The philosophy of First SunAmerica Life Insurance Company is to manage its investment portfolio prudently and conservatively. Emphasis is on the return of principal (security) as well as the return on principal (yield). Investment decisions are based on asset/liability management considerations and long-term value analysis, not on possible short-term gains arising from market interest rate changes. With this strategy, we have been able to protect our contract owners with strong asset quality and high asset liquidity. First SunAmerica is financially strong with $9.55 billion in total assets, including $787 million of capital, surplus and asset reserves. The company’s capital ratio—the ratio of total capital and surplus (including asset reserves) to adjusted total liabilities—is 9.61%.

As of June 30, 2010, First SunAmerica net invested assets (net of investment borrowings and amount due to brokers) totaled $8.9 billion. Of that, 94% was in bonds (mostly corporate issues and mortgage-backed securities) and net cash equivalents. Approximately 97% of First SunAmerica bonds were investment-grade. Real estate, mortgage loans and equities accounted for approximately 6% of net invested assets. Non-performing assets constituted 0.16% of total cash and invested assets.

These financial figures are all important because they demonstrate the company’s ability to provide a return-of-premium guarantee for its fixed annuity contract owners.