As filed with the Securities and Exchange Commission on April 28, 1999
Registration No. 333-14761

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 5

FORM S-2

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

FIRST FORTIS LIFE INSURANCE COMPANY
----------------------------------------------------
(Exact name of registrant as specified in its charter)

New York
------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)

63
------------------------------------------------------
(Primary Standard Industrial Classification Code Number)

13-2699219
----------------------------------
(I.R.S. Employer Identification No.)

220 Salina Meadows Parkway
Syracuse, New York 13212
315-451-0066
-----------------------------------------------------------------
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

David A. Peterson, Esquire
P. O. Box 64284
Saint Paul, Minnesota 55164
651-738-5080
-----------------------------------------------------------------
(Name, address including zip code, and telephone number, including
area code, of agent for service)

Approximate Date of Commencement of Proposed Sale to Public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box:

/X/
-----------------------------------------

Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus contained
herein relates to First Fortis Life Insurance Company=s Form S-1 Registration
Statement (File No. 33-71690) of $3,000,000 of interests under flexible premium
deferred annuity contracts.

CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------

Title of each Proposed Proposed maximum
class of securities Amount to be maximum offering aggregate Amount of
to be registered registered price per unit offering price registration fee
- ------------------------------------------------------------------------------------------------------------------------------------

Interests under flexible * * None registered herewith
premium deferred
fixed annuity
contracts

- ------------------
* The maximum aggregate offering price is estimated solely for the purpose of
determining the registration fee. The amount being registered and the proposed
maximum offering price per unit are not applicable in that these securities are
not issued in predetermined amounts or units.

FIRST FORTIS LIFE INSURANCE COMPANY

Cross-Reference Sheet
Pursuant to Regulation S-K
Item 501(b)

Form S-1 Item Number Prospectus Caption
- -------------------- ------------------

1. Forepart of the Registration Statement and Cover Page; Table of Contents; Distribution and
Outside Front Servicing
Cover Page of Prospectus

2. Inside Front and Back Other Information; Reports
Cover Pages of Prospectus

3. Summary Information, Risk Summary of Contract Features or, as to ratio
of Factors and Ratio of earnings to fixed charges, Not Applicable
Earnings to Fixed Charges

4. Use of Proceeds The Variable Account; Series Fund; The Fixed Account

5. Determination of Offering Price Not Applicable

6. Dilution Not Applicable

7. Selling Security Holders None

8. Plan of Distribution Distribution and Servicing

9. Description of Securities Cover Page; The Variable Account; Series Fund; The
to be Registered Fixed Account; Accumulation Period; Charges and
Deductions; General Provisions

10. Interests of Named Legal Matters
Experts and Counsel

11. Information with Respect First Fortis Life Insurance Company; Further
to the Registrant Information About First Fortis; Financial
Statements; Distribution and Servicing

12. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act
Liabilities

FIRST FORTIS LIFE INSURANCE COMPANY

MAILING ADDRESS: STREET ADDRESS: PHONE: 1-800-745-8248
P.O. BOX 3249 220 SALINA MEADOWS PARKWAY
SYRACUSE SUITE 255
NEW YORK 13220 SYRACUSE
NEW YORK 13212

This prospectus describes flexible premium deferred combination variable and
fixed annuity contracts issued by First Fortis Life Insurance Company ("First
Fortis").

These contracts allow you to accumulate funds on a tax-deferred basis. You may
elect a guaranteed interest accumulation option through a fixed account or a
variable return accumulation option through a separate account, or a combination
of these two options. Under the guaranteed interest accumulation option, you can
choose among ten different guarantee periods, each of which has its own interest
rate which is guaranteed for the entire guarantee period.

Under the variable return accumulation option, you can choose among the
following investment portfolios of Fortis Series Fund:

Money Market Series S&P 500 Index Series
U.S. Government Securities Series Blue Chip Stock Series
Diversified Income Series Global Growth Series
Global Bond Series Growth Stock Series
High Yield Series International Stock Series
Asset Allocation Series Aggressive Growth Series
Global Asset Allocation Series Small Cap Value Series
Value Series Mid Cap Stock Series
Growth & Income Series Large Cap Growth Series

The accompanying prospectus for these investment
portfolios describes the investment objectives, policies
and risks of each of the portfolios.

This prospectus gives you information about the contracts
that you should know before investing. This prospectus
must be accompanied by a current prospectus of the
available investment portfolios. These prospectuses
should be read carefully and kept for future reference.

A Statement of Additional Information, dated May 1, 1999,
about certain aspects of the contracts has been filed
with the Securities and Exchange Commission and is
available without charge, from First Fortis at the
address and phone number printed above. The Table of
Contents for the Statement of Additional Information
appears on page 23 of this prospectus.

THESE CONTRACTS ARE NOT OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, CREDIT UNION, BROKER-DEALER, OR
OTHER FINANCIAL INSTITUTION. THEY ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. THEY
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
FIRST FORTIS
MASTERS
VARIABLE
ANNUITY

Flexible
Premium Deferred

Combination Variable and
Fixed Annuity Contracts

PROSPECTUS DATED
May 1, 1999

[LOGO]

97104 (Ed. 5/99)

TABLE OF CONTENTS

PAGE

Special Terms Used in this Prospectus................................. 3
Information Concerning Fees and Charges............................... 4
Summary of Contract Features.......................................... 6
First Fortis Life Insurance Company................................... 8
The Variable Account.................................................. 8
Series Fund........................................................... 8
The Fixed Account..................................................... 9
- Guaranteed Interest Rates/Guarantee Periods..................... 9
- Market Value Adjustment......................................... 9
- Investments by First Fortis..................................... 10
Accumulation Period................................................... 10
- Issuance of a Contract and Purchase Payments.................... 10
- Contract Value.................................................. 11
- Allocation of Purchase Payments and Contract Value.............. 12
- Total and Partial Surrenders.................................... 12
- Telephone Transactions.......................................... 13
- Benefit Payable on Death of Annuitant or Contract Owner......... 13
The Annuity Period.................................................... 13
- Annuity Commencement Date....................................... 13
- Commencement of Annuity Payments................................ 13
- Relationship Between Subaccount Investment Performance and
Amount of Variable Annuity Payments............................ 14
- Annuity Options................................................. 14
- Death of Annuitant or Other Payee............................... 14
Charges and Deductions................................................ 15
- Premium Taxes................................................... 15
- Charges Against the Variable Account............................ 15
- Tax Charge...................................................... 15
- Surrender Charge................................................ 15
- Miscellaneous................................................... 16
- Reduction of Charges............................................ 16
General Provisions.................................................... 16
- The Contracts................................................... 16
- Postponement of Payment......................................... 16
- Misstatement of Age or Sex and Other Errors..................... 16
- Assignment...................................................... 16
- Beneficiary..................................................... 16
- Reports......................................................... 16
Rights Reserved by First Fortis....................................... 17
Distribution.......................................................... 17
Federal Tax Matters................................................... 17
Further Information About First Fortis................................ 20
- General......................................................... 20
- Ownership of Securities......................................... 20
- Selected Financial Data......................................... 20
- Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 20
Voting Privileges..................................................... 22
Legal Matters......................................................... 23
Other Information..................................................... 23
Contents of Statement of Additional Information....................... 23
First Fortis Financial Statements..................................... F-1
Appendix A--Sample Market Value Adjustment Calculations............... A-1
Appendix B--Sample Death Benefit Calculations......................... B-1
Appendix C--Explanation of Expense Calculations....................... C-1

THE CONTRACTS ARE NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE. FIRST FORTIS DOES NOT AUTHORIZE ANY INFORMATION OR
REPRESENTATION REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS WHICH IS NOT
INCLUDED IN THIS PROSPECTUS, THE RELATED STATEMENT OF ADDITIONAL INFORMATION, OR
ANY SUPPLEMENTS THERETO OR IN ANY SUPPLEMENTAL SALES MATERIAL AUTHORIZED BY
FIRST FORTIS.

SPECIAL TERMS USED IN THIS PROSPECTUS

Accumulation The time period under a contract between the contract issue date and the annuity commencement
Period date.
Accumulation A unit of measure used to calculate a contract owner's interest in the Variable Account during
Unit the Accumulation Period.
Annuitant A person during whose life annuity payments are to be made by First Fortis under the contract.
Annuity Period The time period following the Accumulation Period, during which annuity payments are made by
First Fortis.
Annuity Unit A unit of measurement used to calculate variable annuity payments.
Fixed Annuity An annuity option under which First Fortis promises to pay the Annuitant or any other payee
Option that you designate one or more fixed payments.
Market Value Positive or negative adjustment in fixed account value that we make if such value is paid out
Adjustment more than fifteen days before or after the end of a guarantee period in which it was being
held.
Non-Qualified Contracts that do not qualify for the special federal income tax treatment applicable in
Contracts connection with certain retirement plans.
Qualified Contracts that are qualified for the special federal income tax treatment applicable in
Contracts connection with certain retirement plans.
Series Fund Fortis Series Fund, Inc., a diversified, open-end management investment company in which the
Variable Account invests.
Seven Year The seventh anniversary of a contract issue date, and each subsequent seventh anniversary of
Anniversary that date.
Valuation Date All business days except, with respect to any subaccount, days on which the related portfolio
does not value its shares. Generally, the portfolios value their shares on each day the New
York Stock Exchange is open.
Valuation The period that starts at the close of regular trading on the New York Stock Exchange on a
Period Valuation Date and ends at the close of regular trading on the exchange on the next succeeding
Valuation Date.
Variable The segregated asset account referred to as Variable Account A of First Fortis Life Insurance
Account Company established to receive and invest purchase payments under contracts.
Variable An annuity option under which First Fortis promises to pay the Annuitant or any other payee
Annuity Option chosen by you one or more payments which vary in amount in accordance with the net investment
experience of the subaccounts selected by the Annuitant.

INFORMATION CONCERNING FEES AND CHARGES

CONTRACT OWNER TRANSACTION CHARGES

Front-End Sales Charge Imposed on Purchases...................................................... 0%
Maximum Surrender Charge for Sales Expenses...................................................... 7%(1)

NUMBER OF YEARS SURRENDER CHARGE AS A
SINCE PURCHASE PERCENTAGE OF PURCHASE
PAYMENT WAS CREDITED PAYMENT
- -------------------- --------------------------

Less than 1 7%
At least 1 but less
than 2 6%
At least 2 but less
than 3 5%
At least 3 but less
than 4 4%
At least 4 but less
than 5 3%
At least 5 but less
than 6 2%
At least 6 but less
than 7 1%
7 or more 0%

Other Surrender Fees............................................................................ 0%
Exchange Fee.................................................................................... 0%
ANNUAL CONTRACT ADMINISTRATION CHARGE.................................................................. $ 0

VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)

Mortality and Expense Risk Charge.............................................................. 1.25%
Variable Account Administrative Charge......................................................... .10%
---
Total Variable Account Annual Expenses....................................................... 1.35%

- ------------------------
(1) This charge does not apply in certain cases such as partial surrenders each
year of up to 10% of "new purchase payments" as defined under the heading
"Surrender Charge," or payment of a death benefit.

MARKET VALUE ADJUSTMENT WITH RESPECT TO FIXED ACCOUNT

Surrenders and other withdrawals from the fixed account more than fifteen days
from the end of a guarantee period are subject to a Market Value Adjustment. The
Market Value Adjustment may increase or reduce the fixed account value. It is
computed pursuant to a formula that is described in more detail under "Market
Value Adjustment."

SERIES FUND ANNUAL EXPENSES

U.S. GOVERNMENT
MONEY MARKET SECURITIES DIVERSIFIED GLOBAL BOND HIGH YIELD
SERIES SERIES INCOME SERIES SERIES SERIES
------------- --------------- ------------- ----------- -----------

Investment Advisory and Management Fee................ 0.30% 0.47% 0.47% 0.75% 0.50%
Other Expenses........................................ 0.05% 0.04% 0.05% 0.13% 0.06%
Total Series Fund Operating Expenses.................. 0.35% 0.51% 0.52% 0.88% 0.56%

GLOBAL ASSET
ALLOCATION
SERIES
---------------

Investment Advisory and Management Fee................ 0.90%
Other Expenses........................................ 0.11%
Total Series Fund Operating Expenses.................. 1.01%

ASSET S&P 500
ALLOCATION VALUE GROWTH & INDEX BLUE CHIP
SERIES SERIES INCOME SERIES SERIES STOCK SERIES
--------------- --------- ------------- ----------- -------------

Investment Advisory and Management Fee................ 0.47% 0.70% 0.64% 0.40% 0.89%
Other Expenses........................................ 0.04% 0.06% 0.03% 0.06% 0.05%
Total Series Fund Operating Expenses.................. 0.51% 0.76% 0.67% 0.46% 0.94%

INTERNATIONAL
STOCK SERIES
-------------

Investment Advisory and Management Fee................ 0.85%
Other Expenses........................................ 0.09%
Total Series Fund Operating Expenses.................. 0.94%

SMALL CAP
MID CAP STOCK VALUE GLOBAL GROWTH LARGE CAP GROWTH STOCK
SERIES SERIES SERIES GROWTH SERIES SERIES
------------- ----------- ------------- ------------- -------------

Investment Advisory and Management Fee................ 0.90% 0.90% 0.70% 0.90% 0.61%
Other Expenses........................................ 0.35% 0.34% 0.05% 0.35% 0.04%
Total Series Fund Operating Expenses.................. 1.25% 1.24% 0.75% 1.25% 0.65%

AGGRESSIVE
GROWTH SERIES
-------------

Investment Advisory and Management Fee................ 0.68%
Other Expenses........................................ 0.04%
Total Series Fund Operating Expenses.................. 0.72%

- ------------------------
(a) As a percentage of Series average net assets based on 1998 historical data.

EXAMPLES*

If you SURRENDER your contract in full at the end of any of the time periods
shown below, you would pay the following cumulative expenses on a $1,000
investment, assuming a 5% annual return on assets:

IF ALL AMOUNTS ARE INVESTED IN ONE PORTFOLIO: 1 YEAR 3 YEARS 5 YEARS
- --------------------------------------------------------------------------------------- ----------- ----------- -----------

Money Market Series.................................................................... 80 98 118
U.S. Government Securities Series...................................................... 82 103 126
Diversified Income Series.............................................................. 82 103 127
Global Bond Series..................................................................... 85 114 145
High Yield Series...................................................................... 82 104 129
Global Asset Allocation Series......................................................... 87 118 151
Asset Allocation Series................................................................ 82 103 126
Value Series........................................................................... 84 110 139
Growth & Income Series................................................................. 83 107 134
S&P 500 Index Series................................................................... 81 101 123
Blue Chip Stock Series................................................................. 86 116 148
International Stock Series............................................................. 86 116 148
Mid Cap Stock Series................................................................... 89 125 163
Small Cap Value Series................................................................. 89 125 163
Global Growth Series................................................................... 84 110 138
Large Cap Growth Series................................................................ 89 125 163
Growth Stock Series.................................................................... 83 107 133
Aggressive Growth Series............................................................... 84 109 137

IF ALL AMOUNTS ARE INVESTED IN ONE PORTFOLIO: 10 YEARS
- --------------------------------------------------------------------------------------- -----------

Money Market Series.................................................................... 198
U.S. Government Securities Series...................................................... 215
Diversified Income Series.............................................................. 216
Global Bond Series..................................................................... 253
High Yield Series...................................................................... 220
Global Asset Allocation Series......................................................... 266
Asset Allocation Series................................................................ 215
Value Series........................................................................... 241
Growth & Income Series................................................................. 231
S&P 500 Index Series................................................................... 209
Blue Chip Stock Series................................................................. 259
International Stock Series............................................................. 259
Mid Cap Stock Series................................................................... 290
Small Cap Value Series................................................................. 289
Global Growth Series................................................................... 240
Large Cap Growth Series................................................................ 290
Growth Stock Series.................................................................... 229
Aggressive Growth Series............................................................... 237

If you COMMENCE AN ANNUITY PAYMENT OPTION, or do NOT surrender your contract,
you would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on assets:

IF ALL AMOUNTS ARE INVESTED IN ONE PORTFOLIO: 1 YEAR 3 YEARS 5 YEARS
- --------------------------------------------------------------------------------------- ----------- ----------- -----------

Money Market Series.................................................................... 17 53 91
U.S. Government Securities Series...................................................... 19 58 99
Diversified Income Series.............................................................. 19 58 100
Global Bond Series..................................................................... 22 69 118
High Yield Series...................................................................... 19 59 102
Global Asset Allocation Series......................................................... 24 73 124
Asset Allocation Series................................................................ 19 58 99
Value Series........................................................................... 21 65 112
Growth & Income Series................................................................. 20 62 107
S&P 500 Index Series................................................................... 18 56 96
Blue Chip Stock Series................................................................. 23 71 121
International Stock Series............................................................. 23 71 121
Mid Cap Stock Series................................................................... 26 80 136
Small Cap Value Series................................................................. 26 80 136
Global Growth Series................................................................... 21 65 111
Large Cap Growth Series................................................................ 26 80 136
Growth Stock Series.................................................................... 20 62 106
Aggressive Growth Series............................................................... 21 64 110

IF ALL AMOUNTS ARE INVESTED IN ONE PORTFOLIO: 10 YEARS
- --------------------------------------------------------------------------------------- -----------

- ------------------------
* Does not include the effect of any Market Value Adjustment.

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

------------------------

The foregoing tables and examples are included to assist you in understanding
the transaction and operating expenses imposed directly or indirectly under the
contracts and Series Fund. Amounts for state premium taxes or similar
assessments will also be deducted, where applicable.

See Appendix C for an explanation of the calculation of the amounts set forth
above.

SUMMARY OF CONTRACT FEATURES

The following summary should be read in conjunction with the detailed
information in this prospectus.

The contracts are designed to provide individuals with retirement benefits
through the accumulation of purchase payments on a fixed or variable basis, and
by the application of such accumulations to provide fixed or variable annuity
payments.

"We," "our," and "us" mean First Fortis Life Insurance Company. "You" and "your"
mean a reader of this prospectus who is contemplating making purchase payments
or taking any other action in connection with a contract.

Depending on the state that you live in, the contract that is issued to you may
be as a part of a group contract or as an individual contract. Participation in
a group contract will be evidenced by the issuance of a certificate showing your
interest under the group contract. In other states, an individual contract will
be issued to you. Both the certificate and the contract are referred to as a
"contract" in this prospectus.

FREE LOOK

You have the right to examine a contract during a "free look" period after you
receive the contract and return it for a refund of the amount of the then
current contract value. However, in certain states where required by state law
the refund will be in the amount of all purchase payments that have been made,
without interest or appreciation or depreciation. The "free look" period is
generally 10 days unless a longer time is specified on the face page of your
contract.

PURCHASE PAYMENTS

The initial purchase payment under a contract must be at least $5,000 ($2,000
for a contract which is part of a qualified plan). Additional purchase payments
under a contract must be at least $50. See "Issuance of a Contract and Purchase
Payments."

ALLOCATION OF PURCHASE PAYMENTS

On the date that the contract is issued, the initial purchase payment is
allocated, as specified by you in the contract application, among one or more of
the portfolios, or to one or more of the guarantee periods in the fixed account,
or to a combination thereof. Subsequent purchase payments are allocated in the
same way, or pursuant to different allocation percentages that the you may
request in writing.

VARIABLE ACCOUNT INVESTMENT OPTIONS

Each of the subaccounts of the Variable Account invests in shares of a
corresponding portfolio of Series Fund. Contract value in each of the
subaccounts of the Variable Account will vary to reflect the investment
experience of each of the corresponding portfolios, as well as deductions for
certain charges.

Each portfolio has a separate and distinct investment objective and is managed
by Fortis Advisers, Inc or a subadviser of Fortis Advisers, Inc. A full
description of the portfolios and their investment objectives, policies, risks
and expenses can be found in the current prospectus for Series Fund, which
accompanies this prospectus, and Series Fund Statement of Additional Information
which is available upon request from First Fortis at the address and phone
number on the cover of this prospectus.

FIXED ACCOUNT INVESTMENT OPTIONS

Any amount allocated by the contract owner to the fixed account earns a
guaranteed interest rate. The level of the guaranteed interest rate depends on
the length of the guarantee period selected by the contract owner. We currently
make available ten different guarantee periods, ranging from one to ten years.

If amounts are transferred, surrendered or otherwise paid out more than fifteen
days before or after the end of the applicable guarantee period, a Market Value
Adjustment will be applied to increase or decrease the amount of fixed account
value that is paid out. Accordingly, the Market Value Adjustment can result in
gains or losses to you.

For a more complete discussion of the fixed account investment options and the
Market Value Adjustment, see "The Fixed Account."

TRANSFERS

During the Accumulation Period, you can transfer all or part of your contract
value from one subaccount to another or into the fixed account and, subject to
any Market Value Adjustment, from one guarantee period to another or into a
subaccount. There is currently no charge for these transfers. We reserve the
right to restrict the frequency of or otherwise condition, terminate, or impose
charges upon, transfers from a subaccount during the Accumulation Period. During
the Annuity Period the person receiving annuity payments may make up to four
transfers (but not from a Fixed Annuity Option) during each year of the Annuity
Period. For a description of certain limitations on transfer rights, see
"Allocations of Purchase Payments and Contract Value--Transfers."

TOTAL OR PARTIAL SURRENDERS

Subject to certain conditions, all or part of the contract value may be
surrendered by you before the earlier of the Annuitant's death or the annuity
commencement date. Amounts surrendered may be subject to a surrender charge and,
in addition, amounts surrendered from the fixed account may be subject to a
Market Value Adjustment. See "Total and Partial Surrenders," "Surrender Charge"
and "Market Value Adjustment." Particular attention should be paid to the tax
implications of any surrender, including possible penalties for premature
distributions. See "Federal Tax Matters."

ANNUITY PAYMENTS

The contract provides several types of annuity benefits to you or other persons
you properly designate to receive such payments, including Fixed and Variable
Annuity Options. The contract owner has considerable flexibility in choosing the
annuity commencement date. However, the tax implications of an annuity
commencement date must be carefully considered, including the possibility of
penalties for commencing benefits either too soon or too late. See "Annuity
Commencement Date," "Annuity Options" and "Federal Tax Matters" in this
prospectus and "Taxation Under Certain Retirement Plans" in the Statement of
Additional Information.

DEATH BENEFIT

In the event that the Annuitant or contract owner dies prior to the annuity
commencement date, a death benefit is payable. See "Benefit Payable on Death of
Annuitant or Contract Owner."

LIMITATIONS IMPOSED BY RETIREMENT PLANS AND EMPLOYERS

Certain rights you would otherwise have under a contract may be limited by the
terms of any applicable employee benefit plan. These limitations may restrict
such things as total and partial surrenders, the amount or timing of purchase
payments that may be made, when annuity payments must start and the type of
annuity options that may be selected. Accordingly, you should familiarize
yourself with these and all other aspects of any retirement plan in connection
with which a contract is issued.

The record owner of contracts may be an employer (or the employer's designee) in
connection with an employee benefit plan. In the latter cases, certain rights
that a contract owner otherwise would have under a contract may be reserved
instead by the employer.

TAX IMPLICATIONS

The tax implications for you or any other persons who may receive payments under
a contract, and those of any related employee benefit plan can be quite
important. A brief discussion of some of these is set out under "Federal Tax
Matters" in this prospectus and "Taxation Under Certain Retirement Plans" in the
Statement of Additional Information, but such discussion is not comprehensive.
Therefore, you should consider these matters carefully and consult a qualified
tax adviser before making purchase payments or taking any other action in
connection with a contract or any related employee benefit plan. Failure to do
so could result in serious adverse tax consequences which might otherwise have
been avoided.

QUESTIONS AND OTHER COMMUNICATIONS

Any question about procedures of the contract should be directed to your sales
representative, or First Fortis' home office: P.O. Box 3249, Syracuse, NY 13220;
1-800-745-8248. Purchase payments and written requests should be mailed or
delivered to the same home office address. All communications should include the
contract number, the contract owner's name and, if different, the Annuitant's
name. The number for telephone transfers is 1-800-745-8248.

Any purchase payment or other communication, except a 10-day cancellation
notice, is deemed received at First Fortis' home office on the actual date of
receipt there in proper form unless received (1) after the close of regular
trading on The New York Stock Exchange, or (2) on a date that is not a Valuation
Date. In either of these two cases, the date of receipt will be deemed to be the
next Valuation Date.

FINANCIAL AND PERFORMANCE INFORMATION

The information presented below reflects the Accumulation Unit information for
subaccounts of the Variable Account through December 31, 1998. Accumulation
Units have been rounded to the nearest whole unit.

MONEY U.S. GOV'T DIVERSIFIED GLOBAL HIGH GLOBAL ASSET ASSET GROWTH &
MARKET SECURITIES INCOME BOND YIELD ALLOCATION ALLOCATION VALUE INCOME
----------- ----------- ----------- --------- --------- ------------- ----------- --------- -----------

DECEMBER 31,
1998
Accumulation
Units in
Force....... 318,605 71,200 597,806 14,947 132,636 91,185 867,243 160,886 326,229
Accumulation
Unit
Value....... $ 1.532 $ 18.421 $ 2.059 $ 13.254 $ 12.823 $ 16.513 $ 3.326 $ 14.768 $ 21.767
DECEMBER 31,
1997
Accumulation
Units in
Force....... 170,961 12,970 148,631 5,883 47,286 25,317 542,582 55,753 137,613
Accumulation
Unit
Value....... $ 1.474 $ 17.149 $ 1.963 $ 11.837 $ 12.917 $ 14.433 $ 2.809 $ 13.651 $ 19.487
DECEMBER 31,
1996
Accumulation
Units in
Force....... 31,800 427 20,649 1,347 9,846 7,591 63,004 15,690 14,412
Accumulation
Unit
Value....... $ 1.418 $ 15.935 $ 1.801 $ 11.961 $ 11.928 $ 12.884 $ 2.368 $ 11.048 $ 15.468
MAY 1, 1996*
Accumulation
Unit
Value....... $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000

INTERNATIONAL GLOBAL GROWTH AGGRESSIVE MID CAP LARGE CAP SMALL CAP

S&P 500 BLUE CHIP STOCK GROWTH STOCK GROWTH STOCK GROWTH VALUE

--------- --------- ------------- ----------- ----------- ----------- ----------- ----------- -----------

DECEMBER 31,
1998
Accumulation
Units in
Force....... 385,486 270,261 125,894 75,340 475,115 105,783 13,231 90,599 23,823

Accumulation
Unit
Value....... $ 18.689 $ 18.238 $ 16.113 $ 21.433 $ 3.870 $ 15.829 $ 9.625 $ 11.755 $ 9.367

DECEMBER 31,
1997
Accumulation
Units in
Force....... 96,726 74,226 36,305 47,369 240,842 47,583 -- -- --

Accumulation
Unit
Value....... $ 14.786 $ 14.429 $ 14.021 $ 19.507 $ 3.296 $ 13.241 -- -- --

DECEMBER 31,
1996
Accumulation
Units in
Force....... 5,144 9,457 10,999 6,899 70,686 14,449 -- -- --

Accumulation
Unit
Value....... $ 11.326 $ 11.520 $ 12.690 $ 18.510 $ 2.971 $ 13.232 -- -- --

MAY 1, 1996*
Accumulation
Unit
Value....... $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000 $ 10.000 -- -- --

- ----------------------------------
* Accumulation Unit value at date of initial registration effectiveness.

Audited financial statements of the Variable Account are included in the
Statement of Additional Information.

Advertising and other sales materials may include yield and total return figures
for the subaccounts of the Variable Account. These figures are based on
historical results and are not intended to indicate future performance. "Yield"
is the income generated by an investment in the subaccount over a period of time
specified in the advertisement. This rate of return is assumed to be earned over
a full year and is shown as a percentage of the investment. "Total Return" is
the total change in value of an investment in the subaccount over a period of
time specified in the advertisement. The rate of return shown would produce that
change in value over the specified period, if compounded annually. Yield figures
do not reflect the surrender charge and yield and total return figures do not
reflect premium tax charges. This makes the performance shown more favorable.

Financial information concerning First Fortis is included in this prospectus
under "Further Information About First Fortis" and "First Fortis Financial
Statements."

FIRST FORTIS LIFE INSURANCE COMPANY

First Fortis Life Insurance Company is the issuer of the contracts. At the end
of 1997, First Fortis had approximately $7 billion of total life insurance in
force. First Fortis is a New York corporation founded in 1971. It is qualified
to sell life insurance and annuity contracts in New York. First Fortis is a
wholly-owned subsidiary of Fortis, Inc., which is itself indirectly owned 50% by
Fortis (NL)N.V. and 50% by Fortis (B). Fortis, Inc. manages the United States
operations for these two companies.

First Fortis is affiliated with the Fortis Financial Group. This group is a
joint effort by Fortis Benefits Insurance Company, Fortis Advisers, Inc., Fortis
Investors, Inc., and Fortis Insurance Company to offer financial products
through the management, marketing and servicing of mutual funds, annuities, life
insurance and disability income products.

Fortis (NL)N.V. is a diversified financial services company headquartered in
Utrecht, The Netherlands, where its insurance operations began in 1847. Fortis
(B) is a diversified financial services company headquartered in Brussels,
Belgium, where its insurance operations began in 1824. Fortis (NL)N.V. and
Fortis (B) have merged their operating companies under the trade name of Fortis.
The Fortis group of companies is active in insurance, banking and financial
services, and real estate development in The Netherlands, Belgium, the United
States, Western Europe, and the Pacific Rim. The Fortis group of companies had
approximately $390 billion in assets at the end of 1998.

All of the guarantees and commitments under the contracts are general
obligations of First Fortis, regardless of whether you have allocated the
contract value to the Variable Account or to the fixed account. None of First
Fortis' affiliated companies has any legal obligation to back First Fortis'
obligations under the contracts.

THE VARIABLE ACCOUNT

The Variable Account is a segregated investment account of First Fortis. First
Fortis established Variable Account A under New York insurance law as of October
1, 1993. The Variable Account is an integral part of First Fortis. However, the
Variable Account is registered with the Securities and Exchange Commission as a
unit investment trust under the Investment Company Act of 1940. Assets in the
Variable Account representing reserves and liabilities under these contracts and
other variable annuity contracts issued by First Fortis will not be chargeable
with liabilities arising out of any other business of First Fortis.

The Variable Account has subaccounts. The assets in each subaccount are invested
exclusively in a distinct class (or series) of stock issued by Series Fund, each
of which represents a separate investment portfolio within Series Fund. Income
and both realized and unrealized gains or losses from the assets of each
subaccount of the Variable Account are credited to or charged against that
subaccount without regard to income, gains or losses, from any other subaccount
of the Variable Account or arising out of any other business we may conduct. We
may add or eliminate new subaccounts as new portfolios are added or eliminated.

SERIES FUND

Series Fund is a "series" type of mutual fund. Series Fund is registered with
the Securities and Exchange Commission under the Investment Company Act of 1940.
Series Fund has served as the investment medium for the Variable Account since
the Variable Account began operations. Since 1987, Series Fund has also been the
investment medium for other variable accounts of an affiliated company.

First Fortis purchases and redeems Series Fund shares for the Variable Account
at their net asset value without any sales or redemption charges. These shares
are interests in the portfolios of Series Fund available for investment by the
Variable Account. Each portfolio corresponds to one of the subaccounts of the
Variable Account. The assets of each portfolio are separate from the assets of
other portfolios. In addition, each portfolio operates as a separate investment
portfolio whose investment performance has no effect on the investment
performance of any other portfolio.

We automatically reinvest dividends or capital gain distributions attributable
to contracts in shares of the portfolio from which they are received at the
portfolio's net asset value on the date paid. These dividends and distributions
will have the effect of reducing the net asset value of each share of the
corresponding portfolio and increasing, by an equivalent value, the number of
shares outstanding of the portfolio. However, the value of your interest in the
corresponding subaccount will not change as a result of any of these dividends
and distributions.

The portfolios of Series Fund available for investment by the Variable Account
are listed on the cover page of this prospectus.

A full description of the portfolios, their investment policies and
restrictions, the charges, the risks associated with investing in them, and
other aspects of their operations is contained in the prospectus for Series Fund
accompanying this prospectus and in the Statement of Additional Information for
Series Fund. Additional copies of these documents may be obtained from your
sales representative or from our

home office. The complete risk disclosure in the prospectus for the Diversified
Income Series and Asset Allocation Series should be read before selection of
them for investment.

THE FIXED ACCOUNT

GUARANTEED INTEREST RATES/GUARANTEE PERIODS

Any amount you allocate to the fixed account earns a guaranteed interest rate
beginning on the date you make the allocation. The guaranteed interest rate
continues for the number of years you select, up to a maximum of TEN years. At
the end of your guarantee period, your contract value, including accrued
interest, will be allocated to a new guarantee period of equal length. However,
you may reallocate your contract value to a different guarantee period (or
periods) or to one (or more) of the subaccounts of the Variable Account. If you
decide to reallocate your contract value, you must do so by sending us a WRITTEN
REQUEST. We must receive your written request AT LEAST three business days
before the end of your guarantee period. The first day of your new guarantee
period (or other reallocation) will be the day after the end of your previous
guarantee period. We will notify you AT LEAST 45 days and NOT MORE than 60 days
before the end of your guarantee period.

We currently offer ten different guarantee periods. These guarantee periods
range in length from one to ten years. Each guarantee period has its own
guaranteed interest rate, which may differ from those for other guarantee
periods. From time to time we will, at our discretion, change the guaranteed
interest rate for FUTURE guarantee periods. These changes will NOT affect the
guaranteed interest rates we are paying on CURRENT guarantee periods. Please
note, when you allocate or transfer an amount to a guarantee period, a new
guarantee period begins running with respect to that amount. Therefore, the
amount you allocate will earn a guaranteed interest rate that will not change
until the end of that period. In addition, the guaranteed interest rate will
never be less than an effective annual rate of 4%.

We declare the guaranteed interest rates from time to time as market conditions
dictate. We advise you of the guaranteed interest rate for a chosen guarantee
period at the time we receive a purchase payment from you, or at the time we
execute a transfer you have requested , or at the time a guarantee period is
renewed.

We do not have a specific formula for establishing the guaranteed interest rates
for the guarantee periods. Guaranteed interest rates may be INFLUENCED by the
available interest rates on the investments we acquire with the amounts you
allocate for a particular guarantee period. Guaranteed interest rates do not
necessarily CORRESPOND to the available interest rates on the investments we
acquire with the amounts you allocate for a particular guarantee period. See
"Investments by First Fortis". In addition, when we determine guaranteed
interest rates, we may consider: (1) the duration of a guarantee period, (2)
regulatory and tax requirements, (3) sales and administrative expenses we bear,
(4) risks we assume, (5) our profitability objectives, and (6) general economic
trends.

FIRST FORTIS' MANAGEMENT MAKES THE FINAL DETERMINATION OF THE GUARANTEED
INTEREST RATES TO BE DECLARED. WE CANNOT PREDICT OR ASSURE THE LEVEL OF ANY
FUTURE GUARANTEED INTEREST RATES IN EXCESS OF AN EFFECTIVE ANNUAL RATE OF 4%.

You may obtain information concerning the guaranteed interest rates that apply
to the various guarantee periods. You may obtain this information from our home
office or from your sales representative at any time.

MARKET VALUE ADJUSTMENT

Except as described below, we will apply a Market Value Adjustment to any fixed
account value that is:

- surrendered,

- transferred, or

- otherwise paid out

BEFORE the end of the guarantee period in which it is being held.

For example, we will apply a Market Value Adjustment to fixed account value that
we pay:

- as an amount applied to an annuity option, and

- as an amount paid as a single sum in lieu of an annuity.

The Market Value Adjustment we apply may increase or decrease the fixed account
value that is withdrawn or transferred. We determine whether the fixed account
value is increased or decreased by performing a comparison of two guaranteed
interest rates.

The first rate we compare is the guaranteed interest rate for the fixed account
value that is withdrawn or transferred from the existing guarantee period. The
second rate we compare is the guaranteed interest rate we are then offering for
new guarantee periods with durations equal to the number of years remaining in
the existing guarantee period. After comparing these two rates, we determine
whether the fixed account value is increased or decreased as follows:

- If the first rate exceeds the second rate by more than 1/4%, the Market
Value Adjustment produces an INCREASE in the fixed account value withdrawn
or transferred.

- If the first rate does not exceed the second rate by at least 1/4%, the
Market Value Adjustment produces a DECREASE in the fixed account value
withdrawn or transferred.

We will determine the Market Value Adjustment by multiplying the fixed account
value that is withdrawn or transferred from the existing guarantee period (after
deduction of any applicable surrender charge) by the following factor:

1 + I n / 12
( ----------) - 1
1 + J + .0025

where,

- I is the guaranteed interest rate we credit to the fixed account value
that is withdrawn or transferred from the existing guarantee period.

- J is the guaranteed interest rate we are then offering for new guarantee
periods with durations equal to the number of years remaining in the
existing guarantee period (rounded up to the next higher number of years).

- N is the number of months remaining in the existing guarantee period
(rounded up to the next higher number of months).

However, if we stop offering a guaranteed interest rate for a guarantee period,
we determine I and J with a different method. In these cases, we determine I and
J by using the "bond equivalent yield" on applicable U.S. Treasury Bills or U.S.
Treasury Notes. We determine this yield on either the 1st or the 15th of the
applicable month. Therefore, if we stop offering a guaranteed interest rate for
a guarantee period, I and J will be as follows:

- I is the bond equivalent yield that was available on applicable U.S.
Treasury Bills or U.S. Treasury Notes at the beginning of the existing
guarantee period. The applicable U.S. Treasury Bills or U.S. Treasury
Notes will be those that have maturities equal in length to that of the
existing guarantee period.

- J is the bond equivalent yield on applicable U.S. Treasury Bills or U.S.
Treasury Notes that is available at the time we calculate the Market Value
Adjustment. The applicable U.S. Treasury Bills or U.S. Treasury Notes will
be those that have maturities equal in length to the length of time
remaining in the existing guarantee period.

You will find sample Market Value Adjustment calculations in Appendix A.

We do not apply a Market Value Adjustment to withdrawals and transfers of fixed
account value under THREE exceptions. We describe these exceptions below.

(1) We will NOT apply a Market Value Adjustment to fixed account
value that we pay out as a death benefit.

(2) We will NOT apply a Market Value Adjustment to fixed account
value that we pay out during a 30 DAY period that:

- BEGINS 15 DAYS BEFORE the end date of the guarantee period in which the
fixed account value was being held,

and that:

- ENDS 15 DAYS AFTER the end date of the guarantee period in which the fixed
account value was being held.

(3) We will NOT apply a Market Value Adjustment to fixed account
value that is withdrawn or transferred from a guarantee period on a
PERIODIC, AUTOMATIC BASIS. This exception only applies to such withdrawals
or transfers under a FORMAL First Fortis program for the withdrawal or
transfer of fixed account value.

We may impose CONDITIONS AND LIMITATIONS on any formal First Fortis program for
the withdrawal or transfer of fixed account value. Ask your First Fortis
representative about the availability of such a program in your state. In
addition, if such a program is available in your state, your First Fortis
representative can inform you about the conditions and limitations that may
apply to that program.

INVESTMENTS BY FIRST FORTIS

First Fortis' legal obligations with respect to the fixed account are supported
by our general account assets. These general account assets also support our
obligations under other insurance and annuity contracts. Investments purchased
with amounts allocated to the fixed account are the property of First Fortis,
and you have no legal rights in such investments. Subject to applicable law, we
have sole discretion over the investment of assets in our general account and in
the fixed account. Neither our general account nor the fixed account is subject
to registration under the Investment Company Act of 1940.

We will invest amounts in our general account, and amounts in the fixed account,
in compliance with applicable state insurance laws and regulations concerning
the nature and quality of investments for the general account. Within specified
limits and subject to certain standards and limitations, these laws generally
permit investment in:

- federal, state and municipal obligations,

- preferred and common stocks,

- corporate bonds,

- real estate mortgages,

- real estate, and

- certain other investments.

See "First Fortis" Financial Statements for information on our investments.
Investment management for amounts in our general account and in the fixed
account is provided to us by Fortis Advisors, Inc.

When we establish guaranteed interest rates, we will consider the available
return on the instruments in which we invest amounts allocated to the fixed
account. However, this return is only one of many factors we consider when we
establish the guaranteed interest rates. See "Guaranteed Interest
Rates/Guarantee Periods".

Generally, we expect to invest amounts allocated to the fixed account in debt
instruments. We expect that these debt instruments will approximately match our
liabilities with regard to the guarantee periods. We also expect that these debt
instruments will primarily include:

(1) securities issued by the United States Government or its
agencies or instrumentalities. These securities may or may not be guaranteed by
the United States Government;

(2) debt securities that, at the time of purchase, have an
investment grade within the four highest grades assigned by Moody's Investors
Services, Inc. ("Moody's"), Standard & Poor's Corporation ("Standard &
Poor's"), or any other nationally recognized rating service. Moody's four
highest grades are: Aaa, Aa, A, and Baa. Standard & Poor's four highest
grades are: AAA, AA, A, and BBB;

(3) other debt instruments including, but not limited to, issues of,
or guaranteed by, banks or bank holding companies and corporations.
Although not rated by Moody's or Standard & Poor's, we deem these
obligations to have an investment quality comparable to securities that may
be purchased as stated above;

(4) other evidences of indebtedness secured by mortgages or deeds
of trust representing liens upon real estate.

Except as required by applicable state insurance laws and regulations, we are
not obligated to invest amounts allocated to the fixed account according to any
particular strategy, See "Regulation and Reserves".

ACCUMULATION PERIOD

ISSUANCE OF A CONTRACT AND PURCHASE PAYMENTS

purchase payment at our home office. If we cannot apply the initial purchase
payment within five Valuation Dates after receipt because the application or
other issuing instructions are incomplete, we will return the initial purchase
payment unless you consent to our retaining the initial purchase payment and
applying it as of the end of the Valuation Period in which the necessary
requirements are fulfilled. Regardless of your consent, if the initial purchase
payment still cannot be credited within thirty Valuation Dates after receipt
because the application or issuing instructions are incomplete, the initial
purchase payment will be returned to you. The initial purchase payment must be
at least $5,000 ($2,000 for a contract issued pursuant to a qualified plan).

The date that we apply the initial purchase payment to the purchase of the
contract is also the contract issue date. The contract issue date is the date
used to determine contract years, regardless of when we deliver the contract.
Our crediting of investment experience in the Variable Account, or a fixed rate
of return in the fixed account, generally begins as of the contract issue date.

We will accept additional purchase payments at any time after the contract issue
date and prior to the annuity commencement date, as long as the Annuitant is
living. You must transmit purchase payments (together with any required
information identifying the proper contracts and accounts to be credited with
purchase payments) to our home office. We apply additional purchase payments to
the contract, and add to the contract value as of the end of the Valuation
Period in which we receive the payments.

Each additional purchase payment under a contract must be at least $50. The
total of all purchase payments for all First Fortis annuities having the same
owner, or annuitant, may not exceed $1 million (not more than $500,000 allocated
to the fixed account) without our prior approval. We reserve the right to modify
this limitation at any time.

You may make purchase payments in excess of the initial minimum by monthly draft
against a bank account if you have completed and returned to us a special
authorization form. You may get the form from your sales representative or from
our home office. We can also arrange for you to make purchase payments by wire
transfer, payroll deduction, military allotment, direct deposit and billing.
Purchase payments by check should be made payable to Fortis Fortis Life
Insurance Company.

If the contract value is less than $1,000, we may cancel the contract on any
Valuation Date. We will notify you of our intention to cancel the contract at
least 90 days in advance of the cancellation date. If we do cancel your
contract, we will pay you the full contract value.

CONTRACT VALUE

Contract value is the total of any Variable Account value in all the subaccounts
of the Variable Account, plus any fixed account value in all the guarantee
periods.

The contract does not guarantee a minimum Variable Account value. You bear the
entire investment risk for the contract value that you allocate to the Variable
Account.

DETERMINATION OF VARIABLE ACCOUNT VALUE. A contract's Variable Account value is
based on the number of Accumulation Units and Accumulation Unit values, which
are determined on each Valuation Date. The value of an Accumulation Unit for a
subaccount on any Valuation Date is equal to the previous value of that
subaccount's Accumulation Unit multiplied by that subaccount's net investment
factor (discussed below) for the Valuation Period ending on that Valuation Date.
At the end of any Valuation Period, a contract's Variable Account value in a
subaccount is equal to the number of Accumulation Units in the subaccount times
the value of one Accumulation Unit for that subaccount.

The number of Accumulation Units in each subaccount is equal to

- Accumulation Units purchased at the time that any purchase payments or
transferred amounts are allocated to the subaccount; less

- Accumulation Units redeemed to pay for the portion of any transfers from
or partial surrenders allocated to the subaccount; less

- Accumulation Units redeemed to pay charges under the contract.

NET INVESTMENT FACTOR. The net investment factor for a subaccount is determined
by dividing (1) the net asset value per share of the portfolio shares held by
the subaccount, determined at the end of the current Valuation Period, plus the
per share amount of any dividend or capital gains distribution made with respect
to the portfolio shares held by the subaccount during the current Valuation
Period, minus a per share charge for the increase, plus a per share credit for
the decrease, in any income taxes assessed which we determine to have resulted
from the investment operation of the subaccount or any other taxes which are
attributable to this contract, by (2) the net asset value per share of the
portfolio shares held in the subaccount as determined at the end of the previous
Valuation Period, and subtracting from that result a factor representing the
mortality risk, expense risk and administrative expense charge.

If a subaccount's net investment factor is GREATER THAN ONE, the subaccount's
Accumulation Unit value has INCREASED. If a subaccount's net investment factor
is LESS THAN ONE, the subaccount's Accumulation Unit value has DECREASED.

DETERMINATION OF FIXED ACCOUNT VALUE. A contract's fixed account value is
guaranteed by First Fortis. Therefore, we bear the investment risk with respect
to amounts allocated to the fixed account, except to the extent that (1) we may
vary the guaranteed interest rate for future guarantee periods (subject to the
4% effective annual minimum) and (2) the Market Value Adjustment imposes
investment risks on you.

The contract's fixed account value on any Valuation Date is the sum of its fixed
account values in each guarantee period on that date. The fixed account value in
a guarantee period is equal to the following amounts, in each case increased by
accrued interest at the applicable guaranteed interest rate:

- The amount of purchase payments or transferred amounts allocated to the
guarantee period; less

- The amount of any transfers or surrenders out of the guarantee period.

ALLOCATION OF PURCHASE PAYMENTS AND CONTRACT VALUE

ALLOCATION OF PURCHASE PAYMENTS. In your application for a contract, you may
allocate purchase payments, or portions of payments, to the:

- available subaccounts of the Variable Account, or

- to the guarantee periods in the fixed account, or

- to a combination of the two previous options.

Percentages must be in whole numbers and the total allocation must equal 100%.
The percentage allocations for future purchase payments may be changed, without
charge, at any time by sending a written request to First Fortis' home office.
Changes in the allocation of future purchase payments will be effective on the
date we receive your written request.

TRANSFERS. You may transfer contract value:

- from one available subaccount to another available subaccount, or

- from one available subaccount to the fixed account, or

- from one guarantee period to another guarantee period, or

- from one guarantee period to an available subaccount

You must request transfers by (1) a written request to First Fortis' home
office, or by (2) a telephone transfer as described below. We do not charge for
any transfer. However, transfers from a guarantee period that are (1) more than
15 days before or 15 days after the expiration of the existing guarantee period,
or are (2) not a part of a formal First Fortis program for the transfer of fixed
account value are subject to a Market Value Adjustment. See "Market Value
Adjustment".

The MINIMUM transfer from a subaccount or guarantee period is the LESSER of:

- $1,000, or

- all of the contract value in the subaccount or guarantee period.

However, we may permit a continuing request for transfers of lesser specified
amounts automatically on a periodic basis. Where you make all your transfer
requests at the same time, as part of one request, we will count all transfers
between and among the subaccounts of the Variable Account and the fixed account
as one transfer. We will execute the transfers, and determine all values in
connection with the transfers, at of the end of the Valuation Period in which we
receive the transfer request. The amount of any positive or negative Market
Value Adjustment will be added to or deducted from the transferred amount.

Certain restrictions on very substantial allocations to any one subaccount are
set forth under "Limitations on Allocations" in the Statement of Additional
Information.

TOTAL AND PARTIAL SURRENDERS

TOTAL SURRENDERS. You may surrender all of the cash surrender value at any time
during the life of the Annuitant and prior to the annuity commencement date. If
you choose to make a total surrender, you must do so by written request sent to
our home office. We reserve the right to require that the contract be returned
to us prior to making payment, although this will not affect our determination
of the amount of the cash surrender value. Cash surrender value is:

- the contract value at the end of the Valuation Period during which we
receive the written request for the total surrender at our home office,
less

- any applicable surrender charge, and

- after we have applied any Market Value Adjustment.

See "Surrender Charge" and "Market Value Adjustment".

We must receive written consent of all collateral assignees and irrevocable
beneficiaries prior to any total surrender. We will generally pay surrenders
from the Variable Account within seven days of the date of receipt by our home
office of the written request. However, we may postpone payments in certain
circumstances. See "Postponement of Payment".

The amount we pay upon total surrender of the cash surrender value (taking into
account any prior partial surrenders) may be more or less than the total
purchase payments you made. After a surrender of the cash surrender value or at
any time the contract value is zero, all rights of the owner, Annuitant, or any
other person will terminate.

PARTIAL SURRENDERS. At any time during the life of the Annuitant and prior to
the annuity commencement date, you may surrender a portion of the fixed account
and/or the Variable Account. You must request partial surrender by a written
request sent to First Fortis' home office. We will not accept a partial
surrender request from you unless the net proceeds payable to you, as a result
of the request, are at least $1,000. We will surrender the entire cash surrender
value under the contract if the total contract value in both the Variable
Account and fixed account would be less than $1,000 after the partial surrender.

You should specify the subaccounts of the Variable Account or guarantee periods
of the fixed account that you wish to partially surrender. If you do not
specify, we take the partial surrender from the subaccounts and from the
guarantee periods of the fixed account on a pro rata basis.

We will surrender Accumulation Units from the Variable Account and/ or dollar
amounts from the fixed account so that the total amount of the partial surrender
equals the dollar amount of the partial surrender request. We will reduce the
partial surrender by the amount of any applicable surrender charge. In addition,
if the surrender is from a guarantee period, we will reduce the amount payable
to you by any negative Market Value Adjustment, or we will increase the amount
payable to you by any positive Market Value Adjustment UNLESS the surrender is
(1) within 15 days before or 15 days after the expiration of a guarantee period,
or (2) is a part of a formal First Fortis program for the transfer or withdrawal
of fixed account value. The partial surrender will be effective at the end of
the Valuation Period in which we receive the written request for partial
surrender at our home office. Payments will generally be made within seven days
of the effective date of such request, although certain delays are permitted.
See "Postponement of Payment".

The Internal Revenue Code provides that a penalty tax will be imposed on certain
premature surrenders. For a discussion of this and other tax implications of
total and partial surrenders, including withholding requirements, see "Federal
Tax Matters". Also, under tax deferred annuity contracts pursuant to Section
403(b) of the Internal Revenue Code, no distributions of voluntary salary
reduction amounts will be permitted prior to one of the following events:
attainment of age 59 1/2 by the employee or the employee's separation from
service, death, disability or hardship. (Hardship distributions will be limited
to the lesser of the amount of the hardship or the amount of salary reduction
contributions, exclusive of earnings thereon.)

TELEPHONE TRANSACTIONS

You or your representative may make certain requests under the contract by
telephone if we have a written telephone authorization on file. These include
requests for (1) transfers, (2) withdrawals, and (3) changes in purchase payment
allocation instructions, dollar-cost averaging, portfolio rebalancing programs,
and systematic withdrawals. Our home office will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These
procedures may include, among others, (1) requiring some form of personal
identification such as your address and social security number prior to acting
upon instructions received by telephone, (2) providing written confirmation of
such transactions, and/or (3) tape recording of telephone instructions. Your
request for telephone transactions authorizes us to record telephone calls. We
may be liable for any losses due to unauthorized or fraudulent instructions if
we do not employ reasonable procedures. If we do employ reasonable procedures,
we will not be liable for any losses due to unauthorized or fraudulent
instructions. We reserve the right to place limits, including dollar limits, on
telephone transactions.

BENEFIT PAYABLE ON DEATH OF ANNUITANT OR CONTRACT OWNER

If the Annuitant or contract owner dies prior to the annuity commencement date,
we will pay a death benefit. If more than one Annuitant has been named, we will
pay the death benefit payable upon the death of an Annuitant only upon the death
of the last survivor of the persons so named. The death benefit will equal the
greater of:

(1) the sum of all purchase payments made (less all prior
surrenders and previously-imposed surrender charges and prior negative Market
Value Adjustments),

(2) the contract value as of the date used for valuing the death
benefit, or

(3) the contract value (less the amount of any subsequent
surrenders and surrender charges and negative Market Value Adjustments in
connection therewith), as of the contract's Seven Year Anniversary
immediately preceding the earlier of:

(a) the date of death of either the contract owner or Annuitant,
or

(b) the date either first reaches his or her 75th birthday.

See Appendix B for Sample Death Benefit Calculations.

The value of the death benefit is determined as of the end of the Valuation
Period in which we receive, at our home office, proof of death and the written
request as to the manner of payment. Upon receipt of these items, the death
benefit generally will be paid within seven days. Under certain circumstances,
payment of the death benefit may be postponed. See "Postponement of Payment." If
we do not receive a written request for a settlement method, we will pay the
death benefit in a single sum, based on values determined at that time.

The person entitled to the death benefit may (1) receive a single sum payment,
which terminates the contract, or (2) select an annuity option. If the death
benefit payee selects an annuity option, he or she will have all the rights and
privileges of a payee under the contract. If the death benefit payee desires an
annuity option, the election should be made within 60 days of the date the death
benefit becomes payable. Failure to make a timely election can result in
unfavorable tax consequences. For further information, see "Federal Tax
Matters."

We accept any of the following as proof of death: (1) a copy of a certified
death certificate; (2) a copy of a certified decree of a court of competent
jurisdiction as to the finding of death; or (3) a written statement by a medical
doctor who attended the deceased at the time of death.

The Internal Revenue Code requires that a Non-Qualified Contract contain certain
provisions about an owner's death. We discuss these provisions below under
"Federal Tax Matters--Required Distributions for Non-Qualified Contracts". It is
imperative that written notice of the death of the owner be promptly transmitted
to us at our home office, so that we can make arrangements for distribution of
the entire interest in the contract in a manner that satisfies the Internal
Revenue Code requirements. Failure to satisfy these requirements may result in
the contract not being treated as an annuity contract for federal income tax
purposes with possible adverse tax consequences.

THE ANNUITY PERIOD

ANNUITY COMMENCEMENT DATE

You may specify an annuity commencement date in your application. The annuity
commencement date marks the beginning of the period during which an Annuitant or
other payee designated by the owner receives annuity payments under the
contract. The annuity commencement date must be at least two years after the
contract issue date. You should consult your sales representative in this regard

The Internal Revenue Code may impose penalty taxes on amounts distributed either
too soon or too late depending on the type of retirement arrangement involved.
See "Federal Tax Matters". You should consider this carefully in selecting or
changing an annuity commencement date.

You must submit a written request in order to advance or defer the annuity
commencement date. Moreover, you must submit a written request during the
Annuitant's lifetime. We must receive the request at our home office at least 30
days before the then-scheduled annuity commencement date. The new annuity
commencement date must also be at least 30 days after we receive the written
request. You have no right to make any total or partial surrender during the
Annuity Period.

COMMENCEMENT OF ANNUITY PAYMENTS

$1,000. We would make the payment in a single sum to the Annuitant or other
payee chosen by the owner and cancel the contract. We would not impose any
charge other than the premium tax charge.

Otherwise, we will apply (1) the fixed account value to provide a Fixed Annuity
Option and (2) the Variable Account value in any subaccount to provide a
Variable Annuity Option using the same subaccount, unless you have notified us
by written request to apply the fixed account value and Variable Account value
in different proportions. We must receive written request at our home office at
least 30 days before the annuity commencement date.

We will make annuity payments under a Fixed or Variable Annuity Option on a
monthly basis to the Annuitant or other properly-designated payee, unless we
agree to a different payment schedule. If you name more than one person as an
Annuitant, you may elect to name one of such persons to be the sole Annuitant as
of the annuity commencement date. We reserve the right to change the frequency
of any annuity payment so that each payment will be at least $50.

The amount of each annuity payment will depend on (1) the amount of contract
value applied to an annuity option, (2) the form of annuity selected, and (3)
the age of the Annuitant. For information concerning the relationship between
the Annuitant's sex and the amount of annuity payments, including special
requirements in connection with employee benefits plans, see "Calculations of
Annuity Payments" in the Statement of Additional Information. The Statement of
Additional Information also contains detailed information about how the amount
of each annuity payment is computed.

The dollar amount of any fixed annuity payments is specified during the entire
period of annuity payments according to the provisions of the annuity option
selected. The dollar amount of variable annuity payments varies during the
Annuity Period based on changes in Annuity Unit values for the subaccounts that
you choose to use in connection with your payments.

RELATIONSHIP BETWEEN SUBACCOUNT INVESTMENT PERFORMANCE AND AMOUNT OF VARIABLE
ANNUITY PAYMENTS

The amount of an annuity payment depends on the average effective net investment
return of a subaccount during the period since the preceding payment as follows:

- if the return is HIGHER than 4% annually, the Annuity Unit value will
INCREASE, and the second payment will be HIGHER than the first; and

- if the return is LOWER than 4% annually, the Annuity Unit value will
DECREASE, and the second payment will be LOWER than the first.

"Net investment return," for this purpose, refers to the subaccount's overall
investment performance after deduction of the mortality and expense risk and
administrative expense charges, which are assessed at an annual rate of 1.35%.

We guarantee that the amount of each variable annuity payment after the first
payment will not be affected by variations in our mortality experience or our
expenses.

TRANSFERS. A person receiving annuity payments may make up to four transfers a
year among subaccounts. The current procedures for and conditions on these
transfers are the same as we describe above under "Allocation of Purchase
Payments and Contract Value--Transfers". We do not permit transfers from a Fixed
Annuity Option during the Annuity Period.

ANNUITY OPTIONS

You may select an annuity option or change a previous selection by written
request. We must receive your request at least 30 days before the annuity
commencement date. You may select one annuity form, although payments under that
form may be on a combination fixed and variable basis. If no annuity form
selection is in effect on the annuity commencement date, we usually
automatically apply Option B (described below), with payments guaranteed for ten
years. However, federal pension law may require that we make default payments
under certain retirement plans pursuant to plan provisions and/or federal law.
Tax laws and regulations may impose further restrictions to assure that the
primary purpose of the plan is distribution of the accumulated funds to the
employee.

Your contract offers the following options for fixed and variable annuity
payments. Under each of the options, we make payments as of the first Valuation
Date of each monthly period, starting with the annuity commencement date.

OPTION A, LIFE ANNUITY. We do not make payments after the annuitant dies. It is
possible for the annuitant to receive only one payment under this option, if the
annuitant dies before the second payment is due.

OPTION B, LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10 YEARS TO 20 YEARS. We
continue payments as long as the annuitant lives. If the annuitant dies before
we have made all of the guaranteed payments, we continue installments of the
guaranteed payments to the beneficiary.

OPTION C, JOINT AND FULL SURVIVOR ANNUITY. We continue payments as long as
either the annuitant or the joint annuitant is alive. We stop payments when both
the annuitant and the joint annuitant have died. It is possible for the payee or
payees to receive only one payment under this option if both annuitants die
before the second payment is due.

OPTION D, JOINT AND ONE-HALF CONTINGENT SURVIVOR ANNUITY. We continue payments
as long as either the annuitant or the joint annuitant is alive. If the
annuitant dies first, we continue payments to the joint annuitant at one-half
the original amount. If the joint annuitant dies first, we continue payments to
the annuitant at the original full amount. We stop payments when both the
annuitant and the joint annuitant have died. It is possible for the payee or
payees to receive only one payment under this option if both annuitants die
before the second payment is due.

We also have other annuity options available. You can get information about them
from your sales representative or by calling or writing to our home office.

DEATH OF ANNUITANT OR OTHER PAYEE

or for the life of any joint Annuitant. In all such cases, the person entitled
to receive payments also receives any rights and privileges under the annuity
form in effect.

Additional rules applicable to such distributions under Non-Qualified Contracts
are described under "Federal Tax Matters--Required Distributions for
Non-Qualified Contracts". Though the rules there described do not apply to
contracts issued in connection with qualified plans, similar rules apply to the
plans themselves.

CHARGES AND DEDUCTIONS

PREMIUM TAXES

We deduct state premium taxes as follows:

- when imposed on purchase payments, we pay the amount on your behalf and
deduct the amount from your contract value upon (1) our payment of
surrender proceeds or death benefit or (2) annuitization of a contract, or

- when imposed at the time annuity payments begin, we deduct the amount from
your contract value.

Applicable premium tax rates depend upon your place of residence. Rates can
change by legislation, administrative interpretations, or judicial acts.

CHARGES AGAINST THE VARIABLE ACCOUNT

MORTALITY AND EXPENSE RISK CHARGE. We assess each subaccount of the Variable
Account with a daily charge for mortality and expense risk. This charge is a
nominal annual rate of 1.25% of the average daily net assets of the Variable
Account. It consists of approximately .8% for mortality risk and approximately
.45% for expense risk. We guarantee not to increase this charge for the duration
of the contract. This charge is assessed during both the Accumulation Period and
the Annuity Period.

The mortality risk borne by us arises from our obligation to make annuity
payments (determined in accordance with the annuity tables and other provisions
contained in the contract) for the full life of all Annuitants regardless of how
long all Annuitants or any individual Annuitant might live. In addition, we bear
a mortality risk in that we guarantee to pay a death benefit upon the death of
an Annuitant or owner prior to the annuity commencement date. We do not impose a
surrender charge upon payment of a death benefit. This places a further
mortality risk on us.

The expense risk we assume is that actual expenses incurred in connection with
issuing and administering the contract will exceed the limits on administrative
charges set in the contract.

We bear the loss if the administrative charges and the mortality and expense
risk charge are insufficient to cover the expenses and costs assumed.
Conversely, we profit if the amount deducted proves more than sufficient.

ADMINISTRATIVE EXPENSE CHARGE. We assess each subaccount of the Variable Account
with a daily charge at an annual rate of .10% of the average daily net assets of
the subaccount. We assess this charge during both the Accumulation Period and
the Annuity Period. This charge helps cover administrative costs such as those
incurred in issuing contracts, establishing and maintaining the records relating
to contracts, making regulatory filings and furnishing confirmation notices,
voting materials and other communications, providing computer, actuarial and
accounting services, and processing contract transactions. There is no necessary
relationship between the amount of administrative charges assessed on a given
contract and the amount of expenses actually incurred for that contract.

TAX CHARGE

We currently impose no charge for taxes payable by us in connection with the
contract, other than for applicable premium taxes. We reserve the right to
impose a charge for any other taxes that may become payable by us in the future
for the contracts or the Variable Account.

The annual administrative charge and charges against the Variable Account
described above are for the purposes described. We may receive a profit as a
result of these charges.

SURRENDER CHARGE

We do not deduct a sales charge from purchase payments. We deduct surrender
charges on certain total or partial surrenders. We use the revenues from
surrender charges to partially pay our expenses in the sale of the contracts,
including (1) commissions, (2) promotional, distribution and marketing expenses,
and (3) costs of printing and distribution of prospectuses and sales material.

FREE SURRENDERS. You can withdraw the following amounts from the contract
without a surrender charge:

- Any purchase payments that we received more than seven years before the
surrender date and that you have not previously surrendered;

- Any earnings that you have not previously surrendered;

- In any contract year, up to 10% of the purchase payments that we received
less than seven years before the surrender date (whether or not you have
previously surrendered the purchase payments).

Earnings are deemed to be withdrawn first. After all earnings have been
withdrawn, all purchase payments not subject to a surrender charge are deemed to
be withdrawn. After all purchase payments not subject to a surrender charge have
been withdrawn, all purchase payments subject to a surrender charge are deemed
to be withdrawn.

We do not impose a surrender charge on (1) annuitization or (2) payment of a
single sum because less than the minimum required contract value is available to
provide an annuity at the annuity commencement date or (3) payment of any death
benefit.

In addition, we have an administrative policy to waive surrender charges for
full surrenders of contracts that have been in force for at least ten years if
the amount then subject to the surrender charge is less than 25% of the contract
value. We have offered these contracts since 1994. Therefore, we have made no
waivers. We reserve the right to change or terminate this practice at any time,
both for new and for previously issued contracts.

AMOUNT OF SURRENDER CHARGE. We only apply surrender charges if the amount being
withdrawn exceeds the sum of the amounts listed above under "Free Surrenders"
(that is, if the amount being withdrawn includes purchase payments made less
than seven years prior to the surrender date). The surrender charges are:

NUMBER OF YEARS SURRENDER CHARGE
SINCE PURCHASE AS A PERCENTAGE OF
PAYMENT WAS CREDITED PURCHASE PAYMENT
- ----------------------- ---------------------

We anticipate the surrender charge will not be sufficient to cover our
distribution expenses. To the extent that the surrender charge is insufficient,
we will pay such costs from our general account assets. These assets will
include any profit that we derive from the mortality and expense risk charge.

MISCELLANEOUS

The Variable Account invests in shares of the portfolios. Therefore, the net
assets of the Variable Account will reflect the investment advisory fees and
certain other expenses incurred by the portfolios and described in their
prospectus.

REDUCTION OF CHARGES

We will not impose a surrender charge under any contract owned by First Fortis
and the following persons associated with First Fortis, if at the contract issue
date they are (1) officers and directors (2) employees (3) spouses of any such
persons or any of such persons' children.

GENERAL PROVISIONS

THE CONTRACTS

The entire contract includes any application, amendment, rider, endorsement, and
revised contract pages. Only an officer of First Fortis can agree to change or
waive any provision of a contract. Any change or waiver must be in writing and
signed by an officer of First Fortis.

The contracts are non-participating and do not share in dividends or earnings of
First Fortis.

POSTPONEMENT OF PAYMENT

We may defer for up to 15 days the payment of any amount attributable to a
purchase payment made by check to allow the check reasonable time to clear. For
a description of other circumstances in which amounts payable out of Variable
Account assets could be deferred, see "Postponement of Payments" in the
Statement of Additional Information. We may also defer payment of surrender
proceeds payable out of the fixed account for a period of up to 6 months.

MISSTATEMENT OF AGE OR SEX AND OTHER ERRORS

If the Annuitant's age or sex was misstated, we pay the amount that the purchase
payments paid would have purchased at the correct age and sex. If we make any
overpayment because of incorrect information about age or sex, or any other
miscalculation, we deduct the overpayment from the next payment due. We add
underpayments to the next payment. We credit or charge the amount of any
adjustment with interest at the rate of 4% annually.

ASSIGNMENT

Owners and payees may assign their rights and interests under a Qualified
Contract only in certain narrow circumstances referred to in the contract.
Owners and other payees may assign their rights and interests under
Non-Qualified Contracts, including their ownership rights.

We take no responsibility for the validity of any assignment. Owners and payees
must make a change in ownership rights in writing and send it to our home
office. The change will be effective on the date made, although we are not bound
by a change until the date we record it.

The rights under a contract are subject to any assignment of record at our home
office. An assignment or pledge of a contract may have adverse tax consequences.
See below under "Federal Tax Matters".

BENEFICIARY

You may name or change a beneficiary or a contingent beneficiary before the
annuity commencement date. You must send a written request of the change to
First Fortis. Certain retirement programs may require spousal consent to name or
change a beneficiary. In addition, applicable tax laws and regulations may limit
the right to name a beneficiary other than the spouse. We are not responsible
for the validity of any change. A change will take effect as of the date it is
signed but will not affect any payment we make or action we take before
receiving the written request. We also need the consent of any irrevocably named
person before making a requested change.

In the event of the death of a contract owner or Annuitant prior to the annuity
commencement date, the beneficiary will be determined as follows:

- If upon the death of a contract owner there is one or more surviving
contract owners, the surviving contract owner(s) will be the beneficiary
(these override any other beneficiary designations).

- If upon the death of a contract owner there are no surviving contract
owners, and upon the death of the Annuitant, the beneficiary will be the
beneficiary designated by the contract owner.

- If there is no surviving beneficiary who has been designated by the
contract owner, then the contract owner, or the contract owner's estate,
will be the beneficiary.

REPORTS

We will mail to the contract owner (or to the person receiving payments during
the annuity period), at the last known address of record,

any report and communication required by applicable law or regulation. You
should therefore give us prompt written notice of any address change. This will
include annual audited financial statements of the Series Fund, but not
necessarily of the Variable Account or First Fortis.

RIGHTS RESERVED BY FIRST FORTIS

We reserve the right to make certain changes if, in our judgment, they would
best serve the interests of owners and Annuitants or would be appropriate in
carrying out the purposes of the contracts. We will make any change only as
permitted by applicable laws. We will obtain your approval of the changes and
approval from any appropriate regulatory authority if required by law. Examples
of the changes we may make include:

- To operate the Variable Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law.

- To transfer any assets in any subaccount to another subaccount, or to one
or more separate accounts, or to the fixed account; or to add, combine, or
remove subaccounts in the Variable Account.

- To substitute, for the portfolio shares held in any subaccount, the shares
of another portfolio of Series Fund or the shares of another investment
company or any other investment permitted by law.

- To make any changes required by the Internal Revenue Code or by any other
applicable law in order to continue treatment of the contract as an
annuity.

- To change the time or time of day at which a Valuation Date is deemed to
have ended.

- To make any other necessary technical changes in the contract in order to
conform with any action the above provisions permit us to take, including
to change the way we assess charges, but without increasing as to any then
outstanding contract the aggregate amount of the types of charges that we
have guaranteed.

DISTRIBUTION

Fortis Investors, Inc. ("Fortis Investors") is the principal underwriter of the
contracts. The contracts will be sold by individuals who are licensed by state
insurance authorities to sell the contracts of First Fortis, and (1) are
registered representatives of Fortis Investors, or (2) are registered
representatives of other broker-dealer firms or (3) are representatives of other
firms that are exempt from broker dealer regulation. Fortis Investors and any
other broker-dealer firms are (1) registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 as broker-dealers, and (2)
members of the National Association of Securities Dealers, Inc.

Fortis Investors will pay an allowance to its registered representatives and
selling brokers in varying amounts. Fortis Investors does not expect the
allowances under normal circumstances to exceed 6.25% of purchase payments plus
a servicing fee of .25% of contract value per year, starting in the first
contract year.

We and Fortis Investors may, under certain flexible compensation arrangements,
pay lesser or greater selling allowances and larger or smaller service fees to
its registered representatives and other broker dealer firms than as set forth
above. However, in such case, such flexible compensation arrangements will have
actuarial present values that are approximately equivalent to the amounts of the
selling allowances set forth above. Additionally, registered representatives,
broker-dealer firms and exempt firms may qualify for additional compensation
based upon meeting certain production standards. Fortis Investors may charge
back commissions paid to others if the contract upon which the commission was
paid is surrendered or cancelled within certain specified time periods.

First Fortis paid a total of $1,108,526 and $1,355,423 to Fortis Investors for
annuity contract distribution services during 1997 and 1998, respectively,
$149,399 of which in 1997 and $101,176 in 1998 was not reallowed to other broker
dealers or exempt firms. In the distribution agreement, First Fortis has agreed
to indemnify Fortis Investors (and its agents, employees, and controlling
persons) for certain damages and expenses, including those arising under federal
securities laws.

First Fortis or Fortis Investors may also provide additional compensation to
broker-dealers in connection with sales of contracts. Compensation may include
financial assistance to broker-dealers in connection with (1) conferences, (2)
sales or training programs for their employees, (3) seminars for the public, (4)
advertising, (5) sales campaigns regarding contracts, and (6) other
broker-dealer sponsored programs or events. Compensation may also include trips
taken by invited sales representatives and their family members to locations
within or without the United States for business meetings or seminars. First
Fortis or Fortis Investors may pay travel expenses that arise from these trips.

See Note 9 to the Notes to First Fortis' Financial Statements as to amounts it
has paid to Fortis, Inc. and Fortis Benefits Insurance Company, affiliates of
First Fortis for various services.

Fortis Investors is an indirect subsidiary of Fortis (NL)N.V. and Fortis (B).
Fortis Investors is under common control with First Fortis. Fortis Investors'
principal business address is 500 Bielenberg Drive, Woodbury, Minnesota 55125
and its mailing address is P.O. Box 64284, St. Paul, MN 55164. Fortis Investors
is not obligated to sell any specific amount of interests under the contracts.
$23,000,000 of interests in the fixed account and an indefinite amount of
interests in the Variable Account have been registered with the Securities and
Exchange Commission.

FEDERAL TAX MATTERS

The following description is a general summary of the tax rules, primarily
related to federal income taxes. These rules are based on laws, regulations and
interpretations that are subject to change at any time. This summary is not
comprehensive. We do not intend it as tax advice. Federal estate and gift tax
considerations, as well as state and local taxes, may also be material. You
should consult a qualified tax adviser as to the tax implications of taking any
action under a contract or related retirement plan.

NON-QUALIFIED CONTRACTS

Section 72 of the Internal Revenue Code ("Code") governs the taxation of
annuities in general. Neither you nor any other person may exclude or deduct
purchase payments under Non-Qualified Contracts from gross income. However, you
are not currently taxed, until receipt, on any increase in the accumulated value
of a Non-Qualified Contract that results from (1) the investment performance of
the Variable Account, or (2) interest credited to the fixed account. Owners who
are not natural persons are taxed annually on any increase in the contract value
subject to exceptions. You may wish to discuss this with your tax adviser.

The following discussion applies generally to contracts owned by natural
persons.

In general, surrenders or partial withdrawals under contracts are taxed as
ordinary income to the extent of the accumulated income or gain under the
contract. If you assign or pledge any part of the value of a contract, you pay
on the value so pledged or assigned to the same extent as a partial withdrawal.

With respect to annuity payment options, the tax consequences may vary depending
on the option elected under the contract. Until the "investment in the contract"
is recovered, generally only the portion of the annuity payment that represents
the amount by which the contract value exceeds the "investment in the contract"
will be taxed. In general, "investment in the contract" is the aggregate amount
of purchase payments made. After recovery of an Annuitant's or other payee's
"investment in the contract," the full amount of any additional annuity payments
is taxable.

For variable annuity payments, in general, the taxable portion of each annuity
payment (prior to recovery of the "investment in the contract") is the amount of
the payment less the nontaxable portion. The nontaxable portion of each payment
is the "investment in the contract" divided by the total number of expected
annuity payments.

For fixed annuity payments, in general, prior to recovery of the "investment in
the contract", there is no tax on the amount of each payment that bears the same
ratio to that payment as the "investment in the contract" bears to the total
expected value of the annuity payments for the term of the payments. However,
the remainder of each annuity payment is taxable. The taxable portion of a
distribution (in the form of an annuity or a single sum payment) is taxed as
ordinary income.

For purposes of determining the amount of taxable income resulting from
distributions, all contracts and other annuity contracts we or our affiliates
issue to you within the same calendar year will be treated as if they were a
single contract.

You, or any other payee, will pay a 10% penalty on the taxable portion of a
"premature distribution". Generally, an amount is a "premature distribution"
unless the distribution is:

- made on or after you or another payee reach age 59 1/2, or is

- made to a beneficiary on or after your death, or is

- made upon your disability or that of another payee, or is

- part of a series of substantially equal annuity payments for your life or
life expectancy, or is

- part of a series of substantially equal annuity payments for the life or
life expectancy of you AND your beneficiary.

Premature distributions may result, for example, from:

- an early annuity commencement date

- an early surrender or partial surrender of a contract

- an assignment of a contract

- the early death of an Annuitant other than you or another person receiving
annuity payments under the contract

If you transfer ownership of a contract, or designate an Annuitant or payee
other than yourself, you may have certain income or gift tax consequences that
are beyond the scope of this discussion. If you are contemplating any transfer
or assignment of a contract, you should contact a competent tax adviser.

REQUIRED DISTRIBUTIONS FOR NON-QUALIFIED CONTRACTS

In order that a Non-Qualified Contract be treated as an annuity contract for
federal income tax purposes, Section 72(s) of the Code requires:

- if any person receiving annuity payments dies on or after the annuity
commencement date but prior to the time the entire interest in the
contract has been distributed, the remaining portion of such interest will
be distributed at least as rapidly as under the method of distribution
being used as of the date of the person's death; and

- if you die prior to the annuity commencement date, the entire interest in
the contract will be distributed:

- within five years after your death, or

- as annuity payments that will begin within one year of your death and
will be made over your designated beneficiary's life or over a period
not extending beyond the life expectancy of that beneficiary.

However, if the owner's designated beneficiary is the surviving spouse, the
surviving spouse may continue the contract as the new contract owner. Where the
owner or other person receiving payments is not a natural person, the required
distributions under Section 72(A) apply on the death of the primary Annuitant.

The Internal Revenue Service has not issued regulations interpreting the
requirements of Section 72(s) (although it has issued proposed regulations
interpreting similar requirements for qualified plans). We intend to review and
modify the contract if necessary to ensure that it complies with the
requirements of Section 72(s) when clarified by regulation or otherwise.

Generally, the above requirements will be satisfied with a single sum payment
where the death occurs prior to the annuity commencement date. A single sum
payment will be subject to proof of the owner's death. The beneficiary, however,
may elect by written request to receive an annuity option instead of a lump sum
payment. However, if the election is not made within 60 days of the date the
single sum death benefit otherwise becomes payable, the IRS may disregard the
election for tax purposes and tax the beneficiary as if a single sum payment had
been made.

QUALIFIED CONTRACTS

The contracts may be used with several types of tax-qualified plans. The tax
rules applicable to owners, Annuitants, and other payees vary according to the
type of plan and the terms and conditions of the plan itself. In general,
purchase payments made under a tax qualified plan on your behalf are excludable
from your gross income during the Accumulation Period. The portion, if any, of
any purchase payment that is not excluded from your gross income during the
Accumulation Period constitutes your "investment in the contract".

When annuity payments begin, you will receive back your "investment in the
contract" if any, as a tax-free return of capital. The Code provides which
portion of each payment is taxable and which portion is tax free. These rules
may vary depending on the type of tax qualified plan.

The contracts are available in connection with the following types of retirement
plans:

- Section 403(b) annuity plans for employees of certain tax-exempt
organizations and public education institutions;

- Section 401 or 403(a) qualified pension, profit-sharing, or annuity plans;

- Individual retirement annuities ("IRAs") under Section 408(b);

- Simplified employee pension plans ("SEPs") under Section 408(k);

- SIMPLE IRA Plans under Section 408(p); and

- Section 457 unfunded deferred compensation plans of tax-exempt
organizations and private employer unfunded deferred compensation plans.

The tax implications of these plans are further discussed in the Statement of
Additional Information under the heading "Taxation Under Certain Retirement
Plans".

WITHHOLDING

Annuity payments and other amounts received under contracts are subject to
income tax withholding unless the recipient elects not to have taxes withheld.
The amounts withheld will vary among recipients depending on the tax status of
the individual and the type of payments from which taxes are withheld.

Despite the recipient's election, the Code may require withholding from certain
payments outside the United States. The Code may also require withholding from
certain distributions from certain types of qualified retirement plans, unless
the proceeds are transferred directly from the qualified plan to another
qualified retirement plan. Moreover, special "backup withholding" rules may
require us to disregard the recipient's election if the recipient fails to
supply us with a "TIN" or taxpayer identification number (social security number
for individuals), or if the Internal Revenue Service notifies us that the TIN
provided by the recipient is incorrect.

PORTFOLIO DIVERSIFICATION

The United States Treasury Department has adopted regulations under Section
817(h) of the Code that set forth diversification requirements for investments
underlying Non-Qualified Contracts. We believe that the investments will satisfy
these requirements. Failure to do so would result in immediate taxation to you
or another person of all income credited to Non-Qualified Contracts. Also,
current regulations do not provide guidance as to any circumstances in which
control over allocation of values among different investment alternatives may
cause you or another person receiving annuity payments to be treated as the
owners of Variable Account assets for tax purposes. We reserve the right to
amend the contracts in any way necessary to avoid any such result. The Treasury
Department may establish standards in this regard through regulations or
rulings. Such standards may apply only prospectively, although retroactive
application is possible if the Treasury Department considered such standards not
to embody a new position.

CERTAIN EXCHANGES

Section 1035 of the Code provides generally that no gain or loss will be
recognized under the exchange of a life insurance or annuity contract for an
annuity contract. Thus, a properly completed exchange pursuant to the special
annuity contract exchange form we provide for this purpose is not generally a
taxable event under the Code. Moreover, your investment in the contract will be
the same as your investment in the product you exchanged out of.

Because of the complexity of these and other tax aspects in connection with an
exchange, you should consult a tax adviser before making any exchange.

TAX LAW RESTRICTIONS AFFECTING SECTION 403(B) PLANS

Section 403(b)(11) of the Internal Revenue Code restricts the distribution under
Section 403(b) annuity contracts of:

(1) elective contributions made for years beginning after
December 31, 1988;

(2) earnings on those contributions; and

(3) earnings on amounts held as of December 31, 1988.

Distribution of these amounts may only occur upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship. In addition, we may not distribute income attributable to elective
contributions made after December 31, 1988.

FURTHER INFORMATION ABOUT FIRST FORTIS

First Fortis Life Insurance Company is an affiliate of the worldwide Fortis
group of companies owned by Fortis (NL) N.V. of the Netherlands and Fortis (B)
of Belgium. The Company was originally organized under New York Insurance Law on
August 12, 1971, and was acquired by the current owners on March 24, 1989, to
enable the Fortis group of companies the ability to distribute their products to
the New York State marketplace.

On October 1, 1991, First Fortis Life Insurance Company and its affiliate Fortis
Benefits Insurance Company (the "Companies"), entered into an Asset Transfer and
Acquisition Agreement (the "Agreement") with Mutual Benefit Life Insurance
Company in Rehabilitation (MBL). Pursuant to the Agreement, the Companies
acquired certain assets and assumed certain liabilities of MBL relating to the
group life, accident and health, disability and dental insurance business of
MBL. That portion of the business conducted in New York was assumed by First
Fortis, while the remaining and more substantial portion of the business was
assumed by Fortis Benefits Insurance Company. Fortis (NL) N.V. contributed $25
million in cash to the paid-in-capital of First Fortis on October 1, 1991 in
connection with the acquisition.

GENERAL

We offer and sell insurance products, including fixed and variable annuity
contracts, and group life, accident and health insurance policies. We market our
products to small business and individuals through a network of independent
agents, brokers, and financial institutions.

OWNERSHIP OF SECURITIES

All of First Fortis' outstanding shares are owned by Fortis, Inc., One Chase
Manhattan Plaza, New York, N.Y. 10005. Fortis, Inc., in turn is wholly owned by
Fortis International, Inc., which is wholly owned by AMEV/VSB 1990 N.V., both of
which share the same address with N.V. AMEV., Archimedeslaan 10, 3584 BA,
Utrecht, The Netherlands. AMEV/VSB 1990 N.W. is 50% owned by Fortis (NL)N.V. and
50% owned, through certain subsidiaries, by Fortis (B), Boulevard Emile Jacqmain
53, 1000 Brussels, Belgium.

SELECTED FINANCIAL DATA

The following is a summary of certain financial data of First Fortis. This
summary has been derived in part from the financial statements of First Fortis
included elsewhere in this prospectus. You should read the following along with
these financial statements.

YEAR ENDED DECEMBER 31,
----------------------------------------------------------
(IN THOUSANDS) 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------

INCOME STATEMENT DATA
Premiums........................................................ $ 54,451 $ 51,846 $ 67,516 $ 81,201 $ 92,056
Net investment income........................................... 8,187 7,907 7,891 7,466 6,261
Realized investment gains (losses).............................. 1,436 361 (3) 2,683 (1,057)
Other income.................................................... 1,202 682 336 298 287
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES................................................ $ 65,276 $ 60,796 $ 75,740 $ 91,648 $ 97,547
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Benefits and expenses........................................... $ 61,477 $ 60,983 $ 75,596 $ 96,371 $ 104,582
Income tax expense (benefit).................................... 1,347 (63) (39) (1,563) (999)
Net income (loss)............................................... 2,452 (124) 183 (3,160) (6,036)

BALANCE SHEET DATA
Total assets.................................................... $ 217,502 $ 170,898 $ 142,742 $ 139,913 $ 123,954
Total liabilities............................................... 177,476 133,817 107,050 101,523 97,913
Total shareholder's equity...................................... 40,026 37,081 35,692 38,390 26,041

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

REVENUES

First Fortis (the "Company") life insurance premiums increased during 1998 as
compared to 1997 due to strong group life sales. Accident and health premiums
decreased during 1998 as compared to 1997. This accident and health premium
decrease was substantially attributable to the Company's decision, effective
January 1, 1996, to cease new sales of group medical policies. The Company
continues to service the existing group medical business. The decision to
effectively exit the group medical business has reduced annualized premiums
associated with this line from $11.4 million inforce at January 1, 1997 to a
$4.2 million in premium inforce at December 31, 1998. Accident and health
premiums are principally composed of group accident and health coverages. The
discontinuance of group medical sales and strong dental sales have caused the
group accident and health premium mix to shift. The dental, disability income,
and medical premium represented 44%, 41%, and 15%, respectively, of total group
accident and health premium in 1998 compared to 39%, 39%, and 22%, respectively,
in 1997.

The Company continues to match investment portfolio composition to liquidity
needs and capital requirements. Changes in interest rates during 1998 and 1997
resulted in recognition of realized gains and losses upon sales of securities.

BENEFITS

1998 life benefits as compared to premium were lower than 1997 due to more
favorable mortality experience, despite the fact that the aggregate amount of
claims increased. The decrease in accident and health benefits in 1998 as
compared to 1997 is primarily due to improved experience in the group medical
products. Slightly offsetting this is a larger volume of new group long term
disability claims.

EXPENSES

The Company continues to monitor its commission rate structures, and, as
indicated by market conditions, periodically adjusts rates paid. Rates paid vary
by product type, group size and duration.

The Company's general and administrative expenses as a percent of premium has
decreased in 1998 from 1997 as a reflection of the Company's expense monitoring
efforts.

YEAR 2000

INTRODUCTION. The Company relies heavily on information technology ("IT")
systems to conduct its business. These IT systems include both internally
developed and vendor-supplied systems. The Company also has business
relationships with numerous entities including but not limited to financial
institutions, financial intermediaries, third party administrators and other
critical vendors as well as regulators and customers. These entities are
themselves reliant on their IT systems to conduct their businesses. Therefore,
there is a supply chain of dependency among and between all involved entities.

STATE OF READINESS. In 1997, the Fortis parent company organized a
multi-disciplinary Year 2000 Project Team ("Team"). The Company is a part of the
Team. The Team consists of employees at each subsidiary, audit, legal and
outside consultants. The Team has developed and is currently executing a
comprehensive plan designed to make the Company's IT systems Year 2000 ready.
The plan covers four stages including (i) inventory, (ii) assessment, (iii)
programming, and (iv) testing and certification. The Company has completed the
inventory stage for its internal hardware, software and telecommunications
systems (mainframe and client/server applications). The assessment process is
also complete and the Company is utilizing both internal and external resources
to reprogram or replace the systems where necessary, and testing the
applications for Year 2000 readiness. Programming, testing and certification of
these systems and applications are targeted for completion by the end of 1999.

COSTS. The Company is not incurring any cost for the Year 2000 project since it
is being paid for by affiliates of the Company. Costs to upgrade and replace
systems in the normal course of business are not included in this estimate. The
Company believes that its Year 2000 project generally is on schedule.

RISKS. The Company is attempting to limit the potential impact of the Year 2000
by monitoring the progress of its own Year 2000 project and those of its
critical external relationships and by developing contingency/recovery plans.
The Company cannot guarantee that it will be able to identify and/or resolve all
of its Year 2000 issues. Any critical unresolved Year 2000 issues at the Company
or its external relationships, however, could have a material adverse effect on
the Company's results of operations, liquidity or financial condition. If the
Company's Year 2000 issues were unresolved, potential consequence would include,
among other possibilities, the inability to accurately and timely process
benefit claims, update customer's accounts, process financial transactions, bill
customers, assess exposure to risks, determine liquidity requirements or report
accurate data to management, shareholders, customers, regulators and others as
well as business interruptions or shutdowns, financial losses, harm to its
reputation, increased scrutiny by regulators and litigation related to Year 2000
issues.

CONTINGENCY PLANS. Consistent with prudent due diligence efforts, the Company
has defined contingency plans aimed at ensuring the continuity of critical
business functions before and after December 31, 1999, should there be an
unexpected system failure. The Company has developed plans that are designed to
reduce the negative impact on Fortis, and provide methods of returning to normal
operations, if failure occurs.

LIQUIDITY AND CAPITAL RESOURCES

The liquidity requirements of the Company have been met by funds provided from
operations, including investment income. Funds are principally used to provide
for policy benefits, operating expenses, commissions and investment purchases.
The impact of the declining inforce medical business has been considered in
evaluating the Company's future liquidity needs. The Company expects its
operating activities to continue to generate sufficient funds.

The National Association of Insurance Commissioners has implemented risk-based
capital standards to determine the capital requirements of a life insurance
company based upon the risks inherent in its operations. These standards require
the computation of risk-based capital amount which is then compared to a
company's actual total adjusted capital. Based upon current calculation using
these risk-based capital standards, the Company's percentage of total adjusted
capital is in excess of ratios which would require regulatory attention.

The Company has no long or short term debt. As of December 31, 1998, 96% of the
Company's fixed maturity investments consisted of investment grade bonds. The
Company does not expect this percentage to change significantly in the future.

REGULATION

The Company is subject to the laws and regulations established by the New York
State Insurance Department governing insurance business conducted in New York
State. Periodic audits are conducted by the New York Insurance Department
related to the Company's compliance with these laws and regulations. To date,
there have been no adverse findings regarding the Company's operations.

MARKET RISK

Interest rate risk is the Company's primary market risk exposure. Substantial
and sustained increases and decreases in market interest rates can affect the
profitability of insurance products and market value of investments. The yield
realized on new investments generally increases or decreases in direct
relationship with interest rate changes. The market value of the Company's fixed
maturity and mortgage loan portfolios generally increases when interest rates
decrease, and decreases when interest rates increase.

Interest rate risk is monitored and controlled through asset/liability
management. As part of the risk management process, different economic scenarios
are modeled, including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet projected
liability cash flows. A major component of the Company's asset/liability
management program is structuring the investment portfolio with cash flow
characteristics consistent with the cash flow characteristics of the Company's
insurance liabilities.

The Company uses computer models to perform simulations of the cash flow
generated from existing insurance policies under various interest rate
scenarios. Information from these models is used in the determination of
interest crediting strategies and investment strategies. The asset/liability
management discipline includes strategies to minimize exposure to loss as market
interest rates change. On the basis of these analyses, management believes there
is no material solvency risk to the Company with respect to interest rate
movements up or down of 100 basis points from year end levels.

Equity market risk exposure is not significant. Equity investments in the
general account are not material enough to threaten solvency and contractowners
bear the investment risk related to the variable products. Therefore, the risks
associated with the investments supporting the variable separate accounts are
assumed by contractowners, not by the Company. The Company provides certain
minimum death benefits that depend on the performance of the variable separate
accounts. Currently the majority of these death benefit risks are reinsured
which then protects the Company from adverse mortality experience and prolonged
capital market decline.

VOTING PRIVILEGES

In accordance with our view of current applicable law, we will vote shares of
each of the portfolios attributable to a contract at regular and special
meetings of the shareholders of the portfolios. We will vote those shares in
proportion to instructions we receive from the persons having the voting
interest in the contract as of the record date for the corresponding portfolio
shareholders meeting. Owners have the voting interest during the Accumulation
Period, persons receiving annuity payments have the voting interest during the
Annuity Period, and beneficiaries have the voting interest after the death of
the Annuitant or owner. However, if the Investment Company Act of 1940 or any
rules thereunder should be amended or if the present interpretation thereof
should change, and as a result we determine that we are permitted to vote shares
of the portfolios in our own right, we may elect to do so.

We determine the number of shares of a portfolio attributable to a contract as
follows:

- During the Accumulation Period, we divide the amount of contract value in
a subaccount by the net asset value of one share of the portfolio
corresponding to that subaccount. We make this calculation as of the
record date for the applicable portfolio.

- During the Annuity Period, or after the death of the Annuitant or owner,
we make a similar calculation. However, for subaccount value we use the
liability for future variable annuity payments allocable to that
subaccount as of the record date for the applicable portfolio. We
calculate the liability for future variable annuity payments on the basis
of the following on the record date:

- mortality assumptions,

- the assumed interest rate used in determining the number of Annuity
Units under the contract, and

- the applicable Annuity Unit value

During the Annuity Period, the number of votes attributable to a contract will
generally decrease since funds set aside to make the annuity payments will
decrease.

We will vote shares for which we have not received timely instructions, and any
shares attributable to excess amounts we have accumulated in the related
subaccount, in proportion to the voting instructions which we receive for all
contracts and other variable annuity contracts participating in a portfolio. To
the extent that we or any affiliated company holds any shares of a portfolio,
those shares will be voted in the same proportion as instructions for that
portfolio from all our policy holders holding voting interests in that
portfolio. Shares held by separate accounts other than the Variable Account will
in general be voted in accordance with instructions of owners in such other
separate accounts. This diminishes the relative voting influence of the
contracts.

Each person having a voting interest in a subaccount of the Variable Account
will receive proxy material, reports and other materials relating to the
appropriate portfolio. Under the procedures described above, these persons may
give instructions regarding:

- the election of the Board of Directors of the portfolios,

- ratification of the selection of a portfolio's independent auditors,

- the approval of the investment managers of a portfolio,

- changes in fundamental investment policies of a portfolio, and

- all other matters that are put to a vote of portfolio shareholders

LEGAL MATTERS

David A. Peterson, Esquire, Vice President and Assistant General Counsel with
our legal department has passed on the legality of the contracts described in
this prospectus. Messrs. Freedman, Levy, Kroll & Simonds, Washington, D.C., have
advised First Fortis on certain federal securities law matters.

OTHER INFORMATION

We have filed Registration Statements with the Securities and Exchange
Commission under the Securities Act of 1933 as amended, with respect to the
contracts discussed in this prospectus. We have not included in the prospectus
all of the information set forth in the Registration Statement, amendments, and
exhibits thereto. We intend statements contained in this prospectus about the
content of the contracts and other legal instruments to be summaries. For a
complete statement of the terms of these documents, you should refer to the
instruments filed with the Securities and Exchange Commission.

A Statement of Additional Information is available upon request. Its contents
are as follows:

CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

First Fortis and the Variable Account..........
Calculation of Annuity Payments................
Postponement of Payments.......................
Services.......................................
- Safekeeping of Variable Account Assets.....
- Experts....................................
- Principal Underwriter......................
Taxation Under Certain Retirement Plans........
Withholding....................................
Variable Account Financial Statements..........
APPENDIX A--Performance Information............

FIRST FORTIS FINANCIAL STATEMENTS

The financial statements of First Fortis that are included in this prospectus
should be considered primarily as bearing on our ability to meet our obligations
under the contracts. The contracts are not entitled to participate in our
earnings, dividends, or surplus.

REPORT OF INDEPENDENT AUDITORS

Board of Directors
First Fortis Life Insurance Company

We have audited the accompanying balance sheets of First Fortis Life Insurance
Company, an indirect, wholly-owned subsidiary of Fortis (B) and Fortis (NL)
N.V., as of December 31, 1998 and 1997, and the related statements of income,
changes in shareholder's equity and cash flows for each of the three years in
the period ended December 31, 1998. 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 in accordance with generally accepted auditing
standards. 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Fortis Life Insurance
Company at December 31, 1998 and 1997, and the results of its operations and its
cash flows for each of three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.

/s/ Ernst & Young, LLP
February 19, 1999
Minneapolis, MN

F-1

BALANCE SHEETS
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31
-------------------------
1998 1997
----------- -----------

ASSETS
Investments:
Fixed maturities, at fair value (amortized cost
1998--$125,787; 1997--$102,284).......................... $ 130,038 $ 105,776
Short-term investments.................................... 830 11,697
----------- -----------
130,868 117,473

Cash and cash equivalents................................... 1,160 7,453

Receivables:
Uncollected premiums, less allowance (1998 and
1997--$100).............................................. 3,538 2,358
Reinsurance recoverable on unpaid and paid losses......... 28,458 19,764
Other..................................................... 417 1,402
----------- -----------
32,413 23,524
Accrued investment income................................... 1,895 1,700
Deferred policy acquisition costs........................... 3,148 1,413
Property and equipment at cost, less accumulated
depreciation (1998--$2,086; 1997--$1,853).................. 324 676
Deferred federal income taxes............................... 1,150 2,079
Goodwill, less accumulated amortization (1998--$368;
1997--$322)................................................ 462 508
Assets held in separate accounts............................ 46,082 16,072
----------- -----------
TOTAL ASSETS................................................ $ 217,502 $ 170,898
----------- -----------
----------- -----------

See accompanying notes.

F-2

BALANCE SHEETS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31
-------------------------
1998 1997
----------- -----------

POLICY RESERVES, LIABILITIES AND SHAREHOLDER'S EQUITY
POLICY RESERVES AND LIABILITIES:
Future policy benefit reserves:
Life insurance.......................................... $ 30,388 $ 27,671
Interest sensitive and investment products.............. 6,267 6,878
Accident and health..................................... 68,206 61,175
----------- -----------
104,861 95,724
Unearned revenues......................................... 8,535 5,223
Other policy claims and benefits payable.................. 11,084 10,304
Income taxes payable...................................... 2,017 911
Other liabilities......................................... 4,897 5,583
Liabilities related to separate accounts.................. 46,082 16,072
----------- -----------
TOTAL POLICY RESERVES AND LIABILITIES....................... 177,476 133,817

COMMITMENTS AND CONTINGENCIES
SHAREHOLDER'S EQUITY:
Common stock, $20 par value:
Authorized, issued and outstanding shares--100,000...... 2,000 2,000
Additional paid-in capital................................ 37,440 37,440
Retained deficit.......................................... (2,190) (4,642)
Accumulated other comprehensive income.................... 2,776 2,283
----------- -----------
TOTAL SHAREHOLDER'S EQUITY.................................. 40,026 37,081
----------- -----------
TOTAL POLICY RESERVES, LIABILITIES AND SHAREHOLDER'S
EQUITY..................................................... $ 217,502 $ 170,898
----------- -----------
----------- -----------

See accompanying notes.

F-3

FIRST FORTIS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------

REVENUES
Insurance operations:
Life insurance premiums........................................................... $ 23,057 $ 19,158 $ 22,791
Interest sensitive and investment product policy charges.......................... 71 4 59
Accident and health insurance premiums............................................ 31,323 32,684 44,666

Net investment income............................................................... 8,187 7,907 7,891
Net realized gains on investments................................................... 1,436 361 (3)
Other income........................................................................ 1,202 682 336
--------- --------- ---------
TOTAL REVENUES.................................................................... 65,276 60,796 75,740

BENEFITS AND EXPENSES
Benefits to policyholders:
Life insurance.................................................................... 16,167 14,597 19,720
Interest sensitive and investment products........................................ 815 196 72
Accident and health............................................................... 26,616 29,090 37,988
--------- --------- ---------
43,598 43,883 57,780

Amortization of deferred policy acquisition costs..................................... (106) (56) (92)
Insurance commissions................................................................. 5,056 4,457 5,214
General and administrative expenses................................................... 12,929 12,699 12,694
--------- --------- ---------
TOTAL BENEFITS AND EXPENSES....................................................... 61,477 60,983 75,596
--------- --------- ---------
Income (loss) before federal income taxes............................................. 3,799 (187) 144
Federal income taxes.................................................................. 1,347 (63) (39)
--------- --------- ---------
NET INCOME (LOSS)..................................................................... $ 2,452 $ (124) $ 183
--------- --------- ---------
--------- --------- ---------

See accompanying notes.

F-4

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS)

ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN RETAINED COMPREHENSIVE
TOTAL STOCK CAPITAL DEFICIT (LOSS) INCOME
------------ ------------ ------------ ------------- ---------------

Balance, January 1, 1996........................ $ 38,390 $ 2,000 $ 37,440 $ (4,701) $ 3,651
Comprehensive loss:
Net income.................................. 183 -- -- 183 --
Change in unrealized losses on investments,
net........................................ (2,882) -- -- -- (2,882)
------------
Comprehensive loss............................ (2,699)
------------ ------ ------------ ------ ------
Balance, December 31, 1996...................... 35,691 2,000 37,440 (4,518) 769
Comprehensive income:
Net loss.................................... (124) -- -- (124) --
Change in unrealized gains on investments,
net........................................ 1,514 -- -- -- 1,514
------------
Comprehensive income.......................... 1,390
------------ ------ ------------ ------ ------
Balance, December 31, 1997...................... 37,081 2,000 37,440 (4,642) 2,283
Comprehensive income:
Net income.................................. 2,452 -- -- 2,452 --
Change in unrealized gains on investments,
net........................................ 493 -- -- -- 493
------------
Comprehensive income.......................... 2,945
------------ ------ ------------ ------ ------
Balance, December 31, 1998...................... $ 40,026 $ 2,000 $ 37,440 $ (2,190) $ 2,776
------------ ------ ------------ ------ ------
------------ ------ ------------ ------ ------

See accompanying notes.

F-5

STATEMENTS OF CASH FLOWS
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS)

YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------

OPERATING ACTIVITIES
Net income (loss).............................................................. $ 2,452 $ (124) $ 183
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Change in deferred tax....................................................... 665 (1,338) --
Depreciation, amortization and accretion..................................... 299 707 804
Loss on disposal of property and equipment................................... 12 -- --
Net realized (gains) losses on investments................................... (1,436) (361) 4
(Increase) decrease in uncollected premiums, accrued investment income and
other....................................................................... (390) 2,309 (1,076)
Increase in reinsurance recoverable.......................................... (8,694) (5,033) (5,395)
Increase in income taxes payable............................................. 1,106 883 1,772
Amortization of policy acquisition costs..................................... (106) (56) (92)
Policy acquisition costs deferred............................................ (1,629) (1,110) (155)
Increase in future policy benefit reserves, unearned revenues and other
policy claims and benefits.................................................. 13,922 1,769 5,265
(Decrease) increase in other liabilities..................................... (686) 1,533 (1,939)
--------- --------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES...................... 5,515 (821) (629)

INVESTING ACTIVITIES
Purchases of fixed maturity investments........................................ (187,953) (127,426) (140,954)
Sales and repayments of fixed maturity investments............................. 165,971 137,273 135,352
Decrease (increase) in short-term investments.................................. 10,867 (11,697) 6,942
Purchases of property and equipment............................................ -- (107) (310)
--------- --------- ---------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES...................... (11,115) (1,957) 1,030

FINANCING ACTIVITIES
Activities related to investment products:
Considerations received...................................................... 13,661 10,679 --
Surrenders and death benefits................................................ (15,075) (2,152) --
Interest credited to policyholders........................................... 721 159 --
--------- --------- ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES...................... (693) 8,686 --
--------- --------- ---------

(Decrease) increase in cash and cash equivalents................................. (6,293) 5,908 401
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR........................... 7,453 1,545 1,144
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR................................. $ 1,160 $ 7,453 $ 1,545
--------- --------- ---------
--------- --------- ---------

See accompanying note

F-6

NOTES TO FINANCIAL STATEMENTS
FIRST FORTIS LIFE INSURANCE COMPANY

DECEMBER 31, 1998

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

First Fortis Life Insurance Company (the Company) is an affiliate of the
worldwide Fortis group of companies owned by Fortis (B) and Fortis (NL) N.V.
Prior to April 30, 1997, First Fortis was wholly-owned by Fortis (B), while the
other U.S. subsidiaries of Fortis (B) and Fortis (NL) N.V. operated under the
holding company of Fortis, Inc. Upon regulatory approval by the New York State
Insurance Department in April 1997, the Company became a wholly-owned subsidiary
of Fortis, Inc. The Company was organized to enable the Fortis group of
companies to distribute their products to the New York State marketplace. To
date, the Company's revenues have been derived primarily from group employee
benefits products. During 1998, the Company had no direct premium written by
third party administrators ("TPAs"). Effective January 1, 1996, the Company
stopped offering its group medical products; however, the Company will continue
to renew and service existing medical business, which represented $4,648,000,
$7,297,000 and $17,871,000 of 1998, 1997 and 1996 accident and health premiums,
respectively.

BASIS OF STATEMENT PRESENTATION

During 1998, the Company adopted Statement of Financial Accounting Standards
Board (SFAS) 130, REPORTING COMPREHENSIVE INCOME. SFAS 130 establishes new rules
for the reporting and display of comprehensive income and its components;
however, the adoption of this SFAS had no impact on the Company's net income or
shareholder's equity. SFAS 130 requires unrealized gains or losses on the
Company's available-for-sale securities, which prior to adoption were reported
separately in shareholder's equity, to be included in other comprehensive
income. Prior year financial statements have been reclassified to conform to the
requirements of SFAS 130.

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

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which practices differ in certain
respects from statutory accounting practices prescribed or permitted by the
Department of Insurance of the State of New York. The more significant of these
principles are:

REVENUE RECOGNITION AND FUTURE POLICY BENEFIT RESERVES

Premiums for traditional life insurance are recognized as revenue when due over
the premium-paying period. Reserves for future policy benefits are computed
using the net level method and include investment yield, mortality, withdrawal,
and other assumptions based on the Company's experience, modified as necessary
to reflect anticipated trends and to include provisions for possible unfavorable
deviations.

Revenues for interest sensitive and investment products consist of charges
assessed against policy account balances during the period for the cost of
insurance, policy administration, and surrender charges. Future policy benefit
reserves are computed under the retrospective deposit method and consist of
policy account balances before applicable surrender charges. Policy benefits
charged to expense during the period include amounts paid in excess of policy
account balances and interest credited to policy account balances. Interest
credit rates for universal life and investment products ranged from 3.5% to
10.25% in 1998 and 3.5% to 10.0% in 1997 and 1996.

Premiums for accident and health insurance products, including medical, long and
short-term disability and dental insurance products, are recognized as revenues
ratably over the contract period in proportion to the risk insured. Reserves for
future disability benefits are based on the 1964 Commissioners Disability Table
at 6% interest. Calculated reserves are modified based on the Company's actual
experience.

Premiums for credit insurance included in life insurance premiums and accident
and health insurance premiums are recognized as revenues when due over the
estimated coverage period.

CLAIMS AND BENEFITS PAYABLE

Other policy claims and benefits payable for reported and incurred but not
reported claims and related claims adjustment expenses are determined using
case-basis estimates and past experience. The methods of making such estimates
and establishing the related liabilities are continually reviewed and updated.
Any adjustments resulting therefrom are reflected in income currently.

DEFERRED POLICY ACQUISITION COSTS

The costs of acquiring new business, which vary with and are directly related to
the production of new business, are deferred to the extent recoverable and
amortized. For credit life, disability and accident and health insurance
products, such costs are amortized over the premium paying period. For interest
sensitive and investment products, such costs are amortized in relation to
expected future gross profits. Estimation of future gross profits requires
significant management judgment and are reviewed periodically. As excess amounts
of deferred costs over future premiums or gross profits are identified, such
excess amounts are expensed.

INVESTMENTS

The Company's investment strategy is developed based on many factors including
insurance liability matching, rate of return, maturity, credit risk, tax
considerations and regulatory requirements.

All fixed maturity investments are classified as available-for-sale and carried
at fair value.

F-7

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Changes in fair values of available-for-sale securities, after related deferred
income taxes and after adjustment for the changes in pattern of amortization of
deferred policy acquisition costs are reported as accumulated other
comprehensive income and, accordingly, have no effect on net income.

Short term investments are at cost which approximates fair value.

Realized gains and losses on sales of investments, and declines in value judged
to be other-than-temporary, are recognized on the specific identification basis.
Investment income is recorded as earned.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost less accumulated depreciation. The
Company provides for depreciation principally on the straight-line method over
the estimated useful lives of the related property.

GOODWILL

Goodwill represents the excess of the purchase price paid over net assets
acquired in connection with the purchase of the shell of Metropolitan Life.
Goodwill is amortized on a straight line basis over 18 years.

INCOME TAXES

Income taxes have been provided using the liability method. Deferred tax assets
and liabilities are determined based on the temporary differences between the
financial reporting and the tax bases and are measured using the enacted tax
rates.

SEPARATE ACCOUNTS

Revenues and expenses related to the separate account assets and liabilities are
excluded from the amounts reported in the accompanying statements of operations.
Assets and liabilities associated with separate accounts relate to deposit and
annuity considerations for which the contractholder, rather than the Company,
bears the investment risk. Separate account assets are reported at fair value
and represent funds held for the exclusive benefit of the variable annuity
contract owners. The Company receives mortality and expense risk fees from the
separate accounts.

The Company makes contractual mortality assurances to the variable annuity
contract owners that the net assets of the separate accounts will not be
affected by future variations in the actual life expectance experience of the
annuitants and beneficiaries from the mortality assumptions implicit in the
annuity contracts. The Company makes periodic fund transfers to, or withdrawals
from, the separate account assets for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company also guarantees
that the rates at which administrative fees are deducted from contract funds
will not exceed contractual maximums.

GUARANTY FUND ASSESSMENTS

There are a number of insurance companies that are currently under regulatory
supervision. This may result in future assessments by state guaranty fund
associations to cover losses to policyholders of insolvent or rehabilitated
companies. These assessments can be partially recovered through a reduction in
future premium taxes in some states. The Company believes it has adequately
provided for the impact of future assessments relating to current insolvencies.

STATEMENTS OF CASH FLOWS

The Company considers investments with a maturity at the date of their
acquisition of three months or less to be cash equivalents. These securities are
carried principally at amortized cost which approximates fair value

RECLASSIFICATIONS

Certain amounts in the 1997 and 1996 financial statements have been reclassified
to conform to the 1998 presentation.

F-8

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

2. INVESTMENTS

AVAILABLE-FOR-SALE SECURITIES

The following is a summary of the available-for-sale securities (in thousands):

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAIN LOSS VALUE
----------- --------- --------- -----------

December 31, 1998
Governments.................................... $ 18,770 $ 437 $ 14 $ 19,193
Public utilities............................... 14,446 768 119 15,095
Industrial and miscellaneous................... 92,571 3,471 292 95,750
----------- --------- --- -----------
Total........................................ $ 125,787 $ 4,676 $ 425 $ 130,038
----------- --------- --- -----------
----------- --------- --- -----------
December 31, 1997
Governments.................................... $ 3,599 $ 125 $ 2 $ 3,722
Public utilities............................... 8,212 247 -- 8,459
Industrial and miscellaneous................... 90,473 3,197 75 93,595
----------- --------- --- -----------
Total........................................ $ 102,284 $ 3,569 $ 77 $ 105,776
----------- --------- --- -----------
----------- --------- --- -----------

The amortized cost and fair value of fixed maturity securities at December 31,
1998, by contractual maturity, are shown below (in thousands):

AMORTIZED FAIR
COST VALUE
----------- -----------

Due in one year or less................................................ $ 1,226 $ 1,228
Due after one year through five years.................................. 41,505 42,350
Due after five years through ten years................................. 42,709 44,286
Due after ten years.................................................... 40,347 42,174
----------- -----------
Total.................................................................. $ 125,787 $ 130,038
----------- -----------
----------- -----------

Expected maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.

INVESTMENTS ON DEPOSIT

The Company had fixed maturities carried at $525,000, at December 31, 1998 and
1997, on deposit with various governmental authorities as required by law.

NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON INVESTMENTS

Major categories of net investment income for each year were as follows (in
thousands):

1998 1997 1996
--------- --------- ---------

NET INVESTMENT INCOME
Fixed maturities...................................................... $ 8,108 $ 7,744 $ 7,941
Short-term investments................................................ 222 302 231
--------- --------- ---------
8,330 8,046 8,172
Expenses.............................................................. (143) (139) (281)
--------- --------- ---------
Net investment income................................................. $ 8,187 $ 7,907 $ 7,891
--------- --------- ---------
--------- --------- ---------

All net realized gains (losses) on investments resulted from sales of fixed
maturities.

Proceeds from sales of investments were $165,471,000, $134,234,000, and
$135,352,000 in 1998, 1997, and 1996, respectively. Gross gains of $1,757,000,
$1,136,000, and $1,551,000 and gross losses of $321,000, $775,000, and
$1,554,000 were realized on the sales in 1998, 1997, and 1996, respectively.

F-9

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

2. INVESTMENTS (CONTINUED)
NET UNREALIZED GAINS (LOSSES)

The adjusted net unrealized gains (losses) on investments recorded in
accumulated other comprehensive income for the year ended December 31, were as
follows (in thousands):

TAX
BEFORE-TAX (BENEFIT) NET-OF-TAX
AMOUNT EXPENSE AMOUNT
----------- ----------- -----------

December 31, 1998
Unrealized gains (losses) on investments:
Unrealized gains(losses) on available-for-sale
investments............................................. $ 2,194 $ (768) $ 1,426
Reclassification adjustment for gains realized in net
income.................................................. (1,436) 503 (933)
----------- ----------- -----------
Other comprehensive income................................. $ 758 $ (265) $ 493
----------- ----------- -----------
----------- ----------- -----------
December 31, 1997
Unrealized gains (losses) on investments:
Unrealized gains (losses) on available-for-sale
investments............................................. $ 2,766 $ (1,017) $ 1,748
Reclassification adjustment for gains (losses) realized
in net income........................................... (361) 126 (234)
----------- ----------- -----------
Other comprehensive income................................. $ 2,405 $ (891) $ 1,514
----------- ----------- -----------
----------- ----------- -----------
December 31, 1996
Unrealized (losses) gains on investments:
Unrealized gains (losses) on available-for-sale
investments............................................. $ (4,370) $ 1,486 $ (2,884)
Reclassification adjustment for losses realized in net
income.................................................. 3 (1) 2
----------- ----------- -----------
Other comprehensive (loss)................................. $ (4,367) $ 1,485 $ (2,882)
----------- ----------- -----------
----------- ----------- -----------

3. LEASES

The Company leases office space under operating lease arrangements that have
various renewal options and are subject to escalation clauses for real estate
taxes and operating expenses. Rent expense was $789,000, $661,000, and $692,000
in 1998, 1997, and 1996, respectively. Future minimum payments required under
operating lease arrangements that have initial or noncancelable terms in excess
of one year or more are: 1999-- $602,000, 2000--$51,000, 2001--$43,000 and
2002--$28,000.

4. ACCIDENT AND HEALTH RESERVES

Activity for the liability for unpaid accident and health claims is
summarized as follows (in thousands):

YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------

Balance as of January 1, net of reinsurance recoverables........... $ 60,498 $ 61,482 $ 65,764
Add: Incurred losses related to:
Current year..................................................... 16,816 25,424 38,798
Prior years...................................................... 9,800 3,666 (810)
--------- --------- ---------
Total incurred losses.......................................... 26,616 29,090 37,988
Deduct: Paid losses related to:
Current year..................................................... 11,639 15,393 23,727
Prior year....................................................... 12,935 14,681 18,543
--------- --------- ---------
Total paid losses.............................................. 24,574 30,074 42,270
--------- --------- ---------
Balance as of December 31, net of reinsurance recoverables......... $ 62,540 $ 60,498 $ 61,482
--------- --------- ---------
--------- --------- ---------

The table above compares to the amounts reported on the balance sheet in the
following respects: (1) the table above is presented net of ceded reinsurance
and the accident and health reserves reported on the balance sheet are gross of
ceded reinsurance; and (2) the table above includes accident and health benefits
payable which are included with other policy claims and benefits payable
reported on the balance sheet.

As discussed in Note 1, the Company stopped offering group medical products in
1996 but continues to service and renew existing business, resulting in lower
incurred and paid loss activity for the years ended December 31, 1998, 1997 and
1996.

The liability for unpaid accident and health claims includes $59,339,000,
$55,956,000 and $55,152,000 of total disability income reserves as of December
31, 1998, 1997 and 1996, respectively, which were discounted for anticipated
interest earnings assuming a 6.0% interest rate.

F-10

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

4. ACCIDENT AND HEALTH RESERVES (CONTINUED)
The 1998 and 1997 claims incurred related to prior years is principally
additional payments and increases to the discounted accident and health reserves
based on actual experience of claims liabilities through the current year. For
1996, the claims incurred related to prior years resulted from favorable
experience mitigated by increases to the discounted accident and health reserves
based on actual experience of claims liabilities through the current year.

5. FEDERAL INCOME TAXES

As of May 1, 1997, the Company reports its taxable income in a consolidated
federal income tax return along with other affiliated subsidiaries of Fortis,
Inc. (Fortis). Income tax expense or credits are allocated among the affiliated
subsidiaries by applying corporate income tax rates to taxable income or loss
determined on a separate return basis according to a Tax Allocation Agreement.

Deferred income taxes reflect the net tax effects of temporary differences
between the basis of assets and liabilities for financial statement purposes and
for income tax purposes.

The significant components of the Company's deferred tax liabilities and assets
as of December 31, 1998 and 1997 are as follows (in thousands):

DECEMBER 31
--------------------
1998 1997
--------- ---------

Deferred tax assets:
Reserves................................................................... $ 473 $ 2,437
Separate account assets/liabilities........................................ 1,545 229
Deferred policy acquisition costs.......................................... -- 228
Alternative minimum tax credit carryforward................................ 308 392
Net operating loss carryforward............................................ 557 598
Other...................................................................... 19 493
--------- ---------
Total deferred tax assets................................................ 2,902 4,377

Deferred tax liabilities:
Deferred policy acquisition costs.......................................... 213 --
Unrealized gains........................................................... 1,487 1,287
Other...................................................................... 52 1,011
--------- ---------
Total gross deferred tax liabilities..................................... 1,752 2,298
--------- ---------
Net deferred tax asset................................................... $ 1,150 $ 2,079
--------- ---------
--------- ---------

The Company is required to establish a valuation allowance for any portion of
the deferred tax asset that management believes will not be realized. In the
opinion of management, it is more likely than not that the Company will realize
the benefit of the deferred tax assets, and therefore, no such valuation
allowance has been established.

The Company's tax benefit for the year ended December 31 is shown as follows (in
thousands):

1998 1997 1996
--------- --------- ---------

Current................................................................ $ 889 $ (35) $ (131)
Deferred............................................................... 458 (28) 92
--------- --------- ---------
$ 1,347 $ (63) $ (39)
--------- --------- ---------
--------- --------- ---------

Federal income tax payments and refunds resulted in net payments of $382,000 and
$32,000 in 1997 and 1996 respectively, and net refunds of $424,000 in 1998.

The Company's effective income tax rate varied from the statutory federal income
tax rate as follows:

1998 1997 1996
--- --- ---

Statutory income tax rate................................................ 35.0% 35.0% 34.0%
Other, including provision for prior year adjustments.................... .4 (1.3) (61.3)
--- --- ---
35.4% 33.7% (27.3)%
--- --- ---
--- --- ---

As of May 1, 1997, the Company is included as a member of a federal consolidated
group that has a statutory federal rate of 35%.

At December 31, 1998, the Company has net operating loss and capital loss
carryforwards relating to periods ending before May 1, 1997, for federal income
tax purposes of $1,591,000 which are available to offset future federal taxable
income of the Company, if any, through 2009. The Company also has alternative
minimum tax credit carryforwards of $308,000 relating to periods before May 1,
1997, which are available to reduce future federal regular income taxes of the
Company, if any, over an indefinite period of time.

F-11

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

6. REINSURANCE

The maximum amounts that the Company retains on any one life are $500,000
for group life; $250,000 for group accidental death; $2,000 net monthly benefit
for long-term disability; from 10% to 100% of possible benefits payable under
credit life and credit disability insurance; and none of a closed block of
individual life business. Amounts in excess of these limits are reinsured with
various insurance companies on a yearly renewable term, coinsurance or other
basis.

In the second quarter of 1996, the Company received approval from the New York
State Insurance Department for a reinsurance agreement with the Fortis Benefits
Insurance Company ("Fortis Benefits"), an affiliate. The agreement, which became
effective as of January 1, 1996, decreased the Company's long-term disability
reinsurance retention from a $10,000 net monthly benefit to a $2,000 net monthly
benefit for claims incurred on and after January 1, 1996. The Company has ceded
$5,601,000, $5,742,000 and $6,144,000 of premium to Fortis Benefits in 1998,
1997 and 1996, respectively. Fortis Benefits has assumed $9,315,000, $5,452,000
and $3,599,000 of reserves in 1998, 1997 and 1996, respectively, from the
Company. In the future, the agreement is expected to reduce the variability of
financial results for this product line.

Future policy benefits and other policy claims and benefits payable are reported
gross of reinsurance. The reinsured portion of future policy benefits and other
policy claims and benefits payable are $28,458,000 and $19,764,000 in 1998 and
1997, respectively.

Ceded reinsurance premiums for the year ended December 31 were as follows (in
thousands):

1998 1997 1996
--------- --------- ---------

Life insurance...................................................... $ 5,343 $ 3,249 $ 1,366
Accident and health insurance....................................... 11,343 8,768 7,085
--------- --------- ---------
$ 16,686 $ 12,017 $ 8,451
--------- --------- ---------
--------- --------- ---------

Recoveries under reinsurance contracts for the year ended December 31 were as
follows (in thousands):

1998 1997 1996
--------- --------- ---------

Life insurance...................................................... $ 1,740 $ 1,628 $ 1,021
Accident and health insurance....................................... 3,504 2,310 348
--------- --------- ---------
$ 5,244 $ 3,938 $ 1,369
--------- --------- ---------
--------- --------- ---------

Reinsurance ceded would become a liability of the Company in the event the
reinsurers are unable to meet the obligations assumed under the reinsurance
agreement. To minimize its exposure to significant losses from reinsurance
insolvencies, the Company evaluates the financial condition of its reinsurers
and monitors concentrations of credit risk arising from similar geographic
regions, activities or economic characteristics of the reinsurers.

7. DIVIDEND RESTRICTIONS

The Company is subject to insurance regulatory restrictions that limit cash
dividends which can be paid from the Company to its Parent. All dividends
require prior approval by the New York State Insurance Department.

8. REGULATORY ACCOUNTING REQUIREMENTS

The Company prepares its statutory-basis financial statements in accordance
with accounting practices prescribed or permitted by the Department of Insurance
of the State of New York. Prescribed statutory accounting practices include a
variety of publications of the National Association of Insurance Commissioners
("NAIC"), as well as state laws, regulations and general administrative rules.
Permitted statutory accounting practices encompass all accounting practices that
are not prescribed; such practices may differ from company to company within a
state, and may change in the future. While the NAIC has recently completed a
project to codify statutory accounting practices, which may result in changes to
the accounting practices that insurance enterprises use to prepare their
statutory-basis financial statements, adoption by Minnesota is not anticipated
before 2001.

Insurance enterprises are required by state insurance departments to adhere to
minimum risk-based capital ("RBC") requirements developed by the NAIC. The
Company exceeds the minimum RBC requirements.

F-12

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

8. REGULATORY ACCOUNTING REQUIREMENTS (CONTINUED)
Reconciliations of net income (loss) and shareholder's equity on the basis of
statutory accounting to the related amounts presented in the accompanying
statements were as follows (in thousands):

SHAREHOLDER'S EQUITY
NET INCOME (LOSS)
------------------------------- --------------------
1998 1997 1996 1998 1997
--------- --------- --------- --------- ---------

Based on statutory accounting practices............. $ 1,177 $ (296) $ (428) $ 28,782 $ 27,358
Deferred policy acquisition costs................... 1,764 1,180 247 3,148 1,413
Deferred and uncollected premiums................... (14,055) 246 76 97 425
Policy reserves..................................... 13,463 (660) 476 (361) (92)
Investment valuation difference..................... -- (47) -- 4,250 3,492
Realized gains (losses) on investments.............. 896 235 (3) -- --
Amortization of goodwill............................ (46) (46) (46) 462 508
Income taxes........................................ (458) 28 115 55 778
Pension............................................. (19) (275) -- (321) (301)
Amortization of IMR................................. (347) (348) (426) -- --
Interest Maintenance Reserve........................ -- -- -- 2,438 1,888
Asset Valuation Reserve............................. -- -- -- 814 717
Property and equipment.............................. -- -- -- 164 318
Agents balances..................................... -- -- -- 300 456
Other............................................... 77 (141) 172 198 121
--------- --------- --------- --------- ---------
As reported herein.................................. $ 2,452 $ (124) $ 183 $ 40,026 $ 37,081
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

9. TRANSACTIONS WITH AFFILIATED COMPANIES

The Company received various services from Fortis and its affiliates. These
services include assistance in benefit plan administration, corporate insurance,
accounting, tax, auditing, investment information systems, actuarial and other
administrative functions. The fees paid for these services for years ended
December 31, 1998, 1997 and 1996, were $1,712,000, $2,568,000 and $1,648,000,
respectively.

Administrative expenses allocated for the Company may be greater or less than
the expenses that would be incurred if the Company were operating on a separate
company basis.

10. FAIR VALUE DISCLOSURES

VALUATION METHODS AND ASSUMPTIONS

The fair values for fixed maturity securities are based on quoted market prices,
where available. For fixed maturity securities not actively traded, fair values
are estimated using values obtained from independent pricing services or, in the
case of private placements, are estimated by discounting expected future cash
flows using a current market rate applicable to the yield, credit quality, and
maturity of the investments.

For short-term investments, the carrying amount is a reasonable estimate of fair
value. The fair values for the Company's policy reserves under the investment
products are determined using cash surrender value.

Separate account assets and liabilities are reported at their estimated fair
value in the Balance Sheet.

The fair values under all insurance contracts are taken into consideration in
the Company's overall management of interest rate risk, such that the Company's
exposure to changing interest rates is minimized through the matching of
investment maturities with amounts due under insurance contracts.

(IN THOUSANDS)
DECEMBER 31
-----------------------------------------------------
1998 1997
------------------------- -------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
----------- ----------- ----------- -----------

Assets:
Investments:
Securities available-for-sale:
Fixed maturities........................................... $ 130,038 $ 130,038 $ 105,776 $ 105,776
Short-term investments......................................... 830 830 11,697 11,697
Cash........................................................... 1,160 1,160 7,453 7,453
Assets held in separate accounts............................... 46,082 46,082 16,072 16,072
Liabilities:
Individual and group annuities (subject to discretionary
withdrawal)................................................... $ 8,435 $ 8,097 $ 6,877 $ 6,554
Liabilities related to Separate Accounts....................... 46,082 46,082 16,072 16,072

F-13

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

11. RETIREMENT AND OTHER EMPLOYEE BENEFITS

Fortis (the Company's parent) sponsors a defined benefit pension plan
covering employees and certain agents who meet eligibility requirements as to
age and length of service. The benefits are based on years of service and career
compensation. As a matter of policy, pension costs are funded as they accrue and
vested benefits are fully funded. Fortis' funding policy is to contribute
annually the maximum amount that can be deducted for federal income tax
purposes, and to charge each subsidiary an allocable amount based on its
employee census. Pension cost allocated to the Company amounted to $52,000,
$61,000 and $72,000 for 1998, 1997 and 1996, respectively.

The Company has a contributory profit sharing plan, sponsored by Fortis,
covering employees and certain agents who meet eligibility requirements as to
age and length of service. The Company matches 200% up to 3% of the employee's
contribution. Benefits are payable to participants on retirement or disability
and to the beneficiaries of participants in the event of death. The amount
expensed was approximately $124,000, $122,000 and $182,000 for 1998, 1997 and
1996, respectively.

In addition to retirement benefits, the Company participates in other health
care and life insurance benefit plans ("postretirement benefits") for retired
employees, sponsored by Fortis. Health care benefits, either through a
Fortis-sponsored retiree plan for retirees under age 65 or through a cost offset
for individually purchased Medigap policies for retirees over age 65, are
available to employees who retire on or after January 1, 1993, at age 55 or
older, with 15 years or more service. Life insurance, on a retiree pay all
basis, is available to those who retire on or after January 1, 1993.

12. COMMITMENTS AND CONTINGENCIES

The Company is named as a defendant in a number of legal actions arising
primarily from claims made under insurance policies. These actions have been
considered in establishing policy benefit and loss reserves. Management and its
legal counsel are of the opinion that the settlement of these actions will not
have a material adverse effect on the Company's financial position or results of
operations.

13. YEAR 2000 (UNAUDITED)

STATE OF READINESS. In 1997, the Fortis parent company organized a
multi-disciplinary Year 2000 Project Team ("Team"). The Company is a part of the
Team. The Team consists of employees at each subsidiary, audit, legal and
outside consultants. The Team has developed and is currently executing a
comprehensive plan designed to make the Company's IT systems Year 2000 ready.
The plan covers four stages including (i) inventory, (ii) assessment, (iii)
programming, and (iv) testing and certification. At December 31, 1998, the
Company has completed the inventory stage for its internal hardware, software
and telecommunications systems (mainframe and client/server applications). The
assessment process is also complete and the Company is utilizing both internal
and external resources to reprogram or replace the systems where necessary, and
testing the applications for Year 2000 readiness. Programming, testing and
certification of these systems and applications are targeted for completion by
the end of 1999.

F-14

APPENDIX A--SAMPLE MARKET VALUE ADJUSTMENT CALCULATIONS

The formula which will be used to determine the Market Value Adjustment is:

1 + I n/12
( ----------) - 1
1 + J + .0025

Sample Calculation 1: Positive Adjustment

Amount withdrawn or transferred $10,000
Existing Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Existing
Guarantee Period
Guaranteed Interest Rate (I) 8%*
Guaranteed Interest Rate for
new 5-year guarantee (J) 7%*
Remaining Guarantee Period (N) 60 months
Market Value Adjustment

1 + .08 60/12
$10,000 x [( -----------) - 1] = $354.57
1 + .07 + .0025

Amount transferred or withdrawn (adjusted for Market Value
Adjustment): $10,354.57

Sample Calculation 2: Negative Adjustment

Amount withdrawn or transferred $10,000
Existing Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Existing
Guarantee Period
Guaranteed Interest Rate (I) 8%*
Guaranteed Interest Rate for
new 5-year guarantee (J) 9%*
Remaining Guarantee Period (N) 60 months
Market Value Adjustment:

1 + .08 60/12
$10,000 x [( -----------) - 1] = - $559.14
1 + .09 + .0025

Amount transferred or withdrawn (adjusted for Market Value
Adjustment): $9,440.86

Sample Calculation 3: Negative Adjustment

Amount withdrawn or transferred $10,000
Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Existing
Guarantee Period
Guaranteed Interest Rate (I) 8%*
Guaranteed Interest Rate for
new 5-year guarantee (J) 7.75%*
Remaining Guarantee Period (N) 60 months
Market Value Adjustment:

1 + .08 60/12
$10,000 x [( -------------)] - 1] = $0
1 + .0775 + .0025

Amount transferred or withdrawn (adjusted for Market Value
Adjustment): $10,000
- ------------------------
*Assumed for illustrative purposes only.

A-1

APPENDIX B--SAMPLE DEATH BENEFIT CALCULATIONS

Date of Death is the 3rd Contract Anniversary: Example 1 Example 2
----------- -----------

a. Purchase Payments Made Prior to Date of Death $ 20,000 $ 20,000
b. Contract Value on Date of Death $ 17,000 $ 25,000
Death Benefit is larger of a, and b. $ 20,000 $ 25,000

Date of Death is the 8th Contract Anniversary: Example 3 Example 4 Example 5
----------- ----------- -----------

a. Purchase Payments Made Prior to Date of Death $ 20,000 $ 20,000 $ 20,000
b. Contract Value on 7th Contract Anniversary $ 15,000 $ 30,000 $ 30,000
c. Contract Value on Date of Death $ 17,000 $ 25,000 $ 35,000
Death Benefit is larger of a, b, and c. $ 20,000 $ 30,000 $ 35,000

Date of Death is the 15th Contract Anniversary: Example 6 Example 7 Example 8
----------- ----------- -----------

a. Purchase Payments Made Prior to Date of Death $ 20,000 $ 20,000 $ 20,000
b. Contract Value on 14th Contract Anniversary $ 15,000 $ 40,000 $ 40,000
c. Contract Value on Date of Death $ 17,000 $ 30,000 $ 50,000
Death Benefit is larger of a, b, and c. $ 20,000 $ 40,000 $ 50,000

B-1

APPENDIX C--EXPLANATION OF EXPENSE CALCULATIONS

The expense for a given year is calculated by multiplying the projected
beginning of the year policy value by the total expense rate. The total expense
rate is the sum of the variable account expense rate plus the total Series Fund
expense rate plus The annual administrative charge rate.

The policy values are projected by assuming a single payment of $1,000 grows at
an annual rate equal to 5% reduced by the total expense rate described above.

For example, the 3 year expense for the Growth Stock Series is calculated as
follows:

Total Variable Account Annual Expenses 1.35%
+ Total Series Fund Operating Expenses .65%
= Total Expense Rate 2.00%

Year 1 Beginning Policy Value = $1000.00
Year 1 Expense = $1000.00 X .0200 = $20.00

Year 2 Beginning Policy Value = $1030.00
Year 2 Expense = $1030.00 X .0200 = $20.60

Year 3 Beginning Policy Value = $1060.90
Year 3 Expense = $1060.90 X .0200 = $21.22

So the cumulative expenses for years 1-3 for the Growth Stock Series are equal
to
$20.00 + $20.60 + $21.22 = $61.82

If the contract is surrendered, the surrender charge is the surrender charge
percentage times the purchase payment minus the 10% free withdrawal amount:

Surrender Charge Percentage X (Initial Premium - 10% Free Withdrawal) =
Surrender Charge

0.05 X ($1000.00 - $100.00) = $45.00

So the total expense if surrendered is $61.82 + $45.00 = $106.82

C-1

BULK RATE
U.S. POSTAGE

FORTIS-R-

PAID
PERMIT NO. 3794

FORTIS FINANCIAL GROUP

MINNEAPOLIS, MN

P.O. BOX 64284
ST. PAUL, MN 55164

PROSPECTUS
MAY 1, 1999

FIRST FORTIS
MASTERS+
VARIABLE
ANNUITY
Flexible
Premium Deferred
Combination Variable and
Fixed Annuity Contracts

PROSPECTUS DATED
May 1, 1999

FORTIS-R-

FIRST FORTIS LIFE INSURANCE COMPANY
MAILING ADDRESS: STREET ADDRESS: PHONE:
P.O. BOX 3249 220 SALINA MEADOWS 1-800-745-8248
SYRACUSE PARKWAY
NEW YORK 13220 SUITE 255
SYRACUSE
NEW YORK 13212

This prospectus describes flexible premium deferred combination variable and
fixed annuity contracts issued by First Fortis Life Insurance Company ("First
Fortis").

Under the variable return accumulation option, you can choose among the
following investment portfolios of Fortis Series Fund:

The accompanying prospectus for these investment
portfolios describes the investment objectives, policies
and risks of each of the portfolios.

This prospectus gives you information about the
contracts that you should know before investing. This
prospectus must be accompanied by a current prospectus
of the available investment portfolios. These
prospectuses should be read carefully and kept for
future reference.

A Statement of Additional Information, dated May 1,
1999, about certain aspects of the contracts has been
filed with the Securities and Exchange Commission and is
available without charge, from First Fortis at the
address and phone number printed above. The Table of
Contents for the Statement of Additional Information
appears on page 22 of this prospectus.

97104 (Ed. 5/99)

TABLE OF CONTENTS

PAGE

SPECIAL TERMS USED IN THIS PROSPECTUS................................. 3
INFORMATION CONCERNING FEES AND CHARGES............................... 4
SUMMARY OF CONTRACT FEATURES.......................................... 6
FIRST FORTIS LIFE INSURANCE COMPANY................................... 9
THE VARIABLE ACCOUNT.................................................. 9
THE PORTFOLIOS........................................................ 9
THE FIXED ACCOUNT..................................................... 10
- Guaranteed Interest Rates/Guarantee Periods..................... 10
- Market Value Adjustment......................................... 10
- Investments by First Fortis..................................... 11
ACCUMULATION PERIOD................................................... 12
- Issuance of a Contract and Purchase Payments.................... 12
- Contract Value.................................................. 12
- Allocation of Purchase Payments and Contract Value.............. 13
- Total and Partial Surrenders.................................... 13
- Telephone Transactions.......................................... 14
- Benefit Payable on Death of Contract Owner or Annuitant......... 14
THE ANNUITY PERIOD.................................................... 15
- Annuity Commencement Date....................................... 15
- Commencement of Annuity Payments................................ 15
- Relationship Between Subaccount Investment Performance and
Amount of Variable Annuity Payments............................ 15
- Annuity Options................................................. 16
- Death of Annuitant or Other Payee............................... 16
CHARGES AND DEDUCTIONS................................................ 16
- Premium Taxes................................................... 16
- Charges Against the Variable Account............................ 16
- Tax Charge...................................................... 17
- Surrender Charge................................................ 17
- Miscellaneous................................................... 17
- Reduction of Charges............................................ 17
GENERAL PROVISIONS.................................................... 18
- The Contracts................................................... 18
- Postponement of Payment......................................... 18
- Misstatement of Age or Sex and Other Errors..................... 18
- Assignment...................................................... 18
- Beneficiary..................................................... 18
- Reports......................................................... 18
RIGHTS RESERVED BY FIRST FORTIS....................................... 18
DISTRIBUTION.......................................................... 19
FEDERAL TAX MATTERS................................................... 19
FURTHER INFORMATION ABOUT FIRST FORTIS................................ 21
- General......................................................... 21
- Ownership of Securities......................................... 21
- Selected Financial Data......................................... 22
- Management's Discussion And Analysis Of Financial Condition And
Results Of Operations.......................................... 22
VOTING PRIVILEGES..................................................... 23
LEGAL MATTERS......................................................... 24
YEAR 2000 ISSUES...................................................... 24
OTHER INFORMATION..................................................... 24
CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION....................... 24
FIRST FORTIS FINANCIAL STATEMENTS..................................... 24
APPENDIX A--Sample Market Value Adjustment Calculations............... A-1
APPENDIX B--Sample Death Benefit Calculations......................... B-1
APPENDIX C--Explanation Of Expense Calculations....................... C-1
APPENDIX D--Pro Rata Adjustments...................................... D-1

SPECIAL TERMS USED IN THIS PROSPECTUS

Accumulation The time period under a contract between the contract issue date and the annuity commencement
Period date.
Accumulation A unit of measure used to calculate an owner's interest in the Variable Account during the
Unit Accumulation Period.
Annuitant A person during whose life annuity payments are to be made by First Fortis under the contract.
The Annuitant is the person named in the application for the contract. If such person dies
before the annuity commencement date and there is an additional annuitant named in the
application, the additional annuitant shall become the Annuitant. If there is no named
additional annuitant, or the additional annuitant has predeceased the Annuitant who is named
in the application, the owner, if he or she is a natural person, shall become the Annuitant.
Annuity Period The time period following the Accumulation Period, during which annuity payments are made by
First Fortis.
Annuity Unit A unit of measurement used to calculate variable annuity payments.
Fixed Annuity An annuity option under which First Fortis promises to pay the Annuitant or any other payee
Option that you designate one or more fixed payments.
Market Value Positive or negative adjustment in fixed account value that we make if such value is paid out
Adjustment more than fifteen days before or after the end of a guarantee period in which it was being
held.
Non-Qualified Contracts that do not qualify for the special federal income tax treatment applicable in
Contracts connection with certain retirement plans.
Qualified Contracts that are qualified for the special federal income tax treatment applicable in
Contracts connection with certain retirement plans.
Valuation Date All business days except, with respect to any subaccount, days on which the related portfolio
does not value its shares. Generally, the portfolios value their shares on each day the New
York Stock Exchange is open.
Valuation The period that starts at the close of regular trading on the New York Stock Exchange on a
Period Valuation Date and ends at the close of regular trading on the exchange on the next succeeding
Valuation Date.
Variable The segregated asset account referred to as Separate Account A of First Fortis Life Insurance
Account Company established to receive and invest purchase payments under contracts.
Variable An annuity option under which First Fortis promises to pay the Annuitant or any other payee
Annuity Option chosen by you one or more payments which vary in amount in accordance with the net investment
experience of the subaccounts selected by the Annuitant.

INFORMATION CONCERNING FEES AND CHARGES

CONTRACT OWNER TRANSACTION CHARGES

Front-End Sales Charge Imposed on
Purchases................................... 0%
Maximum Surrender Charge for Sales
Expenses.................................... 7%(1)

NUMBER OF YEARS SURRENDER CHARGE
SINCE PURCHASE PAYMENT AS A PERCENTAGE
WAS CREDITED OF PURCHASE PAYMENT
- ---------------------------- ----------------------

Less than 2 7%
At least 2 but less than 4 6%
At least 4 but less than 5 5%
At least 5 but less than 6 3%
At least 6 but less than 7 1%
7 or more 0%

Other Surrender Fees....................... 0%
Exchange Fee............................... 0%
ANNUAL CONTRACT ADMINISTRATION CHARGE............. $0
VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)
Mortality and Expense Risk Charge.......... 1.25%
Variable Account Administrative Charge..... .10%
Total Variable Account Annual Expenses..... 1.35%

MARKET VALUE ADJUSTMENT WITH RESPECT TO FIXED ACCOUNT

Surrenders and other withdrawals from the fixed account more than fifteen days
from the end of a guarantee period other than the one year guarantee period are
subject to a Market Value Adjustment. The Market Value Adjustment may increase
or reduce the fixed account value. We compute this adjustment according to a
formula that we describe in more detail under "Market Value Adjustment."

PORTFOLIO ANNUAL EXPENSES

U.S.
MONEY GOVERNMENT DIVERSIFIED GLOBAL
MARKET SECURITIES INCOME BOND HIGH YIELD
SERIES SERIES SERIES SERIES SERIES
----------- -------------- ------------- ----------- -------------

GLOBAL ASSET ASSET GROWTH &
ALLOCATION ALLOCATION VALUE INCOME
SERIES SERIES SERIES SERIES
-------------- ------------ ---------- ------------

Investment Advisory and Management Fee................ 0.90% 0.47% 0.70% 0.64%
Other Expenses........................................ 0.11% 0.04% 0.06% 0.03%
Total Series Fund Operating Expenses.................. 1.01% 0.51% 0.76% 0.67%

BLUE CHIP
S&P 500 STOCK INTERNATIONAL MID CAP
INDEX SERIES SERIES STOCK SERIES STOCK SERIES
------------ ---------- --------------- --------------

Investment Advisory and Management Fee...................... 0.40% 0.89% 0.85% 0.90%
Other Expenses.............................................. 0.06% 0.05% 0.09% 0.35%
Total Series Fund Operating Expenses........................ 0.46% 0.94% 0.94% 1.25%

GLOBAL GROWTH
SMALL CAP GROWTH LARGE CAP STOCK
VALUE SERIES SERIES GROWTH SERIES SERIES
-------------- ----------- ---------------- -----------

Investment Advisory and Management Fee...................... 0.90% 0.70% 0.90% 0.61%
Other Expenses.............................................. 0.34% 0.05% 0.35% 0.04%
Total Series Fund Operating Expenses........................ 1.24% 0.75% 1.25% 0.65%

AGGRESSIVE
GROWTH SERIES
-------------
Investment Advisory and Management Fee...................... 0.68%
Other Expenses.............................................. 0.04%
Total Series Fund Operating Expenses........................ 0.72%

- ------------------------
(a) As a percentage of portfolio average net assets based on 1998 historical
data.

EXAMPLES*

IF ALL AMOUNTS ARE INVESTED IN ONE PORTFOLIO: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------ ------- ------- ------- --------

Money Market Series......................................... 80 107 136 198
U.S. Government Securities Series........................... 82 112 144 215
Diversified Income Series................................... 82 112 145 216
Global Bond Series.......................................... 85 123 163 253
High Yield Series........................................... 82 113 147 220
Global Asset Allocation Series.............................. 87 127 169 266
Asset Allocation Series..................................... 82 112 144 215
Value Series................................................ 84 119 157 241
Growth & Income Series...................................... 83 116 152 231
S&P 500 Index Series........................................ 81 110 141 209
Blue Chip Stock Series...................................... 86 125 166 259
International Stock Series.................................. 86 125 166 259
Mid Cap Stock Series........................................ 89 134 181 290
Small Cap Value Series...................................... 89 134 181 289
Global Growth Series........................................ 84 119 156 240
Large Cap Growth Series..................................... 89 134 181 290
Growth Stock Series......................................... 83 116 151 229
Aggressive Growth Series.................................... 84 118 155 237

If you COMMENCE AN ANNUITY payment option, or do NOT surrender your contract,
you would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on assets:

IF ALL AMOUNTS ARE INVESTED IN ONE PORTFOLIO: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------ ------- ------- ------- --------

Money Market Series......................................... 17 53 91 198
U.S. Government Securities Series........................... 19 58 99 215
Diversified Income Series................................... 19 58 100 216
Global Bond Series.......................................... 22 69 118 253
High Yield Series........................................... 19 59 102 220
Global Asset Allocation Series.............................. 24 73 124 266
Asset Allocation Series..................................... 19 58 99 215
Value Series................................................ 21 65 112 241
Growth & Income Series...................................... 20 62 107 231
S&P 500 Index Series........................................ 18 56 96 209
Blue Chip Stock Series...................................... 23 71 121 259
International Stock Series.................................. 23 71 121 259
Mid Cap Stock Series........................................ 26 80 136 290
Small Cap Value Series...................................... 26 80 136 289
Global Growth Series........................................ 21 65 111 240
Large Cap Growth Series..................................... 26 80 136 290
Growth Stock Series......................................... 20 62 106 229
Aggressive Growth Series.................................... 21 64 110 237

- ------------------------
* Does not include the effect of any Market Value Adjustment.

------------------------------

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

We have included the foregoing tables and examples to help you understand the
transaction and operating expenses we directly or indirectly impose under the
contracts and under the portfolios. We will also deduct amounts for state
premium taxes or similar assessments where these deductions are applicable.

See Appendix C for an explanation of the calculation of the amounts set forth
above.

SUMMARY OF CONTRACT FEATURES

The following summary should be read in conjunction with the detailed
information in this prospectus.

FREE LOOK

You have the right to examine a contract during a "free look" period after you
receive the contract and return it for a refund of the amount of the then
current contract value. However, in certain states where required by state law
the refund will be in the amount of all purchase payments that have been made,
without interest or appreciation or depreciation. The "free look' period is
generally 10 days unless a longer time is specified on the face page of your
contract.

PURCHASE PAYMENTS

ALLOCATION OF PURCHASE PAYMENTS

VARIABLE ACCOUNT INVESTMENT OPTIONS

Each of the subaccounts of the Variable Account invests in shares of a
corresponding portfolio. Contract value in each of the subaccounts of the
Variable Account will vary to reflect the investment experience of each of the
corresponding portfolios, as well as deductions for certain charges.

Each portfolio has a separate and distinct investment objective and is managed
by Fortis Advisers, Inc or a subadviser of Fortis Advisers, Inc. A full
description of the portfolios and their investment objectives, policies, risks
and expenses can be found in the current prospectus for the portfolios, which
accompanies this prospectus, and the portfolios' Statement of Additional
Information which is available upon request from First Fortis at the address and
phone number on the cover of this prospectus.

FIXED ACCOUNT INVESTMENT OPTIONS

Any amount allocated by the owner to the fixed account earns a guaranteed
interest rate. The level of the guaranteed interest rate depends on the length
of the guarantee period selected by the owner. We currently make available ten
different guarantee periods, ranging from one to ten years.

If amounts are transferred, surrendered or otherwise paid out more than fifteen
days before or after the end of the applicable guarantee period other than the
one year guarantee period, a Market Value Adjustment will be applied to increase
or decrease the amount of fixed account value that is paid out. Accordingly, the
Market Value Adjustment can result in gains or losses to you. There is no Market
Value Adjustment for transfers or surrenders from the one-year guarantee period
of the fixed account.

For a more complete discussion of the fixed account investment options and the
Market Value Adjustment, see "The Fixed Account."

TRANSFERS

TOTAL OR PARTIAL SURRENDERS

Subject to certain conditions, all or part of the contract value may be
surrendered by you before the earlier of (1) the annuity commencement date, or
(2) if the owner is a non-natural person the Annuitant's death. Amounts
surrendered may be subject to a surrender charge and, in addition, amounts
surrendered from the fixed account may be subject to a Market Value Adjustment.
See "Total and Partial Surrenders," "Surrender Charge" and "Market Value
Adjustment." Particular attention should be paid to the tax implications of any
surrender, including possible penalties for premature distributions. See
"Federal Tax Matters."

ANNUITY PAYMENTS

The contract provides several types of annuity benefits to you or other persons
you properly designate to receive such payments, including Fixed and Variable
Annuity Options. The owner has considerable flexibility in choosing the annuity
commencement date. However, the tax implications of an annuity commencement date
must be carefully considered, including the possibility of penalties for
commencing benefits either too soon or too late. See "Annuity Commencement
Date,"

"Annuity Options" and "Federal Tax Matters" in this prospectus and "Taxation
Under Certain Retirement Plans" in the Statement of Additional Information.

DEATH BENEFIT

In the event of the death of the owner, or the Annuitant if the owner is a
non-natural person, prior to the annuity commencement date, a death benefit is
payable. See "Benefit Payable on Death of Contract Owner or Annuitant."

LIMITATIONS IMPOSED BY RETIREMENT PLANS AND EMPLOYERS

The record owner of contracts may be an employer (or the employer's designee) in
connection with an employee benefit plan. In the latter cases, certain rights
that an owner otherwise would have under a contract may be reserved instead by
the employer.

TAX IMPLICATIONS

QUESTIONS AND OTHER COMMUNICATIONS

Any question about procedures of the contract should be directed to your sales
representative, or First Fortis' home office: P.O. Box 3249, Syracuse, NY 13220;
1-800-745-8248. Purchase payments and written requests should be mailed or
delivered to the same home office address. All communications should include the
contract number, the owner's name and, if different, the Annuitant's name. The
number for telephone transfers is 1-800-745-8248.

FINANCIAL AND PERFORMANCE INFORMATION

GLOBAL
MONEY U.S. GOV'T DIVERSIFIED GLOBAL HIGH ASSET ASSET GROWTH &
MARKET SECURITIES INCOME BOND YIELD ALLOCATION ALLOCATION VALUE INCOME
-------- ---------- ----------- -------- ------- ---------- ---------- ------- --------

December 31, 1998
Accumulation Units
in Force......... 318,605 71,200 597,806 14,947 132,636 91,185 867,243 160,886 326,229
Accumulation Unit
Value............ $1.532 $18.421 $2.039 $13.254 $12.723 $16.513 $3.326 $14.768 $21.767
December 31, 1997
Accumulation Units
in Force......... 170,961 12,970 148,631 5,883 47,286 542,582 25,317 55,753 137,613
Accumulation Unit
Value............ $1.474 $17.149 $1.963 $11.837 $12.917 $2.809 $14.433 $13.651 $19.487
December 31, 1996
Accumulation Units
in Force......... 31,800 427 20,649 1,347 9,846 7,591 63,004 15,690 14,412
Accumulation Unit
Value............ $1.418 $15.935 $1.801 $11.961 $11.928 $12.884 $2.368 $11.048 $15.468
May 1, 1996*
Accumulation Unit
Value............ $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000

LARGE
BLUE INTERNATIONAL GLOBAL GROWTH AGGRESSIVE MID CAP CAP SMALL CAP
S&P 500 CHIP STOCK GROWTH STOCK GROWTH STOCK GROWTH VALUE
------- ------- ------------- ------- ------- ---------- ------- ------- ---------

December 31, 1998
Accumulation Units
in Force......... 385,486 270,261 125,894 75,340 475,115 105,783 13,231 90,599 23,823
Accumulation Unit
Value............ $18.689 $18.238 $16.113 $21.433 $3.870 $15.829 $9.625 $11.755 $9.367
December 31, 1997
Accumulation Units
in Force......... 96,726 74,226 36,305 47,369 240,842 47,583 -- -- --
Accumulation Unit
Value............ $14.786 $14.429 $14.021 $19.507 $3.296 $13.241 -- -- --
December 31, 1996
Accumulation Units
in Force......... 5,144 9,457 10,999 6,899 70,686 14,449 -- -- --
Accumulation Unit
Value............ $11.326 $11.520 $12.690 $18.510 $2.971 $13.232 -- -- --
May 1, 1996*
Accumulation Unit
Value............ $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 -- -- --

- ------------------------
* Accumulation Unit value at date of initial registration effectiveness.

Audited financial statements of the Variable Account are included in the
Statement of Additional Information.

Financial information concerning First Fortis is included in this prospectus
under "Further Information About First Fortis" and "First Fortis Financial
Statements."

FIRST FORTIS LIFE INSURANCE COMPANY

THE VARIABLE ACCOUNT

The Variable Account has subaccounts. The assets in each subaccount are invested
exclusively in one of the portfolios listed on the first page of the prospectus,
each of which represents a separate investment portfolio. Income and both
realized and unrealized gains or losses from the assets of each subaccount of
the Variable Account are credited to or charged against that subaccount without
regard to income, gains or losses from any other subaccount of the Variable
Account or arising out of any other business we may conduct. We may add or
eliminate new subaccounts as new portfolios are added or eliminated.

THE PORTFOLIOS

You may choose from among a number of different portfolios. Each portfolio is a
mutual fund available for purchase only as a funding vehicle for benefits under
variable life insurance and variable annuity products. These variable life
insurance and variable annuity products are issued by First Fortis and by other
life insurance companies. Each portfolio corresponds to one of the subaccounts
of the Variable Account. The assets of each portfolio are separate from the
assets of other portfolios. In addition, each portfolio operates as a separate
investment portfolio whose investment performance has no effect on the
investment performance of any other portfolio. We offer more detailed
information for each investment portfolio. This information includes the
investment policies, investment restrictions, charges, and risks attendant to
investing in each portfolio. This information also includes other aspects of
each portfolio's operations. You may find this information in the current
prospectus for each portfolio. These portfolio prospectuses must accompany this
prospectus, and you should read them in conjunction with it. You may obtain a
copy of each prospectus from us, free of charge, by calling 1-800-800-2000, ext.
3057, or by writing P.O. Box 64272, St. Paul, Minnesota 55164.

As noted, the investment portfolios may be available to registered separate
accounts of other participating insurance companies. These portfolios may also
be available to the Variable Account and other separate accounts of First
Fortis. Although First Fortis does not anticipate any disadvantages to this,
there is a possibility that a material conflict may arise between the interest
of the Variable Account and one or more of the other separate accounts
participating in the portfolios. For example, a conflict may occur due to (1) a
change in law affecting the operations of variable life and variable annuity
separate accounts, (2) differences in the voting instructions of the contract
owners and those of other companies, or (3) some other reason. In the event of
conflict, First Fortis will take any steps necessary to protect the contract
owners and variable annuity payees.

First Fortis purchases and redeems portfolios' shares for the Variable Account
at their net asset value without any sales or redemption

charges. We automatically reinvest dividends or capital gain distributions
attributable to contracts in shares of the portfolio from which they are
received at the portfolio's net asset value on the date paid. These dividends
and distributions will have the effect of reducing the new asset value of each
share of the corresponding portfolio and increasing, by an equivalent value, the
number of shares outstanding of the portfolio. However, the value of your
interest in the corresponding subaccount will not change as a result of any such
dividends and distributions.

The portfolios available for investment by the Variable Account are listed on
the cover page of this prospectus.

THE FIXED ACCOUNT

GUARANTEED INTEREST RATES/GUARANTEE PERIODS

MARKET VALUE ADJUSTMENT

Except as described below, we will apply a Market Value Adjustment to any fixed
account value that is:

- surrendered,

- transferred, or

- otherwise paid out

BEFORE the end of the guarantee period in which it is being held.

For example, we will apply a Market Value Adjustment to fixed account value that
we pay:

- as an amount applied to an annuity option, and

- as an amount paid as a single sum in lieu of an annuity.

- If the first rate exceeds the second rate by more than 1/4%, the Market
Value Adjustment produces an increase in the fixed account value withdrawn
or transferred.

- If the first rate does not exceed the second rate by at least 1/4%, the
Market Value Adjustment produces a decrease in the fixed account value
withdrawn or transferred.

1 + I n / 12
( ----------) - 1
1 + J + .0025

where,

- I is the guaranteed interest rate we credit to the fixed account value
that is withdrawn or transferred from the existing guarantee period.

- N is the number of months remaining in the existing guarantee period
(rounded up to the next higher number of months).

You will find sample Market Value Adjustment calculations in Appendix A.

We do not apply a Market Value Adjustment to withdrawals and transfers of fixed
account value under four exceptions. We describe these exceptions below.

(1) We will NOT apply a Market Value Adjustment to fixed account
value that we pay out as a death benefit pursuant to a contract.

(2) We will NOT apply a Market Value Adjustment to fixed account
value that is withdrawn or transferred from the one-year guarantee period.

(3) We will NOT apply a Market Value Adjustment to fixed account
value that we pay out during a 30 day period that:

- BEGINS 15 DAYS BEFORE the end date of the guarantee period in which the
fixed account value was being held,

and that:

- ENDS 15 DAYS after the end date of the guarantee period in which the fixed
account value was being held.

(4) We will NOT apply a Market Value Adjustment to fixed account
value that is withdrawn or transferred from a guarantee period on a
PERIODIC, AUTOMATIC BASIS. This exception only applies to such withdrawals
or transfers under a FORMAL First Fortis program for the withdrawal or
transfer of fixed account value.

INVESTMENTS BY FIRST FORTIS

- federal, state and municipal obligations,

- preferred and common stocks,

- corporate bonds,

- real estate mortgages,

- real estate, and

- certain other investments.

See "First Fortis' Financial Statements" for information on our investments.
Investment management for amounts in our general account and in the fixed
account is provided to us by Fortis Advisors, Inc.

(1) securities issued by the United States Government or its
agencies or instrumentalities. These securities may or may not be guaranteed by
the United States Government;

(4) other evidences of indebtedness secured by mortgages or deeds
of trust representing liens upon real estate.

ACCUMULATION PERIOD

ISSUANCE OF A CONTRACT AND PURCHASE PAYMENTS

We reserve the right to reject any application for a contract for any reason. If
we accept your application in the form received, we will credit the initial
purchase payment within two Valuation Dates after the later of (1) receipt of
the application or (2) receipt of the initial purchase payment at our home
office. If we cannot apply the initial purchase payment within five Valuation
Dates after receipt because the application or other issuing instructions are
incomplete, we will return the initial purchase payment unless you consent to
our retaining the initial purchase payment and applying it as of the end of the
Valuation Period in which the necessary requirements are fulfilled. Regardless
of your consent, if the initial purchase payment still cannot be credited within
thirty Valuation Dates after receipt because the application or issuing
instructions are incomplete, the initial purchase payment will be returned to
you. The initial purchase payment must be at least $5,000 ($2,000 for a contract
issued pursuant to a qualified plan).

CONTRACT VALUE

Contract value is the total of any Variable Account value in all the subaccounts
of the Variable Account, plus any fixed account value in all the guarantee
periods.

The contract does not guarantee a minimum Variable Account value. You bear the
entire investment risk for the contract value that you allocate to the Variable
Account.

The number of Accumulation Units in each subaccount is equal to

- Accumulation Units purchased at the time that any purchase payments or
transferred amounts are allocated to the subaccount; less

- Accumulation Units redeemed to pay for the portion of any transfers from
or partial surrenders allocated to the subaccount; less

- Accumulation Units redeemed to pay charges under the contract.

DETERMINATION OF FIXED ACCOUNT VALUE. A contract's fixed account value is
guaranteed by First Fortis. Therefore, we bear the investment risk with respect
to amounts allocated to the fixed account, except to the extent that (1) we may
vary the guaranteed interest rate for future guarantee periods (subject to the
3% effective annual minimum) and (2) the Market Value Adjustment imposes
investment risks on you.

- The amount of purchase payments or transferred amounts allocated to the
guarantee period; less

- The amount of any transfers or surrenders out of the guarantee period.

ALLOCATION OF PURCHASE PAYMENTS AND CONTRACT VALUE

ALLOCATION OF PURCHASE PAYMENTS. In your application for a contract, you may
allocate purchase payments, or portions of payments, to the:

- available subaccounts of the Variable Account, or

- to the guarantee periods in the fixed account, or

- to a combination of the two previous options.

TRANSFERS. You may transfer contract value:

- from one available subaccount to another available subaccount, or

- from one available subaccount to the fixed account, or

- from one guarantee period to another guarantee period, or

- from one guarantee period to an available subaccount

You must request transfers by (1) a written request to First Fortis' home
office, or by (2) a telephone transfer as described below. We do not charge for
any transfer. However, transfers from a guarantee period, other than the
one-year guarantee period, that are (1) more than 15 days before or 15 days
after the expiration of the existing guarantee period, or are (2) not a part of
a formal First Fortis program for the transfer of fixed account value may be
subject to a Market Value Adjustment. See "Market Value Adjustment".

The MINIMUM transfer from a subaccount or guarantee period is the LESSER of:

- $1,000, or

- all of the contract value in the subaccount or guarantee period.

Certain restrictions on very substantial allocations to any one subaccount are
set forth under "Limitations on Allocations" in the Statement of Additional
Information.

TOTAL AND PARTIAL SURRENDERS

- the contract value at the end of the Valuation Period during which we
receive the written request for the total surrender at our home office,
less

- any applicable surrender charge, and

- after we have applied any Market Value Adjustment.

See "Surrender Charge" and "Market Value Adjustment".

We will surrender Accumulation Units from the Variable Account and/ or dollar
amounts from the fixed account so that the total amount of the partial surrender
equals the dollar amount of the partial surrender request. We will reduce the
partial surrender by the amount of any applicable surrender charge. In addition,
if the surrender is from a guarantee period other than the one-year guarantee
period, we will reduce the amount payable to you by any negative Market Value
Adjustment, or we will increase the amount payable to you by any positive Market
Value Adjustment UNLESS the surrender is (1) within 15 days before or 15 days
after the expiration of a guarantee period, or (2) is a part of a formal First
Fortis program for the transfer or withdrawal of fixed account value. The
partial surrender will be effective at the end of the Valuation Period in which
we receive the written request for partial surrender at our home office.
Payments will generally be made within seven days of the effective date of such
request, although certain delays are permitted. See "Postponement of Payment".

TELEPHONE TRANSACTIONS

BENEFIT PAYABLE ON DEATH OF CONTRACT OWNER OR ANNUITANT

If the owner dies prior to the annuity commencement date, we will pay a death
benefit. If the contract owner is a non-natural person, then we will pay a death
benefit upon the death of the Annuitant prior to the annuity commencement date.
In such case, if more than one Annuitant has been named, we will pay the death
benefit payable upon the death of an Annuitant only upon the death of the last
survivor of the persons so named.

The term "decedent" in the death benefit description below refers to the death
of the contract owner unless the contract owner is a non-natural person, in
which case it refers to the death of the Annuitant. Also, the death benefit
description refers to the age of the contract owner. If the contract owner is a
non-natural person, the relevant age will instead be that of the Annuitant.

Additionally, the death benefit description makes reference to "Pro Rata
Adjustments." A pro rata adjustment is calculated separately for each
withdrawal, creating a decrease in the death benefit proportional to the
decrease the withdrawal makes in the contract value. Pro rata adjustments are
made for amounts withdrawn for partial surrenders and any associated surrender
charge (which shall be deemed to be an amount withdrawn), but not for any
contract fee-related surrenders.

The death benefit will equal the greatest of (1), (2), or (3) as follows:

(1) The contract value as of the date used for valuing the death
benefit.

(2) The sum or all purchase payments made, reduced by pro rata
adjustments for each withdrawal.

(3) The highest Anniversary Value of each of the contract's
anniversaries prior to the earlier of: (1) the decedent's death, or (2) the
contract owner's attainment of age 75.

An Anniversary Value is equal to:

(a) the contract value on the anniversary, plus

(b) any purchase payments made since the anniversary, reduced by

The person entitled to the death benefit under the terms of the contract may (1)
receive a single sum payment, which terminates the contract, or (2) select an
annuity option. If the death benefit payee selects an annuity option, he or she
will have all the rights and privileges of a payee under the contract. If the
death benefit payee desires an annuity option, the election should be made
within 60 days of the date the death benefit becomes payable. Failure to make a
timely election can result in unfavorable tax consequences. For further
information, see "Federal Tax Matters."

We accept any of the following as proof of death: (1) a copy of a certified
death certificate; (2) a copy of a certified decree of a 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.

The pro rata adjustments referred to above are more fully described in Appendix
D at the end of this prospectus.

See Appendix A for sample death benefit calculation.

THE ANNUITY PERIOD

ANNUITY COMMENCEMENT DATE

You must submit a written request in order to advance or defer the annuity
commencement date. We must receive the request at our home office at least 30
days before the then-scheduled annuity commencement date. The new annuity
commencement date must also be at least 30 days after we receive the written
request. You have no right to make any total or partial surrender during the
Annuity Period.

COMMENCEMENT OF ANNUITY PAYMENTS

We may pay the entire contract value, rather than apply the amount to an annuity
option if the contract value at the end of the Valuation Period which contains
the annuity commencement date is less than $1,000. We would make the payment in
a single sum to the Annuitant or other payee chosen by the owner and cancel the
contract. We would not impose any charge other than the premium tax charge.

RELATIONSHIP BETWEEN SUBACCOUNT INVESTMENT PERFORMANCE AND AMOUNT OF VARIABLE
ANNUITY PAYMENTS

The amount of an annuity payment depends on the average effective net investment
return of a subaccount during the period since the preceding payment as follows:

- if the return is HIGHER than 3% annually, the Annuity Unit value will
INCREASE, and the second payment will be HIGHER than the FIRST; and

- if the return is LOWER than 3% annually, the Annuity Unit value will
DECREASE, and the second payment will be LOWER than the first.

We guarantee that the amount of each variable annuity payment after the first
payment will not be affected by variations in our mortality experience or our
expenses.

ANNUITY OPTIONS

WE ALSO HAVE OTHER ANNUITY OPTIONS AVAILABLE. You can get information about them
from your sales representative or by calling or writing to our home office.

DEATH OF ANNUITANT OR OTHER PAYEE

Under most annuity forms offered by us, the amounts, if any, payable on the
death of the Annuitant during the Annuity Period are the continuation of annuity
payments for any remaining guarantee period or for the life of any joint
Annuitant. In all such cases, the person entitled to receive payments also
receives any rights and privileges under the annuity form in effect.

CHARGES AND DEDUCTIONS

PREMIUM TAXES

We deduct state premium taxes as follows:

- when imposed on purchase payments, we pay the amount on your behalf and
deduct the amount from your contract value upon (1) our payment of
surrender proceeds

- or death benefit or (2) annuitization of a contract, or when imposed at
the time annuity payments begin, we deduct the amount from your contract
value.

Applicable premium tax rates depend upon your place of residence. Rates can
change by legislation, administrative interpretations, or judicial acts.

CHARGES AGAINST THE VARIABLE ACCOUNT

owner prior to the annuity commencement date. We do not impose a surrender
charge upon payment of a death benefit. This places a further mortality risk on
us.

The expense risk we assume is that actual expenses incurred in connection with
issuing and administering the contract will exceed the limits on administrative
charges set in the contract.

TAX CHARGE
We currently impose no charge for taxes payable by us in connection with the
contract, other than for applicable premium taxes. We reserve the right to
impose a charge for any other taxes that may become payable by us in the future
for the contracts or the Variable Account.

The annual administrative charge and charges against the Variable Account
described above are for the purposes described. We may receive a profit as a
result of these charges.

SURRENDER CHARGE

FREE SURRENDERS. You can withdraw the following amounts from the contract
without a surrender charge:

- Any purchase payments that we received more than seven years before the
surrender date and that you have not previously surrendered;

- Any earnings that you have not previously surrendered;

- In any contract year, up to 10% of the purchase payments that we received
less than seven years before the surrender date (whether or not you have
previously surrendered the purchase payments).

NUMBER OF YEARS SURRENDER CHARGE
SINCE PURCHASE AS A PERCENTAGE OF
PAYMENT WAS CREDITED PURCHASE PAYMENT
- ------------------------- ---------------------

Less than 2 7%
At least 2 but less than
4 6%
At least 4 but less than
5 5%
At least 5 but less than
6 3%
At least 6 but less than
7 1%
7 or more 0%

MISCELLANEOUS

REDUCTION OF CHARGES

GENERAL PROVISIONS

THE CONTRACTS

The contracts are non-participating and do not share in dividends or earnings of
First Fortis.

POSTPONEMENT OF PAYMENT

MISSTATEMENT OF AGE OR SEX AND OTHER ERRORS

ASSIGNMENT

The rights under a contract are subject to any assignment of record at our home
office. An assignment or pledge of a contract may have adverse tax consequences.
See below under "Federal Tax Matters".

BENEFICIARY

In the event of the death of a contract owner, or the Annuitant if the contract
owner is a non-natural person, prior to the annuity commencement date, the
beneficiary will be determined as follows:

- If upon the death of a contract owner there is one or more surviving
contract owners, the surviving contract owner(s) will be the beneficiary
(these override any other beneficiary designations).

- If upon the death of a contract owner there are no surviving contract
owners, and upon the death of the Annuitant, the beneficiary will be the
beneficiary designated by the contract owner.

- If there is no surviving beneficiary who has been designated by the
contract owner, then the contract owner, or the contract owner's estate,
will be the beneficiary.

REPORTS

We will mail to the contract owner (or to the person receiving payments during
the annuity period), at the last known address of record, any report and
communication required by applicable law or regulation. You should therefore
give us prompt written notice of any address change. This will include annual
audited financial statements of the portfolios, but not necessarily of the
Variable Account or First Fortis.

RIGHTS RESERVED BY FIRST FORTIS

- To operate the Variable Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law.

- To transfer any assets in any subaccount to another subaccount, or to one
or more separate accounts, or to the fixed account; or to add, combine, or
remove subaccounts in the Variable Account.

- To substitute, for the portfolio shares held in any subaccount, the shares
of another portfolio or the shares of another investment company or any
other investment permitted by law.

- To make any changes required by the Internal Revenue Code or by any other
applicable law in order to continue treatment of the contract as an
annuity.

- To change the time or time of day at which a Valuation Date is deemed to
have ended.

- To make any other necessary technical changes in the contract in order to
conform with any action the above provisions permit us to take, including
to change the way we assess

charges, but without increasing as to any then outstanding contract the
aggregate amount of the types of charges that we have guaranteed.

DISTRIBUTION

Fortis Investors may, under certain flexible compensation arrangements, pay
lesser or greater selling allowances and larger or smaller service fees to its
registered representatives and other broker dealer firms than as set forth
above. However, in such case, such flexible compensation arrangements will have
actuarial present values that are approximately equivalent to the amounts of the
selling allowances set forth above. Additionally, registered representatives,
broker-dealer firms and exempt firms may qualify for additional compensation
based upon meeting certain production standards. Fortis Investors may charge
back commissions paid to others if the contract upon which the commission was
paid is surrendered or cancelled within certain specified time periods.

First Fortis paid a total of $1,108,526 and $1,355,423 to Fortis Investors for
annuity contract distribution services during 1997 and 1998, respectively,
$101,176 of which in 1997 and $101,176 in 1998 was not reallowed to other broker
dealers or exempt firms. In the distribution agreement, First Fortis has agreed
to indemnify Fortis Investors (and its agents, employees, and controlling
persons) for certain damages and expenses, including those arising under federal
securities laws.

See Note 9 to the Notes to First Fortis' Financial Statements as to amounts it
has paid to Fortis, Inc. and Fortis Benefits Insurance Company, affiliates of
First Fortis for various services.

FEDERAL TAX MATTERS

NON-QUALIFIED CONTRACTS

Section 72 of the Internal Revenue Code ("Code") governs the taxation of
annuities in general. Neither you nor any other person may exclude or deduct
purchase payments under Non-Qualified Contracts from gross income. However, you
are not currently taxed, until receipt, on any increase in the accumulated value
of a Non-Qualified Contract that results from (1) the investment performance of
the Variable Account, or (2) interest credited to the fixed account. Owners who
are not natural persons ARE taxed annually on any increase in the contract value
subject to exceptions. You may wish to discuss this with your tax adviser.

The following discussion applies generally to contracts owned by natural
persons.

For fixed annuity payments, in general, prior to recovery of the "investment in
the contract," there is no tax on the amount of each payment that bears the same
ratio to that payment as the "investment in the contract" bears to the total
expected value of the annuity payments for the term of the payments. However,
the remainder of each annuity payment is taxable. The taxable portion of a
distribution (in the form of an annuity or a single sum payment) is taxed as
ordinary income.

You, or any other payee, will pay a 10% penalty on the taxable portion of a
"premature distribution." Generally, an amount is a "premature distribution"
unless the distribution is:

- made on or after you or another payee reach age 59 1/2, or is

- made to a beneficiary on or after your death, or is

- made upon your disability or that of another payee, or is

- part of a series of substantially equal annuity payments for your life or
life expectancy, or is

- part of a series of substantially equal annuity payments for the life or
life expectancy of you AND your beneficiary.

Premature distributions may result, for example, from:

- an early annuity commencement date

- an early surrender or partial surrender of a contract

- an assignment of a contract

- the early death of an Annuitant other than you or another person receiving
annuity payments under the contract

REQUIRED DISTRIBUTIONS FOR NON-QUALIFIED CONTRACTS

In order that a Non-Qualified Contract be treated as an annuity contract for
federal income tax purposes, Section 72(s) of the Code requires:

- if you die prior to the annuity commencement date, the entire interest in
the contract will be distributed:

- within five years after your death, or

QUALIFIED CONTRACTS

The contracts are available in connection with the following types of retirement
plans:

- Section 403(b) annuity plans for employees of certain tax-exempt
organizations and public education institutions;

- Section 401 or 403(a) qualified pension, profit-sharing, or annuity plans;

- Individual retirement annuities ("IRAs") under Section 408(b);

- Simplified employee pension plans ("SEPs") under Section 408(k);

- SIMPLE IRA Plans under Section 408(p); and

- Section 457 unfunded deferred compensation plans of tax-exempt
organizations and private employer unfunded deferred compensation plans.

The tax implications of these plans are further discussed in the Statement of
Additional Information under the heading "Taxation Under Certain Retirement
Plans".

WITHHOLDING

PORTFOLIO DIVERSIFICATION

CERTAIN EXCHANGES

Because of the complexity of these and other tax aspects in connection with an
exchange, you should consult a tax adviser before making any exchange.

TAX LAW RESTRICTIONS AFFECTING SECTION 403(B) PLANS

Section 403(b)(11) of the Internal Revenue Code restricts the distribution under
Section 403(b) annuity contracts of:

(1) elective contributions made for years beginning after December 31, 1988;

(2) earnings on those contributions; and

(3) earnings on amounts held as of December 31, 1988.

FURTHER INFORMATION ABOUT FIRST FORTIS

On October 1, 1991, First Fortis Life Insurance Company and its affiliate Fortis
Benefits Insurance Company (the "Companies"), entered into an Asset Transfer and
Acquisition Agreement (the "Agreement") with Mutual Benefit Life Insurance
Company in Rehabilitation (MBL). Pursuant to the Agreement, the Companies
acquired certain assets and assumed certain liabilities of MBL relating to the
group life, accident and health, disability and dental insurance business of
MBL. That portion of the business conducted in New York was assumed by First
Fortis, while the remaining and more substantial portion of the business was
assumed by Fortis Benefits Insurance Company. N.V. AMEV contributed $25 million
in cash to the paid-in-capital of First Fortis on October 1, 1991 in connection
with the acquisition.

GENERAL

OWNERSHIP OF SECURITIES

All of First Fortis' outstanding shares are owned by Fortis, Inc., One Chase
Manhattan Plaza, New York, N.Y. 10005. Fortis, Inc., in turn is wholly owned by
Fortis International, Inc., which is wholly owned by AMEV/VSB 1990 N.V., both of
which share the same address with N.V. AMEV., Archimedeslaan 10, 3584 BA,
Utrecht, The Netherlands. AMEV/ VSB 1990 N.W. is 50% owned by Fortis (NL)N.V.
and 50% owned, through certain subsidiaries, by Fortis (B), Boulevard Emile
Jacqmain 53, 1000 Brussels, Belgium.

SELECTED FINANCIAL DATA

YEAR ENDED DECEMBER 31,
----------------------------------------------------------
(IN THOUSANDS) 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------

INCOME STATEMENT DATA
Premiums........................................................ $ 54,451 $ 51,846 $ 67,516 $ 81,201 $ 92,056
Net investment income........................................... 8,187 7,907 7,891 7,466 6,261
Realized investment gains (losses).............................. 1,436 361 (3) 2,683 (1,057)
Other income.................................................... 1,202 682 336 298 287
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES 65,276 60,796 75,740 91,648 97,547
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Benefits and expenses........................................... 61,477 60,983 75,596 96,371 104,582
Income tax expense (benefit).................................... 1,347 (63) (39) (1,563) (999)
Net income (loss)............................................... $ 2,452 $ (124) $ 183 $ (3,160) $ (6,036)

BALANCE SHEET DATA
Total assets.................................................... $ 217,502 $ 170,898 $ 142,742 $ 139,913 $ 123,954
Total liabilities............................................... $ 177,476 $ 133,817 $ 107,050 $ 101,523 $ 97,913
Total shareholder's equity...................................... $ 40,026 $ 37,081 $ 35,692 $ 38,390 $ 26,041

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

REVENUES

BENEFITS

EXPENSES

The Company continues to monitor its commission rate structures, and, as
indicated by market conditions, periodically adjusts rates paid. Rates paid vary
by product type, group size and duration.

The Company's general and administrative expenses as a percent of premium has
decreased in 1998 from 1997 as a reflection of the Company's expense monitoring
efforts.

YEAR 2000

LIQUIDITY AND CAPITAL RESOURCES

REGULATION

VOTING PRIVILEGES

We determine the number of shares of a portfolio attributable to a contract as
follows:

- mortality assumptions,

- the assumed interest rate used in determining the number of Annuity
Units under the contract, and

- the applicable Annuity Unit value

During the Annuity Period, the number of votes attributable to a contract will
generally decrease since funds set aside to make the annuity payments will
decrease.

voted in accordance with instructions of owners in such other separate accounts.
This diminishes the relative voting influence of the contracts.

- the election of the Board of Directors of the portfolios,

- ratification of the selection of a portfolio's independent auditors,

- the approval of the investment managers of a portfolio,

- changes in fundamental investment policies of a portfolio, and

- all other matters that are put to a vote of portfolio shareholders

LEGAL MATTERS

YEAR 2000 ISSUES

At First Fortis, we use computer systems to process policy transactions and
valuations. We need to adjust these computer systems so that we may continue to
administer policies after the Year 2000. First Fortis is devoting all resources
necessary to make these systems modifications, and we expect that the necessary
changes will be completed on time, with no disruption to our policy servicing
operations. However, as with most system conversion projects, risks and
uncertainties exist. In part, this is due to our necessary reliance on third
party vendors. Nonperformance by any of these entities, or other unforeseen
circumstances, could have a material adverse impact on our ability to service
policies. As such, we are closely monitoring these entities to avoid any
unforeseen circumstances. See the Note entitled "Year 2000" in the First Fortis
Financial Statements.

OTHER INFORMATION

A Statement of Additional Information is available upon request. Its contents
are as follows:

CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

First Fortis and the Variable Account..........

Calculation of Annuity Payments................
Postponement of Payments.......................
Services.......................................
- Safekeeping of Variable Account Assets.....
- Experts....................................
- Principal Underwriter......................
Taxation Under Certain Retirement Plans........
Withholding....................................
Variable Account Financial Statements..........
APPENDIX A--Performance Information............

FIRST FORTIS FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITORS

Board of Directors
First Fortis Life Insurance Company

/s/ Ernst & Young, LLP
February 19, 1999
Minneapolis, MN

F-1

BALANCE SHEETS
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31
-------------------------
1998 1997
----------- -----------

Cash and cash equivalents................................... 1,160 7,453

See accompanying notes.

F-2

BALANCE SHEETS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31
-------------------------
1998 1997
----------- -----------

See accompanying notes.

F-3

FIRST FORTIS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------

See accompanying notes.

F-4

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS)

ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN RETAINED COMPREHENSIVE
TOTAL STOCK CAPITAL DEFICIT (LOSS) INCOME
------------ ------------ ------------ ------------- ---------------

See accompanying notes.

F-5

STATEMENTS OF CASH FLOWS
FIRST FORTIS LIFE INSURANCE COMPANY
(IN THOUSANDS)

YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------

See accompanying note

F-6

NOTES TO FINANCIAL STATEMENTS
FIRST FORTIS LIFE INSURANCE COMPANY

DECEMBER 31, 1998

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

BASIS OF STATEMENT PRESENTATION

REVENUE RECOGNITION AND FUTURE POLICY BENEFIT RESERVES

Premiums for credit insurance included in life insurance premiums and accident
and health insurance premiums are recognized as revenues when due over the
estimated coverage period.

CLAIMS AND BENEFITS PAYABLE

DEFERRED POLICY ACQUISITION COSTS

INVESTMENTS

The Company's investment strategy is developed based on many factors including
insurance liability matching, rate of return, maturity, credit risk, tax
considerations and regulatory requirements.

All fixed maturity investments are classified as available-for-sale and carried
at fair value.

F-7

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

Short term investments are at cost which approximates fair value.

PROPERTY AND EQUIPMENT

GOODWILL

INCOME TAXES

SEPARATE ACCOUNTS

GUARANTY FUND ASSESSMENTS

STATEMENTS OF CASH FLOWS

RECLASSIFICATIONS

Certain amounts in the 1997 and 1996 financial statements have been reclassified
to conform to the 1998 presentation.

F-8

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

2. INVESTMENTS

AVAILABLE-FOR-SALE SECURITIES

The following is a summary of the available-for-sale securities (in thousands):

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAIN LOSS VALUE
----------- --------- --------- -----------

The amortized cost and fair value of fixed maturity securities at December 31,
1998, by contractual maturity, are shown below (in thousands):

AMORTIZED FAIR
COST VALUE
----------- -----------

Expected maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.

INVESTMENTS ON DEPOSIT

The Company had fixed maturities carried at $525,000, at December 31, 1998 and
1997, on deposit with various governmental authorities as required by law.

NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON INVESTMENTS

Major categories of net investment income for each year were as follows (in
thousands):

1998 1997 1996
--------- --------- ---------

All net realized gains (losses) on investments resulted from sales of fixed
maturities.

F-9

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

2. INVESTMENTS (CONTINUED)
NET UNREALIZED GAINS (LOSSES)

The adjusted net unrealized gains (losses) on investments recorded in
accumulated other comprehensive income for the year ended December 31, were as
follows (in thousands):

TAX
BEFORE-TAX (BENEFIT) NET-OF-TAX
AMOUNT EXPENSE AMOUNT
----------- ----------- -----------

3. LEASES

4. ACCIDENT AND HEALTH RESERVES

Activity for the liability for unpaid accident and health claims is
summarized as follows (in thousands):

YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------

F-10

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

5. FEDERAL INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the basis of assets and liabilities for financial statement purposes and
for income tax purposes.

The significant components of the Company's deferred tax liabilities and assets
as of December 31, 1998 and 1997 are as follows (in thousands):

DECEMBER 31
--------------------
1998 1997
--------- ---------

The Company's tax benefit for the year ended December 31 is shown as follows (in
thousands):

1998 1997 1996
--------- --------- ---------

Federal income tax payments and refunds resulted in net payments of $382,000 and
$32,000 in 1997 and 1996 respectively, and net refunds of $424,000 in 1998.

The Company's effective income tax rate varied from the statutory federal income
tax rate as follows:

1998 1997 1996
--- --- ---

As of May 1, 1997, the Company is included as a member of a federal consolidated
group that has a statutory federal rate of 35%.

F-11

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

6. REINSURANCE

Ceded reinsurance premiums for the year ended December 31 were as follows (in
thousands):

1998 1997 1996
--------- --------- ---------

Recoveries under reinsurance contracts for the year ended December 31 were as
follows (in thousands):

1998 1997 1996
--------- --------- ---------

7. DIVIDEND RESTRICTIONS

8. REGULATORY ACCOUNTING REQUIREMENTS

Insurance enterprises are required by state insurance departments to adhere to
minimum risk-based capital ("RBC") requirements developed by the NAIC. The
Company exceeds the minimum RBC requirements.

F-12

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

SHAREHOLDER'S EQUITY
NET INCOME (LOSS)
------------------------------- --------------------
1998 1997 1996 1998 1997
--------- --------- --------- --------- ---------

9. TRANSACTIONS WITH AFFILIATED COMPANIES

Administrative expenses allocated for the Company may be greater or less than
the expenses that would be incurred if the Company were operating on a separate
company basis.

10. FAIR VALUE DISCLOSURES

VALUATION METHODS AND ASSUMPTIONS

Separate account assets and liabilities are reported at their estimated fair
value in the Balance Sheet.

F-13

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST FORTIS LIFE INSURANCE COMPANY

11. RETIREMENT AND OTHER EMPLOYEE BENEFITS

12. COMMITMENTS AND CONTINGENCIES

13. YEAR 2000 (UNAUDITED)

STATE OF READINESS. In 1997, the Fortis parent company organized a
multi-disciplinary Year 2000 Project Team ("Team"). The Company is a part of the
Team. The Team consists of employees at each subsidiary, audit, legal and
outside consultants. The Team has developed and is currently executing a
comprehensive plan designed to make the Company's IT systems Year 2000 ready.
The plan covers four stages including (i) inventory, (ii) assessment, (iii)
programming, and (iv) testing and certification. At December 31, 1998, the
Company has completed the inventory stage for its internal hardware, software
and telecommunications systems (mainframe and client/server applications). The
assessment process is also complete and the Company is utilizing both internal
and external resources to reprogram or replace the systems where necessary, and
testing the applications for Year 2000 readiness. Programming, testing and
certification of these systems and applications are targeted for completion by
the end of 1999.

F-14

APPENDIX A--SAMPLE MARKET VALUE ADJUSTMENT CALCULATIONS

The formula which will be used to determine the Market Value Adjustment is:

1 + I n/12
( ----------) - 1
1 + J + 0025

Sample Calculation 1: Positive Adjustment

1 + .08 60/12
$10,000 x [( -----------) - 1] = $354.57
1 + .07 + .0025

Amount transferred or withdrawn (adjusted for Market Value
Adjustment): $10,354.57

Sample Calculation 2: Negative Adjustment

Amount withdrawn or transferred $10,000
Existing Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Existing
Guarantee Period
Guaranteed Interest Rate (I) 8%*
Guaranteed Interest Rate for
new 5-year guarantee (J) 9%*
Remaining Guarantee Period (N) 60 months
Market Value Adjustment:

1 + .08 60/12
$10,000 x [( -----------) - 1] = - $559.14
1 + .09 + .0025

Amount transferred or withdrawn (adjusted for Market Value
Adjustment): $9,440.86

Sample Calculation 3: Negative Adjustment

1 + .08 60/12
$10,000 x [( -------------)] - 1] = $0
1 + .0775 + .0025

Amount transferred or withdrawn (adjusted for Market Value
Adjustment): $10,000
- ------------------------
* Assumed for illustrative purposes only.

A-1

APPENDIX B--SAMPLE DEATH BENEFIT CALCULATIONS

Date of Death is the 3rd Contract Anniversary Example 1 Example 2 Example 3
----------- ----------- -----------

a. Purchase Payments Made Prior to Death, accumulated at 5% $ 32,000 $ 32,000 $ 32,000
b. Contract Value on Date of Death $ 20,000 $ 36,000 $ 25,000
c. 1 Year Ratchet Option Value $ 35,000 $ 36,000 $ 31,000
Death Benefit is larger of a, b, and c. $ 35,000 $ 36,000 $ 32,000

Date of Death is the 5th Contract Anniversary Example 1 Example 2 Example 3
----------- ----------- -----------

a. Purchase Payments Made Prior to Death, accumulated at 5% $ 34,000 $ 34,000 $ 34,000
b. Contract Value on Date of Death $ 38,000 $ 38,000 $ 28,000
c. 1 Year Ratchet Option Value $ 38,000 $ 40,000 $ 33,000
Death Benefit is larger of a, b, and c $ 38,000 $ 40,000 $ 34,000

Date of Death is the 10th Contract Anniversary Example 1 Example 2 Example 3
----------- ----------- -----------

a. Purchase Payments Made Prior to Death, accumulated at 5% $ 36,000 $ 36,000 $ 36,000
b. Contract Value on Date of Death $ 39,000 $ 34,000 $ 31,000
c. 1 Year Ratchet Option Value $ 39,000 $ 37,000 $ 32,000
Death Benefit is larger of a, b, and c $ 39,000 $ 37,000 $ 36,000

B-1

APPENDIX C--EXPLANATION OF EXPENSE CALCULATIONS

The expense for a given year is calculated by multiplying the projected
beginning of the year policy value by the total expense rate. The total expense
rate is the sum of the variable account expense rate plus the total portfolio
expense rate plus The annual administrative charge rate.

The policy values are projected by assuming a single payment of $1,000 grows at
an annual rate equal to 5% reduced by the total expense rate described above.

For example, the 3 year expense for the Growth Stock Series is calculated as
follows:

Total Variable Account Annual Expenses 1.35%
+ Total Series Fund Operating Expenses 0.65%
= Total Expense Rate 2.00%

Year 1 Beginning Policy Value = $1000.00
Year 1 Expense = 1000.00 X .0200 = $20.00

Year 2 Beginning Policy Value = $1029.00
Year 2 Expense = 1030.00 X .0200 = $20.60

Year 3 Beginning Policy Value = $1060.70
Year 3 Expense = 1060.90 X .0200 = $21.22

So the cumulative expenses for years 1-3 for the Growth Stock Series are equal
to $20.00 + $20.60 + $21.22 = $61.82.

If the contract is surrendered, the surrender charge is the surrender charge
percentage times the purchase payment minus the 10% free withdrawal amount:

Surrender Charge (Initial 10% Free Surrender
Percentage X Premium - Withdrawal) = Charge

0.06 x ($1000.00 - $100.00) = $54.00

So the total expense if surrendered is $61.82 + $54.00 = $115.82.

C-1

APPENDIX D--PRO RATA ADJUSTMENTS

Pro rata adjustments are made for withdrawals in calculating the death benefit
payable under the contract. The benefit is described under the section of this
prospectus entitled Benefit Payable on Death of Owner (or Annuitant).

Under the death benefit set forth as (2) in that section, the pro rata
adjustment for a given withdrawal is equal to:

(a) the withdrawn amount, divided by

(b) the contract value immediately before the amount was withdrawn, the result
multiplied by

Under the death benefit set forth as (3) in that section, the pro rata
adjustment for a given withdrawal is equal to

(a) the withdrawn amount, divided by

(b) the contract value immediately before the amount was withdrawn, the result
multiplied by

(i) the contract value on the anniversary, plus

(ii) purchase payments made since the anniversary and before
withdrawal, plus

(iii) pro rata adjustments for withdrawals made since the anniversary
and before the given withdrawal.

D-1

DEFG

FORTIS FINANCIAL GROUP
P.O. BOX 64284
ST. PAUL, MN 55164

BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 3794
MINNEAPOLIS, MN

PROSPECTUS
MAY 1, 1999

FLEXIBLE PREMIUM DEFERRED
COMBINATION VARIABLE AND FIXED ANNUITY CONTRACTS
(MASTERS AND MASTERS +)
Issued by

FIRST FORTIS LIFE INSURANCE COMPANY

STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 1999

This Statement of Additional Information is not a Prospectus. It is intended
that this Statement of Additional Information be read in conjunction with the
Prospectus for contracts under flexible premium deferred combination variable
and fixed annuity contracts ("Contracts"), dated May 1, 1999. A copy of the
Prospectus may be obtained without charge from Fortis Investors, Inc.
1-800-800-2000, mailing address: P.O. Box 64272, St. Paul, MN 55164 or First
Fortis Life Insurance Company ("First Fortis") 1-800-745-8248, mailing address:
P. O. Box 3249, Syracuse, NY 13220. You have the option of receiving benefits
under a Contract through First Fortis' Variable Account A or through First
Fortis' Fixed Account.

TABLE OF CONTENTS

First Fortis and the Variable Account. . . . . . . . . . . . . . . . . . . . . . . .2
Calculation of Annuity Payments. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Postponement of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
- Safekeeping of Variable Account Assets . . . . . . . . . . . . . . . . . . . . .3
- Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
- Principal Underwriter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Limitation on Allocations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Change of Investment Adviser or Investment Policy. . . . . . . . . . . . . . . . . .4
Taxation Under Certain Retirement Plans. . . . . . . . . . . . . . . . . . . . . . .4
Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Variable Account Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .9
Appendix A -- Performance Information. . . . . . . . . . . . . . . . . . . . . . .A-1

In order to supplement the description in the Prospectus, the following provides
additional information about the Contracts and other matters which may be of
interest to you. Terms used in this Statement of Additional Information have
the same meanings as are defined in the Prospectus under the heading "Special
Terms Used in This Prospectus."

FIRST FORTIS AND THE VARIABLE ACCOUNT

First Fortis Life Insurance Company, the issuer of the Contracts, is a New York
corporation qualified to sell life insurance and annuity contracts in New York.
First Fortis is a wholly-owned subsidiary of Fortis, Inc. Fortis Inc. is a
corporation based in New York, which manages the United States operations of
Fortis (NL) N.V. and Fortis (B). Fortis, Inc. is wholly-owned by Fortis
International, Inc., which is in turn wholly-owned by Sycamore Insurance Holding
N.V. The latter is 50% owned by Fortis (NL) N.V. and 50% owned, through certain
subsidiaries, by Fortis (B).

Fortis (NL) N.V. is a publicly-traded, multi-national insurance and financial
services group headquartered in The Netherlands. Fortis (NL) N.V. is an
international financial services firm that has been in business since 1847. It
is one of the largest holding companies in Europe with subsidiary companies in
twelve countries on four continents. Fortis (NL) N.V. is the third largest
insurance company in The Netherlands. Fortis (B) is a multi-national insurance,
real estate and financial services firm that has been in business since 1824. It
has subsidiary companies in eight countries. Fortis (B) is one of the largest
life insurance companies in Belgium. Fortis (NL) N.V. and Fortis (B) have
combined assets of approximately $390 billion.

The assets allocated to the Variable Account are the exclusive property of First
Fortis. Registration of the Variable Account under the Investment Company Act
of 1940 does not involve supervision of the management or investment practices
or policies of the Variable Account or of First Fortis by the Securities and
Exchange Commission. First Fortis may accumulate in the Variable Account
proceeds from charges under the Contracts and other amounts in excess of the
Variable Account assets representing reserves and liabilities under Contracts
and other variable annuity contracts issued by First Fortis. First Fortis may
from time to time transfer to its General Account any of such excess amounts.

Best's Insurance Reports assigned First Fortis a rating of A (Excellent) for
financial position and operating performance. First Fortis has a rating of AA
from Standard & Poor's. As defined by Standard & Poor's, insurers rated AA offer
"excellent financial security." These ratings represent such rating agencies'
independent opinion of First Fortis' financial strength and ability to meet
policy holder obligations, but have no relevance to the performance and quality
of the assets in Subaccounts of the Variable Account.

CALCULATION OF ANNUITY PAYMENTS

FIXED ANNUITY OPTION

The amount of each annuity payment under a Fixed Annuity Option is fixed and
guaranteed by First Fortis. Monthly fixed annuity payments will start as of the
end of the Valuation Period that contains the Annuity Commencement Date. At
that time, the Contract Value, after any Market Value Adjustment, is computed
and that portion of the Contract Value which will be applied to the Fixed
Annuity Option selected is determined. The amount of the first monthly payment
under the Fixed Annuity Option selected will be at least as large as would
result from using the annuity tables contained in the Contract to apply such
amount of Contract Value to the annuity form selected. The dollar amounts of
any fixed annuity payments after the first are specified during the entire
period of annuity payments according to the provisions of the annuity form
selected.

VARIABLE ANNUITY OPTION

ANNUITY UNITS. To the extent a Variable Annuity Option has been selected, we
convert the Accumulation Units for each Subaccount of the Variable Account into
Annuity Units for each Subaccount at their values determined as of the end of
the Valuation Period which contains the Annuity Commencement Date. As of such
time, any Fixed Account Value to be applied to a Variable Annuity Option is also
converted, after any Market Value Adjustment, to Annuity Units in the
Subaccounts selected based on the then-current Annuity Unit value. The initial
number of Annuity Units in each Subaccount is determined by dividing the amount
of the initial monthly variable annuity payment (see "Variable Annuity Option --
Variable Annuity Payments," below) allocable to that Subaccount by the value of
one Annuity Unit in that Subaccount as of the time of the conversion. The
number of Annuity Units for each Subaccount will remain constant, as long as an
annuity remains in force and the allocation among the Subaccounts has not
changed.

The value of each Subaccount's Annuity Units will vary to reflect the investment
experience of the Subaccount as well as

charges deducted from the Subaccount. The value of each Subaccount's Annuity
Units is equal to the prior value of the Subaccount's Annuity Units multiplied
by the net investment factor for that Subaccount (discussed in the Prospectus
under "Contract Value") for the Valuation Period ending on that Valuation Date,
with an offset for the 4% (3% for the Opportunity +) assumed interest rate used
in the annuity tables of the Contract.

VARIABLE ANNUITY PAYMENTS. Variable annuity payments start at the end of the
Valuation Period that contains the Annuity Commencement Date, and will vary in
amount as the related Annuity Unit values vary. The amount of the first monthly
payment is shown on the annuity tables contained in the Contract for each $1,000
of Contract Value applied to the Variable Annuity Option selected as of the end
of such Valuation Period. The first variable annuity payment is, in effect,
allocated among the Subaccounts in the same proportion as the Contract Value is
allocated among the Subaccounts upon commencement of annuity payments.

Payments after the first will vary in amount and are determined on the first
Valuation Date of each subsequent monthly period. If the monthly payment under
the annuity form selected is based on the value of Annuity Units of a single
Subaccount, the monthly payment is found by multiplying the number of the
Contract's Annuity Units for the Subaccount by the Annuity Unit value of such
Subaccount as of the first Valuation Date in each monthly period following the
Annuity Commencement Date. If the monthly payment under the Variable Annuity
Option selected is based upon the value of Annuity Units in more than one
Subaccount, this is repeated for each applicable Subaccount. The sum of these
payments is the variable annuity payment.

GENDER OF ANNUITANT

The amount of each annuity payment ordinarily will be higher for a male
Annuitant than for a female Annuitant with an otherwise identical Contract. This
is because, statistically, females tend to have longer life expectancies than
males. We will make available Contracts with no such differences in connection
with certain employer-sponsored benefit plans. Employers should be aware that,
under most such plans, Contracts that make distinctions based on gender are
prohibited by law.

POSTPONEMENT OF PAYMENTS

With respect to amounts in the Subaccounts of the Variable Account, payment of
any amount due upon a total or partial surrender, death or under an annuity
option will ordinarily be made within seven days after all documents required
for such payment are received by First Fortis at its Home Office.

However, First Fortis may defer the determination, application or payment of any
death benefit, transfer, partial or total surrender or annuity payment, to the
extent dependent on Accumulation or Annuity Unit Values, for any period during
which the New York Stock Exchange is closed (other than customary weekend and
holiday closings) or trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission, for any period during
which any emergency exists as a result of which it is not reasonably practicable
for First Fortis to determine the investment experience for the Contract, or for
such other periods as the Securities and Exchange Commission may by order permit
for the protection of investors.

SERVICES

SAFEKEEPING OF VARIABLE ACCOUNT ASSETS

Title to the assets of the Variable Account is held by First Fortis. The assets
of the Variable Account are kept segregated and held separate and apart from
First Fortis' other assets. Fortis Advisers, Inc., an affiliate of First
Fortis, maintains records of all purchases and redemptions of shares of Fortis
Series Fund, Inc. held by each of the Subaccounts of the Variable Account.

EXPERTS

The financial statements of First Fortis Life Insurance Company at
December 31, 1998 and 1997, and for each of the three years in the period
ended December 31, 1998, and the statements of net assets of First Fortis Life
Insurance Company Variable Account A at December 31, 1998 and the related
statements of changes in net assets for each of the two years in the period
ended December 31, 1998, appearing in the Prospectus, this Statement of
Additional Information and Registration Statement have been audited by Ernst
& Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such authority
as experts in accounting and auditing.

PRINCIPAL UNDERWRITER

Fortis Investors, Inc. ("Fortis Investors"), the principal underwriter of the
Contracts, is a Minnesota corporation and a member of the Securities Investors
Protection Corporation. The offering of the Contracts is continuous, and Fortis
Investors does not anticipate discontinuing the offering of the Contracts,
although it reserves the right to do so. Contracts generally will be issued for
Annuitants from ages zero to ninety.

LIMITATIONS ON ALLOCATIONS

Under the Contract, First Fortis reserves the right to control the amount of any
assets in any investment alternative. Pursuant to this authority, First Fortis
has established the following administrative procedures for the protection of
the interests of all investors participating in Fortis Series' Portfolios: a
Contract Owner may not invest, allocate, transfer or exchange Contract Value
into any Subaccount if the value allocated to the Subaccount under the Contract
(and under any other insurance or annuity contracts directly or indirectly
controlled by the same person, jointly or individually) would immediately
thereafter equal 25% or more of the related Fortis Series Portfolio's net
assets. First Fortis reserves the right to modify these procedures at any time.

CHANGE OF INVESTMENT ADVISER OR INVESTMENT POLICY

Unless otherwise required by law or regulation, and subject to Fortis Advisers,
Inc.'s right to terminate its investment advisory arrangements with Fortis
Series, neither the investment adviser nor any investment policy may be changed
without the consent of First Fortis. No investment policy will be changed
unless a statement of change is filed with and approved by the Insurance
Commissioner of the State of New York. The Contract Owner (or, after annuity
payments start, the payee) will be notified of any material investment policy
change which has been approved. You will be notified of an investment policy
change prior to its implementation by the Variable Account if your comment or
vote is required for such change.

TAXATION UNDER CERTAIN RETIREMENT PLANS

Federal income tax information concerning the purchase of Contracts for specific
types of retirement plans is set forth below. You should also refer to "Federal
Tax Matters" in the Prospectus. The tax information provided is not
comprehensive, and you should consult a qualified tax adviser before taking any
action in connection with a retirement plan.

SECTION 403(b) ANNUITIES FOR EMPLOYEES OF CERTAIN TAX-EXEMPT ORGANIZATIONS
OR PUBLIC EDUCATIONAL INSTITUTIONS

PURCHASE PAYMENTS. Under Section 403(b) of the Internal Revenue Code ("Code"),
payments made by certain employers (i.e., tax-exempt organizations meeting the
requirements of Section 501(c)(3) of the Code, or public educational
institutions) to purchase Contracts for their employees are excludible from the
gross income of employees to the extent that such aggregate purchase payments do
not exceed certain limitations prescribed by the Code. This is the case whether
the purchase payments are a result of voluntary salary reduction amounts or
employer contributions. Salary reduction payments are, however, subject to FICA
(social security) taxes.

TAXATION OF DISTRIBUTIONS. Distributions from a Section 403(b) tax-deferred
annuity are taxed as ordinary income to the recipient as described under
"Federal Tax Matters" in the Prospectus. Taxable distributions received
before the employee attains age 59 1/2 generally are subject to a 10% penalty
tax in addition to regular income tax. Certain distributions are excepted
from this penalty tax, including distributions following the employee's
death, disability, separation from service after age 55, separation from
service at any age if the distribution is in the form of an annuity for the
life (or life expectancy) of the employee (or the employee and Beneficiary)
and distributions not in excess of deductible medical expenses. In addition,
no distributions of voluntary salary reduction amounts will be permitted
prior to one of the following events: attainment of age 59 1/2 by the employee
or the employee's separation from service, death,

disability or hardship. (Hardship distributions will be limited to the lesser
of the amount of the hardship or the amount of salary reduction contributions,
exclusive of earnings thereon.)

REQUIRED DISTRIBUTIONS. Generally, distributions from Section 403(b)
annuities must commence not later than April 1 of the calendar year following
the calendar year in which the employee attains age 70 1/2, and such
distributions must be made over a period that does not exceed the life
expectancy of the employee (or the employee and Beneficiary). A penalty tax
of 50% would be imposed on any amount by which the minimum required
distribution in any year exceeded the amount actually distributed in that
year. In addition, in the event that the employee dies before his or her
entire interest in the Contract has been distributed, the employee's entire
interest must be distributed in accordance with rules similar to those
applicable upon the death of the Contract Owner or Payee in the case of a
Non-Qualified Contract, as described in the Prospectus. Certain of these and
other provisions are incorporated in a special endorsement attached to
Contracts that are intended to qualify under Section 403(b), and reference
should be made to that endorsement for its complete terms.

TAX-FREE EXCHANGES AND ROLLOVERS. The Code provides for the tax-free transfer
of one Section 403(b) annuity for another Section 403(b) annuity, and the IRS
has ruled (Revenue Ruling 90-24) that amounts transferred may qualify as
tax-free transfers under certain circumstances. In addition, Section 403(b)(8)
of the code permits tax-free rollovers from Section 403(b) programs to
individual retirement annuities or other Section 403(b) programs under certain
circumstances.

SECTION 401 QUALIFIED PENSION, PROFIT-SHARING OR ANNUITY PLANS

PURCHASE PAYMENTS. Subject to certain limitations prescribed by the Code,
purchase payments made by an employer (or a self-employed individual) under a
pension, profit-sharing or annuity plan qualified under Section 401 or
Section 403(a) of the Code are generally deductible by the employer and
excluded from the taxable income of the employee for federal income tax
purposes, whether made under a salary reduction agreement or directly by
employer contributions. Salary reduction payments are, however, subject to
FICA (social security) taxes. Purchase payments made directly by an employee
generally are made on an after-tax basis.

TAXATION OF DISTRIBUTIONS. Distributions from Contracts purchased under these
qualified plans are taxable as ordinary income, except to the extent allocable
to an employee's after-tax contributions, as described under "Federal Tax
Matters -- Qualified Plans," in the Prospectus. However, if an employee or
other payee receives a "lump sum" distribution, as defined in the Code, from an
exempt employees' trust, the taxable portion of the distribution may be subject
to special tax treatment. For most individuals receiving lump sum distributions
after attaining age 59 1/2, the rate of tax may be determined under a special
5-year income averaging provision. Those who attained age 50 by January 1, 1986
may instead elect to use a 10-year income averaging provision based on the
income tax rates in effect for 1986. Taxable distributions received prior to
attainment of age 59 1/2 under a Contract purchased under a qualified plan are
subject to the same 10% penalty tax (and the same exceptions) as described above
with respect to Section 403(b) annuities.

REQUIRED DISTRIBUTIONS. The minimum distribution requirements for these
qualified plans are generally the same as described above with respect to
Section 403(b) annuities.

TAX-FREE ROLLOVERS. If, within 60 days of receipt, an employee who receives a
single sum distribution transfers all of the taxable amount received to another
plan qualified under Section 401 or 403(a), or to an individual retirement
account or annuity as provided for under the Code, the transferred amount will
not be taxed in the year of distribution. Certain "partial" distributions may
also qualify for tax-free rollover treatment, but only if transferred to an
individual retirement account or annuity. However, income tax may be withheld
from the distribution unless the distribution is transferred directly from the
qualified plan to the individual retirement account or individual retirement
annuity.

INDIVIDUAL RETIREMENT ANNUITIES

PURCHASE PAYMENTS. Individuals may make contributions for individual retirement
annuity ("IRA") Contracts. Deductible contributions for any year may be made up
to the lesser of $2,000 or 100% of compensation for individuals who (1) are not
(and whose spouses are not) active participants in another retirement plan, (2)
are unmarried and have adjusted gross income of $25,000 or less, or (3) are
married and have adjusted gross income of $40,000 or less. An

individual may also establish an IRA for his or her spouse if they file a joint
return for the taxable year and his or her spouse earns less than the individual
does for that year. The annual purchase payments for both spouses' Contracts
cannot exceed the lesser of $4,000 or 100% of the couple's combined earned
income, and no more than $2,000 may be contributed to either spouse's IRA for
any year. Individuals who are active participants in other retirement plans and
whose adjusted gross income (with certain special adjustment) exceed the cut-off
point ($25,000 for unmarried, $40,000 for married persons filing jointly, and $0
for married persons filing a separate return) by less than $10,000 are entitled
to make deductible IRA contributions in proportionately reduced amounts. For
example, a married individual who is an active participant in another retirement
plan and files a separate tax return is entitled to a partial IRA deduction if
the individual's adjusted gross income is less than $10,000 and no IRA deduction
if his or her adjusted gross income is equal to or greater than $10,000.

An individual may make non-deductible IRA contributions to the extent of (1) the
lesser of $2,000 ($4,000 in the case of a spousal IRA) or 100% of compensation
over (2) the IRA deductible contribution made with respect to the individual.

An individual may not make any contributions to his/her own IRA for the year in
which he/she reaches age 70 1/2 or for any year thereafter. Contributions to a
spouse's IRA may not be made for any year in which that spouse reaches age
70 1/2 or for any year thereafter.

TAXATION OF DISTRIBUTIONS. Distributions from IRA Contracts are taxed as
ordinary income to the recipient, although special rules exist for the
tax-free return of non-deductible contributions. In addition, taxable
distributions received under an IRA Contract prior to age 59 1/2 are subject
to a 10% penalty tax in addition to regular income tax. Certain
distributions are exempted from this penalty tax including distributions
following the owner's death or disability or distribution in the form of an
annuity for the life (or life expectancy) of the owner (or the owner and
beneficiary), or distributions not in excess of deductible medical expenses
or certain distributions to pay health insurance premiums after an extended
period of unemployment.

REQUIRED DISTRIBUTIONS. The minimum distribution requirements for IRAs are
generally the same as described above with respect to Section 403(b) annuities.
Certain of these and other provisions are incorporated in a special endorsement
attached to IRA Contracts, and reference should be made to that endorsement for
its complete terms.

TAX-FREE ROLLOVERS. The Code permits funds to be transferred in a tax-free
rollover from a qualified employer pension, profit-sharing, annuity, bond
purchase or tax-deferred annuity plan to an IRA Contract if certain conditions
are met, and if the rollover of assets is completed within 60 days after the
distribution from the qualified plan is received. In addition, n not more
frequently than once every twelve months, amounts may be rolled over tax-free
from one IRA to another, subject to the 60-day limitation and other
requirements. The once-per-year limitation on rollovers does not apply to
direct transfers of funds between IRA custodians or trustees.

SIMPLIFIED EMPLOYEE PENSION PLANS

PURCHASE PAYMENTS. Under Section 408(k) of the Code, employers may establish a
type of IRA plan referred to as a simplified employee pension plan (SEP).
Employer contributions to a SEP cannot exceed the lesser of $24,000 or 15% of
the employee's earned income. Employees of certain small employers may have
contributions made to a special kind of SEP (SARSEP) on their behalf on a salary
reduction basis if the SARSEP plan was in effect on December 31, 1996. These
salary reduction contributions may not exceed $9,500 in 1997, which is indexed
for inflation. Employees of tax-exempt organizations and state or local
government agencies have never been eligible for the salary reduction type of
SEP.

TAXATION OF DISTRIBUTIONS. Generally, distribution payments from SEPs are
subject to the same distribution rules described above for IRAs.

REQUIRED DISTRIBUTIONS. SEP distributions are subject to the same minimum
required distribution rules described above for IRAs.

TAX-FREE ROLLOVERS. Generally, rollovers and direct transfers may be made to
and from SEPs in the same manner as described above for IRAs, subject to the
same conditions and limitations. Rollovers to other IRAs, excluding SIMPLE IRAs
are also possible. Special rules apply if the rollover is from a SARSEP IRA.

SECTION 408(p) SIMPLE IRA PLANS

PURCHASE PAYMENTS: Under Section 408(p) of the Code, small employers may
establish a type of IRA plan referred to as a Savings Incentive Match Plan for
Employees (SIMPLE Plan). An employee may contribute annually through his or her
employer a pre-tax salary reduction contribution not to exceed the lesser of
$6,000 or 100% of compensation. The employer must annually either (1) match the
employee contribution dollar for dollar up to 3% of pay, or (2) make a 2% of pay
contribution for each eligible employee regardless of whether the employee makes
any salary reduction contribution. In two out of every five years, the employer
has the option to reduce the matching contribution as low as 1% of pay but
advance notice must be provided to employees.

TAXATION OF DISTRIBUTIONS: Generally, distributions from SIMPLE IRA Plans are
subject to the same distribution rules described above for IRAs. However, if an
individual withdraws any amount from his SIMPLE IRA Plan within the first two
years of his or her commencement of participant in the employer's SIMPLE IRA
Plan, the 10% penalty tax for premature distribution, if such tax applies, will
be increased to 25%.

REQUIRED DISTRIBUTIONS: SIMPLE distributions are subject to the same minimum
distribution rules described above for IRAs.

TAX-FREE ROLLOVERS: Generally, rollovers and direct transfers may be made to and
from SIMPLE IRAs in the same manner as described above for IRAs, subject to the
same conditions and limitations. Rollovers or transfers to other IRAs, other
than SIMPLE IRAs, are also possible but only after the second anniversary of
commencement of participation in the employer's SIMPLE IRA Plan.

SECTION 457 UNFUNDED DEFERRED COMPENSATION PLANS OF PUBLIC EMPLOYERS
AND TAX-EXEMPT ORGANIZATIONS

PURCHASE PAYMENTS. Under Section 457 of the Code, all individuals who perform
services for a state or local government or governmental agency may participate
in a deferred compensation program. Other tax-exempt employers may establish
unfunded deferred compensation plans under Section 457 for employees and/or
independent contractors.

Though not actually a qualified plan as that term is normally used, this type of
program allows individuals to defer the receipt of compensation that otherwise
would be currently payable and therefore to defer the payment of federal income
taxes on such amounts. Assuming that the program meets the requirements to be
considered an eligible deferred compensation plan (an "EDCP"), an individual may
contribute (and thereby defer from current income for tax purposes) the lesser
of $7,500 or 33-1/3% of the individual's includible compensation. (Includible
compensation means compensation from the employer which would be currently
includible in gross income for federal tax purposes.) In addition, during the
last three years before an individual attains normal retirement age, additional
"catch-up" deferrals are permitted.

The amounts which are deferred may be used by the employer to purchase the
Contracts offered by this Prospectus. The Contract is owned by the employer and
is subject to the claims of the employer's creditors. The employee has no
rights or interest in the Contract and is entitled only to payment in accordance
with the EDCP provisions.

TAXATION OF DISTRIBUTIONS. Amounts received by an individual from an EDCP are
includible in gross income for the taxable year in which such amounts are paid
or otherwise made available.

DISTRIBUTIONS BEFORE SEPARATION FROM SERVICE. Distributions generally are
not permitted under an EDCP prior to separation from service or reaching age
70 1/2, except in cases of severe financial hardship. Hardship distributions
are includible in the gross income of the individual in the year in which
paid.

REQUIRED DISTRIBUTIONS. The distribution requirements for these qualified plans
are generally the same as described above with respect to Section 403(b)
annuities. However, if distributions do not commence before the employee's
death, the entire interest in the Contract must be distributed within 15 years
if the beneficiary is not the employee's surviving spouse.

TAX-FREE TRANSFERS. The Code permits the tax-free direct transfer of EDCP
amounts to another EDCP, subject to certain conditions. Any transfer must be
with employer consent.

PRIVATE EMPLOYER UNFUNDED DEFERRED COMPENSATION PLANS

PURCHASE PAYMENTS. Private taxable employers may establish unfunded,
non-qualified deferred compensation plans for a select group of management or
highly compensated employees and/or for independent contractors. Certain
arrangements of tax-exempt employers entered into prior August 16, 1986, and not
subsequently modified, are also subject to the rules for private taxable
employer deferred compensation plans discussed below. (Unfunded deferred
compensation plans of other tax-exempt employers are generally subject to the
requirements of Section 457.)

These types of programs allow individuals to defer receipt of up to 100% of
compensation which would otherwise be includible in income and therefore to
defer the payment of federal income taxes on such amounts. Purchase payments
made by the employer, however are not immediately deductible by the employer,
and the employer is currently taxed on any increase in Contract Value.

Deferred compensation plans represent a contractual promise on the part of the
employer to pay current compensation at some future time. The Contract is owned
by the employer and is subject to the claims of the employer's creditors. The
individual has no right or interest in the Contract and is entitled only to
payment from the employer's general assets in accordance with plan provisions.

TAXATION OF DISTRIBUTIONS. Amounts received by an individual from a private
employer deferred compensation plan are includible in gross income for the
taxable year in which such amounts are paid or otherwise made available.

WITHHOLDING

Annuity payments and other amounts received under Contracts are subject to
income tax withholding unless the recipient elects not to have taxes withheld.
The amounts withheld will vary among recipients depending on the tax status of
the individual and the type of payments from which taxes are withheld.

Notwithstanding the recipient's election, withholding may be required with
respect to certain payments to be delivered outside the United States and, with
respect to certain distributions from certain types of qualified retirement
plans, unless the proceeds are transferred directly to another qualified
retirement plan. Moreover, special "backup withholding" rules may require First
Fortis to disregard the recipient's election if the recipient fails to supply
First Fortis with a "TIN" or taxpayer identification number (social security
number for individuals, or if the Internal Revenue Service notifies First Fortis
that the TIN provided by the recipient is incorrect.

OTHER INFORMATION

First Fortis relies upon a SEC no-action letter dated December 22, 1988
providing relief from certain restrictions provided in the Investment Company
Act of 1940 relative to restrictions on redemptions and it complies with its
conditions.

VARIABLE ACCOUNT FINANCIAL STATEMENTS

APPENDIX A

PERFORMANCE INFORMATION

In advertising and other sales material for the Contracts, yield and total
return information for the Subaccounts of the Separate Account may be included.
The information below provides investment results for the indicated Subaccounts
of the Separate Account. The results shown in this section are not an estimate
or guarantee of future investment performance, and do not represent the actual
experience of amounts invested by a particular Participant.

YIELD CALCULATIONS

Yield information for the Money Market Subaccount will be based on the seven
days ended on a specified date. It will be computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical pre-
existing account (after the deduction of all asset based charges) having a
balance of one Accumulation Unit at the beginning of the period, subtracting a
proportionate amount of the annual administrative charge (based on average
Contract size), and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and multiplying
the base period return by (365/7), with the resulting yield figure carried to
the nearest hundredth of one percent. The seven day yield for the Money Market
Subaccount as of December 31, 1998 was 3.86%.

An effective yield may also be quoted for the Money Market Subaccount.
Effective yield is calculated by compounding the current yield as follows:

365/7
Effective Yield = [(Base Period Return + 1) ] - 1

The seven day effective yield for the Money Market Subaccount as of December 31,
1998 was 3.96%.

Yield information for the other Subaccounts will be based on the thirty days
ended on a specified date and carried to the nearest hundredth of a percent,
according to the following formula:

6
YIELD=2[( a-b + 1) -1]
-----
cd

Where: a = net investment income earned during the period by the Portfolio whose
shares are owned by the Subaccount.

b = expenses accrued for the period, including a proportionate amount of
the annual administrative charge (based on average Contract size),

c = the average daily number of Accumulation Units outstanding during the
period, and

d = the offering price per Accumulation Unit at the end of the last day of
the period.

The following table sets forth yield figures for the thirty days ended
December 31, 1998:

SUBACCOUNT YIELD
---------- -----

U.S. Government Securities. . . . . . . . . . . . . . . . . . . . . . 5.89%
Diversified Income. . . . . . . . . . . . . . . . . . . . . . . . . . 6.43%
High Yield. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.21%
Global Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.87%

A-1

TOTAL RETURN CALCULATIONS

Total return information will be given for the one year and five year periods
ended on a specific date, provided that, if the registration statement has been
effective for a Subaccount only during a shorter period, then such shorter
period will be used.

AVERAGE ANNUAL TOTAL RETURN

Total average annual compounded rates of return for each period will be computed
to the nearest one hundredth of a percent, according to the following formula:

n
P(1 + T) = CSV

Where: P = a hypothetical initial purchase payment of $1000,

T = average annual total return,

n = number of years, and

CSV = end of period Cash Surrender Value of hypothetical $1,000
purchase payment made at the beginning of the period.

ONE-YEAR FIVE-YEAR COMMENCEMENT
PERIOD ENDED PERIOD ENDED SUBACCOUNT (1) TO
SUBACCOUNT DEC. 31, 1998 DEC. 31, 1998 TO DEC. 31, 1998
---------- ------------- ------------- -----------------

GROWTH STOCK 13.92% 8.10% 12.52%

U.S. GOVERNMENT SECURITIES 4.13% 1.66% 3.82%

DIVERSIFIED INCOME 1.39% 1.84% 5.15%

ASSET ALLOCATION 14.86% 10.88% 10.76%

GLOBAL GROWTH 6.37% 8.47% 10.39%

HIGH YIELD -4.23% N/A 2.89%

GROWTH & INCOME 8.19% N/A 16.46%

AGGRESSIVE GROWTH 16.05% N/A 8.17%

GLOBAL ASSET ALLOCATION 10.90% N/A 10.88%

GLOBAL BOND 8.47% N/A 4.34%

INTERNATIONAL STOCK 11.41% N/A 10.13%

VALUE 4.67% N/A 13.65%

S & P 500 22.89% N/A 24.63%

BLUE CHIP 22.90% N/A 23.45%

SMALL CAP VALUE N/A N/A N/A

MID CAP STOCK N/A N/A N/A

LARGE CAP STOCK N/A N/A N/A

- -------------------------

(1) Commencing with effective date of initial registration statement for Global
Growth Subaccount on May 1, 1992, U.S. Government Securities Subaccount on
May 1, 1989, High Yield Subaccount, Growth & Income Subaccount and
Aggressive Growth Subaccount on May 1, 1994, Global Bond Subaccount, Global
Asset Allocation Subaccount, International Stock Subaccount on January 2,
1995, Value Subaccount, Blue Chip Stock Subaccount, and S & P 500 Index
Subaccount on January 1, 1996, Small Cap Value Subaccount, Mid Cap Value
Subaccount and Large Cap Growth Subaccount on May 1, 1998 and for all other
Subaccounts on May 2, 1988.

A-2

CUMULATIVE TOTAL RETURN

Total cumulative rates of return for each period will be computed to the nearest
one hundredth of a percent, according to the following formula:

CTR = CSV - P 100
-------
P

Where: P = a hypothetical initial purchase payment of $1,000,

CTR = cumulative total return, and

CSV = end of period Cash Surrender Value of hypothetical $1,000
purchase payment made at the beginning of the period.

ONE-YEAR FIVE-YEAR
PERIOD ENDED PERIOD ENDED COMMENCEMENT
SUBACCOUNT DEC. 31, 1998 DEC. 31, 1998 TO DEC. 31, 1998
---------- ------------- ------------- ----------------

GROWTH STOCK 13.92% 63.09% 252.00%

U.S. GOVERNMENT SECURITIES 3.91% 8.59% 49.21%

DIVERSIFIED INCOME 1.39% 9.52% 70.90%

ASSET ALLOCATION 14.86% 67.59% 197.60%

GLOBAL GROWTH 6.38% 50.16% 93.33%

HIGH YIELD -4.23% N/A 14.23%

GROWTH & INCOME 8.19% N/A 103.67%

AGGRESSIVE GROWTH 16.05% N/A 44.29%

GLOBAL ASSET ALLOCATION 10.90% N/A 51.13%

GLOBAL BOND 8.47% N/A 18.54%

INTERNATIONAL STOCK 11.41% N/A 47.13%

VALUE 4.67% N/A 40.68%

S&P 500 22.89% N/A 79.89%

BLUE CHIP 22.90% N/A 75.38%

SMALL CAP VALUE N/A N/A N/A

MID CAP STOCK N/A N/A N/A

LARGE CAP STOCK N/A N/A N/A

- -------------------------

A-3

Yield figures do not reflect any surrender charge, and yield and total return
figures do not reflect any premium tax charge. Yield and total return figures
do reflect the reimbursement of certain Fortis Series expenses. Current Fixed
Account effective annual rates of interest may also be quoted in advertising and
other sales materials, and these rates do not reflect any deductions or charges.

First Fortis may advertise its relative performance as compiled by outside
organizations. Following is a list of ratings services which may be referred to
in advertisements, along with the category in which the applicable Subaccount is
included:

PORTFOLIO NAME RATING SERVICE CATEGORY

International Stock Morningstar Publications, Inc. Foreign Stock
Subaccount Lipper Analytical Services, Inc. International Fund
Variable Annuity Research & Data Service International Stock

Global Growth Morningstar Publications, Inc. World Stock
Subaccount Lipper Analytical Services, Inc. Global Fund
Variable Annuity Research & Data Service International Stock

Global Asset Morningstar Publications, Inc. International Hybrid
Allocation Subaccount Lipper Analytical Services, Inc. Global Flexible Portfolio
Variable Annuity Research & Data Service Balanced/International

Aggressive Growth Morningstar Publications, Inc. Small Growth
Subaccount Lipper Analytical Services, Inc. Small Cap Fund
Variable Annuity Research & Data Service Aggressive Growth

Small Cap Value Morningstar Publications, Inc. Small Value
Subaccount Lipper Analytical Services, Inc. Small Cap Fund
Variable Annuity Research & Data Service Small Company Funds

GrowthStock Morningstar Publications, Inc. Mid Cap Growth
Subaccount Lipper Analytical Services, Inc. Mid Cap Fund
Variable Annuity Research & Data Service Growth

Mid Cap Stock Morningstar Publications, Inc. Mid Cap Blend
Subaccount Lipper Analytical Services, Inc. Mid Cap Fund
Variable Annuity Research & Data Service All Equity Funds

Large Cap Growth Morningstar Publications, Inc. Large Blend
Subaccount Lipper Analytical Services, Inc. Growth Fund
Variable Annuity Research & Data Service Growth

Blue Chip Stock Morningstar Publications, Inc. Large Blend
Subaccount Lipper Analytical Services, Inc. Growth Fund
Variable Annuity Research & Data Service Growth

S&P 500 Index Morningstar Publications, Inc. Large Blend
Subaccount Lipper Analytical Services, Inc. Index Fund
Variable Annuity Research & Data Service Growth and Income Funds

Growth & Income Morningstar Publications, Inc. Mid Cap Blend
Subaccount Lipper Analytical Services, Inc. Growth & Income
Variable Annuity Research & Data Service Growth and Income

Value Subaccount Morningstar Publications, Inc. Large Blend
Lipper Analytical Services, Inc. Growth & Income
Variable Annuity Research & Data Service Equity-Income

A-4

Asset Allocation Morningstar Publications, Inc. Domestic Hybrid
Subaccount Lipper Analytical Services, Inc. Flexible Portfolio
Variable Annuity Research & Data Service Balanced

Global Bond Morningstar Publications, Inc. International Bond
Subaccount Lipper Analytical Services, Inc. Global Income
Variable Annuity Research & Data Service International Bonds

High Yield Morningstar Publications, Inc. High Yield Bond
Subaccount Lipper Analytical Services, Inc. High Current Yield
Variable Annuity Research & Data Service Corporate Bond High Yield

Diversified Income Morningstar Publications, Inc. Intermediate-Term Bond
Subaccount Lipper Analytical Services, Inc. Corp Debt BBB Rated
Variable Annuity Research & Data Service Corporate Bond General Funds

U.S. Government Morningstar Publications, Inc. Intermediate Government
Subaccount Lipper Analytical Services, Inc. Intermediate U.S. Govt.
Variable Annuity Research & Data Service Government Bond General Funds

Money Market Morningstar Publications, Inc. Money Market
Subaccount Lipper Analytical Services, Inc. Money Market
Variable Annuity Research & Data Service Money Market

ADDITIONAL PERFORMANCE INFORMATION

Additionally, from time to time, First Fortis may include in advertising the net
effective annual yield of an investment in a Contract as compared with the
current before-tax and after-tax yield of CD's (insured fixed rate certificates
of deposit issued by financial institutions). While the yield may be compared
to that of CD's, the yield of a variable Subaccount is not fixed and an
investment in a Contract is not FDIC insured.

A-5

FINANCIAL STATEMENTS

FIRST FORTIS LIFE INSURANCE COMPANY
VARIABLE ACCOUNT A

YEAR ENDED DECEMBER 31, 1998

First Fortis Life Insurance Company
Variable Account A

Financial Statements

Year ended December 31, 1998

CONTENTS

Report of Independent Auditors................................................1

Financial Statements

Statements of Net Assets......................................................3
Statements of Changes in Net Assets...........................................5
Notes to Financial Statements................................................14

Report of Independent Auditors

Board of Directors
First Fortis Life Insurance Company

We have audited the accompanying individual and combined statements of net
assets of the segregated asset subaccounts of First Fortis Life Insurance
Company Variable Account A (comprised of the Fortis Series Fund, Inc.'s Growth
Stock, U.S. Government Securities, Money Market, Asset Allocation, Diversified
Income, Global Growth, Aggressive Growth, Growth & Income, High Yield, Global
Asset Allocation, Global Bond, International Stock, Value, S & P 500, Blue Chip
Stock, Mid Cap Stock, Large Cap Growth, and Small Cap Value Subaccounts; the
Alliance Variable Product's Money Market, International and Premier Growth
Subaccounts; the SAFECO Resource Series' Growth and Equity Subaccounts; the
Federated Insurance Series' U.S. Government Securities Fund II, High Income Fund
II, Utility Series, and American Leaders Series Subaccounts; the Lexington Funds
Inc.'s Emerging Market Subaccount; the MFS Variable Insurance Trust's Emerging
Growth and High Income Subaccounts; the Montgomery Variable Funds' Emerging
Markets and Growth Subaccounts; the Strong Variable Annuity Funds' Discovery II
and International II Subaccounts; the American Century Investments' VP Balanced
and VP Capital Appreciation Subaccounts; the Van Eck Worldwide Insurance Trust's
Worldwide Bond Fund Subaccount; the Neuberger & Berman, Inc.'s AMT Limited
Maturity Bond and AMT Partners Subaccounts; and INVESCO, Inc.'s Health &
Sciences, Industrial Income and Technology Subaccounts) as of December 31, 1998,
and the related statements of changes in net assets for each of the two years in
the periods then ended, except for the Alliance Variable Product's Money Market,
International and Premier Growth Subaccounts; the SAFECO Resource Series' Growth
and Equity Subaccounts; the Federated Insurance Series' U.S. Government
Securities Fund II and High Income Fund II Subaccounts; the MFS Variable
Insurance Trust's Emerging Growth and High Income Subaccounts; the Montgomery
Variable Funds' Emerging Markets and Growth Subaccounts; the Strong Variable
Annuity Fund Discovery II and International II Subaccounts; the American Century
Investments' VP Balanced Subaccount; the Neuberger & Berman, Inc.'s AMT Partners
Subaccount; and INVESCO, Inc.'s Health & Sciences, Industrial Income and
Technology Subaccounts which are for the period from September 1, 1997 to
December 31, 1997 and the Fortis Mid Cap Stock, Large Cap Growth and Small Cap
Value Subaccounts which are for the period May 1, 1998 (commencement of
operations) to December 31, 1998. These financial statements are the
responsibility of the management of First Fortis Life Insurance Company. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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. Our procedures included
confirmation of securities owned as of December 31, 1998 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the individual and combined financial position of the
segregated asset subaccounts of First Fortis Life Insurance Company Variable
Account A at December 31, 1998, and the individual and combined changes in its
net assets for the periods described above, in conformity with generally
accepted accounting principles.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
March 19, 1999

First Fortis Life Insurance Company
Variable Account A

Statements of Net Assets

December 31, 1998

NET ASSET VALUE
FOR VARIABLE
ANNUITY
NET ASSETS ACCUMULATION CONTRACTS PER
AT MARKET UNITS ACCUMULATION
SHARES COST VALUE OUTSTANDING UNIT
-----------------------------------------------------------------------------

Investments in Fortis Series Fund, Inc.:
Growth Stock 44,751 $1,650,355 $1,838,724 44,751 $41.09
U.S. Government Securities 120,019 1,299,443 1,311,582 120,019 10.93
Money Market 44,130 487,192 488,232 44,130 11.06
Asset Allocation 136,741 2,602,095 2,884,296 136,741 21.09
Diversified Income 103,326 1,245,049 1,231,033 103,326 11.91
Global Growth 71,546 1,458,645 1,614,639 71,546 22.57
Aggressive Growth 100,260 1,368,017 1,674,406 100,260 16.70
Growth & Income 334,522 6,322,840 7,100,933 334,522 21.23
High Yield 171,697 1,802,235 1,700,801 171,697 9.91
Global Asset Allocation 105,139 1,471,235 1,505,721 105,139 14.32
Global Bond 17,136 194,334 198,104 17,136 11.56
International Stock 140,061 2,033,364 2,028,486 140,062 14.48
Value 165,278 2,240,047 2,375,906 165,278 14.38
S & P 500 382,247 6,216,885 7,199,393 380,368 18.93
Blue Chip Stock 265,335 4,156,445 4,928,671 265,319 18.58
Mid Cap Stock 13,216 112,950 127,357 13,216 9.64
Large Cap Growth 88,288 902,119 1,063,375 88,288 12.04
Small Cap Value 24,048 212,238 223,154 24,048 9.28

Investments in Alliance Variable Product:
Money Market 656,744 656,744 656,744 57,856 11.35
International 4,880 76,226 78,916 6,481 12.18
Premier Growth 24,441 622,086 758,418 32,730 23.17

Investments in SAFECO Resource Series:
Growth 10,215 257,990 216,975 14,286 15.19
Equity 12,379 336,143 370,994 24,561 15.11

Investments in Federated Insurance Series:
U.S. Government Securities Fund II 4,159 45,009 46,370 4,038 11.48
High Income Fund II 42,220 435,780 461,040 36,236 12.72
Utility Series 2,638 37,847 40,285 2,610 15.43
American Leaders Series 2,955 57,368 64,059 3,644 17.58

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Net Assets (continued)

December 31, 1998

Investments in Lexington Funds, Inc.:
Emerging Markets 1,037 $ 5,328 $ 5,862 986 $ 5.95

Investments in MFS Variable Insurance Trust:
Emerging Growth 5,960 99,265 127,960 6,958 18.39
High Income 46,219 514,532 532,907 43,436 12.27

Investments in Montgomery Variable Funds:
Emerging Markets 2,422 19,282 15,961 2,438 6.55
Growth 6,657 104,989 102,446 6,157 16.64

Investments in Strong Variable Annuity Funds:
Discovery II 1,707 19,954 21,711 1,822 11.92
International II 7,348 63,130 64,517 7,516 8.58

Investments in American Century Investments:
VP Balanced 3,009 24,133 25,092 1,722 14.57
VP Capital Appreciation 728 5,328 6,565 743 8.84

Investments in Van Eck Worldwide Ins. Trust:
Worldwide Bond Fund 20 250 250 21 11.90

Investments in Neuberger & Berman, Inc.:
AMT Limited Maturity Bond 4,157 57,274 57,461 5,263 10.92
AMT Partners 2,738 50,906 51,830 4,003 12.95

Investments in INVESCO, Inc.:
Health & Sciences 8,181 106,494 125,083 7,986 15.66
Industrial Income 1,260 22,720 23,452 1,683 13.93
Technology 2,184 27,664 31,324 2,187 14.32
-------------------------------------------
Total Net Assets $39,421,930 $43,381,035 2,601,209
-------------------------------------------
-------------------------------------------

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets

Year ended December 31, 1998

FORTIS FORTIS
GROWTH U.S. GOVERNMENT MONEY FORTIS
STOCK SECURITIES MARKET ASSET ALLOCATION
-------------------------------------------------------------
OPERATIONS

Dividend income $ 74,961 $ 25,927 $ 14,196 $ 4,471
Mortality and expense and administrative charges
(16,709) (6,277) (4,306) (28,363)
Net realized gain (loss) on investments 13,232 (456) (26,025) 2,361
Net change in unrealized appreciation
(depreciation) of investments 161,133 9,921 3,329 403,071
-------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 232,617 29,115 (12,806) 381,540

CAPITAL TRANSACTIONS
Purchase of Variable Account units 938,415 1,083,157 677,788 1,322,894
Redemption of Variable Account units (142,834) (29,413) (433,177) (372,855)
Mortality and expense and administrative charges redeemed
16,709 6,277 4,306 28,363
-------------------------------------------------------------
Net increase from capital transactions 812,290 1,060,021 248,917 978,402

Net assets at beginning of year 793,817 222,446 252,121 1,524,354
-------------------------------------------------------------
Net assets at end of year $ 1,838,724 $ 1,311,582 $ 488,232 $ 2,884,296
-------------------------------------------------------------
-------------------------------------------------------------

FORTIS FORTIS FORTIS
FORTIS GLOBAL FORTIS GROWTH & HIGH
DIVERSIFIED INC GROWTH AGGRESSIVE GROWTH INCOME YIELD
-----------------------------------------------------------------------
OPERATIONS

Dividend income $ 56,023 $ 1,604 $ 2,104 $ 1,657 $ 119,774
Mortality and expense and administrative charges
(8,973) (17,478) (13,391) (64,764) (16,220)
Net realized gain (loss) on investments (396) 11,413 9,641 20,441 (2,079)
Net change in unrealized appreciation
(depreciation) of investments (17,143) 111,270 280,168 579,716 (120,724)
-----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 29,511 106,809 278,522 537,050 (19,249)

CAPITAL TRANSACTIONS
Purchase of Variable Account units 920,521 745,727 865,048 4,039,563 1,190,129
Redemption of Variable Account units (19,789) (179,438) (112,602) (222,124) (97,106)
Mortality and expense and administrative charges redeemed
8,973 17,478 13,391 64,764 16,220
-----------------------------------------------------------------------
Net increase from capital transactions 909,705 583,767 765,837 3,882,203 1,109,243

Net assets at beginning of year 291,817 924,063 630,047 2,681,680 610,807
-----------------------------------------------------------------------
Net assets at end of year $ 1,231,033 $ 1,614,639 $ 1,674,406 $ 7,100,933 $ 1,700,801
-----------------------------------------------------------------------
-----------------------------------------------------------------------

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1998

FORTIS FORTIS FORTIS
GLOBAL GLOBAL INTERNATIONAL FORTIS
ASSET ALLOCATION BOND STOCK VALUE
---------------------------------------------------------
OPERATIONS

Dividend income $ 99,868 $ 7,959 $ 135,567 $ 52,409
Mortality and expense and administrative charges
(11,070) (1,325) (15,623) (19,724)
Net realized gain (loss) on investments 815 577 6,618 2,650
Net change in unrealized appreciation
(depreciation) of investments 26,698 5,497 (2,847) 96,647
---------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 116,311 12,708 123,715 131,982

CAPITAL TRANSACTIONS
Purchase of Variable Account units 1,034,925 125,991 1,457,342 1,508,103
Redemption of Variable Account units (22,016) (11,560) (77,257) (45,032)
Mortality and expense and administrative charges redeemed
11,070 1,325 15,623 19,724
---------------------------------------------------------
Net increase from capital transactions 1,023,979 115,756 1,395,708 1,482,795

Net assets at beginning of year 365,431 69,640 509,063 761,129
---------------------------------------------------------
Net assets at end of year $ 1,505,721 $ 198,104 $ 2,028,486 $ 2,375,906
---------------------------------------------------------
---------------------------------------------------------

FORTIS FORTIS FORTIS FORTIS
FORTIS BLUE CHIP ORTIS LARGE CAP SMALL CAP
S&P 500 STOCK MID CAP STOCK* GROWTH* VALUE*
-----------------------------------------------------------------------
OPERATIONS

Dividend income $ 106,189 $ 82,088 $ 216 $ 272 $ 2,947
Mortality and expense and administrative charges
(50,027) (36,122) (345) (3,525) (549)
Net realized gain (loss) on investments 6,880 7,951 4 3,875 (133)
Net change in unrealized appreciation
(depreciation) of investments 882,217 676,563 14,407 161,256 10,916
-----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 945,259 730,480 14,282 161,878 13,181

CAPITAL TRANSACTIONS
Purchase of Variable Account units 5,180,564 3,150,945 112,935 959,801 210,341
Redemption of Variable Account units (407,707) (59,745) (205) (61,829) (917)
Mortality and expense and administrative charges redeemed
50,027 36,122 345 3,525 549
-----------------------------------------------------------------------
Net increase from capital transactions 4,822,884 3,127,322 113,075 901,497 209,973

Net assets at beginning of year 1,431,250 1,070,869 -- -- --
-----------------------------------------------------------------------
Net assets at end of year $ 7,199,393 $ 4,928,671 $ 127,357 $ 1,063,375 $ 223,154
-----------------------------------------------------------------------
-----------------------------------------------------------------------

* For the period from May 1, 1998 to December 31, 1998.

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1998

ALLIANCE ALLIANCE
MONEY ALLIANCE PREMIER SAFECO
MARKET INTERNATIONAL GROWTH GROWTH
---------------------------------------------------------
OPERATIONS

Dividend income $ 7,585 $ -- $ -- $ 22,511
Mortality and expense and administrative charges
(2,057) (257) (1,861) (725)
Net realized gain (loss) on investments -- 1,883 2,704 (24,450)
Net change in unrealized appreciation
(depreciation) of investments -- 2,924 133,535 (38,248)
---------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 5,528 4,550 134,378 (40,912)

CAPITAL TRANSACTIONS
Purchase of Variable Account units 3,684,672 760,164 672,665 513,929
Redemption of Variable Account units (3,248,486) (730,934) (333,215) (275,000)
Mortality and expense and administrative charges redeemed
2,057 257 1,861 725
---------------------------------------------------------
Net increase from capital transactions 438,243 29,487 341,311 239,654

Net assets at beginning of year 212,973 44,879 282,729 18,233
---------------------------------------------------------
Net assets at end of year $ 656,744 $ 78,916 $ 758,418 $ 216,975
---------------------------------------------------------
---------------------------------------------------------

FEDERATED U.S.
GOVERNMENT FEDERATED HIGH FEDERATED
SAFECO SECURITIES INCOME FEDERATED AMERICAN
EQUITY FUND II FUND II UTILITY II LEADERS II
-----------------------------------------------------------------------
OPERATIONS

Dividend income $ 17,476 $ 324 $ 11,392 $ 2,328 $ 66
Mortality and expense and administrative charges
(1,281) (100) (1,028) (132) (304)
Net realized gain (loss) on investments 781 2 4,085 -- 7,830
Net change in unrealized appreciation
(depreciation) of investments 47,661 1,208 19,920 2,438 6,691
-----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 64,637 1,434 34,369 4,634 14,283

CAPITAL TRANSACTIONS
Purchase of Variable Account units 124,579 26,626 557,093 35,519 992,788
Redemption of Variable Account units (45,200) (103) (501,159) -- (943,316)
Mortality and expense and administrative charges redeemed
1,281 100 1,028 132 304
-----------------------------------------------------------------------
Net increase from capital transactions 80,660 26,623 56,962 35,651 49,776

Net assets at beginning of year 225,697 18,313 369,709 -- --
-----------------------------------------------------------------------
Net assets at end of year $ 370,994 $ 46,370 $ 461,040 $ 40,285 $ 64,059
-----------------------------------------------------------------------
-----------------------------------------------------------------------

* For the period from May 1, 1998 to December 31, 1998.

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1998

LEXINGTON MFS MONTGOMERY
EMERGING EMERGING MFS HIGH EMERGING
MARKETS GROWTH INCOME MARKETS
-------------------------------------------------
OPERATIONS

Dividend income $ -- $ 1,453 $ 32,386 $ 31
Mortality and expense and administrative charges
(5) (625) (1,681) (41)
Net realized gain (loss) on investments -- (795) (4,057) (11)
Net change in unrealized appreciation
(depreciation) of investments 534 28,368 12,115 (3,380)
-------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 529 28,401 38,763 (3,401)

CAPITAL TRANSACTIONS
Purchase of Variable Account units 5,328 38,432 389,855 14,796
Redemption of Variable Account units -- (87,326) (379,868) (44)
Mortality and expense and administrative charges redeemed 5 625 1,681 41
-------------------------------------------------
Net increase from capital transactions 5,333 (48,269) 11,668 14,793

Net assets at beginning of year -- 147,828 482,476 4,569
-------------------------------------------------
Net assets at end of year $ 5,862 $ 127,960 $ 532,907 $ 15,961
-------------------------------------------------
-------------------------------------------------

AMERICAN
STRONG STRONG AMERICAN CENTURY
MONTGOMERY DISCOVERY INTERNATIONAL CENTURY VP CAPITAL
GROWTH II II VP BALANCED APPRECIATION
-----------------------------------------------------------------
OPERATIONS

Dividend income $ 459 $ 178 $ 418 $ 1,039 $ --
Mortality and expense and administrative charges
(312) (54) (169) (67) (15)
Net realized gain (loss) on investments (26) (3) 305 1,499 343
Net change in unrealized appreciation
(depreciation) of investments (1,414) 2,305 1,966 884 1,237
-----------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (1,293) 2,426 2,520 3,355 1,565

CAPITAL TRANSACTIONS
Purchase of Variable Account units 80,457 7,984 40,679 50,995 156,020
Redemption of Variable Account units (161) (76) (14,233) (37,104) (151,035)
Mortality and expense and administrative charges redeemed 312 54 169 67 15
-----------------------------------------------------------------
Net increase from capital transactions 80,608 7,962 26,615 13,958 5,000

Net assets at beginning of year 23,131 11,323 35,382 7,779 --
-----------------------------------------------------------------
Net assets at end of year $ 102,446 $ 21,711 $ 64,517 $ 25,092 $ 6,565
-----------------------------------------------------------------
-----------------------------------------------------------------

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1998

NEUBERGER &
VAN ECK BERMAN AMT NEUBERGER &
WORLDWIDE LIMITED BERMAN
BOND FUND MATURITY BOND AMT PARTNERS
---------------------------------------------
OPERATIONS

Dividend income $ -- $ -- $ 2,082
Mortality and expense and administrative charges
(1) (51) (115)
Net realized gain (loss) on investments -- -- (18)
Net change in unrealized appreciation
(depreciation) of investments -- 187 738
---------------------------------------------
Net (decrease) increase in net assets
resulting from operations (1) 136 2,687

CAPITAL TRANSACTIONS
Purchase of Variable Account units 250 57,274 34,219
Redemption of Variable Account units -- -- (185)
Mortality and expense and administrative charges redeemed 1 51 115
---------------------------------------------
Net increase from capital transactions 251 57,325 34,149

Net assets at beginning of year -- -- 14,994
---------------------------------------------
Net assets at end of year $ 250 $ 57,461 $ 51,830
---------------------------------------------
---------------------------------------------

INVESCO INVESCO COMBINED
HEALTH & INDUSTRIAL INVESCO VARIABLE
SCIENCES INCOME TECHNOLOGY ACCOUNT
-------------------------------------------------------------
OPERATIONS

Dividend income $ 3,233 $ 1,192 $ 158 $ 892,543
Mortality and expense and administrative charges
(293) (54) (73) (326,091)
Net realized gain (loss) on investments 1,291 331 (1,897) 47,166
Net change in unrealized appreciation
(depreciation) of investments 18,576 1,477 3,572 3,525,389
-------------------------------------------------------------
Net (decrease) increase in net assets
resulting from operations 22,807 2,946 1,760 4,139,007

CAPITAL TRANSACTIONS
Purchase of Variable Account units 129,353 14,731 78,657 33,991,254
Redemption of Variable Account units (30,374) (8,329) (51,365) (9,133,119)
Mortality and expense and administrative charges redeemed 293 54 73 326,091
-------------------------------------------------------------
Net increase from capital transactions 99,272 6,456 27,365 25,184,226

Net assets at beginning of year 3,004 14,050 2,199 14,057,802
-------------------------------------------------------------
Net assets at end of year $ 125,083 $ 23,452 $ 31,324 $ 43,381,035
-------------------------------------------------------------
-------------------------------------------------------------

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets

Year ended December 31, 1997

FORTIS
FORTIS U.S. FORTIS FORTIS
GROWTH GOVERNMENT MONEY ASSET
STOCK SECURITIES MARKET ALLOCATION
---------------------------------------------------------
OPERATIONS

Dividend income $ 57 $ 8,101 $ 11,383 $ 192,549
Mortality and expense and administrative charges (6,272) (1,066) (3,107) (7,853)
Net realized gain (loss) on investments 22,406 (1,976) 3,214 8,609
Net change in unrealized appreciation
(depreciation) of investments 26,263 2,353 (2,658) (117,203)
---------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 42,454 7,412 8,832 76,102

CAPITAL TRANSACTIONS
Purchase of Variable Account units 809,304 315,010 2,580,624 1,460,620
Redemption of Variable Account units (274,309) (107,853) (2,385,564) (169,600)
Mortality and expense and administrative charges
redeemed 6,272 1,066 3,107 7,853
---------------------------------------------------------
Net increase from capital transactions 541,267 208,223 198,167 1,298,873

Net assets at beginning of year 210,096 6,811 45,122 149,379
---------------------------------------------------------
Net assets at end of year $ 793,817 $ 222,446 $ 252,121 $ 1,524,354
---------------------------------------------------------
---------------------------------------------------------

FORTIS FORTIS FORTIS FORTIS
DIVERSIFIED GLOBAL AGGRESSIVE GROWTH & FORTIS
INCOME GROWTH GROWTH INCOME HIGH YIELD
-----------------------------------------------------------------------
OPERATIONS

Dividend income $ 16,326 $ -- $ 7 $ 76,880 $ 646
Mortality and expense and administrative charges (1,961) (7,355) (5,186) (16,770) (4,468)
Net realized gain (loss) on investments (2) (12,952) 755 23,492 1,165
Net change in unrealized appreciation
(depreciation) of investments 2,118 43,191 33,963 191,974 24,198
-----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 16,481 22,884 29,539 275,576 21,541

CAPITAL TRANSACTIONS
Purchase of Variable Account units 236,355 1,198,499 481,066 2,676,915 535,464
Redemption of Variable Account units (235) (432,388) (76,978) (510,526) (68,118)
Mortality and expense and administrative charges
redeemed 1,961 7,355 5,186 16,770 4,468
-----------------------------------------------------------------------
Net increase from capital transactions 238,081 773,466 409,274 2,183,159 471,814

Net assets at beginning of year 37,255 127,713 191,234 222,945 117,452
-----------------------------------------------------------------------
Net assets at end of year $ 291,817 $ 924,063 $ 630,047 $ 2,681,680 $ 610,807
-----------------------------------------------------------------------
-----------------------------------------------------------------------

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1997

FORTIS
GLOBAL FORTIS FORTIS
ASSET GLOBAL INTERNATIONAL FORTIS
ALLOCATION BOND STOCK VALUE
---------------------------------------------------------
OPERATIONS

Dividend income $ 17,421 $ 2,110 $ 19,136 $ 43,484
Mortality and expense and administrative charges (2,913) (518) (3,619) (5,646)
Net realized gain (loss) on investments 3,379 (110) 9,811 12,634
Net change in unrealized appreciation
(depreciation) of investments 8,407 (1,467) (4,635) 31,692
---------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 26,294 15 20,693 82,164

CAPITAL TRANSACTIONS
Purchase of Variable Account units 294,716 98,951 462,256 626,949
Redemption of Variable Account units (56,351) (45,993) (117,125) (127,016)
Mortality and expense and administrative charges
redeemed 2,913 518 3,619 5,646
---------------------------------------------------------
Net increase from capital transactions 241,278 53,476 348,750 505,579

Net assets at beginning of year 97,859 16,149 139,620 173,386
---------------------------------------------------------
Net assets at end of year $ 365,431 $ 69,640 $ 509,063 $ 761,129
---------------------------------------------------------
---------------------------------------------------------

FORTIS ALLIANCE ALLIANCE
FORTIS BLUE CHIP MONEY ALLIANCE PREMIER
S&P 500 STOCK MARKET* INTERNATIONAL* GROWTH*
-----------------------------------------------------------------------
OPERATIONS

Dividend income $ 21,704 $ 4,348 $ 735 $ -- $ --
Mortality and expense and administrative charges (7,708) (6,433) (46) (13) (80)
Net realized gain (loss) on investments 8,202 5,163 -- -- --
Net change in unrealized appreciation
(depreciation) of investments 98,868 93,112 -- (234) 2,797
-----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 121,066 96,190 689 (247) 2,717

CAPITAL TRANSACTIONS
Purchase of Variable Account units 1,365,385 925,855 303,796 45,113 279,932
Redemption of Variable Account units (121,189) (66,571) (91,558) -- --
Mortality and expense and administrative charges
redeemed 7,708 6,433 46 13 80
-----------------------------------------------------------------------
Net increase from capital transactions 1,251,904 865,717 212,284 45,126 280,012

Net assets at beginning of year 58,280 108,962 -- -- --
-----------------------------------------------------------------------
Net assets at end of year $ 1,431,250 $ 1,070,869 $ 212,973 $ 44,879 $ 282,729
-----------------------------------------------------------------------
-----------------------------------------------------------------------

* For the period from September 1, 1997 to December 31, 1997.

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1997

FEDERATED
U.S. FEDERATED
GOVERNMENT HIGH
SAFECO SAFECO SECURITIES INCOME
GROWTH* EQUITY* FUND II* FUND II*
-----------------------------------------------
OPERATIONS

Dividend income $ 2,922 $ 16,403 $ -- $ --
Mortality and expense and administrative charges (6) (62) (6) (112)
Net realized gain (loss) on investments -- -- -- --
Net change in unrealized appreciation
(depreciation) of investments (2,767) (12,809) 153 5,339
-----------------------------------------------
Net increase (decrease) in net assets
resulting from operations 149 3,532 147 5,227

CAPITAL TRANSACTIONS
Purchase of Variable Account units 18,078 222,103 18,160 364,370
Redemption of Variable Account units -- -- -- --
Mortality and expense and administrative charges
redeemed 6 62 6 112
-----------------------------------------------
Net increase from capital transactions 18,084 222,165 18,166 364,482

Net assets at beginning of year -- -- -- --
-----------------------------------------------
Net assets at end of year $ 18,233 $ 225,697 $ 18,313 $ 369,709
-----------------------------------------------
-----------------------------------------------

MFS MFS MONTGOMERY
EMERGING HIGH EMERGING MONTGOMERY STRONG
GROWTH* INCOME* MARKETS* GROWTH* DISCOVERY II*
--------------------------------------------------------------
OPERATIONS

Dividend income $ -- $ -- $ 8 $ 1,003 $ --
Mortality and expense and administrative charges (38) (147) (1) (9) (2)
Net realized gain (loss) on investments 16 -- -- -- --
Net change in unrealized appreciation
(depreciation) of investments 327 6,260 59 (1,129) (548)
--------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 305 6,113 66 (135) (550)

CAPITAL TRANSACTIONS
Purchase of Variable Account units 148,667 476,216 4,502 23,257 11,871
Redemption of Variable Account units (1,182) -- -- -- --
Mortality and expense and administrative charges
redeemed 38 147 1 9 2
--------------------------------------------------------------
Net increase from capital transactions 147,523 476,363 4,503 23,266 11,873

Net assets at beginning of year -- -- -- -- --
--------------------------------------------------------------
Net assets at end of year $ 147,828 $ 482,476 $ 4,569 $ 23,131 $ 11,323
--------------------------------------------------------------
--------------------------------------------------------------

* For the period from September 1, 1997 to December 31, 1997.

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Statements of Changes in Net Assets (continued)

Year ended December 31, 1997

AMERICAN NEUBERGER &
STRONG CENTURY BERMAN
INTERNATIONAL VP BALANCED* AMT PARTNERS*
II*
---------------------------------------------
OPERATIONS

Dividend income $ -- $ -- $ --
Mortality and expense charges (10) (3) (5)
Net realized gain (loss) on investments -- -- --
Net change in unrealized appreciation
(depreciation) of investments (579) 75 186
---------------------------------------------
Net increase (decrease) in net assets
resulting from operations (589) 72 181

CAPITAL TRANSACTIONS
Purchase of Variable Account units 35,961 7,704 14,808
Redemption of Variable Account units -- -- --
Mortality and expense charges redeemed 10 3 5
---------------------------------------------
Increase from capital transactions 35,971 7,707 14,813
Net assets at beginning of year -- -- --
---------------------------------------------
Net assets at end of year $ 35,382 $ 7,779 $ 14,994
---------------------------------------------
---------------------------------------------

INVESCO INVESCO COMBINED
HEALTH & INDUSTRIAL INVESCO VARIABLE
SCIENCES* INCOME* TECHNOLOGY* ACCOUNT
--------------------------------------------------------------
OPERATIONS

Dividend income $ -- $ 994 $ -- $ 436,217
Mortality and expense charges (1) (7) (1) (81,424)
Net realized gain (loss) on investments -- -- -- 83,806
Net change in unrealized appreciation
(depreciation) of investments 14 (745) 88 426,663
--------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 13 242 87 865,262

CAPITAL TRANSACTIONS
Purchase of Variable Account units 2,990 13,801 2,111 16,061,409
Redemption of Variable Account units -- -- -- (4,652,556)
Mortality and expense charges redeemed 1 7 1 81,424
--------------------------------------------------------------
Increase from capital transactions 2,991 13,808 2,112 11,490,277
Net assets at beginning of year -- -- -- 1,702,263
--------------------------------------------------------------
Net assets at end of year $ 3,004 $ 14,050 $ 2,199 $ 14,057,802
--------------------------------------------------------------
--------------------------------------------------------------

* For the period from September 1, 1997 to December 31, 1997.

SEE ACCOMPANYING NOTES.

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements

December 31, 1998

1. GENERAL

FIRST FORTIS LIFE INSURANCE COMPANY

Variable Account A (the "Account") was established as a segregated asset account
of First Fortis Life Insurance Company (First Fortis) on October 1, 1993 under
New York law and became operational July 1, 1996. The Account is registered
under the Investment Company Act of 1940 as a unit investment trust. The
variable annuity contracts are sold under the names Opportunity Variable
Annuity, Masters Variable Annuity and Value Advantage Plus Variable Annuity.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The assets of the Account are segregated from First Fortis' other assets. The
operations of the Account are part of First Fortis. The following is a summary
of significant accounting policies consistently followed by the Account in the
preparation of its financial statements.

INVESTMENT TRANSACTIONS

Capital gain distributions from subaccounts are recorded on the ex-dividend date
and reinvested upon receipt.

INVESTMENT INCOME

Dividend income distributions from subaccounts are recorded on the ex-dividend
date and reinvested upon receipt.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets at the date of the financial
statements and the reported amounts of net increase and decrease in net assets
from operations during the reporting period. Actual results could differ from
these estimates.

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

3. INVESTMENTS

There are forty-two active subaccounts and three inactive subaccounts as of
December 31, 1998 within the Account. The inactive subaccounts are available
funds in which contract holders have not yet invested. Investment in shares of
the Fortis Series Fund, Inc. subaccounts are stated at market value, which is
based on the percentage owned by the Account of the net asset value of the
respective portfolios of these Series. The Series' net asset value is based on
market quotations of the securities held in the portfolio. Investments in the
other subaccounts are valued at the net asset (market) value per share at the
close of business on December 31, as reported by the respective mutual fund.

The cost of investments sold and redeemed is determined on the average cost
method. Unrealized appreciation or depreciation of investments represents the
Account's share of the subaccount's undistributed net investment income,
undistributed realized gains or losses and unrealized appreciation or
depreciation.

Purchases and sales of shares of the Funds are recorded on the trade date. The
number of shares and aggregate cost of purchases, including reinvested dividends
and realized capital gains, and aggregate cost of investments sold or redeemed
for active subaccounts were as follows:

YEAR ENDED DECEMBER 31, 1998

SHARES COST OF
------------------------- COST OF SALES/
PURCHASED SOLD PURCHASES REDEMPTIONS
------------------------------------------------------------------

Fortis Series Fund, Inc.:
Growth Stock 26,601 3,515 $1,013,376 $129,602
U.S. Government Securities 101,885 2,693 1,109,084 29,869
Money Market 60,418 39,145 691,984 459,202
Asset Allocation 69,787 19,556 1,327,365 370,494
Diversified Income 80,644 1,668 976,544 20,185
Global Growth 34,446 8,441 747,331 168,025
Aggressive Growth 62,177 7,552 867,152 102,961
Growth & Income 202,417 10,874 4,041,220 201,683
High Yield 124,255 9,263 1,309,903 99,185
Global Asset Allocation 79,205 1,568 1,134,793 21,201
Global Bond 11,597 1,002 133,950 10,983
International Stock 106,998 5,039 1,592,909 70,639
Value 111,781 3,219 1,560,512 42,382
S & P 500 310,604 24,185 5,286,753 400,827
Blue Chip Stock 196,205 3,472 3,233,033 51,794
Mid Cap Stock 13,242 24 113,151 201
Large Cap Growth 94,015 5,727 960,073 57,954
Small Cap Value 24,166 117 213,288 1,050

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

YEAR ENDED DECEMBER 31, 1998 (CONTINUED)

SHARES COST OF
------------------------- COST OF SALES/
PURCHASED SOLD PURCHASES REDEMPTIONS
------------------------------------------------------------------

Alliance Variable Product:
Money Market 3,659,902 3,248,486 $3,692,257 $3,248,486
International 45,456 43,390 760,164 729,051
Premier Growth 25,024 12,452 672,665 330,511

SAFECO Resource Series:
Growth 19,458 11,106 536,440 299,450
Equity 4,486 1,650 142,055 44,419

Federated Insurance Series:
U.S. Government Securities Fund II 2,400 9 26,950 101
High Income Fund II 53,223 45,804 568,485 497,074
Utility II 2,474 -- 37,847 --
American Leaders II 50,401 47,449 992,854 935,486

Lexington Funds, Inc.:
Emerging Markets 1,037 -- 5,328 --

MFS Variable Insurance Trust:
Emerging Growth 2,051 5,328 39,885 88,121
High Income 36,002 31,526 422,241 383,925

Montgomery Variable Funds:
Emerging Markets 1,991 6 14,827 55
Growth 5,103 12 80,916 187

Strong Variable Annuity Funds:
Discovery II 759 39 8,162 79
International II 4,968 1,458 41,097 13,928

American Century Investments:
VP Balanced 6,306 4,378 52,034 35,605
VP Capital Appreciation 16,768 16,040 156,020 150,692

Van Eck Worldwide Insurance Trust:
Worldwide Bond Fund 20 -- 250 --

Neuberger & Berman, Inc.:
AMT Limited Maturity Bond 4,157 -- 57,274 --
AMT Partners 1,913 11 36,301 203

INVESCO, Inc.:
Health & Sciences 9,985 2,322 132,586 29,083
Industrial Income 811 448 15,923 7,998
Technology 5,982 4,003 78,815 53,262

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

YEAR ENDED DECEMBER 31, 1997

SHARES COST OF
------------------------- COST OF SALES/
PURCHASED SOLD PURCHASES REDEMPTIONS
------------------------------------------------------------------

Fortis Series Fund, Inc.:
Growth Stock 22,661 7,441 $ 809,361 $ 274,309
U.S. Government Securities 30,484 10,301 323,111 107,853
Money Market 233,715 214,478 2,592,007 2,385,564
Asset Allocation 96,893 8,514 1,653,169 169,600
Diversified Income 19,661 20 252,681 235
Global Growth 62,726 23,908 1,198,499 432,388
Aggressive Growth 37,352 5,782 481,073 76,978
Growth & Income 159,029 30,750 2,753,795 510,526
High Yield 51,337 6,574 536,110 68,118
Global Asset Allocation 23,716 4,141 312,137 56,351
Global Bond 9,303 4,219 101,061 45,993
International Stock 35,322 8,441 481,392 117,125
Value 51,090 9,611 670,433 127,016
S & P 500 99,878 9,123 1,387,089 121,189
Blue Chip Stock 68,209 4,934 930,203 66,571

Alliance Variable Product:
Money Market 304,530 91,557 304,531 91,558
International 2,988 -- 45,113 --
Premier Growth 13,470 -- 279,932 --

SAFECO Resource Series:
Growth 781 -- 21,000 --
Equity 8,963 -- 238,506 --

Federated Insurance Series:
U.S. Government Securities Fund II 1,738 -- 18,160 --
High Income Fund II 33,763 -- 364,370 --

MFS Variable Insurance Trust:
Emerging Growth 9,230 71 148,667 1,182
High Income 39,067 -- 476,216 --

Montgomery Variable Funds:
Emerging Markets -- 4,510 --
Growth 432 -- 24,260 --

Strong Variable Annuity Funds: 1,533
Discovery II -- 11,871 --
International II 941 -- 35,961 --

American Century Investments: 3,797
VP Balanced -- 7,704 --

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

YEAR ENDED DECEMBER 31, 1997 (CONTINUED)

SHARES COST OF
-------------------------- COST OF SALES/
PURCHASED SOLD PURCHASES REDEMPTIONS
---------------------------------------------------------------

Neuberger & Berman, Inc.:
AMT Partners 728 - $14,808 $ --

INVESCO, Inc.:
Health & Sciences 272 - 2,990 --
Industrial Income 825 - 14,795 --
Technology 192 - 2,111 --

4. ORGANIZATIONAL EXPENSES AND OTHER CHARGES

ORGANIZATION EXPENSES

First Fortis assumes all organizational expenses of the Account.

ADMINISTRATION CHARGE

A $30 annual contract administrative charge is deducted each contract year from
the value of each Opportunity Variable Annuity on the anniversary of the
contract date and upon surrender of the contract. This charge will be waived
during the accumulation period if the contract value at the end of the contract
year (or upon total surrender) is $25,000 or more.

In addition, First Fortis assesses each subaccount of the Opportunity Variable
Annuity and Masters Variable Annuity a daily charge for administrative expense
at annual rate of 0.10% of the net assets.

MORTALITY AND EXPENSE RISK CHARGE

First Fortis assesses each subaccount of the Opportunity Variable Annuity and
Masters Variable Annuity a daily charge for mortality and expense risk at an
annual rate of 1.25% of the net assets. For the Value Advantage Plus Variable
Annuity the mortality and expense risk charge is assessed at an annual rate of
0.45%.

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

5. SURRENDER AND PREMIUM TAX CHARGES

FREE SURRENDERS

The following amounts can be withdrawn from the contract without a surrender
charge:

- Any purchase payments received more than five years prior to the
surrender date for Opportunity Variable Annuity and seven years for
Master Variable Annuity and have not been previously surrendered.

- In any contract year, up to 10% of the purchase payments received less
than five years prior to the surrender date for Opportunity Variable
Annuity and seven years prior to the surrender date for Master
Variable Annuity.

- For Master Variable Annuity any earnings that have not been previously
surrendered.

- For Value Advantage Plus Variable Annuity there is no surrender
charge.

AMOUNT OF SURRENDER CHARGE

Surrender charges apply only if the amount being withdrawn exceeds the sum of
the amounts listed above under Free Surrenders. The surrender charge is based on
a percentage of the amount of purchase payments surrendered. The percentage of
payments is set at 5% during the first five years on the Opportunity Variable
Annuity contracts with a sliding scale down to zero by the end of the fifth
year, and is set at 7% during the first seven years of the Master Variable
Annuity contracts, with a sliding scale down to zero by the end of the seventh
year.

PREMIUM TAXES

Where premium taxes or similar assessments are imposed by states or other
jurisdiction upon receipt of purchase payments, First Fortis pays such taxes on
behalf of the contract owner and then will deduct a charge for these amounts
from the contract value upon surrender, death of the annuitant or contract
owner, or annuitization of the contract. In jurisdictions where premium taxes or
similar assessments are imposed at the time annuity payments begin, First Fortis
will deduct a charge on a pro rata basis from the contract value at that time.

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

5. SURRENDER AND PREMIUM TAX CHARGES (CONTINUED)

Surrender and premium tax charges are included in redemptions and are paid
directly to First Fortis. Surrender and premium tax charges collected by First
Fortis were $40,683 and $1,607 in 1998 and 1997, respectively.

6. FEDERAL INCOME TAXES

The operations of the Account form part of, and are taxed with, the operations
of First Fortis, which is taxed as a life insurance company under the Internal
Revenue Code. As a result, the net asset value of the subaccounts are not
affected by income taxes on income distributions received by the subaccounts.

7. RELATED PARTY TRANSACTIONS

Fortis Advisers, Inc. (Fortis Advisers), an affiliate of First Fortis, provides
investment management services to Fortis Series Fund, Inc. in exchange for
investment advisory and management fees. Investment advisory and management fees
are based on each portfolio's daily net assets and decrease in reduced
percentages as average daily net assets increase. The fees represent an
investment expense to Fortis Series Fund, Inc. which reduces the portfolios' net
assets. These fees charged by Fortis Advisers are not available on an individual
variable account basis. Fees for all variable accounts to which Fortis Advisers
provided investment management services amounted to $17,790,513 and $14,415,172
in 1998 and 1997, respectively.

8. YEAR 2000 ISSUE (UNAUDITED)

The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the Account. The Account
has no computer systems of its own but is dependent upon the systems of Fortis
Benefits Insurance Company, Fortis Advisers and certain other third parties.

First Fortis Life Insurance Company
Variable Account A

Notes to Financial Statements (continued)

8. YEAR 2000 ISSUE (UNAUDITED) (CONTINUED)

A comprehensive review of Fortis Benefits' and Fortis Advisers' computer systems
and business processes has been conducted to identify the major systems that
could be affected by the Year 2000 issue. Steps are being taken to resolve any
potential problems including modification to existing software and the purchase
of new software. These measures are scheduled to be completed and tested on a
timely basis. Fortis Benefits' and Fortis Advisers' goal is to complete internal
remediation and testing of each system by mid 1999.

The costs related to the Year 2000 issue are not expected to have a material
impact on Fortis Benefits' and Fortis Advisers' results of operations or
financial condition. This expectation is subject to uncertainties that could
cause actual results to differ materially. Factors that could influence the
total costs to be incurred by Fortis Benefits and Fortis Advisers in connection
with the Year 2000 issue include the ability of Fortis Benefits and Fortis
Advisers to successfully identify systems containing two-digit year codes, the
nature and amount of programming required to fix the affected programs, the
related labor and consulting costs for such remediation, and the ability of
third parties that interface with Fortis Benefits and Fortis Advisers to
successfully address their Year 2000 issues.

Fortis Benefits and Fortis Advisers are evaluating the Year 2000 readiness of
advisors and other third parties whose system failures could have an impact on
Fortis Benefits' and Fortis Advisers' operations. The potential materiality of
any such impact is not entirely known at this time. Fortis Benefits and Fortis
Advisers are closely monitoring these entities to avoid any unforeseen
circumstances.

Fortis Benefits' and Fortis Advisers' Year 2000 project includes establishing
Year 2000 contingency plans for all key business units. These plans are being
developed and are expected to be substantially complete by the end of the first
quarter of 1999. These plans will continue to be refined throughout 1999 as
additional information related to potential Year 2000 exposure is gathered.

PART II.

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The estimated expenses of the issuance and distribution of the Contracts, other
than commissions on sales of the Contracts are as follows:

AMOUNT

Securities and Exchange Commission
registration fee $ 0.
Printing and engraving $1,500.00
Accounting fees and expenses $1,500.00
Legal fees and expenses $3,000.00

Item 15. Indemnification of Directors and Officers

First Fortis' By-Laws provide for indemnity and payment of expenses of First
Fortis' officers and directors in connection with certain legal proceedings,
judgments, and settlements arising by reason of their service as such, all to
the extent and in the manner permitted by law. Applicable New York law generally
permits payment of such indemnification and expenses if the person seeking
indemnification has acted in good faith and for a purpose that he reasonably
believed to be in, or not opposed to, the best interests of the Company, and, in
a criminal proceeding, if the person seeking indemnification also has no
reasonable cause to believe his conduct was unlawful. No indemnification is
further permitted to an individual if there has been an adjudication, and a
judgement rendered adverse to the individual seeking indemnification, finding
that the acts were committed in bad faith, as the result of active and
deliberate dishonesty, or that there was personal gain, financial profit, or
other advantage which he or she was not otherwise legally entitled.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the indemnification provision described in response to
Item 14, 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.

Item 16. Exhibits

a. Exhibits

1. Form of Principal Underwriter and Servicing Agreement -- filed as
an exhibit to Registration Statement No. 33-71686 on Form N-4
filed April 11, 1994 and incorporated by reference.

2. None.

3. (a) Charter of First Fortis Life Insurance Company (Incorporated
by reference from Form 10-K405, File No. 33-71690, of
registrant filed March 29, 1996).

(b) By-laws of First Fortis Life Insurance Company (Incorporated
by reference from Form N-4 Registration Statement, File No.
33-71686, of registrant and its Separate Account A filed on
November 15, 1993);

4. (a) Form of Combination Fixed and Variable Annuity Contract;
(Incorporated by reference from Form N-4 Registration
Statement, File No. 33-71686, of registrant and its Separate
Account A filed April 27, 1995);

(b) Form of Application to be used in connection with Contract
filed as Exhibit 5 (Incorporated by reference from Form N-4
Registration Statement, File No. 33-71686, of registrant and
its Separate Account A filed April 27, 1995);

(c) Form of IRA Endorsement (Incorporated by reference from Form
N-4 Registration Statement, File No. 33-71686, of registrant
and its Separate Account A filed April 27, 1995);

(d) Form of Section 403(b) Annuity Endorsement (Incorporated by
reference from Form N-4 Registration Statement, File No.
33-71686, of registrant and its Separate Account A filed
April 27, 1995);

(e) Form of Automatic Portfolio Rebalancing Endorsement
(Incorporated by reference from Form N-4 Registration
Statement, File No. 33-71686, of registrant and its Separate
Account A filed April 27, 1995);

(f) Form of Systematic Withdrawal Option Endorsement
(Incorporated by reference from Form N-4 Registration
Statement, File No. 33-71686, of registrant and its Separate
Account A filed April 27, 1995);

(g) Form of Systematic Transfer Endorsement (Incorporated by
reference from Form N-4 Registration Statement, File No.
33-71686, of registrant and its Separate Account A filed
April 27, 1995);

5. Opinion and consent of David A. Peterson, Esq., Corporate Counsel
of Fortis Benefits Insurance Company, as to the legality of the
securities being registered (Incorporated by reference from this
Form S-1 registration filed on October 24, 1996).

10. Administrative Service Agreement (Incorporated by reference from
Form N-4 Registration Statement, File No. 33-71686, of registrant
and its Separate Account A filed on November 15, 1993).

24. Consent of Ernst & Young LLP--filed herewith.

25. (a) Power of Attorney for Messr. Freedman and Madame Gharib.
(Incorporated by reference from Form N-4 Registration Statement,
File No. 33-71686, of registrant and its Separate Account A filed
on November 15, 1993).

(b) Power of Attorney for Messrs. Gardner, Nelson and Galston.
(Incorporated by reference from Form N-4 Registration Statement,
File No. 33-71686, of registrant and its Separate Account A filed
on April 12, 1994.)

(c) Power of Attorney for Messr. Kopperud (Incorporated by
reference from Form N-4 Registration Statement, File No.
33-71686, of registrant and its Separate Account A filed April
27, 1995.)

28. (b) Financial statement schedules.

None.

Item 17. Undertakings

The Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement, including (but not
limited to) any addition or deletion of a managing
underwriter.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

SIGNATURES

As required by the Securities Act of 1933, the Registrant has caused this
Registration Statement to be signed on its behalf in the Town of Salina, County
of Onondaga, State of New York on this 19th day of April, 1999.

FIRST FORTIS LIFE INSURANCE COMPANY

By:/s/__Zafar Rashid______________________
Zafar Rashid
President & Chief Executive Officer
(Principal Executive Officer)

As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons, in the capacities indicated, on April 19, 1999.

Signature Title With First Fortis
- --------- -----------------------

/s/ Zafar Rashid President, Chief Executive Officer
- --------------------------------- and Director
Zafar Rashid (Principal Executive Officer)

/s/ Terry J. Kryshak Sr. Vice President and Chief
- --------------------------------- Administrative Officer and Director
Terry J. Kryshak

Treasurer and Director
/s/ Larry M. Cains (Principal Financial Officer)
- ---------------------------------
Larry M. Cains

/s/ Barbara R. Hege Chief Financial Officer (Principal
- --------------------------------- Accounting Officer)
Barbara R. Hege

* Chairman of Board and Director
- ---------------------------------
Allen Royal Freedman

* Director
- ---------------------------------
Susie Gharib

* Director
- ---------------------------------
Dale Edward Gardner

* Director
- ---------------------------------
Kenneth Warwick Nelson

/s/ Robert B. Pollock Director
- ---------------------------------
Robert B. Pollock

/s/ Dean C. Kopperud Director
- ---------------------------------
Dean C. Kopperud

* Director
- ---------------------------------
Clarence Elkus Galston

*By /s/ Terry J. Kryshak
-----------------------------
Terry J. Kryshak
Attorney-in-fact

EXHIBIT INDEX

Item
Number Description
- ------ -----------

24 Consent of Accountants