FIRST INVESTORS LIFE SEPARATE ACCOUNT E INDIVIDUAL VARIABLE LIFE INSURANCE POLICIES OFFERED BY FORESTERS LIFE INSURANCE AND ANNUITY COMPANY

FIRST INVESTORS LIFE SEPARATE ACCOUNT E INDIVIDUAL VARIABLE LIFE INSURANCE POLICIES OFFERED BY FORESTERS LIFE INSURANCE AND ANNUITY COMPANY Statement of Additional Information dated May 1, 2016 This Statement of Additional Information ( SAI ) is not a prospectus and should be read in conjunction with the prospectuses for the individual variable life insurance policies offered by Foresters Life Insurance and Annuity Company through First Investors Life Separate Account E ( Separate Account E or the Separate Account ), which may be obtained at no cost by writing to Foresters Life Insurance and Annuity Company, Raritan Plaza 1, Edison, NJ 08837, by telephoning (800) 832-7783, or by visiting our website at www.forestersfinancial.com. Separate Account E currently funds two individual variable life insurance policies: Variable Universal Life, a flexible premium adjustable variable life insurance policy ( VUL ) with a prospectus dated May 1, 2016 and Single Premium Variable Life Insurance Policy, a modified single premium variable life insurance policy ( SPVL ) with a prospectus dated May 1, 2016. Unless otherwise noted, the terms used in this SAI have the same meanings as in the prospectuses. TABLE OF CONTENTS Page General Description... 2 Services... 4 Other Information... 4 Valuation Information... 5 Relevance of Financial Statements... 5 Appendix... 6 Financial Statements... 7

GENERAL DESCRIPTION Foresters Life Insurance and Annuity Company. Foresters Life Insurance and Annuity Company, 40 Wall Street, New York, New York 10005 ( FLIAC ), a stock life insurance company incorporated under the laws of the State of New York in 1962, writes life insurance and annuities. Foresters Financial Holding Company, Inc. ( FFHC ), a holding company, owns all of the voting common stock of Foresters Investment Management Company, Inc. ( FIMCO or Adviser ) and all of the outstanding stock of FLIAC, Foresters Financial Services, Inc. ( FFS or Underwriter ) and Foresters Investor Services, Inc. ( FIS ), the transfer agent for First Investors Life Series Funds ( Life Series Funds ). The Independent Order of Foresters ( Foresters ) controls FFHC and, therefore, the Adviser and FLIAC. Foresters is a Canadian fraternal benefit society with operations in Canada, the United States and the United Kingdom and its principal business address is 789 Don Mills Road, Toronto, Canada M3C 1T9. The following chart provides information about the Officers and Directors of FLIAC. Name FLIAC Office Principal Occupation for Last Five Years Carol Lerner Brown Secretary Assistant Secretary FFS since 1989; Secretary FLIAC and FIMCO since 1989; Secretary FFHC 1989-2011, Assistant Secretary FFHC since 2011; Secretary FIS since 1989; and Secretary Foresters Advisory Services, LLC since 2012. Craig D. Cloyed Director Director FLIAC and FFHC since 2012; President and Director Calvert Investment Distributors, Inc. from 1998 to March 2012. William H. Drinkwater Lawrence M. Falcon Francis X. Gannon Senior Vice President and Chief Actuary Senior Vice President and Comptroller Chief Financial Officer and Treasurer Senior Vice President and Chief Actuary FLIAC since 2003. Senior Vice President and Comptroller FLIAC since 1990. Chief Financial Officer and Treasurer FLIAC, FFS, FIS and FFHC since 2013; Chief Financial Officer FIMCO since 2013; Chief Financial Officer Foresters Advisory Services, LLC since 2013; Principal FX Capital LLC 2009-2013; Corporate Comptroller AlliedBarton 2010-2011; and Director Jefferson Wells International 2008-2009. Anthony M. Garcia Director President and Chief Executive Officer Foresters since 2014; Director Forester Life Limited since 2014; Director Forester Holdings (Europe) Limited since 2014; Director Forester Fund Management Limited since 2014; Chairman and Director FFHC since 2014; Director FLIAC since 2014; President Western & Southern Agency Group 2012-2014; and President and Chief Executive Officer TIAA-CREF Life Insurance Company 2009-2012. Steven Guterman Director Director FLIAC and FFHC since 2012; Chief Executive Officer InstantLabs Medical Diagnostics Corp. since 2010. 2

Jason Helbraun Assistant Vice President Assistant Vice President FLIAC since 2006. Martha E. Marcon Director Director Foresters Life Insurance Company since 2013; Director FLIAC and FFHC since 2011; Director Foresters since 2009; Director Mercury General Corp. 2008-present; and Director NIA Group 2006-present. Loretta McCarthy Director Director FLIAC and FFHC since 2012; Managing Director Golden Seeds, LLC since 2005. Glen Mueller Cheryl Neal Vice President and Chief Underwriter Director and Chairman Vice President and Chief Underwriter FLIAC since 2005. President and Executive Vice President The Independent Order of Foresters North America Life and Annuity Division since May 2015; Executive Vice President and Chief Operating Officer Liberty Mutual Benefits 2014-2015; Executive Vice President Liberty Mutual Group; President and Chief Operating Officer Liberty Life Assurance Company of Boston 2008-2014; Group Director HSBC Bank Insurance Services Division, Marketing Strategy and Direct Business 2002-2008; Director HSBC Bank Product Development & Marketing Strategy, Retail Services Private Label Credit Cards 2001-2002; and Director HSBC Bank, Preapproved Acquisitions, HFC/Beneficial Consumer Finance 1998-2001. David Schimmel Vice President Vice President since 2011 and Assistant Vice President 2006-2011 of FLIAC. John Shey Carol E. Springsteen Assistant Vice President President and Director Assistant Vice President FLIAC since 2006. President and Director FLIAC since 2003; and Member of Board of Managers, Foresters Advisory Services, LLC since 2012. Separate Account Assets. Separate Account E was established on September 30, 2004 under the provisions of the New York Insurance Law. Separate Account E s assets are segregated from the assets of FLIAC, and that portion of Separate Account E s assets having a value equal to, or approximately equal to, the reserves and contract liabilities under a Policy is not chargeable with liabilities arising out of any other business of FLIAC. Separate Account E is registered with the Securities and Exchange Commission ( Commission ) as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"), but such registration does not involve any supervision by the Commission of the management or investment practices or policies of the Separate Account. 3

SERVICES Custodian. FLIAC, subject to applicable laws and regulations, is the custodian of the securities of the Subaccounts of Separate Account E. We maintain the records and accounts of Separate Account E. Independent Registered Public Accounting Firm. KPMG LLP, 345 Park Avenue, New York, NY 10154, is the independent registered public accounting firm for Separate Account E and Foresters Life Insurance and Annuity Company. Underwriter. FLIAC and Separate Account E have entered into an Underwriting Agreement with FFS. FFS, an affiliate of FLIAC and of the Adviser, has its principal business address at 40 Wall Street, New York, New York 10005. For the fiscal years ending December 31, 2013, 2014 and 2015, FFS received underwriting commissions of $775,315, $891,166 and $625,352, respectively, in connection with the distribution of SPVL in a continuous offering. Sale of VUL commenced in April 2014 and for the fiscal years ending December 31, 2014 and December 31, 2015, FFS received underwriting commissions of $990,473 and $3,480,844, respectively, in connection with the distribution of VUL in a continuous offering. FLIAC anticipates continuing to offer the Policies, but reserves the right to discontinue the offering. FFS is a registered broker-dealer under the Securities Exchange Act of 1934, and a member of the Financial Industry Regulatory Authority. Distribution of Policy. The Policies are sold by insurance agents licensed to sell variable life insurance policies, who are registered representatives of FFS or by other broker-dealers who have selling agreements with FFS. We pay FFS a commission on policies sold. In regards to VUL, in the first policy year, we pay FFS a commission of 99% of premiums paid up to the target premium and 6% of premiums paid in excess of the target premium. In policy years 2-10, we pay FFS a commission of 5% of premium payments. We pay FFS a commission of 3% of premium payments thereafter. In regards to SPVL, we pay a commission on policies sold of 7.175% of premium payments. Commissions paid on the Policies are not charged directly to Policyowners or the Separate Account. FFS is, in turn, responsible for paying FFS representatives all commissions and other compensation that may be due to them for selling the policy. FFS representatives may sell other variable life insurance and annuity products as to which they receive more or less compensation than they do for selling the Policies. OTHER INFORMATION Reports. At least once each Policy year, we mail a report to the Policyowner within 31 days after the Policy anniversary. We mail the report to the last address known to us. The report shows (1) the death benefit at the beginning and end of the policy year, (2) the Accumulation Value and surrender value at the beginning and end of the policy year, (3) policy loan activity (4) all transactions which have occurred during the policy year, and (5) other information as may be required by applicable law or regulation. The report also shows your allocation among the Subaccounts and/or the Fixed Account on that anniversary. State Regulation. We are subject to the laws of the State of New York governing insurance companies and to regulations of the New York State Department of Financial Services (the Department ). We file an annual statement in a prescribed form with the Department each year covering our operations for the preceding year and our financial condition as of the end of such year. Our books and accounts are subject to review by the Department at any time. The Department conducts a full examination of our operations periodically. The Department does not engage in any supervision of our management or investment practices or policies, except to determine compliance 4

with the requirements of the New York Insurance Law. We also are subject to regulation under the insurance laws of other jurisdictions in which we may operate. VALUATION INFORMATION Value of a Unit. For each Subaccount of Separate Account E, the value of a Unit of interest of that Subaccount initially was set arbitrarily at $10.00. The value of a Unit for any subsequent Valuation Period is determined by multiplying the value of a Unit for the immediately preceding Valuation Period by the Net Investment Factor for the Valuation Period for which the Unit Value is being calculated (see Appendix I, Example B). The investment performance of each Fund, and expenses and deductions of certain charges affect the Unit Value. The value of a Unit for the Subaccounts may increase or decrease from Valuation Period to Valuation Period. Net Investment Factor. The Net Investment Factor for each Subaccount for any Valuation Period is determined by dividing (a) by (b) where: (a) is the net result of: (1) the net asset value per share of the applicable Fund determined at the end of the current Valuation Period, plus (2) the per share amount of any dividend or capital gains distributions made by the applicable Fund if the "ex-dividend" date occurs during the current Valuation Period, less (3) the per share amount of any taxes charged by us. (b) is the net asset value per share of the applicable Fund determined as of the end of the immediately preceding Valuation Period. The Net Investment Factor may be greater or less than one, and therefore, the Unit value of any Subaccount may increase or decrease. (For an illustration of this calculation, see Appendix I, Example A.) RELEVANCE OF FINANCIAL STATEMENTS The values of the interests of Policyowners under the Policies will be affected by the investment results of the Subaccounts and the returns on any amounts they allocate to the Fixed Account. The financial statements of FLIAC as contained herein should be considered only as bearing upon FLIAC's ability to meet its obligations to Policyowners under the, including, but not limited to, the minimum and any declared excess interest credited on accumulation values in the Fixed Account, and they should not be considered as bearing on the investment performance of the Subaccounts. 5

APPENDIX I EXAMPLE A Formula and Illustration for Determining the Net Investment Factor of a Subaccount of Separate Account E Net Investment Factor = A + B C Where: A = The Net Asset Value of a Fund share as of the end of the current Valuation Period. Assume... = $8.51000000 B = The per share amount of any dividend or capital gains distribution since the end of the immediately preceding Valuation Period, less the per share amount of any taxes charged by us. Assume... = $0 C = The Net Asset Value of a Fund share as of the end of the immediately preceding Valuation Period. Assume... = $8.39000000 Then, the Net Investment Factor = 8.51000000 + 0... = $1.01430274 8.39000000 Unit Value = A x B Where: EXAMPLE B Formula and Illustration for Determining Unit Value of a Subaccount of Separate Account E A = The Unit Value for the immediately preceding Valuation Period. Assume... = $1.46328760 B = The Net Investment Factor for the current Valuation Period. Assume... = $1.01430274 Then, the Unit Value = $1.46328760 x 1.01430274... = $1.484216622 6

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Financial Statements December 31, 2015 (With Report of Independent Registered Public Accounting Firm Thereon) 7

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Table of Contents Page Report of Independent Registered Public Accounting Firm 1 Statements of Assets and Liabilities 2 Statements of Operations 4 Statements of Changes in Net Assets 6 Notes to Financial Statements 9

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statement of Assets and Liabilities December 31, 2015 Cash Fund for Growth and Special Select Management Income Income Situations International Growth Government Assets: Investments at net asset value (note 3): First Investors Life Series Fund $ 1,248,531 $ 6,510,731 $ 17,909,469 $ 7,511,682 $ 5,353,325 $ 5,075,222 $ 2,699,957 Liabilities: Payable to Foresters Life Insurance and Annuity Company Net assets 1,248,531 6,510,731 17,909,469 7,511,682 5,353,325 5,075,222 2,699,957 Net assets represented by contracts in accumulation period $ 1,248,531 $ 6,510,731 $ 17,909,469 $ 7,511,682 $ 5,353,325 $ 5,075,222 $ 2,699,957 (Continued) 2

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statement of Assets and Liabilities December 31, 2015 Limited Investment Duration High Balanced Equity Target Grade Quality Bond Opportunity Real Estate Total Return Income Income Maturity 2015 Assets: Investments at net asset value (note 3): First Investors Life Series Fund $ 5,096,622 $ 258,955 $ 5,230,317 $ 136,396 $ 4,845,835 $ 91,330 $ 7,515,259 $ Liabilities: Payable to Foresters Life Insurance and Annuity Company Net assets 5,096,622 258,955 5,230,317 136,396 4,845,835 91,330 7,515,259 Net assets represented by contracts in accumulation period $ 5,096,622 $ 258,955 $ 5,230,317 $ 136,396 $ 4,845,835 $ 91,330 $ 7,515,259 $ See accompanying notes to financial statements 3

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statement of Operations Year ended December 31, 2015 Cash Fund for Growth and Special Select Management Income Income Situations International Growth Government Investment income: Income: Dividends $ $ 326,407 $ 199,274 $ 43,846 $ 54,356 $ 16,716 $ 59,736 Expenses: Mortality and expense risks (note 5) 15,662 109,677 308,551 124,267 87,928 82,210 47,630 Administrative charges (note 5) 22,333 10,048 43,643 24,734 12,594 16,041 2,009 Total expenses 37,995 119,725 352,194 149,001 100,522 98,251 49,639 Net investment income (loss) (37,995) 206,682 (152,920) (105,155) (46,166) (81,535) 10,097 Realized gain on investments: Realized gain distributions 912,998 301,989 239,534 Realized gain (loss) on investments (8,182) 126,939 20,673 25,378 36,422 (4,612) Realized gains (losses) (8,182) 1,039,937 322,662 25,378 275,956 (4,612) Change in unrealized appreciation (depreciation) on investments (455,061) (1,799,574) (422,754) 93,695 (158,825) (52,815) Net increase (decrease) in net assets resulting from operations $ (37,995) $ (256,561) $ (912,557) $ (205,247) $ 72,907 $ 35,596 $ (47,330) (Continued) 4

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statement of Operations Year ended December 31, 2015 Limited Investment Duration High Balanced Equity Target Grade Quality Bond Opportunity Real Estate Total Return Income Income Maturity 2015 Investment income: Income: Dividends $ 202,904 $ $ 7,535 $ $ 35,786 $ $ 120,250 $ 41,575 Expenses: Mortality and expense risks (note 5) 86,794 2,909 71,210 224 69,155 42 128,412 8,101 Administrative charges (note 5) 4,721 658 50,865 896 17,577 3 12,396 Total expenses 91,515 3,567 122,075 1,120 86,732 45 140,808 8,101 Net investment income (loss) 111,389 (3,567) (114,540) (1,120) (50,946) (45) (20,558) 33,474 Realized gain on investments: Realized gain distributions 253,797 6,392 Realized gain (loss) on investments (1,350) (37) 3,675 13 2,886 45,078 (91,966) Realized gains (losses) (1,350) (37) 3,675 13 2,886 298,875 (85,574) Change in unrealized appreciation (depreciation) on investments (224,092) (1,231) (99,745) 3,091 (124,700) (359) (497,367) 42,185 Net increase (decrease) in net assets resulting from operations $ (114,053) $ (4,835) $ (210,610) $ 1,984 $ (172,760) $ (404) $ (219,050) $ (9,915) See accompanying notes to financial statements 5

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statements of Changes in Net Assets Years ended December 31, 2015 and 2014 Cash Management Fund for Income Growth and Income Special Situations International 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Increase (decrease) in net assets: From operations: Net investment income (loss) $ (37,995) $ (27,682) $ 206,682 $ 154,804 $ (152,920) $ (102,836) $ (105,155) $ (81,288) $ (46,166) $ (32,152) Realized gain distributions 912,998 93,215 301,989 980,339 Realized gain (loss) on investments (8,182) 2,211 126,939 144,890 20,673 18,982 25,378 17,159 Change in unrealized appreciation (depreciation) on investments (455,061) (237,068) (1,799,574) 740,019 (422,754) (644,007) 93,695 20,672 Net increase (decrease) in net assets resulting from operations (37,995) (27,682) (256,561) (80,053) (912,557) 875,288 (205,247) 274,026 72,907 5,679 From contract transactions: Net insurance premiums from contract owners 24,483 87,683 1,119,149 1,412,663 2,445,714 2,745,785 1,266,676 1,036,035 753,465 881,905 Transfers between sub-accounts 194,323 608 74,539 237,179 125,797 (185,744) (51,968) (27,000) (39,441) 68,808 Cost of insurance (note 5) (22,295) (16,418) (74,344) (55,563) (233,385) (178,941) (88,290) (64,463) (61,761) (48,432) Transfers for contract benefits and terminations (17,111) (154,877) (87,231) (551,309) (281,636) (135,611) (133,640) (181,559) (65,631) Increase (decrease) in net assets derived from contract transactions 179,400 71,873 964,467 1,507,048 1,786,817 2,099,464 990,807 810,932 470,704 836,650 Net increase (decrease) in net assets 141,405 44,191 707,906 1,426,995 874,260 2,974,752 785,560 1,084,958 543,611 842,329 Net assets: Beginning of year 1,107,126 1,062,935 5,802,825 4,375,830 17,035,209 14,060,457 6,726,122 5,641,164 4,809,714 3,967,385 End of year $ 1,248,531 $ 1,107,126 $ 6,510,731 $ 5,802,825 $ 17,909,469 $ 17,035,209 $ 7,511,682 $ 6,726,122 $ 5,353,325 $ 4,809,714 (Continued) 6

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statements of Changes in Net Assets Years ended December 31, 2015 and 2014 Limited Duration Select Growth Government Investment Grade High Quality Bond Opportunity 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Increase (decrease) in net assets From operations: Net investment income (loss) $ (81,535) $ (54,982) $ 10,097 $ 19,140 $ 111,389 $ 108,424 $ (3,567) $ (256) $ (114,540) $ (44,464) Realized gain distributions 239,534 3,894 779 Realized gain (loss) on investments 36,422 46,554 (4,612) (4,731) (1,350) 6,040 (37) (26) 3,675 12,597 Change in unrealized appreciation (depreciation) on investments (158,825) 428,431 (52,815) 16,976 (224,092) 68,170 (1,231) (570) (99,745) 133,738 Net increase (decrease) in net assets resulting from operations 35,596 423,897 (47,330) 31,385 (114,053) 182,634 (4,835) (852) (210,610) 102,650 From contract transactions: Net insurance premiums from contract owners 878,115 704,165 245,272 221,624 529,521 458,935 172,682 59,523 2,145,506 1,898,108 Transfers between sub-accounts (32,666) (4,392) 8,104 13,314 (6,825) (233,209) 34,664 2,938 37,416 180,153 Cost of insurance (note 5) (57,350) (38,357) (36,041) (30,013) (60,662) (50,597) (2,416) (167) (67,550) (25,049) Transfers for contract benefits and terminations (85,143) (42,830) (40,106) (71,769) (33,546) (129,256) (2,582) (68,118) (73,532) Increase (decrease) in net assets derived from contract transactions 702,956 618,586 177,229 133,156 428,488 45,873 204,930 59,712 2,047,254 1,979,680 Net increase (decrease) in net assets 738,552 1,042,483 129,899 164,541 314,435 228,507 200,095 58,860 1,836,644 2,082,330 Net assets: Beginning of year 4,336,670 3,294,187 2,570,058 2,405,517 4,782,187 4,553,680 58,860 3,393,673 1,311,343 End of year $ 5,075,222 $ 4,336,670 $ 2,699,957 $ 2,570,058 $ 5,096,622 $ 4,782,187 $ 258,955 $ 58,860 $ 5,230,317 $ 3,393,673 (Continued) 7

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Statements of Changes in Net Assets Years ended December 31, 2015 and 2014 Real Estate Total Return Balanced Income Equity Income Target Maturity 2015 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Increase (decrease) in net assets From operations: Net investment income (loss) $ (1,120) $ $ (50,946) $ (37,516) $ (45) $ $ (20,558) $ (11,083) $ 33,474 $ 15,315 Realized gain distributions 253,797 249,464 6,392 9,718 Realized gain (loss) on investments 13 2,886 10,781 45,078 54,006 (91,966) (1,505) Change in unrealized appreciation (depreciation) on investments 3,091 (124,700) 107,792 (359) (497,367) 110,989 42,185 (32,649) Net increase (decrease) in net assets resulting from operations 1,984 (172,760) 81,057 (404) (219,050) 403,376 (9,915) (9,121) From contract transactions: Net insurance premiums from contract owners 99,505 1,798,083 1,911,509 63,361 918,328 1,153,893 3,125 20,015 Transfers between sub-accounts 35,785 72,693 2,205 28,392 (27,345) (74,187) (486,146) 12,234 Cost of insurance (note 5) (894) (52,108) (23,432) (20) (94,618) (74,523) (6,992) (7,464) Transfers for contract benefits and terminations 16 (67,790) (62,910) 1 (179,808) (154,957) (12,096) (6,209) Increase (decrease) in net assets derived from contract transactions 134,412 1,750,878 1,827,372 91,734 616,557 850,226 (502,109) 18,576 Net increase (decrease) in net assets 136,396 1,578,118 1,908,429 91,330 397,507 1,253,602 (512,024) 9,455 Net assets: Beginning of year 3,267,717 1,359,288 7,117,752 5,864,150 512,024 502,569 End of year $ 136,396 $ $ 4,845,835 $ 3,267,717 $ 91,330 $ $ 7,515,259 $ 7,117,752 $ $ 512,024 See accompanying notes to financial statements 8

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 (1) Organization First Investors Life Separate Account E (Separate Account E), a unit investment trust registered under the Investment Company Act of 1940 (the 1940 Act), is a segregated investment account established by Foresters Life Insurance and Annuity Company (formerly First Investors Life Insurance Company) (FLIAC) and exists in accordance with the regulations of the New York State Department of Financial Services. Assets of Separate Account E have been used to purchase shares of First Investors Life Series Funds (the Funds), an open-end diversified management investment company registered under the 1940 Act. The contract holder directs the deposits into the sub-accounts that comprise Separate Account E and bears the investment risk if the sub-accounts do not meet their stated investment objectives. The sub-accounts invest in the following underlying fund portfolios: Cash Management, Fund for Income, Growth and Income, Special Situations, International, Select Growth, Government, Investment Grade, Limited Duration High Quality Bond, Opportunity, Real Estate, Total Return, Balanced Income, and Equity Income. Target Maturity 2015 was closed on December 15, 2015. The Total Return Fund and the Opportunity Fund were launched on December 17, 2012. There were no transactions in the Total Return Fund and Opportunity Fund sub-accounts in 2012. The Limited Duration High Quality Bond Fund was launched on July 1, 2014. The Real Estate Fund and the Balanced Income Fund were launched on May 1, 2015 and November 2, 2015, respectively. FLIAC offers a modified single premium variable life product (SPVL) and a variable universal life product (VUL) through Separate Account E. (2) Significant Accounting Practices (a) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (b) Subsequent Events Subsequent events after the balance sheet date through the date that the financial statements were available for issuance, April 5, 2016, were evaluated in the preparation of the financial statements. 9 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 (c) Investments Shares of the Funds held by each of the sub-accounts of Separate Account E are valued at net asset value per share of such Funds, which value its investment securities at fair value on a daily basis. All distributions received from the Funds are reinvested to purchase additional shares of the Funds at net asset value. Investment transactions are accounted for on a trade date basis and average cost is the basis followed in determining the cost of investments sold for financial statement purposes. (d) Investment Income Investment income consists of dividends declared by the Funds and is recognized on the ex-dividend date. Realized gains and losses are recorded on a trade date basis. Reinvested realized gain distributions are recorded when received. Average cost is used as the basis of investments held and sold. The change in the value of the Funds is recorded as unrealized appreciation or depreciation and is included in the accompanying statement of operations. (e) Federal Income Taxes Separate Account E is not taxed separately because its operations are part of the total operations of FLIAC, which is taxed as a life insurance company under the Internal Revenue Code. Separate Account E will not be taxed as a regulated investment company under Subchapter M of the Code. Under existing Federal income tax law, no taxes are payable on the investment income or on the capital gains of Separate Account E. (3) Investments Investments are valued using Level 1 inputs, as defined within the fair value hierarchy established by the Financial Accounting Standards Board (FASB), and consist of the following at December 31, 2015: 10 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 Net asset Fair Shares value value Cost First Investors Life Series Fund: Cash Management 1,248,531 $ 1.00 $ 1,248,531 $ 1,248,531 Fund for Income 1,073,438 $ 6.07 $ 6,510,731 $ 7,032,074 Growth and Income 415,396 $ 43.11 $ 17,909,469 $ 14,650,450 Special Situations 231,807 $ 32.40 $ 7,511,682 $ 7,315,855 International 250,381 $ 21.38 $ 5,353,325 $ 4,783,457 Select Growth 363,048 $ 13.98 $ 5,075,222 $ 3,829,174 Government 277,503 $ 9.73 $ 2,699,957 $ 2,810,363 Investment Grade 476,512 $ 10.70 $ 5,096,622 $ 5,198,972 Limited Duration High Quality Bond 26,722 $ 9.69 $ 258,955 $ 260,757 Opportunity 354,959 $ 14.73 $ 5,230,317 $ 5,040,165 Real Estate 13,432 $ 10.15 $ 136,396 $ 133,304 Total Return 404,451 $ 11.98 $ 4,845,835 $ 4,783,132 Balanced Income 9,287 $ 9.83 $ 91,330 $ 91,689 Equity Income 375,525 $ 20.01 $ 7,515,259 $ 6,412,224 The cost of purchases and proceeds from sale of investments for the year ended December 31, 2015 were as follows: Purchases Sales Cash Management $ 218,806 $ 77,402 Fund for Income $ 1,520,096 $ 348,947 Growth and Income $ 3,683,783 $ 1,136,889 Special Situations $ 1,612,511 $ 424,869 International $ 807,821 $ 383,284 Select Growth $ 1,134,365 $ 273,410 Government $ 313,111 $ 125,786 Investment Grade $ 732,425 $ 192,548 Limited Duration High Quality Bond $ 207,347 $ 5,984 Opportunity $ 2,190,457 $ 257,743 Real Estate $ 135,291 $ 2,000 Total Return $ 1,906,562 $ 206,629 Balanced Income $ 91,753 $ 64 Equity Income $ 1,292,375 $ 442,579 Target Maturity 2015 $ 51,092 $ 513,334 Management determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Management utilizes valuation techniques that maximize the use of observable inputs (Levels 1 and 2) and minimize the use of unobservable inputs (Level 3) within the fair value hierarchy established by the FASB. The three levels of inputs are described below: 11 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 Level 1 unadjusted quoted prices in active markets for identical assets or liabilities that Separate Account E has the ability to access. Level 2 observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. Level 3 unobservable inputs for the asset and liability, to the extent relevant inputs are not available, representing Separate Account E s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. The inputs methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The fair value of investments in each of the sub-accounts of the Separate Account at December 31, 2015 was determined by management using quoted market prices which, is equal to the net asset value of the underlying investments in life series funds. Management determined that these investments are valued using Level 1 inputs since there is no restriction in the redemption of these investments, and sufficient transaction volume exists. In addition, there were no transfers between the different Levels established in the FASB s fair value hierarchy during the year ended December 31, 2015. (4) Changes in Units The changes in units outstanding for the years ended December 31, 2015 and 2014 were as follows: 2015 2014 Net Net Units Units increase Units Units increase issued redeemed (decrease) issued redeemed (decrease) Cash Management 632,635 (620,080) 12,555 729,294 (725,371) 3,923 Fund for Income 63,297 (11,669) 51,628 95,394 (9,741) 85,653 Growth and Income 96,471 (25,882) 70,589 117,520 (25,033) 92,486 Special Situations 46,535 (10,150) 36,385 43,090 (10,953) 32,137 International 34,141 (12,904) 21,237 51,532 (7,765) 43,767 Select Growth 40,774 (7,277) 33,497 43,672 (9,267) 34,405 Government 18,451 (9,321) 9,130 16,566 (10,073) 6,493 Investment Grade 31,768 (10,614) 21,154 27,345 (29,822) (2,477) Limited Duration High Quality Bond 21,495 (813) 20,682 6,329 (284) 6,045 Opportunity 129,012 (2,923) 126,089 143,024 (8,161) 134,863 Real Estate 13,491 (59) 13,432 Total Return 142,077 (7,573) 134,504 161,656 (13,196) 148,460 Balanced Income 9,293 (5) 9,288 Equity Income 39,279 (14,193) 25,086 54,390 (13,732) 40,658 Target Maturity 2015 632 (35,765) (35,133) 1,693 (1,038) 655 12 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 (5) Separate Account Charge and Deductions In consideration for its assumption of the mortality and expense risks connected with the SPVL and VUL contracts, FLIAC computes the charge at an effective annual rate of 1.75% and 0.50%, respectively, of the Subaccount Accumulation Value. This deduction is assessed through a reduction of units. A monthly charge is made to Separate Account E for the cost of insurance protection. This amount varies with the age and sex of the insured and the net amount of insurance at risk and is assessed through the redemption of units on the anniversary date of the policy. Optional insurance riders available under VUL contracts carry an additional charge. With the exception of the Children s Term Rider, this amount varies with the age and sex of the insured and is assessed through the redemption of units on each monthly deduction date following election of the rider. The Children s Term Rider is $0.464 per $1,000 of coverage. A monthly policy charge of $10 is deducted from the accumulation value of VUL contracts and is assessed through the redemption of units. A face amount charge is also deducted monthly from the accumulation value of VUL contracts. This charge is calculated based upon each $1,000 of face amount and may vary with the age and sex of the insured. It is assessed through the redemption of units. 13 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 (6) Financial Highlights Table Net assets Units 1 Unit value ($) ($000s) Investment income ratio Expense ratio Total return (%) 2 (%) 3 (%) 4 Cash Management: December 31: 2015 110,841 11.263 1,249 2014 98,287 11.263 1,107 2013 94,363 11.263 1,063 2012 106,491 11.263 1,200 2011 80,096 11.263 902 Fund for Income: December 31: 2015 409,633 15.909 6,511 5.15 (1.85) 2014 358,004 16.209 5,803 4.75 0.79 2013 272,352 16.082 4,376 5.05 6.88 2012 184,290 15.047 2,773 5.03 13.51 2011 94,357 13.256 1,250 6.59 5.66 Growth and Income: December 31: 2015 900,228 19.877 17,909 1.13 (3.12) 2014 829,638 20.518 17,035 1.09 7.65 2013 737,152 19.061 14,060 1.48 38.06 2012 656,493 13.806 9,069 1.20 17.46 2011 459,003 11.755 5,401 1.50 2.37 Special Situations: December 31: 2015 332,472 22.577 7,512 0.60 (0.52) 2014 296,087 22.696 6,726 0.45 6.30 2013 263,950 21.352 5,641 0.90 30.88 2012 242,449 16.314 3,958 0.49 10.01 2011 155,936 14.830 2,314 0.46 2.24 International: December 31: 2015 302,552 17.692 5,353 1.06 3.49 2014 281,315 17.095 4,810 1.04 2.39 2013 237,549 16.696 3,967 1.20 6.77 2012 189,438 15.638 2,963 1.32 20.85 2011 145,987 12.940 1,889 2.00 0.64 Select Growth: December 31: 2015 283,456 17.903 5,075 0.35 3.21 2014 249,960 17.346 4,337 0.32 13.53 2013 215,555 15.279 3,294 0.44 33.15 2012 185,750 11.475 2,132 0.04 13.30 2011 98,002 10.128 992 0.12 5.25 Government: December 31: 2015 192,610 14.035 2,700 2.23 0.04 2014 183,480 14.029 2,570 2.50 3.14 2013 176,987 13.602 2,406 2.40 (2.47) 2012 139,576 13.947 1,943 2.37 1.95 2011 82,202 13.681 1,120 3.16 5.41 14 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 Net assets Units 1 Unit value ($) ($000s) Investment income ratio Expense ratio Total return (%) 2 (%) 3 (%) 4 Investment Grade: December 31: 2015 323,644 15.764 5,097 4.05 (0.35) 2014 302,489 15.819 4,782 4.08 5.85 2013 304,966 14.944 4,554 3.64 (0.80) 2012 241,820 15.065 3,639 3.45 11.23 2011 141,622 13.543 1,915 4.52 6.23 Limited Duration High Quality Bond: 5 December 31: 2015 26,727 9.690 259 (0.51) 2014 6,045 9.740 59 (2.60) Opportunity: 5 December 31: 2015 354,078 14.767 5,230 0.17 (0.81) 2014 227,989 14.887 3,394 5.73 2013 93,125 14.080 1,311 39.96 2012 10.060 0.60 Real Estate: 5 December 31: 2015 13,432 10.150 136 1.50 Total Return: 5 December 31: 2015 399,992 12.114 4,846 0.87 (1.61) 2014 265,487 12.313 3,268 0.08 5.96 2013 117,027 11.620 1,359 17.02 2012 9.930 (0.70) Balanced Income: 5 December 31: 2015 9,287 9.830 91 (1.70) Equity Income: December 31: 2015 400,037 18.762 7,515 1.63 (1.03) 2014 374,951 18.957 7,118 1.58 8.25 2013 334,293 17.512 5,864 1.92 30.53 2012 287,034 13.416 3,854 1.64 11.20 2011 227,315 12.065 2,747 1.86 1.53 Target Maturity 2015: 5 December 31: 2015 9.45 (0.41) 2014 35,132 14.576 512 4.76 0.02 2013 34,477 14.573 503 4.12 (0.19) 2012 34,667 14.601 506 4.00 0.84 2011 31,065 14.480 450 3.54 7.14 15 (Continued)

FIRST INVESTORS LIFE SEPARATE ACCOUNT E Notes to Financial Statements December 31, 2015 1. These units include units held for certain direct charges to contract owner accounts through the redemption of units. 2. These amounts represent the dividends, excluding distributions of capital gains, received by the sub-account from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as the separate account charge, that are assessed against contract owner accounts either through reductions in unit values or redemption of units. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the sub-account invests. 3. These amounts represent the annualized contract expenses of the separate account for the periods indicated. There are no expenses that result in a direct reduction in unit value. Charges made directly to contract owner accounts through redemption of units and expenses of the underlying fund have been excluded. 4. These amounts represent the total return for the periods indicated, including changes in value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. 5. The Total Return Fund and the Opportunity Fund were launched on December 17, 2012. There were no transactions in the Total Return Fund and Opportunity Fund sub-accounts in 2012. The Limited Duration High Quality Bond Fund was launched on July 1, 2014. The total return for the Limited Duration High Quality Bond Fund for 2014 was calculated for the period July 1, 2014 to December 31, 2014. The Real Estate Fund and the Balanced Income Fund were launched on May 1, 2015 and November 2, 2015, respectively. The total return for the Real Estate Fund and the Balanced Income Fund were calculated for the period May 1, 2015 to December 31, 2015 and November 2, 2015 to December 31, 2015, respectively. The Target Maturity 2015 Fund was closed on December 15, 2015. The total return for the Target Maturity 2015 Fund for 2015 was calculated for the period January 1, 2015 to December 14, 2015. 16

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY (formerly First Investors Life Insurance Company) Statutory Financial Statements December 31, 2015, 2014 and 2013 (With Independent Auditors Report)

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY Table of Contents Page Independent Auditors Report for the years 2015, 2014 and 2013 1 Financial Statements: Statutory Statements of Admitted Assets, Liabilities and Capital and Surplus as of December 31, 2015 and 2014 3 Statutory Statements of Income for the years ended December 31, 2015, 2014 and 2013 4 Statutory Statements of Changes in Capital and Surplus for the years ended December 31, 2015, 2014 and 2013 5 Statutory Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013 6 Notes to Statutory Financial Statements 7 Supplementary Schedule Reinsurance 26

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL AND SURPLUS DECEMBER 31, 2015 AND 2014 (in US dollars) ASSETS Cash and invested assets 2015 2014 Bonds, at amortized cost (fair value: 2015 - $570,705,170; 2014 - $475,546,634) $ 568,954,040 $ 454,352,123 Cash and cash equivalents 20,677,629 30,842,180 Policy loans 94,999,128 89,134,868 Total Cash and Invested Assets 684,630,797 574,329,171 Deferred and uncollected premiums 4,187,256 4,156,741 Accrued investment income 10,202,452 8,800,847 Admitted deferred tax assets 4,587,000 4,568,000 Current income tax recoverable 1,856,599 754,838 Other assets 240,117 425,136 TOTAL ASSETS EXCLUDING SEPARATE ACCOUNTS 705,704,221 593,034,733 Separate account assets 1,227,229,612 1,259,735,751 TOTAL ADMITTED ASSETS $ 1,932,933,833 $ 1,852,770,484 LIABILITIES AND CAPITAL AND SURPLUS LIABILITIES Life and accident and health reserves $ 279,144,008 $ 261,769,743 Annuity reserves 363,530,255 265,739,029 Claims and other contract liabilities 12,451,745 11,027,293 Interest Maintenance Reserve 623,050 1,572,907 Asset Valuation Reserve 3,260,126 2,524,431 Accounts payable and accrued liabilities 6,168,530 9,012,333 Net transfers due from separate accounts (19,791,266) (17,310,527) TOTAL LIABILITIES EXCLUDING SEPARATE ACCOUNTS 645,386,448 534,335,209 Separate account liabilities 1,227,229,612 1,259,735,751 TOTAL LIABILITIES 1,872,616,060 1,794,070,960 CAPITAL AND SURPLUS Common Stock, par value $4.75; authorized, issued and outstanding 534,350 shares 2,538,162 2,538,162 Additional paid in capital 6,496,180 6,496,180 Unassigned surplus 51,283,431 49,665,182 TOTAL CAPITAL AND SURPLUS 60,317,773 58,699,524 TOTAL LIABILITIES AND CAPITAL AND SURPLUS $ 1,932,933,833 $ 1,852,770,484 See accompanying notes to statutory financial statements. 3

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY STATUTORY STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2015, 2014, AND 2013 (in US dollars) 2015 2014 2013 REVENUES Premiums and annuity considerations $ 203,651,518 $ 240,357,138 $ 182,054,688 Investment income 26,080,800 21,444,609 18,353,926 Amortization of interest maintenance reserve 896,253 701,720 661,980 Income from fees associated with investment management, administration & contract guarantees from separate accounts 11,246,893 10,414,793 8,748,607 Other income 305,019 251,986 204,539 TOTAL REVENUES 242,180,483 273,170,246 210,023,740 BENEFITS AND EXPENSES Policyholder benefits and changes in contract liabilities 90,814,340 88,303,446 89,518,178 Increase in life and annuity reserves 115,165,490 122,576,132 69,770,848 Net transfers (from) to separate accounts (10,023,360) 15,699,932 8,011,495 Commissions and expense allowances 17,212,803 17,914,864 13,249,915 Operating expenses 16,756,320 16,417,472 15,625,562 TOTAL BENEFITS AND EXPENSES 229,925,593 260,911,846 196,175,998 Net gain from operations before dividends to policyholders and federal income taxes 12,254,890 12,258,400 13,847,742 Dividends to policyholders 908,006 767,347 925,700 Net gain from operations before federal income taxes 11,346,884 11,491,053 12,922,042 Federal income tax 3,025,854 3,515,512 3,068,355 NET GAIN FROM OPERATIONS 8,321,030 7,975,541 9,853,687 Net realized capital gains, net of transfers to IMR and net of taxes - - - NET INCOME $ 8,321,030 $ 7,975,541 $ 9,853,687 See accompanying notes to statutory financial statements. 4

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS YEARS ENDED DECEMBER 31, 2015, 2014, AND 2013 (in US dollars) 2015 2014 2013 BALANCE AT BEGINNING OF YEAR $ 58,699,524 $ 51,813,751 $ 46,525,396 Net income 8,321,030 7,975,541 9,853,687 Change in unrealized gain (loss) on investments - - 4,223 Change in Asset Valuation Reserve (735,695) (509,446) (375,618) Change in non-admitted assets (2,066,268) (1,933,563) (498,935) Change in net deferred income taxes 999,182 1,353,241 53,998 Dividends to stockholders (4,900,000) - (3,749,000) BALANCE AT END OF YEAR $ 60,317,773 $ 58,699,524 $ 51,813,751 See accompanying notes to statutory financial statements. 5

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY STATUTORY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2015, 2014 and 2013 (in US dollars) 2015 2014 2013 Cash flows from operating activities: Premiums and other insurance amounts received $ 203,419,047 $ 239,988,360 $ 181,711,154 Investment income received 29,781,905 24,641,642 21,354,771 Other receipts 11,551,912 10,666,779 8,953,146 Benefits and contract liabilities paid (90,823,820) (90,018,736) (90,084,972) Commissions and general expenses paid (37,684,083) (38,182,390) (31,459,391) Net transfers to separate accounts 7,542,621 (20,314,977) (12,005,464) Net cash provided by operating activities 123,787,582 126,780,678 78,469,244 Cash flows from investing activities: Proceeds from maturities and sale of investment securities 48,438,807 48,561,324 33,336,022 Purchase of investments securities (171,538,216) (156,196,871) (92,810,870) Purchase of furniture, equipment and other assets (88,464) (152,761) (270,980) Net increase in policy loans (5,864,260) (7,000,858) (6,008,552) Net cash used for investing activities (129,052,133) (114,789,166) (65,754,380) Cash flows from financing activities: Dividends paid (4,900,000) - (3,749,000) Net cash used for financing activities (4,900,000) - (3,749,000) Net (decrease) increase in cash and short term investments (10,164,551) 11,991,512 8,965,864 Cash and short term investments: Beginning of year 30,842,180 18,850,668 9,884,804 End of year $ 20,677,629 $ 30,842,180 $ 18,850,668 The company paid federal income tax of $4,100,000 in 2015, $3,550,000 in 2014 and $2,488,300 in 2013. See accompanying notes to statutory financial statements. 6

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY Notes to Statutory Financial Statements December 31, 2015, 2014 and 2013 (in US Dollars) (1) Nature of Operations Foresters Life Insurance and Annuity Company (formerly First Investors Life Insurance Company) (the Company ) is a wholly-owned subsidiary of Foresters Financial Holding Company, Inc. (formerly First Investors Consolidated Corporation) ( FFHC ). The Company predominately writes variable and fixed annuity and variable life insurance products along with traditional life insurance and other accident and health insurance. In addition, the Company sponsors segregated investment trusts registered under the Investment Company Act of 1940. The principal affiliates of the Company are: Foresters Financial Services, Inc. (formerly First Investors Corporation) ( Broker-Dealer ), Foresters Investment Management Company, Inc. (formerly First Investors Management Company, Inc.) ( Mutual Fund Management Company ), Foresters Investor Services, Inc. (formerly Administrative Data Management Corporation) ( Transfer Agent ), and Foresters Advisory Services, LLC (formerly First Investors Advisory Services, LLC). FFHC is a wholly-owned subsidiary of The Independent Order of Foresters ( Foresters ). (2) Basis of Presentation The financial statements of the Company are presented on the basis of accounting practices prescribed or permitted by the New York State Department of Financial Services ( NYDFS ). The NYDFS recognizes only statutory accounting practices prescribed or permitted by the state of New York for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under the New York Insurance Law. The State of New York has adopted the National Association of Insurance Commissioners ( NAIC ) Accounting Practices and Procedures manual, version effective January 1, 2001. This basis of presentation differs from U.S. generally accepted accounting principles ( GAAP ) in that: (a) Life insurance policy reserves are computed on the statutory valuation basis using the 1958, 1980 or 2001 CSO Mortality Table with interest rates from 2.50% to 5.25% rather than according to the Company s estimates of mortality, investment yields, withdrawals and other benefits and expenses. The fixed deferred annuity is valued using CARVM at 3.75% 5% and variable annuities are valued using VACARVM at 4% to 5.25%. On both a statutory and GAAP basis, the reserve held for old deferred annuities is equal to the funds accumulated at a current rate of 4% per annum; (b) certain expenditures, principally for furniture and equipment and agents debit balances, are not admissible and are therefore charged to surplus rather than recognized as assets; 7 (Continued)

FORESTERS LIFE INSURANCE AND ANNUITY COMPANY Notes to Statutory Financial Statements December 31, 2015, 2014 and 2013 (in US Dollars) (c) commissions and other costs of acquiring new business are expensed as incurred rather than recognized as deferred acquisition costs and amortized over the premium paying period of policies and contracts; (d) income tax effects of temporary differences are provided to the extent that the temporary differences will be realized within three years (admitted deferred tax assets); (e) the statutory asset valuation and interest maintenance reserves are recognized as liabilities rather than included in retained earnings; (f) On investment type contracts, the entire amount received from contract holders is recognized as revenue rather than just the portion of the payment deemed to be assessments against policyholder account balances; (g) investments in fixed maturities that are deemed to be available-for-sale for GAAP are recorded at amortized cost rather than estimated fair value; and (h) The statutory statements of cash flows do not classify cash flows in a manner which is consistent with GAAP. A reconciliation of net income to net cash provided by operating activities is not provided. The effects of these variances on the accompanying statutory financial statements has not been determined, but are presumed to be material. The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. (3) Other Significant Accounting Practices (a) Cash and Short-term Investments Cash and cash equivalents include short-term investments with original maturities of one year or less. The carrying amounts for cash and short-term investments approximate their fair values. Short-term investments are carried at amortized cost. (b) Bonds Bonds are reported at amortized cost. Amortization of premiums and accretion of discounts on bonds are recognized using the scientific method that 8 (Continued)