SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

/X/	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
OR
/ /	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001 Commission File No. 33-5014 FIRST SUNAMERICA LIFE INSURANCE COMPANY

Incorporated in New York	06-0992729 (IRS Employer Identification No.)
733 Third Avenue, 4th Floor, New York, New York 10017 Registrant's telephone number, including area code: (800) 272-3007
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS Yes X No THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANTS COMMON STOCK ON NOVEMBER 13, 2000 WAS AS FOLLOWS:
Common Stock (par value $10,000.00 per share)	300 shares outstanding

FIRST SUNAMERICA LIFE INSURANCE COMPANY

INDEX

		Page Number(s)

Part I - Financial Information
	Balance Sheet (Unaudited) - March 31, 2001 and December 31, 2000	3
	Statement of Income and Comprehensive Income (Unaudited)- Three Months Ended March 31, 2001 and 2000	4
	Statement of Cash Flows (Unaudited) - Three Months Ended March 31, 2001 and 2000	5-6
	Notes to Financial Statements (Unaudited)	7
	Management's Discussion and Analysis of Financial Condition and Results of Operations	8-20
	Quantitative and Qualitative Disclosures About Market Risk	21
Part II - Other Information		22-23

			March 31, 2001			December 31, 2000
FIRST SUNAMERICA LIFE INSURANCE COMPANY BALANCE SHEET (Unaudited)
			(In thousands)

ASSETS

Investments and cash:
	Cash and short-term investments		$	36,999		$	40,704
	Bonds, notes and redeemable preferred
		stocks available for sale, at fair
		value (amortized cost: March 31, 2001,
		$1,246,208; December 2000, $1,269,340)		1,242,589			1,237,469
	Common stocks available for sale, at fair
		value (cost: March 31, 2001 and
		December 2000, $812)		420			785
	Mortgage loans			165,144			167,408
	Policy loans			39,422			39,881

	Total investments and cash			1,484,574			1,486,247

Variable annuity assets held in separate
	accounts			501,070			565,547
Accrued investment income				11,946			14,809
Deferred acquisition costs				107,747			124,451
Income taxes currently receivable from Parent				4,461			8,067
Defered income taxes				7,674			7,914
Other assets				6,841			7,338

TOTAL ASSETS			$	2,124,313		$	2,214,373

LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
	Reserves for fixed annuity contracts		$	1,136,158		$	1,180,665
	Reserves for universal life insurance
		contracts		252,186			256,318
	Other liabilities			39,759			24,215

	Total reserves, payables and accrued
		liabilities		1,428,103			1,461,198

Variable annuity liabilities related to
	separate accounts			501,070			565,547

Shareholder's equity:
	Common Stock			3,000			3,000
	Additional paid-in capital			144,428			144,428
	Retained earnings			48,695			49,689
	Accumulated other comprehensive loss			(983	)		(9,489	)

	Total shareholder's equity			195,140			187,628

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY			$	2,124,313		$	2,214,373

See accompanying notes to financial statements

			2001			2000
FIRST SUNAMERICA LIFE INSURANCE COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the three months ended March 31, 2001 and 2000 (Unaudited)
			(In thousands)

Investment income			$	26,915		$	32,836

Interest expense on:
	Fixed annuity contracts			(13,772	)		(18,305	)
	Universal life insurance contracts			(2,931	)		(3,132	)

	Total interest expense			(16,703	)		(21,437	)

NET INVESTMENT INCOME				10,212			11,399

NET REALIZED INVESTMENT LOSSES				(10,629	)		(1,513	)

Fee income:
	Variable annuity fees			2,093			2,204
	Universal life insurance fees, net			1,037			500
	Surrender charges			696			772

TOTAL FEE INCOME				3,826			3,476

GENERAL AND ADMINISTRATIVE EXPENSES				(761	)		(954	)

AMORTIZATION OF DEFERRED
	ACQUISITION COSTS			(4,202	)		(4,809	)

ANNUAL COMMISSIONS				(175	)		(173	)

PRETAX INCOME (LOSS)				(1,729	)		7,426

Income tax benefit (expense)				735			(2,879	)

NET INCOME (LOSS)			$	(994	)	$	4,547

OTHER COMPREHENSIVE INCOME (LOSS), NET OF
	TAX:
	Net unrealized gains (losses) on debt and
		equity securities available for sale
		identified in the current period
		(net of income tax expense of $2,878
		for 2001 and income tax benefit of
		$3,971 for 2000)		5,344			(7,375	)
	Less reclassification adjustment for
		net realized losses included in net
		income (net of income tax benefit of
		$1,702 for 2001 and $363 for 2000)		3,162			675

	OTHER COMPREHENSIVE INCOME (LOSS)			8,506			(6,700	)

COMPREHENSIVE INCOME (LOSS)			$	7,512		$	(2,153	)

See accompanying notes to financial statements.

				2001			2000
FIRST SUNAMERICA LIFE INSURANCE COMPANY STATEMENTS OF CASH FLOWS For the three months ended March 31, 2001 and 2000 (Unaudited)
				(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income				$	(994	)	$	4,547
Adjustments to reconcile net income to net
	cash provided by operating activities:
		Interest credited to:
			Fixed annuity contracts		13,772			18,305
			Universal life insurance contracts		2,931			3,132
		Net realized investment losses			10,629			1,513
		Accretion of net discounts on
			investments		(816	)		(999	)
		Provision for deferred income taxes			(4,341	)		1,820
Change in:
	Accrued investment income				2,863			3,592
	Deferred acquisition costs				1,904			2,194
	Income taxes receivable/payable				3,606			(816	)
	Other liabilities				(165	)		(7,158	)
Other, net					3,743			1,653

NET CASH PROVIDED BY OPERATING
	ACTIVITIES				33,132			27,783

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
	Bonds, notes and redeemable preferred stocks				(42,864	)		(7,986	)
	Mortgage loans				(3,591	)		(26	)
	Other investments, excluding short-term
		investments			(28	)		---
Sales of:
	Bonds, notes and redeemable preferred stocks				49,809			83,497
	Other investments, excluding short-term
		investments			---			485
Redemptions and maturities of:
	Bonds, notes and redeemable preferred stocks				22,125			25,214
	Mortgage loans				5,979			3,460
	Other investments, excluding short-term
		investments			488			617

NET CASH PROVIDED BY INVESTING
	ACTIVITIES			$	31,918		$	105,261

See accompanying notes to financial statements

		2001			2000
FIRST SUNAMERICA LIFE INSURANCE COMPANY STATEMENTS OF CASH FLOWS (Continued) For the three months ended March 31, 2001 and 2000 (Unaudited)
		(In thousands)

CASH FLOWS FROM FINANCING ACTIVITIES:
Premium receipts on:
	Fixed annuity contracts	$	15,609		$	6,841
	Universal life insurance contracts		2,344			2,382
Net exchanges from the fixed accounts
	of variable annuity contracts		(7,782	)		(13,524	)
Withdrawal payments on:
	Fixed annuity contracts		(53,474	)		(76,762	)
	Universal life insurance contracts		(8,388	)		(8,217	)
Claims and annuity payments on:
	Fixed annuity contracts		(7,690	)		(8,250	)
	Universal life insurance contracts		(5,220	)		(6,208	)
Net repayments of other
	short-term financings		(4,154	)		(7,948	)

NET CASH USED BY FINANCING ACTIVITIES			(68,755	)		(111,686	)

NET INCREASE (DECREASE) IN CASH AND
	SHORT-TERM INVESTMENTS		(3,705	)		21,358

CASH AND SHORT-TERM INVESTMENTS AT
	BEGINNING OF PERIOD		40,704			29,350

CASH AND SHORT-TERM INVESTMENTS AT
	END OF PERIOD	$	36,999		$	50,708

SUPPLEMENTAL CASH FLOW INFORMATION:

Net income taxes paid to Parent		$	---		$	1,875

See accompanying notes to financial statements

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

1.	BASIS OF PRESENTATION

	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. 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. In the opinion of the Company, the accompanying unaudited financial statements contain all adjustments necessary, consisting of normal recurring items, to present fairly the Company's financial position as of March 31, 2001 and December 31, 2000, the results of its operations and its cash flows for the three months ended March 31, 2001 and 2000. The results of operations for the three months ended March 31, 2001 are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2000, contained in the Company's 2000 Annual Report on Form 10-K. Certain items have been reclassified to conform to the current period's presentation.

2.	RECENTLY ISSUED ACCOUNTING STANDARD

	In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS 133 was postponed by SFAS 137, Accounting for Derivative Instruments and Hedging Activities- Deferral of the Effective Date of FASB No. 133, and is now effective for the Company as of January 1, 2001. Because of the Company's minimal use of derivatives, the new Statement has no impact on either the earnings or the financial position of the Company at March 31, 2001.

FIRST SUNAMERICA LIFE INSURANCE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition and results of operations of First SunAmerica Life Insurance Company (the "Company") for the three months ended March 31, 2001 ("2001") and March 31, 2000 ("2000") follows. Certain items have been reclassified to conform to the current period's presentation.

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

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

RESULTS OF OPERATIONS

NET LOSS totaled $1.0 million in 2001 compared with net income of $4.5 million in 2000.

PRETAX LOSS totaled $1.7 million in 2001 compared with pretax income of $7.4 million in 2000. The decline in 2001 results compared to 2000 primarily resulted from increased net realized investment losses and decreased net investment income.

NET INVESTMENT INCOME, which is the spread between the income earned on invested assets and the interest paid on fixed annuities and other interest-bearing liabilities, totaled $10.2 million in 2001, down from $11.4 million in 2000. These amounts equal 2.72% on average invested assets (computed on a daily basis) of $1.5 billion in 2001 compared with 2.50% on average invested assets of $1.8 billion in 2000.

Net investment spreads include the effect of income earned or interest paid on the difference between average invested assets and average interest-bearing liabilities. Average invested assets exceeded average interest-bearing liabilities by $91.4 million in 2001, compared with $66.7 million in 2000. The difference between the Company's yield on average invested assets and the rate paid on average interest-bearing liabilities (the "Spread Difference") was 2.44% in 2001 and 2.31% in 2000. The increase in the Spread Difference in 2001 compared to 2000 is due primarily to the decrease in the interest rates paid on interest-bearing liabilities as discussed below.

Investment income (and the related yields on average invested assets) totaled $26.9 million (7.18%) in 2001, and $32.8 million (7.19%) in 2000.

Expenses incurred to manage the investment portfolio amounted to $0.7 million in 2001 and $0.5 million in 2000. These expenses are included as a reduction to investment income in the income statement.

Total interest expense equaled $16.7 million in 2001 and $21.4 million in 2000. The average rate paid on all interest-bearing liabilities was 4.74% in 2001, compared with 4.88% in 2000. Interest-bearing liabilities averaged $1.41 billion during 2001 and $1.76 billion during 2000. The decrease in interest rates paid and average liabilities in 2001 results primarily from the continued reduction of crediting rates and subsequent withdrawals on certain closed blocks of business.

DECLINE IN AVERAGE INVESTED ASSETS largely results from the surrenders of certain closed blocks of fixed annuity policies. 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") partially offset by net exchanges from fixed accounts into the separate accounts of variable annuity contracts. Fixed Annuity Premiums and UL Premiums totaled $19.6 million in 2001 and $15.7 million in 2000 and are largely premiums for the fixed accounts of variable annuities. Such premiums have increased, in part, as a result of reallocation to fixed products in a declining stock market. On an annualized basis, these premiums represent 6% and 3%, respectively, of the related reserve balances at the beginning of 2001 and 2000.

NET REALIZED INVESTMENT LOSSES totaled $10.6 million in 2001 and $1.5 million in 2000 and include impairment writedowns of $11.1 in 2001 and $1.2 million in 2000. Thus, net realized gains from sales and redemptions of investments totaled $0.5 million in 2001 compared to net losses of $0.3 million in 2000.

The Company sold or redeemed invested assets, principally bonds and notes, aggregating $81.9 million in 2001, and $85.5 million in 2000. Sales of investments result from the active management of the Company's investment portfolio, including assets received as part of the acquisition by the Company on July 1, 1999 of the New York individual life and individual and group annuity business of MBL Life Assuarance Corporation ("the Acquisition"). 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, on an annualized basis, 0.14% and 0.06% of average invested assets in 2001 and 2000, 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 include $11.1 million and $1.2 million of provisions applied to bonds in 2001 and 2000, respectively. On an annualized basis, impairment writedowns represent 2.97% and 0.27% of average invested assets in 2001 and 2000, respectively. For the twenty quarters ended March 31, 2001, impairment writedowns as an annualized percentage of average invested assets have ranged up to 3.99% and have averaged 0.25%. Such writedowns are made when the Company has determined that the applicable assets have suffered other than temporary declines in the net realizable value. 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 $2.1 million in 2001 and $2.2 million in 2000. On an annualized basis, variable annuity fees represent 1.5% of average variable annuity assets in both periods presented. Variable annuity assets averaged $546.7 million and $574.0 million during 2001 and 2000, respectively. Variable annuity premiums, which exclude premiums allocated to the fixed accounts of variable annuity products, totaled $5.5 million and $9.9 million in 2001 and 2000, respectively. On an annualized basis, these amounts represent 4% and 7% 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 "Decline in Average Invested Assets") are not classified in variable annuity premiums. 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 $20.0 million and $17.0 million in 2001 and 2000, respectively. Variable Annuity Product Sales primarily reflect sales of the Company's flagship variable annuity line, Polaris. Polaris is a multimanager variable annuity that offers investors a choice of 31 variable funds and a number of guaranteed fixed-rate funds. Variable Annuity Product Sales have increased in 2001, principally as a result of 4 new funds offered by Polaris in December 2000, promotional rates during 2001, and enhanced relationships with New York based investment firms.

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

UNIVERSAL LIFE INSURANCE FEES amounted to $1.0 million and $0.5 million in 2001 and 2000, respectively. Universal life insurance fees consist of mortality charges, up-front fees earned on premiums received and administrative fees net of excess mortality expense on these contracts. The Company does not actively market universal life insurance contracts. Such fees annualized represent 1.7% and 0.7% of average reserves for universal life insurance contracts in the respective periods. Universal life insurance fees have increased in 2001, principally as a result of better than normal mortality experience in the quarter, which cannot necessarily be expected to continue in future quarters.

SURRENDER CHARGES on fixed and variable annuity contracts and universal life contracts totaled $0.7 million in 2001 and $0.8 million in 2000. Surrender charges generally are assessed on withdrawels at declining rates during the first seven years of a contract. Withdrawal payments, which exclude claims and periodic annuity benefits, totaled $70.6 million in 2001, compared with $93.2 million in 2000. Annualized, these payments when expressed as a percentage of average fixed and variable annuity and universal life reserves represent 14.8% and 16.4% for 2001 and 2000, respectively. Withdrawals include variable annuity payments from the separate accounts totaling $8.7 million (6.4% of average variable annuity reserves) in 2001 and $8.2 million (5.8% of average variable annuity reserves) in 2000.

GENERAL AND ADMINISTRATIVE EXPENSES totaled $0.8 million in 2001 and $1.0 million in 2000. 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 $4.2 million in 2001, compared with $4.8 million in 2000. The decrease in amortization is related to the impact of net realized capital losses.

ANNUAL COMMISSIONS totaled $0.2 million in both 2001 and 2000. Annual commissions represent renewal commissions paid quarterly in arrears to maintain the persistency of certain of the Company's variable annuity contracts. Substantially all of the Company's currently available variable annuity products allow for an annual commission payment option in return for a lower immediate commission. The Company estimates that approximately 75% of the average balances of its variable annuity products is currently subject to such annual commissions. Based on current sales, this percentage is expected to increase in future periods.

INCOME TAX BENEFIT totaled $0.7 million in 2001 and income tax expense totaled $2.9 million in 2000, representing effective tax rates of 43% and 39%, respectively.

FINANCIAL CONDITION AND LIQUIDITY

SHAREHOLDER'S EQUITY increased to $195.1 million at March 31, 2001 from $187.6 million at December 31, 2000, due principally to $8.5 million decrease in accumulated other comprehensive loss offset by the $1.0 million of net loss recorded in 2001.

INVESTED ASSETS at March 31, 2001 totaled $1.48 billion, compared with $1.49 billion at December 31, 2000. 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, notes and redeemable preferred stocks (the "Bond Portfolio") is available to be sold in response to changes in market interest rates, changes in relative value of asset sectors and individual securities, changes in prepayment risk, changes in the credit quality outlook for certain securities, the Company's need for liquidity and other similar factors.

THE BOND PORTFOLIO, which constituted 84% of the Company's total investment portfolio at March 31, 2001, had an amortized cost that was $3.6 million greater than its aggregate fair value at March 31, 2001 and $31.9 million greater than its aggregate fair value at December 31, 2000. The decrease in net unrealized losses on the Bond Portfolio during 2001 principally reflects the decline in prevailing interest rates and the corresponding effect on the fair value of the Bond Portfolio at March 31, 2001.

At March 31, 2001 the Bond Portfolio included $1.2 billion of bonds rated by Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"), Fitch ("Fitch") or the Securities Valuation Office of the National Association of Insurance Commissioners ("NAIC"), and $2.0 million of bonds rated by the Company pursuant to statutory ratings guidelines established by the NAIC. At March 31, 2001, approximately $1.16 billion of the Bond Portfolio was investment grade, including $557.7 million of U.S. government/agency securities and mortgage-backed securities ("MBSs").

At March 31, 2001, the Bond Portfolio included $86.7 million of bonds that were not investment grade. These non-investment-grade bonds accounted for approximately 4.1% of the Company's total assets and approximately 5.8% of its invested assets.

Non-investment-grade securities generally provide higher yields and involve greater risks than investment-grade securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment-grade issuers. In addition, the trading market for these securities is usually more limited than for investment-grade securities. The Company had no material issuer concentrations of non-investment-grade securities at March 31, 2001.

The table on the following page summarizes the Company's rated bonds by rating classification as of March 31, 2001.

RATED BONDS BY RATING CLASSIFICATION (Dollars in thousands)
Issues Rated by S&P/Moody's/Fitch			Issues not rated by S&P/Moody's Fitch, by NAIC Category			Total

S&P category (1)	Amortized cost	Estimated fair value	NAIC category (2)	Amortized cost	Estimated fair value	Amortized cost	Estimated fair value	Percent of invested assets

AAA+ to A-
(A11 to A3)
[AAA to A-
{AAA to A-}	$ 935,281	$ 947,174	1	$ 24,314	$ 24,457	$ 959,595	$ 971,630	65.45	%

BBB+ to BBB-
(Baa1 to Baa3)
[BBB+ to BBB-]
{BBB+ to BBB-}	163,909	163,978	2	20,045	20,249	183,954	184,227	12.41	%

BB+ to BB-
(Ba1 to Ba3)
[BB+ to BB-]
{BB+ to BB-}	13,682	11,811	3	1,926	1,735	15,608	13,546	0.91	%

B+ to B-
(B1 to B3)
[B+ to B-]
{B+ to B-}	72,996	61,824	4	1,996	2,000	74,992	63,824	4.30	%

CCC+ to C
(Caa to C)
[CCC]
{CCC+ to C-}	11,029	8,725	5	---	---	11,029	8,725	0.59	%

CI to D
[DD]
{D}	399	220	6	452	417	851	637	0.04	%

TOTAL RATED ISSUES	$1,197,296	$1,193,732		$ 48,733	$ 48,858	$1,246,029	$1,242,589

Footnotes appear on the following 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. Issues are categorized based on the highest of the S&P, Moody's 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/Fitch rating groups listed above, with categories 1 and 2 considered investment grade. The NAIC categories include $2.0 million of assets that were rated by the Company pursuant to applicable NAIC rating guidelines.

Senior secured loans ("Secured Loans") are included in the Bond Portfolio and aggregated $62.1 million at March 31, 2001. Secured Loans are senior to subordinated debt and equity and are secured by assets of the issuer. At March 31, 2001, Secured Loans consisted of $19.4 million of publicly traded securities and $42.7 million of privately traded securities. These Secured Loans are composed of loans to borrowers spanning 8 industries, with 23% of these assets concentrated in utilities, 9% concentrated in technology, 8% concentrated in telecommunications and 8% concentrated in energy. No other industry concentration constituted more than 7% 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, Fitch, the NAIC or by the Company, pursuant to comparable statutory ratings guidelines established by the NAIC.

MORTGAGE LOANS aggregated $165.1 million at March 31, 2001 and consisted of 111 commercial first mortgage loans with an average loan balance of approximately $1.5 million, collateralized by properties located in 32 states. Approximately 29% of this portfolio was office, 28% was retail, 17% was industrial, 14% was multifamily residential and 12% was other types. At March 31, 2001, approximately 28% of this portfolio was secured by properties located in California, approximately 13% by properties located in Michigan, approximately 9% by properties located in New York and no more than 5% of this portfolio was secured by properties located in any other single state. At March 31, 2001, one mortgage loan had an outstanding balance of $10.0 million or more, which represented approximately 6% of this portfolio. At March 31, 2001, approximately 30% of the mortgage loan portfolio consisted of loans with balloon payments due before April 1, 2004. During 2001 and 2000, 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 March 31, 2001, approximately 50% of the mortgage loans were seasoned loans underwritten to the Company's standards and purchased at or near par from other financial institutions. Such loans generally have higher average interest rates than loans that could be originated today. The balance of the mortgage loan portfolio has been originated by the Company under strict underwriting standards. Commercial mortgage loans on properties such as offices, hotels and shopping centers generally represent a higher level of risk than do mortgage loans secured by multifamily residences. This greater risk is due to several factors, including the larger size of such loans and the more immediate effects of general economic conditions on these commercial property types. However, due to the seasoned nature of the Company's mortgage loan portfolio and its strict underwriting standards, the Company believes that it has prudently managed the risk attributable to its mortgage loan portfolio while maintaining attractive yields.

POLICY LOANS totaled $39.4 million at March 31, 2001 compared to $39.9 million at December 31, 2000 and are primarily loans taken against universal life policies which were acquired in the Acquisition.

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, default rates, and general economic conditions. Its portfolio strategy is constructed with a view to achieve adequate risk-adjusted returns consistent with its investment objectives of effective asset-liability matching, liquidity and safety. The Company's fixed-rate products incorporate surrender charges or other restrictions in order to encourage persistency. Approximately 73% of the Company's fixed annuity and universal life reserves had surrender penalties or other restrictions at March 31, 2001.

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, notes and redeemable preferred stocks; mortgage loans; and policy loans. At March 31, 2001, these assets had an aggregate fair value of $1.49 billion with a duration of 3.7. The Company's fixed-rate liabilities are its fixed annuity and universal life insurance contracts. At March 31, 2001, these liabilities had an aggregate fair value (determined by discounting future contractual cash flows by related market rates of interest) of $1.33 billion with a duration of 2.4. The Company's potential exposure due to a relative 10% increase in prevailing interest rates from their March 31, 2001 levels is a loss of approximately $10.1 million, representing an increase in the fair value of its fixed-rate liabilities that is not offset by an increase in the fair value of its fixed-rate assets. 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 and universal life 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 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 these 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 $5.6 million of bonds at March 31, 2001, and constituted 0.37% of total invested assets. At December 31, 2000, defaulted investments totaled $7.2 million and constituted less than 0.5% 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 March 31, 2001, approximately $832.8 million of the Bond Portfolio had an aggregate unrealized gain of $22.1 million, while approximately $409.8 million of the Company's Bond Portfolio had an aggregate unrealized loss of $25.7 million. In addition, the Company's investment portfolio currently provides approximately $14.6 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 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.

REGULATION

The Company, in common with other insurers, is subject to regulation and supervision by the states and 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 a State 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 standards are intended to help identify inadequately capitalized companies 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 RBC Model Law provides for four incremental levels of regulatory attention for insurers whose surplus is below the calculated RBC target. These levels of attention range in severity from requiring the insurer to submit a plan for corrective action to actually placing the insurer under regulatory control. The statutory capital and surplus of the Company exceeded its RBC requirements by a considerable margin as of March 31, 2001.

In 1998, the NAIC adopted the codification of statutory accounting principles ("Codification") which replaced the NAIC's primary guidance on statutory accounting, effective January 1, 2001. Codification changes prescribed statutory accounting practices and will result in changes to the accounting practices that the Company uses to prepare its statutory basis financial statements. Codification has been adopted by all fifty states as the prescribed basis of accounting. New York, however, has made certain modifications (e.g., no deferred taxes will be recorded for companies domiciled in the State of New York). The adoption of Codification resulted in a decrease to the Company's statutory surplus of approximately $14.2 million.

Privacy provisions of the Gramm-Leach-Bliley Act are fully effective in 2001 and establish new consumer protections regarding the security, confidentiality, and uses of nonpublic personal information of individuals. The law also requires financial institutions to disclose their privacy policies to their customers. Additional privacy legislation pending in the United States Congress and several states is designed to provide further privacy protections to consumers of financial products and services.

These statutes and regulations may result in additional regulatory compliance costs, may limit the Company's ability to market its products, and may otherwise constrain the nature or scope of the Company's insurance and financial services operations.

The Gramm-Leach-Bliley Act also allows 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 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The quantitative and qualitative disclosures about market risk are contained in the Asset-Liability Matching section of Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 16 and 17 herein.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submissions of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

Not applicable.

EXHIBITS

There were no exhibits filed during the three months ended March 31, 2001.

REPORTS ON FORM 8-K

No Current Reports on Form 8-K were filed by the Company during the three months ended March 31, 2001.

SIGNATURES

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


		First SunAmerica Life Insurance Company Registrant

Dated: May 14, 2001		/s/ N. Scott Gillis N. Scott Gillis Senior Vice President (Principal Financial Officer)

Dated: May 14, 2001		/s/ Maurice S. Hebert Maurice S. Hebert Vice President and Controller (Principal Accounting Officer)

FIRST SUNAMERICA LIFE INSURANCE CO 10-Q