485BPOS for Seasons Select II

As filed pursuant to Rule 497
under the Securities Act of 1933
Registration No. 333-116026
811-08369
[LOGO] Seasons
Select/II/
A new way to
look at money/TM/
PROSPECTUS
<R>
April 29, 2005
</R>

ALLOCATED FIXED AND VARIABLE GROUP ANNUITY
issued by
FS VARIABLE ANNUITY ACCOUNT FIVE
and
FIRST SUNAMERICA LIFE INSURANCE COMPANY

The annuity contract has several investment choices - fixed investment options
which offer interest rates guaranteed by First SunAmerica Life Insurance
Company for different periods of time, and Variable Portfolios:
SELECT PORTFOLIOS FOCUSED PORTFOLIOS SEASONS STRATEGIES
Large Cap Growth Focus Growth Growth Strategy
Large Cap Composite Focus Growth and Income (which invests in Stock Portfolio, Asset Allocation:
Large Cap Value Focus Value Diversified Growth Portfolio and Multi-Managed Growth Portfolio)
Mid Cap Growth Focus TechNet Moderate Growth Strategy
Mid Cap Value (which invests in Stock Portfolio, Asset Allocation:
Small Cap SEASONS MANAGED ALLOCATION Diversified Growth Portfolio and Multi-Managed Moderate Growth
International Equity PORTFOLIOS Portfolio)
Diversified Fixed Income Allocation Growth Balanced Growth Portfolio
Strategic Fixed Income Allocation Moderate Growth (which invests in Stock Portfolio, Asset Allocation:
Cash Management Allocation Moderate Diversified Growth Portfolio and Multi-Managed Income/Equity
Allocation Balanced Portfolio)
Conservative Growth Strategy
(which invests in Stock Portfolio, Asset Allocation:
Diversified Growth Portfolio and Multi-Managed
Income Portfolio)

<R>
all of which invest in the Underlying Funds of
</R>
Seasons Series Trust
which is managed by:

<R>
SELECT PORTFOLIOS FOCUSED PORTFOLIOS SEASONS STRATEGIES
AIG Global Investment Corp. AIG SunAmerica Asset AIG SunAmerica Asset Management Corp.
AIG SunAmerica Asset Management Corp. Management Corp. Janus Capital Management LLC.
Banc of America Capital Management, LLC American Century Putnam Investment Management, L.L.C.
Franklin Advisers, Inc. Investment Management, T. Rowe Price Associates, Inc.
Goldman Sachs Asset Management, L.P. Inc. Wellington Management Company, LLP.
Goldman Sachs Asset Management Int'l Baron Capital Management,
Janus Capital Management LLC. Inc. SEASONS MANAGED ALLOCATION PORTFOLIOS
Lord Abbett & Co. LLC. Credit Suisse Asset Ibbotson Investment Advisors, LLC.
T. Rowe Price Associates, Inc. Management, Inc.
Salomon Brothers Asset Management Inc. Harris Associates L.P.
Wellington Management Company, LLP. Janus Capital Management,
LLC
J.P. Morgan Investment
Management Inc.
Marsico Capital
Management, LLC.
RCM Capital Management,
LLC
Third Avenue Management
LLC.
Thornburg Investment
Management, Inc.
</R>

You can put your money into any one or all of the Variable Portfolios and/or
fixed investment options.

Please read this prospectus carefully before investing and keep it for your
future reference. It contains important information you should know about the
Seasons Select/II/ Variable Annuity. If elected, this variable annuity provides
a payment enhancement program called "Seasons Rewards." Your withdrawal charge
schedule will be longer and greater than other contracts offered without the
Seasons Rewards program.

<R>
To learn more about the annuity offered by this prospectus, you can obtain a
copy of the Statement of Additional Information ("SAI") dated April 29, 2005.
The SAI has been filed with the Securities and Exchange Commission ("SEC") and
can be considered part of this prospectus.
</R>

<R>
The table of contents of the SAI appears below in this prospectus. For a free
copy of the SAI, call us (800) 99NY-SUN or write our Annuity Service Center at,
P.O. Box 54299, Los Angeles, California 90054-0299.
</R>

A registration statement has been filed with the SEC under the Securities Act
of 1933 relating to the contract. This prospectus does not contain all the
information in the registration statement as permitted by SEC regulations. The
omitted information can be obtained from the SEC's principal office in
Washington, D.C., upon payment of a prescribed fee.

In addition, the SEC maintains a website (http://www.sec.gov) that contains the
SAI, materials incorporated by reference and other information filed
electronically with the SEC.

Annuities involve risk, including possible loss of principal, and are not a
deposit or obligation of, or guaranteed or endorsed by, any bank. They are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.

This variable annuity provides an optional bonus feature called "Seasons
Rewards". If you elect this feature, in exchange for bonuses credited to your
contract, your surrender charge schedule will be longer and higher than if you
chose not to elect this feature. These withdrawal charges may offset the value
of any bonus, if you make an early withdrawal.

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.


TABLE OF CONTENTS
<R>
Glossary..............................................................................   3
Highlights............................................................................   4
Fee Tables............................................................................   5
  Maximum Owner Transaction Expenses..................................................   5
  Transfer Fee........................................................................   5
  Contract Maintenance Fee............................................................   5
  Separate Account Annual Expenses....................................................   5
  Additional Optional Feature Fees....................................................   5
   Optional Seasons Income Rewards Fee................................................   5
   Optional Seasons Promise Fee.......................................................   5
  Underlying Fund Expenses............................................................   5
Maximum and Minimum Expense Examples..................................................   6
The Seasons Select/II/ Variable Annuity...............................................   8
Purchasing a Seasons Select/II/ Variable Annuity......................................   9
  Allocation of Purchase Payments.....................................................   9
  Seasons Rewards Program.............................................................  10
  Current Enhancement Levels..........................................................  11
  90 Day Window.......................................................................  11
  Accumulation Units..................................................................  11
  Free Look...........................................................................  12
  Exchange Offers.....................................................................  12
Investment Options....................................................................  13
  Variable Portfolios.................................................................  13
    Select and Focused Portfolios.....................................................  13
    Seasons Managed Allocation Portfolios.............................................  14
    The Seasons Strategies............................................................  15
    Seasons Strategy Rebalancing......................................................  16
  Fixed Investment Options............................................................  18
  Dollar Cost Averaging Fixed Accounts................................................  18
  Transfers During the Accumulation Phase.............................................  19
  Dollar Cost Averaging Program.......................................................  20
  Automatic Asset Rebalancing Program.................................................  21
  Return Plus Program.................................................................  21
  Voting Rights.......................................................................  22
  Substitution........................................................................  22
Access to Your Money..................................................................  22
  Free Withdrawal Provision...........................................................  23
  Systematic Withdrawal Program.......................................................  24
  Minimum Contract Value..............................................................  24
  Qualified Contract Owners...........................................................  24
Optional Living Benefits..............................................................  24
  Seasons Income Rewards Feature......................................................  24
  Seasons Promise Feature.............................................................  29
Death Benefit.........................................................................  31
  General Information About Death Benefits............................................  31
  Extended Legacy Program and Beneficiary Continuation Options........................  32
  Standard Death Benefit..............................................................  33
  Optional Enhanced Death Benefit.....................................................  33
  Spousal Continuation................................................................  33
Expenses..............................................................................  34
  Separate Account Charges............................................................  34
  Withdrawal Charges..................................................................  34
  Investment Charges..................................................................  35
  Contract Maintenance Fee............................................................  35
  Transfer Fee........................................................................  35
  Optional Seasons Income Rewards Fee.................................................  35
  Optional Seasons Promise Fee........................................................  36
  Optional Enhanced Death Benefit.....................................................  36
  Income Taxes........................................................................  36
  Reduction or Elimination of Charges and Expenses, and Additional Amounts Credited...  36
Income Options........................................................................  36
  Annuity Date........................................................................  36
  Income Options......................................................................  37
  Allocation of Annuity Payments......................................................  37
  Fixed or Variable Income Payments...................................................  37
  Income Payments.....................................................................  38
  Transfers During the Income Phase...................................................  38
  Deferment of Payments...............................................................  38
Taxes.................................................................................  38
  Annuity Contracts in General........................................................  38
  Tax Treatment of Distributions--Non-Qualified Contracts.............................  39
  Tax Treatment of Distributions--Qualified Contracts.................................  39
  Minimum Distributions...............................................................  40
  Tax Treatment of Death Benefits.....................................................  40
  Contracts Owned by a Trust or Corporation...........................................  41
  Gifts, Pledges and/or Assignments of a Contract.....................................  41
  Diversification and Investor Control................................................  41
Other Information.....................................................................  41
  First SunAmerica....................................................................  41
  The Separate Account................................................................  42
  The General Account.................................................................  42
  Registration Statements.............................................................  42
  Payments in Connection with Distribution of the Contract............................  42
  Administration......................................................................  43
  Legal Proceedings...................................................................  43
Table of Contents of Statement of Additional Information..............................  44
Appendix A--Seasons Rewards Program Examples.......................................... A-1
Appendix B--Seasons Income Rewards Examples........................................... B-1
Appendix C--Death Benefits Following Spousal Continuation............................. C-1
</R>

                                      2


GLOSSARY

We have capitalized some of the technical terms used in this prospectus. To
help you understand these terms, we define them in this glossary.

Accumulation Phase--The period during which you invest money in your contract.

Accumulation Units--A measurement we use to calculate the value of the variable
portion of your contract during the Accumulation Phase.

Annuitant(s)--The person(s) on whose life (lives) we base annuity payments.

Annuity Date--The date on which annuity payments are to begin, as selected by
you.

Annuity Units--A measurement we use to calculate the amount of annuity payments
you receive from the variable portion of your contract during the Income Phase.

Beneficiary(ies)--The person(s) designated to receive any benefits under the
contract if you or the Annuitant dies.

<R>
Company--Refers to First SunAmerica Life Insurance Company ("First
SunAmerica"), the insurer that issues this contract. The term "we," "us," "our"
and "First SunAmerica" are also used to identify the Company.
</R>

<R>
Fixed Account--An account, if available, that we may offer in which you may
invest money and earn a fixed rate of return.
</R>

Income Phase--The period during which we make annuity payments to you.

IRS--The Internal Revenue Service.

Latest Annuity Date--Your 90th birthday or tenth anniversary, whichever is
later.

<R>
Market Close--The close of the New York Stock Exchange, usually at 1 p.m.
Pacific Time.
</R>

Non-Qualified (Contract)--A contract purchased with after-tax dollars. In
general, these contracts are not under any pension plan, specially sponsored
program or individual retirement account ("IRA").

Payment Enhancement(s)--The amount(s) allocated to your contract by us under
the Seasons Rewards Program. Payment enhancements are calculated as a
percentage of your Purchase Payments and are considered earnings.

Purchase Payments--The money you give us to buy the contract, as well as any
additional money you give us to invest in the contract after you own it.

Qualified (Contract)--A contract purchased with pretax dollars. These contracts
are generally purchased under a pension plan, specially sponsored program or
individual retirement account ("IRA").

<R>
Trust--Refers to the Seasons Series Trust.
</R>

<R>
Underlying Funds--The underlying investment portfolios of the Trusts in which
the Variable Portfolios invest.
</R>

<R>
Variable Portfolio(s)--Refers collectively to the Select Portfolios, Focused
Portfolios, Managed Allocation Portfolios and/or Seasons Strategies. The
Variable Portfolios invest in the Underlying Funds of Seasons Series Trust.
</R>

                                      3


HIGHLIGHTS
  ------------------------------------------------------------------------------

<R>
The Seasons Select/II/ Variable Annuity is a contract between you and First
SunAmerica Life Insurance Company (the "Company"). It is designed to help you
invest on a tax-deferred basis and meet long-term financial goals. There are
minimum Purchase Payment amounts required to purchase a contract. Purchase
Payments may be invested in the Select Portfolios, Focused Portfolios, Managed
Allocation Portfolios and/or pre-allocated Seasons Strategies ("Variable
Portfolios") and Fixed Accounts. You may also elect to participate in the
Seasons Rewards program of the contract that can provide you with Payment
Enhancements to invest in your contract in exchange for a longer withdrawal
charge schedule. Like all deferred annuities, the contract has an Accumulation
Phase and an Income Phase. During the Accumulation Phase, you invest money in
your contract. The Income Phase begins when you start receiving income payments
from your annuity to provide for your retirement.
</R>

<R>
Free Look: If you cancel your contract within 10 days after receiving it, we
will cancel the contract without charging a withdrawal charge. You will receive
the greater of Purchase Payments or the value of your contract on the date we
receive your request. This amount may be more or less than your original
Purchase Payment. If you elected to participate in Seasons Rewards, you receive
any gain and we bear any loss on any Payment Enhancement(s) if you decide to
cancel your contract during the free look period. Please see PURCHASING A
SEASONS SELECT/II/ VARIABLE ANNUITY in the prospectus.
</R>

Expenses: There are fees and charges associated with the contract. Each year,
we deduct a $30 contract maintenance fee from your contract, which may be
waived for contracts of $50,000 or more. We also deduct separate account
charges, which equal 1.40% annually of the average daily value of your contract
allocated to the Variable Portfolios. There are investment charges on amounts
invested in the Variable Portfolios. If you elect optional features available
under the contract we may charge additional fees for these features. A separate
withdrawal charge schedule applies to each Purchase Payment. The percentage of
the withdrawal charge declines over time. After a Purchase Payment has been in
the contract for seven complete years, or nine complete years if you
participate in the Seasons Rewards Program, withdrawal charges no longer apply
to that Purchase Payment. Please see the FEE TABLE, PURCHASING A SEASONS
SELECT/II/ VARIABLE ANNUITY and EXPENSES in the prospectus.

Access to Your Money: You may withdraw money from your contract during the
Accumulation Phase. If you do so, earnings are deemed to be withdrawn first.
You will pay income taxes on earnings and untaxed contributions when you
withdraw them. Payments received during the Income Phase are considered partly
a return of your original investment. A federal tax penalty may apply if you
make withdrawals before age 59 1/2. As noted above, a withdrawal charge may
apply. Please see ACCESS TO YOUR MONEY and TAXES in the prospectus.

<R>
Optional Living Benefits: You may elect one of the optional living benefits
available under your contract. For an additional fee, these features are
designed to protect a portion of your investment in the event your contract
value declines due to unfavorable investment performance during the
Accumulation Phase and before a death benefit is payable. See OPTIONAL LIVING
BENEFITS in the prospectus.
</R>

Death Benefit: A death benefit feature is available under the contract to
protect your Beneficiaries in the event of your death during the Accumulation
Phase. An optional enhanced death benefit is also available. Please see DEATH
BENEFITS in the prospectus.

Income Options: When you are ready to begin taking income, you can choose to
receive income payments on a variable basis, fixed basis or a combination of
both. You may also chose from five different income options, including an
option for income that you cannot outlive. Please see INCOME OPTIONS in the
prospectus.

Inquiries: If you have questions about your contract call your financial
representative or contact our Annuity Service Center P.O. Box 54299 Los
Angeles, California 90054-0299. Telephone Number: (800) 99NY-SUN.

<R>

First SunAmerica offers several different variable annuity products to meet the
diverse needs of our investors. Our products may provide different features and
benefits offered at  different  fees,  charges  and  expenses.  We  also  offer
products that do not offer  the  Seasons  Rewards  program.  Contracts  without
Seasons Rewards program have the same mortality and expense risk charges as the
same contract with the program. However, contracts without the Seasons  Rewards
program generally have a shorter surrender charge schedule which may have lower
surrender  charges  in  certain  years.  When  working  with   your   financial
representative to determine the best product to  meet  your  needs  you  should
consider, among other things whether the features  of  this  contract  and  the
related fees provide the  most  appropriate  package  to  help  you  meet  your
long-term retirement savings goals.
</R>

<R>

If you would like more information  regarding  how  money  is  shared
amongst our business partners, including broker-dealers through which
you may purchase a variable annuity, see Payments in Connection  with
the Distribution of the Contract in the prospectus.
</R>


Please read the prospectus carefully for  more  detailed  information
regarding these and other features and benefits of the  contract,  as
well as the risks of investing.

                                      4


FEE TABLES
  ------------------------------------------------------------------------------
The following describes the fees and expenses that you will pay at the time
that you buy the contract, transfer cash value between investment options or
surrender the contract.

MAXIMUM OWNER TRANSACTION EXPENSES

MAXIMUM WITHDRAWAL CHARGES
               (as a percentage of each Purchase Payment)/1/
               If Seasons Rewards is elected................ 9%
               If Seasons Rewards is not elected............ 7%

TRANSFER FEE
$25 per transfer after the first 15 transfers in any contract year.

<R>
The following describes the fees and expenses that you may pay periodically
during the time that you own the contract, not including Underlying Fund fees
and expenses, which are outlined in the next section.
</R>

                        CONTRACT MAINTENANCE FEE/2/ $30

SEPARATE ACCOUNT ANNUAL EXPENSES
(deducted daily as a percentage of your average daily net asset value)

<R>
                  Mortality and Expense Risk Fees....... 1.25%
                  Distribution Expense Charge........... 0.15%
                  Optional Death Benefit Fee/3/......... 0.20%
                                                         -----
                  Total Separate Account Annual Expenses 1.60%
</R>

ADDITIONAL OPTIONAL FEATURE FEES
You may elect either Seasons Promise or Seasons Income Rewards described below.

OPTIONAL SEASONS INCOME REWARDS FEE
(calculated as a percentage of your Purchase Payments received in the first 90
days less withdrawals)

<R>
                        Contract Year Annualized Fee/4/
                        ------------- ----------------
                             0-7.....       0.65%
                            8-10.....       0.45%
                             11+.....       none
</R>

OPTIONAL SEASONS PROMISE FEE
(calculated as a percentage of your contract value minus Purchase Payments
received after the 90th day since you purchased your contract)

                        Contract Year Annualized Fee/5/
                        ------------- ----------------
                            0-7......       0.50%
                            8-10.....       0.25%
                            11+......       none

<R>
The next item shows the minimum and maximum total operating expenses charged by
the Underlying Funds of the Trust before any waiver or reimbursements that you
may pay periodically during the time you own the contract. More detail
concerning Trust's fees and expenses is contained in the prospectus for each of
the Trusts. Please read it carefully before investing.
</R>

<R>
UNDERLYING FUND EXPENSES
</R>

<R>
             Total Annual Trust Operating Expenses Minimum Maximum
             ------------------------------------- ------- -------
               (expenses that are deducted from
               Underlying Funds of the Trust,
               including management fees, other
               expenses and 12b-1 fees, if
               applicable)........................  1.02%   2.27%
</R>

--------
Footnotes to the Fee Table:

/1/Withdrawal Charge Schedule (as a percentage of each Purchase Payment)
<R>
          Years.............. 1   2   3   4   5   6   7   8   9   10+
          Non-Seasons Rewards 7%  6%  5%  4%  3%  2%  1%  0%  0%  0%
          Seasons Rewards.... 9%  9%  8%  7%  6%  5%  4%  3%  2%  0%
</R>

<R>
/2/The contract maintenance fee may be waived if contract value is $50,000 or
   more.
</R>

/3/If elected, the fee is an annualized charge that is deducted daily from your
   contract value.

<R>
/4/The Seasons Income Rewards feature is an optional guaranteed minimum
   withdrawal benefit. The fee is deducted from your contract at the end of the
   first contract quarter following election and quarterly thereafter.
</R>

<R>
/5/The Seasons Promise feature is an optional guaranteed minimum accumulation
   benefit. The fee is deducted from your contract value at the end of the
   first contract quarter and quarterly thereafter.
</R>

                                      5


MAXIMUM AND MINIMUM EXPENSE EXAMPLES
  ------------------------------------------------------------------------------

                         IF YOU ELECT SEASONS REWARDS

<R>
These Examples are intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include owner transaction expenses, contract maintenance fees, separate
account annual expense, fees for optional features and expenses for the
Underlying Funds of the Trusts.
</R>

<R>
The Examples assume that you invest $10,000 in the contract for the time
periods indicated; that your investment has a 5% return each year; no
withdrawals and that the maximum and minimum fees and expenses of the
Underlying Funds of the Trusts are reflected. Although your actual costs may be
higher or lower, based on these assumptions your costs at the end of the stated
period would be:
</R>

MAXIMUM EXPENSE EXAMPLES
<R>
(assuming maximum separate account annual expenses of 1.60% (including the
optional enhanced death benefit 0.20%)) and investment in an Underlying Fund
with total expenses of 2.27%.)
</R>

<R>
(1)If you surrender your contract at the end of the applicable time period and
   you elect Seasons Income Rewards (0.65% for years 0-7 and 0.45% for years
   8-10).
</R>

                                 1 year 3 years
                                 ------ -------
                                 $1,367 $2,107

(2)If you annuitize your contract at the end of the applicable time period:

                                 1 year 3 years
                                 ------ -------
                                  $369  $1,123

<R>
(3)If you do not surrender your contract and you elect Seasons Income Rewards
   (0.65% for years 0-7 and 0.45% for years 8-10).
</R>

                                 1 year 3 years
                                 ------ -------
                                  $467  $1,407

MINIMUM EXPENSE EXAMPLES
<R>
(assuming minimum separate account annual expenses of 1.40% and investment in
an Underlying Fund with total expenses of 1.02%.)
</R>

(1)If you surrender your contract at the end of the applicable time period and
   you do not elect any optional features:

                                 1 year 3 years
                                 ------ -------
                                 $1,155 $1,485

(2)If you annuitize your contract at the end of the applicable time period:

                                 1 year 3 years
                                 ------ -------
                                  $245   $755

(3)If you do not surrender your contract and you do not elect any optional
   features:

                                 1 year 3 years
                                 ------ -------
                                  $255   $785

                                      6


MAXIMUM AND MINIMUM EXPENSE EXAMPLES
  ------------------------------------------------------------------------------

                      IF YOU DO NOT ELECT SEASONS REWARDS

<R>
These Examples are intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include owner transaction expenses, contract maintenance fees, separate
account annual expense, fees for optional features and expenses for the
Underlying Funds of the Trusts.
</R>

<R>
The Examples assume that you invest $10,000 in the contract for the time
periods indicated; that your investment has a 5% return each year; and that the
maximum and minimum fees and expenses of the Underlying Funds of the Trusts are
reflected. Although your actual costs may be higher or lower, based on these
assumptions your costs at the end of the stated period would be:
</R>

MAXIMUM EXPENSE EXAMPLES
<R>
(assuming maximum separate account annual expenses of 1.60% (including the
optional enhanced death benefit 0.20%)) and investment in an Underlying Fund
with total expenses of 2.27%.)
</R>

<R>
(1)If you surrender your contract at the end of the applicable time period and
   Seasons Income Rewards (0.65% for years 0-7 and 0.45% for years 8-10).
</R>

                                 1 year 3 years
                                 ------ -------
                                 $1,158 $1,879

(2)If you annuitize your contract at the end of the applicable time period:

                                 1 year 3 years
                                 ------ -------
                                  $369  $1,123

<R>
(3)If you do not surrender your contract and you elect Seasons Income Rewards
   (0.65% for years 0-7 and 0.45% for years 8-10).
</R>

                                 1 year 3 years
                                 ------ -------
                                  $458  $1,379

MINIMUM EXPENSE EXAMPLES
<R>
(assuming minimum separate account annual expenses of 1.40% and investment in
an Underlying Fund with total expenses of 1.02%.)
</R>

(1)If you surrender your contract at the end of the applicable time period and
   you do not elect any optional features:

                                 1 year 3 years
                                 ------ -------
                                  $950  $1,268

(2)If you annuitize your contract at the end of the applicable time period:

                                 1 year 3 years
                                 ------ -------
                                  $245   $755

(3)If you do not surrender your contract and you do not elect any optional
   features:

                                 1 year 3 years
                                 ------ -------
                                  $250   $768
                    Explanation of Fee Tables and Examples

<R>
1.The purpose of the Fee Tables and Examples is to show you the various
  expenses you will incur directly and indirectly by investing in the contract.
  We converted the contract maintenance fee to a percentage (0.05%). The actual
  impact of the contract maintenance fee may differ from this percentage and
  may be waived for contract values over $50,000. Additional information on the
  Underlying Fund expenses can be found in the Trust prospectus located behind
  this prospectus.
</R>

<R>
2.In addition to the stated assumptions, the Examples assume separate account
  expenses as indicated and that no transfer fees were imposed.
</R>

3.Examples reflecting participation in the Seasons Rewards program reflect the
  Seasons Rewards withdrawal charge schedule and a 2% upfront payment
  enhancement.

<R>
4.Examples reflecting application of optional features and benefits use the
  highest fees and charges being offered for these features. If you elected
  Seasons Promise instead of Seasons Income Rewards, your expenses would be
  lower than those shown in these tables. The fee for the Seasons Income
  Rewards and Seasons Promise features are not calculated as a percentage of
  your daily net asset value but on other calculation more fully described in
  the prospectus.
</R>

<R>
5.These Examples should not be considered a representation of past or future
  expenses. Actual expenses may be more or less than those shown.
</R>

 Condensed financials are not yet available as sales of this product have only
                                recently begun.

                                      7


THE SEASONS SELECT/II/ VARIABLE ANNUITY
  ------------------------------------------------------------------------------

An annuity is a contract between you and an insurance company. You are the
owner of the contract. The contract provides three main benefits:

   . Tax Deferral: You do not pay taxes on your earnings from the annuity until
     you withdraw them.

   . Death Benefit: If you die during the Accumulation Phase, the insurance
     company pays a death benefit to your Beneficiary.

   . Guaranteed Income: If elected, you receive a stream of income for your
     lifetime, or another available period you select.

Tax-qualified retirement plans (e.g., IRAs, 401(k) or 403(b) plans) defer
payment of taxes on earnings until withdrawn. If you are considering funding a
tax-qualified retirement plan with an annuity, you should know that an annuity
does not provide any additional tax deferral treatment of earnings beyond the
treatment provided by the tax-qualified retirement plan itself. However,
annuities do provide other features and benefits which may be valuable to you.
You should fully discuss this decision with your financial representative.

This annuity was developed to help you contribute to your retirement savings.
This annuity works in two stages, the Accumulation Phase and the Income Phase.
Your contract is in the Accumulation Phase during the period when you make
payments into the contract. The Income Phase begins when you request us to
start making payments to you out of the money accumulated in your contract.

The contract is called a "variable" annuity because it allows you to invest in
variable investment portfolios. The Variable Portfolios, are similar to mutual
funds, in that they have specific investment objectives and their performance
varies. You can gain or lose money if you invest in the Variable Portfolios.
The amount of money you accumulate in your contract depends on the performance
of the Variable Portfolios in which you invest.

<R>
The contract may also offer several Fixed Account options for varying time
periods. Fixed account options earn interest at a rate set and guaranteed by
the Company. If available, and you allocate money to the Fixed Account options,
the amount of money that accumulates in your contract depends on the total
interest credited to the particular Fixed Account option(s) in which you are
invested.
</R>

<R>
For more information on the Variable Portfolios and Fixed Account options
available under this contract, see INVESTMENT OPTIONS below.
</R>

This annuity is designed for investors whose personal circumstances allow for a
long-term investment time horizon, to assist in contributing to retirement
savings. As a function of the federal tax code you may be assessed a 10%
federal tax penalty on any withdrawal made prior to your reaching age 59 1/2.
Additionally, this contract provides that you will be charged a withdrawal
charge on each Purchase Payment withdrawn if that Purchase Payment has not been
invested in this contract for at least 7 years, or 9 years if you elect to
participate in the Seasons Rewards Program. Because of these potential
penalties, you should fully discuss all of the benefits and risks of this
contract with your financial representative prior to purchase.

First SunAmerica issues the Seasons Select/II/ Variable Annuity. When you
purchase a Seasons Select/II/ Variable Annuity, a contract exists between you
and First SunAmerica. The Company is a stock life insurance company organized
under the laws of the state of New York. Its principal place of business is 733
Third Avenue, 4th floor, New York, New York 10017. The Company conducts life
insurance and annuity business in the state of New York. First SunAmerica is an
indirect, wholly owned subsidiary of American International Group, Inc., a
Delaware corporation.

                                      8


PURCHASING A SEASONS SELECT/II/ VARIABLE ANNUITY
  ------------------------------------------------------------------------------

An initial Purchase Payment is the money you give us to buy a contract. Any
additional money you give us to invest in the contract after purchase is a
subsequent Purchase Payment.

This chart shows the minimum initial and subsequent Purchase Payments permitted
under your contract. These amounts depend upon whether a contract is Qualified
or Non-qualified for tax purposes.

<R>
                                        Minimum        Minimum Subsequent
                   Minimum Initial     Subsequent      Purchase Payment--
                   Purchase Payment Purchase Payment Automatic Payment Plan
                   ---------------- ---------------- ----------------------
     Qualified          $2,000            $250                $100
     Non-qualified      $5,000            $500                $100
</R>

We reserve the right to require Company approval prior to accepting Purchase
Payments greater than $1,000,000. For contracts owned by a non-natural owner,
we reserve the right to require prior Company approval to accept Purchase
Payments greater than $250,000. Subsequent Purchase Payments that would cause
total Purchase Payments in all contracts issued by the Company and AIG
SunAmerica Life Assurance Company, an affiliate of the Company, to the same
owner to exceed these limits may also be subject to company pre-approval. For
any contracts subject to these dollar amount reservations, we further reserve
the right to limit the death benefit amount payable in excess of contract value
at the time we receive all required paperwork and satisfactory proof of death.
Any limit on the maximum death benefit payable would be mutually agreed upon by
you and the Company prior to purchasing the contract. We reserve the right to
change the amount at which pre-approval is required, at any time.

<R>
Once you have contributed at least the minimum initial Purchase Payment, you
can establish an optional automatic payment plan that allows you to make
subsequent Purchase Payments of as little as $100.
</R>

We will not issue a contract to anyone age 86 or older on the contract issue
date and we will not accept subsequent Purchase Payments from contract owners
age 86 or older. In general, we will not issue a Qualified contract to anyone
who is age 70 1/2 or older, unless they certify to us that the minimum
distribution required by the federal tax code is being made.

<R>
</R>
<R>
We allow this contract to be jointly owned. We may require that the joint
owners be spouses. However, the age of the older spouse is used to determine
the availability of any age driven benefits. The addition of a joint owner
after the contract has been issued is contingent upon prior review and approval
by the Company.
</R>

You may assign this contract before beginning the Income Phase by sending us a
written request for an assignment. Your rights and those of any other person
with rights under this contract will be subject to the assignment. We reserve
the right to not recognize assignments if it changes the risk profile of the
owner of the contract, as determined in our sole discretion. Please see the
Statement of Additional Information for details on the tax consequences of an
assignment.

Allocation of Purchase Payments

<R>
We invest your Purchase Payments in the Fixed Accounts and Variable Portfolios
according to your instructions. If we receive a Purchase Payment without
allocation instructions, we will invest the money according to your last
allocation instructions. Purchase Payments are applied to your contract based
upon the value of the variable investment option next determined after receipt
of your money. See INVESTMENT OPTIONS below.
</R>

In order to issue your contract, we must receive your completed application,
Purchase Payment allocation instructions and any other required paper work at
our Annuity Service Center. We allocate your initial Purchase Payment within
two days of receiving it. If we do not have complete information necessary to
issue your contract, we will contact you. If we do not have the information
necessary to issue your contract within 5 business days we will send your money
back to you or ask your permission to keep your money until we get the
information necessary to issue the contract.

                                      9


SEASONS REWARDS PROGRAM

If you elect to participate in the Seasons Rewards Program at contract issue,
we contribute an Upfront Payment Enhancement and, if applicable, a Deferred
Payment Enhancement to your contract in conjunction with each Purchase Payment
you invest during the life of your contract. If you elect to participate in
this program, all Purchase Payments are subject to a nine year withdrawal
charge schedule. See WITHDRAWAL CHARGES below. If you make an early withdrawal
of Purchase Payments, we may effectively recoup a portion of any bonuses
applicable to any payment withdrawn. See EXPENSES below. You may not elect to
participate in the Seasons Rewards program if you are age 81 or older at the
time of contract issue. The Seasons Rewards Program may not be approved for
sale through the broker-dealer with which your financial representative is
affiliated. Amounts we contribute to your contract under this program are
considered earnings and are allocated to your contract as described below.

<R>
Purchase Payments may not be invested in the Dollar Cost Averaging Fixed
Accounts if you participate in the Seasons Rewards Program.
</R>

There may be scenarios in which due to negative market conditions and your
inability to remain invested over the long-term, a contract with the Seasons
Rewards Program may not perform as well as the contract without the feature.

  Enhancement Levels

The Upfront Payment Enhancement Rate, Deferred Payment Enhancement Rate and
Deferred Payment Enhancement Date may be determined based on stated Enhancement
Levels. Each Enhancement Level is a range of dollar amounts which may
correspond to different enhancement rates and dates. Enhancement Levels may
change from time to time, at our sole discretion. The Enhancement Level
applicable to your initial Purchase Payment is determined by the amount of that
initial Purchase Payment. With respect to any subsequent Purchase Payments we
determine your Enhancement Level by adding to your contract value on the date
we receive each subsequent Purchase Payment the amount of that subsequent
Purchase Payment.

  Upfront Payment Enhancement

An Upfront Payment Enhancement is an amount we add to your contract on the day
we receive a Purchase Payment. We calculate an Upfront Payment Enhancement
amount as a percentage (the "Upfront Payment Enhancement Rate") of each
Purchase Payment. We periodically review and establish the Upfront Payment
Enhancement Rate, which may increase or decrease at any time, but will never be
less than 2%. The applicable Upfront Payment Enhancement Rate is that which is
in effect for any applicable Enhancement Level, when we receive each Purchase
Payment under your contract. The Upfront Payment Enhancement amounts are
allocated among the fixed and variable investment options according to the
current allocation instructions in effect when we receive each Purchase Payment.

  Deferred Payment Enhancement

A Deferred Payment Enhancement is an amount we may add to your contract on a
future date (the "Deferred Payment Enhancement Date"). We calculate the
Deferred Payment Enhancement amount, if any, as a percentage of each Purchase
Payment (the "Deferred Payment Enhancement Rate"). We periodically review and
establish the Deferred Payment Enhancement Rates and Deferred Payment
Enhancement Dates. The Deferred Payment Enhancement Rate being offered may
increase, decrease or be eliminated by us, at any time. The Deferred Payment
Enhancement Date, if applicable, may change at any time. The applicable
Deferred Payment Enhancement Date and Deferred Payment Enhancement Rate are
those which may be in effect for any applicable Enhancement Level, when we
receive each Purchase Payment under your contract. Any applicable Deferred
Payment Enhancement, when credited, is allocated to the Cash Management
portfolio.

If you withdraw any portion of a Purchase Payment, to which a Deferred Payment
Enhancement applies, prior to the Deferred Payment Enhancement Date, we reduce
the amount of the corresponding Deferred Payment Enhancement in the same
proportion that your withdrawal (and any fees and charges associated with such
withdrawals) reduces that Purchase Payment. For purposes of the Deferred
Payment Enhancement, withdrawals are assumed to be taken from earnings first,
then from Purchase Payments, on a first-in-first-out basis.

                                      10


CURRENT ENHANCEMENT LEVELS

The Enhancement Levels, Upfront Payment Enhancement Rate, Deferred Payment
Enhancement Rate and Deferred Payment Enhancement Date applicable to all
Purchase Payments, are as follows:

<R>
                           Upfront Payment         Deferred Payment
       Enhancement Level   Enhancement Rate        Enhancement Rate
       -----------------   ----------------        ----------------
         Under $40,000            2%                      0%
       $40,000 -- $99,999         4%                      0%
      $100,000 -- $499,999        4%        1% paid on the 9th anniversary
       $500,000 and above         5%        1% paid on the 9th anniversary
</R>

The applicable Payment Enhancement rate is that which is in effect when we
receive each purchase payment under your contract. Future Upfront Enhancement
Rates may change at any time, but will never be less than 2%. Future Deferred
Payment Enhancement Rates may increase or stay the same; there is no minimum
Deferred Payment Enhancement Rate. The number of years before which you may
receive any applicable future Deferred Payment Enhancement may change as well.
<R>
</R>

90 Day Window

Contracts issued with the Seasons Rewards feature may be eligible for a
"Look-Back Adjustment." As of the 90th day after your contract was issued, we
will total your Purchase Payments made over those 90 days, without considering
any investment gain or loss in contract value on those Purchase Payments. If
your total Purchase Payments bring you to an Enhancement Level which, as of the
date we issued your contract, would have provided for a higher Upfront and/or
any applicable Deferred Payment Enhancement Rate on each Purchase Payment, you
will get the benefit of the Enhancement Rate(s) that were applicable to that
higher Enhancement Level at the time your contract was issued. We will add any
applicable Upfront Look Back Adjustment to your contract on the 90th day
following the date of contract issue. We will send you a confirmation
indicating any applicable Upfront and/or Deferred Look Back Adjustment, on or
about the 90th day following the date of contract issuance. We will allocate
any applicable Upfront Look Back Adjustment according to your then-current
allocation instructions on file for subsequent Purchase Payments at the time we
make the contribution. If applicable, any Deferred Look Back Adjustment will be
allocated to the Cash Management portfolio.

We will not allocate any applicable Deferred Payment Enhancement to your
contract if any of the following circumstances occurs prior to the Deferred
Payment Enhancement Date:

   . You surrender your contract;

   . A death benefit it paid on your contract;

   . You switch to the Income Phase of your contract; or

   . You fully withdraw the corresponding Purchase Payment.

Appendix A provides an example of the 90 Day Window Provision.

WE RESERVE THE RIGHT TO MODIFY, SUSPEND OR TERMINATE THE SEASONS REWARDS
PROGRAM (IN ITS ENTIRETY OR ANY COMPONENT) AT ANY TIME.

Check with your representative for information on the Upfront Payment
Enhancement Rate, Deferred Payment Enhancement Rate and Deferred Payment
Enhancement Date.

Accumulation Units

The value of the variable portion of your contract will go up or down depending
upon the investment performance of the Variable Portfolios you select. In order
to keep track of the value of your contract, we use a unit of measure called an
Accumulation Unit which works like a share of a mutual fund. During the Income
Phase, we call them Annuity Units.

                                      11


An Accumulation Unit value is determined each day that the New York Stock
Exchange ("NYSE") is open. We base the number of units you receive on the unit
value of the variable investment option as of the date we receive your money,
if we receive it before 1:00 p.m. Pacific Standard Time (PST) and on the next
day's unit value if we receive your money after 1:00 p.m. PST. We calculate an
Accumulation Unit for each Variable Portfolio after the NYSE closes each day.
We do this by:

   1. determining the total value of money invested in a particular Variable
      Portfolio;

   2. subtracting from that amount any asset-based charges and any other
      charges such as taxes we have deducted; and

   3. dividing this amount by the number of outstanding Accumulation Units.

   Example (contracts without Seasons Rewards):

   We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
   the money to the Focus Growth Portfolio. We determine that the value of an
   Accumulation Unit for the Focus Growth Portfolio is $11.10 when the NYSE
   closes on Wednesday. We then divide $25,000 by $11.10 and credit your
   contract on Wednesday night with 2,252.2523 Accumulation Units for the Focus
   Growth Portfolio.

   Example (contracts with Seasons Rewards):

   We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
   the money to the Focus Growth Portfolio. If the Upfront Payment Enhancement
   is 2.00% of your Purchase Payment, we would add an Upfront Payment
   Enhancement of $500 to your contract. We determine that the value of an
   Accumulation Unit for the Focus Growth Portfolio is $11.10 when the NYSE
   closes on Wednesday. We then divide $25,500 by $11.10 and credit your
   contract on Wednesday with 2,297.2973 Accumulation Units for the Focus
   Growth Portfolio.

Free Look

<R>
You may cancel your contract within ten days after receiving it. We call this a
"free look." To cancel, you must mail the contract along with your free look
request to our Annuity Service Center at P.O. Box 54299, Los Angeles,
California 90054-0299.
</R>

Generally we will refund to you the greater of (1) your Purchase Payments or
(2) the value of your contract on the day we receive your request MINUS any
applicable Free Look Payment Enhancement Deduction, if you had elected the
Seasons Rewards program. The Free Look Payment Enhancement Deduction is equal
of the lesser of (1) the value of any Payment Enhancement(s) on the day we
receive your free look request; or (2) the Payment Enhancement amount(s), if
any, which we allocated to your contract. Thus, you receive any gain and we
bear any loss on any Payment Enhancement(s) if you decide to cancel your
contract during the free look period.

Additionally, all contracts issued as an IRA require the full return of
Purchase Payments upon a free look. With respect to those contracts, we reserve
the right to put your money in the Cash Management investment option during the
free look period and will allocate your money according to your instructions at
the end of the applicable free look period. Currently, we do not put your money
in the Cash Management investment option during the free look period unless you
allocate your money to it. If your contract was issued as an IRA and you cancel
your contract during the free look period, we return the greater of (1) your
Purchase Payments; or (2) the value of your contract MINUS the Free Look
Payment Enhancement Deduction, if applicable.

Exchange Offers

From time to time, we may offer to allow you to exchange an older variable
annuity issued by First SunAmerica or one of its affiliates, for a newer
product with more current features and benefits, also issued by First
SunAmerica or one of its affiliates. Such an exchange offer will be made in
accordance with applicable state and federal securities and insurance rules and
regulations. We will explain the specific terms and conditions of any such
exchange offer at the time the offer is made.

                                      12


INVESTMENT OPTIONS
  ------------------------------------------------------------------------------

Variable Portfolios

The contract offers Variable Portfolios, and, if available, fixed investment
options. We designed the contract to meet your varying investment needs over
time. You can achieve this by using the Variable Portfolios alone or in concert
with the fixed investment options. The Variable Portfolios are only available
through the purchase of certain variable annuities.

<R>
Each of the variable investment options of the contract invests in Underlying
Funds of Seasons Series Trust. AIG SunAmerica Asset Management Corp. ("AIG
SAAMCo"), an affiliate of First SunAmerica, manages Seasons Series Trust. AIG
SAAMCo has engaged sub-advisers to provide investment advice for certain of the
Underlying Funds.
</R>

<R>
You should read the Prospectus for the Seasons Series Trust carefully before
investing. The Trust Prospectus which is attached hereto contains detailed
information about the Underlying Funds including investment objective and risk
factors.
</R>

SELECT AND FOCUSED PORTFOLIOS

<R>
The contract offers ten Select Portfolios, each with a distinct investment
objective, utilizing a disciplined investing style to achieve its objective.
Each Select Portfolio invests in an Underlying Fund of the Seasons Series
Trust. Except for the Cash Management portfolio, each Underlying Fund is
multi-managed by a team of three money managers. One component of the
Underlying Funds is an unmanaged component that tracks a particular target
index or subset of an index. The other two components are actively managed.
However, the Diversified Fixed Income and Strategic Fixed Income portfolios do
not have an unmanaged component but three components which are all actively
managed. The unmanaged component of each Underlying Fund is intended to balance
some of the risks associated with an actively traded portfolio.
</R>

The contract also offers Focused Portfolios. Each multi-managed Focused
Portfolio offers you at least three different professional managers, and each
of which advises a separate portion of the Focused Portfolio. Each manager
actively selects a limited number of stocks that represent their best stock
selections. This approach to investing results in a more concentrated
portfolio, which will be less diversified than the Select Portfolios, and may
be subject to greater market risks.

<R>
Each Underlying Fund and the respective managers are:
</R>

                               SELECT PORTFOLIOS
<R>
 Large Cap Growth        Mid Cap Growth             International Equity
 AIG Global Investment   AIGGIC                     AIGGIC
 Corp. ("AIGGIC")        T. Rowe Price              Goldman Sachs Asset
 Goldman Sachs Asset     Wellington Management      Management Int'l
 Management L.P.                                    Lord Abbett
 ("GSAM")                Mid Cap Value
 Janus Capital           AIGGIC                     Strategic Fixed Income
 Management LLC          GSAM                       AIGGIC
 ("Janus")               Lord, Abbett & Co. LLC     Franklin Advisers, Inc.
                         ("Lord Abbett")            Salomon
 Large Cap Composite
 AIGGIC                  Small Cap                  Diversified Fixed Income
 AIG SAAMCo              AIGGIC                     AIGGIC
 T. Rowe Price           AIG SAAMCo                 AIG SAAMCo
 Associates, Inc.        Salomon Brothers Asset     Wellington Management
 ("T. Rowe Price")       Management, Inc.
                         ("Salomon")                Cash Management
 Large Cap Value                                    Banc of America Capital
 AIGGIC                                             Management, LLC
 T. Rowe Price
 Wellington Management
 Company, LLP
 ("Wellington
 Management")
</R>

                                      13

FOCUSED PORTFOLIOS
<R>
Focus Growth Focus Growth & Income Focus Value Focus TechNet
Janus Capital Management LLC Harris Associates L.P. Third Avenue Management AIG SAAMCo
Marsico Capital Management, ("Harris") LLC Baron Capital Management, Inc.
LLC. ("Marsico") Thornburg Investment J.P. Morgan Investment RCM Capital Management, LLC
Credit Suisse Asset Management, Inc. Management Inc.
Management, Inc. Marsico ("J.P. Morgan")
American Century Investment
Management Inc. ("American
Century")
</R>

Each Select and Focused Portfolio is designed to meet a distinct investment
objective facilitated by the management philosophy of three different money
managers (except for the Cash Management portfolio). Generally, the Purchase
Payments received for allocation to each Select and Focused Portfolio will be
allocated equally among the three managers for that Select or Focused
Portfolio. Each quarter AIG SAAMCo will evaluate the asset allocation between
the three managers of each Select or Focused Portfolio. If AIG SAAMCo
determines that the assets have become significantly unequal in allocation
among the managers, then the incoming cash flows may be redirected in an
attempt to stabilize the allocations. Generally, existing Select and Focused
Portfolio assets will not be rebalanced. However, we reserve the right to do so
in the event that it is deemed necessary and not adverse to the interests of
contract owners invested in the Select and Focused Portfolios.

Seasons Managed Allocation Portfolios

The contract also offers four Seasons Managed Allocation Portfolios each with a
different investment goal. Each Seasons Managed Allocation Portfolio is
structured as a "fund-of-funds" which means that it pursues its investment goal
by investing its assets in a combination of the Select Portfolios and the
Focused Portfolios. A fund-of-funds strategy generally offers investors an
efficient means of diversification among a number of mutual funds while
obtaining professional management in determining which funds to select, how
much of their assets to commit to each fund, and when to make that selection.

Each Seasons Managed Allocation Portfolio is managed by a professional manager,
Ibbotson Associates Advisers, LLC ("Ibbotson"). Ibbotson creates a target
allocation annually for each Seasons Managed Allocation Portfolio. The target
allocation will reflect the percentage in which a Seasons Managed Allocation
Portfolio should invest in the Select and Focused Portfolios. Due to market
movements, portfolio management decisions or cash flow consideration, Ibbotson
may determine that a Seasons Managed Allocation Portfolio's investments in the
Select and Focused Portfolios require adjustments in order to meet its target
allocation. Generally, Ibbotson will manage the investments among the Select
and Focused Portfolios for each Seasons Managed Allocation Portfolio to match
its target allocation and to rebalance assets back to the target allocation, as
it deems necessary.

This approach allows the Seasons Managed Allocation Portfolios to offer
professional asset management on two levels: 1) the fund management of each
underlying Select and Focused Portfolio; and 2) the overlay portfolio
management provided by Ibbotson.


Each Managed Allocation Portfolio can invest in as many as all of the Select
and Focused Portfolios listed above. The four Seasons Managed Allocation
Portfolios are:


         --------------------------------------------------------------
           Seasons Managed
             Allocation
             Portfolios            Objective       Investment Strategy
         --------------------------------------------------------------
         --------------------------------------------------------------
         Allocation Growth    Long-term capital    Invest primarily in
           Portfolio          appreciation         equity-based
                                                   portfolios.
                                                   Designed to provide
                                                   higher growth
                                                   potential, while
                                                   maintaining risk at
                                                   a reasonable level.
         --------------------------------------------------------------
         --------------------------------------------------------------
         Allocation Moderate  Long-term capital    Focuses on equity
           Growth Portfolio   appreciation         investing to help
                                                   maximize growth
                                                   potential, but also
                                                   invests a portion
                                                   of its assets in
                                                   the bond market for
                                                   income.
         --------------------------------------------------------------
         --------------------------------------------------------------
         Allocation Moderate  Long-term capital    Combines equity
           Portfolio          appreciation and     investing with
                              moderate current     increased exposure
                              income.              to fixed income
                                                   investing. Designed
                                                   for investors who
                                                   want growth, but
                                                   who are also
                                                   seeking a moderate
                                                   level of income.
         --------------------------------------------------------------
         --------------------------------------------------------------
         Allocation Balanced  Long-term capital    Offers the greatest
           Portfolio          appreciation and     exposure to fixed
                              income               income. Designed
                                                   for investors who
                                                   need greater
                                                   balance of growth
                                                   potential and
                                                   current income.
         --------------------------------------------------------------

Special note should be taken of the similarities and differences between the
Seasons Managed Allocation Portfolios and the Seasons Strategies, described in
detail below. Each alternative reflects an allocation model. The Seasons
Managed Allocation Portfolios differ from the Seasons Strategies in the
following respects. A professional manager actively manages the Seasons Managed
Allocation Portfolios' investments in the Select and Focused Portfolios. The
Seasons Strategies are limited to investment in the specified funds of the
Seasons Series Trust with a pre-determined target asset allocation mix that
does not change over the life of the contract. Thus, the Seasons Managed
Allocation Portfolios are responsive to changing market conditions, and current
judgments of professional management, while the Seasons Strategies assume that
the pre-determined asset allocation mix will continue to be consistent with its
risk objective. Please read carefully the descriptions of each alternative for
more details.

SEASONS STRATEGIES

The contract offers four Seasons Strategies, each with a different investment
objective. Each Seasons Strategy is a Variable Portfolio of the separate
account and invests in three underlying funds of Seasons Series Trust. We
designed the Seasons Strategies utilizing an asset allocation approach to meet
your investment needs over time, considering factors such as your age, goals
and risk tolerance. However, each Seasons Strategy is designed to achieve
different levels of growth over time.

The Seasons Strategies differ from other Variable Portfolios because they each
invest in more than one underlying fund of Seasons Series Trust. The allocation
of money among these underlying funds varies depending on the objective of the
Seasons Strategy.

The underlying funds of Seasons Series Trust in which the Seasons Strategies
invest include the Asset Allocation: Diversified Growth Portfolio, the Stock
Portfolio and the Multi-Managed Growth, Multi-Managed Moderate Growth,
Multi-Managed Income/Equity and Multi-Managed Income Portfolios (the
"Multi-Managed Portfolios").

The Asset Allocation: Diversified Growth Portfolio is managed by Putnam
Investment Management, Inc. The Stock Portfolio is managed by T. Rowe Price
Associates, Inc. All of the Multi-Managed Portfolios include the same three
basic

                                      15


investment components: a growth component managed by Janus Capital Management
LLC., a balanced component managed by AIG SunAmerica Asset Management Corp. and
a fixed income component managed by Wellington Management Company, LLP. The
Growth Seasons Strategy and the Moderate Growth Seasons Strategy also have an
aggressive growth component which AIG SAAMCo manages. The percentage that any
one of these components represents in each Multi-Managed Portfolio varies in
accordance with the investment objective.

Each Seasons Strategy uses an investment approach based on asset allocation.
This approach is achieved by each Seasons Strategy investing in distinct
percentages in three specific underlying funds of the Seasons Series Trust. In
turn, the underlying funds invest in a combination of domestic and
international stocks, bonds and cash. The goal for each Seasons Strategy is to
have a specified asset mix of stocks, bonds and cash in accordance with the
specified objective of the Seasons Strategy and relative to the underlying
funds in which the Seasons Strategy invests. The stated target asset allocation
percentages and the mix of underlying funds comprising each Seasons Strategy
does not change for the life of the contract.

Seasons Strategy Rebalancing

Each Seasons Strategy is designed to meet its investment objective by
allocating a portion of your money to three different investment portfolios. At
the beginning of each quarter a rebalancing occurs among the underlying funds
to realign each Seasons Strategy with its distinct percentage investment in the
three underlying funds. This rebalancing is designed to help maintain the asset
allocation mix for each Seasons Strategy. The pie charts on the following page
demonstrate:

   . the asset allocation mix for each Seasons Strategy; and

   . the percentage allocation of each underlying fund in which the Seasons
     Strategy invests.

On the first business day of each quarter (or as close to such date as is
administratively practicable) your money will be allocated among the various
investment portfolios according to the percentages set forth on the prior
pages. Additionally, within each Multi-Managed Portfolio, your money will be
rebalanced among the various components. Rebalancing a Seasons Strategy may
involve shifting a portion of assets out of underlying funds with higher
returns into underlying funds with relatively lower returns.

                                      16


                                Growth Strategy

   Goal:  Long-term growth of capital, allocating its assets primarily to
stocks. This Strategy may be best suited for those with longer periods to
invest.

                                    [CHART]


Asset Allocation: Diversified Growth Portfolio (Putnam)     25%
Growth component (Janus)                                    20%
Aggressive Growth component AIG SAAMCo)                     10%
Balanced component (AIG SAAMCo)                             10%
Fixed Income component (Wellington)                         10%
Stock Portfolio (T Rowe Price)                              25%


                           Balanced Growth Strategy

   Goal:  Focuses on conservation of principal by investing in a more balanced
weighting of stocks and bonds, with a secondary objective of seeking a high
total return. This Strategy may be best suited for those approaching retirement
and with less tolerance for investment risk.

                                    [CHART]

Asset Allocation: Diversified Growth Portfolio (Putnam)    25%
Growth component (Janus)                                  9.9%
Balanced component (AIG SAAMCo)                          15.4%
Fixed Income component (Wellington)                      29.7%
Stock Portfolio (T Rowe Price)                             20%


                           Moderate Growth Strategy

   Goal:  Growth of capital through investments in equities, with a secondary
objective of conservation of principal by allocating more of its assets to
bonds than the Growth Strategy. This Strategy may be best suited for those
nearing retirement years but still earning income.

                                    [CHART]


Asset Allocation: Diversified Growth Portfolio (Putnam)      25%
Growth component (Janus)                                   15.4%
Aggressive Growth component (AIG SAAMCo)                    9.9%
Balanced component (AIG SAAMCo)                             9.9%
Fixed Income component (Wellington)                        19.8%
Stock Portfolio (T Rowe Price)                               20%


                         Conservative Growth Strategy

   Goal:  Capital preservation while maintaining some potential for growth over
the long term. This Strategy may be best suited for those with lower investment
risk tolerance.

                                    [CHART]


Asset Allocation: Diversified Growth Portfolio (Putnam)     25%
Growth component (Janus)                                   4.8%
Balanced component (AIG SAAMCo)                           10.2%
Fixed Income component (Wellington)                         45%
Stock Portfolio (T Rowe Price)                              15%


                                      17


Fixed Investment Options

<R>
Your contract may offer Fixed Account guarantee periods to which you may
allocate certain Purchase Payments or contract value. Available guarantee
periods may be for different lengths of time (such as 1, 3 or 5 years) and may
have different guaranteed interest rates, as noted below. We guarantee the
interest rate credited to amounts allocated to any available Fixed Account and
that the rate will never be less than the minimum guaranteed interest rate as
specified in your contract. Once established, the rates for specified payments
do not change during the guarantee period. We determine the Fixed Accounts
offered at any time in our sole discretion and we reserve the right to change
the Fixed Accounts that we make available at any time, unless state law
requires us to do otherwise. Please check with your financial representative to
learn if any Fixed Accounts are currently offered.
</R>

<R>
There are three interest rate scenarios for money allocated to the Fixed
Accounts. Each of these rates may differ from one another. Once declared, the
applicable rate is guaranteed until the corresponding guarantee period expires.
Under each scenario your money may be credited a different rate of interest as
follows:
</R>

<R>
   . Initial Rate:  The rate credited to any portion of the initial Purchase
     Payment allocated to a Fixed Account.
</R>

<R>
   . Current Rate:  The rate credited to any portion of the subsequent Purchase
     Payments allocated to a Fixed Account.
</R>

<R>
   . Renewal Rate:  The rate credited to money transferred from a Fixed Account
     or a Variable Portfolio into a Fixed Account and to money remaining in a
     Fixed Account after expiration of a guarantee period.
</R>

<R>
When a Fixed Account guarantee period ends, you may leave your money in the
same Fixed Account or you may reallocate your money to another Fixed Account or
to the Variable Portfolios. If you want to reallocate your money, you must
contact us within 30 days after the end of the current interest guarantee
period and instruct us as to where you would like the money invested. We do not
contact you. If we do not hear from you, your money will remain in the same
Fixed Account where it will earn interest at the renewal rate then in effect
for that Fixed Account.
</R>

<R>
If available, you may systematically transfer interest earned in available
Fixed Accounts into any of the Variable Portfolios on certain periodic
schedules offered by us. If available, these systematic transfers will not
count toward the 15 free transfers per contract year. You may change or
terminate these systematic transfers by contacting our Annuity Service Center.
Check with your financial representative regarding the current availability of
this service.
</R>

<R>
All Fixed Accounts may not be available. We reserve the right to refuse any
Purchase Payment to available Fixed Accounts if we are crediting a rate equal
to the minimum guaranteed interest rate specified in your contract. If you do
not elect to participate in the Seasons Rewards program, we may also offer
Dollar Cost Averaging ("DCA") Fixed Accounts. The rules, restrictions and
operation of DCA Fixed Accounts may differ from the standard Fixed Accounts
described above, please see DOLLAR COST AVERAGING below for more details.
</R>

Dollar Cost Averaging Fixed Accounts

<R>
If you do not elect the Seasons Rewards program, you may invest initial and/or
subsequent Purchase Payments in DCA Fixed Accounts, if available. The minimum
Purchase Payment that you must invest for the 6-month DCA Fixed Account is $600
and $1,200 for the 12-month DCA Fixed Account, if such accounts are available.
Purchase Payments less than these minimum amounts will automatically be
allocated to the Variable Portfolios ("target account(s)") according to your
instructions to us or your current allocation on file. DCA Fixed Accounts also
credit a fixed rate of interest but are specifically designed to facilitate a
dollar cost averaging program. Interest is credited to amounts allocated to the
DCA Fixed Accounts while your investment is transferred to the Variable
Portfolios over certain specified time frames. The interest rates applicable to
the DCA Fixed Account may differ from those applicable to any available FAGPs
but will never be less than the minimum annual guaranteed interest rate as
specified in your contract. However, when using a DCA Fixed Account the annual
interest rate is paid on a declining balance as you systematically transfer
your investment to the Variable Portfolios. Therefore, the actual effective
yield will be less than the annual crediting rate. We determine the DCA Fixed
Accounts offered at any time in our sole discretion and we reserve the right to
change to DCA Fixed Accounts that we make available at any time, unless state
law requires us to do otherwise. See DOLLAR COST AVERAGING below for more
information.
</R>

                                      18


<R>
</R>
<R>
Transfers During the Accumulation Phase
</R>

<R>
Subject to our rules, restrictions and policies, during the Accumulation Phase
you may transfer funds between the Variable Portfolios and/or any available
Fixed Account options by telephone or through the Company's website
(http://www.aigsunamerica.com) or in writing by mail or facsimile. All transfer
instructions submitted via facsimile must be sent to (818) 615-1543, otherwise
they will not be considered received by us. We may accept transfers by
telephone or the Internet if you complete and send the Telephone Transfer
Agreement form to our Annuity Service Center. When receiving instructions over
the telephone or the Internet, we follow procedures we have adopted to provide
reasonable assurance that the transactions executed are genuine. Thus, we are
not responsible for any claim, loss or expense from any error resulting from
instructions received over the telephone or the Internet. If we fail to follow
our procedures, we may be liable for any losses due to unauthorized or
fraudulent instructions.
</R>

<R>
Any transfer request will be priced as of the day it is confirmed in good order
by us if the request is processed before Market Close. If the transfer request
is processed after Market Close, the request will be priced as of the next
business day.
</R>

<R>
Funds already in your contract cannot be transferred into the DCA Fixed
Accounts. You must transfer at least $100 per transfer. If less than $100
remains in any Variable Portfolio after a transfer, that amount must be
transferred as well.
</R>

<R>
  Transfer Policies
</R>

<R>
We do not want to issue this variable annuity contract to contract owners
engaged in trading strategies that seek to benefit from short-term price
fluctuations or price inefficiencies in the Variable Portfolios of this product
("Short-Term Trading") and we discourage Short-Term Trading as more fully
described below. However, we cannot always anticipate if a potential contract
owner intends to engage in Short-Term Trading. Short-Term Trading may create
risks that may result in adverse effects on investment return of an Underlying
Fund. Such risks may include, but are not limited to: (1) interference with the
management and planned investment strategies of an Underlying Fund and/or (2)
increased brokerage and administrative costs due to forced and unplanned fund
turnover; both of which may dilute the value of the shares in the Underlying
Fund and reduce value for all investors in the Variable Portfolio. In addition
to negatively impacting the contract owner, a reduction in contract value may
also be harmful to annuitants and/or beneficiaries.
</R>

<R>
We have adopted the following administrative procedures to discourage
Short-Term Trading.
</R>

<R>
We charge for transfers in excess of 15 in any contract year. Currently, the
fee is $25 for each transfer exceeding this limit. Transfers resulting from
your participation in the DCA or Asset Rebalancing programs are not counted
towards the number of free transfers per contract year.
</R>

<R>
In addition to charging a fee when you exceed 15 transfers as described in the
preceding paragraph, all transfer request in excess of 15 transfers per
contract year must be submitted in writing by United States Postal Service
first-class mail ("U.S. Mail") until your next contract anniversary ("Standard
U.S. Mail Policy"). We will not accept transfer requests sent by any other
medium except U.S. Mail until your next contract anniversary. Transfer requests
required to be submitted by U.S. Mail can only be cancelled by a written
request sent by U.S. Mail with the appropriate paperwork received prior to the
execution of the transfer. All transfers made on the same day prior to Market
Close are considered one transfer request. Transfers resulting from your
participation in the DCA or Asset Rebalancing programs are not included for the
purposes of determining the number of transfers before applying the Standard
U.S. Mail Policy. We apply the Standard U.S. Mail Policy uniformly and
consistently to all contract owners except for omnibus group contracts and
contracts utilizing third party asset allocation services as described below.
</R>

<R>
We believe that the Standard U.S. Mail Policy is a sufficient deterrent to
Short-Term Trading and we do not conduct any additional routine monitoring.
However, we may become aware of transfer patterns among the Variable Portfolios
and/or available Fixed Accounts which reflect what we consider to be Short-Term
Trading or otherwise detrimental to the Variable Portfolios but have not yet
triggered the limitations of the Standard U.S. Mail Policy described above. If
such transfer activity cannot be controlled by the Standard U.S. Mail Policy,
we may require you to adhere to our Standard U.S. Mail Policy prior to reaching
the specified number of transfers ("Accelerated U.S. Mail Policy"). To the
extent we become aware of Short-Term Trading activities which cannot be
reasonably controlled by the Standard U.S. Mail Policy or the Accelerated U.S.
Mail Policy, we also reserve the right to evaluate, in our sole discretion,
whether to impose further
</R>

                                      19


<R>
limits on the number and frequency of transfers you can make, impose minimum
holding periods and/or reject any transfer request or terminate your transfer
privileges. We will notify you in writing if your transfer privileges are
terminated. In addition, we reserve the right to not accept transfers from a
third party acting for you and not to accept preauthorized transfer forms.
</R>

<R>
Some of the factors we may consider when determining whether to accelerate the
Standard U.S. Mail Policy, reject or impose other conditions on transfer
privileges include:
</R>

<R>
   (1)the number of transfers made in a defined period;
</R>

<R>
   (2)the dollar amount of the transfer;
</R>

<R>
   (3)the total assets of the Variable Portfolio involved in the transfer
      and/or transfer requests that represent a significant portion of the
      total assets of the Variable Portfolio;
</R>

<R>
   (4)the investment objectives and/or asset classes of the particular Variable
      Portfolio involved in your transfers;
</R>

<R>
   (5)whether the transfer appears to be part of a pattern of transfers to take
      advantage of short-term market fluctuations or market inefficiencies;
      and/or
</R>

<R>
   (6)other activity, as determined by us, that creates an appearance, real or
      perceived, of Short-Term Trading.
</R>

<R>
Notwithstanding the administrative procedures above, there are limitations on
the effectiveness of these procedures. Our ability to detect and/or deter
Short-Term Trading is limited by operational systems and technological
limitations. We cannot guarantee that we will detect and/or deter all
Short-Term Trading. To the extent that we are unable to detect and/or deter
Short-Term Trading, the Variable Portfolios may be negatively impacted as
described above. Additionally, the Variable Portfolios may be harmed by
transfer activity related to other insurance companies and/or retirement plans
or other investors that invest in shares of the Underlying Fund. You should be
aware that the design of our administrative procedures involves inherently
subjective decisions, which we attempt to make in a fair and reasonable manner
consistent with the interests of all owners of this contract. We do not enter
into agreements with contract owners whereby we permit or intentionally
disregard Short-Term Trading.
</R>

<R>
The Standard and Accelerated U.S. Mail Policies are applied uniformly and
consistently to contract owners utilizing third party trading
services/strategies performing asset allocation services for a number of
contract owners at the same time except for purposes of calculating the number
of transfers for the Standard U.S. Mail Policy. A calendar year will be used
(instead of a contract year) for these contracts. You should be aware that such
third party trading services may engage in transfer activities that can also be
detrimental to the Variable Portfolios. These transfer activities may not be
intended to take advantage of short-term price fluctuations or price
inefficiencies. However, such activities can create the same or similar risks
to Short-Term Trading and negatively impact the Variable Portfolios as
described above.
</R>

<R>
Omnibus group contracts may invest in the same Underlying Funds available in
your contract but on an aggregate, not individual basis. Thus, we have limited
ability to detect Short-Term Trading in omnibus group contracts and the
Standard U.S. Mail Policy does not apply to these contracts. Our inability to
detect Short-Term Trading may negatively impact the Variable Portfolios as
described above.
</R>

<R>
We reserve the right to modify the policies and procedures described in this
section at any time. To the extent that we exercise this reservation of rights,
we will do so uniformly and consistently unless we disclose otherwise.
</R>

<R>
For information regarding transfers during the Income Phase, see INCOME OPTIONS
below.
</R>

Dollar Cost Averaging Program

The Dollar Cost Averaging ("DCA") program allows you to invest gradually in the
variable investment options. Under the program you systematically transfer a
set dollar amount or percentage from any Variable Portfolio (source accounts)
to any other Variable Portfolio (target accounts). Transfers may occur on such
periodic schedules such as monthly or weekly. You may change the frequency to
other available options at any time by notifying us in writing. Fixed account
options are not available as target accounts for the DCA program. The minimum
transfer amount under the DCA program is $100. There is no fee for
participating in the DCA program.

                                      20


<R>
We may also offer DCA Fixed Accounts for a specified time period exclusively to
facilitate this program. If you elect to participate in the Seasons Rewards
Program, the DCA Fixed Accounts are not available under your contract. The DCA
Fixed Accounts only accept new Purchase Payments. You cannot transfer money
already in your contract into these options. If you allocate a Purchase Payment
into DCA Fixed Accounts, we transfer all your money allocated to that account
into the Variable Portfolios you select over the selected time period at an
offered frequency. The minimum Purchase Payment that you must invest for the
6-month DCA Fixed Account is $600 and $1,200 for the 12-month DCA Fixed
Account, if such accounts are available. Purchase Payments less than these
minimum amounts will automatically be allocated to the target account(s)
according to your instructions to us or your current allocation on file.
</R>

<R>
You may terminate your DCA program at any time. If money remains in the DCA
Fixed Account, we transfer the remaining money according to your instructions
or to your current allocation on file. Transfers resulting from a termination
of this program do not count towards your 15 free transfers.
</R>

The DCA program is designed to lessen the impact of market fluctuations on your
investment. However, we cannot ensure that you will make a profit. When you
elect the DCA program, you are continuously investing in securities regardless
of fluctuating price levels. You should consider your tolerance for investing
through periods of fluctuating price levels.

We reserve the right to modify, suspend or terminate this program at any time.

   Example:

   Assume that you want to gradually move $750 each month from the Cash
   Management Portfolio to the Mid-Cap Value SELECT PORTFOLIO over six months.
   You set up dollar cost averaging and purchase Accumulation Units at the
   following values:

                    Month Accumulation Unit Units Purchased
                    ----- ----------------- ---------------
                      1        $ 7.50             100
                      2        $ 5.00             150
                      3        $10.00              75
                      4        $ 7.50             100
                      5        $ 5.00             150
                      6        $ 7.50             100

   You paid an average price of only $6.67 per Accumulation Unit over six
   months, while the average market price actually was $7.08. By investing an
   equal amount of money each month, you automatically buy more Accumulation
   Units when the market price is low and fewer Accumulation Units when the
   market price is high. This example is for illustrative purposes only.

We reserve the right to modify, suspend or terminate this program at any time.

Automatic Asset Rebalancing Program

Earnings in your contract may cause the percentage of your investment in each
investment option to differ from your original allocations. The Automatic Asset
Rebalancing Program addresses this situation. At your election, we periodically
rebalance your investments in the Variable Portfolios to return your
allocations to their original percentages. Asset rebalancing typically involves
shifting a portion of your money out of an investment option with a higher
return into an investment option with a lower return. At your request,
rebalancing occurs on a quarterly, semi-annual or annual basis. Transfers made
as a result of rebalancing do not count against your 15 free transfers for the
contract year. There is no fee for participating in the Automatic Asset
Rebalancing program.

We reserve the right to modify, suspend or terminate this program at any time.

Return Plus Program

<R>
The Return Plus Program allows you to invest in one or more of the Variable
Portfolios without putting your principal at direct risk. The program
accomplishes this by allocating your investment strategically between any
available fixed
</R>

                                      21


<R>
investment options (other than the DCA Fixed Accounts) and the Variable
Portfolios you select. You decide how much you want to invest and approximately
when you want a return of principal, based on the available Fixed Account that
you select. We calculate how much of your Purchase Payment to allocate to the
particular fixed investment option to ensure that it grows to an amount equal
to your total principal invested under this program. There is no fee for
participating in this program.
</R>

   Example:

<R>
   Assume that you want to allocate a portion of your initial Purchase Payment
   of $100,000 to the multi-year fixed investment option. You want the amount
   allocated to the fixed investment option to grow to $100,000 in 7 years. If
   the 7-year fixed investment option is offering a 5% interest rate, we will
   allocate $71,069 to the 7-year fixed investment option to ensure that this
   amount will grow to $100,000 at the end of the 7-year period. The remaining
   $28,931 may be allocated among the Variable Portfolios, as determined by
   you, to provide opportunity for greater growth.
</R>

The Return Plus Program is only available if we are offering FAGPs. There is no
fee for participating in the Return Plus Program.

We reserve the right to modify, suspend or terminate this program at any time.

Voting Rights

<R>
First SunAmerica is the legal owner of the Trust's shares. However, when an
Underlying Fund solicits proxies in conjunction with a vote of shareholders, we
must obtain your instructions on how to vote those shares. We vote all of the
shares we own in proportion to your instructions. This includes any shares we
own on our own behalf. Should we determine that we are no longer required to
comply with these rules, we will vote the shares in our own right.
</R>

Substitution

We may amend your contract due to changes to the investment variable portfolios
offered under your contract. For example, we may offer new portfolios, delete
portfolios, or stop accepting allocations and/or investments in a particular
portfolio. We may move assets and re-direct future premium allocations from one
portfolio to another if we receive investor approval through a proxy vote or
SEC approval for a fund substitution. This would occur if a portfolio is no
longer an appropriate investment for the contract, for reasons such as
continuing substandard performance, or for changes to the portfolio manager,
investment objectives, risks and strategies, or federal or state laws. The new
investment variable Portfolio offered may have different fees and expenses. You
will be notified of any upcoming proxies or substitutions that affect your
portfolio choices.

ACCESS TO YOUR MONEY
  ------------------------------------------------------------------------------

You can access money in your contract by making a partial or total withdrawal,
and/or by receiving income payments during the Income Phase. See INCOME OPTIONS
below.

Generally, we deduct a withdrawal charge applicable to any partial or total
withdrawal. If you withdraw your entire contract value, we also deduct any
applicable premium taxes and a contract maintenance fee. See EXPENSES below. We
calculate charges due on a total withdrawal on the day after we receive your
request and other required paper work. We return your contract value less any
applicable fees and charges.

<R>
The minimum partial withdrawal amount is $1,000. We require that the value left
in any Variable Portfolio or Fixed Account be at least $500 after the
withdrawal. You must send a written withdrawal request. For withdrawals of
$500,000 and more, you must submit a signature guarantee at the time of your
request. Unless you provide us with different instructions, partial withdrawals
will be made in equal amounts from each Variable Portfolio and the fixed
investment option in which your contract is invested.
</R>

We may be required to suspend or postpone the payment of a withdrawal for any
period of time when: (1) the NYSE is closed (other than a customary weekend and
holiday closings); (2) trading with the NYSE is restricted; (3) an emergency

                                      22


exists such that disposal of or determination of the value of shares of the
Portfolios is not reasonably practicable; (4) the SEC, by order, so permits for
the protection of contract owners.

Additionally, we reserve the right to defer payments for a withdrawal from a
fixed investment option. Such deferrals are limited to no longer than six
months.

Free Withdrawal Provision

Your contract provides for a free withdrawal amount each year. A free
withdrawal amount is the portion of your account that we allow you to take out
each year without being charged a surrender penalty. However, upon a future
full surrender of your contract, any previous free withdrawals would be subject
to a surrender charge, if any is applicable at the time of the full surrender.

If you participate in the Seasons Rewards Program, you will not receive any
applicable Deferred Payment Enhancement if you fully withdraw a Purchase
Payment or your contract value prior to the corresponding Deferred Payment
Enhancement Date. See SEASONS REWARDS PROGRAM above.

To determine your free withdrawal amount and the amount, if any, on which we
assess a withdrawal charge, we refer to two special terms. These are
penalty-free earnings and the Total Invested Amount.

The penalty-free earnings portion of your contract is your account value less
your Total Invested Amount. The Total Invested Amount is the total of all
Purchase Payments you have made into the contract less portions of some prior
withdrawals you made. The portions of prior withdrawals that reduce your Total
Invested Amount are as follows:

   1. Any prior withdrawals on which you previously paid a withdrawal charge,
      plus the amount of the withdrawal charge.

   2. Any prior free withdrawals in any year that were in excess of your
      penalty-free earnings and were free because the Purchase Payment
      withdrawn is no longer subject to surrender charges at the time of the
      withdrawal.

When you make a withdrawal, we assume that it is taken from penalty-free
earnings first, then from the Total Invested Amount on a first-in, first-out
basis. This means that you can also access your Purchase Payments which are no
longer subject to a surrender charge before those Purchase Payments which are
still subject to the surrender charge.

During your first contract year your free withdrawal amount is the greater of:

   1. Your penalty-free earnings, or;

   2. If you are participating in the Systematic Withdrawal program, a total of
      10% of your Total Invested Amount less any prior withdrawals taken during
      the contract year.

After the first contract year, you can take out the greater of the following
amounts each year:

   1. Your penalty free earnings and any portion of your Total Invested Amount
      no longer subject to surrender charges, or;

   2. 10% of the portion of your Total Invested Amount that has been in your
      contract for at least one year less any withdrawals taken during the
      contract year.

Purchase Payments withdrawn, above and beyond the amount of your free
withdrawal amount, which have been invested for less than 7 years, or 9 years
if you elect to participate in the Seasons Rewards Program, will result in your
paying a withdrawal charge. The amount of the charge and how it applies are
discussed more fully below. You should consider, before purchasing this
contract, the effect this charge will have on your investment if you need to
withdraw more money than the free withdrawal amount. You should fully discuss
this decision with your financial representative.

The withdrawal charge percentage applicable is determined by the age of the
Purchase Payment being withdrawn. For purposes of calculating the surrender
charge in the event of a full surrender, the charge is calculated based on the
remaining Total Invested Amount still subject to surrender charge.

For example, you make an initial Purchase Payment of $100,000. For purposes of
this example, we will assume a 0% growth rate over the life of the contract, no
election of any optional futures and no subsequent Purchase Payments. In

                                      23


contract year 2 and year 3, you take out your maximum free withdrawal of
$10,000 for each year. After those free withdrawals your contract value is
$80,000. In contract year 5 you request a full surrender of your contract. We
will apply the following calculation, A - (B X C) = D, where:

A = Your contract value at the time of your request for surrender ($80,000)
B = The amount of your Total Invested Amount still subject to surrender charge
($100,000)
C = Assume the withdrawal charge percentage applicable to the age of each
Purchase Payment at the time of full surrender (4%) [B X C = $4,000]
D = Your full surrender value ($76,000)

Systematic Withdrawal Program

If you elect, we use money in your contract to pay you monthly, quarterly,
semi-annual or annual payments during the Accumulation Phase. Electronic
transfer of these funds to your bank account is also available. The minimum
amount of each withdrawal is $100. There must be at least $500 remaining in
your contract at all times. Withdrawals may be taxable and a 10% IRS tax
penalty may apply if you are under age 59 1/2. Any withdrawals you make using
this program count against your free withdrawal amount as described above.
Withdrawals in excess of that amount may incur a withdrawal charge. There is no
additional charge for participating in this program.

The program is not available to everyone. Please check with our Annuity Service
Center, which can provide the necessary enrollment forms. We reserve the right
to modify, suspend or terminate this program at any time.

Minimum Contract Value

Where permitted by state law, we may terminate your contract if both of the
following occur: (1) your contract is less than $500 as a result of
withdrawals; and (2) you have not made any Purchase Payments during the past
three years. We will provide you with sixty days written notice. At the end of
the notice period, we will distribute the contract's remaining value to you.

Qualified Contract Owners

Certain Qualified plans restrict and/or prohibit your ability to withdraw money
from your contract. See TAXES below for a more detailed explanation.

OPTIONAL LIVING BENEFITS
  ------------------------------------------------------------------------------

You may elect one of the Optional Living Benefits described below. These
features are designed to protect a portion of your investment in the event your
contract value declines due to unfavorable investment performance during the
Accumulation Phase and before a death benefit is payable. Please see the
descriptions below for detailed information.

Seasons Income Rewards Feature

<R>
</R>
<R>
What is Seasons Income Rewards?
</R>

<R>
Seasons Income Rewards is an optional living benefit feature. If you elect this
feature, for which you will be charged an annualized fee, after a specified
waiting period, you are guaranteed to receive withdrawals, over a minimum
number of years that in total equal Purchase Payments made in the first 90 days
adjusted for withdrawals during that period (the "Benefit"), even if the
contract value falls to zero. Seasons Income Rewards may offer protection in
the event your contract value declines due to unfavorable investment
performance. Seasons Income Rewards has rules and restrictions that are
discussed more fully below.
</R>

<R>
What options are currently available?
</R>

<R>
Three options are currently available under this feature. The available
options, referred to as the Step-Up Options, provide a guaranteed minimum
withdrawal amount over a minimum number of years equal to at least your initial
Purchase
</R>

                                      24


<R>
Payment (adjusted for withdrawals) with an opportunity to receive a 10%, 20% or
50% step-up amount. If you take withdrawals prior to the Benefit Availability
Date (as defined in the table below), the Benefit will be reduced and you may
not receive a step-up amount depending on the option selected.
</R>

<R>
Each option and its components are fully described below. You should read each
option carefully and discuss the feature with your financial representative
before electing an option.
</R>

<R>
How and when can I elect the feature?
</R>

<R>
You may only elect the feature at the time of contract issue and must choose
one of the options discussed below. You may not change the option after
election. You cannot elect the feature if you are age 81 or older on the
contract issue date. Generally, once you elect the feature, it cannot be
cancelled.
</R>

<R>
Seasons Income Rewards cannot be elected if you elect the Seasons Promise
feature. See SEASONS PROMISE below. Seasons Income Rewards may not be available
through the broker-dealer with which your financial representative is
affiliated. Please check with your financial representative for availability.
</R>

<R>
How is the Benefit calculated?
</R>

<R>
In order to determine the Benefit's value, we calculate each of the components
as described below. The Benefit's components and value may vary depending on
the option you choose. The earliest date you may begin taking withdrawals under
the Benefit is the Benefit Availability Date. Each one-year period beginning on
the contract issue date and ending on the day before the contract anniversary
date is considered a Benefit Year.
</R>

<R>
The table below is a summary of the three Step-Up Options we are currently
offering:
</R>

<R>
                                                                          Minimum
                                                                        Withdrawal
                                                                        Period* (if
                                                                          Maximum
                                                             Maximum      Annual
                                                              Annual    Withdrawal
                                                            Withdrawal    Amount
                                                Step-Up      Amount +   taken each
Option       Benefit Availability Date          Amount      Percentage     year)
-----------------------------------------------------------------------------------
  1    3 years following contract issue date    10%* of       10% of     11 years
                                               Withdrawal   Withdrawal
                                              Benefit Base Benefit Base
-----------------------------------------------------------------------------------
  2    5 years following contract issue date    20%* of       10% of     12 years
                                               Withdrawal   Withdrawal
                                              Benefit Base Benefit Base
-----------------------------------------------------------------------------------
  3    10 years following contract issue date   50%** of      10% of     15 years
                                               Withdrawal   Withdrawal
                                              Benefit Base Benefit Base
-----------------------------------------------------------------------------------
</R>
<R>
        * You will not receive a Step-Up Amount if you elect Options 1 or 2 and
          take a withdrawal prior to the Benefit Availability Date. The Minimum
          Withdrawal Period for Options 1 and 2 will be 10 years if you do not
          receive a Step-Up Amount.
</R>
<R>
        **If you elect Option 3 and take a withdrawal prior to the Benefit
          Availability Date, you will receive a reduced Step-Up Amount of 30%
          of the Withdrawal Benefit Base. The Minimum Withdrawal Period will be
          13 years if you receive a reduced Step-Up Amount.
</R>
<R>
        + For contract holders subject to annual required minimum
          distributions, the Maximum Annual Withdrawal Amount for this contract
          will be the greater of: (1) the amount indicated in the table above;
          or (2) the annual required minimum distribution amount. Required
          minimum distributions may reduce your Minimum Withdrawal Period.
</R>
<R>
</R>

                                      25


<R>
How are the components for the Step-Up Options calculated?
</R>

<R>
First, we determine the Eligible Purchase Payments, which include the amount of
Purchase Payments made to the contract up to and including the 90th day after
your contract issue date, adjusted for any withdrawals in the same proportion
that the withdrawal reduced the contract value on the date of the withdrawal.
</R>

<R>
Second, we determine the Withdrawal Benefit Base, on the Benefit Availability
Date. The Withdrawal Benefit Base equals the sum of all Eligible Purchase
Payments.
</R>

<R>
Third, we determine a Step-Up Amount, if any, which is calculated as a
specified percentage (listed in the table above) of the Withdrawal Benefit Base
on the Benefit Availability Date. If you elect Option 1 or 2, you will not
receive a Step-Up Amount if you take any withdrawals prior to the Benefit
Availability Date. If you elect Option 3, the Step-Amount will be reduced to
30% of the Withdrawal Benefit Base if you take any withdrawals prior to the
Benefit Availability Date. The Step-Up Amount is not considered a Purchase
Payment and cannot be used in calculating any other benefits, such as death
benefits, contract values or annuitization value.
</R>

<R>
Fourth, we determine a Stepped-Up Benefit Base, which is the total amount
available for withdrawal under the feature and is used to calculate the minimum
time period over which you may take withdrawals under the feature. The
Stepped-Up Benefit Base equals the Withdrawal Benefit Base plus the Step-Up
Amount, if any.
</R>

<R>
Fifth, we determine the Maximum Annual Withdrawal Amount, which is a stated
percentage (listed in the table above) of the Withdrawal Benefit Base and
represents the maximum amount of withdrawals that are available under this
feature each Benefit Year after the Benefit Availability Date.
</R>

<R>
Finally, we determine the Minimum Withdrawal Period, which is the minimum
period over which you may take withdrawals under the feature. The Minimum
Withdrawal Period is calculated by dividing the Stepped-Up Benefit Base by the
Maximum Annual Withdrawal Amount.
</R>

<R>
What is the fee for Seasons Income Rewards?
</R>

<R>
The annualized Seasons Income Rewards fee will be assessed as a percentage of
the Withdrawal Benefit Base. The fee will be deducted quarterly from your
contract value starting on the first quarter following the contract issue date
and ending upon the termination of the feature. If your contract value falls to
zero before the feature has been terminated, the fee will no longer be
assessed. We will not assess the quarterly fee if you surrender or annuitize
before the end of a quarter.
</R>

<R>
                   Contract Year             Annualized Fee
              ---------------------------------------------------
                                          0.65% of Withdrawal
                     0-7 years                Benefit Base
              ---------------------------------------------------
                                          0.45% of Withdrawal
                     8-10 years               Benefit Base
              ---------------------------------------------------
                        11+                       none
</R>
<R>
</R>

<R>
What are the effects of withdrawals on the Step-Up Options?
</R>

<R>
The Benefit amount, Maximum Annual Withdrawal Amount and Minimum Withdrawal
Period may change over time as a result of withdrawal activity. Withdrawals
after the Benefit Availability Date equal to or less than the Maximum Annual
Withdrawal Amount generally reduce the Benefit by the amount of the withdrawal.
Withdrawals in excess of the Maximum Annual Withdrawal Amount will reduce the
Benefit in the same proportion that the contract value was reduced at the time
of the withdrawal. This means if investment performance is down and contract
value is reduced, withdrawals greater than the Maximum Annual Withdrawal Amount
will result in a greater reduction of the Benefit. The impact of withdrawals
and the effect on each component of Seasons Income Rewards are further
explained through the calculations below:
</R>

<R>
   Withdrawal Benefit Base:  Withdrawals prior to the Benefit Availability Date
   reduce the Withdrawal Benefit Base in the same proportion that the contract
   value was reduced at the time of the withdrawal. Withdrawals prior to the
   Benefit Availability Date also eliminate any Step-Up Amount for Options 1
   and 2 and reduce the Step-Up Amount to 30% of the Withdrawal Benefit Base
   for Option 3.
</R>

                                      26


<R>
   Withdrawals after the Benefit Availability Date will not reduce the
   Withdrawal Benefit Base until the sum of withdrawals after the Benefit
   Availability Date exceeds the Step-Up Amount. Thereafter, any withdrawal or
   portion of a withdrawal that exceeds the Step-Up Amount will reduce the
   Withdrawal Benefit Base as follows: (1) If the withdrawal does not cause
   total withdrawals in the Benefit Year to exceed the Maximum Annual
   Withdrawal Amount, the Withdrawal Benefit Base will be reduced by the amount
   of the withdrawal, or (2) If the withdrawal causes total withdrawals in the
   Benefit Year to exceed the Maximum Annual Withdrawal Amount, the Withdrawal
   Benefit Base is reduced to the lesser of (a) or (b), where:
</R>

<R>
       a. is the Withdrawal Benefit Base immediately prior to the withdrawal
          minus the amount of the withdrawal, or;
</R>

<R>
       b. is the Withdrawal Benefit Base immediately prior to the withdrawal
          minus the amount of the withdrawal that makes total withdrawals for
          the Benefit Year equal to the current Maximum Annual Withdrawal
          Amount, and further reduced in the same proportion that the contract
          value was reduced by the amount of the withdrawal that exceeds the
          Maximum Annual Withdrawal Amount.
</R>

<R>
   Stepped-Up Benefit Base:  Since withdrawals prior to the Benefit
   Availability Date eliminate any Step-Up Amount for Options 1 and 2, the
   Stepped-Up Benefit Base will be equal to the Withdrawal Benefit Base if you
   take withdrawals prior to the Benefit Availability Date. For Option 3, if
   you take withdrawals prior to the Benefit Availability Date, the Stepped-Up
   Benefit Base will be equal to the Withdrawal Benefit Base plus the reduced
   Step-Up Amount which will be 30% of the Withdrawal Benefit Base, adjusted
   for such withdrawals.
</R>

<R>
   If you do not take withdrawals prior to the Benefit Availability Date, you
   will receive the entire Step-Up Amount and the Stepped-Up Benefit Base will
   equal the Withdrawal Benefit Base plus the Step-Up Amount.
</R>

<R>
   After the Benefit Availability Date, any withdrawal that does not cause
   total withdrawals in a Benefit Year to exceed the Maximum Annual Withdrawal
   Amount will reduce the Stepped-Up Benefit Base by the amount of the
   withdrawal. After the Benefit Availability Date, any withdrawal that causes
   total withdrawals in a Benefit Year to exceed the Maximum Annual Withdrawal
   Amount (in that Benefit Year) reduces the Stepped-Up Benefit Base to the
   lesser of (a) or (b), where:
</R>

<R>
       a. is the Stepped-Up Benefit Base immediately prior to the withdrawal
          minus the amount of the withdrawal, or;
</R>

<R>
       b. is the Stepped-Up Benefit Base immediately prior to the withdrawal
          minus the amount of the withdrawal that makes total withdrawals for
          the Benefit Year equal to the current Maximum Annual Withdrawal
          Amount, and further reduced in the same proportion that the contract
          value was reduced by the amount of the withdrawal that exceeds the
          Maximum Annual Withdrawal Amount.
</R>

<R>
   Maximum Annual Withdrawal Amount:  If the sum of withdrawals in a Benefit
   Year does not exceed the Maximum Annual Withdrawal Amount for that Benefit
   Year, the Maximum Annual Withdrawal Amount does not change for the next
   Benefit Year. If total withdrawals in a Benefit Year exceed the Maximum
   Annual Withdrawal Amount, the Maximum Annual Withdrawal Amount will be
   recalculated at the start of the next Benefit Year. The new Maximum Annual
   Withdrawal Amount will equal the Stepped-Up Benefit Base on that Benefit
   Year anniversary divided by the Minimum Withdrawal Period on that Benefit
   Year anniversary. The new Maximum Annual Withdrawal Amount may be lower than
   your previous Maximum Annual Withdrawal Amounts.
</R>

<R>
   Minimum Withdrawal Period:  After each withdrawal, a new Minimum Withdrawal
   Period is calculated. If total withdrawals in a Benefit Year are less than
   or equal to the current Maximum Annual Withdrawal Amount, the new Minimum
   Withdrawal Period equals the Stepped-Up Benefit Base after the withdrawal,
   divided by the current Maximum Annual Withdrawal Amount.
</R>

<R>
   During any Benefit Year in which the sum of withdrawals exceeds the Maximum
   Annual Withdrawal Amount, the new Minimum Withdrawal Period equals the
   Minimum Withdrawal Period calculated at the end of the prior Benefit Year
   reduced by one year.
</R>

<R>
   Contract Value:  Any withdrawal under the Benefit reduces the contract value
   by the amount of the withdrawal.
</R>

                                      27


<R>
The SEASONS INCOME REWARDS EXAMPLES APPENDIX provides examples of the effects
of withdrawals on the Seasons Income Rewards feature.
</R>

<R>
What happens if my contract value is reduced to zero?
</R>

<R>
If the contract value is zero but the Stepped-Up Benefit Base is greater than
zero, a Benefit remains payable under the feature. However, the contract and
its other features and benefits will be terminated once the contract value
equals zero. Once the contract is terminated, you may not make subsequent
Purchase Payments and no death benefit or future annuitization payments are
available. Therefore, under adverse market conditions, withdrawals taken under
the Benefit may reduce the contract value to zero eliminating any other
benefits of the contract. To receive your remaining Benefit, you may select one
of the following options:
</R>

<R>
   1. Lump sum distribution of the actuarial present value as determined by us,
      of the total remaining guaranteed withdrawals; or
</R>

<R>
   2. the current Maximum Annual Withdrawal Amount, paid equally on a
      quarterly, semi-annual or annual frequency as selected by you until the
      Stepped-Up Benefit Base equals zero; or
</R>

<R>
   3. any payment option mutually agreeable between you and us.
</R>

<R>
If you do not select a payment option, the remaining Benefit will be paid as
the current Maximum Annual Withdrawal Amount on a quarterly basis.
</R>

<R>
What happens to Seasons Income Rewards upon a spousal continuation?
</R>

<R>
A Continuing Spouse may elect to continue or cancel the feature and its
accompanying fee. The components of the feature will not change as a result of
a spousal continuation. See SPOUSAL CONTINUATION below.
</R>

<R>
Can my non-spousal Beneficiary elect to receive any remaining withdrawals under
Seasons Income Rewards upon my death?
</R>

<R>
If the Stepped-Up Benefit Base is greater than zero when the original owner
dies, and the contract value equals zero and therefore no death benefit is
payable, a non-spousal Beneficiary may elect to continue receiving any
remaining withdrawals under the feature. The components of the feature will not
change. If the Stepped-Up Benefit Base and the contract value are greater than
zero, a non-spousal Beneficiary must make a death claim under the contract
provisions which terminates the Benefit. See DEATH BENEFITS below.
</R>

<R>
Can Seasons Income Rewards be cancelled?
</R>

<R>
Once you elect the feature, you may not cancel it. The feature automatically
terminates upon the occurrence of one of the following:
</R>

<R>
   1. Stepped-Up Benefit Base is equal to zero; or
</R>

<R>
   2. Annuitization of the contract; or
</R>

<R>
   3. Full surrender of the contract; or
</R>

<R>
   4. Death benefit is paid; or
</R>

<R>
   5. Upon a spousal continuation, the Continuing Spouse elects not to continue
      the contract with the feature.
</R>

<R>
We reserve the right to terminate the feature if withdrawals in excess of
Maximum Annual Withdrawal Amount in any Benefit Year reduce the Stepped-Up
Benefit Base by 50% or more.
</R>

<R>
Important Information
</R>

<R>
Seasons Income Rewards is designed to offer protection of your initial
investment in the event of a significant market down turn. Seasons Income
Rewards may not guarantee an income stream based on all Purchase Payments made
into your
</R>

                                      28


<R>
contract nor does it guarantee any investment gains. Seasons Income Rewards
does not guarantee a withdrawal of any subsequent Purchase Payments made after
the 90th day following the contract issue date. This feature also does not
guarantee lifetime income payments. You may never need to rely on Seasons
Income Rewards if your contract performs within a historically anticipated
range. However, past performance is no guarantee of future results.
</R>

<R>
Withdrawals under the feature are treated like any other withdrawal for the
purpose of reducing the contract value, free withdrawal amounts and all other
benefits, features and conditions of your contract.
</R>

<R>
If you need to take withdrawals or are required to take required minimum
distributions ("RMD") under the Internal Revenue Code ("IRC") from this
contract prior to the Benefit Availability Date, you should know that such
withdrawals may negatively impact the value of the Benefit. As noted above,
your Stepped-Up Benefit Base will be reduced if you take withdrawals before the
Benefit Availability Date. Any withdrawals taken under this feature or under
the contract may be subject to a 10% IRS tax penalty if you are under age
59 1/2 at the time of the withdrawal. For information about how the feature is
treated for income tax purposes, you should consult a qualified tax advisor
concerning your particular circumstances. If you set up RMDs and have elected
this feature, your distributions must be automated and will not be recalculated
on an annual basis.
</R>

<R>
We reserve the right at the time your contract is issued to limit the maximum
Eligible Purchase Payments to $1 million. For prospectively issued contracts,
we reserve the right to limit the investment options available under the
contract if you elect this Seasons Income Rewards feature.
</R>

<R>
We reserve the right to modify, suspend or terminate the Seasons Income Rewards
feature (in its entirety or any component) at any time for prospectively issued
contracts.
</R>

SEASONS PROMISE FEATURE

What is Seasons Promise?

Seasons Promise is an optional feature of your variable annuity. If you elect
this feature, for which you will be charged an annualized fee, at the end of
applicable waiting period your contract will be worth at least the amount of
your initial Purchase Payment (less adjustments for withdrawals). Seasons
Promise may offer protection in the event that your contract value declines due
to unfavorable investment performance in your contract.

If you elect Seasons Promise, at the end of the applicable waiting period we
will evaluate your contract to determine if a Seasons Promise benefit is
payable to you. The applicable waiting period is ten full contract years from
your contract issue date. The last day in the waiting period is your benefit
date, the date on which we will calculate any Seasons Promise benefit payable
to you.

<R>
How and when can I elect the feature?
</R>

<R>
You may only elect this feature at the time your contract is issued, so long as
the applicable waiting period prior to receiving the benefit ends before your
Latest Annuity Date. You cannot elect the feature if you are age 81 or older on
the contract issue date. The effective date for this feature will be your
contract issue date. Seasons Promise is not available if you elect Seasons
Income Rewards. See SEASONS INCOME REWARDS above.
</R>

Seasons Promise may not be available through the broker-dealer with which your
financial representative is affiliated. Please check with your financial
representative for availability.

Can Seasons Promise be cancelled?

Generally, this feature and its corresponding charge cannot be cancelled or
terminated prior to the end of the waiting period. The feature terminates
automatically following the end of the waiting period. In addition, Seasons
Promise will no longer be available and no benefit will be paid if a death
benefit is paid or if the contract is fully surrendered or annuitized before
the end of the waiting period.

                                      29


How is the benefit calculated?

Seasons Promise is a one-time adjustment to your contract value in the event
that your contract value at the end of the waiting period is less than the
guaranteed amount. The amount of the benefit payable to you, if any, at the end
of the waiting period will be based upon the amount of your initial Purchase
Payment and may also include certain portions of subsequent Purchase Payments
contributed to your contract over specified periods of time, as follows:

                                  Percentage of Purchase Payments included in the
Time Elapsed Since Effective Date       Seasons Promise Benefit Calculation
---------------------------------------------------------------------------------
            0-90 days                                  100%
---------------------------------------------------------------------------------
            91+ days                                    0%

The Seasons Promise benefit calculation is equal to your Seasons Promise Base,
as defined below, minus your Contract Value on the benefit date. If the
resulting amount is positive, you will receive a benefit under the feature. If
the resulting amount is negative, you will not receive a benefit. Your Seasons
Promise Base is equal to (a) minus (b) where:

       (a)is the Purchase Payments received on or after the effective date
          multiplied by the applicable percentages in the table above, and;

       (b)is an adjustment for all withdrawals and applicable fees and charges
          made subsequent to the effective date, in an amount proportionate to
          the amount by which the withdrawal decreased the contract value at
          the time of the withdrawal.

Payment Enhancements under the Seasons Rewards feature are not considered
Purchase Payments and are not used in the calculation of the Seasons Promise
Base. See SEASONS REWARDS above.

We will allocate any benefit amount contributed to the contract value on the
benefit date to the Cash Management portfolio. Any Seasons Promise benefit paid
is not considered a Purchase Payment for purposes of calculating other
benefits. Benefits based on earnings, if any, will continue to define earnings
as the difference between contract value and Purchase Payments adjusted for
withdrawals. For information about how the benefit is treated for income tax
purposes, you should consult a qualified tax advisor for information concerning
your particular circumstances.

What is the fee for Seasons Promise?

Seasons Promise is an optional feature. If elected, you will incur an
additional charge for this feature. The annualized charge will be deducted from
your contract value invested in the Variable Portfolios on a quarterly basis
throughout the waiting period, beginning at the end of the first contract
quarter following the effective date of the feature and up to and including on
the benefit date. Once the feature is terminated, as discussed above, the
charge will no longer be deducted. We will also not assess the quarterly fee if
you surrender or annuitize before the end of the quarter.

<R>
                         Contract Year Annualized Fee*
                         -----------------------------
                             0-7            0.50%
                         -----------------------------
                             8-10           0.25%
                         -----------------------------
                             11+            none
</R>
--------
* As a percentage of your contract value minus Purchase Payments received after
  the 90th day since the purchase of your contract. The amount of this charge
  is subject to change at any time for prospectively issued contracts.

What Happens to Seasons Promise upon a Spousal Continuation?

If your qualified spouse chooses to continue this contract upon your death,
this benefit cannot be terminated. The effective date, the waiting period and
the corresponding benefit payment date will not change as a result of a spousal
continuation. See SPOUSAL CONTINUATION below.

                                      30


Important Information

The Seasons Promise feature may not guarantee a return of all of your Purchase
Payments. If you plan to add subsequent Purchase Payments over the life of your
contract, you should know that the Seasons Promise would not protect the
majority of those payments.

Since the Seasons Promise feature may not guarantee a return of all Purchase
Payments at the end of the waiting period, it is important to realize that
subsequent Purchase Payments made into the contract may decrease the value of
the Seasons Promise benefit. For example, if near the end of the waiting period
your Seasons Promise Base is greater than your contract value, and you then
make a subsequent Purchase Payment that causes your contract value to be larger
than your Seasons Promise Base on your benefit date, you will not receive any
benefit even though you have paid for the Seasons Promise feature throughout
the waiting period. You should discuss subsequent Purchase Payments with your
financial representative as such activity may reduce the value of this Seasons
Promise benefit.

We reserve the right to modify, suspend or terminate the Seasons Promise
feature (in its entirety or any component) at any time for prospectively issued
contracts.

DEATH BENEFIT
  ------------------------------------------------------------------------------

General Information About Death Benefits

If you die during the Accumulation Phase of your contract, we pay a death
benefit to your beneficiary. The death benefit options are discussed in detail
below. If you die during the Income Phase, your Beneficiary will receive any
remaining guaranteed income payments in accordance with the income option you
choose. See INCOME OPTIONS below.

You designate the Beneficiary to receive any death benefit payments. You may
change the Beneficiary at any time, unless you previously made an irrevocable
Beneficiary designation. A new Beneficiary designation is not effective until
we record the change.

If the Beneficiary is the spouse of the owner, he or she can elect to continue
the contract, rather than receive a death benefit. See SPOUSAL CONTINUATION
below.

If the Annuitant dies before annuity payments begin, you can name a new
Annuitant. If no Annuitant is named within 30 days, you will become the
Annuitant. However, if the owner is a non-natural person (for example, a
trust), then the death of the Annuitant will be treated as the death of the
owner, no new Annuitant may be named and the death benefit will be paid.

The death benefit will be calculated and paid out when we receive all required
paperwork and satisfactory proof of death. We consider satisfactory proof of
death one of the following: (1) a certified copy of a death certificate; (2) a
certified copy of a decree of court of competent jurisdiction as to the finding
of death; (3) a written statement by a medical doctor who attended the deceased
at the time of death; or (4) any other proof satisfactory to us.

<R>
If the Beneficiary is the spouse of a deceased original owner, he or she can
elect to continue the Contract. See SPOUSAL CONTINUATION below.
</R>

<R>
If a Beneficiary does not elect a specific form of pay out within 60 days of
our receipt of all required paperwork and satisfactory proof of death, we pay a
lump sum death benefit to the Beneficiary.
</R>

<R>
The death benefit must be paid within five years of the date of death. As an
alternative, the Beneficiary may elect to have the death benefit payable under
one of the available Income Options. Please see INCOME OPTIONS below. A
Beneficiary may also elect to continue the contract and take the death benefit
amount in a series of payments based upon the Beneficiary's life expectancy
under the Extended Legacy program described below, subject to the applicable
Internal Revenue Code distribution requirements. Payments must begin under the
selected Income Option or the Extended Legacy program no later than the first
anniversary of your death for non-qualified contracts or December 31st of the
year following the year of your death for IRAs. Your Beneficiary cannot
participate in the Extended Legacy program if your
</R>

                                      31


<R>
Beneficiary has already elected another settlement option. Beneficiaries who do
not begin taking payments within these specified time periods will not be
eligible to elect an Income Option or participate in the Extended Legacy
program.
</R>

Extended Legacy Program and Beneficiary Continuation Options

The Extended Legacy program can allow a Beneficiary to take the death benefit
amount in the form of income payments over a longer period of time with the
flexibility to withdraw more than the IRS required minimum distribution if they
wish. The contract continues in the original owner's name for the benefit of
the Beneficiary. Generally, IRS required minimum distributions must be made at
least annually over a period not to exceed the Beneficiary's life expectancy as
determined in the calendar year after your death. Under the Extended Legacy
program, a Beneficiary may withdraw all or a portion of the contract value at
any time, name their own beneficiary to receive any remaining unpaid interest
in the contract in the event of their death and make transfers among investment
options. If the contract value is less than the death benefit amount as of the
date we receive satisfactory proof of death and all required paperwork, we will
increase the contract value by the amount which the death benefit exceeds
contract value. Participation in the program may impact certain features of the
contract as detailed in the Death Claim Form. Please see your financial
representative for additional information.

Alternatively to the Extended Legacy program, the Beneficiary may also elect to
receive the death benefit under a 5-year option. The Beneficiary may take
withdrawals as desired, but the entire contract value must be distributed by
the fifth anniversary of your death for Non-qualified contracts or by December
31st of the year containing the fifth anniversary of your death for IRAs. For
IRAs, the five-year option is not available if the date of death is after the
required beginning date for distributions (April 1 of the year following the
year the owner reaches the age of 70 1/2).

For information regarding how these payments are treated for tax purposes,
consult your tax advisor regarding tax implications and your particular
circumstances.

  Defined Terms

The term "Net Purchase Payment" is used frequently in explaining the death
benefit options. Net Purchase Payment is an on-going calculation. It does not
represent a contract value.

We define Net Purchase Payments as Purchase Payments less an Adjustment for
each withdrawal. If you have not taken any withdrawals from your contract, Net
Purchase Payments equals total Purchase Payments into your contract. To
calculate the Adjustment amount for the first withdrawal made under the
contract, we determine the percentage by which the withdrawal reduced contract
value. For example, a $10,000 withdrawal from a $100,000 contract is a 10%
reduction in value. This percentage is calculated by dividing the amount of
each withdrawal (including fees and charges applicable to the withdrawal) by
the contract value immediately before taking that withdrawal. The resulting
percentage is then multiplied by the amount of total Purchase Payments and
subtracted from the amount of total Purchase Payments on deposit at the time of
the withdrawal. The resulting amount is the initial Net Purchase Payment
calculation.

To arrive at the Net Purchase Payment calculation for subsequent withdrawals,
we determine the percentage by which the contract value is reduced by taking
the amount of the withdrawal in relation to the contract value immediately
before taking the withdrawal. We then multiply the Net Purchase Payment
calculation as determined prior to the withdrawal by this percentage. We
subtract that result from the Net Purchase Payment calculation as determined
prior to the withdrawal to arrive at all subsequent Net Purchase Payment
calculation.

If you have not taken any withdrawals from your contract, Net Purchase Payments
equals total Purchase Payments into your contract. If Seasons Rewards is
elected, any payment enhancements are not considered Purchase Payments.

DEATH BENEFIT OPTIONS

This contract provides two death benefit options: the Standard Death Benefit
which is automatically included in your contract for no additional fee, and an
optional enhanced death benefit, which you may elect for an additional fee. If
you choose the optional enhanced death benefit, you must do so at the time of
contract application and the election cannot be terminated.

                                      32


STANDARD DEATH BENEFIT

If the contract is issued prior to your 83rd birthday, the standard death
benefit on your contract is the greater of:

   1. Contract value; or

   2. Net Purchase Payments received prior to your 86th birthday.

If you are age 83-85 at the time of contract issue, the standard death benefit
is the greater of:

   1. Contract value; or

   2. The lesser of:

      a. Net Purchase Payments received prior to your 86th birthday; or

      b. 125% of contract value.

<R>
OPTIONAL DEATH BENEFIT
</R>

You may elect the optional enhanced death benefit described below which can
provide greater protection for your beneficiaries. You must elect the optional
enhanced death benefit at the time we issue your contract and once elected it
cannot be terminated by you. The optional enhanced death benefit is not
available if you are age 83 or older at the time of contract issue. The fee for
the optional enhanced death benefit is 0.20% of the average daily ending value
of the assets you have allocated to the Variable Portfolios.

<R>
  Maximum Anniversary Death Benefit
</R>

If the contract is issued prior to your 83rd birthday, the death benefit is the
greatest of:

   1. Contract value; or

   2. Net Purchase Payments received prior to your 86th birthday

   3. Maximum anniversary value on any contract anniversary prior to your 83rd
      birthday. The anniversary value equals the contract value on a contract
      anniversary increased by Purchase Payments recorded after that
      anniversary but received prior to your 86th birthday; and adjusted for
      any withdrawals (and fees and charges applicable to those withdrawals)
      recorded after the anniversary, in the same proportion that the
      withdrawal reduced the contract value on the date of the withdrawal.

If you elect the optional enhanced death benefit and you are age 90 or older at
the time of death, the death benefit is the contract value.

SPOUSAL CONTINUATION

If you are the original owner of the contract and the Beneficiary is your
spouse, your Spouse may elect to continue the contract after your death. The
spouse becomes the new owner ("Continuing Spouse"). The contract and its
elected features, if any, remain the same. The Continuing Spouse is subject to
the same fees, charges and expenses applicable to the original owner of the
contract. The Continuing Spouse can only elect to continue the contract upon
the death of the original owner of the contract. To the extent the Continuing
Spouse invests in the Variable Portfolios they will be subject to investment
risk as was the original owner.

Upon continuation of the contract, we will contribute to the contract value an
amount by which the death benefit that would have been paid to the beneficiary
upon the death of the original owner exceeds the contract value ("Continuation
Contribution"), if any. We calculate the Continuation Contribution as of the
date of the original owner's death. We will add the Continuation Contribution
as of the date we receive both the Continuing Spouse's written request to
continue the contract and proof of death of the original owner in a form
satisfactory to us ("Continuation Date"). The Continuation Contribution is not
considered a Purchase Payment for any other calculation except as noted in
Appendix C.

Generally, the Continuing Spouse cannot change any contract provisions as the
new owner. However, on the Continuation Date, the Continuing Spouse may
terminate the original owner's election of the optional enhanced death benefit
and the

                                      33


available death benefit will be the Standard Death Benefit. We will terminate
the optional enhanced death benefit if the Continuing Spouse is age 83 or older
on the Continuation Date and the available death benefit will be the Standard
Death Benefit. If the Continuing Spouse is age 86 or older on the Continuation
Date, the death benefit will be contract value. If the optional enhanced death
benefit was elected by the original owner and the Continuing Spouse lives to
age 90 or older, the death benefit will also be contract value. See Appendix C
for further explanation of the death benefit calculations following a Spousal
Continuation.

We reserve the right to modify, suspend or terminate the spousal continuation
provision (in its entirety or any component) at any time for prospectively
issued contracts.

EXPENSES
  ------------------------------------------------------------------------------

There are charges and expenses associated with your contract. These charges and
expenses reduce your investment return. We will not increase the contract
maintenance fee or withdrawal charges under your contract. However the
investment charges under your contract may increase or decrease. Some states
may require that we charge less than the amounts described below.

Separate Account Charges

The Company deducts separate account charges in the amount of 1.40% annually of
the value of your contract invested in the Variable Portfolios. We deduct the
charge daily. These charges compensate the Company for the mortality and
expense risk and the costs of contract distribution assumed by the Company.

Generally, the mortality risks assumed by the Company arise from its
contractual obligations to make income payments after the Annuity Date and to
provide a death benefit. The expense risk assumed by the Company is that the
costs of administering the contracts and the Separate Account will exceed the
amount received from the administrative fees and charges assessed under the
contract. If these charges do not cover all of our expenses, we will pay the
difference. Likewise, if these charges exceed our expenses, we will keep the
difference. The Insurance Charge is expected to result in a profit. Profit may
be used for any legitimate cost/expense including distribution, depending upon
market conditions.

Withdrawal Charges

During the Accumulation Phase you may make withdrawals from your contract.
However, a withdrawal charge may apply. We apply a withdrawal charge upon an
early withdrawal against each Purchase Payment you put into the contract. The
withdrawal charge equals a percentage of the Purchase Payment you take out of
the contract. The contract does provide a free withdrawal amount every year.
See ACCESS TO YOUR MONEY above. The withdrawal charge percentage declines each
year a Purchase Payment is in the contract, as follows:

      Withdrawal Charge without the Seasons Rewards Program (Schedule A)

                     Year        1   2   3   4   5   6   7   8+
               ----------------- -   -   -   -   -   -   -   --
               Withdrawal Charge 7%  6%  5%  4%  3%  2%  1%  0%

        Withdrawal Charge with the Seasons Rewards Program (Schedule B)

                 Year        1   2   3   4   5   6   7   8   9   10+
           ----------------- -   -   -   -   -   -   -   -   -   ---
           Withdrawal Charge 9%  9%  8%  7%  6%  5%  4%  3%  2%   0%

After a Purchase Payment has been in the contract for seven complete years, or
nine complete years if you elect to participate in the Seasons Rewards Program,
the withdrawal charge no longer applies to that Purchase Payment. When
calculating the withdrawal charge, we treat withdrawals as coming first from
the Purchase Payments that have been in your contract the longest. However, for
tax purposes, your withdrawals are considered earnings first, then Purchase
Payments.

The Seasons Rewards Program is designed to reward long term investing. We
expect that if you remain committed to this investment over the long term, we
will profit as a result of fees charged over the life of your contract.
However, neither

                                      34


the mortality and expense fees, distribution expenses, contract administration
fee nor investment management fees are higher on the Seasons Rewards Program
than contracts that do not feature the Program.

Whenever possible, we deduct the withdrawal charge from the money remaining in
your contract from each of your investment options on a pro-rata basis. If you
withdraw all of your contract value, we deduct any applicable withdrawal
charges from the amount withdrawn. We will not assess a withdrawal charge for
money withdrawn to pay a death benefit. We do not currently assess a withdrawal
charge upon election to receive income payments from your contract. Withdrawals
made prior to age 591/2 may result in tax penalties. See TAXES below.

Investment Charges

Investment Management Fees

Charges are deducted from the assets of the investment portfolios underlying
the Variable Portfolios for the advisory and other expenses of the portfolios.
See FEE TABLES above.

12b-1 Fees

<R>
Portfolio shares are all subject to fees imposed under a servicing plan adopted
by the Seasons Series Trust pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The annualized service fee of 0.25% (also known as a 12b-1 fee) is
used generally to pay financial intermediaries for services provided over the
life of the contract.
</R>

For more detailed information on these investment charges, refer to the
attached prospectus for the Seasons Series Trust.

Contract Maintenance Fee

During the Accumulation Phase, we subtract a contract maintenance fee from your
account once per year. This charge compensates us for the cost of contract
administration. However, if your contract value is $50,000 or more on your
contract anniversary date, the fee is waived. This waiver is subject to change
without notice. We will deduct the $30 contract maintenance fee on a pro-rata
basis from your contract value on your contract anniversary. If you withdraw
your entire contract value, we deduct the fee from that withdrawal.

Transfer Fee

We currently permit 15 free transfers between investment options each contract
year. We charge you $25 for each additional transfer that contract year. See
INVESTMENT OPTIONS above.

Optional Seasons Income Rewards Fee

<R>
</R>
<R>
The annualized Seasons Income Rewards fee will be assessed as a percentage of
the Withdrawal Benefit Base. The fee will be deducted quarterly from your
contract value starting on the first quarter following the contract issue date
and ending upon the termination of the feature. If your contract value falls to
zero before the feature has been terminated, the fee will no longer be
assessed. We will not assess the quarterly fee if you surrender or annuitize
before the end of a quarter.
</R>

<R>
           ----------------------------------------------------------
                Contract Year                 Annualized Fee
           ----------------------------------------------------------
                  0-7 years          0.65% of Withdrawal Benefit Base
           ----------------------------------------------------------
                                           0.45% of Withdrawal
                  8-10 years                   Benefit Base
           ----------------------------------------------------------
                  11+ years                        none
           ----------------------------------------------------------
</R>
<R>
</R>

                                      35


Optional Seasons Promise Fee

<R>
The annualized Seasons Promise fee is calculated as a percentage of your
contract value minus purchase payments received after the 90th day since the
purchase of your contract. The amount of this charge is subject to change at
any time for prospectively issued contracts.
</R>

<R>
                          ----------------------------
                          Contract Year Annualized Fee
                          ----------------------------
                              0-7           0.50%
                          ----------------------------
                              8-10          0.25%
                          ----------------------------
                              11+           none
                          ----------------------------
</R>

Optional Enhanced Death Benefit

We charge 0.20% for the optional enhanced death benefit. On a daily basis, we
deduct this charge from the average daily ending value of the assets you have
allocated to the Variable Portfolios.

Income Taxes

We do not currently deduct income taxes from your contract. We reserve the
right to do so in the future.

Reduction or Elimination of Charges and Expenses, and Additional Amounts
Credited

Sometimes sales of the contracts to groups of similarly situated individuals
may lower our administrative and/or sales expenses. We reserve the right to
reduce or waive certain charges and expenses when this type of sale occurs. In
addition, we may also credit additional interest to policies sold to such
groups. We determine which groups are eligible for such treatment. Some of the
criteria we evaluate to make a determination are: size of the group; amount of
expected Purchase Payments; relationship existing between us and prospective
purchaser; nature of the purchase; length of time a group of contracts is
expected to remain active; purpose of the purchase and whether that purpose
increases the likelihood that our expenses will be reduced; and/or any other
factors that we believe indicate that administrative and/or sales expenses may
be reduced.

The Company may make such a determination regarding sales to its employees, it
affiliates' employees and employees of currently contracted broker-dealers; its
registered representatives and immediate family members of all of those
described.

We reserve the right to change or modify any such determination or the
treatment applied to a particular group, at any time.

INCOME OPTIONS
  ------------------------------------------------------------------------------

Annuity Date

During the Income Phase, the money in your Contract is used to make regular
income payments to you. You may switch to the Income Phase any time after your
first contract anniversary. You select the month and year in which you want
income payments to begin. The first day of that month is the Annuity Date. You
may change your Annuity Date, so long as you do so at least seven days before
the income payments are scheduled to begin. Once you begin receiving income
payments, you cannot change your Income Option. Except as discussed under
Option 5, once you begin receiving income payments, you cannot otherwise access
your money through a withdrawal or surrender. Other pay out options may be
available. Contact our Annuity Service Center for more information.

If you participate in the Seasons Rewards Program and switch to the Income
Phase prior to a Deferred Payment Enhancement Date, if applicable, we will not
allocate any corresponding Deferred Payment Enhancement to your contract. See
SEASONS REWARDS PROGRAM above.

Income payments must begin on or before the Latest Annuity Date. If you do not
choose an Annuity Date, your income payments will automatically begin on the
Latest Annuity Date. Certain states may require your income payments to start
earlier.

                                      36


If the Annuity Date is past your 85th birthday, your contract could lose its
status as an annuity under Federal tax laws. This may cause you to incur
adverse tax consequences. In addition, certain Qualified contracts require you
to take minimum distributions after you reach age 70 1/2. See TAXES below.

Income Options

Currently, this Contract offers five Income Options. Other income options may
be available. Please contact the Annuity Service Center for more information.
If you elect to receive income payments but do not select an option, your
income payments will be made in accordance with Option 4 for a period of 10
years. For income payments selected for joint lives, we pay according to Option
3 for a period of 10 years.

We base our calculation of income payments on the life of the Annuitant and the
annuity rates set forth in your contract. As the contract owner, you may change
the Annuitant at any time prior to the Annuity Date. You must notify us if the
Annuitant dies before the Annuity Date and then designate a new Annuitant.

Option 1 - Life Income Annuity

This option provides income payments for the life of the Annuitant. Income
payments stop when the Annuitant dies.

Option 2 - Joint and Survivor Life Annuity

This option provides income payments for the life of the Annuitant and for the
life of another designated person. Upon the death of either person, we will
continue to make income payments during the lifetime of the survivor. Income
payments stop whenever the survivor dies.

Option 3 - Joint and 100% Survivor Life Annuity with 10 or 20 Year Period
Certain

This option is similar to Option 2 above, with an additional guarantee of
payments for at least 10 or 20 years. If the Annuitant and the Survivor die
before all of the payments have been made, the remaining payments are made to
the Beneficiary under your Contract.

Option 4 - Life Annuity with 10 or 20 Year Period Certain

This option is similar to Option 1 above. In addition, this option provides a
guarantee that income payments will be made for at least 10 or 20 years. You
select the number of years. If the Annuitant dies before all guaranteed income
payments are made, the remaining income payments go to the Beneficiary under
your Contract.

Option 5 - Income for a Specified Period

This option provides income payments for a guaranteed period ranging from 5 to
30 years. If the Annuitant dies before all the guaranteed income payments are
made, the remaining income payments are made to the Beneficiary under your
contract. Additionally, if variable income payments are elected under this
option, you (or the Beneficiary under the contract if the Annuitant dies prior
to all guaranteed payments being made) may redeem the contract value (in full
or in part) after the Annuity Date. The amount available upon such redemption
would be the discounted present value of any remaining guaranteed payments. The
value of an Annuity Unit, regardless of the option chosen, takes into account
the mortality and expense risk charge. Since Option 5 does not contain an
element of mortality risk, no benefit is derived from this charge.

Allocation of Annuity Payments

You can choose income payments that are fixed, variable or both. If payments
are fixed, AIG SunAmerica Life guarantees the amounts of each payment. If the
payments are variable, the amounts are not guaranteed. They will go up and/or
down based upon the performance of the Variable Portfolios in which you invest.

Fixed or Variable Income Payments

If at the date when income payments begin you are invested in the Variable
Portfolios only, your income payments will be variable. If you elect a fixed
payment, your income payments will be fixed in amount. If you are invested in
both fixed

                                      37


and variable options at the time you begin the Income Phase, a portion of your
income payments will be fixed and a portion will be variable.

Income Payments

We make income payments on a monthly, quarterly, semi-annual or annual basis.
You instruct us to send you a check or to have the payments direct deposited
into your bank account. If state law allows, we distribute annuities with a
contract value of $5,000 or less in a lump sum. Also, if the selected income
option results in annuity payments of less than $50 per payment, we may
decrease the frequency of the payments, state law allowing.

Your income payments will vary if you are invested in the Variable Portfolios
after the Annuity date depending on four factors:

   . for life options, your age when payments begin and in most states if a
     non-qualified contract, your gender; and

   . the value of your contract in the Variable Portfolios on the Annuity Date;
     and

   . the 3.5% assumed investment rate for variable income payments used in the
     annuity table for the contract; and

   . the performance of the Variable Portfolios in which you are invested
     during the time you receive income payments.

<R>
If you are invested in both the Fixed Account options, if available, and the
Variable Portfolios after the Annuity Date, the allocation of funds between the
Fixed Accounts and Variable Portfolios also impact the amount of your annuity
payments.
</R>

The value of variable income payments, if elected, is based on an assumed
interest rate ("AIR") of 3.5% compounded annually. Variable income payments
generally increase or decrease from one income payment date to the next based
upon the performance of the applicable Variable Portfolios. If the performance
of the Variable Portfolios selected is equal to the AIR, the income payments
will remain constant. If performance of Variable Portfolios is greater than the
AIR, the income payments will increase and if it is less than the AIR, the
income payments will decline.

Transfers During the Income Phase

During the Income Phase, one transfer per month is permitted between the
Variable Portfolios. No other transfers are allowed during the Income Phase.

Deferment of Payments

We may defer making fixed payments for up to six months, or less if required by
law. Interest is credited to you during the deferral period. See also ACCESS TO
YOUR MONEY above.

Please read the Statement of Additional Information, available upon request,
for a more detailed discussion of the income options.

You may wish to consult your tax advisor for information concerning your
particular circumstances.

<R>
</R>
<R>
TAXES
</R>
  ------------------------------------------------------------------------------

<R>
Note: The basic summary below addresses broad federal taxation matters, and
generally does not address state taxation issues or questions. It is not tax
advice. We caution you to seek competent tax advice about your own
circumstances. We do not guarantee the tax status of your annuity. Tax laws
constantly change; therefore, we cannot guarantee that the information
contained herein is complete and/or accurate. We have included an additional
discussion regarding taxes in the SAI.
</R>

<R>
Annuity Contracts in General
</R>

<R>
The Internal Revenue Code ("IRC") provides for special rules regarding the tax
treatment of annuity contracts. Generally, taxes on the earnings in your
annuity contract are deferred until you take the money out. Qualified
retirement investments
</R>

                                      38


<R>
that satisfy specific tax and ERISA requirements automatically provide tax
deferral regardless of whether the underlying contract is an annuity, a trust,
or a custodial account. Different rules apply depending on how you take the
money out and whether your contract is Qualified or Non-Qualified.
</R>

<R>
If you do not purchase your contract under a pension plan, a specially
sponsored employer program or an individual retirement account, your contract
is referred to as a Non-Qualified contract. A Non-Qualified contract receives
different tax treatment than a Qualified contract. In general, your cost in a
Non-Qualified contract is equal to the Purchase Payments you put into the
contract. You have already been taxed on the cost basis in your contract.
</R>

<R>
If you purchase your contract under a pension plan, a specially sponsored
employer program or as an individual retirement account, your contract is
referred to as a Qualified contract. Examples of qualified plans or
arrangements are: Individual Retirement Accounts ("IRAs"), Roth IRAs,
Tax-Sheltered Annuities (referred to as 403(b) contracts), plans of
self-employed individuals (often referred to as H.R. 10 Plans or Keogh Plans)
and pension and profit sharing plans, including 401(k) plans. Typically, for
employer plans and tax-deductible IRA contributions, you have not paid any tax
on the Purchase Payments used to buy your contract and therefore, you have no
cost basis in your contract. However, you normally will have cost basis in a
Roth IRA, and you may have cost basis in a traditional IRA or in another
Qualified Contract.
</R>

<R>
Tax Treatment of Distributions--Non-Qualified Contracts
</R>

<R>
If you make a partial or total withdrawal from a Non-Qualified contract, the
IRC treats such a withdrawal as first coming from the earnings and then as
coming from your Purchase Payments. Purchase payments made prior to August 14,
1982, however, are an important exception to this general rule, and for tax
purposes are treated as being distributed before the earnings on those
contributions. If you annuitize your contract, a portion of each income payment
will be considered, for tax purposes, to be a return of a portion of your
Purchase Payment(s). Any portion of each income payment that is considered a
return of your Purchase Payment will not be taxed. Withdrawn earnings are
treated as income to you and are taxable. The IRC provides for a 10% penalty
tax on any earnings that are withdrawn other than in conjunction with the
following circumstances: (1) after reaching age 59 1/2; (2) when paid to your
Beneficiary after you die; (3) after you become disabled (as defined in the
IRC); (4) when paid in a series of substantially equal periodic payments
calculated over your life or for the joint lives of you and your Beneficiary
for a period of 5 years or attainment of age 59 1/2, whichever is longer; (5)
under an immediate annuity; or (6) which are attributable to Purchase Payments
made prior to August 14, 1982.
</R>

<R>
Tax Treatment of Distributions--Qualified Contracts (including governmental
457(b) eligible deferred compensation plans)
</R>

<R>
Generally, you have not paid any taxes on the Purchase Payments used to buy a
Qualified contract. As a result, with certain limited exceptions, any amount of
money you take out as a withdrawal or as income payments is taxable income. In
the case of certain Qualified contracts, the IRC further provides for a 10%
penalty tax on any taxable withdrawal or income payment paid to you other than
in conjunction with the following circumstances: (1) after reaching age 59 1/2;
(2) when paid to your Beneficiary after you die; (3) after you become disabled
(as defined in the IRC); (4) in a series of substantially equal periodic
payments calculated over your life or for the joint lives of you and your
Beneficiary, that begins after separation from service with the employer
sponsoring the plan and continued for a period of 5 years until you attain age
59 1/2, whichever is longer; (5) to the extent such withdrawals do not exceed
limitations set by the IRC for deductible amounts paid during the taxable year
for medical care; (6) to fund higher education expenses (as defined in the IRC;
only from an IRA); (7) to fund certain first-time home purchase expenses (only
from an IRA); (8) when you separate from service after attaining age 55 (does
not apply to an IRA); (9) when paid for health insurance, if you are unemployed
and meet certain requirements; and (10) when paid to an alternate payee
pursuant to a qualified domestic relations order (does not apply to IRAs). This
10% penalty tax does not apply to withdrawals or income payments from
governmental 457(b) eligible deferred compensation plans, except to the extent
that such withdrawals or income payments are attributable to a prior rollover
to the plan (or earnings thereon) from another plan or arrangement that was
subject to the 10% penalty tax.
</R>

<R>
The IRC limits the withdrawal of an employee's voluntary Purchase Payments from
a Tax-Sheltered Annuity (TSA). Withdrawals can only be made when an owner (1)
reaches age 59 1/2; (2) severs employment with the employer; (3) dies;
</R>

                                      39


<R>
(4) becomes disabled (as defined in the IRC); or (5) experiences a financial
hardship (as defined in the IRC). In the case of hardship, the owner can only
withdraw Purchase Payments. Additional plan limitations may also apply. Amounts
held in a TSA annuity contract as of December 31, 1988 are not subject to these
restrictions. Qualifying transfers of amounts from one TSA contract to another
TSA contract under section 403(b) or to a custodial account under section
403(b) (7), and qualifying transfers to a state defined benefit plan to
purchase service credits, are not considered distributions, and thus are not
subject to these withdrawal limitations. If amounts are transferred from a
custodial account described in Code section 403(b) (7) to this contract the
transferred amount will retain the custodial account withdrawal restrictions.
</R>

<R>
Withdrawals from other Qualified Contracts are often limited by the IRC and by
the employer's plan.
</R>

<R>
Minimum Distributions
</R>

<R>
Generally, the IRC requires that you begin taking annual distributions from
qualified annuity contracts by April 1 of the calendar year following the later
of (1) the calendar year in which you attain age 70 1/2 or (2) the calendar
year in which you separate from service from the employer sponsoring the plan.
If you own an IRA, you must begin taking distributions when you attain age
70 1/2. If you own more than one TSA, you may be permitted to take your annual
distributions in any combination from your TSAs. A similar rule applies if you
own more than one IRA. However, you cannot satisfy this distribution
requirement for your TSA contract by taking a distribution from an IRA, and you
cannot satisfy the requirement for your IRA by taking a distribution from a TSA.
</R>

<R>
You may be subject to a surrender charge on withdrawals taken to meet minimum
distribution requirements, if the withdrawals exceed the contract's maximum
penalty free amount.
</R>

<R>
Failure to satisfy the minimum distribution requirements may result in a tax
penalty. You should consult your tax advisor for more information.
</R>

<R>
You may elect to have the required minimum distribution amount on your contract
calculated and withdrawn each year under the automatic withdrawal option. You
may select monthly, quarterly, semiannual, or annual withdrawals for this
purpose. This service is provided as a courtesy and we do not guarantee the
accuracy of our calculations. Accordingly, we recommend you consult your tax
advisor concerning your required minimum distribution. You may terminate your
election for automated minimum distribution at any time by sending a written
request to our Annuity Service Center. We reserve the right to change or
discontinue this service at any time.
</R>

<R>
The IRS issued regulations, effective January 1, 2003, regarding required
minimum distributions from qualified annuity contracts. One of the regulations
effective January 1, 2006 require that the annuity contract value used to
determine required minimum distributions include the actuarial value of other
benefits under the contract, such as optional death benefits. This regulation
does not apply to required minimum distributions made under an irrevocable
annuity income option. Generally, we are currently awaiting further
clarification from the IRS on this regulation, including how the value of such
benefits is determined. You should discuss the effect of these new regulations
with your tax advisor.
</R>

<R>
Tax Treatment of Death Benefits
</R>

<R>
Any death benefits paid under the contract are taxable to the Beneficiary. The
rules governing the taxation of payments from an annuity contract, as discussed
above, generally apply whether the death benefits are paid as lump sum or
annuity payments. Estate taxes may also apply.
</R>

<R>
Certain enhanced death benefits may be purchased under your contract. Although
these types of benefits are used as investment protection and should not give
rise to any adverse tax effects, the IRS could take the position that some or
all of the charges for these death benefits should be treated as a partial
withdrawal from the contract. In that case, the amount of the partial
withdrawal may be includible in taxable income and subject to the 10% penalty
if the owner is under 59 1/2.
</R>

<R>
If you own a Qualified contract and purchase these enhanced death benefits, the
IRS may consider these benefits "incidental death benefits." The IRC imposes
limits on the amount of the incidental death benefits allowable for Qualified
contracts. If the death benefit(s) selected by you are considered to exceed
these limits, the benefit(s) could result in taxable income to the owner of the
Qualified contract. Furthermore, the IRC provides that the assets of an IRA
(including a Roth
</R>

                                      40


<R>
IRA) may not be invested in life insurance, but may provide, in the case of
death during the Accumulation Phase, for a death benefit payment equal to the
greater of Purchase Payments or Contract Value. This contract offers death
benefits, which may exceed the greater of Purchase Payments or Contract Value.
If the IRS determines that these benefits are providing life insurance, the
contract may not qualify as an IRA (including Roth IRAs). You should consult
your tax advisor regarding these features and benefits prior to purchasing a
contract.
</R>

<R>
Contracts Owned by a Trust or Corporation
</R>

<R>
A Trust or Corporation ("Non-Natural Owner") that is considering purchasing
this contract should consult a tax advisor. Generally, the IRC does not treat a
Non-Qualified contract owned by a non-natural owner as an annuity contract for
Federal income tax purposes. The non-natural owner pays tax currently on the
contract's value in excess of the owner's cost basis. However, this treatment
is not applied to a contract held by a trust or other entity as an agent for a
natural person nor to contracts held by Qualified Plans. See the SAI for a more
detailed discussion of the potential adverse tax consequences associated with
non-natural ownership of a non-qualified annuity contract.
</R>

<R>
Gifts, Pledges and/or Assignments of a Contract
</R>

<R>
If you transfer ownership of your Non-Qualified contract to a person other than
your spouse (or former spouse incident to divorce) as a gift you will pay
federal income tax on the contract's cash value to the extent it exceeds your
cost basis. The recipient's cost basis will be increased by the amount on which
you will pay federal taxes. In addition, the IRC treats any assignment or
pledge (or agreement to assign or pledge) of any portion of a Non-Qualified
contract as a withdrawal. See the SAI for a more detailed discussion regarding
potential tax consequences of gifting, assigning, or pledging a Non-Qualified
contract.
</R>

<R>
The IRC prohibits Qualified annuity contracts including IRAs from being
transferred, assigned or pledged as security for a loan. This prohibition,
however, generally does not apply to loans under an employer-sponsored plan
(including loans from the annuity contract) that satisfy certain requirements,
provided that: (a) the plan is not an unfunded deferred compensation plan; and
(b) the plan funding vehicle is not an IRA.
</R>

<R>
Diversification and Investor Control
</R>

<R>
The IRC imposes certain diversification requirements on the underlying
investments for a variable annuity. We believe that the management of the
Underlying Funds monitors the Funds so as to comply with these requirements. To
be treated as a variable annuity for tax purposes, the underlying investments
must meet these requirements.
</R>

<R>
The diversification regulations do not provide guidance as to the circumstances
under which you, and not the Company, would be considered the owner of the
shares of the Variable Portfolios under your Non-Qualified Contract, because of
the degree of control you exercise over the underlying investments. This
diversification requirement is sometimes referred to as "investor control." It
is unknown to what extent owners are permitted to select investments, to make
transfers among Variable Portfolios or the number and type of Variable
Portfolios owners may select from. If any guidance is provided which is
considered a new position, then the guidance should generally be applied
prospectively. However, if such guidance is considered not to be a new
position, it may be applied retroactively. This would mean that you, as the
owner of the Non-qualified Contract, could be treated as the owner of the
underlying Variable Portfolios. Due to the uncertainty in this area, we reserve
the right to modify the contract in an attempt to maintain favorable tax
treatment.
</R>

<R>
These investor control limitations generally do not apply to Qualified
Contracts, which are referred to as "Pension Plan Contracts" for purposes of
this rule, although the limitations could be applied to Qualified Contracts in
the future.
</R>
<R>
</R>

OTHER INFORMATION
  ------------------------------------------------------------------------------

First SunAmerica

<R>
</R>
<R>
The Company is a stock life insurance company originally organized under the
laws of the state of New York on December 5, 1978. Its principal place of
business is 733 Third Avenue, New York, New York 10017. The Company conducts
life insurance and annuity business in the state of New York. The Company is an
indirect, wholly owned subsidiary of American International Group, Inc.
("AIG"), a Delaware corporation.
</R>

                                      41


The Separate Account

The Company established the FS Variable Annuity Account Five (the "Separate
Account") under New York law on August 1, 1997. The Separate Account is
registered with the SEC as a unit investment trust under the Investment Company
Act of 1940, as amended.

The Company owns the assets in the Separate Account, however, the assets in the
Separate Account are not chargeable with liabilities arising out of any other
business conducted by the Company. Income gains and losses (realized and
unrealized) resulting from assets in the Separate Account are credited to or
charged against the Separate Account without regard to other income, gains or
losses of the Company. Assets in the Separate Account are not guaranteed by the
Company.

The General Account

<R>
</R>
<R>
Money allocated to any Fixed Account options goes into the Company's general
account. The general account consists of all of the company's assets other than
assets attributable to a Separate Account. All of the assets in the general
account are chargeable with the claims of any of the Company's contract holders
as well as all of its creditors. The general account funds are invested as
permitted under state insurance laws.
</R>

<R>
The Company has a support agreement in effect between the Company and its
ultimate parent company, American International Group, Inc. ("AIG"), and the
Company's insurance policy obligations are guaranteed by American Home
Assurance Company, a subsidiary of AIG. See the Statement of Additional
Information for more information regarding these arrangements.
</R>
<R>
</R>

<R>
Registration Statements
</R>

<R>
Registration statements under the Securities Act of 1933 (the "1933 Act"), as
amended, related to the contracts offered by this prospectus are on file with
the SEC. This prospectus does not contain all of the information contained in
the registration statements and exhibits. For further information regarding the
Separate Account, the Company and its general account, the Variable Portfolios
and the contract, please refer to the registration statements and exhibits.
</R>

<R>
</R>
<R>
Payments in Connection with Distribution of the Contract
</R>

<R>
  Payments to Broker-Dealers
</R>

<R>
Registered representatives of broker-dealers sell the contract. We pay
commissions to the broker-dealers for the sale of your contract ("Contract
Commissions"). There are different structures by which a broker-dealer can
choose to have their Contract Commissions paid. For example, as one option, we
may pay upfront Contract Commission only, that may be up to a maximum 8% of
each Purchase Payment you invest (which may include promotional amounts).
Another option may be a lower upfront Contract Commission on each Purchase
Payment, with a trail commission of up to a maximum 1.50% of contract value
annually. Generally, the higher the upfront commissions, the lower the trail
and vice versa. We pay Contract Commissions directly to the broker-dealer with
whom your registered representative is affiliated. Registered representatives
may receive a portion of these amounts we pay in accordance with any agreement
in place between the registered representative and his/her broker-dealer firm.
</R>

<R>
We may pay broker-dealers support fees in the form of additional cash or
non-cash compensation. These payments may be intended to reimburse for specific
expenses incurred or may be based on sales, certain assets under management,
longevity of assets invested with us or a flat fee. These payments may be
consideration for, among other things, product placement/preference, greater
access to train and educate the firm's registered representatives about our
products, our participation in sales conferences and educational seminars and
allowing broker-dealers to perform due diligence on our products. The amount of
these fees may be tied to the anticipated level of our access in that firm. We
enter into such arrangements in our discretion and we may negotiate customized
arrangements with firms, including affiliated and non-affiliated broker-dealers
based on various factors. We do not deduct these amounts directly from your
Purchase Payments. We anticipate recovering these amounts from the fees and
charges collected under the contract.
</R>

                                      42


<R>
Contract commissions and other support fees may influence the way that a
broker-dealer and its registered representatives market the contracts and
service customers who purchase the contracts and may influence the broker-
dealer and its registered representatives to present this contract over others
available in the market place. You should discuss with your broker-dealer
and/or registered representative how they are compensated for sales of a
contract and/or any resulting real or perceived conflicts of interest.
</R>

<R>
AIG SunAmerica Capital Services, Inc., Harborside Financial Center, 3200 Plaza
5, Jersey City, NJ 07311-4992, distributes the contracts. AIG SunAmerica
Capital Services, an affiliate of the Company, is a registered broker-dealer
under the Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. No underwriting fees are paid in connection with the
distribution of the contracts.
</R>

<R>
  Payments We Receive
</R>

<R>
In addition to amounts received pursuant to established 12b-1 Plans from the
Underlying Funds, we receive compensation from the Trust's investment advisor
related to the availability of the Underlying Funds in the contract. Such
amounts received from our affiliate, AIG SAAMCo, are paid pursuant to a profit
sharing agreement and are not expected to exceed 0.50% annually based on assets
under management. Furthermore, AIG SAAMCo and/or certain subadvisers may help
offset the costs we incur for training to support sales of the Underlying Funds
in the contract.
</R>

Administration

We are responsible for the administrative servicing of your contract. During
the Accumulation Phase, you will receive confirmation of transactions within
your contract. Transactions made pursuant to contractual or systematic
agreements, such as deduction of the annual maintenance fee and dollar cost
averaging, may be confirmed quarterly. Purchase payments received through the
Automatic Payment Plan or a salary reduction arrangement, may also be confirmed
quarterly. For other transactions, we send confirmations immediately.

During the Accumulation and Income Phases, you will receive a statement of your
transactions over the past quarter and a summary of your account values. Please
contact our Annuity Service Center at 1-800-99NY-SUN, if you have any comment,
question or service request.

We send out transaction confirmations and quarterly statements. It is your
responsibility to review these documents carefully and notify us of any
inaccuracies immediately. We investigate all inquiries. To the extent that we
believe we made an error, we retroactively adjust your contract, provided you
notify us within 30 days of receiving the transaction confirmation or quarterly
statement. Any other adjustments we deem warranted are made as of the time we
receive notice of the error.

Legal Proceedings

<R>
</R>
<R>
There are no pending legal proceedings affecting the Separate Account. From
time to time, the Company is party to various kinds of litigation incidental to
its business operations. In management's opinion, these matters are not
material in relation to the financial position of the Company.
</R>

<R>
AIG has announced that it has delayed filing its Annual Report on Form 10-K for
the year ended December 31, 2004 to allow AIG's Board of Directors and new
management adequate time to complete an extensive review of AIG's books and
records. The review includes issues arising from pending investigations into
non-traditional insurance products and certain assumed reinsurance transactions
by the Office of the Attorney General for the State of New York and the
Securities and Exchange Commission and from AIG's decision to review the
accounting treatment of certain additional items. Circumstances affecting AIG
can have an impact on the company. For example, the recent ratings actions
taken by the major rating agencies with respect to AIG resulted in
corresponding actions being taken with respect to the Company's ratings.
Accordingly, we can give no assurance that any further changes in circumstances
for AIG will not impact us.
</R>

                                      43


Appendix A - Seasons Rewards Program Examples
  ------------------------------------------------------------------------------

The following examples assume an initial $125,000 Purchase Payment is made and
that the Company is offering Upfront and Deferred Payment Enhancements in
accordance with this chart:

                    Upfront Payment  Deferred Payment          Deferred Payment
Enhancement Level   Enhancement Rate Enhancement Rate          Enhancement Date
-----------------------------------------------------------------------------------------
Under $100,000             2%               0%        N/A
-----------------------------------------------------------------------------------------
$100,000 - $499,999        2%               1%        Nine years from the date we receive
                                                      each Purchase Payment.
-----------------------------------------------------------------------------------------
$500,000 - more            2%               2%        Nine years from the date we receive
                                                      each Purchase Payment.
-----------------------------------------------------------------------------------------

I.  Deferred Payment Enhancement

If you elect to participate in the Seasons Rewards Program at contract issue,
we contribute at least 2% of each Purchase Payment to your contract for each
Purchase Payment we receive, as an Upfront Payment Enhancement. Any applicable
Deferred Payment Enhancement is allocated to your contract on the corresponding
Deferred Payment Enhancement Date and, if declared by the Company, is a
percentage of your remaining Purchase Payment on the Deferred Payment
Enhancement Date. Deferred Purchase Payment Enhancements are reduced
proportionately by partial withdrawals of that Purchase Payment prior to the
Deferred Payment Enhancement Date. The Deferred Payment Enhancement Rate may
increase, decrease or be eliminated at any time.

Example 1 - No Withdrawals Are Made

The Upfront Payment Enhancement allocated to your contract is $2,500 (2% of
$125,000).

On your 9th contract anniversary, the Deferred Payment Enhancement Date, your
Deferred Payment Enhancement of $1,250 (1% of your remaining Purchase Payment
or $125,000) will be allocated to your contract.

Example 2 - Withdrawal Made Prior to Deferred Payment Enhancement Date

As in Example 1, your Upfront Payment Enhancement is $2,500.

This example also assumes the following:

    (1)Your contract value on your 5th contract anniversary is $190,000.

    (2)You request a withdrawal of $75,000 on your 5th contract anniversary.

    (3)No subsequent Purchase Payments have been made.

    (4)No prior withdrawals have been taken.

On your 5th contract anniversary, your penalty-free earnings in the contract
are $65,000 ($190,000 contract value less your $125,000 investment in the
contract). Therefore, you are withdrawing $10,000 of your initial Purchase
Payment. Your contract value will also be reduced by a $500 withdrawal charge
on the $10,000 Purchase Payment (5% of $10,000). Your gross withdrawal is
$75,500 of which $10,500 constitutes part of your Purchase Payment.

The withdrawal of $10,500 of your $125,000 Purchase Payment is a withdrawal of
8.4% of your Purchase Payment. Therefore, only 91.6% or $114,500 of your
initial Purchase Payment remains in your contract.

On your 9th contract anniversary, the Deferred Payment Enhancement Date,
assuming no other transactions occur affecting the Purchase Payment, we
allocate your Deferred Payment Enhancement of $1,145 (1% of your remaining
Purchase Payment, $114,500) to your contract.

                                      A-1


II.  90 Day Window

Contracts issued with the Seasons Rewards feature may be eligible for a
"Look-Back Adjustment." As of the 90th day after your contract was issued, we
will total your Purchase Payments remaining in your contract at that time,
without considering any investment gain or loss in contract value on those
Purchase Payments. If your total Purchase Payments bring you to an Enhancement
Level which, as of the date we issued your contract, would have provided for a
higher Upfront and/or Deferred Payment Enhancement Rate on each Purchase
Payment, you will get the benefit of the Enhancement Rate(s) that were
applicable to that higher Enhancement Level at the time your contract was
issued.

This example assumes the following:

    (1)No withdrawal in the first 90 days.

    (2)Initial Purchase Payment of $50,000 on November 1, 2000.

    (3)Subsequent Purchase Payment of $50,000 on January 15, 2001.

    (4)Subsequent Purchase Payment of $25,000 on January 28, 2001.

ENHANCEMENT AT THE TIME PURCHASE PAYMENT RECEIVED

                                                                Deferred
                            Purchase   Upfront    Deferred       Payment
                            Payment    Payment     Payment     Enhancement
   Date of Purchase Payment  Amount  Enhancement Enhancement      Date
   --------------------------------------------------------------------------
       November 1, 2000     $50,000       2%          0%     N/A
   --------------------------------------------------------------------------
       January 15, 2001     $50,000       2%          1%     January 15, 2010
   --------------------------------------------------------------------------
       January 28, 2001     $25,000       2%          1%     January 28, 2010

ENHANCEMENT ADJUSTMENTS ON THE 90TH DAY FOLLOWING CONTRACT ISSUE

The sum of all Purchase Payments made in the first 90 days of the contract
equals $125,000. According to the Enhancement Levels in effect at the time this
contract was issued, a $125,000 Purchase Payment would have received a 2%
Upfront Payment Enhancement and a 1% Deferred Payment Enhancement. Under the 90
Day Window provision all Purchase Payments made within those first 90 days
would receive the benefit of the parameters in place at the time the contract
was issued, as if all of the Purchase Payments were received on the date of
issue. Thus, the first two payment enhancements would be adjusted at the end of
the 90 days as follows:

                                                                Deferred
                            Purchase   Upfront    Deferred       Payment
                            Payment    Payment     Payment     Enhancement
   Date of Purchase Payment  Amount  Enhancement Enhancement      Date
   --------------------------------------------------------------------------
       November 1, 2000     $50,000       2%          1%     November 1, 2009
   --------------------------------------------------------------------------
       January 15, 2001     $50,000       2%          1%     January 15, 2010
   --------------------------------------------------------------------------
       January 28, 2001     $25,000       2%          1%     January 28, 2010

                                      A-2


Appendix B - Seasons Income Rewards Examples
  ------------------------------------------------------------------------------

<R>
</R>
<R>
The following examples demonstrate the operation of the Seasons Income Rewards
feature:
</R>

<R>
Example                 1:
</R>

<R>
   Assume you elect Seasons Income Rewards Option 2 and you invest a single
   Purchase Payment of $100,000. If you make no additional Purchase Payments
   and no withdrawals, your Withdrawal Benefit Base is $100,000 on the Benefit
   Availability Date.
</R>

<R>
   Your Stepped-Up Benefit Base equals Withdrawal Benefit Base plus the Step-Up
   Amount ($100,000 + (20% X $100,000) = $120,000). Your Maximum Annual
   Withdrawal Amount as of the Benefit Availability Date is 10% of your
   Withdrawal Benefit Base ($100,000 X 10% = $10,000). The Minimum Withdrawal
   Period is equal to the Stepped-Up Benefit Base divided by the Maximum Annual
   Withdrawal Amount, which is 12 years ($120,000/$10,000). Therefore, you may
   take $120,000 in withdrawals of up to $10,000 annually over a minimum of 12
   years beginning on or after the Benefit Availability Date.
</R>

<R>
Example                 2 - Impact of Withdrawals prior to the Benefit
                        Availability Date for Options 1 and 2:
</R>

<R>
   Assume you elect Seasons Income Rewards Option 2 and you invest a single
   Purchase Payment of $100,000. You make a withdrawal of $11,000 prior to the
   Benefit Availability Date. Prior to the withdrawal, your contract value is
   $110,000. You make no other withdrawals before the Benefit Availability Date.
</R>

<R>
   Immediately following the withdrawal, your Withdrawal Benefit Base is
   recalculated by first determining the proportion by which your contract
   value was reduced by the withdrawal ($11,000/$110,000 = 10%). Next, we
   reduce your Withdrawal Benefit Base by the percentage by which the contract
   value was reduced by the withdrawal ($100,000 -- (10% X 100,000) = $90,000).
   Since the Step-Up Amount is zero because a withdrawal was made prior to the
   Benefit Availability Date, your Stepped-Up Benefit Base on the Benefit
   Availability Date equals your Withdrawal Benefit Base. Therefore, the
   Stepped-Up Benefit Base also equals $90,000. Your Maximum Annual Withdrawal
   Amount is 10% of the Withdrawal Benefit Base on the Benefit Availability
   Date ($90,000). This equals $9,000. Therefore, you may take withdrawals of
   up to $9,000 annually over a minimum of 10 years ($90,000/$9,000) = 10).
</R>

<R>
Example                 3 - Impact of Withdrawals prior to the Benefit
                        Availability Date for Option 3:
</R>

<R>
   Assume you elect Seasons Income Rewards Option 3 and you invest a single
   Purchase Payment of $100,000. You make a withdrawal of $11,000 prior to
   Benefit Availability Date. Prior to the withdrawal, your contract value is
   $110,000. You make no other withdrawals before the Benefit Availability Date.
</R>

<R>
   Immediately following the withdrawal, your Withdrawal Benefit Base is
   recalculated by first determining the proportion by which your contract
   value was reduced by the withdrawal ($11,000/$110,000) = 10%). Next, we
   reduce your Withdrawal Benefit Base by the percentage by which the contract
   value was reduced by the withdrawal ($100,000 -- (10% X 100,000) = $90,000).
   Since the withdrawal occurred prior to the Benefit Availability Date, your
   Step-Up Amount will be reduced to 30% of your Withdrawal Benefit Base ((30%
   X $90,000) = $27,000). Therefore, your Stepped-Up Benefit Base on the
   Benefit Availability Date equals the Withdrawal Benefit Base plus the
   Step-Up Amount (($90,000 + $27,000) = $117,000). Your Maximum Annual
   Withdrawal Amount is 10% of the Withdrawal Benefit Base on the Benefit
   Availability Date ($90,000). This equals $9,000. Therefore, you may take
   withdrawals of up to $9,000 annually over a minimum of 13 years
   ($117,000/$9,000 =13).
</R>

<R>
Example                 4 - Impact of Withdrawals less than or equal to Maximum
                        Annual Withdrawal Amount after the Benefit Availability
                        Date:
</R>

<R>
   Assume you elect Seasons Income Rewards Option 2 and you invest a single
   Purchase Payment of $100,000. You make a withdrawal of $7,500 during the
   first year after the Benefit Availability Date.
</R>

                                      B-1


<R>
   Because the withdrawal is less than or equal to your Maximum Annual
   Withdrawal Amount ($10,000), your Stepped-Up Benefit Base ($120,000) is
   reduced by the total dollar amount of the withdrawal ($7,500). Your new
   Stepped-Up Benefit Base equals $112,500. Your Maximum Annual Withdrawal
   Amount remains $10,000. Your new Minimum Withdrawal Period following the
   withdrawal is equal to the new Stepped-Up Benefit Base divided by your
   current Maximum Annual Withdrawal Amount, ($112,500/$10,000). Therefore, you
   may take withdrawals of up to $10,000 over a minimum of 11 years and 3
   months.
</R>

<R>
Example                 5 - Impact of Withdrawals in excess of Maximum Annual
                        Withdrawal Amount after the Benefit Availability Date:
</R>

<R>
   Assume you elect Seasons Income Rewards Option 2 and you invest a single
   Purchase Payment of $100,000. Your Withdrawal Benefit Base is $100,000 and
   your Stepped-Up Benefit Base is $120,000. You make a withdrawal of $15,000
   during the first year after the Benefit Availability Date. Your contract
   value is $125,000 at the time of the withdrawal.
</R>

<R>
   Because the withdrawal is greater than your Maximum Annual Withdrawal Amount
   ($10,000), we recalculate your Stepped-Up Benefit Base ($120,000) by taking
   the lesser of two calculations. For the first calculation, we deduct the
   amount of the withdrawal from the Stepped-Up Benefit Base ($120,000 --
   $15,000 = $105,000). For the second calculation, we deduct the amount of the
   Maximum Annual Withdrawal Amount from the Stepped-Up Benefit Base ($120,000
   -- $10,000 = $110,000). Next, we calculate the excess portion of the
   withdrawal ($5,000) and determine the proportion by which the contract value
   was reduced by the excess portion of the withdrawal ($5,000/$125,000 = 4%).
   Finally we reduce $110,000 by that proportion (4%) which equals $105,600.
   Your Stepped-Up Benefit Base is the lesser of these two calculations or
   $105,000. The Minimum Withdrawal Period following the withdrawal is equal to
   the Minimum Withdrawal Period at the end of the prior year (12 years)
   reduced by one year (11 years). Your Maximum Annual Withdrawal Amount is
   your Stepped-Up Benefit Base divided by your Minimum Withdrawal Period
   ($105,000/11), which equals $9,545.45.
</R>

                                      B-2


Appendix C - Death Benefits Following Spousal Continuation
  ------------------------------------------------------------------------------

The term "Continuation Net Purchase Payment" is used frequently to describe the
death benefit options payable to the beneficiary of a Continuing Spouse. We
define Continuation Net Purchase Payment as Net Purchase Payments made as of
the Continuation Date plus any Purchase Payments recorded after the
Continuation Date; and reduced for any withdrawals (and fees and charges
applicable to those withdrawals) recorded after the Continuation Date, in the
same proportion that the withdrawal reduced the contract value on the date of
the withdrawal. For the purposes of calculating Continuation Net Purchase
Payments, the amount that equals the contract value on the Continuation Date,
including the Continuation Contribution is considered a Purchase Payment. If
the Continuing Spouse makes no additional Purchase Payments or withdrawals,
Continuation Net Purchase Payments equal the contract value on the Continuation
Date, including the Continuation Contribution. All other capitalized terms have
the meanings defined in the glossary and/or prospectus.

Standard Death Benefit Payable Upon Continuing Spouse's Death

If the Standard Death Benefit was selected by the original owner, the death
benefit is as follows upon the Continuing Spouse's death:

   A. If the Continuing Spouse is age 82 or younger on the Continuation Date,
      the death benefit is the greater of:

      1. Contract value; or

      2. Contract value on the Continuation Date; plus any Continuation Net
         Purchase Payments received prior to the Continuing Spouse's 86th
         birthday.

   B. If the Continuing Spouse is age 83-85 on the Continuation Date, the death
      benefit is the greater of:

      1. Contract value; or

      2. The lesser of:

          a. Contract value on the Continuation Date; plus any Continuation Net
             Purchase Payments received prior to the Continuing Spouse's 86th
             birthday; or

          b. 125% of contract value.

If the Continuing Spouse is age 86 or older on the Continuation Date, the
Standard Death Benefit is the contract value.

Enhanced Death Benefit Payable Upon Continuing Spouse's Death

If Enhanced Death Benefit was selected by the original owner, the death benefit
is as follows upon a Continuing Spouses's death;

   A. If the Continuing Spouse is age 82 or younger on the Continuation Date,
      the death benefit is the greatest of:

      a. Contract value; or

      b. Contract value on the Continuation Date; plus any Continuation Net
         Purchase Payments received prior to the Continuing Spouse's 86th
         birthday; or

      c. Maximum anniversary value on any contract anniversary occurring after
         the Continuation Date but prior to the Continuing Spouse's 83rd
         birthday; plus any Purchase Payments received after that anniversary
         but received prior to the Continuing Spouse's 86th birthday; and
         reduced for any withdrawals (and fees and charges applicable to those
         withdrawals) recorded after the anniversary in the same proportion
         that the withdrawal reduced the contract value on the date of the
         withdrawal.

                                      C-1


================================================================================
                                SEPARATE ACCOUNT
================================================================================

FS Variable Annuity Account Five was originally established by First SunAmerica
Life Insurance Company (the "Company") on August 1, 1997 pursuant to the
provisions of New York law, as a segregated asset account of the Company. The
separate account meets the definition of a "separate account" under the federal
securities laws and is registered with the SEC 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 SEC.

The assets of the separate account are the property of the Company. However, the
assets of the separate account, equal to its reserves and other contract
liabilities, are not chargeable with liabilities arising out of any other
business the Company may conduct.

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 Select Portfolios, Focused Portfolios and
Strategies, with the assets of each Select Portfolio, Focused Portfolio and
Strategy invested in the shares of one or more underlying investment portfolios.
The Company does not guarantee the investment performance of the separate
account, its Select Portfolios, Focused Portfolios and Strategies or the
underlying investment portfolios. Values allocated to the separate account and
the amount of variable annuity payments will vary with the values of shares of
the underlying investment portfolios, and are also reduced by insurance charges
and fees.

The basic objective of a variable annuity contract is to provide variable
annuity payments which will be to some degree responsive to changes in the
economic environment, including inflationary forces and changes in rates of
return available from various types of investments. The contract is designed to
seek to accomplish this objective by providing that variable annuity payments
will reflect the investment performance of the separate account with respect to
amounts allocated to it both before and after the Annuity Date. Since the
separate account is always fully invested in shares of the underlying investment
portfolios, its investment performance reflects the investment performance of
those entities. The values of such shares held by the separate account fluctuate
and are subject to the risks of changing economic conditions as well as the risk
inherent in the ability of the underlying funds' managements to make necessary
changes in their Select Portfolios, Focused Portfolios and Strategies to
anticipate changes in economic conditions. Therefore, the owner bears the entire
investment risk that the basic objectives of the contract may not be realized,
and that the adverse effects of inflation may not be lessened. There can be no
assurance that the aggregate amount of variable annuity payments will equal or
exceed the Purchase Payments made with respect to a particular account for the
reasons described above, or because of the premature death of an Annuitant.

Another important feature of the contract related to its basic objective is the
Company's promise that the dollar amount of variable annuity payments made
during the lifetime of the Annuitant will not be adversely affected by the
actual mortality experience of the Company or the actual expenses incurred by
the Company in excess of expense deductions provided for in the contract
(although the Company does not guarantee the amounts of the variable annuity
payments).

================================================================================
                                 GENERAL ACCOUNT
================================================================================

<R>
The General Account is made up of all of the general assets of the Company other
than those allocated to the separate account or any other segregated asset
account of the Company. A Purchase Payment may be allocated to the available
Fixed Account options and/or available DCA Fixed Account(s) available in
connection with the general account, as elected by the owner purchasing a
contract. Assets supporting amounts allocated to a fixed investment option
become part of the Company's general account assets and are available to fund
the claims of all classes of customers of the Company, as well as of its
creditors. Accordingly, all of the Company's assets held in the general account
will be available to fund the Company's obligations under the contracts as well
as such other claims.
</R>
The Company will invest the assets of the general account in the manner chosen
by the Company and allowed by applicable state laws regarding the nature and
quality of investments that may be made by life insurance companies and the
percentage of their assets that may be committed to any particular type of
investment. In general, these laws permit investments, within specified limits
and subject to certain qualifications, in federal, state and municipal
obligations, corporate bonds, preferred and common stocks, real estate
mortgages, real estate and certain other investments.

<R>
Support Agreement Between the Company and AIG

The Company has a support agreement in effect between the Company and AIG (the
"Support Agreement"), pursuant to which AIG has agreed that AIG will cause the
Company to maintain a policyholder's surplus of not less than $1,000,000 or such
greater amount as shall be sufficient to enable the Company to perform its
obligations under any policy issued by it. The Support Agreement also provides
that if the Company needs funds not otherwise available to it to make timely
payment of its obligations under policies issued by it, AIG will provide such
funds at the request of the Company. The Support Agreement is not a direct or
indirect guarantee by AIG to any person of any obligations of the Company. AIG
may terminate the Support Agreement with respect to outstanding obligations of
the Company only under circumstances where the Company attains, without the
benefit of the Support Agreement, a financial strength rating equivalent to that
held by the Company with the benefit of the Support Agreement. Policyholders
have the right to cause the Company to enforce its rights against AIG and, if
the Company fails or refuses to take timely action to enforce the Support
Agreement or if the Company defaults in any claim or payment owed to such
policyholder when due, have the right to enforce the Support Agreement directly
against AIG.

The Company's insurance policy obligations are guaranteed by American Home
Assurance Company ("American Home"), a subsidiary of AIG, and a member of an AIG
intercompany pool. This guarantee is unconditional and irrevocable, and the
Company's policyholders have the right to enforce the guarantee directly against
American Home.
</R>

                                        3


================================================================================
                                PERFORMANCE DATA
================================================================================

From time to time the separate account may advertise the Cash Management
Portfolio'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 Cash Management Portfolio refers to the net income generated for
a contract funded by an investment in the Portfolio (which invests in shares of
the Cash Management Portfolio of Seasons Series Trust) 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
Portfolio 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 withdrawal charges. The impact of other recurring
charges (including the mortality and expense risk charge, distribution expense
charge and contract maintenance fee) 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.

The Separate Account may advertise "total return" data for its Select
Portfolios, Focused Portfolios and Strategies. Total return figures are based on
historical data and are not intended to indicate future performance. The "total
return" for a Select Portfolio, Focused Portfolio or Strategy 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 contract funded by that Select
Portfolio, Focused Portfolio or Strategy 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.) 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 the date the Variable Portfolios first became
available through the Separate Account, the total return data for the Variable
Portfolios of the Separate Account will be derived from the performance of the
corresponding underlying funds of Seasons Series Trust, ("Trust") modified to
reflect the charges and expenses as if the contract had been in existence since
the inception date of the Trust's underlying fund. Further, returns shown are
for the original class of shares of the Trust, adjusted to reflect the fees and
charges for the newer class of shares (for Class 3) until performance for the
newer class becomes available. However, the actual shares purchased under this
contract are Class 3 of the Trust. Returns of the newer class will be
lower than those of the original class since the newer class of shares is
subject to service fees of 0.25% for the Trust. The inception date of the Class
3 shares in Seasons Series Trust is November 17, 2003. In some cases a
particular Variable Portfolio may have been available in another contract funded
through this separate account. If the Variable Portfolio was incepted in this
separate account prior to the offering of this contract, we report standardized
contract performance adjusted for the fees and charges on this contract. We
commonly refer to these performance calculations as hypothetical adjusted
historical returns. Performance figures similarly adjusted but based on
underlying Trusts' performance (outside of this separate account) should not be
construed to be actual historical performance of the relevant separate account
Variable Portfolio. Rather, they are intended to indicate the historical
performance of the corresponding underlying funds of the Trust adjusted to
provide direct comparability to the performance of the Variable Portfolios after
the date the contracts were first offered to the public (which will reflect the
effect of fees and charges imposed under the contracts). The Trust has served
since its inception as underlying investment media for separate accounts of
other insurance companies in connection with variable contracts not having the
same fee and charge schedules as those imposed under the contracts.

Performance data for the various Variable Portfolios are computed in the manner
described below.


Cash Management Portfolio

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 - CMF)/(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

    CMF = an allocated portion of the $30 annual Contract Maintenance Fee,
          prorated for 7 days

The change in the value of an Accumulation Unit during the 7 day period reflects
the income received minus any expenses accrued, during such 7 day period. The
Contract Maintenance Fee (CMF) is first allocated among the Select Portfolios,
Focused Portfolios and/or Strategies and the general account so that each Select
Portfolio's, Focused Portfolio's and/or Strategy's allocated portion of the fee
is proportional to the percentage of the number of accounts that have money
allocated to that Select Portfolio, Focused Portfolio and/or Strategy. The fee
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 Cash Management Portfolio.
Finally, as is done with the other charges discussed above, the result is
multiplied by the fraction 365/7 to arrive at the portion attributable to the 7
day period.

The current yield is then obtained by annualizing the Base Period Return:

    Current Yield = (Base Period Return) x (365/7)

                                        4


The Cash Management Portfolio 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 underlying fund. 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)365/7 - 1]

The yield quoted should not be considered a representation of the yield of the
Cash Management Portfolio in the future since the yield is not fixed. Actual
yields will depend on the type, quality and maturities of the investments held
by the underlying fund and changes in interest rates on such investments. But
also on factors such as an 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 Cash
Management Portfolio and for providing a basis for comparison with other
investment alternatives. However, the Cash Management Portfolio's yield
fluctuates, unlike bank deposits or other investments that typically pay a fixed
yield for a stated period of time.

Other Portfolios

The Portfolios of the separate account other than the Cash Management Portfolio
compute their performance data as "total return."

Total return for a Portfolio represents a single computed annual rate of return
that, when compounded annually over a specified time period (one, five, and ten
years, or since inception) and applied to a hypothetical initial investment in a
contract funded by that Portfolio 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:

For contracts without the Seasons Rewards Program:
--------------------------------------------------

                       P (1 + T) TO THE POWER OF n = ERV

For contracts with the Seasons Rewards Program:
------------------------------------------------

                   [P (1 + E)](1 + T) TO THE POWER OF n = ERV

    where:

        P = a hypothetical initial payment of $1,000

        T = average annual total return

        n = number of years

        E = Payment Enhancement Rate

        ERV = redeemable value of a hypothetical $1,000 payment made at the
              beginning of the 1, 5 or 10 year period as of the end of the
              period (or fractional portion thereof)

Standardized performance for the Portfolios and Strategies available in this
contract reflect total returns using the method of computation discussed below:

     -    Using the seven year surrender charge schedule available on contracts
          issued without the Seasons Rewards Program. No enhancement is
          reflected under the calculation, as the Payment Enhancement is not
          available unless the Seasons Rewards is elected; AND

     -    Using the nine year surrender charge schedule available on contracts
          issued with the Seasons Rewards Program, including the minimum Upfront
          Payment Enhancement of 2% of Purchase Payments and calculating the
          value after redemption only based on the initial $1,000 Purchase
          Payment.

We may, from time to time, advertise other variations of performance along with
the standardized performance as described above. We may, in sales literature,
show performance only applicable to one surrender charge schedule to a contract
holder who has already the contract with or without the Seasons Rewards Program.
However, we will not report performance for the contract featuring the Seasons
Rewards Program, unless net of withdrawal charges.

                                        5


================================================================================
                                 INCOME PAYMENTS
================================================================================

Initial Annuity Payment

The initial annuity payment is determined by taking the contract value, less any
premium tax, less any Market Value Adjustment that may apply in the case of a
premature annuitization of CERTAIN guarantee amounts, and then applying it 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 (except where, as in the case of certain Qualified contracts and
other employer-sponsored retirement plans, such classification is not permitted)
and age of the Annuitant and designated second person, if any. The dollars
applied are then divided by 1,000 and the result multiplied by the appropriate
annuity factor appearing in the table to compute the amount of the first monthly
annuity payment. In the case of a variable annuity, 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 variable annuity payment. The number of Annuity
Units determined for the first variable annuity payment remains constant for the
second and subsequent monthly variable annuity payments, assuming that no
reallocation of contract values is made.

Subsequent Monthly Payments

For a fixed annuity, the amount of the second and each subsequent monthly
annuity payment is the same as that determined above for the first monthly
payment.

The amount of the second and each subsequent monthly variable annuity payment is
determined by multiplying the number of Annuity Units, as determined in
connection with the determination of the initial monthly payment, above, by the
Annuity Unit Value as of the day preceding the date on which each annuity
payment is due.

================================================================================
                               ANNUITY UNIT VALUES
================================================================================

The value of an Annuity Unit is determined independently for each Select
Portfolio, Focused Portfolio and Strategy. The annuity tables contained in the
contract are based on a 3.5% per annum assumed investment rate. If the actual
net investment rate experienced by a Select Portfolio, Focused Portfolio or
Strategy exceeds 3.5%, variable annuity payments derived from allocations to
that Select Portfolio, Focused Portfolio or Strategy will increase over time.
Conversely, if the actual rate is less than 3.5%, variable annuity payments will
decrease over time. If the net investment rate equals 3.5%, the variable annuity
payments will remain constant. If a higher assumed investment rate had been
used, the initial monthly payment would be higher, but the actual net investment
rate would also have to be higher in order for annuity payments to increase (or
not to decrease).

The payee 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 Select Portfolios, Focused Portfolios and/or Strategies elected, and the
amount of each annuity payment will vary accordingly. For each Select Portfolio,
Focused Portfolio and/or Strategy, the value of an Annuity Unit is determined by
multiplying the Annuity Unit value for the preceding month by the Net Investment
Factor for the month for which the Annuity Unit value is being calculated. The
result is then multiplied by a second factor which offsets the effect of the
assumed net investment rate of 3.5% per annum which is assumed in the annuity
tables contained in the contract.

Net Investment Factor

The Net Investment Factor ("NIF") is an index applied to measure the net
investment performance of Select Portfolio, Focused Portfolio or Strategy from
one month to the next. The NIF may be greater or less than or equal to one;
therefore, the value of an Annuity Unit may increase, decrease or remain the
same.

The NIF for any Select Portfolio, Focused Portfolio or Strategy for a certain
month is determined by dividing (a) by (b) where:

(a) is the Accumulation Unit value of the Select Portfolio, Focused Portfolio or
Strategy determined as of the end of that month, and
(b) is the Accumulation Unit value of the Select Portfolio, Focused Portfolio or
Strategy determined as of the end of the preceding month.

                                        6


The NIF for a Select Portfolio, Focused Portfolio or Strategy for a given month
is a measure of the net investment performance of the Select Portfolio, Focused
Portfolio or Strategy from the end of the prior month to the end of the given
month. A NIF of 1.000 results from no change; a NIF greater than 1.000 results
from an increase; and a NIF less than 1.000 results from a decrease. The NIF is
increased (or decreased) in accordance with the increases (or decreases,
respectively) in the value of the shares of the underlying investment portfolios
in which the Select Portfolio, Focused Portfolio or Strategy invests; it is also
reduced by separate account asset charges.

Illustrative Example

Assume that one share of a given Select Portfolio, Focused Portfolio or Strategy
had an Accumulation Unit value of $11.46 as of the close of the New York Stock
Exchange ("NYSE") on the last business day in September; that its Accumulation
Unit value had been $11.44 at the close of the NYSE on the last business day at
the end of the previous month. The NIF for the month of September is:

                       NIF = ($11.46/$11.44) = 1.00174825

The change in Annuity Unit value for a Select Portfolio, Focused Portfolio or
Strategy from one month to the next is determined in part by multiplying the
Annuity Unit value at the prior month end by the NIF for that Select Portfolio,
Focused Portfolio or Strategy for the new month. In addition, however, the
result of that computation must also be multiplied by an additional factor that
takes into account, and neutralizes, the assumed investment rate of 3.5 percent
per annum upon which the annuity payment tables are based. For example, if the
net investment rate for a Select Portfolio, Focused Portfolio or Strategy
(reflected in the NIF) were equal to the assumed investment rate, the variable
annuity payments should remain constant (i.e., the Annuity Unit value should not
change). The monthly factor that neutralizes the assumed investment rate of 3.5
percent per annum is:

                        1/[(1.035)/\(1/12)] = 0.99713732

In the example given above, if the Annuity Unit value for the Select Portfolio,
Focused Portfolio or Strategy was $10.103523 on the last business day in August,
the Annuity Unit value on the last business day in September would have been:

                $10.103523 x 1.00174825 x 0.99713732 = $10.092213

To determine the initial payment, the initial annuity payment for variable
annuitization is calculated based on our mortality expectations and an assumed
interest rate (AIR) of 3.5%. Thus the initial variable annuity payment is the
same as the initial payment for a fixed interest payout annuity calculated at an
effective rate of 3.5%.

The NIF measures the performance of the funds that are the basis for the amount
of future annuity payments. This performance is compared to the AIR, and if the
growth in the NIF is the same as the AIR rate the payment remains the same as
the prior month. If the rate of growth of the NIF is different than the AIR,
then the payment is changed proportionately to the ratio (1+NIF)/(1+AIR),
calculated on a monthly basis. If the NIF is greater than the AIR, then this
proportion is greater than one and payments are increased. If the NIF is less
than the AIR, then this proportion is less than one and payments are decreased.

Variable Annuity Payments

Illustrative Example

Assume that a male owner, P, owns a contract in connection with which P has
allocated all of his contract value to a single Select Portfolio, Focused
Portfolio or Strategy. P is also the sole Annuitant and, at age 60, has elected
to annuitize his contract as a life annuity with 120 monthly payments
guaranteed. As of the last valuation preceding the Annuity Date, P's Account was
credited with 7543.2456 Accumulation Units each having a value of $15.432655,
(i.e., P's Account Value is equal to 7543.2456 x $15.432655 = $116,412.31).
Assume also that the Annuity

                                        7


Unit value for the Select Portfolio, Focused Portfolio or Strategy on that same
date is $13.256932, and that the Annuity Unit value on the day immediately prior
to the second annuity payment date is $13.327695.

P's first variable annuity payment is determined from annuity rate tables, using
the information assumed above. From the tables, which supply monthly annuity
payments for each $1,000 of applied contract value, P's first variable annuity
payment is determined by multiplying the monthly installment of $4.79 (Option 4
tables, male Annuitant age 60 at the Annuity Date annuitizing in 2010) by the
result of dividing P's account value by $1,000:

             First Payment = $4.79 x ($116,412.31/$1,000) = $557.61

The number of P's Annuity Units (which will be fixed; i.e., it will not change
unless he transfers his Account to another Account) is also determined at this
time and is equal to the amount of the first variable annuity payment divided by
the value of an Annuity Unit on the day immediately prior to annuitization:

                 Annuity Units = $557.61/$13.256932 = 42.062143

P's second variable annuity payment is determined by multiplying the number of
Annuity Units by the Annuity Unit value as of the day immediately prior to the
second payment due date:

                Second Payment = 42.062143 x $13.327695 = $560.59

The third and subsequent variable annuity payments are computed in a manner
similar to the second variable annuity payment.

Note that the amount of the first variable annuity payment depends on the
contract value in the relevant Select Portfolio, Focused Portfolio or Strategy
on the Annuity Date and thus reflects the investment performance of the Select
Portfolio, Focused Portfolio or Strategy net of fees and charges during the
Accumulation Phase. The amount of that payment determines the number of Annuity
Units, which will remain constant during the Annuity Phase (assuming no
transfers from the Select Portfolio, Focused Portfolio or Strategy). The net
investment performance of the Select Portfolio, Focused Portfolio or Strategy
during the Annuity Phase is reflected in continuing changes during this phase in
the Annuity Unit value, which determines the amounts of the second and
subsequent variable annuity payments.

<R>
Additional Provisions

We will require proof of age and sex of the Annuitant before making any life
annuity payment provided for by the contract. If the age or sex of the Annuitant
has been misstated, we will compute the amount payable based on the correct age
and sex. If annuity payments have begun, any underpayment that may have been
made will be paid in full with the next annuity payment, including interest at
the minimum annual rate of 3%. Any overpayments, including interest at the
minimum annual rate of 3%, unless repaid to us in one sum, will be deducted from
future annuity payments until we are repaid in full.

If a contract provision requires that a person be alive, we may require due
proof that the person is alive before we act under that provision.

We will give the payee under an annuity payment option a settlement contract for
the payment option.

You may assign the contract prior to the Annuity Date. You must send a dated and
signed written request to our Administrative Office accompanied by a duly
executed copy of any assignment. We are not responsible for the validity of any
assignment.
</R>

                                        8


<R>
--------------------------------------------------------------------------------
                                     TAXES
--------------------------------------------------------------------------------

General

Note: We have prepared the following information on taxes as a general
discussion of the subject. It is not intended as tax advice to any individual.
You should consult your own tax adviser about your own circumstances.

Section 72 of the Internal Revenue Code of 1986, as amended (the "Code" or
"IRC") governs taxation of annuities in general. An owner is not taxed on
increases in the value of a contract until distribution occurs, either in the
form of a non-annuity distribution or as income 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. A different rule applies to Purchase Payments made (including, if
applicable, in the case of a contract issued in exchange for a prior contract)
prior to August 14, 1982. Those Purchase Payments are considered withdrawn
first for federal income tax purposes, followed by earnings on those Purchase
Payments. For contracts issued in connection with Nonqualified plans, the cost
basis is generally the Purchase Payments, while for contracts issued in
connection with Qualified plans 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 portion of each payment that is in excess of the
exclusion amount is includible in taxable income. The exclusion amount for
payments based on a fixed annuity option is determined by multiplying the
payment by the ratio that the cost basis of the Contract (if any, and adjusted
for any period or refund feature) bears to the expected return under the
Contract. The exclusion amount for payments based on a variable annuity option
is determined by dividing the cost basis of the Contract (adjusted for any
period certain or refund guarantee) by the number of years over which the
annuity is expected to be paid. Payments received after the investment in the
Contract has been recovered (i.e. when the total of the excludable amount
equals the investment in the Contract) are fully taxable. 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. Owners, annuitants and beneficiaries under the Contracts should seek
competent financial advice about the tax consequences of any distributions.

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, not including IRAs,
20% of the distribution must be withheld, unless the payee elects to have the
distribution "rolled over" or transferred to another eligible plan in a direct
"trustee to trustee" transfer. This requirement is mandatory and cannot be
waived by the owner. Withholding on other types of distributions, including
distributions from IRAs can be waived.

An "eligible rollover distribution" is the taxable portion of any amount
received by a covered employee from a traditional IRA or retirement plan
qualified under Sections 401(a) or 403(a) or, if from a plan of a governmental
employer, under Section 457(b) of the Code, or from a tax-sheltered annuity
qualified under Section 403(b) of the Code other than (1) substantially equal
periodic payments calculated using 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;
(2) financial hardship withdrawals; and (3) minimum 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 taxable portion of the
distribution, but the owner may elect in such cases to waive the withholding
</R>

                                        9


<R>
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 -- Separate Account Investments

Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of Nonqualified variable annuity contracts. These
requirements generally do not apply to Qualified Contracts, which are
considered "Pension Plan Contracts" for purposes of these Code requirements.
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 owner with respect to earnings
allocable to the contract prior to the receipt of any payments under the
contract. The Code contains a safe harbor provision which provides that annuity
contracts, such as your contract, meet the diversification requirements if, as
of the close of each calendar 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."

Non-Natural Owners

Under Section 72(u) of the Code, the investment earnings on premiums for the
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to a Contract held by a trust or other entity as an
agent for a natural person nor to Contracts held by Qualified Plans. Purchasers
should consult their own tax counsel or other tax adviser before purchasing a
Contract to be owned by a non-natural person.

Multiple Contracts

The Code provides that multiple Nonqualified 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. For purposes of this rule, contracts received in a
Section 1035 exchange will be considered issued in the year of the exchange.
(However, they may be treated as issued on the issue date of the contract being
exchanged, for certain purposes, including for determining whether the contract
is an immediate annuity contract.) Owners should consult a tax adviser prior to
purchasing more than one Nonqualified annuity contract from the same issuer in
any calendar year.

Tax Treatment of Assignments of Qualified Contracts

Generally, a Qualified contract, including an IRA, may not be assigned or
pledged. One exception to this rule is if the assignment is part of a permitted
loan program under an employer-sponsored plan or pursuant to a qualified
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                                       10


<R>
domestic relations order meeting the requirements of the plan or arrangement
under which the contract is issued (or, in the case of an IRA, pursuant to a
domestic relations order.)

Tax Treatment of Gifting, Assigning, or Transferring Ownership of a
Nonqualified Contract

If you transfer ownership of your Nonqualified Contract to a person other than
your spouse (or former spouse if incident to divorce) you will be taxed on the
earnings above the purchase payments at the time of transfer. If you transfer
ownership of your Nonqualified Contract and receive payment less than the
Contract's value, you will also be liable for the tax on the Contract's value
above your purchase payments not previously withdrawn. The new Contract owner's
purchase payments (basis) in the Contract will be increased to reflect the
amount included in your taxable income.

Trustee to Trustee Transfers of Qualified Contracts

The IRC limits the withdrawal of Purchase Payments from certain Tax-Sheltered
Annuities (TSAs) and certain other Qualified contracts. Withdrawals can only be
made when an owner: (1) reaches age 59 1/2; (2) separates from employment from
the employer sponsoring the plan; (3) dies; (4) becomes disabled (as defined in
the IRC); or (5) experiences a financial hardship (as defined in the IRC). In
the case of hardship, the owner can only withdraw Purchase Payments. Transfers
of amounts from one Qualified contract to another Qualified contract of the
same plan type or to a state defined benefit plan to purchase service credits
are not considered distributions, and thus are not subject to these withdrawal
limitations. Such transfers may, however, be subject to limitations under the
annuity contract.

Partial 1035 Exchanges

Section 1035 of the Code provides that an annuity contract may be exchanged in
a tax-free transaction for another annuity contract. Historically, it was
generally understood that only the exchange of an entire annuity contract, as
opposed to a partial exchange, would be respected by the IRS as a tax-free
exchange. In 1998, the U.S. Tax Court ruled that the direct transfer of a
portion of an annuity contract into another annuity contract qualified as a
tax-free exchange. In 1999, the IRS acquiesced in that Tax Court decision, but
stated that it would nonetheless continue to challenge partial exchange
transactions under certain circumstances. In Notice 2003-51, published on July
9, 2003, the IRS announced that, pending the publication of final regulations,
it will consider all the facts and circumstances to determine whether a partial
exchange and subsequent withdrawal from, or surrender of, either the surviving
annuity contract or the new annuity contract within 24 months of the partial
exchange should be treated as an integrated transaction, and thus whether the
two contracts should be treated as a single contract to determine the tax
treatment of the surrender or withdrawal under Section 72 of the Code. Although
Notice 2003-51 and the IRS's acquiescence in the Tax Court decision indicate
that the IRS will respect partial exchanges of annuity contracts under certain
circumstances, uncertainty remains, and owners should seek their own tax advice
regarding such transactions and the tax risks associated with subsequent
surrenders or withdrawals.

Qualified Plans

The contracts offered by this prospectus are designed to be suitable for use
under various types of Qualified plans. Taxation of owners in each Qualified
plan varies with the type of plan and terms and conditions of each specific
plan. Owners and Beneficiaries are cautioned that benefits under a Qualified
plan may be subject to limitations under the employer-sponsored plan, in
addition to 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 information 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
</R>

                                       11


<R>
or distributions made in violation of applicable limitations. Furthermore,
certain contractual withdrawal penalties and restrictions may apply to
surrenders from Qualified contracts.

(a) Plans of Self-Employed Individuals: "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 owners may vary depending
upon the particular plan design. However, the Code places limitations and
restrictions on these plans, such as: amounts of allowable contributions; form,
manner and timing of distributions; vesting and non-forfeitability of
interests; nondiscrimination in eligibility and participation; and the tax
treatment of distributions, withdrawals and surrenders. 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, education 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.

One of these limits, on the amount that the employee may contribute on a
voluntary basis, is imposed by the annuity contract as well as by the Code. That
limit for 2005 is $14,000. The limit may be increased by up to $3,000 for
certain employees with at least fifteen years of full-time equivalent service
with an eligible employer, and by an additional $4,000 in 2005 for employees age
50 or older, provided that other applicable requirements are satisfied. Total
combined employer and employee contributions for 2005 may not exceed the lessor
of $42,000 or 100% of compensation. Furthermore, the Code sets forth additional
restrictions governing such items as transferability, distributions,
nondiscrimination and withdrawals. 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 a traditional "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. The ability to deduct an IRA contribution to a traditional IRA is
subject to limits based upon income levels, retirement plan participation
status, and other factors. The maximum IRA (traditional and/or Roth)
contribution for 2005 is the lessor of $4,000 or 100% of compensation.
Individuals age 50 or older may be able to contribute an additional $500 in
2005. IRAs are subject to limitations on eligibility, contributions,
transferability and distributions. 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) Roth IRAs

Section 408(A) of the Code permits an individual to contribute to an individual
retirement program called a Roth IRA. Contributions to a Roth IRA are not
deductible but distributions are tax-free if certain requirements are
satisfied. The maximum IRA (traditional and/or Roth) contribution for 2005 is
the lessor of $4,000 or 100% of compensation. Individuals age 50 or older may
be able to contribute an additional $500 in 2005. Unlike traditional IRAs, to
which everyone can contribute even if they cannot deduct the full contribution,
income limits for Roth IRAs are limitations on who can establish such a
contract. Generally, you can contribute to a Roth IRA if you have taxable
compensation and your modified adjusted gross income is less than: $160,000 for
married filing jointly or qualifying widow(er), $10,000 for married filing
separately and you lived with your spouse at any time during the year, and
$110,000 for single, head of household, or married filing separately and you
did not live with your spouse at any time during the year. Certain persons may
be eligible to convert a traditional IRA into a Roth IRA.
</R>

                                       12


<R>
Conversion into Roth IRAs normally require taxes to be paid on any previously
untaxed amounts included in the amount converted. If the Contracts are made
available for use with Roth IRAs, they may be subject to special requirements
imposed by the Internal Revenue Service ("IRS"). Purchasers of the Contracts
for this purpose will be provided with such supplementary information as may be
required by the IRS or other appropriate agency.

(e) Pension and Profit-Sharing Plans

Sections 401(a) of the Code permits certain employers to establish various
types of retirement plans, including 401(k) plans, for employees. However,
public employers may not establish new 401(k) plans. 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 owners 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
non-forfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. Purchasers of contracts for use with pension or profit sharing
plans should obtain competent tax advice as to the tax treatment and
suitability of such an investment.

(f) Deferred Compensation Plans - Section 457(b)

Under Section 457(b) of the Code, governmental and certain other tax-exempt
employers may establish, for the benefit of their employees, deferred
compensation plans, 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. Funds in a non-governmental
457(b) plan remain assets of the employer and are subject to claims by the
creditors of the employer. As of January 1, 1999, all 457(b) plans of state and
local governments must hold assets and income in a qualifying trust, custodial
account, or annuity contract for the exclusive benefit of participants and
their Beneficiaries.

Economic Growth and Tax Relief Reconciliation Act of 2001

For tax years beginning in 2002, the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA) expands the range of eligible tax-free
rollover distributions that may be made among qualified contracts. The changes
made to the IRC by EGTRRA are scheduled to expire on December 31, 2010.
Congress may, however, decide to promulgate legislation making the changes
permanent or delaying their expiration.
</R>

                                       13


<R>
================================================================================
                            DISTRIBUTION OF CONTRACTS
================================================================================

The contracts are offered through AIG SunAmerica Capital Services, Inc., located
at Harborside Financial Center, 3200 Plaza 5, Jersey City, New Jersey
07311-4992. AIG SunAmerica Capital Services, 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. The Company and
AIG SunAmerica Capital Services, Inc. are each an indirect wholly owned
subsidiary of AIG Retirement Services, Inc. No underwriting fees are paid in
connection with the distribution of the contracts. Contracts are offered on a
continuous basis.

================================================================================
                              FINANCIAL STATEMENTS
================================================================================

The financial statements of First SunAmerica Life Insurance Company at December
31, 2004 and 2003 and for each of the three years in the period ended December
31, 2004 are presented in this Statement of Additional Information. The
financial statements of FS Variable Annuity Account Five (the "Separate
Account") are not included in this prospectus, as sales have not yet occurred.
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.

PricewaterhouseCoopers LLP, 350 South Grand Avenue, Los Angeles, California
90071, serves as the independent registered public accounting firm for the
Separate Account and the Company. The financial statements referred to above
have been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
</R>

                                       14

In our opinion, the accompanying balance sheet and the related statements of income and comprehensive income and of cash flows, in all material respects, the financial position of First SunAmerica Life Insurance Company (the “Company”), an indirect wholly owned subsidiary of American International Group, Inc., at December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 our opinion.

As discussed in Note 2 to the financial statements, the Company changed its method of accounting and reporting for certain nontraditional long-duration contracts in 2004.

First SunAmerica Life Insurance Company (the “Company”) is a direct wholly owned subsidiary of SunAmerica Life Insurance Company (the “Parent”), which is a wholly owned subsidiary of AIG Retirement Services, Inc. (“AIGRS”)(formerly AIG SunAmerica Inc.), a wholly owned subsidiary of American International Group, Inc. (“AIG”). AIG is a holding company, which through its subsidiaries is engaged in a broad range of insurance and insurance-related activities, financial services, and retirement services and asset management. The Company is a New York-domiciled life insurance company principally engaged in the business of writing fixed and variable annuity contracts for retirement savings in the State of New York.

Substantially all of the Company’s revenues are derived from the State of New York. Products are marketed through affiliated and independent broker-dealers, full-service securities firms and financial institutions. Two financial institutions represented approximately 13% and 11% of deposits in the year ended December 31, 2004. One financial institution represented approximately 16% and one independent broker-dealer represented approximately 15% of deposits in the year ended December 31, 2003. One financial institution represented approximately 19% of deposits in the year ended December 31, 2002. No other independent selling organization was responsible for more than 10% of deposits for any such periods.

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

BASIS OF PRESENTATION: The accompanying financial statements have been prepared on the basis of generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period’s presentation.

INVESTMENTS: Cash and short-term investments primarily include cash, commercial paper, money market investments 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, notes and redeemable preferred stocks available for sale and common stocks are carried at aggregate fair value and changes in unrealized gains or losses, net of deferred acquisition costs, deferred other expenses and income tax, are credited or charged directly to the accumulated other comprehensive income or loss component of shareholder’s equity. Bonds, notes and redeemable preferred stocks and common stocks are reduced to estimated net fair value when declines in value are considered to be other than temporary. Estimates of net fair 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. Policy loans are carried at unpaid balances.

The Company has entered into a securities lending agreement with an affiliated lending agent, which authorizes the agent to lend securities held in the Company’s portfolio to a list of authorized borrowers. The fair value of securities pledged under the securities lending agreement were $507,000,000 and $151,000,000 as of December 31, 2004 and 2003, respectively and represents securities included in bonds, notes and redeemable preferred stocks available for sale caption in the balance sheet as of December 31, 2004 and 2003, respectively. The affiliated lending agent receives primarily cash collateral in an amount in excess of the market value of the securities loaned. The Company monitors the daily market value of securities loaned with respect to the collateral value and obtains additional collateral when necessary to ensure that collateral is maintained at a minimum of 102% of the value of the loaned securities. Such collateral is not available for the general use of the Company. Income earned on the collateral, net of interest paid on the securities lending agreements and the related management fees paid to administer the program, is recorded as investment income in the statement of income and comprehensive income.

Realized gains and losses on the sale of investments are recognized in income at the date of sale and are determined by using the specific cost identification method. Premiums and discounts on investments are amortized to investment income by using the interest method over the contractual lives of the investments.

The Company regularly reviews its investments for possible impairment based on criteria including economic conditions, market prices, past experience and other issuer-specific developments among other factors. If there is a decline in a security’s net realizable value, a determination is made as to whether that decline is temporary or “other than temporary”. If it is believed that a decline in the value of a particular investment is temporary, the decline is recorded as an unrealized loss in accumulated other comprehensive income. If it is believed that the decline is “other than temporary”, the Company writes down the carrying value of the investment and records a realized loss in the statement of income and comprehensive income. Impairment writedowns totaled $759,000, $3,139,000 and $9,515,000 in the years ending December 31, 2004, 2003 and 2002.

DEFERRED ACQUISITION COSTS (“DAC”): Policy acquisition costs are deferred and amortized over the estimated lives of the annuity and universal life insurance contracts. Policy acquisition costs include commissions and other costs that vary with, and are primarily related to, the production or acquisition of new business.

DAC is amortized based on a percentage of expected gross profits (“EGPs”) over the life of the underlying policies. EGPs are computed based on assumptions related to the underlying contracts, including their anticipated duration, the growth rate of the separate account assets (with respect to variable options of the variable annuity contracts) or general account assets (with respect to fixed annuity contracts, fixed options of variable annuity contracts (“Fixed Options”) and universal life insurance contracts) supporting the annuity obligations, costs of providing for contract guarantees and the level of expenses necessary to maintain the contracts. The Company adjusts amortization of DAC and other deferred expenses (a “DAC unlocking”) when estimates of future gross profits to be realized from its annuity contracts are revised.

The assumption for the long-term annual net growth of the separate account assets used by the Company in the determination of DAC amortization with respect to its variable annuity contracts is 10% (the “long-term growth rate assumption”). The Company uses a “reversion to the mean” methodology that allows the Company to maintain this 10% long-term growth rate assumption, while also giving consideration to the effect of short-term swings in the equity markets. For example, if performance were 15% during the first year following the introduction of a product, the DAC model would assume that market returns for the following five years (the “short-term growth rate assumption”) would approximate 9%, resulting in an average annual growth rate of 10% during the life of the product. Similarly, following periods of below 10% performance, the model will assume a short-term growth rate higher than 10%. A DAC unlocking will occur if management deems the short-term growth rate (i.e., the growth rate required to revert to the mean 10% growth rate over a five-year period) to be unreasonable. The use of a reversion to the mean assumption is common within the industry; however, the parameters used in the methodology are subject to judgment and vary within the industry.

As debt and equity securities available for sale are carried at aggregate fair value, an adjustment is made to DAC 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 which is a component of accumulated other comprehensive income and is credited or charged directly to shareholder’s equity.

The Company reviews the carrying value of DAC on at least an annual basis. Management considers estimated future gross profit margins as well as expected mortality, interest earned and credited rates, persistency and expenses in determining whether the carrying amount is recoverable. Any amounts deemed unrecoverable are charged to expense.

OTHER DEFERRED EXPENSES: The annuity operations currently offer enhanced crediting rates or bonus payments to contract holders on certain of its products. Such amounts are deferred and amortized over the life of the policy using the same methodology and assumptions used to amortize DAC. The Company previously deferred these expenses as part of DAC and reported the amortization of such amounts as part of DAC amortization. Upon implementation of Statement of Position 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts” (“SOP 03-1”), the Company reclassified $16,098,000 of these expenses from DAC to other deferred expenses, which is reported on the balance sheet. The prior period consolidated balance sheet and consolidated statements of income and comprehensive income presentation has been reclassified to conform to the new presentation. See Recently Issued Accounting Standards below.

The Company reviews the carrying value of other deferred expenses on at least an annual basis. Management considers estimated future gross profit margins as well as expected mortality, interest earned, credited rates, persistency, withdrawal rates, rates of market return and expenses in determining whether the carrying amount is recoverable. Any amounts deemed unrecoverable are charged to expense.

VARIABLE ANNUITY ASSETS AND LIABILITIES RELATED TO SEPARATE ACCOUNTS: The assets and liabilities resulting from the receipt of variable annuity deposits are segregated in separate accounts. The Company receives administrative fees for managing the funds and other fees for assuming mortality and certain expense risks. Such fees are included in variable annuity policy fees in the statement of income and comprehensive income.

RESERVES FOR FIXED ANNUITY AND UNIVERSAL LIFE INSURANCE CONTRACTS: Reserves for fixed annuity and universal life insurance contracts are accounted for 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 (deposits received, plus accrued interest, less withdrawals and assessed fees). Under GAAP, deposits collected on non-traditional life and annuity insurance products, such as those sold by the Company, are not reflected as revenues in the Company’s statement of income and comprehensive income, as they are recorded directly to contract holder liabilities upon receipt.

RESERVE FOR GUARANTEED BENEFITS: Reserve for guaranteed minimum death benefits (“GMDB”) is accounted for in accordance with SOP 03-1 and is included in other liabilities on the balance sheet. See Note 7.

FEE INCOME: Fee income includes variable annuity policy fees, universal life insurance fees and surrender charges. Variable annuity policy fees are generally based on the market value of assets in the separate accounts

supporting the variable annuity contracts. Universal life insurance policy fees consist of mortality charges, up-front fees earned on deposits received and administrative fees, net of reinsurance premiums. Surrender charges are assessed on withdrawals occurring during the surrender charge period. All fee income is recorded as income is earned.

INCOME TAXES: Prior to 2004, the Company was included in a consolidated federal income tax return with its Parent. Beginning in 2004, the Company is included in the consolidated federal income tax return of its ultimate parent, AIG. Income taxes have been calculated as if the Company filed a separate return. Deferred income tax assets and liabilities are recognized based on the difference between financial statement carrying amounts and income tax basis of assets and liabilities using enacted income tax rates and laws.

RECENTLY ISSUED ACCOUNTING STANDARDS: In July 2003, the American Institute of Certified Public Accountants issued SOP 03-1. This statement was effective as of January 1, 2004, and requires the Company to recognize a liability for GMDB and certain living benefits related to its variable annuity contracts, account for enhanced crediting rates or bonus payments to contract holders and modifies certain disclosures and financial statement presentations for these products. In addition, SOP 03-1 addresses the presentation and reporting of separate accounts and the capitalization and amortization of certain other expenses. The Company reported for the first quarter of 2004 a one-time cumulative accounting charge upon adoption of $2,013,000 ($3,098,000 pre-tax) to reflect the liability and the related impact of DAC as of January 1, 2004.

The amortized cost and estimated fair value of bonds, notes and redeemable preferred stocks by major category follow:

At December 31, 2004, bonds and notes included $107,951,000 not rated investment grade. These non-investment-grade securities are comprised of bonds spanning 10 industries with 31%, 19%, 13% and 12% concentrated in telecommunications, cyclical consumer products, transportation and financial services industries, respectively. No other industry concentration constituted more than 10% of these assets.

At December 31, 2004, mortgage loans were collateralized by properties located in 27 states, with loans totaling approximately 25% and 12% of the aggregate carrying value of the portfolio secured by properties located in California and New York, respectively. No more than 10% of the portfolio was secured by properties located in any other single state.

At December 31, 2004, the carrying value, which approximates its estimated fair value, of all investments in default as to the payment of principal or interest totaled $1,700,000.

At December 31, 2004, $613,000 of bonds, at amortized cost, was on deposit with regulatory authorities in accordance with statutory requirements.

The Company had no investments in any one entity or its affiliates exceeding 10% of the Company’s shareholder’s equity at December 31, 2004.

The amortized cost and estimated fair value of bonds, notes and redeemable preferred stocks by contractual maturity, as of December 31, 2004, follow:

Actual maturities of bonds, notes and redeemable preferred stocks may differ from those shown above due to prepayments and redemptions.

Gross unrealized gains and losses on bonds, notes and redeemable preferred stocks by major category follow:

Gross unrealized gains on equity securities aggregated $5,000 and $9,000 at December 31, 2004 and 2003, respectively. Gross unrealized losses on equity securities aggregated $0 and $5,000 at December 31, 2004 and 2003, respectively.

The following tables summarize the Company’s gross unrealized losses and estimated fair values on investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2004 and 2003 (dollars in thousands):

Realized investment gains and losses on the sales of investments are as follows:

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

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

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

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

BONDS, NOTES AND REDEEMABLE PREFERRED STOCKS: Fair value is based principally on independent pricing services, broker quotes and other independent information. For securities that do not have readily determinable market prices, the fair value is estimated with internally prepared valuations (including those based on estimates of future profitability). Otherwise, the most recent purchases and sales of similar unquoted securities, independent broker quotes or comparison to similar securities with quoted prices when possible is used to estimate the fair value of those securities.

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

COMMON STOCKS: Fair value is based principally on independent pricing services, broker quotes and other independent information.

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

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

VARIABLE ANNUITY LIABILITIES RELATED TO SEPARATE ACCOUNTS: Variable annuity liabilities are carried at the market value of the underlying securities of the variable annuity assets held in separate accounts.

SECURITIES LENDING COLLATERAL/PAYABLE: Carrying value is considered to be a reasonable estimate of fair value.

The estimated fair values of the Company’s financial instruments at December 31, 2004 and 2003 compared with their respective carrying values are as follows:

The Company issues variable annuity contracts for which the investment risk is generally borne by the contract holder, except with respect to amounts invested in the fixed-rate account options. For many of the Company’s variable annuity contracts, the Company offers contractual guarantees in the event of death or at specified dates during the accumulation period. Such benefits are referred to as GMDB and guaranteed minimum account value (“GMAV”), respectively.

The assets supporting the variable portion of variable annuity contracts are carried at fair value and reported as summary total “variable annuity assets held in separate accounts” with an equivalent summary total reported for liabilities. Amounts assessed against the contract holders for mortality, administrative, other services and certain features are included in variable annuity policy fees in the statement of income and comprehensive income. Changes in liabilities for minimum guarantees are included in guaranteed benefits in the statement of income and comprehensive income. Separate account net investment income, net investment gains and losses and the related liability charges are offset within the same line item in the statement of income and comprehensive income.

The Company offers GMDB options that guarantee for virtually all contract holders, that upon death, the contract holder’s beneficiary will receive the greater of (1) the contract holder’s account value, or (2) a guaranteed minimum death benefit that varies by product and election by policy owner. The GMDB liability is determined each period end by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to guaranteed benefits, if actual experience or other evidence suggests that earlier assumptions should be revised.

GMAV is a feature offered on certain variable annuity products. If available and elected by the contract holder at the time of contract issuance, GMAV guarantees that the account value under the contract will at least equal the amount of deposits invested during the first ninety days, adjusted for subsequent withdrawals, at the end of a ten-year waiting period. GMAVs are considered to be derivatives under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and are recognized at fair value in the balance sheet and through investment income in the statement of income and comprehensive income. The Company began offering the GMAV option in 2004.

Details concerning the Company’s guaranteed benefit exposures as of December 31, 2004 are as follows:

The following summarizes the reserves for guaranteed benefits on variable contracts reflected in the general account:

The following assumptions and methodology were used to determine the reserve for guaranteed benefits at December 31, 2004:

Reinsurance contracts do not relieve the Company from its obligations to contract holders. The Company could become liable for all obligations of the reinsured policies if the reinsurers were to become unable to meet the obligations assumed under the respective reinsurance agreements. The Company monitors its credit exposure with respect to these agreements. However, due to the high credit ratings of the reinsurers, such risks are considered to be minimal. The Company has no reinsurance recoverable or related concentration of credit risk greater than 10% of shareholder’s equity.

The Company has a reinsurance treaty under which the Company retains no more than $100,000 of risk on any one insured life in order to limit the exposure to loss on any single insured. Universal life insurance fees are presented net of reinsurance premiums of $7,275,000, $7,132,000 and $6,078,000 in 2004, 2003 and 2002, respectively. Reinsurance recoveries recognized as a reduction of claims on universal life insurance contracts amounted to $8,855,000, $3,645,000 and $4,247,000 in 2004, 2003 and 2002, respectively.

In 2004, the Company entered a contract to reinsure credit life and credit accident and health insurance policies. The Company receives a share of premium for the reinsured policies and will indemnify the reinsured for a proportionate share of these liabilities while the reinsured retains the assets and corresponding reserve liabilities. The treaty is for one year with the option to renew annually and may be terminated by either party with 180 days advance notice.

At December 31, 2004, the Company has commitments to purchase approximately $5,000,000 of asset backed securities in the ordinary course of business. These commitments expire in total in 2007.

Various lawsuits against the Company have arisen in the ordinary course of business. Contingent liabilities arising from litigation, income taxes and regulatory and other matters are not considered material in relation to the financial position, results of operations or cash flows of the Company.

The Company is authorized to issue 300 shares of its $10,000 par value Common Stock. At December 31, 2004 and December 31, 2003, 300 shares were outstanding.

Gross unrealized gains (losses) on fixed maturity and equity securities included in accumulated other comprehensive income are as follows:

On September 30, 2003 and December 31, 2003, the Company received cash capital contributions from the Parent of $40,000,000 and $75,000,000, respectively.

Dividends that the Company may pay to its shareholder in any year without prior approval of the New York Department of Insurance are limited by statute. The maximum amount of dividends which can be paid to stockholders by a life insurance company domiciled in the State of New York without obtaining the prior approval of the Superintendent of Insurance is limited to the lesser of the Company’s net gain from operations of the preceding year’s statutory annual statement or 10% of preceding year’s statutory surplus. Dividends of $25,870,000 can be paid to the shareholder during 2005 without prior approval of the New York Superintendent of Insurance.

Under statutory accounting principles utilized in filings with insurance regulatory authorities, the Company’s net income for the year ended December 31, 2004 was approximately $41,524,000 and net loss for years ended December 31, 2003 and 2002 were $28,065,000, and $1,416,000, respectively. The Company’s statutory capital and surplus totaled approximately $261,706,000 at December 31, 2004, $213,084,000 at December 31, 2003 and $123,141,000 at December 31, 2002.

The components of the provisions for income taxes on pretax income consist of the following:

Income taxes computed at the United States federal income tax rate of 35% and income tax expenses reflected in the statement of income and comprehensive income differ as follows:

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 liability for deferred income taxes are as follows:

The Company has concluded that the deferred tax asset will be fully realized and no valuation allowance is necessary.

On October 31, 2003, the Company became a party to an existing credit agreement under which the Company agreed to make loans to AIG in an aggregate amount of up to $5,000,000. This commitment expires on October 28, 2005. There was no outstanding balance under this agreement at December 31, 2004.

On January 20, 2004, the Company entered into a short-term financing arrangement with the Parent whereby the Company has the right to borrow up to $15,000,000 from the Parent and vice versa. Any advances made under this agreement must be repaid within 30 days. There was no outstanding balance under this agreement at December 31, 2004.

On February 15, 2004, the Company entered into a short-term financing arrangement with an affiliate, AIG SunAmerica Life Assurance Company (“AIG SALAC”) whereby the Company has the right to borrow up to $15,000,000 from AIG SALAC and vice versa. Any advances made under this arrangement must be repaid within 30 days. There was no outstanding balance under this agreement at December 31, 2004.

On February 15, 2004, the Company entered into a short-term financing arrangement with SunAmerica Investments, Inc. (“SAII”) whereby the Company has the right to borrow up to $15,000,000 from SAII and vice versa. Any advances made under this arrangement must be repaid within 30 days. There was no outstanding balance under this agreement at December 31, 2004.

The Company’s products may be sold by nine affiliated companies: SunAmerica Securities, Inc.; Advantage Capital Corporation; Financial Service Corporation; Sentra Securities Corporation; Spelman & Co. Inc.; Royal Alliance Associates, Inc.; VALIC Financial Advisors Inc.; American General Equity Services Corporation; and American General Securities Incorporated. Commissions paid to these broker-dealers totaled $996,000, $1,063,000 and $1,143,000 in the years ended December 31, 2004, 2003 and 2002, respectively. These affiliated broker-dealers represent 3%, 1% and 5% of annuity deposits in the years ended December 31, 2004, 2003 and 2002, respectively.

Pursuant to a cost allocation agreement, the Company purchases administrative, investment management, accounting, legal, marketing and data processing services from its Parent and from certain AIG affiliates. Amounts paid for such services totaled $7,925,000 for the year ended December 31, 2004, $5,250,000 for the year ended December 31, 2003 and $8,399,000 for the year ended December 31, 2002. The component of such costs that relate to the production or acquisition of new business during these periods amounted to $2,138,000, $3,855,000 and $3,305,000, in 2004, 2003 and 2002 respectively, and is deferred and amortized as part of DAC. The other components of these costs are included in general and administrative expenses in the statement of income and comprehensive income.

AIG Annuity Insurance Company, an affiliate, is responsible for the administration of the Company’s fixed annuity contracts and is reimbursed for the cost of administration. Costs charged to the Company to administer these policies were approximately $1,138,000 in 2004, $841,000 in 2003 and $107,000 in 2002. Additionally, costs charged to the Company for marketing such policies amounted to $1,605,000 in 2004, $4,010,000 in 2003 and $1,021,000 in 2002 and are deferred and amortized as part of DAC. The Company believes these costs are less than the Company would have incurred to administer these policies internally.

The majority of the Company’s invested assets are managed by an affiliate of the Company. The investment management fees incurred were $2,223,000, $1,232,000 and $793,000 for the years ended December 31, 2004, 2003 and 2002, respectively.

The Company incurred $629,000, $106,000 and $7,000 of management fees to an affiliate of the Company to administer its securities lending program (see Note 2) for the year ended December 31, 2004, 2003 and 2002, respectively.

On February 1, 2004, the Company entered into an administrative services agreement with its affiliate AIG SunAmerica Asset Management Corp. (“SAAMCo”), whereby SAAMCo will pay to the Company a fee based on a percentage on all assets invested through the Company’s variable annuity products in exchange for services performed. SAAMCo is the investment advisor for certain trusts that serve as investment options for the Company’s variable annuity products. Amounts earned by the Company under this agreement totaled $1,537,000 in 2004 and are included in variable annuity policy fees in the statement of income and comprehensive income. A fee of $150,000, $1,620,000 and $1,777,000 was paid under a different agreement in 2004, 2003 and 2002, respectively.

The Company has a support agreement in effect between the Company and AIG (the “Support Agreement”), pursuant to which AIG has agreed that AIG will cause the Company to maintain a contract holders’ surplus of not less than $1,000,000 or such greater amount as shall be sufficient to enable the Company to perform its obligations under any policy issued by it. The Support Agreement also provides that if the Company needs funds not otherwise available to it to make timely payment of its obligations under policies issued by it, AIG will provide such funds at the request of the Company. The Support Agreement is not a direct or indirect guarantee by AIG to any person of any obligations of the Company. AIG may terminate the Support Agreement with respect to outstanding obligations of the Company only under circumstances where the Company attains, without the benefit of the Support Agreement, a financial strength rating equivalent to that held by the Company with the benefit of the Support

Agreement. Contract holders have the right to cause the Company to enforce its rights against AIG and, if the Company fails or refuses to take timely action to enforce the Support Agreement or if the Company defaults in any claim or payment owed to such contract holder when due, have the right to enforce the Support Agreement directly against AIG.

The Company’s insurance policy obligations are guaranteed by American Home Assurance Company (“American Home”), a subsidiary of AIG, and a member of an AIG intercompany pool. This guarantee is unconditional and irrevocable, and the Company’s contract holders’ have the right to enforce the guarantee directly against American Home. While American Home does not publish financial statements, it does file statutory annual and quarterly reports with the New York State Insurance Department, where such reports are available to the public. AIG is a reporting company under the Securities Exchange Act of 1934, and publishes annual reports on Form 10-K and quarterly reports on Form 10-Q, which are available from the Securities and Exchange Commission.

The Company’s ultimate parent, AIG, has announced that it has delayed filing its Annual Report on Form 10-K for the year ended December 31, 2004 to allow AIG’s Board of Directors and new management adequate time to complete an extensive review of AIG’s books and records. The review includes issues arising from pending investigations into non-traditional insurance products and certain assumed reinsurance transactions by the Office of the Attorney General for the State of New York and the SEC and from AIG’s decision to review the accounting treatment of certain additional items. Circumstances affecting AIG can have an impact on the Company. For example, the recent downgrades and ratings actions taken by the major rating agencies with respect to AIG, resulted in corresponding downgrades and ratings actions being taken with respect to the Company’s ratings. Accordingly, we can give no assurance that any further changes in circumstances for AIG will not impact us. While the outcome of this investigation is not determinable at this time, management believes that the ultimate outcome will not have a material adverse effect on Company operating results, cash flows or financial position.


                           PART C -- OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

     The following financial statements are included in Part B of the
Registration Statement:

Financial statements of First SunAmerica Life Insurance Company at December 31,
2004 and 2003, and for each of the three years in the period ended December 31,
2004.

Financial statements of FS Variable Annuity Account Five are not included in
this prospectus, as sales have not yet occurred.

(b) Exhibits

(1)  Resolutions Establishing Separate Account ...............................  ***
(2)  Custody Agreements ......................................................  *
(3)  (a)  Form of Distribution Contract ......................................  *
     (b)  Form of Selling Agreement ..........................................  *
(4)  (a)  Variable Annuity Contract ..........................................  ****
     (b)  Death Benefit Endorsement ..........................................  *
     (c)  Guaranteed Minimum Account Value Endorsement .......................  *
     (d)  Guaranteed Minimum Withdrawal Benefit Endorsement ..................  Filed Herewith
(5)  (a)  Application for Contract ...........................................  ****
(6)  Depositor -- Corporate Documents
     (a)  Certificate of Corporation .........................................  **
     (b)  By-laws ............................................................  **
(7)  Reinsurance Contract ....................................................  Not Applicable
(8)  Form of Fund Participation Agreements
     (a)  Seasons Series Trust Form of Fund Participation Agreement ..........  *
(9)  Opinion of Counsel ......................................................  ****
     Consent of Counsel ......................................................  Not Applicable
(10) Consent of Independent Registered Public Accounting Firm ................  Filed Herewith
(11) Financial Statements Omitted from Item 23 ...............................  Not Applicable
(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,
     the Depositor of Registrant .............................................  Filed Herewith
(15) Power of Attorney .......................................................  ***

----------
*    Incorporated by reference to Pre-Effective Amendments 1 and 1 to File Nos.
     333-118218 and 811-08369, filed December 9, 2004, accession number
     0001193125-04-210437.

**   Incorporated by reference to Post-Effective Amendments 5 and 7 to File Nos.
     033-85014 and 811-08810, filed January 30, 1998, accession number
     0000950148-98-000132.

***  Incorporated by reference to initial Form N-4, File Nos. 333-116026 and
     811-08369, filed May 28, 2004, accession number 0001193125-04-096250.

**** Incorporated by reference to Pre-Effective Amendments 1 and 1 to File Nos.
     333-116026 and 811-08369, filed February 1, 2005, accession number
     0001193125-05-016305.

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.

NAME POSITION
---------------------------------------------------------------------------------------------
Jay S. Wintrob Director, Chief Executive Officer & President
James R. Belardi Director and Senior Vice President
Marc H. Gamsin Director and Senior Vice President
N. Scott Gillis*** Director, Senior Vice President and Chief Financial Officer
Jana W. Greer*** Director and Senior Vice President
Bruce R. Abrams** Director, Senior Vice President
Christine A. Nixon Director, Senior Vice President and Secretary
M. Bernard Aidinoff* Director
Marion E. Fagen* Director
Patrick J. Foley* Director
Cecil C. Gamwell III* Director
Jack R. Harnes* Director
David L. Herzog* Director
John I. Howell* Director
Ernest T. Patrikis* Director
Michael J. Akers** Senior Vice President
Gregory M. Outcalt Senior Vice President
Stewart R. Polakov*** Senior Vice President and Controller
Edwin R. Raquel*** Senior Vice President and Chief Actuary
Kurt W. Bernlohr** Vice President
Michelle H. Powers** Vice President
Mallary L. Reznik Vice President
Stephen Stone*** Vice President
Edward T. Texeria*** Vice President
Virginia N. Puzon Assistant Secretary

-----------
* Principal business address 70 Pine Street, New York, NY 10270
** Principal business address is 2727 Allen Parkway, Houston, TX 77019
*** Principal business address is 21650 Oxnard Street, Woodland Hills, CA 91367

Item 26. Persons Controlled By or Under Common Control With Depositor or
Registrant

The Registrant is a separate account of First SunAmerica Life (Depositor).
Depositor is a subsidiary of American International Group, Inc. ("AIG"). 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 filed
herewith. An organizational chart can be found in the Company's Form 10-K, SEC
file number 033-81474, accession number 0000950148-05-000048, filed April 15,
2005. An organization chart for AIG can be found in Form 10-K, SEC file number
001-08787, accession number 0000950123-04-00330, filed March 15, 2004. That
organization chart is current as of December 2003. As of the date of this
filing, AIG has not yet filed its 2004 Form 10-K.

Item 27. Number of Contract Owners

Sales of this contract have not yet begun.

Item 28. Indemnification

Section 719 of the Business Corporation Law of the State of New York permits the
indemnification of directors, officers, employees and agents of New York
corporations. Section 10 of the Company's By-Laws ("By-Laws") authorize the
indemnification of directors and officers to the full extent required or
permitted by the Laws of the State of New York, now or hereafter in force,
whether such persons are serving the Company, or, at its request, any other
entity, which indemnification shall include the advance of expenses under the
procedures and to the full extent permitted by law. In addition, the Company's
officers and directors are covered by certain directors' and officers' liability
insurance policies maintained by the Company's parent.


Additionally, pursuant to the Distribution Agreement filed as Exhibit 3(a) to
this Registration Statement, Depositor has agreed to indemnify and hold harmless
AIG SunAmerica Capital Services, Inc. ("Distributor") for damages and expenses
arising out of (1) any untrue statement or alleged untrue statement of a
material fact contained in materials prepared by Depositor in conjunction with
the offer and sale of the contracts, or Depositor's failure to comply with
applicable law or (2) other material breach of the Distribution Agreement.
Likewise, the Distributor has agreed to indemnify and hold harmless Depositor
and its affiliates, including its officers, directors and the separate account,
for damages and expenses arising out of any untrue statement or alleged untrue
statement of a material fact contained in materials prepared by Distributor in
conjunction with the offer and sale of the contracts, or Distributor's failure
to comply with applicable law or other material breach of the Distribution
Agreement.

Pursuant to the Selling Agreement, a form of which is filed as Exhibit 3(b) to
this Registration Statement, Depositor and Distributor are generally indemnified
by selling broker/dealers firms from wrongful conduct or omissions in
conjunction with the sale of the contracts.

Item 29. Principal Underwriter

(a) AIG SunAmerica Capital Services, Inc. acts as distributor for the
following investment companies:
     AIG SunAmerica Life Assurance Company - Variable Separate Account
     AIG SunAmerica Life Assurance Company - Variable Annuity Account One
     AIG SunAmerica Life Assurance Company - Variable Annuity Account Two
     AIG SunAmerica Life Assurance Company - Variable Annuity Account Four
     AIG SunAmerica Life Assurance Company - Variable Annuity Account Five
     AIG SunAmerica Life Assurance Company - Variable Annuity Account Seven
     AIG SunAmerica Life Assurance Company - Variable Annuity Account Nine
     First SunAmerica Life Insurance Company - FS Variable Separate Account
     First SunAmerica Life Insurance Company - FS Variable Annuity Account One
     First SunAmerica Life Insurance Company - FS Variable Annuity Account Two
     First SunAmerica Life Insurance Company - FS Variable Annuity Account Five
     First SunAmerica Life Insurance Company - FS Variable Annuity Account Nine
     Presidential Life Insurance Company - Variable Account One
     Anchor Series Trust
     Seasons Series Trust
     SunAmerica Series Trust
     SunAmerica Style Select Series, Inc. issued by AIG SunAmerica Asset
     Management Corp. (AIG SAAMCo)
     SunAmerica Equity Funds issued by AIG SAAMCo
     SunAmerica Income Funds issued by AIG SAAMCo
     SunAmerica Money Market Funds, Inc. issued by AIG SAAMCo
     SunAmerica Strategic Investment Series, Inc. issued by AIG SAAMCo
     SunAmerica Senior Floating Rate Fund, issued by AIG SAAMCo
     VALIC Company I and
     VALIC Company II

(b) Directors, Officers and principal place of business:

     Officer/Directors*           Position
     ----------------------------------------------------------------------------------------
     Peter A. Harbeck             Director
     J. Steven Neamtz             Director, President & Chief Executive Officer
     Debbie Potash-Turner         Senior Vice President, Chief Financial Officer & Controller
     John T. Genoy                Vice President
     James Nichols                Vice President
     Thomas Lynch                 Chief Compliance Officer
     Christine A. Nixon**         Secretary
     Virginia N. Puzon**          Assistant Secretary
----------
*    Unless otherwise indicated, the principal business address of AIG
     SunAmerica Capital Services, Inc. and of each of the above individuals is
     Harborside Financial Center, 3200 Plaza 5, Jersey City, New Jersey 07311.

**   Principal business address is 1 SunAmerica Center, Los Angeles, California
     90067.

(c) AIG SunAmerica Capital Services, Inc. retains no compensation or commissions
from the Registrant.


Item 30. Location of Accounts and Records

All of the accounts, books, records or other documents required to be kept by
Section 31(a) of the investment Company Act of 1940 and its rules are maintained
by Depositor at 21650 Oxnard Ave., Woodland Hills, California 91367.

First SunAmerica Life, the Depositor for the Registrant, is located at 733 Third
Avenue, New York, New York 10017. First SunAmerica Life 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.

Item 31. Management Services

Not Applicable.


Item 32. Undertakings

Registrant undertakes to: (a) 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; (b) include either (1) 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 (2) 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 (c) 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.

The Registrant 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). The Registrant has complied with conditions one
through four on the no-action letter.

Insofar as indemnification for liability arising under the Securities Act of
1933 ("Act") may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The Depositor represents that the fees and charges to be deducted under the
variable annuity contract described in the prospectus contained in this
registration statement are, in the aggregate, reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
in connection with the contract.


                                   SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Post-Effective Amendment Nos. 1 and 2 to its Registration Statement on Form N-4
(File Nos. 333-116026 and 811-08369) to be signed on its behalf, in the City of
Los Angeles, and the State of California, on this 25th day of April 2005.

                                  FS VARIABLE ANNUITY ACCOUNT FIVE
                                  (Registrant)

                                  By: FIRST SUNAMERICA LIFE INSURANCE COMPANY

                                  By:            /s/ JAY S. WINTROB
                                      ---------------------------------------
                                      Jay S. Wintrob, Chief Executive Officer

                                  FIRST SUNAMERICA LIFE INSURANCE COMPANY
                                  (Depositor)

                                  By:            /s/ JAY S. WINTROB
                                      ---------------------------------------
                                      Jay S. Wintrob, Chief Executive Officer

     As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.

      SIGNATURE                         TITLE                         DATE
      ---------                         -----                         ----

JAY S. WINTROB*            Chief Executive Officer, President     April 25, 2005
----------------------               & Director
Jay S. Wintrob               (Principal Executive Officer)


BRUCE R. ABRAMS*                       Director                   April 25, 2005
----------------------
Bruce R. Abrams


M. BERNARD AIDINOFF*                   Director                   April 25, 2005
----------------------
M. Bernard Aidinoff


JAMES R. BELARDI*                      Director                   April 25, 2005
----------------------
James R. Belardi


MARION E. FAJEN*                       Director                   April 25, 2005
----------------------
Marion E. Fajen


PATRICK J. FOLEY*                      Director                   April 25, 2005
----------------------
Patrick J. Foley


MARC H. GAMSIN*                        Director                   April 25, 2005
----------------------
Marc H. Gamsin


CECIL C. GAMWELL III*                  Director                   April 25, 2005
----------------------
Cecil C. Gamwell III


	December 31, 2004		December 31, 2003
	(in thousands)
ASSETS

Investments and cash:
Cash and short-term investments	$	24,858	$	104,011
Bonds, notes and redeemable preferred stocks available for sale, at fair value (amortized cost: December 31, 2004, $2,919,279; December 31, 2003, $2,617,647)		2,971,425		2,657,812
Mortgage loans		276,859		215,521
Policy loans		32,899		35,251
Common stocks available for sale, at fair value (cost: December 31, 2004, $700; December 31, 2003, $291)		705		295
Securities lending collateral		517,644		154,756

Total investments and cash		3,824,390		3,167,646

Variable annuity assets held in separate accounts		488,046		438,224
Accrued investment income		32,486		27,577
Deferred acquisition costs		157,729		161,828
Other deferred expenses		19,139		16,098
Income taxes currently receivable from Parent		—		1,360
Other assets		9,033		1,749

TOTAL ASSETS	$	4,530,823	$	3,814,482

LIABILITIES AND SHAREHOLDER’S EQUITY

Reserves, payables and accrued liabilities:
Reserves for fixed annuity contracts	$	2,863,048	$	2,490,145
Reserves for universal life insurance contracts		226,133		232,271
Income taxes currently payable to Parent		2,540		—
Securities lending payable		517,644		154,756
Payable to brokers		—		40,852
Other liabilities		31,807		66,814

Total reserves, payables and accrued liabilities		3,641,172		2,984,838

Variable annuity liabilities related to separate accounts		488,046		438,224

Deferred income taxes		25,092		41,895

Total liabilities		4,154,310		3,464,957

Shareholder’s equity:
Common stock		3,000		3,000
Additional paid-in capital		259,428		259,428
Retained earnings		92,082		68,657
Accumulated other comprehensive income		22,003		18,440

Total shareholder’s equity		376,513		349,525

TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$	4,530,823	$	3,814,482


	Years Ended December 31,
	2004			2003		2002
	(in thousands)
REVENUES

Fee income:
Variable annuity policy fees	$	8,903		$	8,077	$	9,003
Universal life insurance policy fees, net of reinsurance		5,354			5,289		6,276
Premiums on reinsurance contract		6,586			—		—
Surrender charges		2,999			1,744		1,854

Total fee income		23,842			15,110		17,133

Investment income		167,371			119,730		97,327
Net realized investment gains (losses)		(2,655	)		2,417		(10,025	)

Total revenues		188,558			137,257		104,435

BENEFITS AND EXPENSES

Interest expense:
Fixed annuity contracts		90,167			65,631		47,186
Universal life insurance contracts		10,858			11,076		11,489

Total interest expense		101,025			76,707		58,675

Amortization of bonus interest		2,411			1,038		248
General and administrative expenses		7,711			6,036		8,112
Amortization of deferred acquisition costs		31,772			19,526		16,119
Annual commissions		1,554			1,038		771
Commissions on reinsurance contract		3,034			—		—
Claims on universal life insurance contracts, net of reinsurance recoveries		3,905			3,098		2,985
Claims on reinsurance contract		2,616			—		—
Guaranteed benefits		1,193			816		1,735

Total benefits and expenses		155,221			108,259		88,645

PRETAX INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE		33,337			28,998		15,790

Income tax expense		7,899			12,081		9,032

INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE		25,438			16,917		6,758

Cumulative effect of accounting change, net of tax		(2,013	)		—		—

NET INCOME	$	23,425		$	16,917	$	6,758


	Years Ended December 31,
	2004			2003			2002
	(in thousands)
OTHER COMPREHENSIVE INCOME, NET OF TAX:

Net unrealized gains on debt and equity securities available for sale identified in the current period less related amortization of deferred acquisition costs and other deferred expenses	$	4,118		$	8,750		$	16,123

Less reclassification adjustment for net realized (gains) losses included in net income		1,364			(1,719	)		3,417
Income tax expense		(1,919	)		(2,461	)		(6,839	)

OTHER COMPREHENSIVE INCOME		3,563			4,570			12,701

COMPREHENSIVE INCOME	$	26,988		$	21,487		$	19,459


	Years Ended December 31,
	2004			2003			2002
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	23,425		$	16,917		$	6,758
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of accounting change, net of tax		2,013			—			—
Interest credited to:
Fixed annuity contracts		90,167			65,631			47,186
Universal life insurance contracts		10,858			11,076			11,489
Net realized investment (gains) losses		2,655			(2,417	)		10,025
Amortization of net premiums/(accretion of net discounts) on investments		5,730			(2,493	)		(1,241	)
Amortization of deferred acquisition costs and other deferred expenses		34,183			20,564			16,367
Acquisition costs deferred		(35,395	)		(79,439	)		(26,952	)
Other expenses deferred		(6,037	)		(13,192	)		(3,393	)
Provision for deferred income taxes		(17,639	)		9,040			25,503
Change in:
Accrued investment income		(4,909	)		(11,728	)		(3,537	)
Income taxes currently receivable from / payable to Parent		3,900			8,471			(13,550	)
Other assets		(7,284	)		(348	)		860
Other liabilities		(8,200	)		16,035			3,788
Other, net		3,754			3,922			(350	)

NET CASH PROVIDED BY OPERATING ACTIVITIES		97,221			42,039			72,953

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
Bonds, notes and redeemable preferred stocks		(952,300	)		(1,883,889	)		(604,280	)
Mortgage loans		(82,533	)		(53,070	)		(45,944	)
Common stock		—			—			(845	)
Other investments, excluding short-term investments		—			(771	)		(417	)
Sales of:
Bonds, notes and redeemable preferred stocks		388,143			399,240			219,856
Other investments, excluding short-term investments		112			1,522			49
Redemptions and maturities of:
Bonds, notes and redeemable preferred stocks		217,009			284,025			121,967
Mortgage loans		21,413			30,846			25,833
Other investments, excluding short-term investments		1,513			1,572			1,709

NET CASH USED IN INVESTING ACTIVITIES	$	(406,643	)	$	(1,220,525	)	$	(282,072	)


	Years Ended December 31,
	2004			2003			2002
	(in thousands)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deposits received on:
Fixed annuity contracts	$	444,942		$	1,278,022		$	390,423
Universal life insurance contracts		9,419			9,436			9,712
Net exchanges to (from) the fixed accounts of variable annuity contracts		(15,532	)		427			23,546
Withdrawal payments on:
Fixed annuity contracts		(151,329	)		(114,000	)		(137,007	)
Universal life insurance contracts		(8,261	)		(7,522	)		(10,740	)
Claims and annuity payments, net of reinsurance, on:
Fixed annuity contracts		(31,615	)		(24,551	)		(37,837	)
Universal life insurance contracts		(17,355	)		(12,270	)		(20,005	)
Capital contributions		—			115,000			—

NET CASH PROVIDED BY FINANCING ACTIVITIES		230,269			1,244,542			218,092

NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS		(79,153	)		66,056			8,973

CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD		104,011			37,955			28,982

CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD	$	24,858		$	104,011		$	37,955

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid to Parent	$	(21,639	)	$	(5,430	)	$	(2,922	)


	Amortized Cost		Estimated Fair Value
	(in thousands)
AT DECEMBER 31, 2004:

U.S. government securities	$	18,743	$	19,358
Mortgage-backed securities		753,378		771,642
Securities of public utilities		120,769		125,369
Corporate bonds and notes		1,599,497		1,624,383
Other debt securities		426,892		430,673

Total	$	2,919,279	$	2,971,425


	Amortized Cost		Estimated Fair Value
	(in thousands)
AT DECEMBER 31, 2003:

U.S. government securities	$	17,671	$	18,054
Mortgage-backed securities		619,800		634,640
Securities of public utilities		126,229		131,158
Corporate bonds and notes		1,226,035		1,248,590
Other debt securities		627,912		625,370

Total	$	2,617,647	$	2,657,812


	Gross Unrealized Gains		Gross Unrealized Losses
	(in thousands)
AT DECEMBER 31, 2004:

U.S. government securities	$	634	$	(19	)
Mortgage-backed securities		20,512		(2,248	)
Securities of public utilities		4,873		(273	)
Corporate bonds and notes		33,360		(8,474	)
Other debt securities		6,263		(2,482	)

Total	$	65,642	$	(13,496	)

AT DECEMBER 31, 2003:

U.S. government securities	$	383	$	—
Mortgage-backed securities		20,483		(5,643	)
Securities of public utilities		5,258		(329	)
Corporate bonds and notes		30,773		(8,217	)
Other debt securities		7,294		(9,837	)

Total	$	64,191	$	(24,026	)


	Less than 12 Months						12 Months or More						Total
December 31, 2004	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items
U.S. government securities	$	2,001	$	(19	)	1	$	—	$	—		—	$	2,001	$	(19	)	1
Mortgage-backed securities		152,192		(1,887	)	31		13,802		(362	)	7		165,994		(2,249	)	38
Securities of public utilities		22,303		(273	)	6		—		—		—		22,303		(273	)	6
Corporate bonds and notes		385,522		(4,043	)	85		72,370		(4,430	)	12		457,892		(8,473	)	97
Other debt securities		97,774		(1,926	)	17		26,848		(556	)	7		124,622		(2,482	)	24

Total	$	659,792	$	(8,148	)	140	$	113,020	$	(5,348	)	26	$	772,812	$	(13,496	)	166


	Less than 12 Months						12 Months or More						Total
December 31, 2003	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items	Fair Value		Unrealized Loss			Items
Mortgage-backed securities	$	183,577	$	(5,643	)	37	$	—	$	—		—	$	183,577	$	(5,643	)	37
Securities of public utilities		15,013		(329	)	6		—		—		—		15,013		(329	)	6
Corporate bonds and notes		388,358		(8,204	)	69		56		(13	)	1		388,414		(8,217	)	70
Other debt securities		219,407		(8,357	)	44		3,521		(1,480	)	1		222,928		(9,837	)	45

Total	$	806,355	$	(22,533	)	156	$	3,577	$	(1,493	)	2	$	809,932	$	(24,026	)	158


	Carrying Value		Fair Value
	(in thousands)
AT DECEMBER 31, 2004:

ASSETS:
Cash and short-term investments	$	24,858	$	24,858
Bonds, notes and redeemable preferred stocks		2,971,425		2,971,425
Mortgage loans		276,859		284,054
Policy loans		32,899		32,899
Common stock		705		705
Securities lending collateral		517,644		517,644
Variable annuity assets held in separate accounts		488,046		488,046

LIABILITIES:
Reserves for fixed annuity contracts	$	2,863,048	$	2,827,611
Securities lending payable		517,644		517,644
Variable annuity liabilities related to separate accounts		488,046		488,046


	Return of Net Deposits			Highest Specified Anniversary Account Value Minus Withdrawals Post Anniversary
	(dollars in thousands)
In the event of death (GMDB):
Account value	$	148,283		$	649,952
Net amount at risk (a)	$	348			57,713
Average attained age of contract holders		65			62
Range of guaranteed minimum return rates		0	%		0	%

Accumulation at specified date (GMAV):
Account value	$	16,314		$	—
Net amount at risk (b)		—			—
Weighted average period remaining until guaranteed payment		9.8 Years			—


	(in thousands)
Balance at January 1, 2004 (c)	$	1,640
Guaranteed benefits incurred		1,193
Guaranteed benefits paid		(934	)

Balance at December 31, 2004	$	1,899