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

For the quarterly period ended June 30, 1997

                                     OR

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

      For the transition period from                   to                  


                        Commission File No. 33-47472


                   ANCHOR NATIONAL LIFE INSURANCE COMPANY


           Incorporated in California                  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 REGISTRANTS COMMON STOCK ON August 14,
1997 WAS AS FOLLOWS:

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






<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

                                    INDEX



                                                                    Page
                                                                  Number(s)

Part I - Financial Information

      Consolidated Balance Sheet (Unaudited) -
      June 30, 1997 and September 30, 1996                          3 - 4


      Consolidated Income Statement (Unaudited) -
      Three Months and Nine Months Ended June 30, 1997 and 1996         5


      Consolidated Statement of Cash Flows (Unaudited) -
      Nine Months Ended June 30, 1997 and 1996                      6 - 7


      Note to Consolidated Financial Statements (Unaudited)             8


      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                          9 - 22


Part II - Other Information                                            23 






















<PAGE>
<TABLE>
                    ANCHOR NATIONAL LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                         ITEM 1 - FINANCIAL STATEMENTS

                          CONSOLIDATED BALANCE SHEET
                                  (Unaudited)
<CAPTION>
                                                     June 30,    September 30,
                                                         1997             1996
                                              ---------------   --------------
<S>                                          <C>               <C>            
ASSETS

Investments:
  Cash and short-term investments              $  270,125,000   $  122,058,000
  Bonds, notes and redeemable 
   preferred stocks available for sale,
    at fair value (amortized cost:
      June 1997, $2,006,364,000;
      September 1996, $2,001,024,000)           2,023,800,000    1,987,271,000
  Mortgage loans                                  270,468,000       98,284,000
  Common stocks, at fair value (cost:  
    June 1997, $2,506,000;
    September 1996, $2,911,000)                     5,174,000        3,970,000
  Real estate                                      24,000,000       39,724,000
  Other invested assets                           137,515,000       77,925,000
                                              ---------------   --------------
  Total investments                             2,731,082,000    2,329,232,000

  Variable annuity assets                       8,242,446,000    6,311,557,000
  Receivable from brokers for sales of
    securities                                            ---       52,348,000
  Accrued investment income                        23,743,000       19,675,000
  Deferred acquisition costs                      515,020,000      443,610,000
  Other assets                                     57,301,000       48,113,000
                                              ---------------   --------------
TOTAL ASSETS                                  $11,569,592,000   $9,204,535,000
                                              ===============   ==============











                             See accompanying note

                                       3
<PAGE>
                    ANCHOR NATIONAL LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                         ITEM 1 - FINANCIAL STATEMENTS

                    CONSOLIDATED BALANCE SHEET (Continued)
                                  (Unaudited)
<CAPTION>
                                                     June 30,    September 30,
                                                         1997             1996
                                              ---------------   --------------
<S>                                          <C>               <C>            
LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts         $2,131,406,000   $1,789,962,000
  Reserves for guaranteed investment
    contracts                                     421,657,000      415,544,000
  Payable to brokers for purchases of 
    securities                                      5,611,000              ---
  Income taxes currently payable                   29,351,000       21,486,000
  Other liabilities                               108,874,000       74,710,000
                                              ---------------   --------------
  Total reserves, payables                                   
    and accrued liabilities                     2,696,899,000    2,301,702,000
                                              ---------------   --------------
Variable annuity liabilities                    8,242,446,000    6,311,557,000
                                              ---------------   --------------
Subordinated notes payable to Parent               36,041,000       35,832,000
                                              ---------------   --------------
Deferred income taxes                              56,964,000       70,189,000
                                              ---------------   --------------
Shareholder's equity:
  Common Stock                                      3,511,000        3,511,000
  Additional paid-in capital                      308,674,000      280,263,000
  Retained earnings                               216,213,000      207,002,000
  Net unrealized gain (loss) on debt and
    equity securities available for sale            8,844,000       (5,521,000)
                                              ---------------   --------------
  Total shareholder's equity                      537,242,000      485,255,000
                                              ---------------   --------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY    $11,569,592,000   $9,204,535,000
                                              ===============   ==============
</TABLE>







                             See accompanying note

                                       4
<PAGE>
<TABLE>
                    ANCHOR NATIONAL LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (Continued)

                         CONSOLIDATED INCOME STATEMENT
                                  (Unaudited)

<CAPTION>
                                            Three Months                Nine Months       
                                     -------------------------   -------------------------
                                        1997          1996          1997          1996    
                                     -----------   -----------   -----------   -----------
<S>                                 <C>           <C>           <C>           <C>         
Investment income                    $56,272,000   $42,377,000  $153,703,000  $121,414,000
                                     -----------   -----------   -----------   -----------
Interest expense on:
  Fixed annuity contracts            (28,732,000)  (21,129,000)  (81,078,000)  (59,759,000)
  Guaranteed investment contracts     (6,196,000)   (5,209,000)  (18,182,000)  (13,962,000)
  Senior indebtedness                 (1,016,000)     (781,000)   (1,754,000)   (2,402,000)
  Subordinated notes payable                                  
    to Parent                           (809,000)     (632,000)   (2,333,000)   (1,897,000)
                                     -----------   -----------   -----------   -----------
Total interest expense               (36,753,000)  (27,751,000) (103,347,000)  (78,020,000)
                                     -----------   -----------   -----------   -----------
NET INVESTMENT INCOME                 19,519,000    14,626,000    50,356,000    43,394,000
                                     -----------   -----------   -----------   -----------
NET REALIZED INVESTMENT LOSSES        (2,400,000)     (574,000)  (22,690,000)  (11,337,000)
                                     -----------   -----------   -----------   -----------
Fee income:
  Variable annuity fees               35,229,000    26,871,000    98,168,000    76,353,000
  Net retained commissions            10,344,000     8,379,000    27,917,000    23,027,000
  Asset management fees                6,202,000     6,371,000    18,925,000    19,235,000
                                     -----------   -----------   -----------   -----------
TOTAL FEE INCOME                      51,775,000    41,621,000   145,010,000   118,615,000
                                     -----------   -----------   -----------   -----------
Other income and expenses:
  Surrender charges                    1,339,000     1,416,000     3,794,000     3,828,000
  General and administrative 
    expenses                         (23,530,000)  (20,027,000)  (69,062,000)  (55,337,000)
  Amortization of deferred 
    acquisition costs                (21,495,000)  (14,793,000)  (48,753,000)  (42,166,000)
  Annual commissions                  (2,508,000)   (1,276,000)   (5,942,000)   (3,269,000)
  Other, net                             (49,000)     (410,000)       32,000      (174,000)
                                     -----------   -----------   -----------   -----------
TOTAL OTHER INCOME AND EXPENSES      (46,243,000)  (35,090,000) (119,931,000)  (97,118,000)
                                     -----------   -----------   -----------   -----------
PRETAX INCOME                         22,651,000    20,583,000    52,745,000    53,554,000
Income tax expense                    (7,531,000)   (6,251,000)  (18,034,000)  (18,654,000)
                                     -----------   -----------   -----------   -----------

NET INCOME                           $15,120,000   $14,332,000   $34,711,000   $34,900,000
                                     ===========   ===========   ===========   ===========
                                     See accompanying note
                                               5
<PAGE>
                    ANCHOR NATIONAL LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (Continued)

                     CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Unaudited)
<CAPTION>
                                                  Nine Months Ended June 30,
                                             -------------------------------
                                                     1997               1996
                                             ------------       ------------
<S>                                         <C>                <C>          
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                 $ 34,711,000       $ 34,900,000
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Interest credited to: 
        Fixed annuity contracts                81,078,000         59,759,000
        Guaranteed investment contracts        18,182,000         13,962,000
      Net realized investment losses           22,690,000         11,337,000
      Accretion of net discounts on 
        investments                            (9,025,000)        (6,405,000)
      Amortization of goodwill                    876,000            876,000
      Provision for deferred income taxes     (20,960,000)       (12,488,000)
  Change in:
    Accrued investment income                  (4,068,000)        (8,468,000)
    Deferred acquisition costs                (82,110,000)       (42,667,000)
    Other assets                              (10,064,000)        (6,819,000)
    Income taxes currently payable              7,865,000         10,349,000
    Other liabilities                           9,403,000          3,967,000
    Other, net                                    273,000           (202,000)
                                             ------------       ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES      48,851,000         58,101,000
                                             ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of:
    Bonds, notes and redeemable preferred
      stocks                               (2,220,070,000)    (1,417,951,000)
    Mortgage loans                           (187,265,000)               ---
    Other investments, excluding short-term
      investments                             (71,684,000)       (15,223,000)
  Sales of:
    Bonds, notes and redeemable preferred
      stocks                                1,960,229,000        957,467,000
    Other investments, excluding short-term
      investments                               1,233,000         16,311,000
  Redemptions and maturities of:
    Bonds, notes and redeemable preferred
      stocks                                  308,659,000        191,035,000
    Mortgage loans                             15,371,000          9,706,000
    Other investments, excluding short-term
      investments                              16,838,000          6,257,000
                                             ------------       ------------
NET CASH USED BY INVESTING ACTIVITIES        (176,689,000)      (252,398,000)
                                             ------------       ------------

                             See accompanying note
                                       6
<PAGE>
                    ANCHOR NATIONAL LIFE INSURANCE COMPANY
                        PART I - FINANCIAL INFORMATION
                   ITEM 1 - FINANCIAL STATEMENTS (Continued)

               CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
                                  (Unaudited)
<CAPTION>
                                                  Nine Months Ended June 30,
                                             -------------------------------
                                                     1997               1996
                                             ------------       ------------
<S>                                         <C>                <C>          
CASH FLOWS FROM FINANCING ACTIVITIES:
  Premium receipts on:  
    Fixed annuity contracts                  $877,884,000       $514,353,000
    Guaranteed investment contracts            55,000,000         89,967,000 
  Net exchanges from the fixed 
    accounts of variable annuity contracts   (402,933,000)      (169,313,000)
  Withdrawal payments on:
    Fixed annuity contracts                  (188,979,000)      (199,990,000)
    Guaranteed investment contracts           (67,111,000)       (12,715,000)
  Claims and annuity payments on fixed
    annuity contracts                         (25,837,000)       (22,320,000)
  Net receipts from (repayments of)
    other short-term financings                24,970,000       (126,468,000)
  Capital contributions received               28,411,000         27,387,000
  Dividends paid                              (25,500,000)       (29,400,000)
                                             ------------       ------------

NET CASH PROVIDED BY FINANCING 
  ACTIVITIES                                  275,905,000         71,501,000
                                             ------------       ------------
NET INCREASE (DECREASE) IN CASH AND
  SHORT-TERM INVESTMENTS                      148,067,000       (122,796,000)

CASH AND SHORT-TERM INVESTMENTS AT 
  BEGINNING OF PERIOD                         122,058,000        249,209,000
                                             ------------       ------------
CASH AND SHORT-TERM INVESTMENTS AT 
  END OF PERIOD                              $270,125,000       $126,413,000
                                             ============       ============

Supplemental cash flow information:

  Interest paid on indebtedness              $  3,454,000       $  3,879,000
                                             ============       ============

  Net income taxes paid                      $ 31,133,000       $ 20,789,000
                                             ============       ============
</TABLE>

                             See accompanying note
                                       7
<PAGE>

                   ANCHOR NATIONAL LIFE INSURANCE COMPANY
                       PART I - FINANCIAL INFORMATION
                        ITEM 1 - FINANCIAL STATEMENTS

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)


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

Anchor National Life Insurance Company (the "Company") is an indirect wholly
owned subsidiary of SunAmerica Inc. (the "Parent").  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,
1997 and September 30, 1996, the results of its consolidated operations for the
three months and nine months ended June 30, 1997 and 1996 and its consolidated
cash flows for the nine months ended June 30, 1997 and 1996.  The results of
operations for the three months and nine months ended June 30, 1997 are not
necessarily indicative of the results to be expected for the full year.  The
accompanying unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the fiscal
year ended September 30, 1996, contained in the Company's 1996 Annual Report
on Form 10-K.  Certain items have been reclassified to conform to the current
period's presentation.  





























                                      8
<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY
                       PART I - FINANCIAL INFORMATION
                ITEM 2 - 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, 1997 and 1996 follows.  In
connection with, and because it desires to take advantage of, the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
cautions readers regarding certain forward-looking statements contained in the
following discussion 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.  In particular, 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 or projected levels of sales and redemptions of the
Company's products, investment spreads and yields, or the earnings and
profitability of the Company's activities.

      Forward-looking statements are necessarily based upon 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, with respect to future business decisions,
are subject to change.  These uncertainties and contingencies can affect actual
results and 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 events or
developments, some of which may be national in scope, such as general economic
conditions, changes in tax law and changes in interest rates, some of which may
be related to the insurance industry generally, such as pricing competition,
regulatory developments and industry consolidation, and others of which 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 $15.1 million in the third quarter of 1997 and $14.3
million in the third quarter of 1996.  For the nine months, net income amounted
to $34.7 million in 1997, compared with $34.9 million in 1996.

      PRETAX INCOME totaled $22.7 million in the third quarter of 1997 and
$20.6 million in the third quarter of 1996.  This $2.1 million increase
primarily resulted from increased variable annuity fee income and net
investment income, partially offset by an increase in amortization of deferred
acquisition costs.  For the nine months, pretax income totaled $52.7 million
in 1997, compared with $53.6 million in 1996.  This decline in the nine months
of 1997 primarily resulted from increases in general and administrative
expenses and net realized investment losses, partially offset by an increase
in fee income.
                                      9
<PAGE>
      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, increased to $19.5 million in the third quarter
of 1997 from $14.6 million in the third quarter of 1996.  These amounts
represent 2.82% on average invested assets (computed on a daily basis) of $2.77
billion in the third quarter of 1997 and 2.58% on average invested assets of
$2.27 billion in the third quarter of 1996.  For the nine months, net
investment income increased to $50.4 million in 1997 from $43.4 million in
1996, representing 2.52% on average invested assets of $2.66 billion in 1997
and 2.71% on average invested assets of $2.14 billion in 1996.

      Net investment spreads include the effect of income earned on the excess
of average invested assets over average interest-bearing liabilities. This
excess declined to $95.8 million in the third quarter of 1997 from $141.2
million in the third quarter of 1996, and declined to $131.2 million in the
nine months of 1997 from $141.7 million in the nine months of 1996.  The
difference between the Company's yield on average invested assets and the rate
paid on average interest-bearing liabilities was 2.63% in the third quarter of
1997, 2.26% in the third quarter of 1996, 2.25% in the nine months of 1997 and
2.37% in the nine months of 1996.

      Investment income totaled $56.3 million in the third quarter of 1997, up
from $42.4 million in the third quarter of 1996.  For the nine months,
investment income amounted to $153.7 million in 1997, up $32.3 million from the
$121.4 million recorded in 1996.  These amounts represent yields on average
invested assets of 8.12% and 7.48% in the third quarters of 1997 and 1996,
respectively, and 7.70% and 7.58% in the nine months of 1997 and 1996,
respectively.  These increased yields in 1997 include the effects of higher
returns from the Company's investments in partnerships.  The increases in
investment income in 1997 also reflect increases in average invested assets.

      Partnership income increased to $2.8 million (representing a yield of
26.42% on related average assets of $42.8 million) in the third quarter of
1997, compared with $1.5 million (representing a yield of 16.18% on related
average assets of $36.2 million) in the third quarter of 1996.  For the nine
months, partnership income amounted to $5.0 million (representing a yield of
15.32% on related average assets of $43.4 million) in 1997, compared with $3.8
million (representing a yield of 12.66% on related average assets of $40.1
million) in 1996.  Partnership income is based upon cash distributions received
from limited partnerships, the operations of which the Company does not
significantly 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 aggregated $36.8 million in the third quarter of
1997 and $27.8 million in the third quarter of 1996.  For the nine months,
interest expense aggregated $103.3 million in 1997, compared with $78.0 million
in 1996.  The average rate paid on all interest-bearing liabilities was 5.49%
(5.36% on fixed annuity contracts and 5.92% on guaranteed investment contracts
("GICs")) in the third quarter of 1997, compared with 5.22% (5.07% on fixed
annuity contracts and 5.71% on GICs) in the third quarter of 1996.  For the
nine months, the average rate paid on all interest-bearing liabilities was
5.45% (5.33% on fixed annuity contracts and 5.80% on GICs) in 1997 and 5.21%
(5.07% on fixed annuity contracts and 5.88% on GICs) in 1996.  Interest-bearing
liabilities averaged $2.68 billion during the third quarter of 1997, $2.13
billion during the third quarter of 1996, $2.53 billion during the nine months
of 1997 and $2.00 billion during the nine months of 1996.
                                     10
<PAGE>
      The increase in the average rates paid on fixed annuity contracts during
1997 primarily resulted from the impact of certain promotional one-year
interest rates offered on the Company's Polaris variable annuity product.  Most
of the Company's GICs are variable and are repriced quarterly at the then-
current interest rates.

      The growth in average invested assets in 1997 primarily reflects the
receipt of fixed-rate premiums, consisting of both fixed accounts of variable
annuity products and GICs.  Since June 30, 1996, fixed annuity premiums have
totaled $1.11 billion and GIC premiums have aggregated $100.0 million.  Fixed
annuity premiums totaled $188.9 million in the third quarter of 1997, $136.6
million in the third quarter of 1996, $877.9 million in the nine months of 1997
and $514.4 million in the nine months of 1996.  The increases in premiums for
the fixed accounts of variable annuities resulted primarily from greater
inflows into the one-year fixed account of the Company's Polaris product.  The
Company has observed that many purchasers of its variable annuity contracts
allocate new premiums to the one-year fixed account and concurrently elect the
option to dollar cost average into one or more variable funds.  Accordingly,
the Company anticipates that it will see a large portion of these premiums
transferred into the variable funds.

      There were no GIC premiums during the third quarter of 1997 and $3.8
million of GIC premiums in the third quarter of 1996.  For the nine months, GIC
premiums totaled $55 million in 1997 and $90.0 million in 1996.  The Company's
GIC's guarantee the payment of principal and interest at fixed or variable
rates for a term of one to five years.  Contracts that are purchased by asset
management firms either prohibit withdrawals or permit withdrawals with notice
ranging from 90 to 270 days.  Contracts that are purchased by banks or state
and local governmental authorities either prohibit withdrawals or permit
scheduled book value withdrawals subject to terms of the underlying indenture
or agreement.  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 $2.4 million in the third quarter
of 1997, compared with $0.6 million in the third quarter of 1996.  Net realized
investment losses include impairment writedowns of $3.9 million in the third
quarter of 1997 and $1.0 million in the third quarter of 1996.  Therefore, net
gains from sales of investments totaled $1.5 million in the third quarter of
1997, compared with $0.4 million of net gains in the third quarter of 1996. 
For the nine months, net realized investment losses totaled $22.7 million in
1997, compared with $11.3 million in 1996 and include impairment writedowns of
$20.0 million and $14.9 million, respectively. Therefore, for the nine months,
net losses from sales of investments totaled $2.7 million in 1997, compared
with net gains of $3.6 million in 1996.

      The Company sold invested assets, principally bonds and notes,
aggregating $501.1 million, $200.6 million, $1.85 billion and $893.9 million
in the third quarters of 1997 and 1996 and the nine months of 1997 and 1996,
respectively.  Net gains and losses from sales of investments fluctuate from
period to period, and represent, on an annualized basis, 0.22%, 0.08%, 0.13%
and 0.22%, respectively, of average invested assets for the third quarters of
1997 and 1996 and the nine months of 1997 and 1996.

      Impairment writedowns in the nine months reflect $15.7 million and $15.2
million of provisions applied to non-income producing land owned in Arizona in
1997 and 1996, respectively.  The  statutory  carrying value of this land had
                                     11
<PAGE>
been guaranteed by the Company's ultimate Parent, SunAmerica Inc.
("SunAmerica").  SunAmerica made capital contributions of $28.4 million and
$27.4 million  on  December 31, 1997  and  1996, respectively, to the Company
through the Company's direct parent in exchange for the termination of its
guaranty with respect to this land.  Accordingly, the Company reduced the
carrying value of this land to estimated fair value to reflect the full
termination of the guaranty.  Impairment writedowns, on  an  annualized basis,
represent 0.56%, 0.18%, 1.00% and 0.93% of average invested assets for the
third quarters of 1997 and 1996 and the nine months of 1997 and 1996,
respectively.  For the eleven quarters beginning October 1, 1994, impairment
writedowns as an annualized percentage of average invested assets have ranged
up to 2.28% and have averaged 0.36%.  Such writedowns are based 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 supporting
variable annuity contracts in separate accounts.  Such fees totaled $35.2
million in the third quarter of 1997 and $26.9 million in the third quarter of
1996.  For the nine months, variable annuity fees totaled $98.2 million in
1997, compared with $76.4 million in 1996.  These increased fees reflect growth
in average variable annuity assets principally due to the receipt of variable
annuity premiums, increased market values and net exchanges into the separate
accounts from the fixed accounts of variable annuity contracts, partially
offset by surrenders.  Variable annuity assets averaged $7.62 billion during
the third quarter of 1997 and $5.92 billion during the third quarter of 1996. 
For the nine months, variable annuity assets averaged $7.11 billion in 1997,
compared with $5.60 billion in 1996.  Variable annuity premiums, which exclude
premiums allocated to the fixed accounts of variable annuity products, have
aggregated $1.08 billion since June 30, 1996.  Variable annuity premiums
increased to $328.6 million in the third quarter of 1997 from $264.7 million
in the third quarter of 1996.  For the nine months, variable annuity premiums
totaled $859.6 million in 1997, compared with $698.7 million in 1996.  Sales
of variable annuity products (which include premiums allocated to the fixed
accounts) amounted to $517.5 million, $401.3 million, $1.74 billion and $1.21
billion for the third quarters of 1997 and 1996 and the nine months of 1997 and
1996, respectively.  These increases may be attributed, in part, to market
share gains through enhanced distribution, strong investor interest in equity
investments, as well as broad consumer demand for flexible retirement savings
products that offer a variety of fixed and variable 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.

      NET RETAINED COMMISSIONS are primarily derived from commissions on the
sales of nonproprietary investment products by the Company's broker-dealer
subsidiary, after deducting the substantial portion of such commissions that
is passed on to registered representatives.  Net retained commissions totaled
$10.3 million in the third quarter of 1997 and $8.4 million in the third
quarter of 1996.  For the nine months, net retained commissions totaled $27.9
million in 1997, compared with $23.0 million in 1996.  Broker-dealer sales
(mainly sales of general securities, mutual funds and annuities) totaled $2.98
billion in the third quarter of 1997 and $2.42 billion in the third quarter of
1996.  For the nine months, such sales totaled $7.69 billion in 1997 and $6.74
billion in 1996.  The increases in sales and net retained commissions during
1997 reflect a greater number of registered representatives, higher average
production per representative and generally favorable market conditions. 
Increases in net retained commissions may not be proportionate to increases in
sales primarily due to differences in sales mix.  
                                     12
<PAGE>
      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 $6.2 million on
average assets managed of $2.31 billion in the third quarter of 1997 and $6.4
million on average assets managed of $2.15 billion in the third quarter of
1996.  For the nine months, asset management fees totaled $18.9 million on
average  assets managed of $2.27 billion in 1997, compared with $19.2 million
on average assets managed of $2.15 billion in 1996.  Asset management fees
decreased slightly in 1997, despite increases in average assets managed,
principally  due to changes in product mix.  Sales of mutual funds, excluding
sales of money market accounts, have aggregated $354.1 million since June 30,
1996.  Mutual fund sales totaled $114.4 million in the third quarter of 1997,
up $48.3 million from the $66.1 million recorded in the third quarter of 1996.
For the nine months, such sales totaled $296.7 million in 1997, up from $166.0 
million in 1996.  The significant increases in sales in the 1997 periods
principally resulted from the introduction in November 1996 of the Company's
"Style Select Series" product. Redemptions of mutual funds, excluding
redemptions of money market accounts, amounted to $102.1 million in the third
quarter of 1997 and $95.4 million in the third quarter of 1996.  For the nine
months, such redemptions amounted to $316.3 million in 1997 and $295.0 million
in 1996.

      SURRENDER CHARGES on fixed and variable annuities totaled $1.3 million
in the third quarter of 1997, $1.4 million in the third quarter of 1996 and
$3.8 million in the nine months of both 1997 and 1996.  Surrender charges
generally are assessed on annuity withdrawals at declining rates during the
first five to seven years of an annuity contract.  Withdrawal payments, which
include surrenders and lump-sum annuity benefits, totaled $262.3 million in the
third quarter of 1997 and $241.0 million in the third quarter of 1996.  These
payments, annualized, represent 10.86% and 12.87%, respectively, of average
fixed and variable annuity reserves.  For the nine months, withdrawal payments
totaled  $778.2 million in 1997 and $679.8 million in 1996, and, annualized,
represent 11.48% and 12.82%, respectively, of average fixed and variable
annuity reserves.  Withdrawals include variable annuity payments from the
separate accounts totaling $197.9 million in the third quarter of 1997, $173.0
million in the third quarter of 1996, $589.3 million in the nine months of 1997
and $479.4 million in the nine months of 1996.  Management anticipates that
withdrawal rates will remain relatively stable for the foreseeable future.

      GENERAL AND ADMINISTRATIVE EXPENSES totaled $23.5 million in the third
quarter of 1997 and $20.0 million in the third quarter of 1996.  For the nine
months, general and administrative expenses totaled $69.1 million in 1997,
compared with $55.3 million in 1996.  Expenses in 1997 increased primarily due
a growing block of business.  Expenses remain closely controlled through a
company-wide cost containment program and continue to represent approximately
1% of average total assets on a annualized basis.

      AMORTIZATION OF DEFERRED ACQUISITION COSTS totaled $21.5 million in the
third quarter of 1997 and $14.8 million in the third quarter of 1996.  For the
nine months, such amortization totaled $48.8 million in 1997, compared with
$42.2 million in 1996.  The increases in amortization during 1997 were
primarily due to additional fixed and variable annuity sales and the subsequent
amortization of related deferred commissions and other acquisition costs.  Such
increases are expected to continue for the foreseeable future.


                                     13
<PAGE>
      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 payment.  Annual commissions totaled
$2.5 million in the third  quarter of 1997, $1.3 million in the third quarter
of 1996, $5.9 million in the nine months of 1997 and $3.3 million in the nine
months of 1996.  The increase in annual commissions reflects increased sales
of annuities that offer this commission option.  The Company estimates that
approximately 45% of the average balance of its variable annuity products is
currently subject to such annual commissions.  Based on current sales, this
percentage is expected to increase in future periods.

      INCOME TAX EXPENSE totaled $7.5 million in the third quarter of 1997 and
$6.3 million in the third quarter of 1996, representing effective annualized
tax rates of 33% and 30%, respectively.  For the nine months, income tax
expense totaled $18.0 million in 1997 and $18.7 million in 1996, representing
effective annualized tax rates of 34% and 35%, respectively.

FINANCIAL CONDITION AND LIQUIDITY

      SHAREHOLDER'S EQUITY increased to $537.2 million at June 30, 1997 from
$506.2 million at March 31, 1997, primarily as a result of an $8.8 million net
unrealized gain on debt and equity securities available for sale, versus the
$7.1 million net unrealized loss on such securities recorded at March 31, 1997,
and the $15.1 million of net income recorded in the third quarter of 1997.

      TOTAL ASSETS increased by $1.20 billion to $11.57 billion at June 30,
1997 from $10.37 billion at March 31, 1997, principally as a result of a $1.25
billion increase in the separate accounts for variable annuities.
  
      INVESTED ASSETS at June 30, 1997 totaled $2.73 billion, compared with
$2.78 billion at March 31, 1997.  This decline primarily resulted from
increased net exchanges into the separate accounts from the fixed accounts of
variable annuity contracts, partially offset by the $20.1 million net
unrealized gain recorded on debt and equity securities available for sale at
June 30, 1997, versus the $16.2 million net unrealized loss recorded on such
securities at March 31, 1997.  The Company manages most of its invested assets
internally.  The Company's general investment philosophy is to hold fixed
maturity 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 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 had an aggregate fair value that exceeded its
amortized cost by $17.4 million at June 30, 1997.  At March 31, 1997, the
amortized cost exceeded the fair value of the Bond Portfolio by $17.7 million. 
The net unrealized gain on the Bond Portfolio since March 31, 1997 principally
reflects the lower relative prevailing interest rates at June 30, 1997 and
their corresponding effect on the fair value of the Bond Portfolio.

      At June 30, 1997, the Bond Portfolio (excluding $6.5 million of
redeemable preferred stocks) included $1.91 billion (at amortized cost) of
bonds rated by Standard and Poor's Corporation ("S&P"), Moody's Investors
Service ("Moody's"), Duff and Phelps Credit Rating Co. ("DCR"), Fitch Investors
                                     14
<PAGE>
Service, L.P. ("Fitch") or the National Association of Insurance Commissioners
("NAIC"), and $92.6 million (at amortized cost) of bonds rated by the Company
pursuant to statutory rating guidelines established by the NAIC.  At June 30,
1997, approximately $1.83 billion (at amortized cost) of the Bond Portfolio was
investment grade, including $767.4 million of U.S. government/agency securities
and mortgage-backed securities ("MBSs").

      At June 30, 1997, the Bond Portfolio included $174.5 million (at
amortized cost, with a fair value of $180.2 million) of bonds that were not
investment grade.  Based on their June 30, 1997 amortized cost, these non-
investment-grade bonds accounted for 1.51% of the Company's total assets and
6.44% 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, 1997.  The table on the following page summarizes the Company's
rated bonds by rating classification.


































                                     15
<PAGE>
<TABLE>
                                          RATED BONDS BY RATING CLASSIFICATION
                                                 (dollars in thousands)
<CAPTION>
                                                   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             Percent of    Estimated
  [DCR]/{Fitch}         Amortized         fair  category    Amortized          fair   Amortized   invested         fair
   category (1)              cost        value        (2)        cost         value        cost   assets(3)       value
---------------       -----------  -----------  --------  -----------  ------------ -----------  ---------  ----------- 

<S>                  <C>          <C>          <C>       <C>          <C>          <C>          <C>        <C>         
AAA+ to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-}         $ 1,107,793  $ 1,113,749       1    $   133,334  $   136,785  $ 1,241,127     45.78%  $ 1,250,534
BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}          468,288      469,495       2        115,904      116,937      584,192     21.55       586,432
BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-] 
  {BB+ to BB-}             10,756       11,984       3         13,820       13,973       24,576      0.91        25,957
B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}              115,151      117,863       4         32,063       33,614      147,214      5.43       151,477
CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}              2,110        2,110       5            ---          ---        2,110      0.08         2,110
C1 to D
  [DD]
  {D}                         ---          ---       6            609          609          609      0.02           609
                      -----------  -----------            -----------  -----------  -----------             -----------
TOTAL RATED ISSUES    $ 1,704,098  $ 1,715,201            $   295,730  $   301,918  $ 1,999,828             $ 2,017,119
                      ===========  ===========            ===========  ===========  ===========             ===========
</TABLE>
Footnotes appear on the following page.















                                                           16

<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 $92.6 million (at amortized cost) of
      assets that were rated by the Company pursuant to applicable NAIC rating
      guidelines.

(3)   At amortized cost.
















                                      17
<PAGE>
      Senior Secured Loans  ("Secured Loans") are included in the Bond
Portfolio and their amortized cost aggregated $229.2 million at June 30, 1997. 
Secured Loans are senior to subordinated debt and equity, and are secured by
assets of the issuer.  At June 30, 1997, Secured Loans consisted of loans to
72 borrowers spanning 28 industries, with 19% of these assets (at amortized
cost) concentrated in financial institutions.  No other industry concentration
constituted more than 10% of these assets.

      While the trading market for Secured Loans is more limited than for
publicly traded corporate debt issues, management believes that participation
in these transactions has enabled the Company to improve its investment yield. 
Although, as a result of restrictive financial covenants, Secured Loans involve
greater risk of technical default than do publicly traded investment-grade
securities, management believes that the risk of loss upon default for its
Secured Loans is mitigated by their financial covenants and senior secured
positions.  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 $270.5 million at June 30, 1997 and consisted
of 60 first mortgage loans with an average loan balance of approximately
$4.5 million, collateralized by properties located in 19 states.  Approximately
25% of this portfolio was multifamily residential, 22% was office, 14% was
retail, 14% was hotel, and 25% was other types.  At June 30, 1997,
approximately 18% of the portfolio was secured by properties located in New
York, 12% by properties located in Massachusetts and 10% by properties located
in Washington.  The Company had no concentrations in any other state or type
of property that amounted to more than 9% of the mortgage loan portfolio.  At
June 30, 1997, there were four loans with outstanding balances of $10 million
or more, the largest of which had a balance of approximately $20.4 million,
which collectively aggregated approximately 26% of the portfolio.  At June 30,
1997, approximately 32% of the mortgage loan portfolio consisted of loans with
balloon payments due before July 1, 2000.  During the third quarters and nine
months of 1997 and 1996, loans delinquent by more than 90 days, foreclosed
loans and restructured loans have not been significant in relation to the
portfolio.

      At June 30, 1997, approximately 21% of the mortgage loans in the
portfolio were seasoned loans underwritten to the Company's standards and
purchased at or near par from another financial institution.  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 effects of general economic conditions
on these commercial properties.  However, due to the  seasoned  nature  of  the
Company's mortgage loans and its strict underwriting standards, the Company
believes that it has reduced the risk attributable to its mortgage loan
portfolio while maintaining attractive yields.

      OTHER INVESTED ASSETS aggregated $137.5 million at June 30, 1997,
including $43.9 million of investments in limited partnerships, $67.9 million
of separate account investments and an aggregate of $25.7 million of
miscellaneous investments, including  policy  loans, residuals, and leveraged
leases.  The Company's limited partnership interests, accounted for by using
the cost method of accounting, invest mainly in equity securities.





                                     18
<PAGE>
      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 maturities 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 maturities are priced over the
yield curve and general ecomomic 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 designs its fixed-rate products and conducts its investment
operations in order to closely match the duration of the assets in its
investment portfolio to its annuity and GIC obligations.  The Company seeks to
achieve a predictable spread between what it earns on its assets and what it
pays on its liabilities by investing principally in fixed-rate securities.  The
Company's fixed-rate products incorporate surrender charges or other
limitations in order to encourage persistency.  Approximately 72% of the
Company's fixed annuity and GIC reserves had surrender penalties or other
restrictions at June 30, 1997.

      As part of its asset-liability matching discipline, the Company conducts
detailed computer simulations that model its fixed-maturity assets and
liabilities under commonly used stress-test interest rate scenarios.  Based on
the results of these computer simulations, the investment portfolio has been
constructed with a view to maintaining a desired investment spread between the
yield on portfolio assets and the rate paid on its interest-bearing liabilities
under a variety of possible future interest rate scenarios.  At June 30, 1997,
the weighted average life of the Company's investments was approximately five
years and the  duration was approximately three.  Weighted average life is the
average time to receipt of all principal, incorporating the effects of
scheduled amortization and expected prepayments, weighted by book value. 
Duration is a common option-adjusted measure for the price sensitivity of a
fixed-income 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 portfolio
cashflows resulting from embedded options such as prepayments and bond calls.

      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, 1997, the Company had one outstanding Swap Agreement
with a notional principal amount of $15.9 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"), dollar roll transactions
("Dollar Rolls") and by investing in MBSs.  It also seeks to enhance its spread
income by using Reverse Repos and Dollar Rolls.  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.  Dollar
                                     19
<PAGE>
Rolls are similar to Reverse Repos except that the repurchase involves
securities that are only substantially the same as the securities sold and the
arrangement is not collateralized, nor is it governed by a repurchase
agreement.  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 Dollar Rolls,
Reverse Repos and Swap Agreements is counterparty risk.  The Company believes,
however, that the counterparties to its Dollar Rolls, Reverse Repos and Swap
Agreements are financially responsible and that the counterparty risk
associated with those transactions is minimal.  Counterparty risk associated
with Dollar Rolls is further mitigated by the Company's participation in an MBS
trading clearinghouse.  The sell and buy transactions that are submitted to
this clearinghouse are marked to market on a daily basis and each participant
is required to over-collateralize its net loss position by 30% with either
cash, letters of credit or government securities.  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.   

      INVESTED ASSETS EVALUATION routinely includes a review by the Company of
its portfolio of debt securities.  Management identifies monthly those
investments that require additional monitoring and carefully reviews the
carrying value of such investments at least quarterly to determine whether
specific investments should be placed 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 collateral (if
any), 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.

      The carrying values of bonds that are determined to have declines in
value that are other than temporary are reduced to net realizable value and no
further accruals of interest are made.  The valuation allowances 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.



                                     20
<PAGE>
      DEFAULTED INVESTMENTS, comprising all investments that are in default as
to the payment of principal or interest, totaled $4.2 million at June 30, 1997
(at amortized cost after impairment writedowns, with a fair value of $4.2
million) including $2.7 million of bonds and notes and $1.5 million of mortgage
loans.  At June 30, 1997, defaulted investments constituted 0.2% of total
invested assets.  At March 31, 1997, defaulted investments totaled $5.3 million
and constituted 0.2% of total invested assets. 

      SOURCES OF LIQUIDITY are readily available to the Company in the form of
the Company's existing portfolio cash and short-term investments, Reverse Repo
capacity on invested assets and, if required, proceeds from invested asset
sales.  At June 30, 1997, approximately $1.41 billion of the Company's Bond
Portfolio had an aggregate unrealized gain of $26.9 million, while
approximately $593.8 million of the Bond Portfolio had an aggregate unrealized
loss of $9.5 million.  In addition, the Company's investment portfolio
currently provides approximately $23.7 million of monthly cash flow from
scheduled principal and interest payments.

      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
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.

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 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, 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.




                                     21
<PAGE>
      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 from time to time 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 approved and recommended to
the states for adoption and implementation several regulatory initiatives
designed to reduce the risk of insurance company insolvencies and market
conduct violations.  These initiatives include investment reserve requirements,
risk-based capital standards, new investment standards and restrictions on an
insurance company's ability to pay dividends to its stockholders.  The NAIC is
also currently developing model laws relating to product design and
illustrations for annuity products.  Current proposals are still being debated
and the Company is monitoring developments in this area and the effects any
changes would have on the Company.
  
      SunAmerica Asset Management Corp. is registered with the SEC as a
registered 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 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 subsidiary is subject to regulation and
supervision by the states in which it transacts business, as well as by the
National Association of Securities Dealers, Inc. (the "NASD"). The NASD has
broad administrative and supervisory powers relative to all aspects of business
and may examine the subsidiary's business and accounts at any time.

























                                     22
<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY
                         PART II - 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



No Current Report on Form 8-K was filed during the three months ended June 30,
1997.


















                                     23
<PAGE>
                                 SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       ANCHOR NATIONAL LIFE INSURANCE COMPANY

Date:  August 14, 1997                 By:/s/ SCOTT L. ROBINSON  
-----------------------                ------------------------
                                       Scott L. Robinson
                                       Senior Vice President and Director


      Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated:

Signature                  Title                              Date
---------                  -----                              ----

/s/   SCOTT L. ROBINSON    Senior Vice President and          August 14, 1997
------------------------    Director (Principal Financial     ---------------
      Scott L. Robinson     Officer)
                            

/s/   N. SCOTT GILLIS      Senior Vice President and          August 14, 1997
------------------------    Controller (Principal             ---------------
      N. Scott Gillis       Accounting Officer)
                            
                                    


























                                          24
<PAGE>
                   ANCHOR NATIONAL LIFE INSURANCE COMPANY
                           LIST OF EXHIBITS FILED



Exhibit
  No.       Description
-------     -----------
27          Financial Data Schedule