<PAGE> 1
File Nos.33-39888
811-6313
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 10 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]
Amendment No. 11
(Check appropriate box or boxes)
VARIABLE ANNUITY ACCOUNT ONE
(Exact Name of Registrant)
First SunAmerica Life Insurance Company
(Name of Depositor)
733 Third Avenue, 4th Floor
New York, New York 10017
(Address of Depositor's Principal Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (310) 772-6000
Susan L. Harris, Esq.
First SunAmerica Life Insurance Company
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
(Name and Address of Agent for Service)
<TABLE>
<CAPTION>
Title and Amount
of Securities Amount of
Being Registered Registration Fee
- ---------------- ----------------
<S> <C> <C>
Flexible Payment Pursuant to Rule 24f-2, the $
Deferred Annuity Registrant has filed an election
Contracts to register an indefinite
number of securities under the
Securities Act of 1933
</TABLE>
It is proposed that this filing will become effective:
-- immediately upon filing pursuant to paragraph (b) of Rule 485
X on January 31, 1996 pursuant to paragraph (b) of Rule 485
-- 60 days after filing pursuant to paragraph (a) of Rule 485
-- on [date] pursuant to paragraph (a) of Rule 485
The registrant has elected pursuant to Rule 24f-2 under the Investment Company
Act of 1940 to register an indefinite amount of securities. The Registrant
intends to file its Rule 24f-2 Notice for the fiscal year ended December 31,
1995 on or about February 28, 1996.
<PAGE> 2
VARIABLE ANNUITY ACCOUNT ONE
Cross Reference Sheet
PART A - PROSPECTUS
<TABLE>
<CAPTION>
Item Number in Form N-4 Caption
- ----------------------- -------
<S> <C> <C>
1. Cover Page............................. Cover Page
2. Definitions............................ Definitions
3. Synopsis............................... Summary
4. Condensed Financial Information........ Condensed Financial
Information-Accumulation
Unit Values
5. General Description of Registrant,
Depositor and Portfolio Companies...... Description of the
Company and the
Separate Account; Anchor
Series Trust
6. Deductions............................. Contract Charges
7. General Description of
Variable Annuity Contracts............. Description of the
Contracts
8. Annuity Period......................... Annuity Period
9. Death Benefit.......................... Description of the
Contracts; Annuity Period
10. Purchases and Contract Value........... Purchases and Contract
Value
11. Redemptions............................ Purchases and Contract
Value
12. Taxes.................................. Taxes
13. Legal Proceedings...................... Legal Proceedings
14. Table of Contents of Statement
of Additional Information.............. Table of Contents of the
Statement of Additional
Information
</TABLE>
<PAGE> 3
PART B - STATEMENT OF ADDITIONAL INFORMATION
Certain information required in part B of the Registration Statement
has been included within the prospectus forming part of this Registration
Statement; the following cross-references suffixed with a "P" are made by
reference to the captions in the prospectus.
<TABLE>
<CAPTION>
Item Number in Form N-4 Caption
- ----------------------- -------
<S> <C> <C>
15. Cover Page............................. Cover Page
16. Table of Contents...................... Table of Contents
17. General Information and History........ Company
18. Services............................... Not Applicable
19. Purchase of Securities Being Offered... Purchases and Contract Value(P)
20. Underwriters........................... Distributor
21. Calculation of Performance Data........ Performance Data
22. Annuity Payments....................... Annuity Payments
23. Financial Statements................... Financial Statements
</TABLE>
<PAGE> 4
- --------------------------------------------------------------------------------
FLEXIBLE PAYMENT VARIABLE ANNUITY
CONTRACTS
- --------------------------------------------------------------------------------
ISSUED BY
FIRST SUNAMERICA LIFE INSURANCE COMPANY
IN CONNECTION WITH
VARIABLE ANNUITY ACCOUNT ONE
CORPORATE OFFICE:
733 THIRD AVENUE, 4TH FLOOR
NEW YORK, NEW YORK 10017
<TABLE>
<S> <C>
CORRESPONDENCE ACCOMPANIED ALL OTHER CORRESPONDENCE,
BY PAYMENTS: ADMINISTRATIVE SERVICE CENTER:
P.O. BOX 100357 P.O. BOX 54299
PASADENA, CALIFORNIA 91189-0357 LOS ANGELES, CA 90054-0299
TELEPHONE NUMBER: (800) 99-NYSUN
</TABLE>
The Contracts offered by this Prospectus provide for accumulation of
Contract Values and payment of annuity benefits on a variable basis. The
Contracts are available for both Qualified and Nonqualified Plans. (See
"Taxes").
Purchase Payments under the Contracts may be allocated among the Divisions
of the Separate Account, and/or to the Fixed Account option funded through the
Company's General Account. Each of the twelve Divisions of the Separate Account
described in this Prospectus are invested solely in the shares of one of the
following currently available portfolios of Anchor Series Trust:
<TABLE>
<S> <C>
- Foreign Securities Portfolio - Multi-Asset Portfolio
- Capital Appreciation Portfolio - High Yield Portfolio
- Growth Portfolio - Target '98 Portfolio
- Natural Resources Portfolio - Fixed Income Portfolio
- Convertible Securities Portfolio - Government and Quality Bond Portfolio
- Strategic Multi-Asset Portfolio - Money Market Portfolio
</TABLE>
Additional Portfolios may be made available in the future.
The Fixed Account option pays a fixed rate of interest declared by the
Company for one year from the date amounts are allocated to it.
This Prospectus concisely sets forth the information a prospective investor
ought to know before investing. PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN
IT FOR YOUR FUTURE REFERENCE. Owners bear the complete investment risk for all
Purchase Payments allocated to the Separate Account.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE CONTRACTS OFFERED BY THIS PROSPECTUS INVOLVE RISK, INCLUDING LOSS OF
PRINCIPAL, AND ARE NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE CONTRACTS OFFERED BY THIS PROSPECTUS ARE NOT AVAILABLE IN ALL STATES.
A Statement of Additional Information about the variable portion of the
Contracts has been filed with the Commission, as part of the Registration
Statement, and is available without charge upon written or oral request to the
Company at its Administrative Service Center at the address and telephone number
set forth above. The Table of Contents of the Statement of Additional
Information, dated January 31, 1996, appears on page 30 of this Prospectus.
This Prospectus is dated January 31, 1996.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
- ---- ----
<S> <C>
DEFINITIONS.................................................................................... 2
SUMMARY........................................................................................ 4
FEE TABLES..................................................................................... 6
EXAMPLES....................................................................................... 7
EXPLANATION OF FEE TABLES AND EXAMPLES......................................................... 7
CONDENSED FINANCIAL INFORMATION -- ACCUMULATION UNIT VALUES.................................... 8
PERFORMANCE DATA............................................................................... 9
DESCRIPTION OF THE COMPANY AND THE SEPARATE ACCOUNT............................................ 9
Company.................................................................................... 9
Separate Account........................................................................... 10
FINANCIAL STATEMENTS........................................................................... 10
ANCHOR SERIES TRUST............................................................................ 11
Equity Portfolios.......................................................................... 11
Managed Portfolios......................................................................... 11
Fixed Income Portfolios.................................................................... 12
Voting Rights.............................................................................. 13
Substitution of Securities................................................................. 13
CONTRACT CHARGES............................................................................... 13
Mortality and Expense Risk Charge.......................................................... 13
Administrative Charges..................................................................... 14
Administrative Expense Charge............................................................ 14
Records Maintenance Charge............................................................... 14
Sales Charges.............................................................................. 14
Withdrawal Charge........................................................................ 14
Annuity Charge........................................................................... 15
Deduction for Separate Account Income Taxes................................................ 15
Other Expenses............................................................................. 15
Reduction of Charges for Sales to Certain Groups........................................... 15
DESCRIPTION OF THE CONTRACTS................................................................... 16
Transfer During Accumulation Period........................................................ 16
Automatic Dollar Cost Averaging Program.................................................... 17
Modification of the Contract............................................................... 17
Assignment................................................................................. 17
Death of Owner of Non-Qualified Contract................................................... 18
Death Benefit.............................................................................. 18
Beneficiary................................................................................ 19
ANNUITY PERIOD................................................................................. 19
Annuity Date............................................................................... 19
Allocation of Annuity Payments............................................................. 19
Annuity Options............................................................................ 20
Other Options.............................................................................. 21
Transfer During Annuity Period............................................................. 21
Death Benefit During Annuity Period........................................................ 22
PURCHASES AND CONTRACT VALUE................................................................... 22
Minimum Purchase Payment................................................................... 22
Maximum Purchase Payment................................................................... 22
Allocation of Purchase Payments............................................................ 22
Accumulation Unit Value.................................................................... 23
Distribution of Contracts.................................................................. 23
Withdrawals (Redemptions).................................................................. 23
Systematic Withdrawal Program.............................................................. 24
ERISA Plans................................................................................ 24
Minimum Contract Value..................................................................... 24
ADMINISTRATION................................................................................. 25
TAXES.......................................................................................... 25
General.................................................................................... 25
Withholding Tax on Distributions........................................................... 26
Diversification............................................................................ 26
Multiple Contracts......................................................................... 27
Tax Treatment of Assignments............................................................... 27
Tax Treatment of Withdrawals -- Non-Qualified Contracts.................................... 27
Qualified Plans............................................................................ 27
Tax Treatment of Withdrawals -- Qualified Contracts........................................ 29
Tax Sheltered Annuities -- Withdrawal Limitations.......................................... 29
Deferred Compensation Plans -- Section 457................................................. 29
LEGAL PROCEEDINGS.............................................................................. 30
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION................................... 30
</TABLE>
(i)
<PAGE> 6
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------
The following terms, as used in this Prospectus, have the indicated
meanings:
ACCUMULATION PERIOD -- The period between the Issue Date of the Contract and the
Annuity Date, the build-up phase of the Contract.
ACCUMULATION UNIT -- A unit of measurement which the Company uses to calculate
Contract Value during the Accumulation Period.
ADMINISTRATIVE SERVICE CENTER -- Its current address and phone number are: P.O.
Box 54299, Los Angeles, California 90054-0299, (800) 99-NYSUN. Correspondence
accompanying a payment should be directed to P.O. Box 100357, Pasadena,
California 91189-0357. The Company will notify Contract Owners of any change in
address or telephone number.
ANNUITANT(S) -- The person(s) designated on the application to receive or who
actually receive(s) annuity payments. Annuity payments involving life
contingencies depend on the continuation of an Annuitant's life.
ANNUITIZATION -- The process by which an Owner converts from the Accumulation
Period to the Annuity Period. Upon Annuitization, the Contract is converted from
the build-up phase to the phase during which the Annuitant(s) receive(s)
periodic annuity payments.
ANNUITY DATE -- The date on which annuity payments are to begin.
ANNUITY PERIOD -- The period starting on the Annuity Date.
ANNUITY UNIT -- A unit of measurement which the Company uses to calculate the
amount of Variable Annuity payments.
BENEFICIARY(IES) -- The person designated to receive any benefits under a
Contract upon the death of the Annuitant or the Owner. If the Owner dies during
the Accumulation Period, the Beneficiary will, unless the Owner has elected
otherwise, become the Owner of the Contract.
CODE -- The Internal Revenue Code of 1986, as amended.
COMPANY -- First SunAmerica Life Insurance Company, a New York corporation.
CONTRACT(S) -- The flexible payment variable annuity contracts offered by this
Prospectus.
CONTRACT OWNER(S) OR OWNER(S) -- The person(s) having the privileges of
ownership defined in the Contract. If an Owner dies during the Accumulation
Period, the Beneficiary will, unless the Owner has elected otherwise, become the
Owner of the Contract. Joint Owners have equal ownership interests in the
Contract unless the Company is advised otherwise in writing. Only spouses may be
Joint Owners.
CONTRACT VALUE -- The sum of the values of the Owner's interest in the General
Account and the Separate Account Divisions.
CONTRACT YEAR -- A year starting from the Issue Date in one calendar year and
ending on the Issue Date in the succeeding calendar year.
CONTRIBUTION YEAR -- With respect to a given Purchase Payment, a year starting
from the date of the Purchase Payment in one calendar year and ending on the day
before the anniversary of such date in the succeeding calendar years. The
Contribution Year in which a Purchase Payment is made is "Contribution Year 0";
subsequent Contribution Years are successively numbered beginning with
Contribution Year 1.
DIVISION OR SEPARATE ACCOUNT DIVISION -- A Division of the Separate Account
invested wholly in shares of one of the Portfolios of the Trust.
DUE PROOF OF DEATH -- (1) A certified copy of a death certificate; or (2) a
certified copy of a decree of a court of competent jurisdiction as to the
finding of death; or (3) a written statement by a medical doctor who attended
the deceased at time of death; or (4) any other proof satisfactory to the
Company.
2
<PAGE> 7
FIXED ANNUITY -- A series of payments that are fixed in amount and made during
the Annuity Period to a payee under a Contract.
GENERAL ACCOUNT -- The Company's general investment account which contains all
the assets of the Company, with the exception of the Separate Account and other
segregated asset accounts.
ISSUE DATE -- The date a Contract is issued.
NON-QUALIFIED PLAN -- A retirement plan which does not receive favorable tax
treatment under Sections 401, 403(b), 408 or 457 of the Code.
PORTFOLIO -- One of the investment options available under the Contract in the
Trust.
PURCHASE PAYMENTS -- Amounts paid to the Company by a Contract Owner.
QUALIFIED PLAN -- A retirement plan which receives favorable tax treatment under
Sections 401, 403(b), 408 or 457 of the Code.
SEPARATE ACCOUNT OR ACCOUNT -- A segregated investment account of the Company
entitled "Variable Annuity Account One" established by the Company.
TRUST -- Anchor Series Trust.
VALUATION DATE -- Monday through Friday except for New Year's Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas Day.
VALUATION PERIOD -- The period commencing at 4:00 p.m. New York time on each
Valuation Date and ending at 4:00 p.m. New York time on the next succeeding
Valuation Date.
VARIABLE ANNUITY -- A series of payments made during the Annuity Period which
varies in amount in accordance with the investment experience of the Separate
Account Division(s).
WITHDRAWAL CHARGE -- The contingent deferred sales charge assessed against
certain withdrawals or annuitizations.
WITHDRAWAL VALUE -- Contract Value, less any premium tax payable if the Contract
is being annuitized, minus any applicable Withdrawal Charge.
3
<PAGE> 8
- --------------------------------------------------------------------------------
SUMMARY
- --------------------------------------------------------------------------------
This Prospectus describes the uses and objectives of the Contracts, their
costs, and the rights and privileges of the Owner. It also contains information
about the Company, the Separate Account and its Divisions, and the Portfolios in
which the Divisions invest. We urge you to read it carefully and retain it and
the Prospectus for the Trust for future reference. (The Prospectus for the Trust
is attached to and follows this Prospectus).
WHAT IS THE CONTRACT?
The Contract offered is a tax deferred annuity which provides fixed
benefits, variable benefits or a combination of both. Individuals wishing to
purchase a Contract must complete an application and provide an initial Purchase
Payment which will be sent to the Company at its Administrative Service Center
or in such other manner as deemed acceptable to the Company. The minimum and
maximum of Purchase Payments vary depending upon the type of Contract purchased.
(See "Minimum Purchase Payment").
WHAT IS THE DIFFERENCE BETWEEN A VARIABLE ANNUITY AND A FIXED ANNUITY?
The Contract has appropriate provisions relating to variable and fixed
accumulation values and variable and fixed annuity payments. A Variable Annuity
and a Fixed Annuity have certain similarities. Both provide that Purchase
Payments, less certain deductions, will be accumulated prior to the Annuity
Date. After the Annuity Date, annuity payments will be made to a designated
payee for the life of the Annuitant or a period certain or a combination
thereof. The Company assumes mortality and expense risks under the Contracts,
for which it receives certain compensation.
The most significant difference between a Variable Annuity and a Fixed
Annuity is that under a Variable Annuity, all investment risk before and after
the Annuity Date is assumed by the Owner or other payee; the amounts of the
annuity payments vary with the investment performance of the Divisions of the
Separate Account selected by the Owner. Under a Fixed Annuity, in contrast, the
investment risk after the Annuity Date is assumed by the Company and the amounts
of the annuity payments do not vary.
HOW MAY PURCHASE PAYMENTS BE ALLOCATED?
Purchase Payments for the Contracts may be allocated pursuant to
instructions in the application to one or more Divisions of the Separate
Account, and/or to the Company's General Account. The Separate Account invests
in shares of the following Portfolios (see "Anchor Series Trust"):
* FOREIGN SECURITIES * MULTI-ASSET
* CAPITAL APPRECIATION * HIGH-YIELD
* GROWTH * TARGET '98
* NATURAL RESOURCES * FIXED INCOME
* CONVERTIBLE SECURITIES * GOVERNMENT AND QUALITY BOND
* STRATEGIC MULTI-ASSET * MONEY MARKET
Purchase Payments allocated to the General Account will earn interest at the
current rate then being offered by the Company for a one year period beginning
on the date amounts are allocated to it.
Prior to the Annuity Date, transfers may be made among the Divisions and/or
the General Account. Fifteen transfers are permitted before a transfer fee will
be assessed. (See "Description of the Contracts -- Transfer During Accumulation
Period").
MAY WITHDRAWALS BE MADE BEFORE ANNUITIZATION?
Except as explained below, Contract Value may be withdrawn at any time
during the Accumulation Period. In addition to potential losses due to
investment risks, withdrawals may be reduced by a Withdrawal Charge, and a
penalty tax and income tax may apply. Contracts in connection with
4
<PAGE> 9
Qualified Plans may be subject to additional withdrawal restrictions imposed by
the plan. Earnings under a Contract may be withdrawn at any time during such
period free of a Withdrawal Charge. Alternatively, there is a free withdrawal
amount which applies to the first withdrawal during a Contract Year after the
first Contract Year. (See "Contract Charges -- Sales Charges -- Withdrawal
Charge"). Certain Owners of Nonqualified Plan Contracts and Contracts issued in
connection with Individual Retirement Annuities ("IRAs") may choose to withdraw
amounts which in the aggregate add up to 10% of their Purchase Payments annually
pursuant to a systematic withdrawal program without charge. (See "Purchases and
Contract Value -- Systematic Withdrawal Program"). Withdrawals are taxable and a
10% federal tax penalty may apply to withdrawals before age 59 1/2.
Owners should consult their own tax counsel or other tax adviser regarding
any withdrawals or distributions.
CAN I EXAMINE THE CONTRACT?
The Contract Owner may return the Contract to the Company within 10 days
after it is received by delivering or mailing it to the Company's Administrative
Service Center. If the Contract is returned to the Company, it will be
terminated and the Company will pay the Owner an amount equal to the Contract
Value represented by the Contract on the date it is received by the Company.
WHAT ARE THE CHARGES AND DEDUCTIONS UNDER A CONTRACT?
A mortality and expense risk charge is assessed daily against the assets of
each Division at an annual rate of 1.25%. An administrative expense charge is
assessed daily against the assets of each Division at an annual rate of 0.15%.
The Contracts also provide for certain deductions and charges, including a
Records Maintenance Charge of $30 annually, which is guaranteed not to increase.
The Contract permits up to 15 free transfers each Contract Year, after which
point a $25 transfer fee is applicable to each subsequent transfer.
Additionally, a Withdrawal Charge may be assessed against the Contract Value
during the first five Contribution Years (5%-4%-3%-2%-1%) when a withdrawal is
made. (See "Contract Charges").
DOES THE CONTRACT PAY ANY DEATH BENEFITS?
A Death Benefit is provided in the event of the death of the Owner during
the Accumulation Period. The Death Benefit is equal to the greater of: (1) the
Contract Value upon receipt of Due Proof of Death; or (2) the total of Purchase
Payments made prior to the death of the Owner, minus any partial withdrawals
and/or partial annuitizations and contract charges; or (3) after the fifth
Contract Year, the Contract Value at the last anniversary of the Issue Date of
the Contract minus any partial withdrawals and/or partial annuitizations since
that anniversary. (See "Description of the Contracts -- Death Benefit").
WHAT ARE THE AVAILABLE ANNUITY OPTIONS UNDER THE CONTRACT?
There are three available annuity options under the Contract. They include
an annuity for life, a joint and survivor annuity, and monthly payments for a
specified number of years. If a Contract Owner does not elect otherwise, monthly
annuity payments generally will be made under the first option to provide a life
annuity with 120 monthly payments certain. (See "Annuity Period -- Annuity
Options").
DOES THE OWNER HAVE ANY VOTING RIGHTS UNDER THE CONTRACT?
Owners will have the right to vote on matters affecting the Portfolios to
the extent that proxies are solicited by the Trust. If the Owner does not vote,
the Company will vote such interests in the same proportion as it votes shares
for which it has received instructions. (See "Anchor Series Trust -- Voting
Rights").
5
<PAGE> 10
- --------------------------------------------------------------------------------
FEE TABLES
- --------------------------------------------------------------------------------
OWNER TRANSACTION EXPENSES
WITHDRAWAL CHARGE (AS A PERCENTAGE OF PURCHASE PAYMENTS):
<TABLE>
<CAPTION>
CONTRIBUTION YEAR
- -----------------
<S> <C>
One.................................................................................. 5%
Two.................................................................................. 4%
Three................................................................................ 3%
Four................................................................................. 2%
Five................................................................................. 1%
Six and later........................................................................ 0%
ANNUAL RECORDS MAINTENANCE CHARGE.......................................................... $30
TRANSFER FEE............................................................................... $25
(applies solely to transfers in excess of fifteen in a Contract Year)
</TABLE>
- ---------------
The Owner Transaction Expenses apply to the Contract Value allocated to the
General Account, as well as the Separate Account.
- --------------------------------------------------------------------------------
ANNUAL SEPARATE ACCOUNT EXPENSES
(AS A PERCENTAGE OF DAILY NET ASSET VALUE)
<TABLE>
<S> <C>
MORTALITY RISK CHARGE..................................................................... 0.90%
EXPENSE RISK CHARGE....................................................................... 0.35%
ADMINISTRATION EXPENSE CHARGE............................................................. 0.15%
------
TOTAL EXPENSE CHARGE................................................................ 1.40%
======
</TABLE>
- ---------------
ANNUAL TRUST EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS FOR THE FISCAL YEAR ENDED DECEMBER 31,
1994):
<TABLE>
<CAPTION>
TOTAL ANNUAL
MANAGEMENT FEE OTHER EXPENSES EXPENSES
-------------- -------------- ------------
<S> <C> <C> <C>
Foreign Securities..................................... .9% .3% 1.2%
Capital Appreciation................................... .7% .1% .8%
Growth................................................. .7% .1% .8%
Natural Resources...................................... .8% .2% 1.0%
Convertible Securities................................. .7% .2% .9%
Strategic Multi-Asset.................................. 1.0% .3% 1.3%
Multi-Asset............................................ 1.0% .1% 1.1%
High Yield............................................. .7% .2% .9%
Target '98............................................. .6% .2% .8%
Fixed Income........................................... .6% .2% .8%
Government & Quality Bond.............................. .6% .1% .7%
Money Market........................................... .5% .1% .6%
</TABLE>
6
<PAGE> 11
- --------------------------------------------------------------------------------
EXAMPLES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE CONDITIONS
ACCOUNT A Contract Owner would pay the following expenses on a TIME PERIODS
DIVISION $1,000 investment assuming 5% annual return on assets: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
FOREIGN (a) upon surrender at the end of the stated time period. (a) $77 $110 $151 $300
SECURITIES (b) if the Contract WAS NOT surrendered. (b) 27 83 142 300
- ---------------------------------------------------------------------------------------------------------------------------
CAPITAL SAME (a) 73 98 131 261
APPRECIATION (b) 23 71 122 261
- ---------------------------------------------------------------------------------------------------------------------------
GROWTH SAME (a) 73 98 131 261
(b) 23 71 122 261
- ---------------------------------------------------------------------------------------------------------------------------
NATURAL SAME (a) 75 104 141 281
RESOURCES (b) 25 77 132 281
- ---------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE SAME (a) 74 101 136 271
SECURITIES (b) 24 74 127 271
- ---------------------------------------------------------------------------------------------------------------------------
STRATEGIC SAME (a) 78 113 155 310
MULTI-ASSET (b) 28 86 146 310
- ---------------------------------------------------------------------------------------------------------------------------
MULTI-ASSET SAME (a) 76 107 146 291
(b) 26 80 137 291
- ---------------------------------------------------------------------------------------------------------------------------
HIGH YIELD SAME (a) 74 101 136 271
(b) 24 74 127 271
- ---------------------------------------------------------------------------------------------------------------------------
TARGET '98 SAME (a) 73 98 131 261
(b) 23 71 122 261
- ---------------------------------------------------------------------------------------------------------------------------
FIXED SAME (a) 73 98 131 261
INCOME (b) 23 71 122 261
- ---------------------------------------------------------------------------------------------------------------------------
GOV'T & SAME (a) 72 95 125 250
QUALITY BOND (b) 22 68 116 250
- ---------------------------------------------------------------------------------------------------------------------------
MONEY MARKET SAME (a) 71 92 120 240
(b) 21 65 111 240
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
EXPLANATION OF FEE TABLES
AND EXAMPLES
- --------------------------------------------------------------------------------
1. The purpose of the foregoing tables and examples is to assist the Contract
Owner in understanding the various costs and expenses that he or she will
bear directly or indirectly. The table reflects expenses of the Separate
Account as well as the Trust. For additional information see "Contract
Charges" of this Prospectus and "Management of the Trust" of the Prospectus
for the Trust. The examples do not illustrate the tax consequences of
surrendering a Contract.
2. The examples assume that there were no transactions which would result in
the imposition of the Transfer Fee. The Contracts are sold only in the State
of New York, which does not assess premium taxes. Accordingly, premium taxes
are not reflected.
3. For purposes of the amounts reported in the examples, the Records
Maintenance Charge is reflected by dividing the total amount of Records
Maintenance Charges anticipated to be collected during the year by the total
net assets of the Separate Account's Divisions and the related Fixed Account
Assets.
4. NEITHER THE FEE TABLES NOR THE EXAMPLES ARE REPRESENTATIONS OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
7
<PAGE> 12
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
9/03/91 FISCAL FISCAL FISCAL
(INCEPTION) YEAR YEAR YEAR
TO ENDED ENDED ENDED
SEPARATE ACCOUNT DIVISION 12/31/91 12/31/92 12/31/93 12/31/94
- --------------------------------------------- ----------- -------- -------- --------
<S> <C> <C> <C> <C>
Foreign Securities
Beginning AUV.............................. $11.66 $11.26 $ 9.64 $12.39
End AUV.................................... $11.26 $ 9.64 $12.39 $11.83
End # AU's................................. 6,197 32,027 110,045 165,468
Capital Appreciation
Beginning AUV.............................. $13.71 $15.36 $19.09 $22.79
End AUV.................................... $15.36 $19.09 $22.79 $21.62
End # AU's................................. 244 27,092 111,129 167,384
Growth
Beginning AUV.............................. $23.45 $23.36 $27.40 $29.12
End AUV.................................... $26.36 $27.40 $29.12 $27.36
End # AU's................................. 4,483 108,874 179,035 170,859
Natural Resources
Beginning AUV.............................. $11.51 $11.13 $11.25 $15.11
End AUV.................................... $11.13 $11.25 $15.11 $15.05
End # AU's................................. 451 8,283 20,215 43,075
Convertible Securities
Beginning AUV.............................. $12.66 $13.12 $15.55 $18.70
End AUV.................................... $13.12 $15.55 $18.70 $16.67
End # AU's................................. 1,911 19,305 58,427 69,818
Strategic Multi-Asset
Beginning AUV.............................. $12.65 $13.55 $13.88 $15.78
End AUV.................................... $13.55 $13.88 $15.78 $15.16
End # AU's................................. 545 11,556 32,409 77,616
Multi-Asset
Beginning AUV.............................. $13.78 $14.98 $15.97 $16.90
End AUV.................................... $14.98 $15.97 $16.90 $16.39
End # AU's................................. 8,409 141,059 310,679 287,625
High Yield
Beginning AUV.............................. $13.75 $14.44 $16.24 $19.07
End AUV.................................... $14.44 $16.24 $19.07 $17.96
End # AU's................................. 1,395 34,946 63,091 80,486
Target '98
Beginning AUV.............................. $13.80 $15.11 $15.97 $17.52
End AUV.................................... $15.11 $15.97 $17.52 $16.57
End # AU's................................. 4,195 23,426 51,836 61,733
Fixed Income
Beginning AUV.............................. $19.00 $20.31 $21.34 $22.71
End AUV.................................... $20.31 $21.34 $22.71 $21.67
End # AU's................................. 1,266 40,684 66,362 56,430
Government &
Quality Bond
Beginning AUV.............................. $19.61 $21.00 $22.13 $23.63
End AUV.................................... $21.00 $22.13 $23.63 $22.60
End # AU's................................. 3,572 177,925 217,255 176,490
Money Market
Beginning AUV.............................. $15.06 $15.23 $15.53 $15.72
End AUV.................................... $15.23 $15.53 $15.72 $16.10
End # AU's................................. 48 91,048 82,889 15,560
</TABLE>
AUV -- Accumulation Unit Value.
AU -- Accumulation Units.
8
<PAGE> 13
- --------------------------------------------------------------------------------
PERFORMANCE DATA
- --------------------------------------------------------------------------------
From time to time the Separate Account may advertise its Money Market
Division's "yield" and "effective yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Money Market Division refers to the net income generated for a
Contract funded by an investment in the Division over a seven-day period (which
period will be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated similarly but,
when annualized, the income earned by an investment in the Division is assumed
to be reinvested at the end of each seven-day period. The "effective yield" will
be slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment. Neither the yield nor the effective yield takes into
consideration the effect of any capital changes that might have occurred during
the seven-day period, nor do they reflect the impact of premium taxes or any
Annuity Charges or Withdrawal Charges. The impact of other, recurring charges on
both yield figures is, however, reflected in them to the same extent it would
affect the yield (or effective yield) for a Contract of average size.
In addition, the Separate Account may advertise "total return" data for its
other Divisions. Like the yield figures described above, total return figures
are based on historical data and are not intended to indicate future
performance. The "total return" is a computed rate of return that, when
compounded annually over a stated period of time and applied to a hypothetical
initial investment in a Division made at the beginning of the period, will
produce the same Contract Value at the end of the period that the hypothetical
investment would have produced over the same period (assuming a complete
redemption of the Contract at the end of the period). Recurring Contract charges
are reflected in the total return figures in the same manner as they are
reflected in the yield data for Contracts funded through the Money Market
Division. The effect of applicable Withdrawal Charges due to the assumed
redemption will be reflected in the return figures, but may be omitted in
additional return figures given for comparison.
For periods starting prior to September 3, 1991, the date the Contracts
were first offered the public, the total return data will be derived from the
performance of the corresponding Portfolios of the Trust, modified to reflect
the same charges and expenses as if the Division had been in existence since the
inception date of each respective Portfolio. Thus, such performance figures
should not be construed to be actual historic performance of the Division.
Rather, they are intended to indicate the historic performance of the Trust,
adjusted to provide direct comparability to the performance of the Division
after September 3, 1991. The Trust has served since its inception as an
underlying investment medium for separate accounts of other insurance companies
having the same fee and charge schedules as those of the Separate Account.
For a more complete description of Contract charges, see "Contract
Charges"; for a more detailed description of the performance data computations,
please refer to the Statement of Additional Information.
- --------------------------------------------------------------------------------
DESCRIPTION OF THE COMPANY AND THE SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
COMPANY
The Company is a stock life insurance company organized under the laws of
the state of New York on December 5, 1978. Its legal domicile is 733 Third
Avenue, New York, New York 10017. The Company is an indirect, wholly owned
subsidiary of SunAmerica Inc., a Maryland corporation.
9
<PAGE> 14
The Company and its affiliates, SunAmerica Life Insurance Company, Anchor
National Life Insurance Company, SunAmerica Asset Management Corp., Imperial
Premium Finance, Inc., Resources Trust Company and two broker-dealers, offer a
full line of financial services, including fixed and variable annuities, mutual
funds, premium finance and trust administration services. As of September 30,
1995, the Company had $163.2 million in assets while SunAmerica Inc., the
Company's ultimate parent, together with its subsidiaries, held $28.39 billion
of assets, consisting of $16.84 billion of assets owned, $2.13 billion of assets
managed in mutual funds and private accounts, and $9.42 billion under custody in
retirement trust accounts.
The Company may from time to time publish in advertisements, sales
literature and reports to Owners, the ratings and other information assigned to
it by A.M. Best Company ("A.M. Best"). A.M. Best's ratings reflect its current
opinion on the relative financial strength and operating performance of an
insurance company in comparison to the norms of the life/health insurance
industry. Its ratings do not apply to the Separate Account. However, the
contractual obligations under the Contracts are general corporate obligations of
the Company.
The Company is admitted to conduct life insurance and annuity business in
the state of New York. The Contracts offered by this Prospectus are issued by
the Company and will be funded in the Separate Account, as well as in the
Company's General Account.
SEPARATE ACCOUNT
The Separate Account was established pursuant to New York insurance law on
May 30, 1990. The Separate Account is registered with the Securities and
Exchange Commission as a unit investment trust under the Investment Company Act
of 1940. This registration does not involve supervision of the management of the
Separate Account or the Company by the Securities and Exchange Commission.
The assets of the Separate Account are the property of the Company.
However, the assets of the Separate Account, equal to the reserves and other
contract liabilities of the Separate Account, are not chargeable with
liabilities arising out of any other business the Company may conduct. The
Company's obligations arising under the Contracts are general corporate
obligations of the Company.
Income, gains and losses, whether or not realized, from assets allocated to
the Separate Account are credited to or charged against the Separate Account
without regard to other income, gains or losses of the Company.
The Separate Account is divided into Divisions, with the assets of each
Division invested in the shares of one of the twelve Portfolios of the Trust.
The Company does not guarantee the investment performance of the Separate
Account or its Divisions. Values allocated to the Separate Account and the
amount of variable annuity payments will vary with the value of shares of the
Portfolios and the Contract charges.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Financial statements of the Separate Account appear in the Statement of
Additional Information. Financial information regarding the General Account is
reported in the Company's financial statements. The Company's financial
statements are also included in the Statement of Additional Information. A copy
of the Statement of Additional Information may be obtained by contacting the
Company at its Administrative Service Center.
10
<PAGE> 15
- --------------------------------------------------------------------------------
ANCHOR SERIES TRUST
- --------------------------------------------------------------------------------
Each of the twelve Divisions of the Separate Account invests solely in the
shares of one of the twelve Portfolios of Anchor Series Trust. The Trust is an
open-end diversified management investment company registered under the
Investment Company Act of 1940. While a brief summary of the investment
objectives is set forth below, more comprehensive information, including a
discussion of potential risks, is found in the Prospectus for the Trust.
Additional copies of this Prospectus, the Trust's Prospectus and the Statement
of Additional Information can be obtained by calling the Administrative Service
Center number on the cover page of this Prospectus. Both prospectuses should be
read carefully before investing to understand all aspects of the Contract, the
Separate Account and the Portfolios. SunAmerica Asset Management Corp. ("SAAM"),
an affiliate of the Company, is the investment manager for the Trust. Wellington
Management Company ("WMC"), which is not affiliated with the Company, serves as
sub-adviser for the Trust. (See the Trust Prospectus for information concerning
the investment management fees.)
The twelve Portfolios and their investment objectives are:
EQUITY PORTFOLIOS
FOREIGN SECURITIES PORTFOLIO seeks long-term capital appreciation. This
Portfolio will invest primarily in a diversified group of equity securities
issued by foreign companies and primarily denominated in foreign currencies.
CAPITAL APPRECIATION PORTFOLIO seeks long-term capital appreciation. This
Portfolio will invest in a widely diversified group of growth equity securities,
debt securities and preferred stocks that are convertible into, or which carry
warrants to purchase, common stocks or other equity interests and in addition
may invest up to 25% of its total assets in foreign securities. This Portfolio
may also engage in transactions involving stock index futures and options
thereon as a hedge against changes in market conditions.
GROWTH PORTFOLIO seeks capital appreciation. This Portfolio will invest in
growth equity securities and may invest up to 25% of its total assets in foreign
securities. This Portfolio may also engage in transactions involving stock index
futures and options thereon as a hedge against changes in market conditions.
NATURAL RESOURCES PORTFOLIO seeks total return in excess of the U.S. rate
of inflation as represented by the Consumer Price Index. This Portfolio will
invest primarily in equity securities of companies which are expected to benefit
from rising inflation, because they own or control assets which appreciate in
inflationary periods, or because of increased activity during these periods of
inflation, and in debt obligations and fixed income securities which are
expected to provide favorable returns in periods of rising inflation. This
Portfolio will invest in domestic securities and foreign securities and may
engage in transactions including stock index futures contracts and options
thereon, and transactions involving the future delivery of fixed income
securities ("Financial Futures Contracts") and options thereon, as a hedge
against changes in market conditions.
CONVERTIBLE SECURITIES PORTFOLIO seeks high current income and long-term
capital appreciation. This Portfolio will invest primarily in a variety of
securities convertible into common stock which are issued by publicly held
corporations. The Portfolio may also engage in transactions involving Financial
Futures Contracts and options thereon as a hedge against changes in market
conditions.
MANAGED PORTFOLIOS
STRATEGIC MULTI-ASSET PORTFOLIO seeks high long-term total investment
return. This Portfolio will invest in a diversified group of securities of the
following types: growth equity and aggressive growth equity securities,
including the securities of smaller companies which may be newer and less
seasoned, investment grade and high-yield, high-risk bonds, international
securities and money market instruments. The Portfolio may also engage in
transactions involving stock index futures contracts and
11
<PAGE> 16
options thereon, and Financial Futures Contracts and options thereon as a hedge
against changes in market conditions.
MULTI-ASSET PORTFOLIO seeks long-term total investment return consistent
with moderate investment risk. This Portfolio will invest in a diversified group
of securities, including: growth equity securities, convertible securities,
investment grade fixed income securities and money market securities. The
Portfolio also may engage in transactions involving stock index futures
contracts and options thereon, and Financial Futures Contracts and options
thereon, as a hedge against changes in market conditions.
FIXED INCOME PORTFOLIOS
HIGH YIELD PORTFOLIO seeks high current income. A secondary investment
objective is capital appreciation. This Portfolio will seek its objectives by
investing, except for temporary defensive purposes, at least 65% of its assets
in high-yielding, high-risk, income-producing corporate bonds, which generally
carry ratings lower than those assigned to investment grade bonds by Moody's
Investor's Service, Inc. ("Moody's") or Standard & Poor's Corporation ("Standard
& Poor's"), or which are unrated. This Portfolio may also engage in transactions
involving Financial Futures Contracts and options thereon as a hedge against
changes in market conditions. High-yield, high-risk bonds typically are subject
to greater risks than are investments in lower-yielding, higher-rated bonds. See
the Trust's Prospectus for more information.
TARGET '98 PORTFOLIO seeks a predictable compounded investment return for a
specified time period, consistent with preservation of capital. This Portfolio
will invest primarily in zero coupon securities and current, interest-bearing,
investment grade debt obligations which are issued by the U.S. Government, its
agencies and instrumentalities, and both domestic and foreign corporations.
These investments will generally mature no later than November 15, 1998. Upon
maturity, the Portfolio will be converted to cash. The redemption proceeds will,
except as otherwise directed by the Contract Owner, be used to purchase shares
of the Money Market Portfolio.
In January 1998, the Company will notify all Contract Owners then having
Contract Value allocated to the Target '98 Division of the forthcoming maturity
and liquidation of the Target '98 Portfolio, and will request instructions as to
which other Division(s) each Contract Owner's interest in the Target '98
Division is to be reallocated upon such liquidation. Contract Values will be
automatically reallocated to the Money Market Division except to the extent that
instructions indicating a different reallocation are received by the Company on
or before November 15, 1998.
To facilitate an orderly liquidation, no transfers into the Target '98
Division will be permitted after January 1, 1998. Reallocations of Contract
Value from the Target '98 Division effected in connection with the liquidation
as described above will not be considered "transfers" for purposes of
determining any applicable transfer fees. Other transfers out of the Target '98
Division will not be permitted after October 15, 1998. Of course, none of the
foregoing constraints affect a Contract Owner's right to redeem his or her
Contract Value at any time. (See "Purchases and Contract Value -- Withdrawals
(Redemption)").
FIXED INCOME PORTFOLIO seeks high level of current income consistent with
preservation of capital. This Portfolio will invest primarily in investment
grade, fixed income securities and may engage in Financial Futures Contracts and
options thereon as a hedge against changes in market conditions.
GOVERNMENT AND QUALITY BOND PORTFOLIO seeks relatively high current income,
liquidity and security of principal. This Portfolio will invest in obligations
issued, guaranteed or insured by the U.S. Government, its agencies or
instrumentalities ("government securities") and in corporate debt securities
rated Aa or better by Moody's or AA or better by Standard & Poor's ("high
quality corporate bonds"). It is currently anticipated that the Portfolio will
have the majority of its assets invested in government securities since the
Trust is permitted to treat each U.S. agency or instrumentality as a separate
issuer for purposes of determining compliance with diversification standards
imposed by Section 817(h) of the Code. (See "Taxes -- Diversification").
12
<PAGE> 17
MONEY MARKET PORTFOLIO seeks current income consistent with stability of
principal through investment in a diversified portfolio of money market
instruments maturing in 397 days or less. The Portfolio will maintain a
dollar-weighted average portfolio maturity of not more than 90 days.
There is no assurance that the investment objective of any of the
Portfolios will be met. Contract Owners bear the complete investment risk for
Purchase Payments allocated to a Division. Contract Values will fluctuate in
accordance with the investment performance of the Division(s) to which Purchase
Payments are allocated, and in accordance with the imposition of the fees and
charges assessed under the Contracts.
Shares of the Trust are, and will be, issued and redeemed only in
connection with investments in and payments under variable contracts sold by the
Company and its affiliate, Anchor National Life Insurance Company as well as two
unaffiliated companies, Presidential Life Insurance Company and Phoenix Mutual
Life Insurance Company. No disadvantage to Contract Owners is seen to arise from
the fact that the Trust offers its shares in this fashion.
Additional Portfolios may be established by the Trust from time to time and
may be made available to Contract Owners. However, there is no assurance that
this will occur.
VOTING RIGHTS
In accordance with its view of present applicable law, the Company will
vote the shares of the Trust held in the Separate Account at special meetings of
the shareholders of the Trust in accordance with instructions received from
persons having the voting interest in the Separate Account. The Company will
vote shares for which it has not received instructions in the same proportion as
it votes shares for which it has received instructions. The Trust does not hold
regular meetings of shareholders.
The number of shares which a person has a right to vote will be determined
as of a date to be chosen by the Company not more than 60 days prior to the
meeting of the Trust's shareholders. Voting instructions will be solicited by
written communication at least 14 days prior to such meeting. The person having
such voting rights will be the Contract Owner before the Annuity Date or the
death of the Annuitant; thereafter the payee entitled to receive payments under
the Contract. Voting rights attributable to a Contract will generally decrease
as Contract Values decrease.
SUBSTITUTION OF SECURITIES
If the shares of any of the Portfolios should no longer be available for
investment by the Separate Account or if, in the judgment of the Company's Board
of Directors, further investment in the shares of a Portfolio is no longer
appropriate in view of the purpose of the Contract, the Company may substitute
shares of another open-end management investment company (or series thereof) for
Portfolio shares already purchased or to be purchased in the future by Purchase
Payments under the Contract. No substitution of securities may take place
without prior approval of the Securities and Exchange Commission and under such
requirements as it may impose.
- --------------------------------------------------------------------------------
CONTRACT CHARGES
- --------------------------------------------------------------------------------
MORTALITY AND EXPENSE RISK CHARGE
The Company deducts a risk charge from each Division of the Separate
Account during each Valuation Period. The risk charge is equal, on an annual
basis, to 1.25% of the daily net asset value of each Division (approximately
.90% is for mortality risks and approximately .35% is for expense risks). The
mortality risks assumed by the Company arise from its contractual obligations to
make annuity payments after the Annuity Date for the life of the Annuitant(s),
to waive the Withdrawal Charge in the event of the death of the Annuitant, and
to provide the death benefit prior to the Annuity Date. The expense risk assumed
by the Company is that the costs of administering the Contracts and the
13
<PAGE> 18
Separate Account will exceed the amount received from the Records Maintenance
Charge and the Administrative Expense Charge. (See "Administrative Charges").
This charge is guaranteed by the Company and cannot be increased.
ADMINISTRATIVE CHARGES
ADMINISTRATIVE EXPENSE CHARGE
The Company deducts an Administrative Expense Charge from each Division of
the Separate Account which is equal, on an annual basis, to .15% of the daily
net asset value of each Division. This charge is designed to cover those
administrative expenses which exceed the revenues from the Records Maintenance
Charge. The Company does not intend to profit from this charge. The Company
believes that the Administrative Expense Charge has been set at a level that
will recover no more than the actual costs associated with administering the
Contract. In the event that it exceeds the amount necessary to reimburse the
Company for its administrative expenses, the charge will be appropriately
reduced. In no event will this charge be increased. The Administrative Expense
Charge is assessed during both the Accumulation Period and the Annuity Period.
RECORDS MAINTENANCE CHARGE
An annual Records Maintenance Charge of $30 is charged against each
Contract. The amount of this charge is guaranteed and cannot be increased by the
Company. This charge reimburses the Company for expenses incurred in
establishing and maintaining records relating to a Contract. The Records
Maintenance Charge will be assessed each Contract Year on the anniversary of the
Issue Date of the Contract. In the event that a total surrender of Contract
Value is made, the Charge will be assessed as of the date of surrender without
proration.
SALES CHARGES
The Withdrawal Charge and the Annuity Charge are sales charges.
WITHDRAWAL CHARGE
Effective January 1, 1989, federal tax law limits withdrawals from annuity
contracts issued in connection with 403(b) Qualified Plans. Subject to those
limitations, the Contract Value may be withdrawn at any time during the
Accumulation Period. Contract Owners should consult their own tax counsel or
other tax adviser regarding any withdrawals. (See "Taxes -- Tax Treatment of
Withdrawals -- Non-Qualified Contracts" and "Taxes -- Tax Treatment of
Withdrawals -- Qualified Contracts").
There is a Free Withdrawal Amount which applies to the first withdrawal
during a Contract Year after the first Contract Year. The Free Withdrawal Amount
is equal to 10% of the aggregate Purchase Payments less prior withdrawals.
Alternatively, certain Owners of Non-Qualified Contracts and Contracts issued in
connection with IRAs may choose to withdraw amounts which in the aggregate add
up to 10% of their initial Purchase Payments annually pursuant to the Systematic
Withdrawal Program without charge. To participate in the Systematic Withdrawal
Program, Owners must complete an enrollment form which describes the program and
send it to the Company, c/o its Administrative Service Center. Depending on
fluctuations in the net asset value of the Separate Account's Divisions,
systematic withdrawals may reduce or even exhaust Contract Value. (See
"Purchases and Contract Value -- Systematic Withdrawal Program").
A contingent deferred sales charge, which is referred to as the Withdrawal
Charge, may be imposed upon other withdrawals. Withdrawal Charges will vary in
amount depending upon the Contribution Year in which the Purchase Payment being
withdrawn was made, and will be calculated based on the Withdrawal Charge Table,
below, and the amount of Purchase Payment withdrawn which is still subject to
the Withdrawal Charge and not previously withdrawn. The Withdrawal Charge is
deducted from remaining Contract Value so that the actual reduction in Contract
Value as a result of the withdrawal
14
<PAGE> 19
will be greater than the withdrawal amount requested and paid. Free withdrawals
and other withdrawals will be allocated to Purchase Payments on a
first-in-first-out basis so that all withdrawals are allocated to Purchase
Payments to which the lowest Withdrawal Charge, if any, applies.
WITHDRAWAL CHARGE TABLE
<TABLE>
<CAPTION>
APPLICABLE WITHDRAWAL
CONTRIBUTION YEAR CHARGE PERCENTAGE
----------------- ---------------------
<S> <C>
First................................................... 5%
Second.................................................. 4%
Third................................................... 3%
Fourth.................................................. 2%
Fifth................................................... 1%
Sixth and later......................................... 0%
</TABLE>
Where legally permitted, the Withdrawal Charge will be eliminated when a
Contract is issued to an officer, director or employee of the Company or its
affiliates, or an immediate family member of such person. In addition, the
Withdrawal Charge may be waived by the Company on withdrawals where the amount
withdrawn is used to purchase another annuity contract issued by the Company.
Additional information regarding the elimination or waiver of the Withdrawal
Charge may be obtained by contacting the Company.
The amounts obtained from the Withdrawal Charge will be used to pay sales
commissions and other promotional or distribution expenses associated with the
marketing of the Contracts. To the extent that the Withdrawal Charge is
insufficient to cover all sales commissions and other promotional or
distribution expenses, the Company may use any of its corporate assets,
including potential profit which may arise from the Mortality and Expense Risk
Charge (See "Contract Charges -- Mortality and Expense Risk Charge"), to make up
any difference.
ANNUITY CHARGE
If a Contract Owner elects to have annuity payments made under annuity
option 1, Life Income with Installments Guaranteed or annuity option 2, Joint
and Survivor Annuity (See "Annuity Period -- Annuity Options"), no Annuity
Charge applies and 100% of Contract Value is applied.
If a Contract Owner elects annuity option 3, Income for a Specified Period,
and if Purchase Payments were made in the Contract Year in which annuity
payments are to begin or any of the four preceding Contract Years, an Annuity
Charge may apply. This Annuity Charge equals the Withdrawal Charge that would
apply if the Contract were being surrendered. Further, no Annuity Charge will be
assessed if annuity option 3 is elected by a Beneficiary under the Death
Benefit.
The Annuity Charge also applies to certain annuitizations of Contract
Values allocated to the General Account.
DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES
While the Company is not currently maintaining a provision for taxes, the
Company has reserved the right to establish such a provision for taxes in the
future if it determines in its sole discretion, that it will incur a tax as a
result of the operation of the Separate Account. The Company will deduct for any
taxes incurred by it as a result of the operation of the Separate Account
whether or not there was a provision for taxes and whether or not it was
sufficient. (See "Taxes").
OTHER EXPENSES
There are other deductions from and expenses paid out of the assets of the
Trust which are described in the accompanying Trust Prospectus.
REDUCTION OF CHARGES FOR SALES TO CERTAIN GROUPS
The Company may reduce the charges on individual Contracts sold to certain
groups of individuals, or to a trustee, employer or other entity representing a
group, where it is expected that
15
<PAGE> 20
such sales will result in savings of sales or administrative expenses. The
Company determines the eligibility of groups for such reduced charges, and the
amount of such reductions for particular groups, by considering the following
factors: (1) the size of the group; (2) the total amount of Purchase Payments
expected to be received from the group; (3) the nature of the group for which
the Contracts are purchased, and the persistency expected in that group; (4) the
purpose for which the Contracts are purchased and whether that purpose makes it
likely that expenses will be reduced; and (5) any other circumstances which the
Company believes to be relevant to determining whether reduced sales or
administrative expenses may be expected. None of the reductions in charges for
group sales is contractually guaranteed. Such reductions may be withdrawn or
modified by the Company on a uniform basis. The Company's reductions in charges
for group sales will not be unfairly discriminatory to the interests of any
Contract Owners.
- --------------------------------------------------------------------------------
DESCRIPTION OF THE CONTRACTS
- --------------------------------------------------------------------------------
TRANSFER DURING ACCUMULATION PERIOD
During the Accumulation Period, the Contract Owner, or his or her agent,
may transfer Contract Values among Divisions and/or the General Account, by
written request or by telephone authorization pursuant to a duly executed
Telephone Transfer Authorization Form delivered to the Company at its
Administrative Service Center, if applicable law permits. The Company has in
place procedures which are designed to provide reasonable assurance that
telephone authorizations are genuine, including tape recording all telephone
communications and requesting identifying information. Accordingly, the Company
and its affiliates disclaim all liability for any claim, loss or expense
resulting from any alleged error or mistake in connection with a telephone
transfer which was not properly authorized by the Contract Owner. However, if
the Company fails to employ reasonable procedures to ensure that all telephone
transfers are properly authorized, the Company may be held liable for such
losses. The Company reserves the right to modify or discontinue at any time and
without notice the use of telephone transfers and acceptance of telephone
transfer instructions from someone other than the Contract Owner. Telephone
calls authorizing transfers must be completed by 4:00 p.m. Eastern time in order
to effect the transfer the day of receipt. All other transfers will be processed
on the next business day.
Transactions effecting transfer may not be made more than fifteen times in
any Contract Year without charge. A charge of $25 per transaction is assessed
against any transaction effecting transfer in excess of the fifteen permitted
without charge in any Contract Year or, if all or part of a Contract Owner's
interest in a Division is transferred to another Division, within 30 days of the
Issue Date. Transfers made under the Dollar Cost Averaging Program, described
below, are counted against this limitation in the same manner as other
transfers. The fee will be deducted from Contract Values which remain in the
Division from which the transfer was made. If the remaining Contract Value is
insufficient to pay the transfer fee, then the fee will be deducted from
transferred Contract Values. The transfer fee is at cost with no margin included
for profit. The transfer fee may be waived, under certain circumstances, in
connection with pre-approved transfer programs. Contract Owners are not
permitted to transfer amounts allocated or transferred to the Target '98
Division from that Division more frequently than once every 30 days.
This transfer privilege may be suspended, modified or terminated at any
time without notice. (See "Taxes -- Diversification").
The minimum partial transfer amount is $500. No partial transfer may be
made if the value of the Contract Owner's interest in the Division from which a
transfer is being made would be less than $500 after the transfer. As with
initial Purchase Payments, at least $500 must be allocated to a Division before
another Division is selected. These dollar amounts are subject to change at the
Company's option. The Company may waive the minimum partial transfer amount in
connection with pre-authorized automatic transfer programs.
16
<PAGE> 21
Any amounts allocated or transferred to the General Account may only be
transferred from the General Account once each Contract Year during the 30-day
period following the anniversary of such allocation or transfer. If a transfer
request is received prior to the anniversary of an allocation or transfer, then
the transfer will take effect on the next Valuation Date following the
anniversary if the anniversary is not a Valuation Date. If the Company receives
the transfer request within the 30 days following the anniversary of an
allocation or transfer to the General Account the transfer will be effective on
the next following Valuation Date. The foregoing limitations may be waived in
connection with pre-authorized automatic transfer programs.
AUTOMATIC DOLLAR COST AVERAGING PROGRAM
Contract Owners who wish to purchase units of the Separate Accounts over a
period of time may be able to do so through the Dollar Cost Averaging ("DCA")
Program. Under this DCA Program, a Contract Owner may authorize the automatic
transfer of a fixed dollar amount ($100 minimum) or percentage of his or her
choice at regular intervals from either the Money Market Portfolio, Government
and Quality Bond Portfolio or the General Account to one or more of the Separate
Accounts (other than the Money Market Portfolio or the Government and Quality
Bond Portfolio) at the unit values determined on the dates of the transfers. The
intervals between transfers from the Money Market Portfolio or Government and
Quality Bond Portfolio may be monthly, quarterly, semi-annually or annually, at
the option of the Contract Owner. Transfers from the General Account must be
made by percentage and at quarterly intervals only and are limited to 8% of the
value of the Contract Owner's interest in the General Account in any Contract
Year. The theory of dollar cost averaging is that greater numbers of units are
purchased at times when the unit prices are relatively low than are purchased
when the prices are higher. This has the effect of reducing the aggregate
average cost per unit to less than the average of the unit prices on the same
purchase dates. However, participation in the DCA Program does not assure the
Contract Owner of a greater profit, or any profit, from his or her purchases
under the DCA Program; nor will it prevent or necessarily alleviate losses in a
declining market.
Although the various options under the DCA Program will allow transfers to
be made either from the Money Market Portfolio, Government and Quality Bond
Portfolio or the General Account, a Contract Owner must elect to have the
transfers made exclusively from one or the other of these three sources. A
Contract Owner may elect to increase, decrease or change the frequency or amount
of Purchase Payments under a DCA Program. The application and any Purchase
Payments should be sent to the Company at the address set forth on the first
page for correspondence. The Company reserves the right to modify, suspend or
terminate the DCA Program at any time.
A Contract Owner may not simultaneously participate in both the DCA Program
and the Systematic Withdrawal Program. Participation in the DCA Program will be
effective one week after the Company has received and approved the application
to participate in the DCA Program.
MODIFICATION OF THE CONTRACT
Only the Company's President or Secretary may approve a change or waive the
provisions of the Contract. Any change or waiver must be in writing. No agent
has the authority to change or waive the provisions of the Contract.
ASSIGNMENT
Contracts issued pursuant to Non-Qualified Plans that are not subject to
Title 1 of the Employee Retirement Income Security Act of 1974 ("ERISA") may be
assigned by the Owner at any time during the lifetime of the Annuitant prior to
the Annuity Date. The Company will not be bound by any assignment until written
notice is received by the Company, c/o its Administrative Service Center. The
Company is not responsible for the validity, tax or other legal consequences of
any assignment. An assignment will not affect any payments the Company may make
or actions it may take before it receives notice of the assignment.
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If the Contract is issued pursuant to a Qualified Plan (or a Non-Qualified
Plan that is subject to Title 1 of ERISA), it may not be assigned, pledged or
otherwise transferred except under such conditions as may be allowed under
applicable law.
BECAUSE AN ASSIGNMENT MAY BE A TAXABLE EVENT, CONTRACT OWNERS SHOULD
CONSULT COMPETENT TAX ADVISERS SHOULD THEY WISH TO ASSIGN THEIR CONTRACTS.
DEATH OF OWNER OF NON-QUALIFIED CONTRACT
The following section applies only if the Contract is issued on a
Non-Qualified basis and if either of the two following conditions exists:
(A) The Owner and the Annuitant are the same individual and that
individual dies during the Accumulation Period; or
(B) The Owner and Annuitant are different persons and the Owner dies
during the Accumulation Period prior to the Annuitant's death.
If either of the above conditions occurs, the following provisions apply:
(1) If the Beneficiary is the spouse of the Owner, then the
Beneficiary may elect to become the Owner and maintain the Contract in full
force and effect. A spouse Beneficiary may alternatively choose to take a
lump sum distribution. (See below).
(2) If the Beneficiary is a natural person and not the spouse of the
Owner, the Beneficiary can elect to have the existing Contract Value paid
under one of the annuity options set forth in the Contract over a period
not extending beyond the life expectancy of the Beneficiary at the time of
the election, or such a Beneficiary can elect to take a lump sum
distribution. (See below). Payments under any annuity option selected must
begin not later than one year after the date of death of the Owner.
(3) If there is no Beneficiary or if the Beneficiary is not a natural
person, then the entire Contract Value must be paid out within five years
of the Owner's death.
The amount of a lump sum distribution is the greater of:
(1) the current Contract Value at the time of election; or
(2) the total amount of Purchase Payments made under the Contract less
the aggregate dollar amount of any partial withdrawals and any Withdrawal
Charges which were assessed at the time of withdrawal. Under this
alternative election, the lump sum must be paid to the Beneficiary within
five years of the Owner's death.
If the Contract is issued pursuant to a Qualified Plan, similar provisions
will apply upon the death of the Contract Owner. Purchasers acquiring Contracts
pursuant to Qualified Plans should consult a qualified pension or tax adviser.
DEATH BENEFIT
If the Annuitant dies during the Accumulation Period, a Death Benefit will
be payable to the Beneficiary upon receipt by the Company of Due Proof of Death
of the Annuitant.
The Death Benefit is equal to the greater of:
(1) the Contract Value at the end of the Valuation Period during which
Due Proof of Death and an election of the type of payment to be made to the
Beneficiary is received by the Company, c/o its Administrative Service
Center; or
(2) the total amount of Purchase Payments minus the amount of partial
withdrawals and/or partial annuitizations and applicable contract charges;
or
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(3) after the fifth Contract Year, the Contract Value at the last
anniversary of the Issue Date of the Contract minus the total amount of any
partial withdrawals and/or partial annuitizations made since that
anniversary.
Payment of the Death Benefit may be made in one lump sum or applied under
one of the annuity options.
BENEFICIARY
The Contract Owner may designate the Beneficiary(ies) to receive any amount
payable on death. However, where a Contract is jointly owned, each joint Owner
shall be a primary Beneficiary. The original Beneficiary(ies) will be named in
the application. Unless an irrevocable Beneficiary(ies) designation was
previously filed or unless the Contract is jointly owned, the Contract Owner may
change the Beneficiary(ies) prior to the Annuity Date by written request
delivered to the Company, c/o its Administrative Service Center, or by
completing a Change of Beneficiary Form provided by the Company. Any change will
take effect when recorded by the Company. The Company is not liable for any
payment made or action taken before it records the change.
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ANNUITY PERIOD
- --------------------------------------------------------------------------------
ANNUITY DATE
The Contract Owner selects an Annuity Date (the date on which annuity
payments are to begin) at the time of application. The Annuity Date must always
be the first day of a calendar month and must be at least one month after the
Issue Date. Annuity payments will begin no later than the first day of the
calendar month following the Annuitant's 85th birthday. Where joint Annuitants
are named, the Annuity Date may not be later than the first of the month
following the 85th birthday of the youngest Annuitant. The Contract Owner may
change the Annuity Date at any time at least seven days prior to the Annuity
Date then indicated on the Company's records by written notice to the Company,
c/o its Administrative Service Center.
The actual dollar amount of variable annuity payments is dependent upon:
(1) the Contract Value at the time of annuitization; (2) the annuity table
specified in the Contract; (3) the annuity option selected; and (4) the
investment performance of the Divisions selected. In addition, if annuity option
3, Income for a Specified Period, is elected, an Annuity Charge may apply. (See
"Contract Charges -- Sales Charges" and "Contract Charges -- Annuity Charge").
The annuity tables contained in the Contract are based on a 5% assumed
investment rate. If the actual net investment rate exceeds 5%, payments will
increase. Conversely, if the actual rate is less than 5%, annuity payments will
decrease. If a higher assumed investment rate were used, the initial payment
would be higher, but the actual net investment rate would have to be higher in
order for annuity payments to increase.
The Annuitant receives the value of a fixed number of Annuity Units each
month. The value of a fixed number of Annuity Units will reflect the investment
performance of the Divisions elected, and the amount of each annuity payment
will vary accordingly.
ALLOCATION OF ANNUITY PAYMENTS
If all of the Contract Value on the seventh calendar day before the Annuity
Date is allocated to the General Account, the Annuity will be paid as a fixed
annuity. If all of the Contract Value on that date is allocated to the Separate
Account, the Annuity will be paid as a Variable Annuity. If the Contract Value
on that date is allocated to both the General Account and the Separate Account,
the Annuity will be paid as a combination of a fixed annuity and a Variable
Annuity to reflect the allocation between the Accounts. Variable Annuity
payments will reflect the investment performance of the Separate Account
Divisions. The payee(s) may, by written notice to the Company, convert
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Variable Annuity payments to fixed annuity Payments. However, fixed annuity
Payments may not be converted to Variable Annuity payments.
ANNUITY OPTIONS
The Contract Owner, or any Beneficiary who is so entitled, may elect to
receive a lump sum at the end of the Accumulation Period. However, a lump sum
distribution may be deemed to be a withdrawal, and at least a portion of it may
be subject to federal income tax. (See "Taxes -- Tax Treatment of Withdrawals
- -- Non-Qualified Contracts" and "Tax Treatment of Withdrawals -- Qualified
Contracts"). Alternatively, an annuity option may be elected. The Contract
Owner may elect an annuity option or change an annuity option at any time
during the lifetime of the Annuitant prior to the Annuity Date. The Annuitant
may make the election on the Annuity Date unless the Contract Owner has
restricted the right to make such an election. The Beneficiary may elect an
annuity option upon the Annuitant's death unless the Contract Owner has
restricted this right.
If no other annuity option is elected, monthly annuity payments will be
made in accordance with annuity option 1 below with a 10 year period certain.
Generally, annuity payments will be made in monthly installments. However, if
the amount available to apply under an annuity option is less than $2,000, the
Company has the right to pay the annuity in one lump sum. In addition, if the
first payment provided would be less than $20, the Company shall have the right
to change the frequency of payments to be at quarterly, semi-annual or annual
intervals so as to result in an initial payment of at least $20.
The following annuity options are generally available under the Contract.
However, there may be restrictions in the retirement plan pursuant to which a
Contract issued on a qualified basis has been purchased.
OPTION 1 -- LIFE INCOME WITH INSTALLMENTS GUARANTEED
An annuity payable monthly during the lifetime of the payee. Upon election
a guaranteed payment period of either 10 years or 20 years may be chosen. If the
payee dies before the end of the guaranteed period, the present value, based on
a 5% annual interest rate, of any remaining guaranteed payments will be paid to
the payee's estate or to the Beneficiary.
OPTION 2 -- JOINT AND SURVIVOR ANNUITY
An annuity payable monthly while both payees are living. Upon the death of
either payee, the monthly income payable will continue during the lifetime of
the surviving payee at the percentage of the full amount chosen at the time of
election of this annuity option. This is the automatic form of annuity where
joint Annuitants are named, but a different option may be elected.
Annuity payments terminate automatically and immediately upon the death of
the surviving payee without regard to the number or total amount of payments
received.
There is no minimum number of guaranteed payments and it is possible to
have only one annuity payment if both payees die before the due date of the
second payment.
No Annuity Charge applies if either option 1 or option 2 is elected.
OPTION 3 -- INCOME FOR A SPECIFIED PERIOD
If Purchase Payments were made in the Contract Year in which annuity
payments are to begin or in any of the four preceding Contract Years, an Annuity
Charge may apply. The Annuity Charge equals the Withdrawal Charge that would
apply if the Contract were being surrendered. No Annuity Charge will be assessed
if annuity option 3 is elected by a Beneficiary under the Death Benefit.
Under this option, a payee can elect an annuity payable monthly for any
period of years from 5 to 30. This election must be made for full 12 month
periods. In the event the payee dies before the
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specified number of payments has been made, the Beneficiary may elect to
continue receiving the scheduled payments or may alternatively elect to receive
the present value, based on a 5% annual interest rate, of any remaining
guaranteed payments. Because Contract Values are redeemable even after the
Annuity Date under this option at any time while payments are being made, the
payee may elect to receive the present value of the remaining payments, commuted
at the interest rate used to create the annuity factor for this option.
The value of an Annuity Unit, regardless of the option chosen, takes into
account the Mortality and Expense Risk Charge. (See "Contract Charges --
Mortality and Expense Risk Charge"). Since annuity option 3, Income for a
Specified Period, does not contain an element of mortality risk, the payee is
not getting the benefit of this Charge. There shall be no right to terminate
the Contract during the Annuity Period if the option elected contains an
element of mortality risk.
OTHER OPTIONS
At the sole discretion of the Company, other annuity options may be made
available to the Contract Owner. However, to the extent that Withdrawal Charges
would otherwise apply to a withdrawal or termination, the identical Withdrawal
Charge may apply with respect to any additional options.
With respect to Contracts issued under Sections 401, 403(b) or 408 of the
Code, any payments will be made only to the Annuitant and the Annuitant's
spouse.
TRANSFER DURING ANNUITY PERIOD
During the Annuity Period, the payee has the sole right to transfer the
Contract Value to the General Account and/or among Separate Account Division(s)
by written request to the Company. The following limitations apply:
(1) No transfer to a Separate Account Division may be made during the
first year of the Annuity Period. Thereafter, only one transfer per
Division is permitted during each Contract Year of the Annuity Period.
(2) The entire value in a Separate Account Division must be
transferred.
(3) The request for transfer must be received by the Company, c/o its
Administrative Service Center, during the 45 days preceding the anniversary
of the Contract's Issue Date. The transfer will be effected at the next
Annuity Unit value calculation after receipt of a valid transfer request
which meets the limitations and conditions as are prescribed for transfers
during the Accumulation Period. (See "Transfer During Accumulation
Period").
(4) The amount allocated to the General Account in the event of a
transfer from a Separate Account Division will be equal to the annuity
reserve for the payee's interest in that Separate Account Division. The
annuity reserve is the product of "(A)" multiplied by "(B)" multiplied by
"(C)", where "(A)" is the number of Annuity Units representing the payee's
interest in the Separate Account Division per annuity payment; "(B)" is the
Annuity Unit value for the Separate Account Division; and "(C)" is the
present value of $1.00 per payment period as of the adjusted age of the
payee attained at the time of transfer, determined by using the 1983 Table
A, projected at Scale G with interest at the rate of 5% per annum. Amounts
transferred to the General Account will be applied under the annuity option
originally elected, except that adjustment will be made for the time
elapsed since the Annuity Date. All amounts and Annuity Unit values will be
determined as of the end of the Valuation Period preceding the effective
date of transfer.
(5) The transfer privilege may be suspended or discontinued at any
time.
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DEATH BENEFIT DURING ANNUITY PERIOD
If the payee dies after the Annuity Date while the Contract is in force,
the death proceeds, if any, will depend upon the annuity option in effect at the
time of the payee's death. If the Owner or Annuitant, if different, dies after
the Annuity Date and before the entire interest in the Contract has been
distributed, the remaining interest, if any, as provided for in the annuity
option elected will be distributed at least as rapidly as under the method of
distribution in effect at the Owner's or Annuitant's death.
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PURCHASES AND CONTRACT VALUE
- --------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENT
The minimum initial Purchase Payment for Contracts issued pursuant to a
Non-Qualified Plan is $1,000. Minimum additional Purchase Payments may be made
in amounts of $500. The minimum Purchase Payment for a Contract issued pursuant
to a Qualified Plan is $100. A minimum of $500 must be allocated to one Division
or the General Account before transfers are permitted. (See "Description of the
Contracts -- Transfer During Accumulation Period"). The Company reserves the
right to refuse any Purchase Payment at any time.
MAXIMUM PURCHASE PAYMENT
Purchase Payments of more than $500,000 require prior Company approval.
ALLOCATION OF PURCHASE PAYMENTS
Purchase Payments are allocated to the General Account and/or the
Division(s) of the Separate Account selected by the Contract Owner. The current
General Account allocation option pays a fixed rate of interest declared by the
Company for one year from the date amounts are allocated to it. The Company, at
its discretion, may offer other General Account allocation options which are
subject to different terms and conditions than apply to the current option.
Contract Owners making initial Purchase Payments should be sure to specify
their allocations on the application for a Contract. If the application is in
good order, the Company will apply the initial Purchase Payment to the General
Account and the selected Division(s), and credit the Contract with Accumulation
Units within two business days of receipt at the P.O. Box for the Company's
Administrative Service Center. The number of Accumulation Units in a Division
attributable to a Purchase Payment is determined by dividing that portion of the
Purchase Payment which is allocated to the Division by the Division's
Accumulation Unit value during the Valuation Period when the allocation occurs.
IF THE APPLICATION DOES NOT SPECIFY AN ALLOCATION, THE APPLICATION IS NOT
IN GOOD ORDER.
If the application for a Contract is not in good order, the Company will
attempt to rectify it within five business days of its receipt at the P.O. Box
for the Company's Administrative Service Center. The Company will credit the
initial Purchase Payment within two business days after the application has been
rectified. Unless the Contract Owner consents otherwise, the application and the
initial Purchase Payment will be returned if the application cannot be put in
good order within five business days of its receipt.
Just like Contract Owners making initial Purchase Payments, Contract Owners
making subsequent Purchase Payments should be sure to specify how they want
their payments allocated. OTHERWISE, THE COMPANY WILL AUTOMATICALLY PROCESS THE
PURCHASE PAYMENT BASED ON THE PREVIOUS ALLOCATION.
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A Contract Owner may elect to increase, decrease or change the frequency or
amount of Purchase Payments. The application and any Purchase Payments should be
sent to the Company at its Administrative Service Center.
ACCUMULATION UNIT VALUE
Accumulation Unit value is determined Monday through Friday (except for the
following Federal holidays) as of 4:00 p.m. New York time.
<TABLE>
<S> <C>
New Year's Day Independence Day
President's Day Labor Day
Good Friday Thanksgiving
Memorial Day Christmas Day
</TABLE>
A separate Accumulation Unit value is determined for each Division. If the
Company elects or is required to assess a charge for taxes, a separate
Accumulation Unit value may be calculated for Non-Qualified and Qualified
Contracts within each Division.
The net assets are determined by calculating the total value of each
Division's assets (that is, the aggregate value of the shares of the Portfolio
of the Trust held by the Division). After calculation of the net assets of a
Division, that amount is reduced by the accrued but unpaid daily charge for
mortality and expense risks and administration expense (which together amount to
1.40% per annum) and any provision for taxes which may occur. After that
calculation, the resulting number is then divided by the number of Accumulation
Units outstanding at the end of the Valuation Period to determine Accumulation
Unit value.
The Accumulation Unit value for each Division will vary with the price of a
share in the underlying Portfolio and in accordance with the Mortality and
Expense Risk Charge, Administrative Expense Charge, and any provision for taxes.
Assessments of Withdrawal Charges and Records Maintenance Charges are made
separately for each Contract. They do not affect Accumulation Unit value.
DISTRIBUTION OF CONTRACTS
The Contracts are only available in the State of New York.
Contracts are sold by registered representatives of broker-dealers who are
licensed insurance agents of the Company, either individually or through an
incorporated insurance agency. Commissions paid to registered representatives
may vary, but in the aggregate are not anticipated to exceed 5% of any Purchase
Payment.
SunAmerica Capital Services, Inc., located at 733 Third Avenue, New York,
New York 10017 serves as distributor of the Contracts. SunAmerica Capital
Services, Inc., an indirect wholly-owned subsidiary of SunAmerica Inc., is
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended, and is a member of the National Association of Securities Dealers, Inc.
WITHDRAWALS (REDEMPTIONS)
Except as explained below, the Contract Owner may redeem a Contract for all
or a portion of the Contract Value during the Accumulation Period. The Contract
Owner may also redeem Contract Values after the Annuity Date if annuity option 3
is elected. Withdrawal Charges may be assessed. (See "Contract
Charges -- Withdrawal Charge").
Effective January 1, 1989, withdrawals of amounts attributable to
contributions made pursuant to a salary reduction agreement (as defined in
Section 403(b)(11) of the Code) are limited to circumstances only: when the
Contract Owner attains age 59 1/2, separates from service, dies, becomes
disabled (within the meaning of Section 72(m)(7) of the Code), or in the case of
hardship. Withdrawals for hardship are restricted to the portion of the Contract
Owner's Contract Value which represents contributions made by the Contract Owner
and does not include any investment results.
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These limitations on withdrawals apply to: (1) salary reduction contributions
made after December 31, 1988; (2) income attributable to such contributions; and
(3) income attributable to amounts held as of December 31, 1988. The limitations
on withdrawals do not affect rollovers or exchanges between certain Qualified
Plans. Tax penalties may also apply. (See "Taxes -- Tax Sheltered Annuities --
Withdrawal Limitations").
While the foregoing limitations only apply to certain contracts issued in
connection with 403(b) Qualified Plans, all Contract Owners should seek
competent tax advice regarding any withdrawals or distributions.
Except in connection with the Systematic Withdrawal Program, the minimum
partial withdrawal amount is $500, or the Owner's entire interest in the
Division from which a withdrawal is requested. The Owner's interest in the
Division from which the withdrawal is requested must be at least $500 after the
withdrawal is completed if anything is left in that Division.
A written withdrawal request or Systematic Withdrawal Program enrollment
form, as the case may be, must be sent to the Company, c/o its Administrative
Service Center. The required form will not be in good order unless it includes
the Contract Owner's Tax I.D. Number (e.g., Social Security Number) and provides
instructions regarding withholding of income taxes. The Company provides the
required forms.
If the request is for total withdrawal, the Contract or a Lost Contract
Affidavit (which may be obtained by calling the Company's Administrative Service
Center) must be submitted as well. The Withdrawal Value is determined on the
basis of the Accumulation Unit values next computed following receipt of a
request in proper order. The Withdrawal Value will be paid within seven days
after the day a proper request is received by the Company. However, the Company
may suspend the right of withdrawal or delay payment more than seven days: (1)
during any period when the New York Stock Exchange is closed (other than
customary weekend and holiday closings); (2) when trading on the markets the
Separate Account or Portfolios normally utilize is restricted or an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the Separate Account's or a Portfolio's investments or determination of
Accumulation Unit value is not reasonably practicable; or (3) for such other
periods as the Securities and Exchange Commission, by order, may permit for
protection of Contract Owners.
SYSTEMATIC WITHDRAWAL PROGRAM
Certain Participants of Nonqualified Plan Contracts and Contracts issued in
connection with IRAs may choose to withdraw amounts which in the aggregate add
up to a maximum of 10% of their Purchase Payments annually pursuant to a
Systematic Withdrawal Program without charge. Withdrawals are taxable and a 10%
federal tax penalty may apply to withdrawals before age 59 1/2. Participants
must complete an enrollment form which describes the program and send it to the
Company, c/o its Administrative Service Center. Participation in the Systematic
Withdrawal Program may be elected at the time the Contract is issued or on any
date prior to the Annuity Date. Depending on fluctuations in the net asset value
of the Portfolios, systematic withdrawals may reduce or even exhaust Contract
Value. The minimum systematic withdrawal amount is $250 per withdrawal.
ERISA PLANS
Spousal consent may be required when a married Contract Owner seeks a
distribution from a Contract that has been issued in connection with a Qualified
Plan or a Non-Qualified Plan that is subject to Title I of ERISA. Owners should
obtain competent advice.
MINIMUM CONTRACT VALUE
If the Contract Value is less than $500 and no Purchase Payments have been
made during the previous three full calendar years, the Company reserves the
right, after 60 days written notice to the Owner, to terminate the Contract and
distribute the Withdrawal Value to the Owner. This privilege
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<PAGE> 29
will be exercised only if the Contract Value has been reduced to less than $500
as a result of withdrawals. In no instance shall such termination occur if the
value has fallen below $500 due to either decline in Accumulation Unit value or
the imposition of fees and charges.
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ADMINISTRATION
- --------------------------------------------------------------------------------
The Company has primary responsibility for all administration of the
Contracts and the Separate Account. Its Administrative Service Center is located
at P.O. Box 54299, Los Angeles, California 90054-0299 and its telephone number
is (800) 99-NYSUN.
The administrative services provided include, but are not limited to:
issuance of the Contracts; maintenance of Contract Owner records; Contract Owner
services; calculation of unit values; and preparation of Contract Owner reports.
Contract statements and transaction confirmations are mailed to Contract
Owners at least quarterly. Contract Owners should read their statements
carefully and verify their accuracy. Questions about periodic statements should
be communicated to the Company promptly. The Company will investigate all
complaints and make any necessary adjustments retroactively, provided that it
has received notice of a potential error within 30 days after the date the
Contract Owner receives the questioned statement. If the Company has not
received notice of a potential error within this time, any adjustment shall be
made as of the date that the Administrative Service Center receives notice of
the potential error.
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TAXES
- --------------------------------------------------------------------------------
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING
OF CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE
COMPANY CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE
MADE. PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE
POSSIBILITY OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF
THE CONTRACTS. PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE
TREATED AS "ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS.
GENERAL
Section 72 of the Code governs taxation of annuities in general. A Contract
Owner is not taxed on increases in the value of a Contract until distribution
occurs, either in the form of a lump sum payment or as annuity payments under
the annuity option elected. For a lump sum payment received as a total surrender
(total redemption), the recipient is taxed on the portion of the payment that
exceeds the cost basis of the Contract. For a payment received as a withdrawal
(partial redemption), federal tax liability is determined on a last-in-first-out
basis, meaning taxable income is withdrawn before the cost basis of the Contract
is withdrawn. For Non-Qualified Contracts, the cost basis is generally the
Purchase Payments, while for Qualified Contracts there may be no cost basis. The
taxable portion of the lump sum payment is taxed at ordinary income tax rates.
Tax penalties may also apply.
For annuity payments, the taxable portion is determined by a formula which
establishes the ratio that the cost basis of the Contract bears to the total
value of annuity payments for the term of the annuity Contract. The taxable
portion is taxed at ordinary income tax rates. For certain types of Qualified
Plans there may be no cost basis in the Contract within the meaning of Section
72 of the Code. Contract Owners, Annuitants and Beneficiaries under the
Contracts should seek competent financial advice about the tax consequences of
distributions under the retirement plan under which the Contracts are purchased.
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<PAGE> 30
The Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the Separate Account is not a separate entity from
the Company and its operations form a part of the Company.
WITHHOLDING TAX ON DISTRIBUTIONS
The Code generally requires the Company (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a Contract. For "eligible rollover distributions" from Contracts
issued under certain types of Qualified Plans, 20% of the distribution must be
withheld, unless the payee elects to have the distribution "rolled over" to
another eligible plan in a direct "trustee to trustee" transfer. This
requirement is mandatory and cannot be waived by the Contract Owner. Withholding
on other types of distributions can be waived.
An "eligible rollover distribution" is the estimated taxable portion of any
amount received by a covered employee from a plan qualified under section 401(a)
or 403(a) of the Code, or from a tax-sheltered annuity qualified under section
403(b) of the Code (other than (1) annuity payments for the life (or life
expectancy) of the employee, or joint lives (or joint life expectancies) of the
employee and his or her designated Beneficiary, or for a specified period of ten
years or more; and (2) distributions required to be made under the Code).
Failure to "roll over" the entire amount of an eligible rollover distribution
(including an amount equal to the 20% portion of the distribution that was
withheld) could have adverse tax consequences, including the imposition of a
penalty tax on premature withdrawals, described later in this section.
Withdrawals or distributions from a Contract other than eligible rollover
distributions are also subject to withholding on the estimated taxable portion
of the distribution, but the Contract Owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic
payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not adequately
diversified, in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the Contract as
an annuity contract would result in imposition of federal income tax to the
Contract Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contracts meet the
diversification requirements if, as of the close of each quarter, the underlying
assets meet the diversification standards for a regulated investment company,
and no more than 55% of the total assets consist of cash, cash items, U.S.
Government securities and securities of other regulated investment companies.
The Treasury Department has issued Regulations which establish
diversification requirements for the investment portfolios underlying variable
contracts such as the Contracts. The Regulations amplify the diversification
requirements for variable contracts set forth in the Code and provide an
alternative to the safe harbor provision described above. Under the Regulations
an investment portfolio will be deemed adequately diversified if: (1) no more
than 55% of the value of the total assets of the portfolio is represented by any
one investment; (2) no more than 70% of the value of the total assets of the
portfolio is represented by any two investments; (3) no more than 80% of the
value of the total assets of the portfolio is represented by any three
investments; and (4) no more than 90% of the value of the total assets of the
portfolio is represented by any four investments. For purposes of determining
whether or not the diversification standards imposed on the underlying assets of
variable contracts by Section 817(h) of the Code have been met, "each United
States government agency or instrumentality shall be treated as a separate
issuer."
26
<PAGE> 31
The Company intends that each Portfolio of the Trust underlying the
Contracts will be managed by the investment adviser for the Trust in such a
manner as to comply with these diversification requirements.
MULTIPLE CONTRACTS
Multiple annuity contracts which are issued within a calendar year to the
same contract owner by one company or its affiliates are treated as one annuity
contract for purposes of determining the tax consequences of any distribution.
Such treatment may result in adverse tax consequences including more rapid
taxation of the distributed amounts from such combination of contracts. The
Company believes that Congress intended to affect the purchase of multiple
deferred annuity contracts which may have been purchased to avoid withdrawal
income tax treatment. Contract Owners should consult a tax adviser prior to
purchasing more than one annuity contract in any calendar year.
TAX TREATMENT OF ASSIGNMENTS
An assignment of a Contract may be a taxable event and may be prohibited by
ERISA in some circumstances. Contract Owners should therefore consult competent
tax advisers should they wish to assign their Contracts.
TAX TREATMENT OF WITHDRAWALS -- NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate Purchase
Payments made, any amount withdrawn not in form of an annuity payment will be
treated as coming first from the earnings and then, only after the income
portion is exhausted, as coming from the principal. Withdrawn earnings are
includible in a taxpayer's gross income. Section 72 further provides that a 10%
penalty will apply to the income portion of any premature distribution. The
penalty is not imposed on amounts received: (1) after the taxpayer reaches
59 1/2; (2) upon the death of the Contract Owner; (3) if the taxpayer is totally
disabled; (4) in a series of substantially equal periodic payments made for the
life of the taxpayer or for the joint lives of the taxpayer and his Beneficiary;
(5) under an immediate annuity; or (6) which are allocable to purchase payments
made prior to August 14, 1982.
The above information applies to Qualified Contracts issued pursuant to
Section 457 of the Code, but does not apply to other Qualified Contracts.
Separate tax withdrawal penalties and restrictions apply to Qualified Contracts.
(See "Tax Treatment of Withdrawals -- Qualified Contracts").
QUALIFIED PLANS
The Contracts offered by this Prospectus are designed to be suitable for
use under various types of Qualified Plans. Taxation of participants in each
Qualified Plan varies with the type of plan and the terms and conditions of each
specific plan. Contract Owners, Annuitants and Beneficiaries are cautioned that
benefits under a Qualified Plan may be subject to the terms and conditions of
the plan, regardless of the terms and conditions of the contracts issued
pursuant to the plan.
Following are general descriptions of the types of Qualified Plans with
which the Contracts may be used. Such descriptions are not exhaustive and are
for general informational purposes only. The tax rules regarding Qualified Plans
are very complex and will have differing applications depending on individual
facts and circumstances. Each purchaser should obtain competent tax advice prior
to purchasing a Contract issued under a Qualified Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available and described in
this Prospectus. Generally, Contracts issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals -- Qualified Contracts").
27
<PAGE> 32
(A) H.R. 10 PLANS
Section 401 of the Code permits self-employed individuals to establish
Qualified Plans for themselves and their employees, commonly referred to as
"H.R. 10" or "Keogh" plans. Contributions made to the plan for the benefit
of the employees will not be included in the gross income of the employees
until distributed from the plan. The tax consequences to participants may
vary depending upon the particular plan design. However, the Code places
limitations and restrictions on all plans on such items as: amounts of
allowable contributions; form, manner and timing of distributions; vesting
and nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. (See "Tax Treatment of Withdrawals -- Qualified Contracts").
Purchasers of Contracts for use with an H.R. 10 Plan should obtain
competent tax advice as to the tax treatment and suitability of such an
investment.
(B) TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits the purchase of "tax-sheltered
annuities" by public schools and certain charitable, educational and
scientific organizations described in Section 501(c)(3) of the Code. These
qualifying employers may make contributions to the Contracts for the
benefit of their employees. Such contributions are not includible in the
gross income of the employee until the employee receives distributions from
the Contract. The amount of contributions to the tax-sheltered annuity is
limited to certain maximums imposed by the Code. Furthermore, the Code sets
forth additional restrictions governing such items as transferability,
distributions, nondiscrimination and withdrawals. (See "Tax Treatment of
Withdrawals -- Qualified Contracts"). Any employee should obtain competent
tax advice as to the tax treatment and suitability of such an investment.
(C) INDIVIDUAL RETIREMENT ANNUITIES
Section 408(b) of the Code permits eligible individuals to contribute
to an individual retirement program known as an "Individual Retirement
Annuity" ("IRA"). Under applicable limitations, certain amounts may be
contributed to an IRA which will be deductible from the individual's gross
income. These IRAs are subject to limitations on eligibility,
contributions, transferability and distributions. (See "Tax Treatment of
Withdrawals -- Qualified Contracts"). Under certain conditions,
distributions from other IRAs and other Qualified Plans may be rolled over
or transferred on a tax-deferred basis into an IRA. Sales of Contracts for
use with IRAs are subject to special requirements imposed by the Code,
including the requirement that certain informational disclosure be given to
persons desiring to establish an IRA. Purchasers of Contracts to be
qualified as IRAs should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
(D) CORPORATE PENSION AND PROFIT-SHARING PLANS
Sections 401(a) and 401(k) of the Code permit corporate employers to
establish various types of retirement plans for employees. These retirement
plans may permit the purchase of the Contracts to provide benefits under
the plan. Contributions to the plan for the benefit of employees will not
be includible in the gross income of the employee until distributed from
the plan. The tax consequences to participants may vary depending upon the
particular plan design. However, the Code places limitations on all plans
on such items as amount of allowable contributions; form, manner and timing
of distributions; vesting and nonforfeitability of interests;
nondiscrimination in eligibility and participation; and the tax treatment
of distributions, withdrawals and surrenders. (See "Tax Treatment of
Withdrawals -- Qualified Contracts"). Purchasers of Contracts for use with
corporate pension or profit sharing plans should obtain competent tax
advice as to the tax treatment and suitability of such an investment.
28
<PAGE> 33
TAX TREATMENT OF WITHDRAWALS -- QUALIFIED CONTRACTS
Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion
of any early distribution from qualified retirement plans, including contracts
issued and qualified under Code Sections 401 (H.R. 10 and Corporate Pension and
Profit Sharing Plans), 403(b) (Tax-Sheltered Annuities) and 408(b) (IRAs).
The tax penalty will not apply to the following distributions: (1) if
distribution is made on or after the date on which the Contract Owner or
Annuitant (as applicable) reaches age 59 1/2; (2) distributions following the
death or disability of the Contract Owner or Annuitant (as applicable) (for this
purpose "disability" is defined in Section 72(m)(7) of the Code); (3)
distributions that are part of substantially equal periodic payments made not
less frequently than annually for the life (or life expectancy) of the Contract
Owner or Annuitant (as applicable) or the joint lives (or joint life
expectancies) of such Contract Owner or Annuitant (as applicable) and his or her
designated Beneficiary; (4) distributions to a Contract Owner or Annuitant (as
applicable) who has separated from service after he or she has attained age 55;
(5) distributions made to the Contract Owner or Annuitant (as applicable) to the
extent such distributions do not exceed the amount allowable as a deduction
under Code Section 213 to the Contract Owner or Annuitant (as applicable) for
amounts paid during the taxable year for medical care; and (6) distributions
made to an alternate payee pursuant to a qualified domestic relations order.
The exceptions stated in items (4), (5) and (6) above do not apply in the
case of an IRA.
The taxable portion of a withdrawal or distribution from Contracts issued
under certain types of plans may, under some circumstances, be "rolled over"
into another eligible plan so as to continue to defer income tax on the taxable
portion. Effective January 1, 1993, such treatment is available for any
"eligible rollover distribution" made by certain types of plans (as described
above under "Taxes -- Withholding Tax on Distributions") that is transferred
within 60 days of receipt into a plan qualified under section 401(a) or 403(a)
of the Code, a tax-sheltered annuity, an IRA, or an individual retirement
account described in section 408(a) of the Code. Plans making such eligible
rollover distributions are also required, with some exceptions specified in the
Code, to provide for a direct "trustee to trustee" transfer of the distribution
to the transferee plan designated by the recipient.
TAX SHELTERED ANNUITIES -- WITHDRAWAL LIMITATIONS
The Tax Reform Act of 1986, effective January 1, 1989, limits the
withdrawal of amounts attributed to contributions made pursuant to a salary
reduction agreement (as defined in Section 403(b)(11) of the Code) to
circumstances only: when the Contract Owner attains age 59 1/2, separates from
service, dies, becomes disabled (within the meaning of Section 72(m)(7) of the
Code), or in the case of hardship. Withdrawals for hardship are restricted to
the portion of the Contract Owner's Contract Value which represents
contributions by the Contract Owner and does not include any investment results.
These limitations on withdrawals apply only to salary reduction contributions
made after December 31, 1988, to income attributable to such contributions, and
to income attributable to amounts held as of December 31, 1988. The limitations
on withdrawals do not affect rollovers or exchanges between certain Qualified
Plans. Contract Owners should consult their own tax counsel or other tax adviser
regarding any distributions.
DEFERRED COMPENSATION PLANS -- SECTION 457
Under Section 457 of the Code, governmental and certain other tax exempt
employers may establish deferred compensation plans for the benefit of their
employees which may invest in annuity contracts. The Code, as in the case of
Qualified Plans, establishes limitations and restrictions on eligibility,
contributions, and distributions. Under these plans, contributions made for the
benefit of the employees will not be includible in the employees' gross income
until distributed from the plan. However, under a 457 plan all the plan assets
shall remain solely the property of the employer, subject only to the claims of
the employer's general creditors until such time as made available to a
participant or a beneficiary.
29
<PAGE> 34
- --------------------------------------------------------------------------------
LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
There are no legal proceedings to which the Separate Account is a party or
to which the assets of the Separate Account are subject. The Company is engaged
in various kinds of routine litigation that in the Company's judgment will not
have a material adverse impact upon the Company's financial position.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
OF THE STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ITEM PAGE
----
<S> <C>
COMPANY.............................................................................. 1
INDEPENDENT ACCOUNTANTS.............................................................. 1
DISTRIBUTOR.......................................................................... 1
PERFORMANCE DATA..................................................................... 1
Money Market Division.............................................................. 2
Other Divisions.................................................................... 3
ANNUITY PAYMENTS..................................................................... 4
Annuity Unit Value................................................................. 4
Amount of Annuity Payments......................................................... 5
Subsequent Monthly Payments........................................................ 5
FINANCIAL STATEMENTS................................................................. 5
</TABLE>
30
<PAGE> 35
<TABLE>
<S> <C> <C>
- ------------------------------
- ------------------------------
- ------------------------------ Stamp
</TABLE>
FIRST SUNAMERICA LIFE INSURANCE COMPANY
SERVICE CENTER
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
<PAGE> 36
Please forward a copy (without charge) of the Statement of Additional
Information concerning ICAP II Variable Annuity Contracts to:
(Please print or type and fill in all information.)
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City/State/Zip
- ------------------------------------------------------------------------------
Date: Signed:
------------------------ -------------------------------------
<PAGE> 37
STATEMENT OF
ADDITIONAL INFORMATION
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED
VARIABLE ANNUITY CONTRACTS
issued by
VARIABLE ANNUITY ACCOUNT ONE
of
FIRST SUNAMERICA LIFE INSURANCE COMPANY
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE INDIVIDUAL FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY CONTRACTS WHICH ARE REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS DATED JANUARY 31,
1996, AS IT MAY BE SUPPLEMENTED, CALL OR WRITE THE COMPANY AT P.O. BOX 54299,
LOS ANGELES, CALIFORNIA 90054-0299, OR BY CALLING (800) 99-NYSUN.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED
JANUARY 31, 1996
<PAGE> 38
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
<S> <C>
Company .......................................... 1
Independent Accountants........................... 1
Distributor ...................................... 1
Performance Data.................................. 1
Money Market Division........................... 2
Other Divisions................................. 3
Annuity Payments ................................. 4
Annuity Unit Value ............................. 4
Amount of Annuity Payments ..................... 5
Subsequent Monthly Payments .................... 5
Financial Statements ............................. 5
</TABLE>
<PAGE> 39
COMPANY
Information regarding First SunAmerica Life Insurance Company (the "Company")
and its ownership is contained in the Prospectus.
INDEPENDENT ACCOUNTANTS
The financial statements of the Company as of September 30, 1995 and 1994 and
for each of the three years in the period ended September 30, 1995 are
presented in this Statement of Additional Information. The financial
statements of the Company should be considered only as bearing on the ability
of the Company to meet its obligation under the Contracts. The financial
statements of the Separate Account as of December 31, 1994 and for each of the
two years in the period ended December 31, 1994, also are included in this
Statement of Additional Information.
Price Waterhouse LLP, 400 South Hope Street, Los Angeles, California 90071,
serves as the independent accountants for the Separate Account and the Company.
The financial statements referred to above included in this Statement of
Additional Information have been so included in reliance on the reports of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
DISTRIBUTOR
The Contracts are sold by licensed insurance agents, where the Contracts may
be lawfully sold, who are registered representatives of broker-dealers which
are registered under the Securities Exchange Act of 1934 and are members of the
National Association of Securities Dealers, Inc.
The offering is on a continuous basis.
Effective January 28, 1994, the Contracts are offered through the distributor
for the Separate Account, SunAmerica Capital Services, Inc., 733 Third Avenue,
4th Floor, New York, New York 10017, which is an indirect wholly owned
subsidiary of SunAmerica Inc. Prior to this time, Royal Alliance Associates,
Inc. and SunAmerica Securities, Inc., both affiliates of SunAmerica Capital
Services, Inc. and located at 733 Third Avenue, 4th Floor, New York, New York
10017 and 2201 East Camelback Road, Phoenix, Arizona 85016, respectively,
served as co-distributors of the Contracts. Royal Alliance Associates, Inc.
and SunAmerica Capital Services, Inc. are each an indirect wholly-owned
subsidiary of SunAmerica Inc.
For the year ended December 31, 1992, the aggregate amount of underwriting
commissions paid by the Company to Royal Alliance Associates, Inc. and
SunAmerica Securities, Inc. was $466,550, of which $108,085 was retained by
them. For the year ended December 31, 1993, the aggregate amount of
underwriting commissions paid by the Company to Royal Alliance Associates, Inc.
and SunAmerica Securities, Inc. was $428,906, of which $101,137 was retained by
them. For the year ended December 31, 1994, the aggregate amount of
underwriting commissions paid by the Company to SunAmerica Capital Services,
Inc. was $248,222, of which $25,262 was retained by them.
<PAGE> 40
PERFORMANCE DATA
Performance data for the various Divisions of the Separate Account are
determined in the manner described below.
Money Market Division
The annualized current yield and the effective yield for the Money Market
Division for the seven day period ended December 31, 1994 were 2.72% and 2.75%,
respectively.
Current yield is computed by first determining the Base Period Return
attributable to a hypothetical Contract having a balance of one Accumulation
Unit at the beginning of a 7 day period using the formula:
Base Period Return = (EV-SV)/(SV)
where:
SV = value of one Accumulation Unit at the start of a 7
day period
EV = value of one Accumulation Unit at the end of the 7
day period
The value of the Accumulation Unit at the end of the period (EV) is
determined by (1) adding, to the value of the Unit at the beginning of the
period (SV), the investment income from the Money Market Division attributed to
the Accumulation Unit over the period, and (2) subtracting, from the result,
the sum of (a) the portion of the annual Mortality and Expense Risk and
Administrative Charges allocable to the 7 day period (obtained by multiplying
the charges by the fraction 7/365), and (b) a prorated portion of the annual
Records Maintenance Charge of $30 per Contract. The Records Maintenance Charge
is first allocated among the Divisions and the General Account so that each
Division's allocated portion of the charge is proportional to the percentage of
the number of Contract Owners' accounts that have money allocated to that
Division. The portion of the Charge allocable to the Money Market Division is
further reduced, for purposes of the yield computation, by multiplying it by
the ratio that the value of the hypothetical Contract bears to the value of an
account of average size for Contracts funded by the Money Market Division.
Finally, as is done with the other charges discussed above, the result is
multiplied by the fraction 7/365 to arrive at the portion attributable to the 7
day period.
Since the Separate Account was first offered to the public, the performance
of the Money Market Division (and other Divisions) has been computed on the
basis of assumptions about the average account size and the allocation of
contract charges among the various Divisions. These assumptions are based on
the actual experience of another separate account offered for sale in states
other than New York that is used to fund variable annuity contracts that are
similar in all material respects to the Contracts. That separate account, like
the Separate Account, invests in the various Portfolios of the Trust. The
Separate Account will substitute the data derived from its own experience at
the earliest practicable date after such data is judged by the Company to be
statistically reliable. The performance data obtained using these assumptions
may be higher or lower than would have been obtained using different values for
allocation and
<PAGE> 41
account size.
The current yield is then obtained by annualizing the Base Period Return:
Current Yield = (Base Period Return) x (365/7)
The Money Market Division also quotes an "effective yield" that differs from
the current yield given above in that it takes into account the effect of
dividend reinvestment in the Money Market Division. The effective yield, like
the current yield, is derived from the Base Period Return over a 7 day period.
However, the effective yield accounts for dividend reinvestment by compounding
the current yield according to the formula:
Effective Yield = [(Base Period Return+1) to the 365/7 power -1].
Net investment income for yield quotation purposes will not include either
realized capital gains and losses or unrealized appreciation and depreciation,
whether reinvested or not. The yield quotations also do not reflect any impact
of transfer fees or Withdrawal or Annuity Charges.
The yields quoted should not be considered a representation of the yield of
the Money Market Division in the future since the yield is not fixed. Actual
yields will depend not only on the type, quality and maturities of the
investments held by the Money Market Division and changes in interest rates on
such investments, but also on factors such as a Contract Owner's account size
(since the impact of fixed dollar charges will be greater for small accounts
than for larger accounts).
Yield information may be useful in reviewing the performance of the Money
Market Division and for providing a basis for comparison with other investment
alternatives. However, the Money Market Division's yield fluctuates, unlike
bank deposits or other investments that typically pay a fixed yield for a
stated period of time.
Other Divisions
Divisions of the Separate Account other than the Money Market Division
compute their performance data as "total return." The total returns of the
various Divisions over the last one, five and ten year periods, and since their
inception, are shown below, both with and without an assumed complete
redemption at the end of the period.
Total Annual Return (in percent) for Periods Ending on 12/31/94:
(RETURN WITH/WITHOUT REDEMPTION)
<TABLE>
<CAPTION>
Inception Since
Division Date 1 Year 5 Years 10 Years Inception
- -------- --------- ------ ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Foreign Securities 3/23/87 -9.76/-4.76 -2.88/-2.68 ---- 1.90/1.90
Capital Appreciation 3/23/87 -10.26/-5.26 12.05/12.16 ---- 10.23/10.23
Growth 8/13/84 -11.16/-6.16 6.42/6.56 10.45/10.45 10.07/10.07
Natural Resources 1/01/88 -5.78/-0.78 2.54/2.70 ---- 5.62/5.62
Convertible Securities 3/23/87 -16.08/-11.08 8.22/8.35 ---- 6.54/6.54
Strategic Multi-Asset 3/23/87 -9.12/-4.12 4.23/4.38 ---- 5.33/5.33
Multi-Asset 3/23/87 -8.17/-3.17 6.35/6.49 ---- 6.42/6.42
High Yield 1/01/86 -10.98/-5.98 7.21/7.35 ---- 6.54/6.54
</TABLE>
<PAGE> 42
<TABLE>
<S> <C> <C> <C> <C> <C>
Target '98 5/02/88 -10.59/-5.59 5.89/6.04 ---- 7.76/7.76
Fixed Income 8/13/84 -9.83/-4.83 4.90/5.04 7.00/7.00 7.58/7.58
Gov't Quality Bond 8/13/84 -9.52/-4.52 5.55/5.69 7.52/7.52 8.07/8.07
- -------------
</TABLE>
The total return figures are based on historical data and are not intended to
indicate future performance
These figures show the total return hypothetically experienced by
Contracts funded through the various Divisions of the Account over the time
period shown.
For periods starting prior to the date the Contracts were first
offered the public, the total return data is and will be initially derived from
the performance of the corresponding Portfolios of the Trust, modified to
reflect the same charges and expenses as if the Division had been in existence
since the inception date of each respective Portfolio. Thus, such performance
figures should not be construed to be actual historic performance of the
Separate Account. Rather, they are intended to indicate the historic
performance of the Trust, adjusted to provide direct comparability to the
performance of the Division since it was first offered to the public. The
Trust has served since its inception as an underlying investment medium for
separate accounts of other insurance companies having the same fee and charge
schedules as those of the Separate Account.
Total return for a Division represents a computed annual rate of
return that, when compounded annually over the time period shown and applied to
a hypothetical initial investment in a Contract funded by that Division made at
the beginning of the period, will produce the same Contract Value at the end of
the period that the hypothetical investment would have produced over the same
period. The total rate of return (T) is computed so that it satisfies the
formula:
<TABLE>
<S> <C>
P(1+T) to the nth power = ERV
where:
P = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1000 payment made at the beginning of the 1, 5, or
10 year periods at the end of the 1, 5, or
10 year periods (or fractional portion thereof).
</TABLE>
The total return figures given reflect the effects of both
non-recurring and recurring charges, as discussed herein. Recurring charges
are taken into account in a manner similar to that used for the yield
computations for the Money Market Division, described above. The applicable
Withdrawal Charge (if any) is deducted as of the end of the period, to reflect
the effect of the assumed complete redemption in the case of the first of the
two figures given in the table above for each Division and time period.
Because the impact of Records Maintenance Charges on a particular Contract
Owner's account would generally have differed from that assumed in the
computation, due to differences between most actual allocations and the assumed
one, as well as differences due to varying account sizes, the total return
experienced by an actual account over these same time periods would generally
have been different from those given above. As with the Money Market Division
yield figures, total return
<PAGE> 43
figures are derived from historical data and are not intended to be a
projection of future performance.
ANNUITY PAYMENTS
Annuity Unit Value
The value of an Annuity Unit is determined independently for each
Separate Account Division.
For each Division, the value of an Annuity Unit for any Valuation
Period is determined by multiplying the Annuity Unit value for the immediately
preceding Valuation Period by the net investment factor for the Valuation
Period for which the Annuity Unit Value is being calculated and multiplying the
result by an interest factor which offsets the effect of the investment
earnings rate of five percent (5%) per annum that is assumed in the annuity
table contained in the Contract.
The net investment factor for each Division for a Valuation Period is
determined by dividing (a) by (b) and subtracting (c) from the result where:
(a) is the value of an Accumulation Unit from the applicable Division as of the
end of the current Valuation Period; (b) is the value of an Accumulation Unit
for the applicable Division as of the end of the immediately preceding
Valuation Period; and (c) is a factor representing the daily charge for
mortality and expense risks and administration of one and four-tenths percent
(1.40%) per annum.
Amount of Annuity Payments
The initial annuity payment is determined by applying the Contract
Value, less any Annuity Charge (if annuity option 3 is elected), to the annuity
table specified in the Contract. Those tables are based on a set amount per
$1,000 of proceeds applied. The appropriate rate must be determined by the sex
and adjusted age of the Annuitant and joint Annuitant, if any. The adjusted
age is determined from the actual age to the nearest birthday at the Annuity
Date according to the table below. The Adjusted Age Table is used to correct
for population mortality improvements over time.
ADJUSTED AGE TABLE
<TABLE>
<CAPTION>
Adjustment Adjustment
Calendar to Actual Calendar to Actual
Year of Birth Age Year of Birth Age
- ------------- ---------- ------------- ----------
<S> <C> <C> <C>
1899-1905 +6 1946-1951 -1
1906-1911 +5 1952-1958 -2
1912-1918 +4 1959-1965 -3
1919-1925 +3 1966-1972 -4
1926-1932 +2 1973-1979 -5
1933-1938 +1 1980-1985 -6
1939-1945 0 1986-1992 -7
</TABLE>
The dollars applied are then divided by 1,000 and multiplied by the
appropriate annuity factor to indicate the amount of the first annuity payment.
That amount is divided by the value of an Annuity Unit as of the Annuity Date
to establish the number of Annuity Units representing each annuity payment.
The number of Annuity Units determined for the first
<PAGE> 44
annuity payment remains constant for the second and subsequent monthly payments.
Subsequent Monthly Payments
The amount of the second and subsequent annuity payments is determined
by multiplying the number of Annuity Units by the Annuity Unit value as of the
Valuation Period next preceding the date on which each annuity payment is due.
The dollar amount of the first annuity payment determined as above is divided
by the value of an Annuity Unit as of the Annuity Date to establish the number
of Annuity Units representing each annuity payment. The number of Annuity
Units determined for the first annuity payment remains constant for the second
and subsequent monthly payments.
FINANCIAL STATEMENTS
The financial statements of the Company included herein should be
considered only as bearing upon the ability of the Company to meet its
obligations under the Contracts. The financial statements of the Separate
Account are also included in this Statement of Additional Information.
<PAGE> 45
FIRST SUNAMERICA LIFE INSURANCE COMPANY
FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
<PAGE> 46
REPORT OF INDEPENDENT ACCOUNTANTS
November 6, 1995
To the Board of Directors and Shareholder of
First SunAmerica Life Insurance Company
In our opinion, the accompanying balance sheet and the related income statement
and statement of cash flows present fairly, in all material respects, the
financial position of First SunAmerica Life Insurance Company at September 30,
1995 and 1994, and the results of its operations and its cash flows for each of
the three years in the period ended September 30, 1995, in conformity with
generally accepted accounting principles. 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 generally accepted auditing
standards 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 6, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," in fiscal 1994.
Price Waterhouse LLP
<PAGE> 47
FIRST SUNAMERICA LIFE INSURANCE COMPANY
BALANCE SHEET
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Investments:
Cash and short-term investment $ 6,382,000 $ 14,785,000
Bonds and notes:
Available for sale, at fair value
(amortized cost: 1995, $109,217,000;
1994, $61,766,000) 107,771,000 56,066,000
Held for investment, at amortized cost
fair value: 1995, $2,289,000;
1994, $3,117,000) 2,297,000 3,314,000
Mortgage loans 4,733,000 4,763,000
Common stocks, at fair value
(cost: 1995, $112,000) 35,000 ---
------------ ------------
Total investments 121,218,000 78,928,000
Variable annuity assets 32,760,000 26,390,000
Accrued investment income 928,000 717,000
Deferred acquisition costs 6,491,000 5,651,000
Deferred income taxes --- 886,000
Other assets 1,760,000 1,565,000
------------ ------------
TOTAL ASSETS $163,157,000 $114,137,000
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY
Reserves, payables and accrued liabilities:
Reserves for fixed annuity contracts $106,332,000 $ 66,881,000
Income taxes currently payable 23,000 441,000
Other liabilities 1,980,000 610,000
------------ ------------
Total reserves, payables and accrued liabilities 108,335,000 67,932,000
------------ ------------
Variable annuity liabilities 32,760,000 26,390,000
------------ ------------
Deferred income taxes 244,000 ---
------------ ------------
Shareholder's equity:
Common Stock 3,000,000 3,000,000
Additional paid-in capital 14,428,000 14,428,000
Retained earnings 5,250,000 4,727,000
Net unrealized losses on debt and
equity securities available for sale (860,000) (2,340,000)
------------ ------------
Total shareholder's equity 21,818,000 19,815,000
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $163,157,000 $114,137,000
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 48
FIRST SUNAMERICA LIFE INSURANCE COMPANY
INCOME STATEMENT
<TABLE>
<CAPTION>
Years ended September 30,
-------------------------------------------------
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
Investment income $ 7,834,000 $ 5,527,000 $ 5,101,000
----------- ----------- ------------
Interest expense on:
Fixed annuity contracts (5,042,000) (3,635,000) (3,940,000)
Senior indebtedness (8,000) --- ---
----------- ----------- -----------
Total interest expense (5,050,000) (3,635,000) (3,940,000)
----------- ----------- -----------
NET INVESTMENT INCOME 2,784,000 1,892,000 1,161,000
----------- ----------- -----------
NET REALIZED INVESTMENT GAINS (LOSSES) (1,348,000) 445,000 1,932,000
----------- ----------- -----------
VARIABLE ANNUITY FEE INCOME 412,000 382,000 240,000
----------- ----------- -----------
Other income and expenses:
Surrender charges 194,000 367,000 44,000
General and administrative expenses (1,088,000) (1,040,000) (1,066,000)
Amortization of deferred acquisition
costs (300,000) --- (220,000)
Other, net 51,000 (309,000) (386,000)
----------- ----------- -----------
TOTAL OTHER INCOME AND EXPENSES (1,143,000) (982,000) (1,628,000)
----------- ----------- -----------
PRETAX INCOME 705,000 1,737,000 1,705,000
Income tax expense (182,000) (655,000) (829,000)
----------- ----------- -----------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING FOR INCOME TAXES 523,000 1,082,000 876,000
----------- ----------- -----------
Cumulative effect of change in accounting
for income taxes --- (725,000) ---
----------- ----------- -----------
NET INCOME $ 523,000 $ 357,000 $ 876,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 49
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended September 30,
--------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 523,000 $ 357,000 $ 876,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Interest credited to fixed annuity contracts 5,042,000 3,635,000 3,940,000
Net realized investment (gains) losses 1,348,000 (445,000) (1,932,000)
Accretion of net discounts on investments (394,000) (24,000) (55,000)
Amortization of goodwill 58,000 58,000 58,000
Provision for deferred income taxes 333,000 1,388,000 (904,000)
Cumulative effect of change in accounting for income taxes --- 725,000 ---
Change in:
Deferred acquisition costs (2,740,000) (1,011,000) (1,243,000)
Income taxes receivable/payable (418,000) (555,000) 387,000
Other, net (323,000) (115,000) 291,000
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,429,000 4,013,000 1,418,000
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
Bonds and notes available for sale (125,130,000) (67,563,000) (95,150,000)
Bonds and notes held for investment --- (1,019,000) (2,052,000)
Sales of:
Bonds and notes available for sale 55,553,000 50,708,000 60,544,000
Mortgage loans --- --- 16,159,000
Redemptions and maturities of:
Bonds and notes available for sale 20,358,000 5,791,000 1,583,000
Bonds and notes held for investment 1,011,000 --- ---
Other, net (77,000) 31,000 35,000
------------ ------------ ------------
NET CASH USED BY INVESTING ACTIVITIES (48,285,000) (12,052,000) (18,881,000)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Premium receipts on fixed annuity contracts 51,681,000 7,840,000 9,105,000
Withdrawal payments on fixed annuity contracts (14,131,000) (10,504,000) (2,475,000)
Claims and annuity payments on fixed annuity contracts (2,974,000) (3,194,000) (2,272,000)
Other, net 1,877,000 427,000 54,000
------------ ------------ ------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 36,453,000 (5,431,000) 4,412,000
------------ ------------ ------------
NET DECREASE IN CASH AND SHORT-TERM INVESTMENTS (8,403,000) (13,470,000) (13,051,000)
CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD 14,785,000 28,255,000 41,306,000
------------ ------------ ------------
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 6,382,000 $ 14,785,000 $ 28,255,000
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid on indebtedness $ 8,000 $ --- $ ---
============ ============ ============
Income taxes paid (recovered) $ 254,000 $ (178,000) $ 1,149,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 50
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL: First SunAmerica Life Insurance Company (the "Company") is
an indirect wholly owned subsidiary of SunAmerica Inc. (the "Parent").
Certain items have been reclassified to conform to the current year's
presentation.
INVESTMENTS: 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 and common stocks 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. It is management's intent, and the
Company has the ability, to hold the remainder of bonds and notes
until maturity, and, therefore, these investments are carried at
amortized cost. Bonds and notes, whether available for sale or held
for investment, 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. Realized gains and losses on the sale of investments are
recognized in operations at the date of sale and are determined using
the specific cost identification method. Premiums and discounts on
investments are amortized to investment income using the interest
method over the contractual lives of the investments.
DEFERRED ACQUISITION COSTS: Policy acquisition costs are deferred and
amortized, with interest, over the estimated lives of the contracts in
relation to the present value of estimated gross profits, which 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.
1
<PAGE> 51
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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. At
September 30, 1995 and 1994, deferred acquisition costs have been
increased by $200,000 and $2,100,000, respectively, 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 fees for assuming
mortality and certain expense risks. Such fees are included in
Variable Annuity Fee Income in the income statement.
GOODWILL: Goodwill, amounting to $879,000 at September 30, 1995, is
amortized by using the straight-line method over a period of 25 years
and is included in Other Assets in the balance sheet.
CONTRACTHOLDER RESERVES: Contractholder reserves for fixed annuity
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 are recognized in income as earned.
INCOME TAXES: The Company is included in the consolidated federal
income tax return of the Parent and files as a "life insurance
company" under the provisions of the Internal Revenue Code of 1986.
Income taxes have been calculated as if the Company filed a separate
return. Effective October 1, 1993, deferred 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.
2
<PAGE> 52
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. INVESTMENTS
The amortized cost and estimated fair value of bonds and notes
available for sale and held for investment by major category follow:
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
------------- -------------
<S> <C> <C>
AT SEPTEMBER 30, 1995:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 37,693,000 $ 37,759,000
Mortgage-backed securities 60,558,000 60,367,000
Corporate bonds and notes 10,966,000 9,645,000
-------------- -------------
Total available for sale $ 109,217,000 $ 107,771,000
============== =============
HELD FOR INVESTMENT:
Securities of the United States
Government $ 2,297,000 $ 2,289,000
============== =============
AT SEPTEMBER 30, 1994:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 39,775,000 $ 36,398,000
Mortgage-backed securities 13,943,000 12,883,000
Corporate bonds and notes 8,048,000 6,785,000
-------------- -------------
Total available for sale $ 61,766,000 $ 56,066,000
============== =============
HELD FOR INVESTMENT:
Securities of the United States
Government $ 2,301,000 $ 2,102,000
Corporate bonds and notes 1,013,000 1,015,000
-------------- -------------
Total held for investment $ 3,314,000 $ 3,117,000
============== =============
</TABLE>
3
<PAGE> 53
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. INVESTMENTS (Continued)
The amortized cost and estimated fair value of bonds and notes
available for sale and held for investment by contractual maturity, as
of September 30, 1995, follow:
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
------------- -------------
<S> <C> <C>
AVAILABLE FOR SALE:
Due in one year or less $ --- $ ---
Due after one year through five years --- ---
Due after five years through ten years 10,966,000 9,645,000
Due after ten years 37,693,000 37,759,000
Mortgage-backed securities 60,558,000 60,367,000
------------- -------------
Total available for sale $ 109,217,000 $ 107,771,000
============= =============
HELD FOR INVESTMENT:
Due in one year or less $ --- $ ---
Due after one year through five years --- ---
Due after five years through ten years 2,297,000 2,289,000
Due after ten years --- ---
Mortgage-backed securities --- ---
------------- -------------
Total held for investment $ 2,297,000 $ 2,289,000
============= =============
</TABLE>
Actual maturities of bonds and notes will differ from those shown
above because of prepayments and redemptions.
4
<PAGE> 54
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. INVESTMENTS (Continued)
Gross unrealized gains and losses on bonds and notes available for
sale and held for investment by major category follow:
<TABLE>
<CAPTION>
Gross Gross
unrealized unrealized
gains losses
------------- -------------
<S> <C> <C>
AT SEPTEMBER 30, 1995:
AVAILABLE FOR SALE:
Securities of the United States
Government $ 263,000 $ (197,000)
Mortgage-backed securities 257,000 (448,0000)
Corporate bonds and notes 102,000 (1,423,000)
------------- ------------
Total available for sale $ 622,000 $ (2,068,000)
============= ============
HELD FOR INVESTMENT:
Securities of the United States
Government $ 22,000 $ (30,000)
============= ============
AT SEPTEMBER 30, 1994:
AVAILABLE FOR SALE:
Securities of the United States
Government $ --- $ (3,377,000)
Mortgage-backed securities --- (1,060,000)
Corporate bonds and notes 36,000 (1,299,000)
------------- ------------
Total available for sale $ 36,000 $ (5,736,000)
============= ============
HELD FOR INVESTMENT:
Securities of the United States
Government $ 8,000 $ (207,000)
Corporate bonds and notes 2,000 ---
------------- ------------
Total held for investment $ 10,000 $ (207,000)
============= ============
</TABLE>
At September 30, 1995, gross unrealized losses on equity securities
aggregated $112,000 and gross unrealized gains aggregated $35,000.
5
<PAGE> 55
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. INVESTMENTS (Continued)
Gross realized investment gains and losses on sales of all types of
investments are as follows:
<TABLE>
<CAPTION>
Years ended September 30,
-------------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Bonds and notes available
for sale:
Realized gains $ 423,000 $ 644,000 $ 2,157,000
Realized losses (1,771,000) (199,000) (225,000)
------------ ------------ ------------
Total net realized
investment gains (losses) $ (1,348,000) $ 445,000 $ 1,932,000
============ ============ ============
</TABLE>
The sources and related amounts of investment income are as follows:
<TABLE>
<CAPTION>
Years ended September 30,
------------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Short-term investments $ 1,045,000 $ 685,000 $ 1,120,000
Bonds and notes 6,291,000 4,341,000 3,220,000
Mortgage loans 498,000 501,000 761,000
------------ ------------ ------------
Total investment income $ 7,834,000 $ 5,527,000 $ 5,101,000
============ ============ ============
</TABLE>
Expenses incurred to manage the investment portfolio amounted to
$125,000 for the year ended September 30, 1995, $102,000 for the year
ended September 30, 1994, and $84,000 for the year ended September 30,
1993 and are included in General and Administrative Expenses in the
income statement.
6
<PAGE> 56
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. INVESTMENTS (Continued)
The carrying values of investments in any one entity or its affiliates
exceeding 10% of the Company's shareholder's equity are as follows:
<TABLE>
<CAPTION> September 30,
1995
------------
<S> <C>
Short-term investments:
Southern California Edison Commercial Paper $3,989,000
Mortgage loans:
Hyman & Rose Shulman Family Trust 4,733,000
==========
</TABLE>
At September 30, 1995, bonds and notes included $9,768,000 (at
amortized cost, with a fair value of $8,369,000) of investments not
rated investment grade by either Standard & Poor's Corporation,
Moody's Investors Service or under National Association of Insurance
Commissioners' guidelines. The Company had no material concentrations
of non-investment-grade assets at September 30, 1995.
At September 30, 1995, the amortized cost of investments in default as
to the payment of principal or interest was $745,000 and the fair
value was $500,000, all of which are unsecured non-investment-grade
bonds.
At September 30, 1995, $257,000 of bonds, at amortized cost, were on
deposit with regulatory authorities in accordance with statutory
requirements.
3. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair value disclosures are limited to the
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
equity investments) 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.
7
<PAGE> 57
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
3. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
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 and further discounting for current market
factors.
VARIABLE ANNUITY ASSETS: Variable annuity assets are carried at the
market value of the underlying securities.
RESERVES FOR FIXED ANNUITY CONTRACTS: Deferred annuity contracts are
assigned 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.
VARIABLE ANNUITY LIABILITIES: 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.
8
<PAGE> 58
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
3. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
The estimated fair values of the Company's financial instruments at
September 1995 and 1994, compared with their respective carrying
values, are as follows:
<TABLE>
<CAPTION>
Carrying Fair
value value
------------- -------------
<S> <C> <C>
1995:
Assets:
Cash and short-term investments $ 6,382,000 $ 6,382,000
Bonds and notes 110,068,000 110,060,000
Mortgage loans 4,733,000 4,733,000
Variable annuity assets 32,760,000 32,760,000
Liabilities:
Reserves for fixed annuity
contracts 106,332,000 102,782,000
Variable annuity liabilities 32,760,000 31,740,000
============ ============
1994:
Assets:
Cash and short-term investments $ 14,785,000 $ 14,785,000
Bonds and notes 59,380,000 59,183,000
Mortgage loans 4,763,000 4,763,000
Variable annuity assets 26,390,000 26,390,000
Liabilities:
Reserves for fixed annuity contracts 66,881,000 64,626,000
Variable annuity liabilities 26,390,000 25,476,000
============ ============
</TABLE>
4. 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 are adequate and any further liabilities and costs
will not have a material adverse impact upon the Company's financial
position or results of operations.
9
<PAGE> 59
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
5. SHAREHOLDER'S EQUITY
The Company is authorized to issue 300 shares of its $10,000 par value
Common Stock. At September 30, 1995, 1994 and 1993, 300 shares are
outstanding.
Changes in shareholder's equity are as follows:
<TABLE>
<CAPTION>
Years ended September 30,
-----------------------------------------
1995 1994 1993
---------- ----------- ----------
<S> <C> <C> <C>
RETAINED EARNINGS:
Beginning balance $4,727,000 $ 4,370,000 $3,494,000
Net income 523,000 357,000 876,000
----------- ----------- ----------
Ending balance $5,250,000 $ 4,727,000 $4,370,000
========== =========== ==========
NET UNREALIZED GAINS (LOSSES)
ON DEBT AND EQUITY SECURITIES
AVAILABLE FOR SALE:
Beginning balance $(2,340,000) $ 1,331,000 $ --
Excess of market value
over amortized cost on
debt and equity securities
available for sale --- --- 2,039,000
Change in net unrealized
gains (losses) on debt
and equity securities
available for sale 4,177,000 (7,739,000) --
Change in adjustment to
deferred acquisition cost (1,900,000) 2,100,000 --
Tax effect of net change (797,000) 1,968,000 (708,000)
----------- ----------- ----------
Ending balance $ (860,000) $(2,340,000) $1,331,000
=========== =========== ==========
</TABLE>
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, nor if the
Superintendent disapproves the distribution of the dividend within the
30- day period. No dividends were paid in fiscal years 1995, 1994 or
1993.
10
<PAGE> 60
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
5. SHAREHOLDER'S EQUITY (Continued)
Under statutory accounting principles utilized in filings with
insurance regulatory authorities, the Company's net loss for the nine
months ended September 30, 1995 was $1,755,000. The statutory net
income for the year ended December 31, 1994 was $726,000 and for the
year ended December 31, 1993 the statutory net loss was $597,000. The
Company's statutory capital and surplus was $13,962,000 at September
30, 1995, $16,122,000 at December 31, 1994 and $15,623,000 at December
31, 1993.
6. INCOME TAXES
The components of the provisions for income taxes on pretax income
consist of the following:
<TABLE>
<CAPTION>
Net realized
investment
gains (losses) Operations Total
------------- ------------ -------------
<S> <C> <C> <C>
1995:
Currently payable $ (592,000) $ 441,000 $ (151,000)
Deferred (28,000) 361,000 333,000
----------- ---------- -----------
Total income tax expense $ (620,000) $ 802,000 $ 182,000
=========== ========== ===========
1994:
Currently payable $ 121,000 $ (854,000) $ (733,000)
Deferred 65,000 1,323,000 1,388,000
----------- ---------- -----------
Total income tax expense $ 186,000 $ 469,000 $ 655,000
=========== ========== ===========
1993:
Currently payable $ 1,091,000 $ 642,000 $ 1,733,000
Deferred (46,000) (858,000) (904,000)
----------- ---------- -----------
Total income tax expense $ 1,045,000 $ (216,000) $ 829,000
=========== ========== ===========
</TABLE>
11
<PAGE> 61
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
6. INCOME TAXES (Continued)
Income taxes computed at the United States federal income tax rate of
35% for 1995 and 1994 and 34.75% for 1993 and income taxes provided
differ as follows:
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Amount computed at statutory rate $247,000 $608,000 $592,000
Increases (decreases) resulting from:
Amortization of differences
between book and tax bases of
net assets acquired 20,000 10,000 (20,000)
State income taxes, net of
federal tax benefit (86,000) 36,000 250,000
Other, net 1,000 1,000 7,000
-------- -------- --------
Total income tax expense $182,000 $655,000 $829,000
======== ======== ========
</TABLE>
Effective October 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No.109, "Accounting for
Income Taxes." Accordingly, the cumulative effect of this change in
accounting for income taxes was recorded during the quarter ended
December 31, 1993 to decrease the asset for deferred income taxes by
$725,000.
12
<PAGE> 62
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
6. 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 asset for
deferred income taxes are as follows:
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
Deferred tax liabilities:
Investments $ (142,000) $ (45,000)
Deferred acquisition costs (1,703,000) (1,026,000)
Other (66,000) (41,000)
----------- ------------
Total deferred tax liabilities (1,911,000) (1,112,000)
----------- ------------
Deferred tax assets:
Contractholder reserves 1,125,000 659,000
State income taxes 79,000 79,000
Net unrealized losses on certain
debt and equity securities 463,000 1,260,000
----------- ------------
Total deferred tax assets 1,667,000 1,998,000
----------- ------------
Deferred income tax asset (liability) $ (244,000) $ 886,000
=========== ============
</TABLE>
13
<PAGE> 63
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
7. RELATED PARTY MATTERS
The Company pays commissions to two affiliated companies, Royal
Alliance Associates, Inc. ("Royal") and SunAmerica Securities, Inc.
These broker-dealers represent a significant portion of the Company's
business, amounting to approximately 14.8%, 26.5% and 49.3% of
premiums in 1995, 1994 and 1993, respectively. Commissions paid to
these broker-dealers totaled $761,000 in 1995, $326,000 in 1994, and
$733,000 in 1993. Occupancy and office services expenses paid to
Royal totaled $113,000 for the year ended September 30, 1995, $122,000
for the year ended September 30, 1994 and $135,000 for the year ended
September 30, 1993.
The Company purchases administrative, investment management,
accounting, marketing and data processing services from SunAmerica
Financial, Inc., whose purpose is to provide services to the
SunAmerica companies. Amounts paid for such services totaled $722,000
for the year ended September 30, 1995, $706,000 for the year ended
September 30, 1994 and $586,000 for the year ended September 30, 1993.
During the year ended September 30, 1993, the Company sold to
SunAmerica Life Insurance Company, its immediate parent, two mortgage
loans for cash equal to their aggregate book value of $16,547,000.
14
<PAGE> 64
[LOGO]
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
FINANCIAL STATEMENTS
DECEMBER 31, 1994
<PAGE> 65
[LOGO]
REPORT OF INDEPENDENT ACCOUNTANTS
February 21, 1995
To the Board of Directors of First SunAmerica Life Insurance Company
and the Contractholders of its separate account,
Variable Annuity Account One
In our opinion, the accompanying statement of net assets, including
the schedule of portfolio investments, and the related statements of
operations and of changes in net assets present fairly, in all
material respects, the financial position of each of the Variable
Accounts constituting Variable Annuity Account One, a separate account
of First SunAmerica Life Insurance Company (the "Separate Account") at
December 31, 1994, the results of their operations for the year then
ended, and the changes in their net assets for each of the two years
in the period then ended, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Separate Account'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 generally accepted auditing standards 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, which included confirmation
of securities owned as of December 31, 1994 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
<PAGE> 66
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
December 31, 1994
<TABLE>
<CAPTION>
Foreign Capital Natural Convertible Strategic
Securities Appreciation Growth Resources Securities Multi-Asset Multi-Asset
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments in Anchor Series
Trust, at market value $1,956,590 $3,618,724 $4,674,405 $648,329 $1,163,624 $1,176,715 $4,713,303
Liabilities 0 0 0 0 0 0 0
---------- ---------- ---------- -------- ---------- ---------- ----------
Net assets $1,956,590 $3,618,724 $4,674,405 $648,329 $1,163,624 $1,176,715 $4,713,303
========== ========== ========== ======== ========== ========== ==========
Accumulation units outstanding 165,468 167,384 170,859 43,075 69,818 77,616 287,625
========== ========== ========== ======== ========== ========== ==========
Unit value of accumulation units $ 11.8258 $ 21.6196 $ 27.3589 $15.0511 $ 16.6652 $ 15.1609 $ 16.3866
========== ========== ========== ======== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 67
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF NET ASSETS
December 31, 1994
(Continued)
<TABLE>
<CAPTION>
Government and
High Yield Target '98 Fixed Income Quality Bond Money Market
Portfolio Portfolio Portfolio Portfolio Portfolio TOTAL
---------- ---------- ------------ -------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments in Anchor Series
Trust, at market value $1,445,995 $1,022,664 $1,222,923 $3,987,776 $250,591 $25,881,639
Liabilities 0 0 0 0 0 0
---------- ---------- ---------- ---------- -------- -----------
Net assets $1,445,995 $1,022,664 $1,222,923 $3,987,776 $250,591 $25,881,639
========== ========== ========== ========== ======== ===========
Accumulation units outstanding 80,486 61,733 56,430 176,490 15,560
========== ========== ========== ========== ========
Unit value of accumulation units $17.9633 $16.5663 $21.6714 $22.5953 $16.1014
========== ========== ========== ========== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 68
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1994
<TABLE>
<CAPTION>
Market Value
Variable Account Shares Per Share Market Value Cost
- ---------------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Foreign Securities Portfolio 185,400.169 $10.553335 $ 1,956,590 $ 1,944,073
Capital Appreciation Portfolio 206,610.424 17.514719 3,618,724 3,833,602
Growth Portfolio 257,115.101 18.180206 4,674,405 5,283,510
Natural Resources Portfolio 48,775.515 13.292106 648,329 663,100
Convertible Securities Portfolio 100,631.549 11.563213 1,163,624 1,345,868
Strategic Multi-Asset Portfolio 104,236.619 11.288885 1,176,715 1,352,554
Multi-Asset Portfolio 402,596.009 11.707277 4,713,303 5,382,845
High Yield Portfolio 183,622.216 7.874837 1,445,995 1,596,397
Target '98 Portfolio 83,843.824 12.197244 1,022,664 1,146,175
Fixed Income Portfolio 94,814.733 12.898022 1,222,923 1,360,261
Government and Quality Bond
Portfolio 309,990.257 12.864198 3,987,776 4,356,381
Money Market Portfolio 250,591.380 1.000000 250,591 250,591
----------- -----------
$25,881,639 $28,515,357
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 69
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
December 31, 1994
<TABLE>
<CAPTION>
Foreign Capital Natural Convertible Strategic
Securities Appreciation Growth Resources Securities Multi-Asset Multi-Asset
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ------------ --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends and capital gains
distributions $5,237 $332,487 $711,161 $12,993 $152,404 $213,252 $682,129
----------- --------- --------- --------- --------- --------- -----------
Total investment income 5,237 332,487 711,161 12,993 152,404 213,252 682,129
----------- --------- --------- --------- --------- --------- -----------
Expenses:
Mortality risk charge (17,271) (27,515) (43,291) (5,270) (10,449) (9,099) (43,043)
Expense risk charge (6,717) (10,700) (16,835) (2,050) (4,063) (3,538) (16,739)
Administrative expense charge (2,879) (4,586) (7,215) (878) (1,741) (1,516) (7,174)
----------- --------- --------- --------- --------- --------- -----------
Total expenses (26,867) (42,801) (67,341) (8,198) (16,253) (14,153) (66,956)
----------- --------- --------- --------- --------- --------- -----------
Net investment income (loss) (21,630) 289,686 643,820 4,795 136,151 199,099 615,173
----------- --------- --------- --------- --------- --------- -----------
Realized gains from
securities transactions:
Proceeds from shares sold 1,163,019 935,066 892,892 547,651 329,038 223,033 1,080,957
Cost of shares sold (1,110,404) (950,364) (900,613) (556,686) (322,773) (237,905) (1,113,557)
----------- --------- --------- --------- --------- --------- -----------
Net realized gains from
securities transactions 52,615 (15,298) (7,721) (9,035) 6,265 (14,872) (32,600)
----------- --------- --------- --------- --------- --------- -----------
Change in net unrealized
appreciation/depreciation
of investments:
Beginning of period 129,634 195,776 326,768 39,284 97,170 41,886 61,016
End of period 12,517 (214,878) (609,105) (14,771) (182,244) (175,839) (669,542)
----------- --------- --------- --------- --------- --------- -----------
Change in net unrealized
appreciation/depreciation
of investments (117,117) (410,654) (935,873) (54,055) (279,414) (217,725) (730,558)
----------- --------- --------- --------- --------- --------- -----------
Increase (decrease) in net assets
from operations ($86,132) ($136,266) ($299,774) ($58,295) ($136,998) ($33,498) ($147,985)
=========== ========= ========= ========= ========= ======== =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 70
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
December 31, 1994
(Continued)
<TABLE>
<CAPTION>
Government and
High Yield Target '98 Fixed Income Quality Bond Money Market
Portfolio Portfolio Portfolio Portfolio Portfolio TOTAL
---------- ---------- ------------ -------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends and capital gains
distributions $172,643 $84,911 $109,491 $305,698 $24,603 $2,807,009
--------- --------- --------- ----------- ----------- -----------
Total investment income 172,643 84,911 109,491 305,698 24,603 2,807,009
--------- --------- --------- ----------- ----------- -----------
Expenses:
Mortality risk charge (11,953) (8,604) (11,944) (41,278) (6,381) (236,098)
Expense risk charge (4,649) (3,346) (4,645) (16,053) (2,481) (91,816)
Administrative expense charge (1,992) (1,434) (1,991) (6,880) (1,063) (39,349)
--------- --------- --------- ----------- ----------- -----------
Total expenses (18,594) (13,384) (18,580) (64,211) (9,925) (367,263)
--------- --------- --------- ----------- ----------- -----------
Net investment income (loss) 154,049 71,527 90,911 241,487 14,678 2,439,746
--------- --------- --------- ----------- ----------- -----------
Realized gains from
securities transactions:
Proceeds from shares sold 199,941 72,210 429,446 1,872,724 2,955,881 10,701,858
Cost of shares sold (199,785) (75,713) (452,785) (1,979,589) (2,955,881) (10,856,055)
--------- --------- --------- ----------- ----------- -----------
Net realized gains from
securities transactions 156 (3,503) (23,339) (106,865) 0 (154,197)
--------- --------- --------- ----------- ----------- -----------
Change in net unrealized
appreciation/depreciation
of investments:
Beginning of period 82,938 (2,484) (6,151) (10,878) 0 954,959
End of period (150,402) (123,511) (137,338) (368,605) 0 (2,633,718)
--------- --------- --------- ----------- ----------- -----------
Change in net unrealized
appreciation/depreciation
of investments (233,340) (121,027) (131,187) (357,727) 0 (3,588,677)
--------- --------- --------- ----------- ----------- -----------
Increase (decrease) in net assets
from operations ($79,135) ($53,003) ($63,615) ($223,105) $14,678 ($1,303,128)
========= ========= ========= =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 71
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
December 31, 1994
<TABLE>
<CAPTION>
Foreign Capital Natural Convertible Strategic
Securities Appreciation Growth Resources Securities Multi-Asset Multi-Asset
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ------------ --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) ($21,630) $289,686 $643,820 $4,795 $136,151 $199,099 $615,173
Net realized gains (losses)
from securities
transactions 52,615 (15,298) (7,721) (9,035) 6,265 (14,872) (32,600)
Change in net unrealized
appreciation/depreciation
of investments (117,117) (410,654) (935,873) (54,055) (279,414) (217,725) (730,558)
---------- ---------- ---------- -------- ---------- --------- ---------
Increase (decrease) in net assets
from operations (86,132) (136,266) (299,774) (58,295) (136,998) (33,498) (147,985)
---------- ---------- ---------- -------- ---------- --------- ---------
From capital transactions:
Net proceeds from units sold 360,284 813,413 463,119 109,642 216,123 319,023 415,941
Cost of units redeemed (349,607) (311,100) (408,535) (75,020) (46,688) (93,253) (477,590)
Net transfers 669,012 720,106 (293,686) 366,592 38,391 472,921 (329,122)
---------- ---------- ---------- -------- ---------- --------- ---------
Increase (decrease) in net assets
from capital transactions 679,689 1,222,419 (239,102) 401,214 207,826 698,691 (390,771)
---------- ---------- ---------- -------- ---------- --------- ---------
Increase (decrease) in net assets 593,557 1,086,153 (538,876) 342,919 70,828 665,193 (538,756)
Net assets at beginning of period 1,363,033 2,532,571 5,213,281 305,410 1,092,796 511,522 5,252,059
---------- ---------- ---------- -------- ---------- --------- ---------
Net assets at end of period $1,956,590 $3,618,724 $4,674,405 $648,329 $1,163,624 $1,176,715 $4,713,303
========== ========== ========== ======== ========== ========== ==========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 29,519 37,502 17,005 7,128 11,858 20,678 25,212
Units redeemed (28,644) (14,264) (14,649) (4,877) (2,626) (6,044) (28,317)
Units transferred 54,548 33,017 (10,531) 20,609 2,159 30,574 (19,950)
---------- ---------- ---------- -------- ---------- --------- ---------
Increase (decrease) in units
outstanding 55,423 56,255 (8,176) 22,860 11,391 45,207 (23,054)
Beginning units 110,045 111,129 179,035 20,215 58,427 32,409 310,679
---------- ---------- ---------- -------- ---------- --------- ---------
Ending units 165,468 167,384 170,859 43,075 69,818 77,616 287,625
========== ========== ========== ======== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 72
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
December 31, 1994
(Continued)
<TABLE>
<CAPTION>
Government and
High Yield Target '98 Fixed Income Quality Bond Money Market
Portfolio Portfolio Portfolio Portfolio Portfolio TOTAL
---------- ---------- ------------ ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $154,049 $71,527 $90,911 $241,487 $14,678 $2,439,746
Net realized gains (losses) from
securities transactions 156 (3,503) (23,339) (106,865) 0 (154,197)
Change in net unrealized
appreciation/depreciation
of investments (233,340) (121,027) (131,187) (357,727) 0 (3,588,677)
---------- ---------- ---------- ---------- ----------- -----------
Increase (decrease) in net assets
from operations (79,135) (53,003) (63,615) (223,105) 14,678 (1,303,128)
---------- ---------- ---------- ---------- ----------- -----------
From capital transactions:
Net proceeds from units sold 393,437 152,035 201,189 568,879 563,854 4,576,939
Cost of units redeemed (60,784) (16,591) (45,485) (471,685) (623,416) (2,979,754)
Net transfers (10,686) 31,989 (376,330) (1,020,818) (1,007,854) (739,485)
---------- ---------- ---------- ---------- ----------- -----------
Increase (decrease) in net assets
from capital transactions 321,967 167,433 (220,626) (923,624) (1,067,416) 857,700
---------- ---------- ---------- ---------- ----------- -----------
Increase (decrease) in net assets 242,832 114,430 (284,241) (1,146,729) (1,052,738) (445,428)
Net assets at beginning of period 1,203,163 908,234 1,507,164 5,134,505 1,303,329 26,327,067
---------- ---------- ---------- ---------- ----------- -----------
Net assets at end of period $1,445,995 $1,022,664 $1,222,923 $3,987,776 $250,591 $25,881,639
========== ========== ========== ========== =========== ===========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 21,290 8,987 9,149 24,914 35,512
Units redeemed (3,313) (980) (2,068) (20,657) (39,264)
Units transferred (582) 1,890 (17,012) (45,022) (63,588)
---------- ---------- ---------- ---------- -----------
Increase (decrease) in units outstanding 17,395 9,897 (9,932) (40,765) (67,339)
Beginning units 63,091 51,836 66,362 217,255 82,899
---------- ---------- ---------- ---------- -----------
Ending units 80,486 61,733 56,430 176,490 15,560
========== ========== ========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 73
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
December 31, 1993
<TABLE>
<CAPTION>
Foreign Capital Natural Convertible Strategic
Securities Appreciation Growth Resources Securities Multi-Asset Multi-Asset
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ------------ --------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) ($1,943) $95,751 $160,077 $588 $22,523 $3,658 $234,581
Net realized gains (losses)
from securities
transactions 2,997 23,912 33,917 1,208 7,891 1,230 5,423
Change in net unrealized
appreciation/depreciation
of investments 171,120 153,865 156,137 40,021 76,543 39,771 1,638
---------- ---------- ---------- -------- ---------- -------- ----------
Increase in net assets
from operations 172,174 273,528 350,131 41,815 106,957 44,859 241,642
---------- ---------- ---------- -------- ---------- -------- ----------
From capital transactions:
Net proceeds from units sold 420,397 1,434,271 2,046,448 107,911 455,596 117,442 1,543,467
Cost of units redeemed (33,940) (34,734) (92,520) (3,658) (4,870) (10,253) (117,962)
Net transfers 495,546 342,338 (73,998) 66,177 235,000 199,056 1,331,790
---------- ---------- ---------- -------- ---------- -------- ----------
Increase (decrease) in net assets
from capital transactions 882,003 1,741,875 1,879,930 170,430 685,726 306,245 2,757,295
---------- ---------- ---------- -------- ---------- -------- ----------
Increase (decrease) in net assets 1,054,177 2,015,403 2,230,061 212,245 792,683 351,104 2,998,937
Net assets at beginning of period 308,856 517,168 2,983,220 93,165 300,113 160,418 2,253,122
---------- ---------- ---------- -------- ---------- -------- ----------
Net assets at end of period $1,363,033 $2,532,571 $5,213,281 $305,410 $1,092,796 $511,522 $5,252,059
========== ========== ========== ======== =========== ======== ==========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 37,186 69,197 76,376 7,555 25,993 7,997 94,949
Units redeemed (3,002) (1,676) (3,453) (256) (278) (698) (7,256)
Units transferred 43,834 16,516 (2,762) 4,633 13,407 13,554 81,927
---------- ---------- ---------- -------- ---------- -------- ----------
Increase (decrease) in units
outstanding 78,018 84,037 70,161 11,932 39,122 20,853 169,620
Beginning units 32,027 27,092 108,874 8,283 19,305 11,556 141,059
---------- ---------- ---------- -------- ---------- -------- ----------
Ending units 110,045 111,129 179,035 20,215 58,427 32,409 310,679
========== ========== ========== ======== ========== ======== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 74
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
December 31, 1993
(Continued)
<TABLE>
<CAPTION>
Government and
High Yield Target '98 Fixed Income Quality Bond Money Market
Portfolio Portfolio Portfolio Portfolio Portfolio TOTAL
---------- ---------- ------------ -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income (loss) $44,547 $53,919 $70,525 $228,959 $15,793 $929,176
Net realized gains from
securities transactions 9,584 3,082 1,654 43,771 0 134,669
Change in net unrealized
appreciation/depreciation
of investments 78,731 (4,292) (1,570) 22,506 0 734,470
---------- -------- ---------- ---------- ---------- -----------
Increase in net assets from operations 132,862 52,709 70,609 295,236 15,793 1,798,315
---------- -------- ---------- ---------- ---------- -----------
From capital transactions:
Net proceeds from units sold 499,171 473,007 574,403 2,242,845 1,559,660 11,474,618
Cost of units redeemed (37,074) (73,848) (39,171) (236,050) (35,790) (719,870)
Net transfers 40,751 82,224 33,240 (1,104,737) (1,650,033) (2,646)
---------- -------- ---------- ---------- ---------- -----------
Increase (decrease) in net assets
from capital transactions 502,848 481,383 568,472 902,058 (126,163) 10,752,102
---------- -------- ---------- ---------- ---------- -----------
Increase (decrease) in net assets 635,710 534,092 639,081 1,197,294 (110,370) 12,550,417
Net assets at beginning of period 567,453 374,142 868,083 3,937,211 1,413,699 13,776,650
---------- -------- ---------- ---------- ---------- -----------
Net assets at end of period $1,203,163 $908,234 $1,507,164 $5,134,505 $1,303,329 $26,327,067
========== ======== ========== ========== ========== ===========
ANALYSIS OF INCREASE (DECREASE)
IN UNITS OUTSTANDING:
Units sold 27,939 27,915 25,946 97,789 100,864
Units redeemed (2,075) (4,358) (1,769) (10,292) (2,315)
Units transferred 2,281 4,853 1,501 (48,167) (106,708)
---------- -------- ---------- ---------- ----------
Increase (decrease) in units outstanding 28,145 28,410 25,678 39,330 (6,159)
Beginning units 34,946 23,426 40,684 177,925 91,048
---------- -------- ---------- ---------- ----------
Ending units 63,091 51,836 66,362 217,255 82,689
========== ======== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 75
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Variable Annuity Account One (the "Separate Account") is a segregated
investment account of First SunAmerica Life Insurance Company (the
"Company"). The Company is an indirect, wholly-owned subsidiary of
SunAmerica Inc. The Separate Account is registered as a segregated
unit investment trust pursuant to the provisions of the Investment
Company Act of 1940, as amended.
The Separate Account is composed of twelve variable accounts (the
"Variable Accounts") each of which invests solely in the shares of one
of the twelve portfolios of Anchor Series Trust (the "Trust"). The
Trust is a diversified, open-ended, affiliated investment company,
which retains an investment advisor to assist in the investment
activities of the Trust. The contractholder may elect to have
payments allocated to a guaranteed-interest fund in the Company (the
"General Account"), which is not a part of the Separate Account.
These financial statements include balances allocated by the
contractholder to the twelve Variable Accounts and do not include
balances allocated to the General Account.
The Separate Account was established pursuant to New York insurance
law on May 30, 1990 and units were first offered for sale on September
3, 1991.
The investment objectives and policies of the twelve portfolios of the
Trust are summarized below:
FOREIGN SECURITIES PORTFOLIO seeks long-term capital appreciation
through investment primarily in a diversified group of equity
securities issued by foreign companies and primarily denominated in
foreign currencies.
CAPITAL APPRECIATION PORTFOLIO seeks long-term capital appreciation.
This portfolio invests in a widely diversified group of domestic and
foreign growth equity securities, debt securities and preferred stocks
that are convertible into, or carry warrants to purchase, common
stocks or other equity interests. This portfolio may engage in
transactions involving stock index futures and options thereon as a
hedge against changes in market conditions.
GROWTH PORTFOLIO seeks capital appreciation through investment in
domestic and foreign growth equity securities. This portfolio may
engage in transactions involving stock index futures and options
thereon as a hedge against changes in market conditions.
1
<PAGE> 76
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
NATURAL RESOURCES PORTFOLIO seeks a total return in excess of the U.S.
rate of inflation as represented by the Consumer Price Index. This
portfolio invests primarily in equity securities of U.S. or foreign
companies which are expected to provide favorable returns in periods
of rising inflation. This portfolio may also engage in transactions
involving stock index futures contracts and options thereon, and
transactions involving the future delivery of fixed income securities
("Financial Futures Contracts") and options thereon as a hedge against
changes in market conditions.
CONVERTIBLE SECURITIES PORTFOLIO seeks to provide high current income
and long-term capital appreciation by investing primarily in a variety
of securities convertible into common stock which are issued by
publicly held corporations. This portfolio may also engage in
transactions involving Financial Futures Contracts and options thereon
as a hedge against changes in market conditions.
STRATEGIC MULTI-ASSET PORTFOLIO seeks high long-term total investment
return by investing in growth equity securities, aggressive growth
equity securities, investment grade bonds, high-yield, high-risk
bonds, international equity securities and money market instruments.
This portfolio may also engage in transactions involving stock index
futures contracts and options thereon, and Financial Futures Contracts
and options thereon as a hedge against changes in market conditions.
MULTI-ASSET PORTFOLIO seeks long-term total investment return
consistent with moderate investment risk and invests in growth equity
securities, convertible securities, investment grade fixed income
securities and money market securities. This portfolio may also
engage in transactions involving stock index futures contracts and
options thereon, and Financial Futures Contracts and options thereon
as a hedge against changes in market conditions.
HIGH YIELD PORTFOLIO seeks high current income. A secondary
investment objective is capital appreciation. This portfolio invests
at least 65% of its assets in high-yielding, high-risk,
income-producing corporate bonds, which generally carry ratings lower
than those assigned to investment grade bonds by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P"), or
which are unrated. This portfolio may also engage in transactions
involving Financial Futures Contracts and options thereon as a hedge
against changes in market conditions.
2
<PAGE> 77
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
TARGET '98 PORTFOLIO seeks a predictable compounded investment return
for the specified time period, consistent with preservation of
capital, by investing primarily in zero coupon securities and current,
interest-bearing, investment grade debt obligations which are issued
by the U.S. Government, its agencies and instrumentalities, and both
domestic and foreign corporations.
FIXED INCOME PORTFOLIO seeks a high level of current income consistent
with preservation of capital. This portfolio will invest primarily in
investment grade, fixed income securities and may engage in Financial
Futures Contracts and options thereon as a hedge against changes in
market conditions.
GOVERNMENT AND QUALITY BOND PORTFOLIO seeks relatively high current
income, liquidity and security of principal. This portfolio invests
in obligations issued, guaranteed or insured by the U.S. Government,
its agencies or instrumentalities and in corporate debt securities
rated Aa or better by Moody's or AA or better by S&P.
MONEY MARKET PORTFOLIO seeks current income consistent with stability
of principal through investment in a diversified portfolio of money
market instruments maturing in 397 days or less. The portfolio will
maintain a dollar-weighted average portfolio maturity of not more than
90 days.
Investments in the variable portfolios of the Trust are valued at the
net asset value of the fund shares. Securities transactions are
valued on the date the securities are purchased or sold. Income and
capital gains distributions are recorded when received. Realized
gains and losses on the sale of investments in the Trust are
recognized at the date of sale and are determined on an average cost
basis. For purchase payments allocated to the General Account,
interest is credited to the contractholder based on crediting
provisions of the annuity contracts.
Accumulation unit values reflect the net asset value of the Variable
Accounts and are computed daily.
3
<PAGE> 78
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. CHARGES AND DEDUCTIONS
Charges and deductions are applied against the current value of the
Separate Account and are paid as follows:
WITHDRAWAL CHARGE: The contract value may be withdrawn at any time
during the accumulation period. There is a free withdrawal amount for
the first withdrawal during a contract year after the first contract
year. The free withdrawal amount is equal to 10% of aggregate
purchase payments that have not previously been withdrawn. Should a
withdrawal exceed the free withdrawal amount, a withdrawal charge, in
certain circumstances, is imposed and paid to the Company.
Withdrawal charges vary in amount depending upon the contract year in
which the purchase payment being withdrawn was made. The withdrawal
charge is deducted from the remaining contract value so that the
actual reduction in contract value as a result of the withdrawal will
be greater than the withdrawal amount requested and paid. Free
withdrawals and other withdrawals are allocated to purchase payments
on a first-in, first-out basis so that all withdrawals are allocated
to purchase payments to which the lowest (if any) withdrawal charge
applies.
Any amount withdrawn which exceeds a free withdrawal may be subject to
a withdrawal charge in accordance with the withdrawal charge table
shown below:
<TABLE>
<CAPTION>
Contribution Applicable Withdrawal
Year Charge Percentage
------------ ---------------------
<S> <C>
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 1%
Sixth and later 0%
</TABLE>
4
<PAGE> 79
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. CHARGES AND DEDUCTIONS (Continued)
ANNUITY CHARGE: Contractholders may elect a lump sum payment or one
of three annuity options. Option 1 provides a life income with
installments guaranteed, Option 2 provides a joint and survivor
annuity, and Option 3 provides income for a specified period. No
annuity charge is assessed if either Option 1 or Option 2 is elected.
If a contractholder elects Option 3, an annuity charge may be applied
which equals the withdrawal charge that would be applied if the
contract was being surrendered. Further, no annuity charge will be
assessed if Option 3 is elected by a beneficiary under the death
benefit.
RECORDS MAINTENANCE CHARGE: An annual records maintenance charge of
$30 is charged against each contract, which reimburses the Company for
expenses incurred in establishing and maintaining records relating to
a contract. The records maintenance charge will be assessed each
contract year on the anniversary of the issue date of the contract.
In the event that a total surrender of contract value is made, the
charge will be assessed as of the date of surrender without proration.
TRANSFER FEE: A transfer fee of $25 per transaction is assessed on
each transfer of funds in excess of fifteen transactions within a
contract year or if a transfer is made within 30 days of the issue
date of the contract.
MORTALITY RISK CHARGE: The Company deducts a mortality risk charge as
compensation for the mortality risk assumed by virtue of its
contractual obligations to make annuity payments after the contract
has annuitized for the life of the annuitant, to waive the withdrawal
charge in the event of the death of the annuitant and to provide a
death benefit prior to annuitization. As compensation for this, the
Company deducts an amount, computed on a daily basis, which is equal
to an annual rate of 0.90% of the contract value of the Separate
Account.
EXPENSE RISK CHARGE: The Company guarantees that the records
maintenance and administrative expense charges will not increase,
regardless of actual expenses. As compensation for this guarantee,
the Company deducts an amount, computed on a daily basis, which is
equal to an annual rate of 0.35% of the contract value of the Separate
Account.
5
<PAGE> 80
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
2. CHARGES AND DEDUCTIONS (Continued)
ADMINISTRATIVE EXPENSE CHARGE: The Company deducts an administrative
expense charge which is designed to cover the risk that the
administrative expenses will exceed the revenues from the records
maintenance charge. As compensation for assuming this risk, the
Company deducts an amount, computed on a daily basis, which is equal
to 0.15% of the contract value of the Separate Account.
SEPARATE ACCOUNT INCOME TAXES: While the Company is not currently
maintaining a provision for taxes, the Company has reserved the right
to establish such a provision for taxes in the future if it
determines, in its sole discretion, that it will incur a tax as a
result of the operation of the Separate Account.
3. INVESTMENT IN THE TRUST
The aggregate cost of the Trust's shares acquired and the aggregate
proceeds of shares sold for the year ended December 31, 1994 consist
of the following:
<TABLE>
<CAPTION>
Cost of Shares Proceeds from
Variable Account Acquired Shares Sold
---------------- -------------- -------------
<S> <C> <C>
Foreign Securities Portfolio $ 1,821,078 $ 1,163,019
Capital Appreciation Portfolio 2,447,170 935,066
Growth Portfolio 1,297,611 892,892
Natural Resources Portfolio 953,660 547,651
Convertible Securities Portfolio 673,015 329,038
Strategic Multi-Asset Portfolio 1,120,824 223,033
Multi-Asset Portfolio 1,305,359 1,080,957
High Yield Portfolio 675,956 199,941
Target '98 Portfolio 311,168 72,210
Fixed Income Portfolio 299,731 429,446
Government and Quality Bond
Portfolio 1,190,587 1,872,724
Money Market Portfolio 1,903,144 2,955,881
=========== ===========
</TABLE>
6
<PAGE> 81
VARIABLE ANNUITY ACCOUNT ONE
OF
FIRST SUNAMERICA LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
4. FEDERAL INCOME TAXES
The Company qualifies for federal income tax treatment granted to life
insurance companies under subchapter L of the Internal Revenue Service
Code (the "Code"). The operations of the Separate Account are part of
the total operations of the Company and are not taxed separately. The
Separate Account is not treated as a regulated investment company
under the Code.
7
<PAGE> 82
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The following financial statements are included in Part A of the
Registration Statement:
None
The following financial statements are included in Part B of the
Registration Statement:
Financial Statements of First SunAmerica Life
Insurance Company for the fiscal year ended
September 30, 1995
Financial Statements of Variable Annuity Account One
for the fiscal year ended December 31, 1994
(b) Exhibits
(1) Resolutions Establishing Separate Account...... Previously Filed
(2) Custody Agreements............................. Not Applicable
(3) (a) Distribution Contract...................... Previously Filed
(b) Form of Selling Agreement.................. Previously Filed
(4) Variable Annuity Contract...................... Previously Filed
(5) Application for Contract....................... Previously Filed
(6) Depositor - Corporate Documents
(a) Certificate of Incorporation........... Previously Filed
(b) By-Laws................................ Previously Filed
(7) Reinsurance Contract........................... Not Applicable
(8) Fund Participation Agreement................... Previously Filed
(9) Opinion of Counsel............................. Previously Filed
Consent of Counsel............................. Previously Filed
(10) Consent of Independent Accountants............. Filed Herewith
(11) Financial Statements Omitted from Item 23...... None
(12) Initial Capitalization Agreement............... Not Applicable
(13) Performance Computations....................... Not Applicable
(14) Diagram and Listing of All Persons Directly
or Indirectly Controlled By or Under Common
Control with First SunAmerica Life Insurance
Company, the Depositor of Registrant........... Filed Herewith
(15) Powers of Attorney............................. Previously Filed
(27) Financial Data Schedules....................... Filed Herewith
Item 25. Directors and Officers of the Depositor
The officers and directors of First SunAmerica Life Insurance Company
are listed below. Their principal business address is 1 SunAmerica Center, Los
Angeles, California 90067-6022, unless otherwise noted.
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Eli Broad Chairman, President and
Chief Executive Officer
Jay S. Wintrob Director and Executive Vice
President
David W. Ferguson(1) Director
Marc Gamsin Director
Thomas A. Harnett(2) Director
Lester Pollack(3) Director
Richard D. Rohr(4) Director
Jana W. Greer Director and Senior Vice
President
</TABLE>
<PAGE> 83
<TABLE>
<S> <C>
Peter McMillan Director
James R. Belardi Director and Senior Vice
President
Lorin M. Fife Director, Senior Vice
President, General Counsel and
Assistant Secretary
Susan L. Harris Director, Senior Vice
President and Secretary
Gary W. Krat Director and Senior Vice
President
Scott L. Robinson Director, Senior Vice
President and Treasurer
N. Scott Gillis Senior Vice President and
Controller
Edwin R. Reoliquio Senior Vice President and
Chief Actuary
Victor E. Akin Vice President
James W. Rowan Vice President
Michael L. Fowler Vice President
J. Franklin Grey Vice President
Keith B. Jones Vice President
Michael Lindquist Vice President
Edward P. Nolan(5) Vice President
Greg Outcalt Vice President
Scott H. Richland Vice President and
Assistant Treasurer
</TABLE>
- -----------------
(1) One Chase Manhattan Plaza, New York, New York 10005
(2) 99 Park Avenue, New York, New York 10063
(3) One Rockerfeller Plaza, Suite 1025, New York, New York 10020
(4) 100 Renaissance Center, 34th Floor, Detroit, Michigan 48243
(5) 88 Bradley Road, P.O. Box 4005, Woodbridge, Connecticut 06525
Item 26. Persons Controlled By or Under Common Control With Depositor or
Registrant
The Registrant is a separate account of First SunAmerica Life
Insurance Company (Depositor). For a complete listing and diagram of all
persons directly or indirectly controlled by or under common control with the
Depositor or Registrant, see Exhibit 14 incorporated herein by reference.
Item 27. Number of Contract Owners
As of December 31, 1994, the number of Contracts funded by the
Variable Annuity Account One of First SunAmerica Life Insurance Company was
663, of which 287 were Qualified Contracts and 376 were Nonqualified Contracts.
Item 28. Indemnification
None.
Item 29. Principal Underwriter
SunAmerica Capital Services, Inc. serves as distributor to the
Registrant.
Its principal business address is 733 Third Avenue, 4th Floor, New
York, New York 10017. The following are the directors and officers of
SunAmerica Capital Services, Inc.
<PAGE> 84
<TABLE>
<CAPTION>
Name Position with Distributor
---- -------------------------
<S> <C>
Peter Harbeck Director and President
Robert M. Zakem Director, Executive Vice
President and Assistant
Secretary
Gary W. Krat Director
Enrique Lopez-Balboa Vice President
Steven Rothstein Treasurer
Susan L. Harris Secretary
Lorin M. Fife Assistant Secretary
Barbara McInerney Assistant Secretary
</TABLE>
<TABLE>
<CAPTION>
Net
Distribution Compensation
Name of Discounts and on Redemption Brokerage
Distributor Commissions Annuitization Commission Commissions*
- ------------ -------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
SunAmerica None None None None
Capital
Services, Inc.
- ---------------
</TABLE>
* Distribution fee is paid by First SunAmerica Life Insurance Company.
Item 30. Location of Accounts and Records
First SunAmerica Life Insurance Company, the Depositor for the
Registrant, is located at 733 Third Avenue, 4th Floor, New York, New York
10017. SunAmerica Capital Services, Inc., the distributor of the Contracts, is
located at 733 Third Avenue, 4th Floor, New York, New York 10017. Each
maintains those accounts and records required to be maintained by it pursuant
to Section 31(a) of the Investment Company Act and the rules promulgated
thereunder.
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02100, maintains certain accounts and records pursuant to the
instructions of the Registrant.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Registrant undertakes to (1) file post-effective amendments to this
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16
months old for so long as payments under the variable annuity Contracts may be
accepted; (2) include either (A) as part of any application to purchase a
Contract offered by the prospectus forming a part of the Registration
Statement, a space that an applicant can check to request a Statement of
Additional Information, or (B) a postcard or similar written communication
affixed to or included in the Prospectus that the Applicant can remove to send
for a Statement of Additional Information; and (3) deliver any Statement of
Additional Information and any financial statements required to be made
available under this Form N-4 promptly upon written or oral request.
<PAGE> 85
Item 33. Representation
The Company hereby represents that it is relying upon a No-Action
Letter issued to the American Council of Life Insurance dated November 28, 1988
(Commission ref. IP-6-88) and that the following provisions have been complied
with:
1. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement,
including the prospectus, used in connection with the offer of the
contract;
2. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in
connection with the offer of the contract;
3. Instruct sales representatives who solicit participants to purchase
the contract specifically to bring the redemption restrictions imposed
by Section 403(b)(11) to the attention of the potential participants;
4. Obtain from each plan participant who purchases a Section 403(b)
annuity contract, prior to or at the time of such purchase, a signed
statement acknowledging the participant's understanding of (1) the
restrictions on redemption imposed by Section 403(b)(11), and (2)
other investment alternatives available under the employer's Section
403(b) arrangement to which the participant may elect to transfer his
contract value.
<PAGE> 86
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf, in the City of Los Angeles,
and the State of California, on this 30th day of January, 1996.
VARIABLE ANNUITY ACCOUNT ONE
(Registrant)
By: FIRST SUNAMERICA LIFE INSURANCE COMPANY
(Depositor)
By: /s/ JAY S. WINTROB
-----------------------------
Jay S. Wintrob
Executive Vice President
By: FIRST SUNAMERICA LIFE INSURANCE COMPANY
(Depositor, on behalf of itself and Registrant)
By: /s/ JAY S. WINTROB
-----------------------------
Jay S. Wintrob
Executive Vice President
As required by the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed by the following
persons in the capacity and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
ELI BROAD* President, Chief Executive
- --------------------- Officer, & Chairman of
Eli Broad Board
(Principal Executive Officer)
SCOTT L. ROBINSON* Senior Vice President,
- --------------------- Treasurer & Director
Scott L. Robinson (Principal Financial Officer)
N. SCOTT GILLIS* Senior Vice President &
- --------------------- Controller
N. Scott Gillis (Principal Accounting Officer)
JAMES R. BELARDI* Director
- ---------------------
James R. Belardi
DAVID W. FERGUSON* Director
- ---------------------
David W. Ferguson
/s/ LORIN M. FIFE Director January 30, 1996
- ---------------------
Lorin M. Fife
</TABLE>
<PAGE> 87
<TABLE>
<S> <C>
MARC GAMSIN* Director
- ---------------------
Marc Gamsin
JANA W. GREER* Director
- ---------------------
Jana W. Greer
THOMAS A. HARNETT* Director
- ---------------------
Thomas A. Harnett
GARY W. KRAT* Director
- ---------------------
Gary W. Krat
JAY S. WINTROB* Director
- ---------------------
Jay S. Wintrob
SUSAN L. HARRIS* Director
- ---------------------
Susan L. Harris
PETER MCMILLAN* Director
- ---------------------
Peter McMillan
LESTER POLLACK* Director
- ---------------------
Lester Pollack
RICHARD D. ROHR* Director
- ---------------------
Richard D. Rohr
*By: /s/ LORIN M. FIFE Attorney-in-Fact
-------------------
Lorin M. Fife
</TABLE>
Date: January 30, 1996
<PAGE> 88
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Description Numbered Page
- ------- ----------- --------------
<S> <C> <C>
(10) Consent of Independent Accountants
(14) Diagram and Listing of All Persons
Directly or Indirectly Controlled
By or Under Common Control with
First SunAmerica Life Insurance
Company, the Depositor of Registrant
(27) Financial Data Schedules
</TABLE>
<PAGE> 1
EXHIBIT 10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Registration Statement on Form N-4 for Variable
Annuity Account One of First SunAmerica Life Insurance Company, of our report
dated November 6, 1995 relating to the financial statements of First SunAmerica
Life Insurance Company, and of our report dated February 21, 1995 relating to
the financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company, which appear in such Statement of Additional
Information. We also consent to the reference to us under the heading
"Independent Accountants" in such Statement of Additional Information.
PRICE WATERHOUSE LLP
Los Angeles, California
January 29, 1996
<PAGE> 1
EXHIBIT 14
SunAmerica Inc. (a Maryland corporation) owns 100% of SunAmerica Funding Corp.
(a Delaware corporation); SunAmerica Financial, Inc. (a Georgia corporation);
Resources Trust Company (a Colorado corporation); SunAmerica Life Insurance
Company (an Arizona corporation); Imperial Premium Finance, Inc. (a Delaware
corporation); IPF Funding Corp. (a Delaware corporation); SA Investment Group,
Inc. (a California corporation); SunAmerica Capital Trust I (a Delaware
business trust); SunAmerica Capital Trust II (a Delaware business trust);
SunAmerica Capital Trust III (a Delaware business trust); and SunAmerica
Capital Trust IV (a Delaware business trust). In addition, SunAmerica Inc.
owns 80% of AMSUN Realty Holdings (a California corporation).
SunAmerica Financial, Inc. owns 100% of SunAmerica Marketing, Inc. (a Maryland
corporation); SunAmerica Advertising, Inc. (a Georgia corporation); SunAmerica
Investments, Inc. (a Delaware corporation) which owns 100% of Accelerated
Capital Corp. (a Florida corporation; 1401 Sepulveda Corp. (a California
corporation); SunAmerica Louisiana Properties, Inc. (a California corporation);
SunAmerica Real Estate and Office Administration, Inc. (a Delaware
corporation); SunAmerica Affordable Housing Partners, Inc. (a California
corporation); SUN-PLA, Inc. (a California corporation); Hampden I & II Corp. (a
California corporation); SUN-PENN, Inc. (a California corporation); Sun-Duke,
Inc. (a California corporation); Sunport Holdings, Inc. (a California
corporation) which owns 100% of Sunport Property Co. (a Florida corporation);
Sun Chino Property, Inc. (a California corporation); SunAmerica Mortgages, Inc.
(a Delaware corporation); Sun Riverchase, Inc. (a California corporation); Sun
Princeton II, Inc. (a California corporation) which owns 100% of Sun Princeton
I (a California corporation); SunAmerica Planning, Inc. (a Maryland
corporation); Sun Mexico Holdings, Inc. (a Delaware corporation) which owns
100% of Sun Cancun I, Inc. (a Delaware corporation), Sun Cancun II, Inc. (a
Delaware corporation), Sun Ixtapa I, Inc. (a Delaware corporation) and Sun
Ixtapa II, Inc. (a Delaware corporation); Sun Hechs, Inc. (a California
corporation); and KBHS, Inc. (a California corporation) which owns 100% of
Kaufman and Broad Home Systems of Texas, Inc. (a Texas corporation) and 70% of
Home Systems Partners (a California limited partnership) which owns 100% of
Extraneous Holdings Corp. (a Delaware corporation). SunAmerica Planning, Inc.
owns 100% of SunAmerica Securities, Inc. (a Delaware corporation) which owns
100% of Anchor Insurance Services, Inc. (a Hawaii corporation) which owns The
Producers' Edge Insurance Agency Inc. (a California corporation).
SunAmerica Life Insurance Company owns 100% of First SunAmerica Life Insurance
Company (a New York corporation); SunAmerica National Life Insurance Company
(an Arizona corporation); Anchor National Life Insurance Company (an Arizona
corporation) which owns 100% of Anchor Pathway Fund, Anchor Series Trust,
SunAmerica Series Trust (all Massachusetts business trusts); UG Corporation (a
Georgia corporation); Export Leasing FSC, Inc. (a U.S. Virgin Islands
corporation); SunAmerica Virginia Properties, Inc. (a California corporation);
SAL Investment Group (a California corporation); and Saamsun Holding
Corporation (a Delaware corporation). Saamsun Holding Corporation owns 100% of
SAM Holdings Corporation (a California corporation) which owns 100% of
SunAmerica Asset Management Corp. (a Delaware corporation), Anchor Investment
Adviser, Incorporated (a Maryland corporation), SunAmerica Capital Services,
Inc. (a Delaware corporation); SunAmerica Fund Services, Inc. (a Delaware
corporation), ANF Property Holdings, Inc. (a California corporation), Capitol
Life Mortgage Corp. (a Delaware corporation) and Sun Royal Holdings Corporation
(a California corporation). Sun Royal Holdings Corporation and Anchor
Insurance Services, Inc. each owns 50% of Royal Alliance Associates, Inc. (a
Delaware corporation). In addition, SunAmerica Life Insurance Company owns 80%
of SunAmerica Realty Partners (a California corporation) and 33% of New
California Life Holdings, Inc. (a Delaware corporation) which owns 100% of
Aurora National Life Assurance Company (a California corporation) and Premier
Life Insurance Company (a Pennsylvania corporation).
Imperial Premium Finance, Inc. (Delaware) owns 100% of Imperial Premium
Finance, Inc. (a California corporation); Imperial Premium Funding, Inc. (a
Delaware corporation); and SunAmerica Financial Resources, Inc. (a Delaware
corporation).
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 01
<NAME> FOREIGN SECURITIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,944,073
<INVESTMENTS-AT-VALUE> 1,956,590
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,956,590
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 165,468
<SHARES-COMMON-PRIOR> 110,045
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,956,590
<DIVIDEND-INCOME> 5,237
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 26,867
<NET-INVESTMENT-INCOME> (21,630)
<REALIZED-GAINS-CURRENT> 52,615
<APPREC-INCREASE-CURRENT> (117,117)
<NET-CHANGE-FROM-OPS> (86,132)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 84,067
<NUMBER-OF-SHARES-REDEEMED> 28,644
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 593,557
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 12.39
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.83
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 02
<NAME> CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 3,833,602
<INVESTMENTS-AT-VALUE> 3,618,724
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,618,724
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 167,384
<SHARES-COMMON-PRIOR> 111,129
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,618,724
<DIVIDEND-INCOME> 332,487
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 42,801
<NET-INVESTMENT-INCOME> 289,686
<REALIZED-GAINS-CURRENT> (15,298)
<APPREC-INCREASE-CURRENT> (410,654)
<NET-CHANGE-FROM-OPS> (136,266)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 70,519
<NUMBER-OF-SHARES-REDEEMED> 14,264
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,086,153
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 22.79
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.62
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 03
<NAME> GROWTH
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 5,283,510
<INVESTMENTS-AT-VALUE> 4,674,405
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,674,405
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 170,859
<SHARES-COMMON-PRIOR> 179,035
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 4,674,405
<DIVIDEND-INCOME> 711,161
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 67,341
<NET-INVESTMENT-INCOME> 643,820
<REALIZED-GAINS-CURRENT> (7,721)
<APPREC-INCREASE-CURRENT> (935,873)
<NET-CHANGE-FROM-OPS> (299,774)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,005
<NUMBER-OF-SHARES-REDEEMED> 25,180
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (538,876)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 29.12
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.36
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 04
<NAME> NATURAL RESOURCES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 663,100
<INVESTMENTS-AT-VALUE> 648,329
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 648,329
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 43,075
<SHARES-COMMON-PRIOR> 20,215
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 648,329
<DIVIDEND-INCOME> 12,993
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 8,198
<NET-INVESTMENT-INCOME> 4,795
<REALIZED-GAINS-CURRENT> (9,035)
<APPREC-INCREASE-CURRENT> (54,055)
<NET-CHANGE-FROM-OPS> (58,295)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27,737
<NUMBER-OF-SHARES-REDEEMED> 4,877
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 342,919
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 15.11
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.05
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 05
<NAME> CONVERTIBLE SECURITIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,345,868
<INVESTMENTS-AT-VALUE> 1,163,624
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,163,624
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 69,818
<SHARES-COMMON-PRIOR> 58,427
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,163,624
<DIVIDEND-INCOME> 152,404
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 16,253
<NET-INVESTMENT-INCOME> 136,151
<REALIZED-GAINS-CURRENT> 6,265
<APPREC-INCREASE-CURRENT> (279,414)
<NET-CHANGE-FROM-OPS> (136,998)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,017
<NUMBER-OF-SHARES-REDEEMED> 2,626
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 70,828
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 18.70
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.67
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 06
<NAME> STRATEGIC MULTI-ASSET
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,352,554
<INVESTMENTS-AT-VALUE> 1,176,715
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,176,715
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 77,616
<SHARES-COMMON-PRIOR> 32,409
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,176,715
<DIVIDEND-INCOME> 213,252
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 14,153
<NET-INVESTMENT-INCOME> 199,099
<REALIZED-GAINS-CURRENT> (14,872)
<APPREC-INCREASE-CURRENT> (217,725)
<NET-CHANGE-FROM-OPS> (33,498)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 51,252
<NUMBER-OF-SHARES-REDEEMED> 6,044
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 665,193
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 15.78
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.16
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 07
<NAME> MULTI-ASSET
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 5,382,845
<INVESTMENTS-AT-VALUE> 4,713,303
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,713,303
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 287,625
<SHARES-COMMON-PRIOR> 310,679
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 4,713,303
<DIVIDEND-INCOME> 682,129
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 66,956
<NET-INVESTMENT-INCOME> 615,173
<REALIZED-GAINS-CURRENT> (32,600)
<APPREC-INCREASE-CURRENT> (730,558)
<NET-CHANGE-FROM-OPS> (147,985)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,212
<NUMBER-OF-SHARES-REDEEMED> 48,267
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (538,756)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 16.90
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.39
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 08
<NAME> HIGH YIELD
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,596,397
<INVESTMENTS-AT-VALUE> 1,445,995
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,445,995
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 80,486
<SHARES-COMMON-PRIOR> 63,091
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,445,995
<DIVIDEND-INCOME> 172,643
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 18,594
<NET-INVESTMENT-INCOME> 154,049
<REALIZED-GAINS-CURRENT> 156
<APPREC-INCREASE-CURRENT> (233,340)
<NET-CHANGE-FROM-OPS> (79,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21,290
<NUMBER-OF-SHARES-REDEEMED> 3,895
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 242,832
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 19.07
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.96
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 09
<NAME> TARGET '98
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,146,175
<INVESTMENTS-AT-VALUE> 1,022,664
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,022,664
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 61,733
<SHARES-COMMON-PRIOR> 51,836
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,022,664
<DIVIDEND-INCOME> 84,911
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 13,384
<NET-INVESTMENT-INCOME> 71,527
<REALIZED-GAINS-CURRENT> (3,503)
<APPREC-INCREASE-CURRENT> (121,027)
<NET-CHANGE-FROM-OPS> (53,003)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,877
<NUMBER-OF-SHARES-REDEEMED> 980
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 114,430
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 17.52
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.57
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 10
<NAME> FIXED INCOME
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,360,261
<INVESTMENTS-AT-VALUE> 1,222,923
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,222,923
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 56,430
<SHARES-COMMON-PRIOR> 66,362
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,222,923
<DIVIDEND-INCOME> 109,491
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 18,580
<NET-INVESTMENT-INCOME> 90,911
<REALIZED-GAINS-CURRENT> (23,339)
<APPREC-INCREASE-CURRENT> (131,187)
<NET-CHANGE-FROM-OPS> (63,615)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,149
<NUMBER-OF-SHARES-REDEEMED> 19,080
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (284,241)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 22.71
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.67
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 11
<NAME> GOVERNMENT & QUALITY BOND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 4,356,381
<INVESTMENTS-AT-VALUE> 3,987,776
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,987,776
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 176,490
<SHARES-COMMON-PRIOR> 217,255
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,987,776
<DIVIDEND-INCOME> 305,698
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 64,211
<NET-INVESTMENT-INCOME> 241,487
<REALIZED-GAINS-CURRENT> (106,865)
<APPREC-INCREASE-CURRENT> (357,727)
<NET-CHANGE-FROM-OPS> (223,105)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,914
<NUMBER-OF-SHARES-REDEEMED> 65,679
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,146,729)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 23.63
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.60
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Variable Annuity Account One of First SunAmerica
Life Insurance Company for the fiscal year ended December 1, 1994 and is
qualified in its entirety by reference to such financial statements.
<SERIES>
<NUMBER> 12
<NAME> MONEY MARKET
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 250,591
<INVESTMENTS-AT-VALUE> 250,591
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 250,591
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 15,560
<SHARES-COMMON-PRIOR> 82,899
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 250,591
<DIVIDEND-INCOME> 24,603
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 9,925
<NET-INVESTMENT-INCOME> 14,678
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14,678
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 35,512
<NUMBER-OF-SHARES-REDEEMED> 102,852
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,052,738)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 15.72
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.10
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
