SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549


                                    FORM 10-Q

(Mark  One)
/X/   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15 (d) OF THE SECURITIES
      EXCHANGE  ACT  OF  1934

                                       OR

/  /   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE SECURITIES
      EXCHANGE  ACT  OF  1934

                  For the quarterly period ended June 30, 1999


                          Commission File No. 33-47472


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY


      Incorporated  in  Arizona                             86-0198983
                                                           IRS  Employer
                                                         Identification  No.

             1 SunAmerica Center, Los Angeles, California 90067-6022
       Registrant's telephone number, including area code:  (310) 772-6000


     INDICATE  BY  CHECK  MARK  WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED  TO  BE FILED BY SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934  DURING  THE  PRECEDING  12  MONTHS  (OR  FOR  SUCH SHORTER PERIOD THAT THE
REGISTRANT  WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING  REQUIREMENTS  FOR  THE  PAST  90  DAYS  Yes  X  No  ___
                                                    --

     THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK ON AUGUST
16,  1999  WAS  AS  FOLLOWS:

Common  Stock  (par  value  $1,000 per share)           3,511 shares outstanding






















































<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                                      INDEX



                                                                 Page
                                                               Number(s)
                                                               ---------
<S>                                                            <C>
Part I - Financial Information

      Consolidated Balance Sheet (Unaudited) -
      June 30, 1999 and December 31, 1998                            3-4

      Consolidated Statement of Income and Comprehensive
      Income (Unaudited) - Three Months and Six Months Ended
      June 30, 1999 and 1998                                           5

      Consolidated Statement of Cash Flows (Unaudited) -
      Six Months Ended June 30, 1999 and 1998                        6-7

      Notes to Consolidated Financial Statements (Unaudited)        8-12

      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                          13-29

      Quantitative and Qualitative Disclosures About
      Market Risk                                                     30

Part II - Other Information                                           31



























































</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)


                                                     June 30,     December 31,
                                                         1999             1998
                                              ---------------  ---------------
<S>                                           <C>              <C>
ASSETS

Investments:
  Cash and short-term investments             $ 1,292,171,000  $ 3,303,454,000
  Bonds, notes and redeemable
    preferred stocks available for sale,
    at fair value (amortized cost:
    June 1999, $5,810,948,000;
    December 1998, $4,252,740,000)              5,668,697,000    4,248,840,000
  Mortgage loans                                  619,470,000      388,780,000
  Policy loans                                    306,857,000      320,688,000
  Common stocks available for sale, at fair
    value (cost: June 1999, $1,368,000;
    December 1998, $1,409,000)                      2,020,000        1,419,000
  Partnerships                                     57,820,000        4,577,000
  Real estate                                      24,000,000       24,000,000
  Other invested assets                           126,749,000       15,185,000
                                              ---------------  ---------------

  Total investments                             8,097,784,000    8,306,943,000

Variable annuity assets held in separate
  accounts                                     16,659,779,000   13,767,213,000
Accrued investment income                          83,937,000       73,441,000
Deferred acquisition costs                      1,014,372,000      866,053,000
Receivable from brokers for sales of
  securities                                              ---       22,826,000
Other assets                                      102,496,000      109,857,000
                                              ---------------  ---------------

TOTAL ASSETS                                  $25,958,368,000  $23,146,333,000
                                              ===============  ===============
















































See accompanying notes
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                     CONSOLIDATED BALANCE SHEET (Continued)
                                   (Unaudited)


                                                     June 30,      December 31,
                                                         1999              1998
                                             ----------------  ----------------
<S>                                          <C>               <C>
LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts       $ 5,388,378,000   $ 5,453,476,000
  Reserves for universal life insurance
    contracts                                  2,320,672,000     2,339,199,000
  Reserves for guaranteed investment
    contracts                                    306,343,000       353,137,000
  Payable to brokers for purchases of
    securities                                    46,778,000               ---
  Income taxes currently payable                  12,033,000        11,123,000
  Other liabilities                              224,771,000       160,020,000
                                             ----------------  ----------------

  Total reserves, payables
    and accrued liabilities                    8,298,975,000     8,316,955,000
                                             ----------------  ----------------

Variable annuity liabilities related to
  separate accounts                           16,659,779,000    13,767,213,000
                                             ----------------  ----------------

Subordinated notes payable to affiliates          42,868,000       209,367,000
                                             ----------------  ----------------

Deferred income taxes                             20,227,000       105,772,000
                                             ----------------  ----------------

Shareholder's equity:
  Common Stock                                     3,511,000         3,511,000
  Additional paid-in capital                     549,110,000       378,674,000
  Retained earnings                              449,612,000       366,460,000
  Accumulated other comprehensive loss           (65,714,000)       (1,619,000)
                                             ----------------  ----------------

  Total shareholder's equity                     936,519,000       747,026,000
                                             ----------------  ----------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY   $25,958,368,000   $23,146,333,000
                                             ================  ================








































See accompanying notes
</TABLE>


                                        4
<PAGE>

<TABLE>
<CAPTION>

                              ANCHOR NATIONAL LIFE INSURANCE COMPANY
                    CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
                 For the three months and six months ended June 30, 1999 and 1998
                                           (Unaudited)

                                             Three  Months                    Six  Months
                                    ----------------------------    -----------------------------
                                             1999           1998             1999            1998
                                    -------------   ------------    -------------    ------------


<S>                                 <C>             <C>             <C>             <C>
Investment income                   $ 143,535,000   $  47,869,000   $ 273,892,000   $102,371,000
                                    --------------  --------------  --------------  -------------

Interest expense on:
  Fixed annuity contracts             (69,053,000)    (28,214,000)   (133,618,000)   (55,073,000)
  Universal life insurance
    contracts                         (30,018,000)            ---     (60,189,000)           ---
  Guaranteed investment contracts      (4,608,000)     (4,544,000)     (9,766,000)    (9,036,000)
  Senior indebtedness                         ---        (237,000)       (198,000)      (389,000)
  Subordinated notes payable to
    affiliates                          1,684,000        (752,000)     (1,769,000)    (1,516,000)
                                    --------------  --------------  --------------  -------------

  Total interest expense             (101,995,000)    (33,747,000)   (205,540,000)   (66,014,000)
                                    --------------  --------------  --------------  -------------

NET INVESTMENT INCOME                  41,540,000      14,122,000      68,352,000     36,357,000
                                    --------------  --------------  --------------  -------------

NET REALIZED INVESTMENT
  GAINS (LOSSES)                       (7,688,000)      2,674,000      (6,804,000)     4,971,000
                                    --------------  --------------  --------------  -------------

Fee income:
  Variable annuity fees                74,319,000      53,850,000     141,264,000    101,148,000
  Net retained commissions             13,235,000      13,066,000      26,192,000     25,304,000
  Asset management fees                10,385,000       7,707,000      19,664,000     14,850,000
  Universal life insurance fees         7,264,000             ---      13,641,000            ---
  Surrender charges                     4,324,000       2,150,000       8,703,000      4,016,000
  Other fees                            7,304,000       1,103,000      11,050,000      1,765,000
                                    --------------  --------------  --------------  -------------

TOTAL FEE INCOME                      116,831,000      77,876,000     220,514,000    147,083,000
                                    --------------  --------------  --------------  -------------

GENERAL AND ADMINISTRATIVE
  EXPENSES                            (41,486,000)    (24,103,000)    (77,976,000)   (48,554,000)
                                    --------------  --------------  --------------  -------------

AMORTIZATION OF DEFERRED
  ACQUISITION COSTS                   (28,272,000)    (24,896,000)    (55,876,000)   (43,273,000)
                                    --------------  --------------  --------------  -------------

ANNUAL COMMISSIONS                     (9,070,000)     (5,027,000)    (18,158,000)    (9,175,000)
                                    --------------  --------------  --------------  -------------

PRETAX INCOME                          71,855,000      40,646,000     130,052,000     87,409,000

Income tax expense                    (25,891,000)    (15,053,000)    (46,900,000)   (31,505,000)
                                    --------------  --------------  --------------  -------------

NET INCOME                             45,964,000      25,593,000      83,152,000     55,904,000
                                    --------------  --------------  --------------  -------------

OTHER COMPREHENSIVE INCOME, NET
  OF TAX:
  Net unrealized gains (losses)
    on debt and equity securities
    available for sale identified
    in the current period             (46,639,000)         26,000     (66,421,000)       625,000
  Less reclassification
    adjustment for net
    realized losses (gains)
    included in net income              2,344,000      (2,023,000)      2,326,000     (3,635,000)
                                    --------------  --------------  --------------  -------------

  OTHER COMPREHENSIVE LOSS            (44,295,000)     (1,997,000)    (64,095,000)    (3,010,000)
                                    --------------  --------------  --------------  -------------

COMPREHENSIVE INCOME                $   1,669,000   $  23,596,000   $  19,057,000   $ 52,894,000
                                    ==============  ==============  ==============  =============




See accompanying notes
</TABLE>


                                        5

<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 For the six months ended June 30, 1999 and 1998
                                   (Unaudited)


                                                         1999              1998
                                             ----------------  ----------------
<S>                                          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                   $    83,152,000   $    55,904,000
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Interest credited to:
      Fixed annuity contracts                    133,618,000        55,073,000
      Universal life insurance contracts          60,189,000               ---
      Guaranteed investment contracts              9,766,000         9,036,000
    Net realized investment losses (gains)         6,804,000        (4,971,000)
    Accretion of net discounts on
      investments                                 (2,707,000)         (830,000)
    Universal life insurance fees                (13,641,000)              ---
    Amortization of goodwill                         714,000           614,000
    Provision for deferred income taxes          (51,032,000)       (4,457,000)
Change in:
  Accrued investment income                      (10,496,000)       (3,921,000)
  Deferred acquisition costs                    (109,219,000)      (71,047,000)
  Other assets                                     6,647,000       (11,447,000)
  Income taxes currently payable                     910,000         9,052,000
  Other liabilities                               73,204,000        (4,798,000)
Other, net                                         2,053,000           (16,000)
                                             ----------------  ----------------

NET CASH PROVIDED BY OPERATING
  ACTIVITIES                                     189,962,000        28,192,000
                                             ----------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of:
  Bonds, notes and redeemable preferred
    stocks                                    (3,661,629,000)   (1,113,743,000)
  Mortgage loans                                (250,751,000)      (92,114,000)
  Other investments, excluding short-term
    investments                                 (162,212,000)              ---
Sales of:
  Bonds, notes and redeemable preferred
    stocks                                     1,564,138,000       728,422,000
  Other investments, excluding short-term
    investments                                    6,705,000            97,000
Redemptions and maturities of:
  Bonds, notes and redeemable preferred
    stocks                                       590,792,000       201,043,000
  Mortgage loans                                  20,531,000        49,594,000
  Other investments, excluding short-term
    investments                                   18,099,000         1,009,000
                                             ----------------  ----------------

NET CASH USED BY INVESTING ACTIVITIES         (1,874,327,000)     (225,692,000)
                                             ----------------  ----------------






























See accompanying notes
</TABLE>


                                        6

<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
                 For the six months ended June 30, 1999 and 1998
                                   (Unaudited)


                                                       1999             1998
                                          -----------------  ---------------
<S>                                       <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Premium receipts on:
  Fixed annuity contracts                 $  1,004,138,000   $  785,056,000
  Universal life insurance contracts            38,025,000              ---
Net exchanges from the fixed
  accounts of variable annuity contracts      (818,916,000)    (674,927,000)
Withdrawal payments on:
  Fixed annuity contracts                     (389,215,000)    (102,644,000)
  Universal life insurance contracts           (38,877,000)             ---
  Guaranteed investment contracts               (9,374,000)      (8,174,000)
Claims and annuity payments on:
  Fixed annuity contracts                      (49,984,000)     (21,818,000)
  Universal life insurance contracts           (58,199,000)             ---
Net repayments of other short-term
  financings                                    (4,516,000)      (7,249,000)
Capital contributions received                         ---      200,409,000
Dividends paid                                         ---      (51,200,000)
                                          -----------------  ---------------

NET CASH PROVIDED/(USED) BY FINANCING
  ACTIVITIES                                  (326,918,000)     119,453,000
                                          -----------------  ---------------

NET DECREASE IN CASH AND SHORT-TERM
  INVESTMENTS                               (2,011,283,000)     (78,047,000)

CASH AND SHORT-TERM INVESTMENTS AT
  BEGINNING OF PERIOD                        3,303,454,000      264,176,000
                                          -----------------  ---------------

CASH AND SHORT-TERM INVESTMENTS AT
  END OF PERIOD                           $  1,292,171,000   $  186,129,000
                                          =================  ===============

SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid on indebtedness             $        833,000   $    1,603,000
                                          =================  ===============


Income taxes paid, net of refunds         $     74,499,000   $   26,792,000
                                          =================  ===============

</TABLE>



SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH  TRANSACTION:

On  June  30,  1999,  the Company's parent forgave the $170,436,000 surplus note
(included  in  Subordinated  Notes  Payable  to  Affiliates  in the accompanying
consolidated  balance  sheet  at  December  31,  1998) issued in its favor.  The
Company  has  reclassified  this  amount  to  Additional  Paid-In  Capital.





























                             See accompanying notes

                                        7
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.     Basis  of  Presentation
       -----------------------

     At  December  31,  1998,  Anchor  National  Life  Insurance  Company  (the
"Company")  was a wholly owned indirect subsidiary of SunAmerica Inc. On January
1, 1999, SunAmerica Inc. merged with and into American International Group, Inc.
("AIG")  in  a  tax-free  reorganization  that  has been treated as a pooling of
interests for accounting purposes. Thus, SunAmerica Inc. ceased to exist on that
date.  However,  on  the  date of merger, substantially all of the net assets of
SunAmerica  Inc.  were  contributed  to  a  newly formed subsidiary of AIG named
SunAmerica  Inc.  ("SunAmerica").

In the opinion of the Company, the accompanying unaudited consolidated financial
statements  contain  all  adjustments  (consisting  of  only  normal  recurring
accruals)  necessary  to  present  fairly  the  Company's consolidated financial
position  as  of  June  30,  1999  and  December  31,  1998,  the results of its
consolidated  operations for the three months and six months ended June 30, 1999
and  1998 and its consolidated cash flows for the six months ended June 30, 1999
and  1998.  The  results of operations for the three months and six months ended
June  30,  1999 are not necessarily indicative of the results to be expected for
the  full  year.

The  Company  has  changed its fiscal year end from September 30 to December 31.
The  accompanying  unaudited consolidated financial statements should be read in
conjunction  with  the  audited consolidated financial statements for the fiscal
year  ended September 30, 1998, contained in the Company's Annual Report on Form
10-K,  and  the  unaudited  consolidated  financial statements as of and for the
three  months  ended  December  31,  1998, contained in the Company's Transition
Report  on  Form  10-Q.  Certain  items have been reclassified to conform to the
current  period's  presentation.

2.     Reinsurance
       -----------

On  December 31, 1998, the Company acquired the individual life business and the
individual  and  group  annuity business of MBL Life Assurance Corporation ("MBL
Life"),  via  a  100%  coinsurance  transaction,  for  a  cash purchase price of
$128,420,000.  As  part  of this transaction, the Company acquired assets having
an aggregate fair value of $5,718,227,000, composed primarily of invested assets
totaling  $5,715,010,000.  Liabilities  assumed  in  this  acquisition  totaled
$5,831,266,000,  including  $3,460,503,000  of  fixed  annuity  reserves,
$2,317,365,000  of  universal  life  reserves  and  $24,011,000  of  guaranteed
investment  contract  reserves.  The  excess of the purchase price over the fair
value  of  net  assets received amounted to $118,427,000 at June 30, 1999 and is
included  in Deferred Acquisition Costs in the accompanying consolidated balance
sheet.  The income statements for the three months and six months ended June 30,
1999  include the impact of the Acquisition.  On a pro forma basis, assuming the
Acquisition  had  been  consummated  on  January  1,  1998, the beginning of the
prior-year  periods  discussed  herein,  investment  income  would  have  been
$127,615,000  and  net  income  would have been $31,310,000 for the three months
ended  June 30, 1998.  For the six months ended June 30, 1998, investment income
would  have  been  $261,863,000  and  net  income  would  have been $66,762,000.








































                                        8
<PAGE>
2.     Reinsurance  (Continued)
       -----------

     This  business  was  assumed  from MBL Life subject to existing reinsurance
ceded  agreements.  At  December  31,  1998, the maximum retention on any single
life was $2,000,000, and a total credit of $5,057,000 was taken against the life
insurance  reserves,  representing  predominantly  yearly  renewable  term
reinsurance.  In  order to limit even further the exposure to loss on any single
life and to recover an additional portion of the benefits paid over such limits,
the  Company entered into a monthly renewable term reinsurance treaty, effective
January  1,  1999, under which the Company retains no more than $100,000 of risk
on any one insured life.  At June 30, 1999, a total reserve credit of $4,773,000
was taken against the life insurance reserves. With respect to these coinsurance
agreements, the Company could become liable for all obligations of the reinsured
policies if the reinsurers were to become unable to meet the obligations assumed
under  the  respective  reinsurance  agreements.

     Included  in  the block of business acquired from MBL Life was $282,946,000
of  individual  life  business  and $404,563,000 of group annuity business whose
contract  owners  are residents of New York State (the "New York Business").  On
July  1,  1999,  the  New  York  Business was acquired by the Company's New York
affiliate,  First  SunAmerica  Life Insurance Company ("FSA"), via an assumption
reinsurance  agreement and the remainder of the business converted to assumption
reinsurance  which  superseded  the  coinsurance  arrangement.

The  $128,420,000  purchase  price will be allocated between the Company and FSA
based  on the estimated future gross profits of the two blocks of business.  The
portion  to  be  allocated  to  FSA  will  be  approximately  $10,000,000.

     On  December 31, 1998, the Company recaptured the business previously ceded
through  a modified coinsurance transaction to ANLIC Insurance Company (Cayman).
As  part  of  this recapture, the Company paid cash of $170,436,000 and restored
$167,202,000  of deferred acquisition costs ("DAC") that had been written off at
the  inception of the transaction, with the balance of $3,234,000 being recorded
as  DAC  amortization  in  the  income  statement.

3.     Capital  Contributions
       ----------------------

On  December  31, 1998, the Parent contributed additional capital of $70,000,000
to  the  Company.

On  December  30,  1998,  the  Company  received  cash  totaling $170,436,000 in
exchange  for issuance of a surplus note (the "Note") payable to SunAmerica Life
Insurance  Company (the "Parent"), which Note was included in Subordinated Notes
Payable  to  Affiliates  at  December  31, 1998 in the accompanying consolidated
balance  sheet.  The Note bore interest at a rate of 7%, beginning on January 1,
1999.

On  June  30,  1999,  the  Parent  cancelled  the  Note  and funds received were
reclassified  to  Additional  Paid-in  Capital  in the accompanying consolidated
balance  sheet.  Also  on  June  30, 1999, the Parent forgave the total interest
earned  on  the Note of $4,971,000, of which $2,983,000 was included in Interest
Expense  on  Subordinated Notes Payable to Affiliates in the consolidated income
statement  in  the  quarter ended March 31, 1999.  Accordingly, the accompanying
consolidated income statement reflects a $2,983,000 reversal of interest expense
in  Interest  Expense on Subordinated Notes Payable to Affiliates in the quarter
ended  June  30,  1999.





































                                        9
<PAGE>
4.     Adoption  of  New  Accounting  Standard
       ---------------------------------------

Effective October 1, 1998, the Company adopted Statement of Financial Accounting
Standards  No. 130, "Reporting Comprehensive Income" ("SFAS 130") which requires
the reporting of comprehensive income in addition to net income from operations.
Comprehensive  income  is  a more inclusive financial reporting methodology that
includes  disclosure  of certain financial information that historically has not
been  recognized in the calculation of net income.  The adoption of SFAS 130 did
not  have  an impact on the Company's results of operations, financial condition
or  liquidity.  Comprehensive income amounts for the prior year are presented to
conform  to  the current year's presentation.  Net unrealized losses on debt and
equity  securities  available  for sale increased by $44,295,000 and $64,095,000
during  the  three months and six months ended June 30, 1999, respectively.  Net
unrealized  gains  on debt and equity securities available for sale decreased by
$1,997,000  and $3,010,000 during the three months and six months ended June 30,
1998,  respectively.
















































































                                       10
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

4.     Adoption  of  New  Accounting  Standard  (continued)
       ---------------------------------------

The  before tax, after tax, and tax benefit (expense) amounts for each component
of  the  increase  or  decrease in unrealized losses or gains on debt and equity
securities  available  for  sale  for  both  the  current  and prior periods are
summarized  below:
<TABLE>
<CAPTION>

                                                 Tax  Benefit
                                     Before  Tax   (Expense)      Net  of  Tax
                                    -------------  ----------    -------------

     THREE  MONTHS  ENDED  JUNE  30,

1999:
<S>                                 <C>            <C>           <C>
  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period                    $(93,193,000)  $32,618,000   $(60,575,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period                21,441,000    (7,505,000)    13,936,000
                                    -------------  ------------  -------------

  Subtotal                           (71,752,000)   25,113,000    (46,639,000)
                                    -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized losses included
      in net income                    5,947,000    (2,081,000)     3,866,000
  Related change in deferred
    acquisition costs                 (2,341,000)      819,000     (1,522,000)
                                    -------------  ------------  -------------
    Total reclassification
      adjustment                       3,606,000    (1,262,000)     2,344,000
                                    -------------  ------------  -------------

  Total other comprehensive loss    $(68,146,000)  $23,851,000   $(44,295,000)
                                    =============  ============  =============

  THREE MONTHS ENDED JUNE 30,
  1998:

  Net unrealized gains on debt
  and equity securities available
  for sale identified in the
  current period                    $    (59,000)  $    21,000   $    (38,000)

  Decrease in deferred acquisition
    cost adjustment identified in
    the current period                   100,000       (36,000)        64,000
                                    -------------  ------------  -------------

  Subtotal                                41,000       (15,000)        26,000
                                    -------------  ------------  -------------

  Reclassification adjustment for:
    Net realized gains included
      in net income                   (4,913,000)    1,720,000     (3,193,000)
  Related change in deferred
    acquisition costs                  1,800,000      (630,000)     1,170,000
                                    -------------  ------------  -------------
    Total reclassification
      adjustment                      (3,113,000)    1,090,000     (2,023,000)
                                    -------------  ------------  -------------

  Total other comprehensive loss    $ (3,072,000)  $ 1,075,000   $ (1,997,000)
                                    =============  ============  =============

</TABLE>

















                                       11

<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

4.     Adoption  of  New  Accounting  Standard  (continued)
       ---------------------------------------
<TABLE>
<CAPTION>

                                                   Tax  Benefit
                                     Before  Tax     (Expense)      Net  of  Tax
                                    -------------   -----------    -------------

     SIX  MONTHS  ENDED  JUNE  30,

1999:
<S>                                 <C>             <C>            <C>
  Net unrealized losses on debt
  and equity securities available
  for sale identified in the
  current period                    $(143,300,000)  $ 50,155,000   $(93,145,000)

  Increase in deferred acquisition
    cost adjustment identified in
    the current period                 41,112,000    (14,388,000)    26,724,000
                                    --------------  -------------  -------------

  Subtotal                           (102,188,000)    35,767,000    (66,421,000)
                                    --------------  -------------  -------------

  Reclassification adjustment for:
    Net realized losses included
      in net income                     5,591,000     (1,957,000)     3,634,000
    Related change in deferred
      acquisition costs                (2,012,000)       704,000     (1,308,000)
                                    --------------  -------------  -------------
    Total reclassification
      adjustment                        3,579,000     (1,253,000)     2,326,000
                                    --------------  -------------  -------------

  Total other comprehensive loss    $ (98,609,000)  $ 34,514,000   $(64,095,000)
                                    ==============  =============  =============

  SIX MONTHS ENDED JUNE 30,
  1998:

  Net unrealized gains on debt
  and equity securities available
  for sale identified in the
  current period                    $   1,152,000   $   (403,000)  $    749,000

  Decrease in deferred acquisition
    cost adjustment identified in
    the current period                   (193,000)       69,000       (124,000)
                                    --------------  -------------  -------------

  Subtotal                                959,000       (334,000)       625,000
                                    --------------  -------------  -------------

  Reclassification adjustment for:
    Net realized gains included
      in net income                    (8,885,000)     3,110,000     (5,775,000)
    Related change in deferred
      acquisition costs                 3,293,000     (1,153,000)     2,140,000
                                    --------------  -------------  -------------
    Total reclassification
      adjustment                       (5,592,000)     1,957,000     (3,635,000)
                                    --------------  -------------  -------------

  Total other comprehensive loss    $  (4,633,000)  $  1,623,000   $ (3,010,000)
                                    ==============  =============  =============

</TABLE>























                                       12
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Management's  discussion and analysis of financial condition and results of
operations  of  Anchor  National  Life Insurance Company (the "Company") for the
three  months and six months ended June 30, 1999 and June 30, 1998 follows.  The
Company  has  changed  its  fiscal  year  end  to December 31.  Accordingly, the
quarter  ended  December  31,  1998  was  a  transition  period.

     In  connection  with the "safe harbor" provisions of the Private Securities
Litigation  Reform  Act  of 1995, the Company cautions readers regarding certain
forward-looking  statements contained in this report and in any other statements
made by, or on behalf of, the Company, whether or not in future filings with the
Securities  and  Exchange Commission (the "SEC"). Forward-looking statements are
statements  not  based  on  historical  information  and  which relate to future
operations,  strategies,  financial  results, or other developments.  Statements
using verbs such as "expect," "anticipate," "believe" or words of similar import
generally  involve  forward-looking statements.  Without limiting the foregoing,
forward-looking  statements  include  statements  which  represent the Company's
beliefs  concerning  future  levels  of  sales  and redemptions of the Company's
products, investment spreads and yields, or the earnings or profitability of the
Company's  activities.

     Forward-looking  statements  are  necessarily  based  on  estimates  and
assumptions  that  are  inherently subject to significant business, economic and
competitive  uncertainties  and  contingencies,  many  of  which  are beyond the
Company's  control and many of which are subject to change.  These uncertainties
and  contingencies  could  cause  actual results to differ materially from those
expressed  in  any  forward-looking  statements  made  by,  or on behalf of, the
Company.  Whether  or  not actual results differ materially from forward-looking
statements  may  depend  on numerous foreseeable and unforeseeable developments.
Some  may  be national in scope, such as general economic conditions, changes in
tax  law  and  changes  in interest rates.  Some may be related to the insurance
industry  generally,  such  as  pricing competition, regulatory developments and
industry  consolidation.  Others may relate to the Company specifically, such as
credit,  volatility  and  other  risks  associated with the Company's investment
portfolio.  Investors  are  also  directed  to  consider  other  risks  and
uncertainties  discussed  in  documents  filed by the Company with the SEC.  The
Company  disclaims  any  obligation  to  update  forward-looking  information.

RESULTS  OF  OPERATIONS

     NET  INCOME  totaled  $46.0 million in the second quarter of 1999, compared
with  $25.6  million  in  the  second  quarter of 1998.  For the six months, net
income  amounted  to $83.2 million in 1999, compared with $55.9 million in 1998.
On  December 31, 1998, the Company acquired the individual life business and the
individual  and  group  annuity  business of MBL Life Assurance Corporation (the
"Acquisition").  The  Acquisition was accounted for under the purchase method of
accounting,  and,  therefore,  results  of  operations  include  those  of  the
Acquisition  only  from  its  date  of acquisition.  Consequently, the operating
results  for  1999 and 1998 are not comparable.  On a pro forma basis, using the
historical  financial information of the acquired business and assuming that the
Acquisition  had  been  consummated  on  January  1,  1998, the beginning of the
prior-year  periods  discussed  herein, net income would have been $31.3 million
and  $66.8  million  for  the  second  quarter  and  the  six  months  of  1998,
respectively.







































                                       13
<PAGE>

     PRETAX INCOME totaled $71.9 million in the second quarter of 1999 and $40.6
million  in  the  second  quarter  of  1998.  For  the six months, pretax income
totaled  $130.1  million  in  1999,  compared  with  $87.4  million in 1998. The
significant improvements in 1999 over 1998 primarily resulted from increased fee
income  and  net  investment  income,  which  were partially offset by increased
general  and  administrative  expenses,  increased  amortization  of  deferred
acquisition  costs  ("DAC"),  and  net  realized  investment  losses in the 1999
periods.

     NET  INVESTMENT  INCOME,  which  is the spread between the income earned on
invested  assets  and  the  interest  paid  on  fixed  annuities  and  other
interest-bearing  liabilities,  totaled  $41.5  million in the second quarter of
1999,  up from $14.1 million in the second quarter of 1998.  These amounts equal
2.03% on average invested assets (computed on a daily basis) of $8.19 billion in
the second quarter of 1999 and 2.18% on average invested assets of $2.59 billion
in  the  second  quarter  of  1998.  For  the  six months, net investment income
increased to $68.4 million in 1999 from $36.4 million in 1998, equaling 1.66% of
average  invested  assets of $8.25 billion in 1999 and 2.84% of average invested
assets of $2.56 billion in 1998.  On a pro forma basis, assuming the Acquisition
had  been  consummated  on  January  1,  1998,  net investment income on related
average  invested  assets  would have been 0.90% and 1.10% in the second quarter
and  six  months  of 1998, respectively.  The improvement of 1999 net investment
income  over  these pro forma amounts reflects a redeployment of assets received
in  the  Acquisition  into  higher  yielding  investment  categories.

     Net  investment  spreads  include  the  effect  of  income  earned  on  the
difference  between  average  invested  assets  and  average  interest-bearing
liabilities.  In  the  second  quarter, average invested assets exceeded average
interest-bearing  liabilities  by  $148.4  million in 1999, compared with $139.5
million  1998.  The  difference  between the Company's yield on average invested
assets  and  the  rate paid on average interest-bearing liabilities (the "Spread
Difference")  was  1.94%  in  the second quarter of 1999 and 1.88% in the second
quarter  of  1998.  On  a  pro  forma  basis,  assuming the Acquisition had been
consummated  on  January 1, 1998, the Spread Difference would have been 0.90% in
the  second  quarter  of  1998,  reflecting  primarily  the  effect of the lower
yielding  assets  received  in  the  Acquisition.

     For  the  six  months,  average  invested  assets  exceeded  average
interest-bearing  liabilities  by  $118.1  million in 1999, compared with $122.6
million in 1998.  The Spread Difference was 1.59% in 1999 and 2.58% in 1998.  On
a  pro  forma basis, assuming the Acquisition had been consummated on January 1,
1998,  the  Spread  Difference  would  have  been  1.12% in 1998, also primarily
reflecting  the effect of the lower yielding assets received in the Acquisition.

     Investment  income  (and  the  related  yields  on average invested assets)
totaled  $143.5  million  (7.01%)  in  the second quarter of 1999, $47.9 million
(7.38%)  in the second quarter of 1998, $273.9 million (6.64%) in the six months
of  1999  and  $102.4  million  (7.99%)  in  the  six  months of 1998.  Both the
significant  increases  in  investment  income  and the decreases in the related
yields  in 1999 as compared with 1998 principally resulted from the Acquisition.
The  invested  assets  associated  with  the  Acquisition  included  high-grade
corporate,  government  and  government/agency  bonds  and  cash  and short-term
investments,  which  are  generally lower yielding than a significant portion of
the  invested assets that comprise the remainder of the Company's portfolio.  On
a  pro  forma basis, assuming the Acquisition had been consummated on January 1,
1998,  the  yield  on  related average invested assets would have been 6.18% and
6.37%  in  the  second  quarter  and  six  months  of  1998, respectively.   The
improvement  in  1999  yields  over  these  pro  forma





































                                       14
<PAGE>

1998  yields  primarily  reflects  a  redeployment of the assets received in the
Acquisition  into  higher  yielding  investment  categories.

     Investment  income  and  related  yields  in  all  periods also reflect the
Company's  investments in limited partnerships.  Partnership income increased to
$1.5  million  (a  yield of 8.71% on related average assets of $67.2 million) in
the  second  quarter  of  1999, from a loss of $0.7 million (a loss of 21.17% on
related average assets of $14.0 million) in the second quarter of 1998.  For the
six  months,  partnership  income amounted to $4.7 million (a yield of 20.18% on
related  average assets of $46.4 million) in 1999, compared with $6.4 million (a
yield  of  90.27%  on  related  average  assets  of  $14.1  million)  in  1998.
Partnership  income  is  based  upon  cash  distributions  received from limited
partnerships,  the  operations  of  which  the  Company  does  not  influence.
Consequently,  such income is not predictable and there can be no assurance that
the  Company  will  realize  comparable  levels  of  such  income in the future.

     Total interest expense equaled $102.0 million in the second quarter of 1999
and  $33.7  million in the second quarter of 1998.  For the six months, interest
expense  aggregated $205.5 million in 1999, compared with $66.0 million in 1998.
The  average  rate  paid  on  all  interest-bearing liabilities was 5.07% in the
second  quarter of 1999, compared with 5.50% in the second quarter of 1998.  For
the  six  months,  the average rate paid on all interest-bearing liabilities was
5.05%  for 1999 and 5.41% for 1998.  Interest-bearing liabilities averaged $8.05
billion  during  the  second  quarter  of  1999, $2.45 billion during the second
quarter  of  1998, $8.13 billion during the six months of 1999 and $2.44 billion
during  the  six  months  of  1998.  Total  interest expense in 1999 and related
average  rates  paid  reflect  the  effects  of the Acquisition.  On a pro forma
basis,  assuming  the  Acquisition  had been consummated on January 1, 1998, the
average  rate paid on all interest-bearing liabilities would have been 5.28% and
5.25%  and  interest-bearing  liabilities  would have averaged $8.26 billion and
$8.24  billion  in the second quarter and six months of 1998, respectively.  The
decreases  in  the  overall rates paid in 1999 result primarily from a generally
lower  interest rate environment and the forgiveness of $3.0 million of interest
expense  by  the Company's direct parent, SunAmerica Life Insurance Company (the
"Parent")  (see  Note  3  of  Notes  to  Consolidated  Financial  Statements).

     GROWTH  IN  AVERAGE  INVESTED  ASSETS  since 1998 largely resulted from the
impact  of  the  Acquisition.  Changes  in  average invested assets also reflect
sales of fixed annuities and the fixed account options of the Company's variable
annuity  products  ("Fixed  Annuity  Premiums"),  and  renewal  premiums  on its
universal  life  product  ("UL Premiums") acquired in the Acquisition, partially
offset  by  net  exchanges  from  fixed  accounts  into the separate accounts of
variable  annuity contracts.  Since June 30, 1998, Fixed Annuity Premiums and UL
Premiums  have aggregated $1.86 billion.  Fixed Annuity Premiums and UL Premiums
totaled  $626.5  million  in  the  second quarter of 1999, $417.1 million in the
second  quarter  of  1998,  $1.04  billion  in the six months of 1999 and $785.1
million  in  the  six  months  of  1998  and  are largely premiums for the fixed
accounts  of  variable  annuities.  Such  premiums  have  increased  principally
because  of greater sales of the Company's variable annuity products and greater
inflows  into the one-year and six-month fixed accounts of these products, which
are used for dollar-cost averaging into the variable accounts.  Accordingly, the
Company  anticipates  that  it  will  see  a  large  portion  of  these premiums
transferred  into  the  variable  funds.  On an annualized basis, these premiums
represent  32%,  79%, 27% and 75%, respectively, of the related reserve balances
at  the  beginning  of the respective periods.  These decreases in 1999 premiums
when  expressed  as  a  percentage  of  related reserve balances result from the
impact of the Acquisition.  When premium and reserve balances resulting from the
Acquisition  are  excluded,  the  resulting  premiums  represent 112% and 93% of





































                                       15
<PAGE>

beginning fixed annuity reserve balances in the second quarter and six months of
1999,  respectively.

     There  were  no  guaranteed investment contract ("GIC") premiums in 1999 or
1998.  GIC  surrenders and maturities totaled $4.2 million in the second quarter
of  1999,  $4.0  million  in the second quarter of 1998, $9.4 million in the six
months of 1999 and $8.2 million in the six months of 1998.  The Company does not
actively  market  GICs;  consequently,  premiums  and  surrenders  may  vary
substantially  from  period to period.  The GICs issued by the Company generally
guarantee the payment of principal and interest at fixed or variable rates for a
term  of  three  to  five  years.  GICs  that  are  purchased by banks for their
long-term  portfolios  or  state and local governmental entities either prohibit
withdrawals  or  permit scheduled book value withdrawals subject to the terms of
the underlying indenture or agreement.  GICs purchased by asset management firms
for  their  short-term  portfolios  either  prohibit  withdrawals  or  permit
withdrawals  with  notice  ranging  from  90  to 270 days.  In pricing GICs, the
Company  analyzes  cash  flow  information  and prices accordingly so that it is
compensated  for  possible  withdrawals  prior  to  maturity.

     NET  REALIZED  INVESTMENT LOSSES totaled $7.7 million in the second quarter
of  1999,  compared  with  $2.7  million of net investment gains realized in the
second  quarter  of  1998  and include impairment writedowns of $1.4 million and
$0.7  million,  respectively.  Thus,  net  losses  from sales and redemptions of
investments  totaled  $6.3  million  in  the second quarter of 1999 and such net
gains  totaled  $3.4  million in the second quarter of 1998. For the six months,
net  realized investment losses totaled $6.8 million in 1999, compared with $5.0
million  of  net  investment  gains  realized  in  1998  and  include impairment
writedowns  of  $2.0  million and $2.2 million, respectively.  Thus, for the six
months,  net  losses  from  sales  and  redemptions  of investments totaled $4.8
million  in  1999, compared with $7.2 million of gains realized on the sales and
redemptions  of  investments  in  1998.

     The  Company sold or redeemed invested assets, principally bonds and notes,
aggregating  $972.7 million in the second quarter of 1999, $498.4 million in the
second  quarter  of  1998,  $2.18  billion  in the six months of 1999 and $984.3
million  in the six months of 1998.  Sales of investments result from the active
management  of  the Company's investment portfolio, including assets received as
part  of  the  Acquisition.  Because  redemptions  of  investments are generally
involuntary  and  sales  of  investments  are  made  in  both rising and falling
interest  rate  environments, net gains and losses from sales and redemptions of
investments  fluctuate  from period to period, and represent 0.31%, 0.52%, 0.12%
and  0.56%  of average invested assets in the second quarter of 1999, the second
quarter  of  1998,  the  six  months  of  1999  and  the  six  months  of  1998,
respectively.  Active  portfolio  management  involves the ongoing evaluation of
asset  sectors,  individual  securities  within the investment portfolio and the
reallocation  of  investments  from  sectors that are perceived to be relatively
overvalued  to  sectors  that  are  perceived to be relatively undervalued.  The
intent of the Company's active portfolio management is to maximize total returns
on  the  investment portfolio, taking into account credit, option, liquidity and
interest-rate  risk.

     Impairment  writedowns  represent  provisions  applied to bonds in 1999 and
1998.  On  an  annualized  basis,  impairment writedowns represent 0.07%, 0.11%,
0.05%  and  0.17%  of average invested assets in the second quarter of 1999, the
second  quarter  of  1998,  the  six  months of 1999 and the six months of 1998,
respectively.  For  the  nineteen quarters beginning October 1, 1994, impairment
writedowns  as  an annualized percentage of average invested assets have  ranged
up  to  3.06%  and  have  averaged  0.50%.  Such  writedowns  are  based




































                                       16
<PAGE>

upon  estimates  of  the  net realizable value of the applicable assets.  Actual
realization  will  be  dependent  upon  future  events.

     VARIABLE  ANNUITY  FEES are based on the market value of assets in separate
accounts supporting variable annuity contracts.  Such fees totaled $74.3 million
in  the  second quarter of 1999 and $53.9 million in the second quarter of 1998.
For  the  six  months,  variable  annuity  fees  totaled $141.3 million in 1999,
compared with $101.1 million in 1998.  The increased fees in 1999 reflect growth
in  average  variable annuity assets, principally due to the receipt of variable
annuity  premiums,  net  exchanges  into  the  separate  accounts from the fixed
accounts  of  variable  annuity contracts and increased market values, partially
offset  by  surrenders.  On an annualized basis, variable annuity fees represent
2%  of  average  variable  annuity  assets  in  all periods presented.  Variable
annuity  assets  averaged  $15.71  billion during the second quarter of 1999 and
$11.51  billion during the second quarter of 1998.  For the six months, variable
annuity  assets averaged $15.03 billion in 1999, compared with $10.88 billion in
1998.  Variable  annuity premiums, which exclude premiums allocated to the fixed
accounts  of  variable annuity products, aggregated $1.78 billion since June 30,
1998.  Variable  annuity  premiums  totaled $464.9 million and $517.3 million in
the  second  quarters  of  1999  and  1998,  respectively.  For  the six months,
variable  annuity  premiums  increased  to $949.4 million in 1999, compared with
$929.9  million  in  1998.  On an annualized basis, these amounts represent 12%,
19%, 14% and 19% of variable annuity reserves at the beginning of the respective
periods.  Transfers  from  the  fixed accounts of the Company's variable annuity
products  to the separate accounts (see "Growth in Average Invested Assets") are
not  classified  in  variable  annuity  premiums  (in  accordance with generally
accepted  accounting  principles).  Accordingly,  changes  in  variable  annuity
premiums  are not necessarily indicative of the ultimate allocation by customers
among  fixed  and  variable  account  options  of the Company's variable annuity
products.

     Sales of variable annuity products (which include premiums allocated to the
fixed  accounts)  ("Variable  Annuity Product Sales") amounted to $1.03 billion,
$934.3  million,  $1.91 billion and $1.71 billion in the second quarters of 1999
and 1998 and six months of 1999 and 1998, respectively. Variable Annuity Product
Sales  primarily  reflect sales of the Company's flagship variable annuity line,
Polaris.  The  Polaris  products  are multimanager variable annuities that offer
investors  a  choice  of  more than 25 variable funds and a number of guaranteed
fixed-rate funds.  Increases in Variable Annuity Product Sales are due, in part,
to  market share gains through enhanced distribution efforts and consumer demand
for  flexible  retirement savings products that offer a variety of equity, fixed
income  and  guaranteed  fixed  account  investment  choices.

     The  Company  has encountered increased competition in the variable annuity
marketplace  during  recent  years  and  anticipates that the market will remain
highly competitive for the foreseeable future.  Also, from time to time, Federal
initiatives  are  proposed  that could affect the taxation of variable annuities
and  annuities  generally  (See  "Regulation").

     NET  RETAINED  COMMISSIONS  are  primarily  derived from commissions on the
sales  of  nonproprietary  investment  products  by  the Company's broker-dealer
subsidiaries,  after  deducting the substantial portion of such commissions that
is  passed  on  to registered representatives.  Net retained commissions totaled
$13.2  million  in  the  second  quarter of 1999 and $13.1 million in the second
quarter of 1998.  For the six months, net retained commissions amounted to $26.2
million  and  $25.3  million in 1999 and 1998, respectively. Broker-dealer sales
(mainly  sales  of general securities, mutual funds and annuities) totaled $3.67
billion in the second quarter of 1999, $3.05 billion  in  the  second quarter of
1998,  $7.15  billion  in  the  six  months  of





































                                       17
<PAGE>

1999  and $7.36 billion in the six months of 1999.  Fluctuations in net retained
commissions  may  not be proportionate to fluctuations in sales primarily due to
changes  in  sales  mix.

     ASSET  MANAGEMENT  FEES,  which  include investment advisory fees and 12b-1
distribution  fees,  are  based  on the market value of assets managed in mutual
funds  by  SunAmerica Asset Management Corp.  Such fees totaled $10.4 million on
average  assets  managed of $3.99 billion in the second quarter of 1999 and $7.7
million  on  average  assets  managed  of $3.01 billion in the second quarter of
1998.  For  the  six  months,  asset  management  fees  totaled $19.7 million on
average  assets managed of $3.83 billion in 1999, compared with $14.9 million on
average  assets  managed of $2.90 billion in 1998. Asset management fees are not
necessarily  proportionate to average assets managed, principally due to changes
in  product  mix.  Sales  of  mutual  funds,  excluding  sales  of  money market
accounts,  have aggregated $1.11 billion since June 30, 1998.  Mutual fund sales
totaled  $354.3  million in the second quarter of 1999 and $241.5 million in the
second  quarter  of  1998.  For  the  six  months, mutual fund sales amounted to
$650.0  million  in  1999 and $435.4 million in 1998.  The increases in sales in
1999  largely  resulted  from  increased  sales  of  the Company's "Style Select
Series"  product  and the introduction in June 1998 of the "Dogs" of Wall Street
fund.  The  "Style  Select  Series"  is  a  group  of mutual funds that are each
managed  by  three industry-recognized fund managers.  The "Dogs" of Wall Street
fund  contains  30 large capitalization value stocks that are selected by strict
criteria.  Sales  of these products totaled $232.5 million in the second quarter
of 1999, $181.1 million in the second quarter of 1998, $439.9 million in the six
months  of  1999  and  $315.6 million in the six months of 1998.  Redemptions of
mutual funds, excluding redemptions of money market accounts, amounted to $142.7
million  in  the second quarter of 1999, $112.5 million in the second quarter of
1998,  $283.5  million  in  the six months of 1999 and $221.3 million in the six
months  of  1998,  which,  annualized,  represent 17.9%, 18.7%, 18.4% and 19.1%,
respectively,  of  average  related  mutual  fund  assets.

     UNIVERSAL LIFE INSURANCE FEES result from the acquisition of universal life
insurance  contract reserves and the ongoing receipt of renewal premiums on such
contracts,  and  comprise net mortality gains or losses, up-front fees earned on
premiums  received  and  administrative  fees  on such contracts. Universal life
insurance  fees amounted to $7.3 million and $13.6 million in the second quarter
and  six  months  of  1999, respectively.  For the six months of 1999, such fees
annualized  represent  8.1%  of  average  reserves  for universal life insurance
contracts.  Since  the  Acquisition occurred on December 31, 1998, there were no
such  fees  earned  in  1998.

     SURRENDER  CHARGES  on  fixed  and variable annuity contracts and universal
life  contracts  totaled  $4.3  million in the second quarter of 1999 (including
$0.6  million  attributable  to  the Acquisition) and $2.2 million in the second
quarter  of  1998.  For  the  six  months,  such  surrender charges totaled $8.7
million  in  1999  (including  $1.6 million attributable to the Acquisition) and
$4.0  million  in 1998.  Surrender charges generally are assessed on withdrawals
at  declining  rates  during  the  first  seven years of a contract.  Withdrawal
payments  in the second quarter totaled $454.6 million in 1999 (including $121.8
million  attributable to the Acquisition), compared with $309.4 million in 1998.
For  the  six  months,  withdrawal  payments  totaled  $872.7  million  in  1999
(including $199.4 million attributable to the Acquisition) and $609.9 million in
1998.  Annualized,  these  payments  when  expressed  as a percentage of average
fixed  and  variable  annuity  and  universal life reserves represent 7.8% (8.9%
attributable  to  the  Acquisition),  9.2%,  7.7%  (7.1%  attributable  to  the
Acquisition) and 9.4% for the second quarters of 1999 and 1998 and six months of
1999  and  1998, respectively.  Withdrawals include variable annuity withdrawals
from  the  separate  accounts  totaling $305.0 million (7.8% of average variable
annuity



































                                       18
<PAGE>

reserves),  $258.8  million  (9.0% of average variable annuity reserves), $604.0
million  (8.0% of average variable annuity reserves) and $507.3 million (9.3% of
average  variable  annuity reserves) in the second quarters of 1999 and 1998 and
the  six  months of 1999 and 1998, respectively. Consistent with the assumptions
used  in  connection with the Acquisition, management anticipates that the level
of withdrawal payments will reflect higher relative withdrawal rates in the near
future because of higher surrenders on the acquired annuity business.  Excluding
the  effects  of the Acquisition, withdrawal payments represent 7.4% and 7.9% in
the  second  quarter  and  six  months of 1999, respectively, of related average
fixed  and  variable  annuity  reserves.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES  totaled $41.5 million in the second
quarter  of  1999  and $24.1 million in the second quarter of 1998.  For the six
months,  general  and  administrative expenses totaled $78.0 million in 1999 and
$48.6  million in 1998.  The increases in 1999 over 1998 principally reflect the
increased costs related to the business acquired in the Acquisition and expenses
related  to  servicing the Company's growing block of variable annuity policies.
General  and  administrative  expenses  remain  closely  controlled  through  a
company-wide  cost containment program and continue to represent less than 1% of
average  total  assets.

     AMORTIZATION OF DEFERRED ACQUISITION COSTS totaled $28.3 million (including
$2.7  million  attributable  to  the Acquisition) in the second quarter of 1999,
compared  with  $24.9 million in the second quarter of 1998. For the six months,
such  amortization totaled $55.9 million (including $7.2 million attributable to
the  Acquisition)  in  1999  and  $43.3  million  in  1998.  The  increases  in
amortization  during 1999 were also due to additional fixed and variable annuity
and  mutual  fund  sales  and  the  subsequent  amortization of related deferred
commissions  and  other  direct  selling  costs.

     ANNUAL  COMMISSIONS represent renewal commissions paid quarterly in arrears
to  maintain  the  persistency  of  certain  of  the  Company's variable annuity
contracts.  Substantially  all  of  the  Company's  currently available variable
annuity  products  allow for an annual commission payment option in return for a
lower  immediate  commission.  Annual  commissions  totaled  $9.1 million in the
second  quarter  of  1999,  compared  with $5.0 million in the second quarter of
1998.  For  the six months, annual commissions amounted to $18.2 million in 1999
and  $9.2  million in 1998.  The increases in annual commissions in 1999 reflect
increased  sales  of  annuities  that  offer  this commission option and gradual
expiration of the initial fifteen-month periods before such payments begin.  The
Company  estimates that over 55% of its variable annuity product liabilities are
currently  subject  to  such  annual  commissions.  Based on current sales, this
portion  is  expected  to  increase  in  future  periods.

     INCOME  TAX  EXPENSE  totaled  $25.9 million in the second quarter of 1999,
compared with $15.1 million in 1998 and $46.9 million in the six months of 1999,
compared  with  $31.5  million in the six months of 1998, representing effective
annualized  tax  rates  of  36%,  37%,  36%  and  36%,  respectively.

FINANCIAL  CONDITION  AND  LIQUIDITY

     SHAREHOLDER'S  EQUITY increased by 25.4% to $936.5 million at June 30, 1999
from  $747.0  million  at December 31, 1998, due principally to a $170.4 million
capital  contribution  from  the  Parent  (see  Note  3 of Notes to Consolidated
Financial  Statements).  In  addition, the Company recorded $83.2 million of net
income  in  1999,  partially  offset  by a $64.1 million increase in accumulated
other  comprehensive  loss.






































                                       19
<PAGE>

     INVESTED ASSETS at June 30, 1999 totaled $8.10 billion, compared with $8.31
billion  at  December 31, 1998.  The Company manages most of its invested assets
internally.  The  Company's  general investment philosophy is to hold fixed-rate
assets  for  long-term  investment.  Thus, it does not have a trading portfolio.
However,  the  Company  has determined that all of its portfolio of bonds, notes
and  redeemable  preferred stocks (the "Bond Portfolio") is available to be sold
in  response  to  changes in market interest rates, changes in relative value of
asset  sectors and individual securities, changes in prepayment risk, changes in
the  credit  quality  outlook  for  certain  securities,  the Company's need for
liquidity  and  other  similar  factors.

     THE BOND PORTFOLIO, which constituted 70% of the Company's total investment
portfolio  at  June  30,  1999,  had  an  amortized cost that was $142.3 million
greater  than its aggregate fair value at June 30, 1999, compared with an excess
of  $3.9  million  at  December 31, 1998.  The net unrealized losses on the Bond
Portfolio in 1999 principally reflect the recent increase in prevailing interest
rates  and  the  corresponding effect on the fair value of the Bond Portfolio at
June  30,  1999.

     At  June 30, 1999, the Bond Portfolio (excluding $4.4 million of redeemable
preferred  stocks)  included  $5.39  billion of bonds rated by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service ("Moody's"), Duff & Phelps Credit
Rating  Co.  ("DCR"),  Fitch  Investors  Service, L.P. ("Fitch") or the National
Association  of  Insurance  Commissioners  ("NAIC"), and $274.3 million of bonds
rated by the Company pursuant to statutory ratings guidelines established by the
NAIC.  At  June  30, 1999, approximately $5.32 billion of the Bond Portfolio was
investment  grade,  including $1.58 billion of U.S. government/agency securities
and  mortgage-backed  securities  ("MBSs").

     At  June 30, 1999, the Bond Portfolio included $343.7 million of bonds that
were  not investment grade.  These non-investment-grade bonds accounted for 1.3%
of  the  Company's  total  assets  and  4.2%  of  its  invested  assets.

     Non-investment-grade securities generally provide higher yields and involve
greater  risks  than investment-grade securities because their issuers typically
are  more  highly  leveraged  and more vulnerable to adverse economic conditions
than  investment-grade  issuers.  In  addition,  the  trading  market  for these
securities  is  usually  more limited than for investment-grade securities.  The
Company  had  no  material  concentrations of non-investment-grade securities at
June  30,  1999.

     The  table  on  the  following page summarizes the Company's rated bonds by
rating  classification  as  of  June  30,  1999.



















































                                       20

<PAGE>
<TABLE>
<CAPTION>

                                        RATED BONDS BY RATING CLASSIFICATION
                                               (Dollars in thousands)

                                                  Issues  not  rated  by  S&P/Moody's/
        Issues  Rated  by  S&P/Moody's/DCR/Fitch          DCR/Fitch,  by  NAIC Category                       Total
------------------------------------------------    -----------------------------------     -----------------------


S&P/(Moody's)                     Estimated         NAIC             Estimated               Estimated   Percent of
[DCR] {Fitch}         Amortized        fair     category Amortized        fair   Amortized        fair     invested
category (1)               cost       value          (2)      cost       value        cost       value       assets
-------------------  ----------  ----------  ---------  ----------  ----------  ----------  ----------  -----------
<S>                  <C>         <C>         <C>        <C>         <C>         <C>         <C>         <C>
AAA+ to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-}        $4,098,545  $3,999,389         1   $  427,031  $  421,772  $4,525,576  $4,421,161       54.60%

BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}        712,710     695,376         2      207,943     204,107     920,653     899,483       11.11

BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}           59,753      57,500         3          ---         ---      59,753      57,500        0.71

B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}            266,144     259,041         4       24,350      17,798     290,494     276,839        3.42

CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}            3,500       3,360         5        6,000       5,682       9,500       9,042        0.11

CI to D
  [DD]
  {D}                       ---         ---         6          597         297         597         297         ---
                     ----------  ----------             ----------  ----------  ----------  ----------

TOTAL RATED ISSUES   $5,140,652  $5,014,666             $  665,921  $  649,656  $5,806,573  $5,664,322
                     ==========  ==========             ==========  ==========  ==========  ==========
<FN>

Footnotes  appear  on  the  following  page.









































</TABLE>


                                       21

<PAGE>


Footnotes  to  the  table  of  Rated  Bonds  by  Rating  Classification
      -----------------------------------------------------------------------

(1)     S&P and Fitch rate debt securities in rating categories ranging from AAA
(the  highest) to D (in payment default).  A plus (+) or minus (-) indicates the
debt's  relative  standing within the rating category.  A security rated BBB- or
higher  is considered investment grade.  Moody's rates debt securities in rating
categories ranging from Aaa (the highest) to C (extremely poor prospects of ever
attaining  any  real  investment  standing).  The  number  1, 2 or 3 (with 1 the
highest  and  3  the  lowest)  indicates the debt's relative standing within the
rating  category.  A  security  rated  Baa3  or  higher is considered investment
grade.  DCR  rates  debt  securities  in rating categories ranging from AAA (the
highest)  to  DD  (in  payment  default).  A plus (+) or minus (-) indicates the
debt's  relative  standing within the rating category.  A security rated BBB- or
higher  is  considered  investment  grade.  Issues  are categorized based on the
highest  of  the  S&P,  Moody's,  DCR  and  Fitch  ratings  if rated by multiple
agencies.

(2)     Bonds and short-term promissory instruments are divided into six quality
categories  for NAIC rating purposes, ranging from 1 (highest) to 5 (lowest) for
nondefaulted  bonds  plus  one category, 6, for bonds in or near default.  These
six  categories  correspond  with the S&P/Moody's/DCR/Fitch rating groups listed
above, with categories 1 and 2 considered investment grade.  The NAIC categories
include  $274.3  million  of  assets  that were rated by the Company pursuant to
applicable  NAIC  rating  guidelines.





































































                                       22
<PAGE>
     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and  aggregated  $484.2  million  at June 30, 1999.  Secured Loans are senior to
subordinated  debt  and equity and are secured by assets of the issuer.  At June
30,  1999,  Secured  Loans  consisted  of  $161.4  million  of  publicly  traded
securities  and  $322.8  million  of privately traded securities.  These Secured
Loans  are composed of loans to 76 borrowers spanning 18 industries, with 22% of
these  assets  concentrated  in  utilities  and  15%  concentrated  in financial
institutions.  No other industry concentration constituted more than 6% of these
assets.

     While  the  trading market for the Company's privately traded Secured Loans
is  more  limited  than  for  publicly  traded  issues, management believes that
participation  in  these  transactions  has  enabled  the Company to improve its
investment yield.  As a result of restrictive financial covenants, these Secured
Loans  involve  greater  risk  of  technical  default  than  do  publicly traded
investment-grade securities.  However, management believes that the risk of loss
upon  default  for  these Secured Loans is mitigated by such financial covenants
and  the  collateral  values underlying the Secured Loans. The Company's Secured
Loans  are  rated  by  S&P,  Moody's,  DCR,  Fitch,  the NAIC or by the Company,
pursuant  to  comparable  statutory  rating  guidelines established by the NAIC.

     MORTGAGE  LOANS aggregated $619.5 million at June 30, 1999 and consisted of
135  commercial  first  mortgage  loans  with  an  average  loan  balance  of
approximately  $4.6  million, collateralized by properties located in 28 states.
Approximately 38% of this portfolio was office, 14% was multifamily residential,
10%  was  hotels,  9% was manufactured housing, 9% was industrial, 5% was retail
and  15%  was other types.  At June 30, 1999, 36% and 13% of this portfolio were
secured  by  properties located in California and New York, respectively, and no
more  than  8%  of this portfolio was secured by properties located in any other
single  state.  At  June 30, 1999, there were 10 mortgage loans with outstanding
balances  of  $10  million  or  more,  which  loans  collectively  aggregated
approximately 31% of this portfolio.  At June 30, 1999, approximately 27% of the
mortgage loan portfolio consisted of loans with balloon payments due before July
1, 2002. During 1999 and 1998, loans delinquent by more than 90 days, foreclosed
loans  and restructured loans have not been significant in relation to the total
mortgage  loan  portfolio.

     At  June  30,  1999,  approximately 15% of the mortgage loans were seasoned
loans  underwritten to the Company's standards and purchased at or near par from
other financial institutions.  Such loans generally have higher average interest
rates  than  loans  that  could be originated today. The balance of the mortgage
loan  portfolio  has  been  originated  by the Company under strict underwriting
standards.  Commercial  mortgage loans on properties such as offices, hotels and
shopping  centers  generally  represent  a higher level of risk than do mortgage
loans  secured  by  multifamily residences.  This greater risk is due to several
factors,  including the larger size of such loans and the more immediate effects
of general economic conditions on these commercial property types.  However, due
to  the  seasoned nature of the Company's mortgage loan portfolio and its strict
underwriting  standards,  the Company believes that it has prudently managed the
risk  attributable  to  its mortgage loan portfolio while maintaining attractive
yields.

     PARTNERSHIP  INVESTMENTS  totaled  $57.8  million  at  June  30,  1999,
constituting  investments  in  12  separate partnerships with an average size of
approximately  $4.8  million.  These partnerships are accounted for by using the
cost  method  of  accounting  and are managed by independent money managers that
invest  in  a  broad  selection of equity and fixed-income securities, currently
including  approximately  650  separate  issuers.  The  risks  generally






































                                       23
<PAGE>

associated  with  partnerships  include  those  related  to  their  underlying
investments  (i.e.,  equity  securities  and  debt  securities), plus a level of
illiquidity,  which is mitigated, to some extent by the existence of contractual
termination  provisions.

     OTHER  INVESTED ASSETS aggregated $126.7 million at June 30, 1999, compared
with  $15.2  million  at  December  31, 1998, and include $114.5 million of seed
money  for  mutual  funds used as investment vehicles for the Company's variable
annuity  separate  accounts and $12.2 million of collateralized bond obligations
and  collateralized  mortgage  obligation  residuals.

     ASSET-LIABILITY  MATCHING  is utilized by the Company to minimize the risks
of  interest rate fluctuations and disintermediation.  The Company believes that
its  fixed-rate liabilities should be backed by a portfolio principally composed
of  fixed-rate  investments  that  generate  predictable  rates  of return.  The
Company  does  not have a specific target rate of return.  Instead, its rates of
return  vary  over  time depending on the current interest rate environment, the
slope  of the yield curve, the spread at which fixed-rate investments are priced
over  the  yield curve, and general economic conditions.  Its portfolio strategy
is  constructed with a view to achieve adequate risk-adjusted returns consistent
with  its investment objectives of effective asset-liability matching, liquidity
and  safety.  The Company's fixed-rate products incorporate surrender charges or
other  restrictions in order to encourage persistency.  Approximately 35% of the
Company's fixed annuity, universal life and GIC reserves had surrender penalties
or  other  restrictions  at  June  30,  1999.

     As  part  of  its asset-liability matching discipline, the Company conducts
detailed  computer  simulations that model its fixed-rate assets and liabilities
under  commonly  used  stress-test interest rate scenarios.  With the results of
these  computer  simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect its
economic  value  and  achieve  a predictable spread between what it earns on its
invested  assets and what it pays on its liabilities by designing its fixed-rate
products  and conducting its investment operations to closely match the duration
of  the  fixed-rate assets to that of its fixed-rate liabilities.  The Company's
fixed-rate  assets  include:  cash  and short-term investments; bonds, notes and
redeemable  preferred  stocks;  mortgage  loans;  and  investments  in  limited
partnerships  that  invest  primarily in fixed-rate securities and are accounted
for  by  using the cost method.  At June 30, 1999, these assets had an aggregate
fair  value  of  $7.52 billion with a duration of 2.9.  The Company's fixed-rate
liabilities  include  fixed  annuity,  GIC  and  universal  life  reserves  and
subordinated  notes.  At  June 30, 1999, these liabilities had an aggregate fair
value (determined by discounting future contractual cash flows by related market
rates  of  interest)  of  $7.55  billion  with  a duration of 3.3. The Company's
potential  exposure  due to a relative 10% decrease in prevailing interest rates
from  their  June  30,  1999  levels  is  a loss of approximately $17.1 million,
representing  the  increase in the fair value of its fixed-rate liabilities that
is  not  offset  by  an  increase  in  the  fair value of its fixed-rate assets.
Because  the  Company  actively  manages  its  assets  and  liabilities  and has
strategies  in  place  to minimize its exposure to loss as interest rate changes
occur,  it expects that actual losses would be less than the estimated potential
loss.

     Duration is a common option-adjusted measure for the price sensitivity of a
fixed-maturity  portfolio  to  changes  in  interest  rates.  It  measures  the
approximate  percentage  change  in  the market value of a portfolio if interest
rates  change  by  100  basis  points,  recognizing  the  changes  in cash flows
resulting  from  embedded  options  such  as  policy  surrenders,  investment
prepayments  and  bond  calls.  It  also  incorporates  the  assumption that the




































                                       24
<PAGE>
Company  will  continue  to utilize its existing strategies of pricing its fixed
annuity,  universal  life  and  GIC products, allocating its available cash flow
amongst  its  various  investment  portfolio  sectors and maintaining sufficient
levels  of  liquidity.  Because  the calculation of duration involves estimation
and  incorporates assumptions, potential changes in portfolio value indicated by
the  portfolio's  duration  will  likely  be  different  from the actual changes
experienced  under  given  interest  rate  scenarios, and the differences may be
material.

     As  a component of its asset and liability management strategy, the Company
utilizes  interest rate swap agreements ("Swap Agreements") to match assets more
closely  to  liabilities.  Swap  Agreements  are  agreements  to exchange with a
counterparty  interest  rate  payments  of  differing  character  (for  example,
variable-rate payments exchanged for fixed-rate payments) based on an underlying
principal  balance  (notional principal) to hedge against interest rate changes.
The  Company  typically  utilizes  Swap  Agreements  to  create  a  hedge  that
effectively  converts  floating-rate  assets  and  liabilities  into  fixed-rate
instruments.  At  June  30, 1999, the Company had one outstanding Swap Agreement
with  a  notional  principal amount of $21.5 million.  This agreement matures in
December  2024.

     The  Company  also  seeks  to  provide liquidity from time to time by using
reverse  repurchase  agreements  ("Reverse  Repos") and by investing in MBSs. It
also  seeks  to enhance its spread income by using Reverse Repos.  Reverse Repos
involve  a sale of securities and an agreement to repurchase the same securities
at  a  later date at an agreed upon price and are generally over-collateralized.
MBSs  are generally investment-grade securities collateralized by large pools of
mortgage  loans.  MBSs generally pay principal and interest monthly.  The amount
of  principal  and interest payments may fluctuate as a result of prepayments of
the  underlying  mortgage  loans.

     There  are risks associated with some of the techniques the Company uses to
provide  liquidity,  enhance  its  spread  income  and  match  its  assets  and
liabilities.  The  primary  risk associated with the Company's Reverse Repos and
Swap  Agreements  is counterparty risk.  The Company believes, however, that the
counterparties  to  its  Reverse  Repos  and  Swap  Agreements  are  financially
responsible and that the counterparty risk associated with those transactions is
minimal.  It is the Company's policy that these agreements are entered into with
counterparties  who  have  a  debt  rating  of  A/A2 or better from both S&P and
Moody's.  The  Company  continually monitors its credit exposure with respect to
these  agreements.  In  addition to counterparty risk, Swap Agreements also have
interest  rate  risk.  However,  the  Company's  Swap Agreements typically hedge
variable-rate  assets  or  liabilities,  and  interest  rate  fluctuations  that
adversely  affect  the  net  cash  received  or  paid  under the terms of a Swap
Agreement  would  be  offset  by  increased  interest  income  earned  on  the
variable-rate  assets  or  reduced  interest  expense  paid on the variable-rate
liabilities.  The  primary risk associated with MBSs is that a changing interest
rate  environment might cause prepayment of the underlying obligations at speeds
slower or faster than anticipated at the time of their purchase.  As part of its
decision  to  purchase  an  MBS,  the Company assesses the risk of prepayment by
analyzing  the  security's  projected performance over an array of interest-rate
scenarios.  Once an MBS is purchased, the Company monitors its actual prepayment
experience  monthly to reassess the relative attractiveness of the security with
the  intent  to  maximize  total  return.

     INVESTED  ASSETS  EVALUATION  is  routinely  conducted  by  the  Company.
Management  identifies  monthly  those  investments  that  require  additional
monitoring  and  carefully  reviews  the  carrying values of such investments at
least  quarterly  to  determine  whether  specific  investments should be placed





































                                       25
<PAGE>
on  a nonaccrual basis and to determine declines in value that may be other than
temporary.  In  making these reviews for bonds, management principally considers
the  adequacy  of  any  collateral,  compliance  with contractual covenants, the
borrower's  recent  financial  performance,  news  reports  and other externally
generated information concerning the creditor's affairs. In the case of publicly
traded  bonds,  management also considers market value quotations, if available.
For  mortgage  loans,  management generally considers information concerning the
mortgaged  property  and,  among other things, factors impacting the current and
expected payment status of the loan and, if available, the current fair value of
the  underlying  collateral. For investments in partnerships, management reviews
the financial statements and other information provided by the general partners.

     The  carrying values of investments that are determined to have declines in
value  that are other than temporary are reduced to net realizable value and, in
the case of bonds, no further accruals of interest are made.  The provisions for
impairment  on  mortgage  loans are based on losses expected by management to be
realized  on  transfers of mortgage loans to real estate, on the disposition and
settlement  of mortgage loans and on mortgage loans that management believes may
not  be collectible in full. Accrual of interest is suspended when principal and
interest  payments  on  mortgage  loans  are  past  due  more  than  90  days.

     DEFAULTED INVESTMENTS, comprising all investments that are in default as to
the  payment  of  principal  or  interest, totaled $1.1 million ($0.7 million of
mortgage loans and $0.4 million of bonds) at June 30, 1999, and constituted less
than 0.1% of total invested assets.  At December 31, 1998, defaulted investments
totaled  $0.7 million of mortgage loans, and constituted less than 0.1% of total
invested  assets.

     SOURCES  OF  LIQUIDITY  are readily available to the Company in the form of
the  Company's  existing  portfolio  of cash and short-term investments, Reverse
Repo  capacity on invested assets and, if required, proceeds from invested asset
sales.  At  June  30,  1999,  approximately  $1.01 billion of the Company's Bond
Portfolio had an aggregate unrealized gain of $17.0 million, while approximately
$4.66  billion  of the Bond Portfolio had an aggregate unrealized loss of $159.3
million.  In  addition,  the  Company's  investment portfolio currently provides
approximately  $64.6  million  of monthly cash flow from scheduled principal and
interest  payments.  Historically,  cash flows from operations and from the sale
of  the  Company's  annuity  and  GIC products have been more than sufficient in
amount  to  satisfy  the Company's liquidity needs.  As the Company anticipated,
liquidity needs were unusually high this past quarter due to The Acquisition, as
they  will  be for the next quarter.  Short-term investments were sold as needed
to  satisfy  these  current  cash  requirements.

     Management  is  aware  that  prevailing  market  interest  rates  may shift
significantly  and  has  strategies  in  place  to  manage either an increase or
decrease  in  prevailing  rates.  In  a  rising  interest  rate environment, the
Company's  average  cost  of funds would increase over time as it prices its new
and renewing annuities and GICs to maintain a generally competitive market rate.
Management  would  seek  to  place new funds in investments that were matched in
duration  to,  and  higher  yielding than, the liabilities assumed.  The Company
believes  that liquidity to fund withdrawals would be available through incoming
cash  flow, the sale of short-term or floating-rate instruments or Reverse Repos
on the Company's substantial MBS segment of the Bond Portfolio, thereby avoiding
the  sale  of  fixed-rate  assets  in  an  unfavorable  bond  market.

     In a declining rate environment, the Company's cost of funds would decrease
over  time,  reflecting  lower  interest  crediting  rates  on  its  fixed







































                                       26
<PAGE>

annuities and GICs.  Should increased liquidity be required for withdrawals, the
Company  believes  that  a  significant portion of its investments could be sold
without adverse consequences in light of the general strengthening that would be
expected  in  the  bond  market.

YEAR  2000

     The  Company initiated its strategy to deal with the year 2000 challenge in
1997. At that time, many of the computer systems and applications upon which the
Company relied in its daily operations were not year 2000 compliant.  This means
that  because  they  historically used only two digits to identify the year in a
date,  they  were  unable  to distinguish dates in the "2000s" from dates in the
"1900s."  The  Company  has  incurred  approximately $9.0 million of programming
costs  to  make necessary repairs of certain specific non-compliant systems.  In
addition,  the  Company's  parent has made capital expenditures of approximately
$6.0  million  to  replace  certain  other  specific  non-compliant systems, the
amortization of which will be allocated to the Company over future periods.  The
Company does not expect to incur significant additional costs because the repair
or  replacement  of  substantially all systems, including the Company's critical
mainframe  systems, has been completed as of July 31, 1999.  Further, testing of
both  the  repaired  and replaced systems has been substantially completed as of
July  31,  1999.  Nevertheless,  the  Company  will  continue to test all of its
computer  systems  and  applications  throughout  1999  to  ensure  continued
compliance.

     In addition, the Company has distributed a year 2000 questionnaire to those
third  parties  with  which  it  has  significant  interaction.  These  include
suppliers,  distributors,  facilitators,  fund  managers,  lessors and financial
institutions.  The  questionnaire  is designed to enable the Company to evaluate
these  third  parties'  year 2000 compliance plans and state of readiness and to
determine  the  extent  to  which  the Company's systems and applications may be
affected  by  the  failure  of  others to remedy their own year 2000 issues.  To
date,  however,  the  Company  has  received only preliminary feedback from such
parties  and has not independently confirmed any information received from them.
Therefore,  there can be no assurance that such parties will complete their year
2000  conversions  in  a  timely fashion or will not suffer a year 2000 business
disruption  that  may  adversely  affect  the  Company's financial condition and
results  of  operations.

     Although  the  Company's efforts to remedy year 2000 issues are expected to
be  completed  prior  to any potential disruption to the Company's business, the
Company  is  developing several contingency plans to implement in the event that
the  transition  to  the  year  2000  becomes  difficult.

     The  discussion above contains forward-looking statements.  Such statements
are  based on the Company's current estimates, assumptions and opinions, and are
subject  to  various uncertainties that could cause the actual results to differ
materially  from  the Company's expectations.  Such uncertainties include, among
others,  costs to be incurred, the success of the Company in identifying systems
and  applications  that  are  not  year 2000 compliant, the nature and amount of
programming  required  to  upgrade  or  replace each of the affected systems and
applications,  the  availability  of  qualified personnel, consultants and other
resources,  and  the  success of the year 2000 conversion efforts of significant
third  parties.









































                                       27
<PAGE>
REGULATION

     The  Company  is  subject  to  regulation  and supervision by the insurance
regulatory  agencies  of  the  states  in  which  it  is  authorized to transact
business.  State  insurance  laws  establish  supervisory  agencies  with  broad
administrative  and  supervisory  powers.  Principal  among  these  powers  are
granting  and  revoking  licenses to transact business, regulating marketing and
other  trade  practices,  operating  guaranty  associations,  licensing  agents,
approving  policy  forms, regulating certain premium rates, regulating insurance
holding  company  systems,  establishing  reserve  and  valuation  requirements,
prescribing  the  form and content of required financial statements and reports,
performing  financial,  market  conduct  and other examinations, determining the
reasonableness  and  adequacy  of  statutory  capital  and  surplus,  defining
acceptable  accounting  principles, regulating the type, valuation and amount of
investments permitted, and limiting the amount of dividends that can be paid and
the  size  of  transactions  that  can  be  consummated  without first obtaining
regulatory  approval.

     During  the last decade, the insurance regulatory framework has been placed
under increased scrutiny by various states, the federal government and the NAIC.
Various  states have considered or enacted legislation that changes, and in many
cases  increases,  the  states'  authority  to  regulate  insurance  companies.
Legislation  has  been  introduced  in Congress that could result in the federal
government  assuming  some  role  in  the  regulation  of insurance companies or
allowing combinations between insurance companies, banks and other entities.  In
recent years, the NAIC has developed several model laws and regulations designed
to  reduce  the  risk  of  insurance  company  insolvencies  and  market conduct
violations.  These  initiatives  include  investment  reserve  requirements,
risk-based  capital  ("RBC")  standards,  codification  of  insurance accounting
principles,  new investment standards and restrictions on an insurance company's
ability to pay dividends to its stockholders.  The NAIC is also developing model
laws  or  regulations  relating  to, among other things, product design, product
reserving  standards  and  illustrations  for  annuity products.  The Company is
monitoring  developments  in this area and the effects any changes would have on
the  Company.

     The  RBC standards consist of formulas which establish capital requirements
relating  to insurance, business, assets and interest rate risks, and which help
to  identify  companies  which are under-capitalized.  In the event an insurer's
RBC  falls  below  specified  levels, certain specific regulatory actions may be
taken.  The  Company  has  more than enough statutory capital to meet the NAIC's
RBC  requirements as of the most recent calendar year end.  The State of Arizona
has adopted these RBC standards and the Company is in compliance with such laws.
Further,  for  statutory reporting purposes, the annuity reserves of the Company
are  calculated in accordance with statutory requirements and are adequate under
current  cash-flow  testing  models.

     SunAmerica  Asset  Management  Corp.,  a  subsidiary  of  the  Company,  is
registered  with  the SEC as an investment adviser under the Investment Advisers
Act  of  1940.  The mutual funds that it markets are subject to regulation under
the  Investment  Company Act of 1940.  SunAmerica Asset Management Corp. and the
mutual funds are subject to regulation and examination by the SEC.  In addition,
variable  annuities and the related separate accounts of the Company are subject
to  regulation  by  the  SEC under the Securities Act of 1933 and the Investment
Company  Act  of  1940.

     The  Company's  broker-dealer  subsidiaries  are  subject to regulation and
supervision by the states in which they transact business, as well as by the SEC
and  the  National  Association  of  Securities  Dealers  ("NASD").  The  SEC





































                                       28
<PAGE>

and  the  NASD  have broad administrative and supervisory powers relative to all
aspects  of  business and may examine each subsidiary's business and accounts at
any  time.  The SEC also has broad jurisdiction to oversee various activities of
the  Company  and  its  other  subsidiaries.

     From  time  to time, Federal initiatives are proposed that could affect the
Company's  businesses.  Such  initiatives  include  employee  benefit  plan
regulations  and  tax  law changes affecting the taxation of insurance companies
and the tax treatment of insurance and other investment products. Proposals made
in  recent  years to limit the tax deferral of annuities or otherwise modify the
tax  rules  related  to the treatment of annuities have not been enacted.  While
certain  of  the  proposals, if implemented, could have an adverse effect on the
Company's  sales  of  affected  products,  and,  consequently, on its results of
operations,  the  Company  believes  these  proposals have a small likelihood of
being  enacted,  because  they  would discourage retirement savings and there is
strong  public  and  industry  opposition  to  them.














































































                                       29

<PAGE>
           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  quantitative  and  qualitative  disclosures  about  market  risk  are
contained in the Asset-Liability Matching section of Management's Discussion and
Analysis  of  Financial  Condition  and Results of Operations on pages 24 and 25
herein.


























































































                                       30
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                                OTHER INFORMATION


Item  1.  Legal  Proceedings
          ------------------

  Not  applicable.

Item  2.  Changes  in  Securities
          -----------------------

  Not  applicable.

Item  3.  Defaults  Upon  Senior  Securities
          ----------------------------------

  Not  applicable.

Item  4.  Submissions  of  Matters  to  a  Vote  of  Security  Holders
          ------------------------------------------------------------

  Not  applicable.

Item  5.  Other  Information
          ------------------

  Not  applicable.

Item  6.  Exhibits  and  Reports  on  Form  8-K
          -------------------------------------


EXHIBITS

Exhibit
  No.                             Description
-----                             -----------

  27                    Financial  Data  Schedule.

REPORTS  ON  FORM  8-K

There  were  no  Current Reports on Form 8-K filed during the three months ended
June  30,  1999.


















































                                       31

<PAGE>
                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities and Exchange Act of 1934,
the  Registrant  has  duly  caused this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized.


                              ANCHOR  NATIONAL  LIFE  INSURANCE  COMPANY
                              ------------------------------------------
                              Registrant



Date:  August  16,  1999      /s/  SCOTT  L.  ROBINSON
------------------------      ------------------------
                              Scott  L.  Robinson
                              Senior  Vice  President  and  Director
                              (Principal  Financial  Officer)



Date:  August  16,  1999      /s/  N.  SCOTT  GILLIS
------------------------      ----------------------
                              N.  Scott  Gillis
                              Senior  Vice  President  and  Controller
                              (Principal  Accounting  Officer)






































































                                       32
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                             LIST OF EXHIBITS FILED

Exhibit
  No.     Description
-----     -----------

  27                    Financial  Data  Schedule























































                                       33