130.9
million  in  1998  and  $131.7  million in 1997 and are largely premiums for the
fixed  accounts  of  variable  annuities.  Such  premiums have decreased in 1999
principally  as a result of regulatory changes in the State of New York relating
to  non-taxable policy exchange requirements partially offset by greater inflows
into  the  one-year  and  six-month  fixed accounts of these products, which are
principally  used  for  dollar-cost  averaging  into  the  variable  accounts.
Accordingly,  the  Company anticipates that it will see a large portion of these
premiums  transferred  into the variable funds.  These premiums represent 6%, 8%
and  9%,  respectively,  of the related reserve balances at the beginning of the
respective  periods.  These  premiums include premiums for the fixed accounts of
variable  annuities  totaling  $61.0 million, $77.3 million and $68.9 million in
1999,  1998  and  1997,  respectively.

     NET  REALIZED  INVESTMENT  LOSSES totaled $11.2 million in 1999 compared to
net  investment  gains  of  $4.7  million  in 1998 and $5.0 million in 1997. Net
realized  investment  gains  and  losses  include  impairment writedowns of $7.7
million  in  1999, $0.4 million in 1998 and $0.1 million in 1997. Therefore, net
losses  from  sales  and redemptions of investments totaled $3.5 million in 1999
while  net  gains from sales and redemptions of investments totaled $5.1 million
in  1998  and  1997.

     The  Company sold or redeemed invested assets, principally bonds and notes,
aggregating  $478.7 million, $985.1 million and $634.8 million in 1999, 1998 and
1997,  respectively.  Sales  of investments result from the active management of
the  Company's  investment  portfolio,  including assets received as part of the
Acquisitions.  Because  redemptions of investments are generally involuntary and
sales  of  investments  are  made  in  both  rising  and  falling  interest rate
environments,  net  gains  and  losses from sales and redemptions of investments
fluctuate from period to period, and represent 0.20%, 0.33% and 0.57% of average
invested  assets  for  1999,  1998  and  1997,  respectively.  Active  portfolio
management  involves  the  ongoing  evaluation  of  asset  sectors,  individual
securities  within  the investment portfolio and the reallocation of investments
from  sectors that are perceived to be relatively overvalued to sectors that are
perceived  to  be  relatively  undervalued.  The  intent of the Company's active
portfolio  management  is to maximize total returns on the investment portfolio,
taking  into  account  credit,  option,  liquidity  and  interest-rate  risk.

     Impairment  writedowns  primarily  have been applied to defaulted bonds and
mortgage  loans.  Impairment  writedowns  represent  0.44%,  0.03%  and 0.01% of
related  average  invested  assets in 1999, 1998 and 1997, respectively. For the
twenty-one fiscal quarters beginning October 1, 1994, impairment writedowns as a
percent  of  average invested assets have ranged up to 0.86% and  have  averaged
0.14%.  Such  writedowns  are  based  upon  estimates  of  the

                                       13
<PAGE>
net  realizable  value  of  the  applicable  assets.  Actual realization will be
dependent  upon  future  events.

     VARIABLE  ANNUITY  FEES are based on the market value of assets in separate
accounts  supporting variable annuity contracts.  Such fees totaled $6.6 million
in  1999,  $3.6  million in 1998 and $1.7 million in 1997.  These increased fees
reflect  growth  in  average  variable  annuity  assets, due to increased market
values,  the  receipt  of  variable  annuity premiums and net exchanges into the
separate  accounts  from  the  fixed  accounts  of  variable  annuity contracts,
partially offset by surrenders.  Variable annuity fees represent 1.5% of average
variable  annuity  assets  for  each  of  1999, 1998 and 1997.  Variable annuity
assets  averaged  $417.8  million  during  1999,  $234.1 million during 1998 and
$111.8  million  during 1997.  Variable annuity premiums, which exclude premiums
allocated  to  the fixed accounts of variable annuity products, aggregated $66.7
million in 1999, $80.2 million in 1998 and $56.3 million in 1997.  These amounts
represent  19%, 47% and 82% of variable annuity reserves at the beginning of the
respective  periods. Transfers from the fixed accounts of the Company's variable
annuity  products  to  the  separate  accounts  (see "Growth in Average Invested
Assets")  are  not  classified  in variable annuity premiums (in accordance with
generally  accepted  accounting  principles).  Accordingly,  changes in variable
annuity  premiums  are  not necessarily indicative of the ultimate allocation by
customers  among  fixed  and  variable account options of the Company's variable
annuity  products.

     Sales of variable annuity products (which include premiums allocated to the
fixed  accounts)  ("Variable Annuity Product Sales") amounted to $127.7 million,
$157.5  million  and  $125.2  million  in 1999, 1998 and 1997, respectively, and
primarily  reflect  sales  of  the Company's flagship variable annuity, Polaris.
The  Polaris products are multimanager variable annuities that offer investors a
choice of 27 variable funds and 8 guaranteed fixed-rate funds.  Variable Annuity
Product  Sales  have  decreased  in  1999, principally as a result of regulatory
changes  in  the  State  of  New  York  relating  to non-taxable policy exchange
requirements.

     The  Company  has encountered increased competition in the variable annuity
marketplace  during  recent  years  and  anticipates that the market will remain
highly competitive for the foreseeable future.  Also, from time to time, Federal
initiatives  are  proposed which could affect the taxation of variable annuities
and  annuities  generally  (See  "Regulation").

     UNIVERSAL LIFE INSURANCE FEES result from the acquisition of universal life
insurance  contract reserves and the ongoing receipt of renewal premiums on such
contracts,  and  comprise  mortality  charges,  up-front fees earned on premiums
received  and administrative fees on such contracts, net of the excess mortality
expense  on  these  contracts.  Universal  life  insurance fees amounted to $1.9
million  in  1999  and  represent  1.4%  of  average reserves for universal life
insurance  contracts  for 1999.  Since the MBL Life acquisition occurred on July
1,  1999,  there  were  no  such  fees  earned  in  1998  and  1997.

     SURRENDER  CHARGES  on  fixed  and  variable  annuity  and  universal  life
contracts  totaled $3.3 million (including $0.04 million attributable to the MBL
Life acquisition and $2.5 million attributable to the JANY merger) in 1999, $4.4
million  (including  $3.9  million  attributable to the JANY merger) in 1998 and
$1.8  million  (including $1.5 million attributable to the JANY merger) in 1997.
Surrender  charges  generally  are  assessed on annuity withdrawals at declining
rates  during  the  first  seven years of a contract. Withdrawal payments, which
include  surrenders  and  lump-sum  annuity  benefits,  totaled  $392.4  million
(including  $187.2  million  attributable to the MBL Life acquisition and $167.2
million  attributable  to the JANY merger) in 1999, compared with $234.4 million
(including  $198.3  million  attributable  to the JANY merger) in 1998 and $93.5
million  (including  $72.9  million  attributable  to  the JANY merger) in 1997.
These  payments,  when  expressed  as

                                       14
<PAGE>
a percentage of averaged fixed and variable annuity and universal life reserves,
represent  19.0%  (9.1%  attributable  to  the  MBL  Life  acquisition  and 8.1%
attributable  to the JANY merger), 14.0% (11.9% attributable to the JANY merger)
and  9.9%,  respectively.  Excluding  the  effects  of the MBL Life acquisition,
withdrawal  payments  represent  11.3%  of  related  average  fixed and variable
annuity  reserves  in  1999.  Withdrawals include variable annuity payments from
the  separate  accounts totaling $28.6 million (6.9% of average variable annuity
reserves),  $12.8  million  (5.5% of average variable annuity reserves) and $5.3
million  (4.8%  of  average  variable  annuity reserves) in 1999, 1998 and 1997,
respectively.  Consistent  with  the  assumptions  used  in  connection with the
Acquisitions,  management anticipates that the level of withdrawal payments will
reflect  higher  relative  withdrawal rates in the near future because of higher
surrenders  on  the  acquired  businesses.

     GENERAL  AND  ADMINISTRATIVE EXPENSES totaled $7.9 million in 1999 compared
with  $3.3 million in 1998 and $3.2 million in 1997.  The increases in 1999 over
1998  principally  reflect  $1.5  million of reinsurance premiums paid and other
increased  costs  related  to the business acquired in the MBL Life acquisition,
and  expenses  related  to  servicing  the  Company's  growing block of variable
annuity  policies.  In  addition,  expenses  in  1998  include  a  credit  of
approximately  $1.2 million relating to expense allowances on ceded reinsurance.
General  and  administrative  expenses  remain  closely  controlled  through  a
company-wide  cost containment program and continue to represent less than 1% of
average  total  assets.

     AMORTIZATION  OF  DEFERRED  ACQUISITION COSTS totaled $22.7 million in 1999
(including  $0.6  million  attributable  to  the  MBL Life acquisition and $14.9
million  attributable  to  the  JANY merger) compared with $17.1 million in 1998
(including  $15.7  million  attributable  to  the JANY merger) and $10.4 million
(including  $9.2  million attributable to the JANY merger) in 1997. The increase
in  amortization during 1999 was also due to additional Variable Annuity Product
Sales  and the subsequent amortization of related deferred commissions and other
direct  selling  costs.

     ANNUAL  COMMISSIONS  represent  renewal  commissions,  including those paid
quarterly  in  arrears  to  maintain the persistency of certain of the Company's
fixed  and  variable  annuity contracts.  Annual commissions totaled $450,000 in
1999,  $348,000  in  1998  and  $195,000 in 1997.  These increases are primarily
attributable to the fixed annuity contracts acquired in the Acquisitions.  Based
on  current  sales,  the  Company  estimates  that  such annual commissions will
increase  in  future  periods.

     INCOME  TAX  EXPENSE  totaled  $6.6  million  in  1999, compared with $12.1
million  in  1998  and $5.1 million in 1997, representing effective tax rates of
46%  in  1999,  42%  in 1998 and 37% in 1997.  The increase in the tax rates for
1999  and  1998  is  due  to  an  increase  in  state  income  taxes.

FINANCIAL  CONDITION  AND  LIQUIDITY

     SHAREHOLDER'S EQUITY decreased 12.7% to $161.2 million at December 31, 1999
from  $184.7  million  at  December  31,  1998, primarily due to a $31.1 million
increase  in  accumulated  other  comprehensive  loss  partially  offset by $7.7
million  of  net  income  recorded  in  1999.

     INVESTED  ASSETS  totaled  $1.81  billion  at  December  31, 1999 and $1.52
billion  at  December 31, 1998.  The Company manages most of its invested assets
internally.  The  Company's  general investment philosophy is to hold fixed-rate
assets  for  long-term  investment.  Thus, it does not have a trading portfolio.
However, the Company has determined that all of its portfolio of bonds and notes
(the  "Bond Portfolio") is available to be sold in response to changes in market
interest  rates,  changes  in  relative  value  of  asset sectors and individual
securities,  changes  in  prepayment risk, changes in the credit quality outlook
for  certain  securities,  the  Company's

                                       15
<PAGE>
need  for  liquidity  and  other  similar  factors.

     THE BOND PORTFOLIO, which constituted 84% of the Company's total investment
portfolio  at  December  31,  1999, had an amortized cost that was $64.2 million
greater  than  its  aggregate  fair value at December 31, 1999, compared with an
aggregate  fair  value  that  exceeded  its  amortized  cost by $19.8 million at
December  31,  1998.  The  net  unrealized  losses on the Bond Portfolio in 1999
principally  reflect  the  recent  increase in prevailing interest rates and the
corresponding  effect  on  the  fair value of the Bond Portfolio at December 31,
1999.

     At  December  31,  1999, the Bond Portfolio included $1.48 billion of bonds
rated  by  Standard  &  Poor's  Corporation  ("S&P"),  Moody's Investors Service
("Moody's"),  Duff  & Phelps Credit Rating Co. ("DCR"), Fitch Investors Service,
L.P.  ("Fitch") or the National Association of Insurance Commissioners ("NAIC"),
and  $41.8  million  of bonds rated by the Company pursuant to statutory ratings
guidelines  established  by the NAIC.  At December 31, 1999, approximately $1.40
billion  of the Bond Portfolio was investment grade, including $575.6 million of
U.S.  government/agency  securities  and  mortgage-backed  securities  ("MBSs").

     At  December  31, 1999, the Bond Portfolio included $123.8 million of bonds
that  were not investment grade.  These non-investment-grade bonds accounted for
4.8%  of  the  Company's  total  assets  and  6.9%  of  its  invested  assets.

     Non-investment-grade securities generally provide higher yields and involve
greater  risks  than investment-grade securities because their issuers typically
are  more  highly  leveraged  and more vulnerable to adverse economic conditions
than  investment-grade  issuers.  In  addition,  the  trading  market  for these
securities  is  usually  more limited than for investment-grade securities.  The
Company  had  no  material  concentrations of non-investment-grade securities at
December  31,  1999.

     The  table  on  the  following page summarizes the Company's rated bonds by
rating  classification  as  of  December  31,  1999.


                                       16
<PAGE>
<TABLE>
<CAPTION>

                                        RATED BONDS BY RATING CLASSIFICATION
                                               (Dollars in thousands)

                                              Issues  not  rated  by  S&P/Moody's/
  Issues  Rated  by  S&P/Moody's/DCR/Fitch         DCR/Fitch,  by  NAIC  Category                              Total
------------------------------------------   ------------------------------------ ---------------------------------
S&P/(Moody's)                    Estimated         NAIC              Estimated               Estimated    Percent of
[DCR] {Fitch}        Amortized        fair     category   Amortized       fair   Amortized        fair      invested
  category (1)            cost       value          (2)        cost      value        cost       value        assets
-------------------  ----------  ----------  ---------  ----------  ----------  ----------  ----------   -----------
<S>                  <C>         <C>         <C>        <C>         <C>         <C>         <C>         <C>
AAA+ to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-} . . .  $1,119,598  $1,078,593         1   $   39,619  $   39,691  $1,159,217  $1,118,284       61.90%

BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}. .     248,279     238,421         2       43,209      42,367     291,488     280,788       15.54

BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}. . .       8,841       8,875         3            -           -       8,841       8,875        0.49

B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}. . . .     112,601     103,587         4        6,298       6,141     118,899     109,728        6.07

CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}. . .       6,953       3,886         5        1,718       1,360       8,671       5,246        0.29

CI to D
  [DD]
  {D} . . . . . . .           -           -         6            -           -           -           -           -
                     ----------  ----------             ----------  ----------  ----------  ----------

TOTAL RATED ISSUES.  $1,496,272  $1,433,362             $   90,844  $   89,559  $1,587,116  $1,522,921
                     ==========  ==========             ==========  ==========  ==========  ==========
<FN>

Footnotes  appear  on  the  following  page.
</TABLE>

                                       17

<PAGE>

     Footnotes  to  the  table  of  Rated  Bonds  by  Rating  Classification
     -----------------------------------------------------------------------

(1)     S&P and Fitch rate debt securities in rating categories ranging from AAA
(the  highest) to D (in payment default).  A plus (+) or minus (-) indicates the
debt's  relative  standing within the rating category.  A security rated BBB- or
higher  is considered investment grade.  Moody's rates debt securities in rating
categories ranging from Aaa (the highest) to C (extremely poor prospects of ever
attaining  any  real  investment  standing).  The  number  1, 2 or 3 (with 1 the
highest  and  3  the  lowest)  indicates the debt's relative standing within the
rating  category.  A  security  rated  Baa3  or  higher is considered investment
grade.  DCR  rates  debt  securities  in rating categories ranging from AAA (the
highest)  to  DD  (in  payment  default).  A plus (+) or minus (-) indicates the
debt's  relative  standing within the rating category.  A security rated BBB- or
higher  is  considered  investment  grade.  Issues  are categorized based on the
highest  of  the  S&P,  Moody's,  DCR  and  Fitch  ratings  if rated by multiple
agencies.

(2)     Bonds and short-term promissory instruments are divided into six quality
categories  for NAIC rating purposes, ranging from 1 (highest) to 5 (lowest) for
nondefaulted  bonds  plus  one category, 6, for bonds in or near default.  These
six  categories  correspond  with the S&P/Moody's/DCR/Fitch rating groups listed
above, with categories 1 and 2 considered investment grade.  The NAIC categories
include  $41.8  million  of  assets  that  were rated by the Company pursuant to
applicable  NAIC  rating  guidelines.

                                       18

<PAGE>
     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and aggregated $122.1 million at December 31, 1999.  Secured Loans are senior to
subordinated  debt  and  equity,  and  are  secured by assets of the issuer.  At
December  31,  1999, Secured Loans consisted of $33.8 million of publicly traded
securities and $88.3 million of privately traded securities. These Secured Loans
are  composed of loans to 50 borrowers spanning 13 industries, with 25% of these
assets  concentrated  in  utilities,  11%  concentrated  in  airlines  and  8%
concentrated in food services.  No other industry concentration constituted more
than  5%  of  these  assets.

     While  the  trading market for the Company's privately traded Secured Loans
is  more  limited  than  for  publicly  traded  issues, management believes that
participation  in  these  transactions  has  enabled  the Company to improve its
investment yield.  As a result of restrictive financial covenants, these Secured
Loans  involve  greater  risk  of  technical  default  than  do  publicly traded
investment-grade securities.  However, management believes that the risk of loss
upon  default  for  these Secured Loans is mitigated by such financial covenants
and  the  collateral  values underlying the Secured Loans. The Company's Secured
Loans  are  rated  by  S&P,  Moody's,  DCR,  Fitch,  the NAIC or by the Company,
pursuant  to  comparable  statutory  ratings guidelines established by the NAIC.

     MORTGAGE LOANS aggregated $211.9 million at December 31, 1999 and consisted
of  152  commercial  first  mortgage  loans  with  an  average  loan  balance of
approximately  $1.4  million, collateralized by properties located in 33 states.
Approximately  41%  of  this  portfolio  was  office,  25%  was  retail, 12% was
industrial,  11%  was  multifamily  residential  and  11%  was  other types.  At
December 31, 1999, approximately 34% of this portfolio was secured by properties
located  in  California, approximately 11% by properties located in New York and
Michigan and no more than 5% of this portfolio was secured by properties located
in  any  other  single  state.  At  December  31, 1999, one mortgage loan had an
outstanding  balance  of $10 million or more, which represented approximately 5%
of  this  portfolio,  and  approximately  36%  of  the  mortgage  loan portfolio
consisted  of  loans  with  balloon payments due before January 1, 2003.  During
1999  and  1998,  loans  delinquent  by  more than 90 days, foreclosed loans and
restructured  loans  have not been significant in relation to the total mortgage
loan  portfolio.

     At December 31, 1999, approximately 55% of the mortgage loans were seasoned
loans  underwritten to the Company's standards and purchased at or near par from
other financial institutions.  Such loans generally have higher average interest
rates  than  loans  that  could be originated today. The balance of the mortgage
loan  portfolio  has  been  originated  by the Company under strict underwriting
standards.  Commercial  mortgage loans on properties such as offices, hotels and
shopping  centers  generally  represent  a higher level of risk than do mortgage
loans  secured  by  multifamily residences.  This greater risk is due to several
factors,  including the larger size of such loans and the more immediate effects
of general economic conditions on these commercial property types.  However, due
to  the  seasoned nature of the Company's mortgage loan portfolio and its strict
underwriting  standards  utilized,  the  Company  believes that it has prudently
managed  the  risk attributable to its mortgage loan portfolio while maintaining
attractive  yields.

     ASSET-LIABILITY  MATCHING  is utilized by the Company to minimize the risks
of  interest rate fluctuations and disintermediation.  The Company believes that
its  fixed-rate liabilities should be backed by a portfolio principally composed
of  fixed-rate  investments  that  generate  predictable  rates  of return.  The
Company  does  not have a specific target rate of return.  Instead, its rates of
return  vary  over  time depending on the current interest rate environment, the
slope  of the yield curve, the spread at which fixed rate investments are priced
over  the yield curve, and general economic conditions.  Its portfolio  strategy
is  constructed  with  a  view  to

                                       19
<PAGE>
achieve adequate risk-adjusted returns consistent with its investment objectives
of  effective  asset-liability  matching,  liquidity  and safety.  The Company's
fixed-rate products incorporate surrender charges or other restrictions in order
to  encourage  persistency.  Approximately  85%  of  the Company's fixed annuity
reserves  had  surrender  penalties  or other restrictions at December 31, 1999.

     As  part  of  its asset-liability matching discipline, the Company conducts
detailed  computer  simulations that model its fixed-rate assets and liabilities
under  commonly  used  stress-test interest rate scenarios.  With the results of
these  computer  simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect its
economic  value  and  achieve  a predictable spread between what it earns on its
invested  assets and what it pays on its liabilities by designing its fixed-rate
products  and conducting its investment operations to closely match the duration
of  the  fixed-rate assets to that of its fixed-rate liabilities.  The Company's
fixed-rate  assets  include:  cash  and short-term investments; bonds and notes;
and  mortgage  loans.  At  December 31, 1999, these assets had an aggregate fair
value  of  $1.77  billion  with  a  duration  of 3.7.  At December 31, 1999, the
Company's  fixed  annuity liabilities had an aggregate fair value (determined by
discounting  future  contractual cash flows by related market rates of interest)
of  $1.68  billion with a duration of 3.5.  The Company's potential exposure due
to a relative 10% increase in interest rates from their December 31, 1999 levels
is  a  loss  of  $4.6 million in fair value of its fixed-rate assets that is not
offset  by  a decrease in the fair value of its fixed-rate liabilities.  Because
the  Company  actively  manages its assets and liabilities and has strategies in
place  to  minimize  its  exposure  to  loss  as interest rate changes occur, it
expects  that  actual  losses  would  be less than the estimated potential loss.

     Duration is a common option-adjusted measure for the price sensitivity of a
fixed-maturity  portfolio  to  changes  in  interest  rates.  It  measures  the
approximate  percentage  change  in  the market value of a portfolio if interest
rates  change  by  100  basis  points,  recognizing  the  changes  in cash flows
resulting  from  embedded  options  such  as  policy  surrenders,  investment
prepayments  and  bond  calls.  It  also  incorporates  the  assumption that the
Company  will  continue  to utilize its existing strategies of pricing its fixed
annuity  products,  allocating  its  available  cash  flow  amongst  its various
investment  portfolio  sectors  and  maintaining sufficient levels of liquidity.
Because  the  calculation  of  duration  involves  estimation  and  incorporates
assumptions,  potential  changes in portfolio value indicated by the portfolio's
duration  will  likely  be  different  from the actual changes experienced under
given  interest  rate  scenarios,  and  the  differences  may  be  material.

     The  Company  also  seeks  to  provide liquidity from time to time by using
reverse  repurchase  agreements  ("Reverse  Repos") and by investing in MBSs. It
also  seeks  to enhance its spread income by using Reverse Repos.  Reverse Repos
involve  a sale of securities and an agreement to repurchase the same securities
at  a  later date at an agreed upon price and are generally over-collateralized.
MBSs  are generally investment-grade securities collateralized by large pools of
mortgage  loans.  MBSs generally pay principal and interest monthly.  The amount
of  principal  and interest payments may fluctuate as a result of prepayments of
the  underlying  mortgage  loans.

     There  are risks associated with some of the techniques the Company uses to
provide  liquidity,  enhance  its  spread  income  and  match  its  assets  and
liabilities.  The  primary  risk  associated with the Company's Reverse Repos is
counterparty  risk.  The  Company  believes, however, that the counterparties to
its  Reverse  Repos  are  financially responsible and that the counterparty risk
associated  with  those  transactions  is  minimal.  It  is  the

                                       20
<PAGE>
Company's  policy that these agreements are entered into with counterparties who
have  a  debt  rating  of A/A2 or better from both S&P and Moody's.  The Company
continually  monitors its credit exposure with respect to those agreements.  The
primary  risk  associated with MBSs is that a changing interest rate environment
might  cause prepayment of the underlying obligations at speeds slower or faster
than  anticipated  at  the  time  of their purchase.  As part of its decision to
purchase  an  MBS,  the Company assesses the risk of prepayment by analyzing the
security's projected performance over an array of interest-rate scenarios.  Once
an  MBS  is  purchased,  the  Company  monitors its actual prepayment experience
monthly  to reassess the relative attractiveness of the security with the intent
to  maximize  total  return.

     INVESTED  ASSETS  EVALUATION  is  routinely  conducted  by  the  Company.
Management  identifies  monthly  those  investments  that  require  additional
monitoring  and  carefully  reviews  the  carrying values of such investments at
least  quarterly to determine whether specific investments should be placed on a
nonaccrual  basis  and  to  determine  declines  in value that may be other than
temporary.  In  making these reviews for bonds, management principally considers
the  adequacy  of  any  collateral,  compliance  with contractual covenants, the
borrower's  recent  financial  performance,  news  reports  and other externally
generated information concerning the creditor's affairs. In the case of publicly
traded  bonds,  management also considers market value quotations, if available.
For  mortgage  loans,  management generally considers information concerning the
mortgaged  property  and,  among other things, factors impacting the current and
expected payment status of the loan and, if available, the current fair value of
the  underlying  collateral.

     The  carrying values of investments that are determined to have declines in
value  that are other than temporary are reduced to net realizable value and, in
the case of bonds, no further accruals of interest are made.  The provisions for
impairment  on  mortgage  loans are based on losses expected by management to be
realized  on  transfers of mortgage loans to real estate, on the disposition and
settlement  of mortgage loans and on mortgage loans that management believes may
not  be collectible in full. Accrual of interest is suspended when principal and
interest  payments  on  mortgage  loans  are  past  due  more  than  90  days.

     DEFAULTED INVESTMENTS, comprising all investments that are in default as to
the  payment  of  principal  or  interest,  totaled $1.8 million, including $0.9
million  of  bonds  and $0.9 million of mortgage loans at December 31, 1999, and
constituted  0.1%  of  total  invested  assets.  At December 31, 1998, defaulted
investments  totaled  $3.7  million,  including  $2.5  million of bonds and $1.2
million  of  mortgage  loans,  and  constituted  0.2%  of total invested assets.

     SOURCES  OF  LIQUIDITY  are readily available to the Company in the form of
the  Company's  existing  portfolio  of cash and short-term investments, Reverse
Repo  capacity on invested assets and, if required, proceeds from invested asset
sales.  At December 31, 1999, approximately $224.6 million of the Company's Bond
Portfolio  had an aggregate unrealized gain of $4.3 million, while approximately
$1.30  billion  of  the Bond Portfolio had an aggregate unrealized loss of $68.5
million.  In  addition,  the  Company's  investment portfolio currently provides
approximately  $17.9  million  of monthly cash flow from scheduled principal and
interest payments. Historically, cash flows from operations and from the sale of
the  Company's  annuity  products  have  been  more than sufficient in amount to
satisfy  the  Company's  liquidity  needs.

     Management  is  aware  that  prevailing  market  interest  rates  may shift
significantly  and  has  strategies  in  place  to  manage either an increase or
decrease  in  prevailing  rates.  In  a  rising  interest  rate environment, the
Company's  average  cost  of  funds  would  increase  over time as it prices its

                                       21
<PAGE>
new  and  renewing  annuities  to  maintain a generally competitive market rate.
Management  would  seek  to  place new funds in investments that were matched in
duration  to,  and  higher  yielding than, the liabilities assumed.  The Company
believes  that liquidity to fund withdrawals would be available through incoming
cash  flow, the sale of short-term or floating-rate instruments or Reverse Repos
on the Company's substantial MBS segment of the Bond Portfolio, thereby avoiding
the  sale  of  fixed-rate  assets  in  an  unfavorable  bond  market.

     In a declining rate environment, the Company's cost of funds would decrease
over  time,  reflecting  lower  interest crediting rates on its fixed annuities.
Should  increased  liquidity  be  required for withdrawals, the Company believes
that  a  significant  portion  of  its investments could be sold without adverse
consequences in light of the general strengthening that would be expected in the
bond  market.

     CONTINGENT  LIABILITIES  are  discussed  in  Note  9  of  the  accompanying
financial  statements.

     RECENTLY  ISSUED  ACCOUNTING  STANDARDS  are  discussed  in  Note  3 of the
accompanying  financial  statements.

YEAR  2000

     The  Year  2000 issue arose from computer programs written using two digits
rather than four digits to define the applicable year.  This possibly could have
caused  a  failure  of the information technology systems (IT systems) and other
equipment containing imbedded technology (non-IT systems) in the year 2000.  The
Company  implemented  a  plan  to address the Year 2000 issue and to assess Year
2000  issues  relating  to  third  parties  with  which the Company has critical
relationships.  The  Company's cost to make necessary repairs had no significant
impact  on  its  results  of  operations.  The  Company  has not experienced any
business  disruption  from  the year 2000 issue.  Its IT and non-IT systems were
compliant  on  January  1,  2000, and there have been no problems related to any
third  parties  compliance.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The  quantitative  and  qualitative  disclosures  about  market  risk  are
contained in the Asset-Liability Matching section of Management's Disclosure and
Analysis  of  Financial  Condition and Results of Operations on pages 19, 20 and
21, herein. Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative  Instruments  and  Hedging  Activities,"  will  be  effective for the
Company  as  of  January  1,  2001.  Therefore,  it  is  not  included  in  the
accompanying  financial  statements.  The Company has not completed its analysis
of  the  effect  of  SFAS  133,  but management believes that it will not have a
material  impact  on the Company's results of operations, financial condition or
liquidity.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     The  Company's  consolidated  financial  statements  begin  on  page  F-3.
Reference  is  made  to  the  Index  to Financial Statements on page F-1 herein.

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

     None.

                                       22
<PAGE>
<TABLE>
<CAPTION>

                                       PART III

Item  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS

     The  directors  and principal officers of First SunAmerica Life Insurance Company
(the "Company") as of March 29, 2000 are listed below, together with information as to
their  ages, dates of election and principal business occupations during the last five
years  (if  other  than  their  present  business  occupations).

                                                      Other  Positions  and
                                            Year      Other  Business
                          Present           Assumed   Experience  Within
  Name              Age   Position(s)       Position  Last  Five Years**         From-To
  ----              ---   -----------       --------  ------------------         -------

<S>                <C>  <C>                 <C>   <C>                        <C>
Eli Broad*. . . .   66  Chairman,           1994  Co-founded SAI
                        Chief Executive           in 1957
                        Officer and
                        President of
                        the Company
                        Chairman, Chief     1986
                        Executive Officer
                        and President of
                        SunAmerica Inc.
                        ("SAI")

Thomas W. Baxter.   45  Director            1999  Partner, O'Melveny &         1991 to
                                                  Myers LLP                  present

Jay S. Wintrob* .   42  Executive Vice      1991  (Joined SAI in 1987)
                        President of the
                        Company
                        Vice Chairman and   1998
                        Chief Operating
                        Officer of SAI

James R. Belardi*   42  Senior Vice         1992  (Joined SAI in 1986)
                        President of the
                        Company
                        Executive Vice      1995
                        President of SAI

Marc H. Gamsin* .   44  Senior Vice         1999  Executive Vice President     1998 to
                        President of the          SunAmerica Investments,    present
                        Company                   Inc. (GA)
                        Senior Vice         1996  Executive Vice President   1997-1998
                        President of SAI          SunAmerica Investments,
                                                  Inc. (DE)
                                                  Partner, O'Melveny &       1976-1996
                                                  Myers, LLP

Jana W. Greer*. .   47  Senior Vice         1994  (Joined SAI in 1974)
                        President of the
                        Company
                        Senior Vice
                        President of SAI    1992

<FN>

________________________________________
*   Also  serves  as  a  director
**  Unless  otherwise  indicated,  officers  and  positions  are  with SunAmerica Inc.
</TABLE>


                                       23
<PAGE>
<TABLE>
<CAPTION>

                                                      Other  Positions  and
                                            Year      Other  Business
                          Present           Assumed   Experience  Within
  Name              Age   Position(s)       Position  Last  Five Years**         From-To
  ----              ---   -----------       --------  ------------------         -------


<S>                   <C>  <C>               <C>   <C>                         <C>
Susan L. Harris* . .   42  Senior Vice       1994  Vice President,             1994-1995
                           President and           General Counsel-
                           Secretary of the        Corporate Affairs
                           Company                 and Secretary of SAI
                           Senior Vice       1995
                           President,
                           General Counsel
                           and Secretary of
                           SAI

Vicki E. Marmorstein   47  Director          1999  Partner, Latham &             1995 to
                                                   Watkins                     present
                                                   Partner, Coudert            1979-1995
                                                   Brothers

Margery K. Neale . .   40  Director          1996  Partner, Swidler,             1990 to
                                                   Berlin, Shereff &           present
                                                   Friedman, LLP

Lester Pollack . . .   66  Director          1987  Chief Executive               1986 to
                                                   Officer, Centre             present
                                                   Partners, L.P.
                                                   Managing Partner,             1986 to
                                                   Lazard Freres & Co.         present
                                                   Senior Managing               1988 to
                                                   Director, Corporate         present
                                                   Advisors, L.P.

Debbie Potash-Turner   40  Director          1999  Senior Vice President         1998 to
                                                   and Chief Financial         present
                                                   Officer, SunAmerica
                                                   Asset Management Corp.
                                                   Vice President, Royal       1990-1998
                                                   Alliance Associates, Inc.

Richard D. Rohr. . .   73  Director          1987  Partner, Bodman,              1958 to
                                                   Longley & Dahling           present

N. Scott Gillis* . .   46  Senior Vice       2000  Senior Vice President       1994-1999
                           President of the        and Controller,
                           Company                 SunAmerica Life
                           Vice President    1999  Companies ("SLC")
                           and Controller          (Joined SAI in 1985)
                           of SAI

Gregory M. Outcalt .   37  Senior Vice       2000  Vice President, SLC         1993-1999
                           President               (Joined SAI in 1986)
                           of the Company

<FN>

________________________________________
*   Also  serves  as  a  director
**  Unless  otherwise  indicated,  officers  and  positions  are  with  SunAmerica  Inc.
</TABLE>

                                       24
<PAGE>
<TABLE>
<CAPTION>

                                                      Other  Positions  and
                                            Year      Other  Business
                          Present           Assumed   Experience  Within
  Name              Age   Position(s)       Position  Last  Five Years**         From-To
  ----              ---   -----------       --------  ------------------         -------


<S>                   <C>  <C>               <C>   <C>                         <C>
Edwin R. Raquel. . .   42  Senior Vice       1995  Vice President and          1990-1995
                           President and           Actuary, SLC
                           Chief Actuary
                           of the Company

David R. Bechtel . .   32  Vice President    1998  Vice President,             1996-1998
                           & Treasurer of    2000  Deutsche Morgan
                           the Company             Grenfell, Inc.
                                                   Associate,                  1995-1996
                           Vice President    1998  UBS Securities LLC
                           and Treasurer           Associate,                       1994
                           of SAI                  Wachtell Lipton Rosen
                                                                      & Katz

P. Daniel Demko, Jr.   50  Vice President    1999  Executive Vice President,     1998 to
                           of the Company          SunAmerica Retirement       present
                                                   Markets, Inc.
                                                   President & Vice            1995-1998
                                                   Chairman, Global Health
                                                   Network, LLC
                                                   Owner, P. Demko Company     1992-1995

Kevin J. Hart. . . .   45  Vice President    1999  Executive Vice President,     1995 to
                           of the Company          SunAmerica Retirement       present
                                                   Markets, Inc.
                                                   National Sales Manager      1991-1995
                                                   American Skandia Life
                                                   Assurance Corporation

Stewart R. Polakov .   40  Vice President    2000  Vice President,             1997-1999
                           of the Company          SunAmerica Financial
                                                   Director, Investment        1994-1997
                                                   Accounting of SAI
                                                   (Joined SAI in 1991)

Scott H. Richland. .   37  Vice President    1994  Senior Vice President       1997-1998
                           of the Company          and Treasurer of SAI
                           Senior Vice       1997  Vice President and          1995-1997
                           President of SAI        Treasurer of SAI
                                                   Vice President and          1994-1995
                                                   (Joined SAI in 1990)

<FN>

________________________________________
*   Also  serves  as  a  director
**  Unless  otherwise  indicated,  officers  and  positions  are  with  SunAmerica  Inc.
</TABLE>

                                       25

<PAGE>

ITEM  11.  EXECUTIVE  COMPENSATION

     All  of  the  executive  officers of the Company also serve as employees of
SunAmerica  Inc. or its affiliates and receive no compensation directly from the
Company.  Some  of  the  officers  also  serve  as  officers  of other companies
affiliated with the Company.  Allocations have been made as to each individual's
time  devoted  to  his or her duties as an executive officer of the Company.  No
executive officer of the Company earned allocated cash compensation in excess of
$100,000.  Eli  Broad,  Chairman,  Chief  Executive Officer and President of the
Company,  earned  allocated  cash  compensation  of  $65,763.

     Directors  of  the Company who are also employees of SunAmerica Inc. or its
affiliates  receive  no  compensation  in  addition  to  their  compensation  as
employees  of  SunAmerica  Inc.  or  its  affiliates.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     The  Company  is  an  indirect  wholly  owned  subsidiary  of  American
International  Group,  Inc.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     None.


                                       26
<PAGE>
                                     PART IV

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

Financial  Statements  and  Financial  Statement  Schedules

     Reference  is  made  to  the  index  set  forth on page F-1 of this report.

EXHIBITS

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

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

  3(a)     Agreement  and Plan of Merger and Amended and Restated Certificate of
Incorporation  are  incorporated  herein  by  reference  to  Exhibit 3(a) of the
Company's  1997  Annual  Report  on  Form  10-K,  filed  September  22,  1997.

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

  4(a)     Agreement  and Plan of Merger and Amended and Restated Certificate of
Incorporation, filed with the State of New York, Insurance Department, effective
as  of  October  31,  1997.  See  Exhibit  3(a).

  4(b)     Bylaws,  as  amended  January  1,  1996.  See  Exhibit  3(b).

  27          Financial  Data  Schedule

REPORTS  ON  FORM  8-K

No  current  report on Form 8-K was filed during the three months ended December
31,  1999.

                                       27

<PAGE>

<TABLE>
<CAPTION>

                                   SIGNATURES

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

                         FIRST  SUNAMERICA  LIFE  INSURANCE  COMPANY

                         By/s/  N.  SCOTT  GILLIS
                         ------------------------
                         N.  Scott  Gillis
                         Senior  Vice  President  and  Director

March  30,  2000

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


      Signature                            Title                 Date
-------------------------------  -------------------------  --------------
<S>                              <C>                        <C>
/s/   ELI BROAD . . . . . . . .  Chairman, Chief Executive  March 30, 2000
-------------------------------
      Eli Broad . . . . . . . .  Officer and President
                                (Principal Executive Officer)

/s/   N. SCOTT GILLIS . . . . .  Senior Vice President and  March 30, 2000
-------------------------------
      N. Scott Gillis . . . . .  Director (Principal
                                 Financial Officer)

/s/   GREGORY M. OUTCALT. . . .  Senior Vice President      March 30, 2000
-------------------------------
      Gregory M. Outcalt. . . .  (Principal Accounting
                                  Officer)

/s/   JAY S. WINTROB. . . . . .  Executive Vice President   March 30, 2000
-------------------------------
      Jay S. Wintrob. . . . . .  and Director

/s/   JAMES R. BELARDI. . . . .  Senior Vice President      March 30, 2000
-------------------------------
      James R. Belardi. . . . .  and Director

/s/   MARC H. GAMSIN. . . . . .  Senior Vice President      March 30, 2000
-------------------------------
      Marc H. Gamsin. . . . . .  and Director

/s/   JANA W. GREER . . . . . .  Senior Vice President      March 30, 2000
-------------------------------
      Jana W. Greer . . . . . .  and Director

/s/   SUSAN L. HARRIS . . . . .  Senior Vice President,     March 30, 2000
-------------------------------
      Susan L. Harris . . . . .  Secretary and Director

/s/   EDWIN R. RAQUEL . . . . .  Senior Vice President      March 30, 2000
-------------------------------
      Edwin R. Raquel . . . . .  and Chief Actuary

</TABLE>

                                       28
<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                          INDEX TO FINANCIAL STATEMENTS

                                                                   Page
                                                                Number(s)
                                                               ------------
<S>                                                            <C>
Report of Independent Accountants . . . . . . . . . . . . . .  F-2

Balance Sheet - December 31, 1999, December 31, 1998 and
  September 30, 1998. . . . . . . . . . . . . . . . . . . . .  F-3

Statement of Income and Comprehensive Income - Year Ended
  December 31, 1999, Three Months Ended December 31, 1998,
  Years Ended September 30, 1998 and 1997 . . . . . . . . . .  F-4

Statement of Cash Flows - Year Ended December 31, 1999, Three
  Months Ended December 31, 1998, Years Ended September 30,
  1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . .  F-5 to F-6

Notes to Financial Statements . . . . . . . . . . . . . . . .  F-7 to F-25

</TABLE>

                                       F-1
<PAGE>

                         Report of Independent Accountants

To  the  Board  of  Directors  and  Shareholder  of
First  SunAmerica  Life  Insurance  Company:

In  our  opinion,  the  accompanying balance sheet and the related statements of
income  and  comprehensive  income  and  of  cash  flows  present fairly, in all
material  respects,  the  financial  position of First SunAmerica Life Insurance
Company  (the  "Company")  at December 31, 1999, December 31, 1998 and September
30,  1998,  and  the  results  of its operations and its cash flows for the year
ended  December  31,  1999, for the three months ended December 31, 1998 and for
each  of  the  two  fiscal  years  in  the  period  ended September 30, 1998, in
conformity  with  accounting principles generally accepted in the United States.
These  financial  statements are the responsibility of the Company's management;
our  responsibility is to express an opinion on these financial statements based
on  our  audits.  We conducted our audits of these statements in accordance with
auditing  standards  generally accepted in the United States, which 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,  assessing  the  accounting  principles  used  and
significant  estimates  made by management, and evaluating the overall financial
statement  presentation.  We  believe that our audits provide a reasonable basis
for  the  opinion  expressed  above.

As  discussed  in  Note 2, the financial statements for the year ended September
30,  1997  have been restated to reflect the merger of John Alden Life Insurance
Company  of  New  York  ("JANY")  with  and  into  the  Company.  The merger was
accounted  for similar to a pooling of interests.  The income statement for that
year  includes the operating results of JANY's for the period from April 1, 1997
(the  date  of  acquisition  of  JANY  by SunAmerica Life Insurance Company, the
direct  parent  of the Company) through September 30, 1997.  We have audited the
adjustments  that were applied to restate the 1997 financial statements.  In our
opinion,  such adjustments are appropriate and have been properly applied to the
1997  financial  statements.


PricewaterhouseCoopers  LLP
Los  Angeles,  California
January  31,  2000

                                       F-2

<PAGE>
<TABLE>
<CAPTION>

                           FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                        BALANCE SHEET

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

Investments:
  Cash and short-term investments. . . . . .  $   29,350,000   $   18,466,000  $   55,679,000
  Bonds and notes available for sale,
    at fair value (amortized cost:
    December 1999, $1,587,116,000;
    December 1998, $1,293,637,000;
    September 1998, $1,262,703,000). . . . .   1,522,921,000    1,313,390,000   1,303,872,000
  Mortgage loans . . . . . . . . . . . . . .     211,867,000      176,737,000     187,906,000
  Other invested assets. . . . . . . . . . .      42,604,000        6,539,000       6,859,000
                                              ---------------  --------------  --------------

  Total investments. . . . . . . . . . . . .   1,806,742,000    1,515,132,000   1,554,316,000

Variable annuity assets held in separate
  accounts . . . . . . . . . . . . . . . . .     558,605,000      344,619,000     271,865,000
Accrued investment income. . . . . . . . . .      24,076,000       18,169,000      19,853,000
Deferred acquisition costs . . . . . . . . .     137,637,000       96,918,000      87,074,000
Current income taxes receivable                    6,638,000              ---             ---
Deferred income taxes receivable                  18,275,000              ---             ---
Receivable from brokers for sales of
  securities                                             ---       30,597,000       6,661,000
Other assets . . . . . . . . . . . . . . . .       3,539,000        2,247,000       2,451,000
                                              ---------------  --------------  --------------

TOTAL ASSETS . . . . . . . . . . . . . . . .  $2,555,512,000   $2,007,682,000  $1,942,220,000
                                              ===============  ==============  ==============

LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts . . .  $1,523,641,000   $1,432,558,000  $1,460,856,000
  Reserves for universal life insurance
    contracts                                    277,250,000              ---             ---
  Income taxes currently payable                         ---       10,144,000      10,177,000
  Payable to brokers for purchases
    of securities. . . . . . . . . . . . . .          63,000       19,806,000          60,000
  Other liabilities. . . . . . . . . . . . .      34,713,000       12,088,000       7,836,000
                                              ---------------  --------------  --------------

  Total reserves, payables
    and accrued liabilities. . . . . . . . .   1,835,667,000    1,474,596,000   1,478,929,000
                                              ---------------  --------------  --------------

Variable annuity liabilities related
  to separate accounts . . . . . . . . . . .     558,605,000      344,619,000     271,865,000
                                              ---------------  --------------  --------------

Deferred income taxes payable                            ---        3,792,000       5,371,000
                                              ---------------  --------------  --------------

Shareholder's equity:
  Common Stock . . . . . . . . . . . . . . .       3,000,000        3,000,000       3,000,000
  Additional paid-in capital . . . . . . . .     144,428,000      144,428,000     144,428,000
  Retained earnings. . . . . . . . . . . . .      42,409,000       34,737,000      31,361,000
  Accumulated other comprehensive income
    (loss) . . . . . . . . . . . . . . . . .     (28,597,000)       2,510,000       7,266,000
                                              ---------------  --------------  --------------

  Total shareholder's equity . . . . . . . .     161,240,000      184,675,000     186,055,000
                                              ---------------  --------------  --------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY .  $2,555,512,000   $2,007,682,000  $1,942,220,000
                                              ===============  ==============  ==============
</TABLE>


                             See accompanying notes

                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                               FIRST SUNAMERICA LIFE INSURANCE COMPANY

                            STATEMENT OF INCOME AND COMPREHENSIVE INCOME

                                    Year  Ended  Three  Months  Ended  Years  Ended  September  30,
                                                                        ---------------------------
                                   December 31, 1999  December 31, 1998          1998          1997
                                   ---------------  ------------------- ------------  -------------
<S>                                 <C>                  <C>            <C>            <C>
Investment income. . . . . . . . .  $      127,276,000   $ 28,010,000   $117,496,000   $ 65,559,000
                                    -------------------  -------------  -------------  -------------

Interest expense on:
  Fixed annuity contracts. . . . .         (76,114,000)   (18,406,000)   (80,624,000)   (45,765,000)
  Universal life insurance
    contracts                               (6,475,000)           ---            ---            ---
  Senior indebtedness                              ---         (1,000)      (109,000)      (589,000)
                                    -------------------  -------------  -------------  -------------

  Total interest expense . . . . .         (82,589,000)   (18,407,000)   (80,733,000)   (46,354,000)
                                    -------------------  -------------  -------------  -------------

NET INVESTMENT INCOME. . . . . . .          44,687,000      9,603,000     36,763,000     19,205,000
                                    -------------------  -------------  -------------  -------------

NET REALIZED INVESTMENT
  GAINS (LOSSES) . . . . . . . . .         (11,178,000)       797,000      4,690,000      5,020,000
                                    -------------------  -------------  -------------  -------------

Fee income:
  Variable annuity fees. . . . . .           6,600,000      1,189,000      3,607,000      1,712,000
  Universal life insurance
    fees                                     1,873,000            ---            ---            ---
  Surrender charges. . . . . . . .           3,296,000        662,000      4,350,000      1,809,000
                                    -------------------  -------------  -------------  -------------

TOTAL FEE INCOME . . . . . . . . .          11,769,000      1,851,000      7,957,000      3,521,000
                                    -------------------  -------------  -------------  -------------

GENERAL AND ADMINISTRATIVE
  EXPENSES . . . . . . . . . . . .          (7,871,000)    (1,548,000)    (3,301,000)    (3,222,000)
                                    -------------------  -------------  -------------  -------------

AMORTIZATION OF DEFERRED
  ACQUISITION COSTS. . . . . . . .         (22,664,000)    (5,046,000)   (17,120,000)   (10,386,000)
                                    -------------------  -------------  -------------  -------------

ANNUAL COMMISSIONS . . . . . . . .            (450,000)       (90,000)      (348,000)      (195,000)
                                    -------------------  -------------  -------------  -------------

PRETAX INCOME. . . . . . . . . . .          14,293,000      5,567,000     28,641,000     13,943,000

Income tax expense . . . . . . . .          (6,621,000)    (2,191,000)   (12,106,000)    (5,090,000)
                                    -------------------  -------------  -------------  -------------

NET INCOME . . . . . . . . . . . .           7,672,000      3,376,000     16,535,000      8,853,000

OTHER COMPREHENSIVE INCOME
  (LOSS), NET OF TAX:

Net unrealized gains (losses)
  on debt and equity securities
  available for sale:
    Net unrealized gains
      (losses) on debt and
      equity securities available
      for sale identified in
      the current period . . . . .         (32,333,000)    (4,094,000)     3,856,000      8,570,000
    Less reclassification
      adjustment for net
      realized (gains) losses
      included in net income . . .           1,226,000       (662,000)    (2,414,000)    (2,565,000)
                                    -------------------  -------------  -------------  -------------

OTHER COMPREHENSIVE INCOME
  (LOSS) . . . . . . . . . . . . .         (31,107,000)    (4,756,000)     1,442,000      6,005,000
                                    -------------------  -------------  -------------  -------------

COMPREHENSIVE INCOME (LOSS). . . .  $      (23,435,000)  $ (1,380,000)  $ 17,977,000   $ 14,858,000
                                    ===================  =============  =============  =============
</TABLE>

                             See accompanying notes

                                       F-4
<PAGE>
<TABLE>
<CAPTION>

                                FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                        STATEMENT OF CASH FLOWS

                                     Year  Ended  Three  Months  Ended   Years  Ended  September  30,
                                                                        -----------------------------
                                     December 31, 1999 December 31, 1998          1998           1997
                                     ------------  -------------------  --------------  --------------
<S>                                <C>                  <C>             <C>             <C>
CASH FLOWS FROM OPERATING
  ACTIVITIES:
  Net income. . . . . . . . . . .  $        7,672,000   $  3,376,000,   $  16,535,000   $   8,853,000
  Adjustments to reconcile net
    income to net cash provided
    by operating activities:
      Interest credited to:
        Fixed annuity contracts .          76,114,000      18,406,000      80,624,000      45,765,000
        Universal life insurance
          contracts                         6,475,000             ---             ---             ---
      Net realized investment
        (gains)losses . . . . . .          11,178,000        (797,000)     (4,690,000)     (5,020,000)
      Accretion of net
        discounts on investments.          (4,123,000)       (377,000)     (1,985,000)     (1,070,000)
      Amortization of goodwill. .             691,000          14,000          58,000          58,000
      Provision for deferred
        income taxes. . . . . . .          (5,317,000)        981,000        (389,000)        401,000
  Change in:
    Accrued investment income              (5,907,000)            ---             ---             ---
    Deferred acquisition costs. .           5,381,000       4,256,000       5,642,000      (4,215,000)
    Income taxes receivable/
      payable . . . . . . . . . .         (16,782,000)        (33,000)      7,941,000       2,535,000
    Other liabilities                      22,625,000             ---             ---             ---
    Other, net. . . . . . . . . .          (1,042,000)     (1,945,000)      8,472,000      (2,289,000)
                                   -------------------  --------------  --------------  --------------

NET CASH PROVIDED BY OPERATING
  ACTIVITIES. . . . . . . . . . .          96,965,000      23,881,000     112,208,000      45,018,000
                                   -------------------  --------------  --------------  --------------

CASH FLOWS FROM INVESTING
  ACTIVITIES:
  Purchases of:
    Bonds and notes . . . . . . .        (497,462,000)   (323,897,000)   (761,591,000)   (833,174,000)
    Mortgage loans                        (66,338,000)            ---     (82,256,000)            ---
    Other investments, excluding
      short-term investments                      ---             ---         (11,000)            ---
  Sales of:
    Bonds and notes . . . . . . .         399,790,000     271,632,000     864,763,000     561,887,000
    Mortgage loans                                ---             ---             ---      88,371,000
    Other investments, excluding
      short-term investments                  914,000             ---         494,000         140,000
  Redemptions and maturities of:
    Bonds and notes . . . . . . .          73,380,000      18,231,000      81,254,000      51,600,000
    Mortgage loans. . . . . . . .          31,188,000      11,253,000      24,501,000      13,535,000
    Other investments, excluding
      short-term investments                  580,000         320,000             ---          99,000
  Short-term investments received
    from Anchor National Life
    Insurance Company in
    assumption reinsurance
    transaction with MBL Life
    Assurance Corporation                 371,634,000             ---             ---             ---
                                   -------------------  --------------  --------------  --------------

NET CASH PROVIDED (USED) BY
  INVESTING ACTIVITIES. . . . . .         313,686,000     (22,461,000)    127,154,000    (117,542,000)
                                   -------------------  --------------  --------------  --------------
</TABLE>


                                       F-5

<PAGE>
<TABLE>
<CAPTION>

                               FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                 STATEMENT OF CASH FLOWS (Continued)

                                     Year  Ended  Three  Months  Ended  Years  Ended  September  30,
                                                                      -----------------------------
                                  December 31, 1999  December 31, 1998         1998            1997
                                  -------------  -------------------  -------------  --------------
<S>                                <C>                  <C>            <C>             <C>
CASH FLOWS FROM FINANCING
  ACTIVITIES:
  Premium receipts on:
    Fixed annuity contracts . . .  $       36,249,000   $ 19,411,000   $ 130,851,000   $131,711,000
    Universal life insurance
      contracts                             4,790,000            ---             ---            ---
  Net exchanges from the fixed
    accounts of variable annuity
    contracts . . . . . . . . . .         (37,223,000)    (9,340,000)    (47,852,000)   (22,346,000)
  Withdrawal payments on:
    Fixed annuity contracts . . .        (350,019,000)   (49,744,000)   (221,629,000)   (88,229,000)
    Universal life insurance
      contracts                           (13,781,000)           ---             ---            ---
  Claims and annuity payments on:
    Fixed annuity contracts . . .         (39,783,000)    (7,697,000)    (36,892,000)   (13,774,000)
  Capital contributions received                  ---            ---             ---      5,000,000
  Net receipts from (repayments
    of) other short-term
    financings                                    ---      8,737,000     (23,970,000)    18,659,000
  Cession of non-annuity
    product lines                                 ---            ---     (34,776,000)           ---
                                   -------------------  -------------  --------------  -------------

NET CASH PROVIDED (USED) BY
  FINANCING ACTIVITIES. . . . . .        (399,767,000)   (38,633,000)   (234,268,000)    31,021,000
                                   -------------------  -------------  --------------  -------------

NET INCREASE (DECREASE) IN CASH
  AND SHORT-TERM INVESTMENTS. . .          10,884,000    (37,213,000)      5,094,000    (41,503,000)

CASH AND SHORT-TERM INVESTMENTS
  AT BEGINNING OF PERIOD. . . . .          18,466,000     55,679,000      50,585,000      6,707,000

CASH AND SHORT-TERM INVESTMENTS
  OF JOHN ALDEN LIFE INSURANCE
  COMPANY OF NEW YORK AT DATE OF
  ACQUISITION                                     ---            ---             ---     85,381,000
                                   -------------------  -------------  --------------  -------------

CASH AND SHORT-TERM INVESTMENTS
  AT END OF PERIOD. . . . . . . .  $       29,350,000   $ 18,466,000   $  55,679,000   $ 50,585,000
                                   ===================  =============  ==============  =============

SUPPLEMENTAL CASH FLOW
  INFORMATION:

  Interest paid on indebtedness    $              ---   $      1,000   $     109,000   $    589,000
                                   ===================  =============  ==============  =============

  Net income taxes paid            $       28,720,000   $        ---   $   5,439,000   $  2,154,000
                                   ===================  =============  ==============  =============
</TABLE>

                             See accompanying notes

                                       F-6
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                          NOTES TO FINANCIAL STATEMENTS

1.     NATURE  OF  OPERATIONS

First  SunAmerica Life Insurance Company (the "Company") is a New York-domiciled
life  insurance  company  engaged  primarily  in  the  business  of  selling and
administering  fixed  and variable annuities and universal life contracts in the
State  of  New  York.

The  Company  is  an  indirect wholly owned subsidiary of American International
Group,  Inc.  ("AIG"), an international insurance and financial services holding
company.  At  December  31,  1998,  the  Company  was  a  wholly  owned indirect
subsidiary  of  SunAmerica  Inc.,  a  Maryland Corporation.  On January 1, 1999,
SunAmerica  Inc.  merged with and into AIG in a tax-free reorganization that has
been  treated  as  a  pooling  of  interests  for  accounting  purposes.  Thus,
SunAmerica Inc. ceased to exist on that date.  However, immediately prior to the
date  of the merger, substantially all of the net assets of SunAmerica Inc. were
contributed to a newly formed subsidiary of AIG named SunAmerica Holdings, Inc.,
a Delaware Corporation.  SunAmerica Holdings, Inc. subsequently changed its name
to  SunAmerica  Inc.  ("SunAmerica").

     The  operations  of  the  Company are influenced by many factors, including
general  economic  conditions,  monetary  and  fiscal  policies  of  the federal
government,  and  policies of state and other regulatory authorities.  The level
of  sales  of  the  Company's  financial products is influenced by many factors,
including  general  market  rates  of  interest,  the  strength,  weakness  and
volatility  of  equity  markets, and terms and conditions of competing financial
products.  The  Company is exposed to the typical risks normally associated with
a  portfolio of fixed-income securities, namely interest rate, option, liquidity
and  credit  risk.  The  Company  controls its exposure to these risks by, among
other  things,  closely  monitoring  and matching the duration of its assets and
liabilities,  monitoring  and  limiting  prepayment  and  extension  risk in its
portfolio,  maintaining  a  large  percentage  of its portfolio in highly liquid
securities, and engaging in a disciplined process of underwriting, reviewing and
monitoring  credit  risk.  The Company also is exposed to market risk, as market
volatility  may  result  in  reduced  fee  income  in the case of assets held in
separate  accounts.

2.     BUSINESS  COMBINATION

On  March  31, 1997, SunAmerica Life Insurance Company, the direct parent of the
Company, completed the acquisition of all of the outstanding stock of John Alden
Life  Insurance  Company  of  New  York ("JANY").  On October 31, 1997, JANY was
merged  with  and into the Company.  On the date of acquisition, JANY had assets
having an aggregate fair value of $1,536,179,000, composed primarily of invested
assets totaling $1,403,807,000.  Liabilities assumed in this acquisition totaled
$1,411,179,000,  including  $1,363,764,000 of fixed annuity reserves.  An amount
equal  to the excess of the purchase price over the fair value of the net assets
acquired,  amounting  to  $103,695,000  at  September  30,  1997, is included in
Deferred  Acquisition Costs in the balance sheet.  The acquisition was accounted
for  by  using  the  purchase  method  of accounting and the merger by using the
pooling  method  from  the  date of acquisition through the date of merger.  The
balance  sheet  at  September 30, 1997 and the income statement and statement of
cash  flows  for  the  year  ended  September  30,


                                       F-7
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

2.     BUSINESS  COMBINATION  (Continued)

1997  have  been  restated  from those originally contained in the September 30,
1997  Annual  Report  on Form 10-K to include the assets and liabilities of JANY
and  the  results  of  JANY's operations and cash flows for the six-month period
from  April  1,  1997  through  September  30, 1997.  On a pro forma (unaudited)
basis,  assuming the acquisition and merger had occurred on October 1, 1996, the
beginning  of the earliest period presented herein, investment income would have
been  $117,059,000 and net income would have been $12,434,000 for the year ended
September  30,  1997.

3.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS OF PRESENTATION:  The accompanying financial statements have been prepared
in accordance with generally accepted accounting principles.  The preparation of
financial statements in conformity with generally accepted accounting principles
requires  the  use of estimates and assumptions that affect the amounts reported
in  the  financial  statements and the accompanying notes.  Actual results could
differ from those estimates.  Certain items have been reclassified to conform to
the  current  period's  presentation.

Under  generally  accepted  accounting  principles,  premiums  collected  on the
non-traditional  life  and annuity insurance products, such as those sold by the
Company,  are  not reflected as revenues in the Company's statement of earnings,
as  they  are  recorded  directly  to  policyholder  liabilities  upon  receipt.

The  preparation  of  financial statements in conformity with generally accepted
accounting  principles requires the use of estimates and assumptions that affect
the  amounts  reported  in  the financial statements and the accompanying notes.
Actual  results  could  differ  from  those  estimates.

     INVESTED  ASSETS:  Cash  and short-term investments primarily include cash,
commercial paper, money market investments, repurchase agreements and short-term
bank  participations.  All  such  investments  are  carried at cost plus accrued
interest, which approximates fair value, have maturities of three months or less
and  are  considered  cash  equivalents  for  purposes  of reporting cash flows.

     Bonds  and notes available for sale are carried at aggregate fair value and
changes  in  unrealized  gains  or  losses,  net of tax, are credited or charged
directly  to shareholder's equity.  Bonds and notes are reduced to estimated net
realizable  value  when  necessary  for declines in value considered to be other
than  temporary.  Estimates  of  net  realizable value are subjective and actual
realization  will  be  dependent  upon  future  events.

     Mortgage  loans are carried at amortized unpaid balances, net of provisions
for  estimated  losses.  Other  invested  assets  include  real estate, which is
reduced  by  impairment  provisions,  policy  loans, which are carried at unpaid
balances,  and  common  stock,  which  is  carried  at  fair  value.

     Realized  gains  and  losses  on  the sale of investments are recognized in
operations  at  the  date  of  sale  and  are  determined  by  using  the

                                       F-8
<PAGE>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

3.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

specific  cost identification method.  Premiums and discounts on investments are
amortized to investment income by using the interest method over the contractual
lives  of  the  investments.

     DEFERRED  ACQUISITION  COSTS:  Policy  acquisition  costs  are deferred and
amortized,  with  interest,  in  relation  to  the  incidence of estimated gross
profits  to  be  realized  over  the  estimated  lives of the annuity contracts.
Estimated  gross  profits  are  composed  of  net  interest income, net realized
investment gains and losses, variable annuity fees, surrender charges and direct
administrative  expenses.  Deferred acquisition costs consist of commissions and
other  costs  that  vary with, and are primarily  related  to, the production or
acquisition  of  new  business.

As  debt  and equity securities available for sale are carried at aggregate fair
value,  an  adjustment is made to deferred acquisition costs equal to the change
in  amortization  that would have been recorded if such securities had been sold
at  their  stated  aggregate  fair  value and the proceeds reinvested at current
yields.  The  change in this adjustment, net of tax, is included with the change
in  net  unrealized  gains or losses on debt and equity securities available for
sale  that  is  credited  or  charged directly to shareholder's equity. Deferred
Acquisition  Costs  have been increased by $20,200,000 at December 31, 1999, and
decreased by $15,900,000 at December 31, 1998, $30,000,000 at September 30, 1998
and  $31,200,000  at  September  30,  1997  for  this  adjustment.

     VARIABLE  ANNUITY  ASSETS  AND  LIABILITIES:  The  assets  and  liabilities
resulting  from  the  receipt  of  variable  annuity  premiums are segregated in
separate  accounts.  The  Company  receives administrative fees for managing the
funds  and  other  fees  for assuming mortality and certain expense risks.  Such
fees  are  included  in  Variable  Annuity  Fees  in  the  income  statement.

     GOODWILL:  Goodwill  is  amortized by using the straight-line method over a
period  of 25 years and is included in Other Assets in the balance sheet.  There
was  no  goodwill  remaining  at  December  31,  1999.

     CONTRACTHOLDER  RESERVES:  Contractholder  reserves  for  fixed  annuity
contracts  and  universal  life  insurance  contracts  are  accounted  for  as
investment-type  contracts  in accordance with Statement of Financial Accounting
Standards No. 97, "Accounting and Reporting by Insurance Enterprises for Certain
Long-Duration  Contracts  and  for  Realized  Gains  and Losses from the Sale of
Investments,"  and  are  recorded  at accumulated value (premiums received, plus
accrued  interest,  less  withdrawals  and  assessed  fees).

     FEE  INCOME:  Variable  annuity  fees,  universal  life  insurance fees and
surrender  charges  are  recorded  in  income  as  earned.

     INCOME  TAXES:  The  Company  files as a "life insurance company" under the
provisions  of the Internal Revenue Code of 1986.  Its federal income tax return
is  consolidated  with  those  of  its  direct parent, SunAmerica Life Insurance
Company  (the  "Parent"),  and  its  affiliate,  Anchor  National Life Insurance
Company  ("ANLIC").  Income taxes have been  calculated  as if the Company filed
a  separate  return.  Deferred

                                       F-9
<PAGE>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

3.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)

income tax assets and liabilities are recognized based on the difference between
financial  statement  carrying  amounts  and  income  tax  bases  of  assets and
liabilities  using  enacted  income  tax  rates  and  laws.

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

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of  an  Enterprise  and  Related  Information,"  was  adopted for the year ended
December  31,  1999  and  is  included  in Note 14 of the accompanying financial
statements.

4.     FISCAL  YEAR  CHANGE

Effective  December  31,  1998,  the  Company  changed  its fiscal year end from
September  30 to December 31.  Accordingly, the financial statements include the
results  of  operations  for  the  transition  period, which are not necessarily
indicative  of  operations  for a full year.  The financial statements as of and
for  the  three  months  ended  December  31,  1998 were originally filed as the
Company's  unaudited  Transition  Report  on  Form  10-Q.

Results  for  comparable  prior  period  are  summarized  below.
<TABLE>
<CAPTION>

                            Three  Months  Ended
                               December 31, 1997
                               ------------------
<S>                            <C>
Investment income . . . . . .  $       29,882,000

Net investment income . . . .           8,547,000

Net realized investment gains           2,075,000

Total fee income. . . . . . .           1,653,000

Pretax income . . . . . . . .           7,193,000

Net income. . . . . . . . . .           4,274,000
                               ==================
</TABLE>

5.     ACQUISITION

On  December  31,  1998,  ANLIC  acquired  the  individual life business and the
individual  and  group  annuity business of MBL Life Assurance Corporation ("MBL
Life"),  via  a  100%  coinsurance  transaction, for a cash  purchase  price  of
$128,420,000.  As  part  of  this  transaction,

                                      F-10

<PAGE>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

5.     ACQUISITION  (Continued)

ANLIC acquired assets having an aggregate fair value of $5,718,227,000, composed
primarily  of  invested  assets totaling $5,715,010,000.  Liabilities assumed in
this  acquisition  totaled  $5,831,266,000,  including  $3,460,503,000  of fixed
annuity  reserves,  $2,308,742,000 of universal life reserves and $24,011,000 of
guaranteed  investment  contract  reserves.

Included  in  the  block  of business acquired from MBL Life were policies whose
owners  are  residents  of  the State of New York ("the New York Business").  On
July  1,  1999,  the  New  York  Business  was  acquired  by  the Company via an
assumption  reinsurance agreement.  As part of this acquisition, invested assets
equal  to  $678,272,000,  universal  life  reserves equal to $282,247,000, group
pension reserves equal to $406,118,000, and other net assets of $10,093,000 were
assumed by the Company.  On a pro forma basis, assuming the MBL Life acquisition
had  been  consummated  on October 1, 1996, the beginning of the earliest period
presented here, investment income would have been $150,619,000, $164,183,000 and
$112,246,000  for the year ended December 31, 1999 and the years ended September
30,  1998  and  1997,  respectively.  Net  income  would  have  been $9,364,000,
$19,920,000  and  $12,238,000 for the year ended December 31, 1999 and the years
ended  September  30,  1998  and  1997,  respectively.

The  $128,420,000  purchase  price  was  allocated between the Company and ANLIC
based  on the estimated future gross profits of the two blocks of business.  The
portion  allocated  to  the  Company  was  $10,000,000.

As  part  of  the Acquisition, the Company received $34,657,000 from MBL Life to
pay  policy  enhancements guaranteed by the MBL Life rehabilitation agreement to
policyholders  meeting  certain  requirements.  A  primary  requirement was that
annuity policyholders must have converted their MBL Life policy to a policy type
currently  offered by the Company or one of its affiliates by December 31, 1999.
The  enhancements  are  to  be credited in four installments on January 1, 2000,
June  30,  2001,  June  30,  2002  and June 30, 2003, to eligible policies still
active on each of those dates.  On December 31, 1999 the enhancement reserve for
such  payments totaled $35,807,000, which includes interest credited at 6.75% on
the  original reserve.  Of this amount, $4,621,000 was credited to policyholders
in  February  2000  for  the  January  1,  2000  installment.


                                      F-11

<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

6.     INVESTMENTS

The  amortized  cost  and  estimated fair value of bonds and notes available for
sale  by  major  category  follow:

                                                      Estimated
                                     Amortized             Fair
                                           Cost           Value
                                 --------------  --------------
<S>                              <C>             <C>
AT DECEMBER 31, 1999:

Securities of the United States
  Government. . . . . . . . . .  $    1,479,000  $    1,347,000
Mortgage-backed securities. . .     602,095,000     574,247,000
Securities of public utilities.      41,758,000      41,071,000
Corporate bonds and notes . . .     667,450,000     637,985,000
Other debt securities . . . . .     274,334,000     268,271,000
                                 --------------  --------------

  Total . . . . . . . . . . . .  $1,587,116,000  $1,522,921,000
                                 ==============  ==============

AT DECEMBER 31, 1998:

Securities of the United States
  Government. . . . . . . . . .  $   10,230,000  $   10,263,000
Mortgage-backed securities. . .     534,759,000     546,409,000
Securities of public utilities.      78,396,000      80,442,000
Corporate bonds and notes . . .     567,623,000     573,599,000
Other debt securities . . . . .     102,629,000     102,677,000
                                 --------------  --------------

  Total . . . . . . . . . . . .  $1,293,637,000  $1,313,390,000
                                 ==============  ==============

AT SEPTEMBER 30, 1998:

Securities of the United States
  Government. . . . . . . . . .  $      518,000  $      549,000
Mortgage-backed securities. . .     454,934,000     472,557,000
Securities of public utilities.      81,525,000      84,711,000
Corporate bonds and notes . . .     658,674,000     677,717,000
Other debt securities . . . . .      67,052,000      68,338,000
                                 --------------  --------------

  Total . . . . . . . . . . . .  $1,262,703,000  $1,303,872,000
                                 ==============  ==============

</TABLE>


                                      F-12

<PAGE>
<TABLE>
<CAPTION>

                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

6.     INVESTMENTS  (Continued)

The  amortized  cost  and  estimated fair value of bonds and notes available for
sale  by  contractual  maturity,  as  of  December  31,  1999,  follow:

                                                             Estimated
                                             Amortized            Fair
                                                  Cost           Value
                                        --------------  --------------
<S>                                     <C>             <C>
Due in one year or less. . . . . . . .  $   47,125,000  $   46,887,000
Due after one year through five years.     299,033,000     295,798,000
Due after five years through ten years     445,835,000     419,857,000
Due after ten years. . . . . . . . . .     193,028,000     186,133,000
Mortgage-backed securities . . . . . .     602,095,000     574,246,000
                                        --------------  --------------

  Total. . . . . . . . . . . . . . . .  $1,587,116,000  $1,522,921,000
                                        ==============  ==============
</TABLE>


Actual  maturities  of bonds and notes will differ from those shown above due to
prepayments  and  redemptions.  Gross  unrealized  gains and losses on bonds and
notes  available  for  sale  by  major  category  follow:
<TABLE>
<CAPTION>

                                       Gross          Gross
                                  Unrealized     Unrealized
                                       Gains         Losses
                                 -----------  -------------
<S>                              <C>          <C>
AT DECEMBER 31, 1999:

Securities of the United States
  Government. . . . . . . . . .  $     5,000  $   (137,000)
Mortgage-backed securities. . .      873,000   (28,721,000)
Securities of public utilities.       56,000      (743,000)
Corporate bonds and notes . . .    2,867,000   (32,332,000)
Other debt securities . . . . .      454,000    (6,517,000)
                                 -----------  -------------

  Total . . . . . . . . . . . .  $ 4,255,000  $(68,450,000)
                                 ===========  =============

AT DECEMBER 31, 1998:

Securities of the United States
  Government. . . . . . . . . .  $    35,000  $     (2,000)
Mortgage-backed securities. . .   13,104,000    (1,454,000)
Securities of public utilities.    2,585,000      (539,000)
Corporate bonds and notes . . .   18,094,000   (12,118,000)
Other debt securities . . . . .      748,000      (700,000)
                                 -----------  -------------

  Total . . . . . . . . . . . .  $34,566,000  $(14,813,000)
                                 ===========  =============

AT SEPTEMBER 30, 1998:

Securities of the United States
  Government                     $    31,000  $        ---
Mortgage-backed securities. . .   17,733,000      (110,000)
Securities of public utilities.    3,562,000      (376,000)
Corporate bonds and notes . . .   30,219,000   (11,176,000)
Other debt securities . . . . .    1,297,000       (11,000)
                                 -----------  -------------

  Total . . . . . . . . . . . .  $52,842,000  $(11,673,000)
                                 ===========  =============
</TABLE>


                                      F-13

<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

6.     INVESTMENTS  (Continued)

     Gross  unrealized  gains on equity securities available for sale aggregated
$9,000  at December 31, 1998 and September 30, 1998 and $19,000 at September 30,
1997.  There  were  no  gross  unrealized  gains  or losses on equity securities
available  for  sale  at  December  31,  1999  and no gross unrealized losses at
December  31,  1998,  September  30,  1998  and  September  30,  1997.

     Gross  realized  investment gains and losses on sales of investments are as
follows:
<TABLE>
<CAPTION>

                          Year  Ended Three Months  Ended Years  Ended  September  30,
                                                            --------------------------
                         December 31, 1999 December 31, 1998       1998          1997
                         ------------  -------------------  ------------  ------------
<S>                     <C>                  <C>           <C>           <C>
BONDS AND NOTES:
  Realized gains . . .  $        6,040,000   $ 4,290,000   $13,067,000   $ 6,441,000
  Realized losses. . .          (9,688,000)   (1,843,000)   (7,509,000)   (1,466,000)

MORTGAGE LOANS:
  Realized losses                      ---           ---      (289,000)      (15,000)

OTHER INVESTMENTS:
  Realized gains                   164,000           ---        22,000       140,000
  Realized losses                      ---           ---      (209,000)          ---

IMPAIRMENT WRITEDOWNS.          (7,694,000)   (1,650,000)     (392,000)      (80,000)
                        -------------------  ------------  ------------  ------------

  Total net realized
  investment gains
  (losses) . . . . . .  $      (11,178,000)  $   797,000   $ 4,690,000   $ 5,020,000
                        ===================  ============  ============  ============
</TABLE>


The  sources  and  related  amounts  of  investment  income  are  as  follows:
<TABLE>
<CAPTION>
                          Year  Ended Three Months  Ended Years  Ended  September  30,
                                                            --------------------------
                         December 31, 1999 December 31, 1998       1998          1997
                         ------------  -------------------  ------------  ------------
<S>                      <C>                 <C>          <C>           <C>
Short-term investments.  $        4,795,000  $ 1,122,000  $  2,340,000  $ 1,334,000
Bonds and notes . . . .         103,503,000   22,811,000   100,808,000   56,253,000
Mortgage loans. . . . .          17,139,000    3,980,000    13,901,000    7,714,000
Other invested assets .           1,839,000       97,000       447,000      258,000
                         ------------------  -----------  ------------  -----------

Total investment income  $      127,276,000  $28,010,000  $117,496,000  $65,559,000
                         ==================  ===========  ============  ===========
</TABLE>


Expenses  incurred to manage the investment portfolio amounted to $1,548,000 for
the  year  ended December 31, 1999, $218,000 for the three months ended December
31,  1998,  $814,000  for the year ended September 30, 1998 and $387,000 for the
year  ended  September  30,  1997 and are included in General and Administrative
Expenses  in  the  income  statement.

No investments in any one entity or its affiliates exceeded 10% of the Company's
shareholder's  equity  at  December  31,  1999.

At  December  31, 1999, mortgage loans were collateralized by properties located
in  33  states,  with loans totaling approximately 34% of the aggregate carrying
value  of  the  portfolio  secured  by  properties  located  in  California,
approximately  11%  by  properties  located in New York and Michigan and no more
than  5%  of the portfolio was secured by properties located in any other single
state.

     At  December  31,  1999, bonds and notes included $123,849,000 of bonds and
notes not rated investment grade.  The Company had no material concentrations of
non-investment-grade  assets  at  December  31,  1999.
                                      F-14
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

6.     INVESTMENTS  (Continued)

     At  December  31,  1999, the carrying value of investments in default as to
the  payment of principal or interest was $1,760,000.  Such nonperforming assets
had  an  estimated  fair  value  of  $1,293,000.

     At December 31, 1999, $519,000 of bonds, at amortized cost, were on deposit
with  regulatory  authorities  in  accordance  with  statutory  requirements.

7.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

     The  following  estimated  fair value disclosures are limited to reasonable
estimates  of  the  fair value of only the Company's financial instruments.  The
disclosures  do  not  address  the  value  of  the  Company's  recognized  and
unrecognized  nonfinancial  assets  (including  its  other  invested assets) and
liabilities  or  the value of anticipated future business.  The Company does not
plan  to  sell  most  of  its  assets or settle most of its liabilities at these
estimated  fair  values.

     The  fair  value  of  a  financial  instrument  is  the amount at which the
instrument  could be exchanged in a current transaction between willing parties,
other  than  in  a  forced  or liquidation sale.  Selling expenses and potential
taxes  are not included.  The estimated fair value amounts were determined using
available  market information, current pricing information and various valuation
methodologies.  If  quoted  market  prices  were  not  readily  available  for a
financial  instrument,  management  determined  an  estimated  fair  value.
Accordingly,  the  estimates  may not be indicative of the amounts the financial
instruments  could  be  exchanged for in a current or future market transaction.

     The  following methods and assumptions were used to estimate the fair value
of  each  class of financial instruments for which it is practicable to estimate
that  value:

     CASH  AND  SHORT-TERM  INVESTMENTS:  Carrying  value  is considered to be a
reasonable  estimate  of  fair  value.

     BONDS  AND  NOTES:  Fair  value is based principally on independent pricing
services,  broker  quotes  and  other  independent  information.

     MORTGAGE LOANS:  Fair values are primarily determined by discounting future
cash  flows  to  the  present at current market rates, using expected prepayment
rates.

     VARIABLE ANNUITY ASSETS HELD IN SEPARATE ACCOUNTS:  Variable annuity assets
are  carried  at  the  market  value  of  the  underlying  securities.

     RECEIVABLE  FROM  (PAYABLE TO) BROKERS FOR SALES (PURCHASES) OF SECURITIES:
Such  obligations  represent  transactions  of a short-term nature for which the
carrying  value  is  considered  a  reasonable  estimate  of  fair  value.

     RESERVES  FOR  FIXED  ANNUITY  CONTRACTS:  Deferred  annuity  contracts are
assigned a fair value equal to current net surrender value. Annuitized contracts
are  valued  based  on the present value of future cash flows at current pricing
rates.

                                      F-15
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

7.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (Continued)

     RESERVES FOR UNIVERSAL LIFE INSURANCE CONTRACTS:  Universal life and single
life  premium contracts are assigned a fair value equal to current net surrender
value.

VARIABLE  ANNUITY  LIABILITIES  RELATED  TO  SEPARATE  ACCOUNTS:  Fair values of
contracts  in  the  accumulation  phase are based on net surrender values.  Fair
values of contracts in the payout phase are based on the present value of future
cash  flows  at  assumed  investment  rates.

The estimated fair values of the Company's financial instruments at December 31,
1999,  December  31, 1998 and September 30, 1998, compared with their respective
carrying  values,  are  as  follows:
<TABLE>
<CAPTION>

                                             Carrying               Fair
                                                Value              Value
                                       --------------     --------------

DECEMBER 31, 1999:
<S>                                     <C>             <C>
ASSETS:
  Cash and short-term investments. . .  $   29,350,000  $   29,350,000
  Bonds and notes. . . . . . . . . . .   1,522,921,000   1,522,921,000
  Mortgage loans . . . . . . . . . . .     211,867,000     211,197,000
  Variable annuity assets held in
    separate accounts. . . . . . . . .     558,605,000     558,605,000

LIABILITIES:
  Reserves for fixed annuity contracts   1,523,641,000   1,458,786,000
  Reserves for universal life
    insurance contracts. . . . . . . .     277,250,000     261,522,000
  Variable annuity liabilities related
    to separate accounts . . . . . . .     558,605,000     535,282,000
  Payable to brokers for purchase of
    securities . . . . . . . . . . . .          63,000          63,000
                                        ==============  ==============

DECEMBER 31, 1998:

ASSETS:
  Cash and short-term investments. . .  $   18,466,000  $   18,466,000
  Bonds and notes. . . . . . . . . . .   1,313,390,000   1,313,390,000
  Mortgage loans . . . . . . . . . . .     176,737,000     182,013,000
  Variable annuity assets held in
    separate accounts. . . . . . . . .     344,619,000     344,619,000
  Receivable from brokers for sales
    of securities. . . . . . . . . . .      30,597,000      30,597,000

LIABILITIES:
  Reserves for fixed annuity contracts   1,432,558,000   1,382,574,000
  Variable annuity liabilities related
    to separate accounts . . . . . . .     344,619,000     328,064,000
  Payable to brokers for purchase of
    securities . . . . . . . . . . . .      19,806,000      19,806,000
                                        ==============  ==============

</TABLE>

                                      F-16

<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

7.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (Continued)
<TABLE>
<CAPTION>

                                            Carrying            Fair
                                               Value           Value
                                      --------------  --------------
<S>                                   <C>             <C>
SEPTEMBER 30, 1998:

ASSETS:
  Cash and short-term investments. .  $   55,679,000  $   55,679,000
  Bonds and notes. . . . . . . . . .   1,303,872,000   1,303,872,000
  Mortgage loans . . . . . . . . . .     187,906,000     194,471,000
  Variable annuity assets held in
    separate accounts. . . . . . . .     271,865,000     271,865,000
  Receivable from brokers for
    sales of securities. . . . . . .       6,661,000       6,661,000

LIABILITIES:
  Reserves for fixed annuity
    contracts. . . . . . . . . . . .   1,460,856,000   1,406,853,000
  Variable annuity liabilities
    related to separate accounts . .     271,865,000     256,623,000
  Payable to brokers for purchase of
    securities . . . . . . . . . . .          60,000          60,000
                                      ==============  ==============
</TABLE>

8.     REINSURANCE

The  business which was assumed from MBL Life is subject to existing reinsurance
ceded  agreements.  The  agreements,  which  represent  predominantly  yearly
renewable  term  insurance,  allow  for  maximum retention on any single life of
$2,000,000.  In  order  to limit even further the exposure to loss on any single
insured  and  to  recover  an  additional portion of the benefits paid over such
limits,  the Company entered into a reinsurance treaty effective January 1, 1999
under which the Company retains no more than $100,000 of risk on any one insured
life.  At  December  31,  1999,  a  total  reserve  credit of $397,000 was taken
against  the  life  insurance  reserves.  With  respect  to  these  coinsurance
agreements, the Company could become liable for all obligations of the reinsured
policies if the reinsurers were to become unable to meet the obligations assumed
under  the  respective  reinsurance agreements.  The Company monitors its credit
exposure  with  respect  to  these  agreements.  However, due to the high credit
ratings  of  the  reinsurers,  such  risks  are  considered  to  be  minimal.

9.     CONTINGENT  LIABILITIES

The  Company  is involved in various kinds of litigation common to its business.
These  cases  are  in  various  stages  of  development and, based on reports of
counsel,  management believes that provisions made for potential losses relating
to  such  litigation are adequate and any further liabilities and costs will not
have a material adverse impact upon the Company's financial position, results of
operations,  or  cash  flows.

The  Company's  current  financial strength and counterparty credit ratings from
Standard  &  Poor's  are  based  in part on a guarantee (the "Guarantee") of the
Company's  insurance  policy  obligations  by  American  Home  Assurance Company
("American  Home"),  a  subsidiary  of  AIG, and a member of an AIG intercompany
pool,  and  the  belief  that  the  Company  is

                                      F-17
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

9.     CONTINGENT  LIABILITIES  (Continued)

viewed  as  a  strategically  important  member  of  AIG.  The  Guarantee  is
unconditional  and  irrevocable, and policyholders have the right to enforce the
Guarantee  directly  against  American  Home.

The Company's current financial strength rating from Moody's is based in part on
a  support  agreement  between  the  Company  and AIG (the "Support Agreement"),
pursuant  to  which AIG has agreed that AIG will cause the Company to maintain a
policyholders'  surplus  of  not  less than $1 million or such greater amount as
shall  be  sufficient to enable the Company to perform its obligations under any
policy  issued  by  it.  The Support Agreement also provides that if the Company
needs  funds  not  otherwise  available  to  it  to  make  timely payment of its
obligations  under  policies  issued  by  it, AIG will provide such funds at the
request  of  the  Company.  The  Support  Agreement  is not a direct or indirect
guarantee  by  AIG  to  any  person  of  any obligation of the Company.  AIG may
terminate  the  Support Agreement with respect to outstanding obligations of the
Company  only under circumstances where the Company attains, without the benefit
of the Support Agreement, a financial strength rating equivalent to that held by
the  Company  with the benefit of the support agreement.  Policyholders have the
right to cause the Company to enforce its rights against AIG and, if the Company
fails  or  refuses  to take timely action to enforce the Support Agreement or if
the Company defaults in any claim or payment owed to such policyholder when due,
have  the  right  to  enforce  the  Support  Agreement  directly  against  AIG.

American Home does not publish financial statements, although it files statutory
annual and quarterly reports with the New York State Insurance Department, where
such  reports  are available to the public. AIG is a reporting company under the
Securities  Exchange  Act of 1934, and publishes annual reports on Form 10-K and
quarterly  reports  on  Form  10-Q,  which are available from the Securities and
Exchange  Commission.

                                      F-18

<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

10.     SHAREHOLDER'S  EQUITY

     The  Company  is  authorized  to  issue 300 shares of its $10,000 par value
Common  Stock.  At  December 31, 1999, December 31, 1998 and September 30, 1998,
300  shares  were  outstanding.

     Changes  in  shareholder's  equity  are  as  follows:
<TABLE>
<CAPTION>

                          Year  Ended Three Months  Ended Years  Ended  September  30,
                                                            --------------------------
                         December 31, 1999 December 31, 1998       1998          1997
                         ------------  -------------------  ------------  ------------
<S>                        <C>                  <C>            <C>            <C>
ADDITIONAL PAID-IN
  CAPITAL:
  Beginning balances. . .  $      144,428,000   $144,428,000   $144,428,000   $ 14,428,000
  Additional paid-in
    capital acquired as
    a result of the
    merger with JANY                      ---            ---            ---    125,000,000
  Capital contributions
    received                              ---            ---            ---      5,000,000
                           -------------------  -------------  -------------  -------------

Ending balances . . . . .  $      144,428,000   $144,428,000   $144,428,000   $144,428,000
                           ===================  =============  =============  =============

RETAINED EARNINGS:
  Beginning balances. . .  $       34,737,000   $ 31,361,000   $ 14,826,000   $  5,973,000
  Net income. . . . . . .           7,672,000      3,376,000     16,535,000      8,853,000
                           -------------------  -------------  -------------  -------------

Ending balances . . . . .  $       42,409,000   $ 34,737,000   $ 31,361,000   $ 14,826,000
                           ===================  =============  =============  =============

ACCUMULATED OTHER
  COMPREHENSIVE INCOME
  (LOSS):
    Beginning balances. .  $        2,510,000   $  7,266,000   $  5,824,000   $   (181,000)
    Change in net
      unrealized gains
      (losses) on equity
      securities                       (9,000)           ---        (10,000)      (110,000)
    Change in net
      unrealized gains
      (losses) on bonds
      and notes available
      for sale. . . . . .         (83,948,000)   (21,416,000)     1,028,000     40,648,000
    Change in adjustment
      to deferred
      acquisition costs .          36,100,000     14,100,000      1,200,000    (31,300,000)
    Tax effects of net
      changes . . . . . .          16,750,000      2,560,000       (776,000)    (3,233,000)
                           -------------------  -------------  -------------  -------------

Ending balances . . . . .  $      (28,597,000)  $  2,510,000   $  7,266,000   $  5,824,000
                           ===================  =============  =============  =============
</TABLE>


                                      F-19
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

10.     SHAREHOLDER'S  EQUITY  (Continued)

     For  a  life  insurance  company  domiciled  in  the  State of New York, no
dividend  may  be  distributed  to any shareholder unless notice of the domestic
insurer's intention to declare such dividend and the amount have been filed with
the  Superintendent  of  Insurance  not  less  than  30  days in advance of such
proposed  declaration,  or if the Superintendent disapproves the distribution of
the  dividend within the 30-day period. No dividends were paid in the year ended
December  31,  1999,  three  months  ended December 31, 1998 or the fiscal years
ended  1998  or  1997.

     Under  statutory  accounting  principles utilized in filings with insurance
regulatory  authorities,  the  Company's net income for the years ended December
31,  1999,  1998  and  1997  was  $14,210,000,  $16,263,000  and  $18,390,000,
respectively.  The  Company's  statutory capital and surplus was $111,338,000 at
December 31, 1999, $96,474,000 at December 31, 1998 and $94,239,000 at September
30,  1998.

11.     INCOME  TAXES

The  components  of  the  provisions  for  federal income taxes on pretax income
consist  of  the  following:
<TABLE>
<CAPTION>

                            Net  realized
                              Investment
                             Gains (Losses)   Operations         Total
                             ---------------  -----------  ------------
<S>                          <C>              <C>          <C>
December 31, 1999:

Currently payable . . . . .  $    2,345,000   $ 9,593,000  $11,938,000
Deferred. . . . . . . . . .      (6,772,000)    1,455,000   (5,317,000)
                             ---------------  -----------  ------------

  Total income tax expense
    (benefit) . . . . . . .  $   (4,427,000)  $11,048,000  $ 6,621,000
                             ===============  ===========  ============

December 31, 1998:

Currently payable . . . . .  $    1,165,000   $    45,000  $ 1,210,000
Deferred. . . . . . . . . .        (595,000)    1,576,000      981,000
                             ---------------  -----------  ------------

  Total income tax expense.  $      570,000   $ 1,621,000  $ 2,191,000
                             ===============  ===========  ============

September 30, 1998:

Currently payable . . . . .  $    2,711,000   $ 9,784,000  $12,495,000
Deferred. . . . . . . . . .        (515,000)      126,000     (389,000)
                             ---------------  -----------  ------------

  Total income tax expense.  $    2,196,000   $ 9,910,000  $12,106,000
                             ===============  ===========  ============

September 30, 1997:

Currently payable . . . . .  $    1,790,000   $ 2,899,000  $ 4,689,000
Deferred. . . . . . . . . .         (11,000)      412,000      401,000
                             ---------------  -----------  ------------

  Total income tax expense.  $    1,779,000   $ 3,311,000  $ 5,090,000
                             ===============  ===========  ============
</TABLE>


                                      F-20
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

11.     INCOME  TAXES  (Continued)

     Income  taxes  computed at the United States federal income tax rate of 35%
and  income  taxes  provided  differ  as  follows:
<TABLE>
<CAPTION>

                          Year  Ended Three Months  Ended Years  Ended  September  30,
                                                            --------------------------
                         December 31, 1999 December 31, 1998       1998          1997
                         ------------  -------------------  ------------  ------------
<S>                       <C>                  <C>         <C>          <C>
Amount computed at
  statutory rate . . . .  $        4,984,000   $1,949,000  $10,024,000  $4,880,000
Increases (decreases)
  resulting from:
    Amortization of
      differences
      between book and
      tax bases of net
      assets acquired. .             223,000        5,000       20,000      20,000
    State income taxes,
      net of federal
      tax benefit. . . .           1,817,000      237,000    2,042,000     200,000
    Dividend received
      deduction                     (263,000)         ---          ---         ---
    Other, net                      (140,000)         ---       20,000     (10,000)
                          -------------------  ----------  -----------  -----------

    Total income tax
      expense. . . . . .  $        6,621,000   $2,191,000  $12,106,000  $5,090,000
                          ===================  ==========  ===========  ===========
</TABLE>

                                      F-21
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

11.     INCOME  TAXES  (Continued)

     Deferred  income taxes reflect the net tax effects of temporary differences
between  the  carrying amounts of assets and liabilities for financial reporting
purposes  and  the  amounts  used  for  income  tax  reporting  purposes.  The
significant  components  of the (receivable) liability for Deferred Income Taxes
are  as  follows:
<TABLE>
<CAPTION>

                                                   December  31,  September  30,
                                     -------------------------------------------
                                              1999           1998           1998
                                     -------------  -------------  -------------
<S>                                  <C>            <C>            <C>
DEFERRED TAX LIABILITIES:
  Investments                        $        ---   $  1,517,000   $  1,782,000
  Deferred acquisition costs. . . .    22,643,000     29,018,000     29,505,000
  Net unrealized gains on debt and
    equity securities available for
    sale                                      ---      1,347,000      3,912,000
  Other liabilities . . . . . . . .        44,000         46,000         46,000
                                     -------------  -------------  -------------

  Total deferred tax liabilities. .    22,687,000     31,928,000     35,245,000
                                     -------------  -------------  -------------

DEFERRED TAX ASSETS:
  Contractholder reserves . . . . .   (18,026,000)   (18,550,000)   (18,535,000)
  State income taxes                          ---        (79,000)       (79,000)
  Net unrealized losses on debt and
    equity securities available for
    sale                              (15,398,000)           ---            ---
  Other assets. . . . . . . . . . .    (7,538,000)    (9,507,000)   (11,260,000)
                                     -------------  -------------  -------------

  Total deferred tax assets . . . .   (40,962,000)   (28,136,000)   (29,874,000)
                                     -------------  -------------  -------------

  Deferred income taxes . . . . . .  $(18,275,000)  $  3,792,000   $  5,371,000
                                     =============  =============  =============
</TABLE>

12.     COMPREHENSIVE  INCOME

     Effective  October  1,  1998,  the  Company  adopted Statement of Financial
Accounting  Standards  No.  130,  "Reporting  Comprehensive Income" ("SFAS 130")
which  requires  the reporting of comprehensive income in addition to net income
from  operations.  Comprehensive  income is a more inclusive financial reporting
methodology  that  includes  disclosure  of  certain  financial information that
historically  has  not  been  recognized  in the calculation of net income.  The
adoption  of  SFAS  130  did  not  have  an  impact  on the Company's results of
operations,  financial condition or liquidity.  Comprehensive income amounts for
the  prior  year  are  disclosed  to conform to the current year's presentation.


                                      F-22
<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

12.     COMPREHENSIVE  INCOME  (Continued)

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

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

Year  ended  December  31,
1999:
<S>                                 <C>            <C>            <C>
  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period . . . . . . . . .  $(93,613,000)  $ 32,765,000   $(60,848,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period . . . . . .    43,869,000    (15,354,000)    28,515,000
                                    -------------  -------------  -------------

  Subtotal . . . . . . . . . . . .   (49,744,000)    17,411,000    (32,333,000)
                                    -------------  -------------  -------------

  Reclassification adjustment for:
    Net realized losses included
    in net income. . . . . . . . .     9,656,000     (3,380,000)     6,276,000

    Related change in deferred
    acquisition costs. . . . . . .    (7,769,000)     2,719,000     (5,050,000)
                                    -------------  -------------  -------------
    Total reclassification
    adjustment . . . . . . . . . .     1,887,000       (661,000)     1,226,000
                                    -------------  -------------  -------------

  Total other comprehensive loss .  $(47,857,000)  $ 16,750,000   $(31,107,000)
                                    =============  =============  =============
</TABLE>

<TABLE>
<CAPTION>

Three  months  ended  December  31,
1998:
<S>                                 <C>            <C>           <C>
  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period . . . . . . . . .  $(17,664,000)  $ 6,182,000   $(11,482,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period . . . . . .    11,367,000    (3,979,000)     7,388,000
                                    -------------  ------------  -------------

  Subtotal . . . . . . . . . . . .    (6,297,000)    2,203,000     (4,094,000)
                                    -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized losses included
    in net income. . . . . . . . .    (3,752,000)    1,314,000     (2,438,000)

    Related change in deferred
    acquisition costs. . . . . . .     2,733,000      (957,000)     1,776,000
                                    -------------  ------------  -------------
    Total reclassification
    adjustment . . . . . . . . . .    (1,019,000)      357,000       (662,000)
                                    -------------  ------------  -------------

  Total other comprehensive loss .  $ (7,316,000)  $ 2,560,000   $ (4,756,000)
                                    =============  ============  =============
</TABLE>

                                      F-23

<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

12.     COMPREHENSIVE  INCOME  (Continued)

                                               Tax  Benefit
                              Before  Tax        (Expense)       Net  of  Tax
                              -------------      ----------     -------------
<TABLE>
<CAPTION>

Fiscal  Year  ended  September  30,
1998:
<S>                                 <C>            <C>           <C>
  Net unrealized gains on debt
  and equity securities available
  for sale identified in the
  current period . . . . . . . . .  $ 17,664,000   $(6,182,000)  $ 11,482,000

  Increase in deferred acquisition
    cost adjustment identified in
    the current period . . . . . .   (11,732,000)    4,106,000     (7,626,000)
                                    -------------  ------------  -------------

  Subtotal . . . . . . . . . . . .     5,932,000    (2,076,000)     3,856,000
                                    -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized gains included
    in net income. . . . . . . . .   (16,646,000)    5,826,000    (10,820,000)

    Related change in deferred
      acquisition costs. . . . . .    12,932,000    (4,526,000)     8,406,000
                                    -------------  ------------  -------------
    Total reclassification
    adjustment . . . . . . . . . .    (3,714,000)    1,300,000     (2,414,000)
                                    -------------  ------------  -------------

  Total other comprehensive income  $  2,218,000   $  (776,000)  $  1,442,000
                                    =============  ============  =============
</TABLE>


<TABLE>
<CAPTION>

Fiscal  Year  ended  September  30,
1997:
<S>                                 <C>            <C>            <C>
  Net unrealized gains on debt
  and equity securities available
  for sale identified in the
  current period . . . . . . . . .  $ 45,904,000   $(16,066,000)  $ 29,838,000

  Increase in deferred acquisition
    cost adjustment identified in
    the current period . . . . . .   (32,720,000)    11,452,000    (21,268,000)
                                    -------------  -------------  -------------

  Subtotal . . . . . . . . . . . .    13,184,000     (4,614,000)     8,570,000
                                    -------------  -------------  -------------

  Reclassification adjustment for:
    Net realized gains included
    in net income. . . . . . . . .    (5,366,000)     1,878,000     (3,488,000)

    Related change in deferred
    acquisition costs. . . . . . .     1,420,000       (497,000)       923,000
                                    -------------  -------------  -------------
    Total reclassification
    adjustment . . . . . . . . . .    (3,946,000)     1,381,000     (2,565,000)
                                    -------------  -------------  -------------

  Total other comprehensive income  $  9,238,000   $  (3,233,00)  $  6,005,000
                                    =============  =============  =============
</TABLE>

                                      F-24

<PAGE>
                     FIRST SUNAMERICA LIFE INSURANCE COMPANY

                    NOTES TO FINANCIAL STATEMENTS (Continued)

13.     RELATED-PARTY  MATTERS

     The  Company  pays  commissions  to  six  affiliated  companies, SunAmerica
Securities,  Inc.,  Advantage  Capital  Corp.,  Financial Services Corp., Sentra
Securities  Corp.,  Spelman  &  Co.  Inc.  and  Royal  Alliance Associates, Inc.
Commissions  paid  to  these broker-dealers totaled $1,976,000 in the year ended
December  31,  1999,  $615,000  in  the  three  months  ended December 31, 1998,
$3,855,000  in the year ended 1998 and $4,486,000 in the year ended 1997.  These
broker-dealers  represent  a  significant  portion  of  the  Company's business,
amounting  to  37.5%,  27.8%,  33.0%  and  38.9%  of  premiums in the year ended
December  31,  1999,  three  months ended December 31, 1998, and the years ended
September  30,  1998 and 1997, respectively.  One unaffiliated broker-dealer was
responsible for 25% of total premiums in the year ended December 31, 1999 and no
other  single  unaffiliated  broker-dealer  was  responsible for more than 8% of
total  premiums  in  the  year  ended  December  31,  1999.

The  Company  purchases  administrative,  investment  management,  accounting,
marketing  and data processing services from SunAmerica Financial, whose purpose
is to provide services to the Company and its affiliates.  Amounts paid for such
services totaled $7,959,000 for the year ended December 31, 1999, $1,631,000 for
the  three  months  ended  December  31,  1998,  $3,877,000  for  the year ended
September  30,  1998  and $2,454,000 for the year ended September 30, 1997.  The
marketing  components of such costs during these periods amounted to $2,907,000,
$630,000,  $1,877,000  and  $1,223,000,  respectively,  and  are  deferred  and
amortized  as part of Deferred Acquisition Costs.  The other components of these
costs  are  included  in  General  and  Administrative  Expenses  in  the income
statement.

     During  the year ended September 30, 1997, the Company sold one bond with a
book  value  of  $2,072,000  to  SunAmerica.  The Company recorded a net gain of
$83,000  on  the  transaction.

                                      F-25