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 March 31, 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 May 15,
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) -
      March 31, 1997 and September 30, 1996                         3 - 4


      Consolidated Income Statement (Unaudited) -
      Three Months and Six Months Ended March 31, 1997 and 1996         5


      Consolidated Statement of Cash Flows (Unaudited) -
      Six Months Ended March 31, 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>
                                                    March 31,    September 30,
                                                         1997             1996
                                              ---------------   --------------
<S>                                          <C>               <C>            
ASSETS

Investments:
  Cash and short-term investments              $  253,228,000   $  122,058,000
  Bonds, notes and redeemable 
   preferred stocks available for sale,
    at fair value (amortized cost:
      March 1997, $2,256,589,000;
      September 1996, $2,001,024,000)           2,238,880,000    1,987,271,000
  Mortgage loans                                  188,998,000       98,284,000
  Common stocks, at fair value (cost:  
    March 1997, $2,510,000;
    September 1996, $2,911,000)                     4,005,000        3,970,000
  Real estate                                      24,000,000       39,724,000
  Other invested assets                            71,957,000       77,925,000
                                              ---------------   --------------
  Total investments                             2,781,068,000    2,329,232,000

  Variable annuity assets                       6,997,289,000    6,311,557,000
  Receivable from brokers for sales of
    securities                                            ---       52,348,000
  Accrued investment income                        23,210,000       19,675,000
  Deferred acquisition costs                      508,161,000      443,610,000
  Other assets                                     55,506,000       48,113,000
                                              ---------------   --------------
TOTAL ASSETS                                  $10,365,234,000   $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>
                                                    March 31,    September 30,
                                                         1997             1996
                                              ---------------   --------------
<S>                                          <C>               <C>            
LIABILITIES AND SHAREHOLDER'S EQUITY

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts         $2,162,084,000   $1,789,962,000
  Reserves for guaranteed investment
    contracts                                     420,408,000      415,544,000
  Payable to brokers for purchases of 
    securities                                     42,103,000              ---
  Income taxes currently payable                   25,019,000       21,486,000
  Other liabilities                               111,236,000       74,710,000
                                              ---------------   --------------
  Total reserves, payables                                   
    and accrued liabilities                     2,760,850,000    2,301,702,000
                                              ---------------   --------------
Variable annuity liabilities                    6,997,289,000    6,311,557,000
                                              ---------------   --------------
Subordinated notes payable to Parent               35,972,000       35,832,000
                                              ---------------   --------------
Deferred income taxes                              64,938,000       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                               201,093,000      207,002,000
  Net unrealized losses on debt and
    equity securities available for sale           (7,093,000)      (5,521,000)
                                              ---------------   --------------
  Total shareholder's equity                      506,185,000      485,255,000
                                              ---------------   --------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY    $10,365,234,000   $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
       FOR THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1997 AND 1996
                                  (Unaudited)
<CAPTION>
                                            Three Months                 Six Months       
                                     -------------------------   -------------------------
                                        1997          1996          1997          1996    
                                     -----------   -----------   -----------   -----------
<S>                                 <C>           <C>           <C>           <C>         
Investment income                    $50,719,000   $40,384,000   $97,431,000   $79,037,000
                                     -----------   -----------   -----------   -----------
Interest expense on:
  Fixed annuity contracts            (27,155,000)  (19,694,000)  (52,346,000)  (38,630,000)
  Guaranteed investment contracts     (5,948,000)   (4,481,000)  (11,986,000)   (8,753,000)
  Senior indebtedness                   (557,000)   (1,426,000)     (738,000)   (1,621,000)
  Subordinated notes payable                                  
    to Parent                           (766,000)     (632,000)   (1,524,000)   (1,265,000)
                                     -----------   -----------   -----------   -----------
Total interest expense               (34,426,000)  (26,233,000)  (66,594,000)  (50,269,000)
                                     -----------   -----------   -----------   -----------
NET INVESTMENT INCOME                 16,293,000    14,151,000    30,837,000    28,768,000
                                     -----------   -----------   -----------   -----------
NET REALIZED INVESTMENT GAINS 
  (LOSSES)                            (1,174,000)    2,037,000   (20,290,000)  (10,763,000)
                                     -----------   -----------   -----------   -----------
Fee income:
  Variable annuity fees               32,333,000    25,192,000    62,939,000    49,482,000
  Net retained commissions             9,777,000     8,157,000    17,573,000    14,648,000
  Asset management fees                6,305,000     6,361,000    12,723,000    12,864,000
                                     -----------   -----------   -----------   -----------
TOTAL FEE INCOME                      48,415,000    39,710,000    93,235,000    76,994,000
                                     -----------   -----------   -----------   -----------
Other income and expenses:
  Surrender charges                    1,105,000     1,151,000     2,455,000     2,412,000
  General and administrative 
    expenses                         (23,210,000)  (18,313,000)  (45,532,000)  (35,310,000)
  Amortization of deferred 
    acquisition costs                (13,441,000)  (14,181,000)  (27,258,000)  (27,839,000)
  Annual commissions                  (2,001,000)   (1,054,000)   (3,434,000)   (1,993,000)
  Other, net                            (839,000)      195,000        81,000       702,000
                                     -----------   -----------   -----------   -----------
TOTAL OTHER INCOME AND EXPENSES      (38,386,000)  (32,202,000)  (73,688,000)  (62,028,000)
                                     -----------   -----------   -----------   -----------
PRETAX INCOME                         25,148,000    23,696,000    30,094,000    32,971,000
Income tax expense                    (8,903,000)   (8,954,000)  (10,503,000)  (12,403,000)
                                     -----------   -----------   -----------   -----------

NET INCOME                           $16,245,000   $14,742,000   $19,591,000   $20,568,000
                                     ===========   ===========   ===========   ===========
                                     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>
                                                  Six Months Ended March 31,
                                             -------------------------------
                                                     1997               1996
                                             ------------       ------------
<S>                                         <C>                <C>          
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                 $ 19,591,000       $ 20,568,000
  Adjustments to reconcile net income to net
    cash provided by operating activities:
     Interest credited to: 
       Fixed annuity contracts                 52,346,000         38,630,000
       Guaranteed investment contracts         11,986,000          8,753,000
     Net realized investment losses            20,291,000         10,763,000
     Accretion of net discounts on 
       investments                             (4,927,000)        (3,916,000)
     Amortization of goodwill                     583,000            584,000
     Provision for deferred income taxes       (4,404,000)       (11,339,000)
  Change in:
       Accrued investment income               (3,535,000)        (1,870,000)
       Deferred acquisition costs             (63,451,000)       (28,739,000)
       Other assets                            (7,976,000)        (7,629,000)
       Income taxes currently payable           3,533,000         13,524,000
       Other liabilities                        5,053,000         (2,545,000)
  Other, net                                      117,000            188,000
                                             ------------       ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES      29,207,000         36,972,000
                                             ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of:
    Bonds, notes and redeemable preferred
      stocks                               (1,822,206,000)      (998,327,000)
    Mortgage loans                            (96,504,000)               ---
    Other investments, excluding short-term
      investments                              (4,889,000)        (4,112,000)
  Sales of:
    Bonds, notes and redeemable preferred
      stocks                                1,444,348,000        749,024,000
    Other investments, excluding short-term
      investments                                 942,000          1,398,000
  Redemptions and maturities of:
    Bonds, notes and redeemable preferred
      stocks                                  215,577,000        151,404,000
    Other investments, excluding short-term
      investments                              17,634,000         20,020,000
                                             ------------       ------------
NET CASH USED BY INVESTING ACTIVITIES        (245,098,000)       (80,593,000)
                                             ------------       ------------

                             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>
                                                  Six Months Ended March 31,
                                             -------------------------------
                                                     1997               1996
                                             ------------       ------------
<S>                                         <C>                <C>          
CASH FLOWS FROM FINANCING ACTIVITIES:
  Premium receipts on:  
    Fixed annuity contracts                  $688,942,000       $377,752,000
    Guaranteed investment contracts            55,000,000         86,158,000 
  Net exchanges from the fixed 
    accounts of variable annuity contracts   (227,868,000)       (93,739,000)
  Withdrawal payments on:
    Fixed annuity contracts                  (124,474,000)      (132,245,000)
    Guaranteed investment contracts           (62,122,000)        (8,343,000)
  Claims and annuity payments on fixed
    annuity contracts                         (16,941,000)       (15,060,000)
  Net receipts from (repayments of)
    other short-term financings                 6,113,000       (120,273,000)
  Net increase in senior indebtedness                 ---         19,866,000
  Capital contributions received               28,411,000         27,387,000
  Dividend paid                                       ---        (29,400,000)
                                             ------------       ------------

NET CASH PROVIDED BY FINANCING 
  ACTIVITIES                                  347,061,000        112,103,000
                                             ------------       ------------
NET INCREASE IN CASH AND SHORT-TERM
  INVESTMENTS                                 131,170,000         68,482,000

CASH AND SHORT-TERM INVESTMENTS AT 
  BEGINNING OF PERIOD                         122,058,000        249,209,000
                                             ------------       ------------
CASH AND SHORT-TERM INVESTMENTS AT 
  END OF PERIOD                              $253,228,000       $317,691,000
                                             ============       ============

Supplemental cash flow information:

  Interest paid on indebtedness              $  1,608,000       $  2,606,000
                                             ============       ============

  Net income taxes paid                      $ 11,378,000       $ 10,253,000
                                             ============       ============
</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 March 31,
1997 and September 30, 1996, the results of its consolidated operations for the
three months and six months ended March 31, 1997 and 1996 and its consolidated
cash flows for the six months ended March 31, 1997 and 1996.  The results of
operations for the three months and six months ended March 31, 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 March 31, 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 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, and other factors.  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 $16.2 million in the second quarter of 1997 and $14.7
million in the second quarter of 1996.  For the six months, net income amounted
to $19.6 million in 1997, compared with $20.6 million in 1996.

      PRETAX INCOME totaled $25.1 million in the second quarter of 1997 and
$23.7 million in the second quarter of 1996.  For the six months, pretax income
totaled $30.1 million in 1997 and $33.0 million in 1996.  This $2.9 million
decline in the six months of 1997 primarily resulted from increased net
realized investment losses and general and administrative expenses, partially
offset by increased 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 $16.3 million in the second quarter
of 1997 from $14.2 million in the second quarter of 1996.  These amounts
represent 2.41% on average invested assets (computed on a daily basis) of $2.70
billion in the second quarter of 1997 and 2.57% on average invested assets of
$2.20 billion in the second quarter of 1996.  For the six months, net
investment income increased to $30.8 million in 1997 from $28.8 million in
1996, representing 2.37% on average invested assets of $2.60 billion in 1997
and 2.78% on average invested assets of $2.07 billion in 1996.

      Net investment income also includes the effect of income earned on the
excess of average invested assets over average interest-bearing liabilities.
This excess amounted to $147.7 million in the second quarter of 1997, $152.3
million in the second quarter of 1996, $149.0 million in the six months of 1997
and $142.0 million in the six months of 1996.  The difference between the
Company's yield on average invested assets and the rate paid on average
interest-bearing liabilities was 2.11% in the second quarter of 1997, 2.22% in
the second quarter of 1996, 2.06% in the six months of 1997 and 2.42% in the
six months of 1996.

      Investment income totaled $50.7 million in the second quarter of 1997,
up from $40.4 million in the second quarter of 1996.  For the six months,
investment income amounted to $97.4 million in 1997, up from $79.0 million in
1996.  These amounts represent yields on average invested assets of 7.50% and
7.35% in the second quarters of 1997 and 1996, respectively, and 7.48% and
7.63% in the six months of 1997 and 1996, respectively.  Investment income
increased primarily as a result of higher levels of average invested assets.

      Partnership income increased to $1.4 million (representing a yield of
13.19% on related average assets of $42.8 million) in the second quarter of
1997, compared with $0.9 million (representing a yield of 10.52% on related
average assets of $35.3 million) in the second quarter of 1996.  For the six
months, partnership income amounted to $2.2 million (representing a yield of
9.88% on related average assets of $43.7 billion) in 1997, compared with $2.3
million (representing a yield of 11.15% on related average assets of $42.0
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 $34.4 million in the second quarter of
1997 and $26.2 million in the second quarter of 1996.  For the six months,
interest expense aggregated $66.6 million in 1997, compared with $50.3 million
in 1996.  The average rate paid on all interest-bearing liabilities was 5.39%
(5.29% on fixed annuity contracts and 5.69% on guaranteed investment contracts
("GICs")) in the second quarter of 1997, compared with 5.13% (5.04% on fixed
annuity contracts and 5.80% on GICs) in the second quarter of 1996.  For the
six months, the average rate paid on all interest-bearing liabilities was 5.42%
(5.31% on fixed annuity contracts and 5.75% on GICs) in 1997, compared with
5.21% (5.07% on fixed annuity contracts and 5.98% on GICs) in 1996.  Interest-
bearing liabilities averaged $2.56 billion during the second quarter of 1997,
$2.05 billion during the second quarter of 1996, $2.46 billion during the six
months of 1997 and $1.93 billion during the six 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.  The
decline in interest crediting rates on GICs reflects the generally declining
interest rate environment since early 1995 and its effect on the variable-rate
GIC portfolio.

      The growth in average invested assets in 1997 reflects sales of the
Company's fixed-rate products, consisting of both fixed accounts of variable
annuity products and GICs.  Since March 31, 1996, fixed annuity premiums have
aggregated $1.05 billion and GIC premiums have totaled $103.8 million.  Fixed
annuity premiums totaled $326.1 million in the second quarter of 1997 and
$315.2 million in the second quarter of 1996.  For the six months, fixed
annuity premiums totaled $688.9 million in 1997 and $377.8 million in 1996. 
The increases in fixed annuity premiums in 1997 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.

      GIC premiums totaled $50.0 million in the second quarter of 1997 and $55
million in the six months of 1997.  GIC premiums in 1996 amounted to $86.2
million in both the second quarter and the six months.  In 1995, the Company
began to issue GICs, which guarantee the payment of principal and interest at
fixed or variable rates for a term of one to five years.  The Company's GICs
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 $1.2 million in the second quarter
of 1997, compared with net realized investment gains of $2.0 million in the
second quarter of 1996.  For the six months, net realized investment losses
totaled $20.3 million in 1997, compared with $10.8 million in 1996 and include
impairment writedowns of $16.1 million and $13.9 million, respectively.
Therefore, for the six months, net losses from sales of investments totaled
$4.2 million in 1997, compared with net gains of $3.1 million in 1996. 
Impairment writedowns were not recorded in the second quarter of either 1997
or 1996.

      Net losses in the six months of 1997 include $5.4 million of net losses
realized on $1.39 billion of sales of bonds.  Net gains in 1996 include $4.3
million of net gains realized on $690.3 million of sales of bonds.  Sales of
investments are generally made to maximize total return.

      Impairment writedowns in the six months reflect $15.7 million and $13.9
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
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

                                     11
<PAGE>
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  1.24% and 1.44% of average invested assets for the six months of
1997 and 1996, respectively.  Such writedowns are based upon estimates of the
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 $32.3
million in the second quarter of 1997 and $25.2 million in the second quarter
of 1996.  For the six months, variable annuity fees totaled $62.9 million in
1997, compared with $49.5 million in 1996.  These increases reflect growth in
average variable annuity assets, due to increased market values, net exchanges
into the separate accounts from the fixed accounts of variable annuity
contracts and the receipt of variable annuity premiums, partially offset by
surrenders.  Variable annuity assets averaged $7.10 billion during the second
quarter of 1997 and $5.59 billion during the second quarter of 1996.  For the
six months, variable annuity assets averaged $6.85 billion in 1997, compared
with $5.44 billion in 1996.  Variable annuity premiums, which exclude premiums
allocated to the fixed accounts of variable annuity products, have aggregated
$1.02 billion since March 31, 1996.  Variable annuity premiums increased to
$304.1 million in the second quarter of 1997 from $224.5 million in the second
quarter of 1996.  For the six months, variable annuity premiums totaled $531.0
million in 1997, compared with $434.1 million in 1996.  These increases may be
attributed, in part, to market share gains through enhanced distributions, as
well as strong demand for equity investments, principally as a result of
generally favorable market conditions.  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
$9.8 million in the second quarter of 1997 and $8.2 million in the second
quarter of 1996.  For the six months, net retained commissions totaled $17.6
million in 1997 and $14.6 million in 1996.  Broker-dealer sales (mainly sales
of general securities, mutual funds and annuities) totaled $2.67 billion in the
second quarter of 1997 and $2.57 billion in the second quarter of 1996.  For
the six months, such sales totaled $4.70 billion in 1997 and $4.32 billion in
1996.  The increases in sales and net retained commissions during 1997 reflect
a greater number of registered representatives and higher average production,
combined with generally favorable market conditions.  Increases in net retained
commissions may not be proportionate to increases in sales primarily due to
differences 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 $6.3 million on
average assets managed of $2.31 billion in the second quarter of 1997 and $6.4
million on average assets managed of $2.15 billion in the second quarter of
1996.  For the six months, asset management fees totaled $12.7 million on
average assets managed of $2.26 billion in 1997, compared with $12.9 million
on  average  assets  managed of $2.15 billion in 1996.  Asset management fees
                                     12
<PAGE>
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 $305.7 million since March 31,
1996.  Mutual fund sales totaled $119.9 million in the second quarter of 1997,
up $56.3 million from the $63.6 million recorded in the second quarter of 1996.
For the six months, such sales totaled $182.3 million in 1997, up from $99.9 
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 $110.4 million in the second
quarter of 1997 and $102.1 million in the second quarter of 1996.  For the six
months, such redemptions amounted to $214.1 million in 1997 and $199.6 million
in 1996.

      SURRENDER CHARGES on fixed and variable annuities totaled $1.1 million
in the second quarter of 1997, $1.2 million in the second quarter of 1996, $2.5
million in the six months of 1997 and $2.4 million in the six months of 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
$277.8 million in the second quarter of 1997 and $223.6 million in the second
quarter of 1996.  Annualized, these payments represent 12.3% and 12.6%,
respectively, of the aggregate of average fixed and variable annuity reserves. 
For the six months, withdrawal payments totaled  $515.9 million in 1997 and
$438.8 million in 1996, and, annualized, represent 11.8% and 12.7%,
respectively, of average fixed and variable annuity reserves.  Withdrawals
include variable annuity payments from the separate accounts totaling $215.4
million in the second quarter of 1997, $151.8 million in the second quarter of
1996, $391.4 million in the six months of 1997 and $306.3 million in the six
months of 1996. Management anticipates that withdrawal rates will remain
relatively stable for the foreseeable future.

      GENERAL AND ADMINISTRATIVE EXPENSES totaled $23.2 million in the second
quarter of 1997, compared with $18.3 million in the second quarter of 1996. 
For the six months, general and administrative expenses totaled $45.5 million
in 1997, compared with $35.3 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 $13.4 million in the
second quarter of 1997 and $14.2 million in the second quarter of 1996.  For
the six months, such amortization totaled $27.3 million in 1997, compared with
$27.8 million in 1996.

      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
$2.0 million in the second quarter of 1997, $1.1 million in the second quarter
of  1996, $3.4 million in the six months of 1997 and  $2.0 million in the six
months of 1996.  The increase in annual commissions reflects increased sales
of annuities that offer this commission option.  The Company estimates that
approximately 43% 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.
                                     13
<PAGE>
      INCOME TAX EXPENSE totaled $8.9 million in the second quarter of 1997,
$9.0 million in the second quarter of 1996, $10.5 million in the six months of
1997 and $12.4 million in the six months of 1996, and represented effective tax
rates of 35% in 1997 and 38% in 1996.  Tax rates are higher in 1996 because a
larger proportion of the total income was from subsidiaries located in states
with higher income tax rates.

FINANCIAL CONDITION AND LIQUIDITY

      SHAREHOLDER'S EQUITY decreased by $23.9 million to $506.2 million at
March 31, 1997 from $530.1 million at December 31, 1996, primarily as a result
of the $25.5 million dividend paid to the Company's parent, partially offset
by the $16.3 million of net income recorded for the quarter.  Shareholder's
equity at March 31, 1997 was also unfavorably impacted by the recording of a
$7.1 million net unrealized loss on debt and equity securities available for
sale, which represents a $14.7 million swing from the $7.6 million net
unrealized gain recorded at December 31, 1996.

      TOTAL ASSETS increased by $339.5 million to $10.37 billion at March 31,
1997 from $10.03 billion at December 31, 1996, principally due to a $212.9
million increase in the separate accounts for variable annuities and a $77.4
million increase in invested assets.
  
      INVESTED ASSETS at March 31, 1997 totaled $2.78 billion, compared with
$2.70 billion at December 31, 1996.  This $77.4 million increase primarily
resulted from sales of fixed annuities and the fixed account of variable
annuities, partially offset by $16.2 million of unrealized losses on debt and
equity securities available for sale, compared to $18.4 million of unrealized
gains at December 31, 1996.

      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 prepayment risk, the
Company's need for liquidity and other similar factors.  

      THE BOND PORTFOLIO had an aggregate amortized cost that exceeded its fair
value by $17.7 million at March 31, 1997.  At December 31, 1996, the fair value
of the Bond Portfolio exceeded its amortized cost by $17.0 million.  The net
unrealized loss on the Bond Portfolio since December 31, 1996 principally
reflects higher relative prevailing interest rates at March 31, 1997 and their
corresponding effect on the fair value of the Bond Portfolio.

      All of the Bond Portfolio ($2.26 billion at amortized cost, excluding
$6.5 million of redeemable preferred stocks) at March 31, 1997 was rated by
Standard and Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Duff and Phelps Credit Rating Co. ("DCR"), Fitch Investors Service, L.P.
("Fitch") or  under comparable statutory rating guidelines established by the
National Association of Insurance Commissioners ("NAIC") and implemented by
either the NAIC or the Company.  At March 31, 1997, approximately $2.06 billion
of the Bond Portfolio (at amortized cost) was rated investment grade by one or
more of these agencies or by the Company or the NAIC, pursuant to applicable
NAIC guidelines, including $1.02 billion of U.S. government/agency securities
and mortgage-backed securities ("MBSs").

                                     14
<PAGE>
      At March 31, 1997, the Bond Portfolio included $188.5 million (fair
value, $187.6 million) of bonds not rated investment grade by S&P, Moody's,
DCR, Fitch or the NAIC.  Based on their March 31, 1997 amortized cost, these
non-investment-grade bonds accounted for 1.82% of the Company's total assets
and 6.74% 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 intends that the proportion of its portfolio invested in such
securities not exceed current levels, but its policies may change from time to
time, including in connection with any possible acquisition.  The Company had
no material concentrations of non-investment-grade securities at March 31,
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-}         $ 1,371,315  $ 1,356,231       1    $   144,866  $   146,878  $ 1,516,181     54.20%  $ 1,503,109
BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}          430,153      426,680       2        115,206      114,776      545,359     19.50       541,456
BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-] 
  {BB+ to BB-}             13,802       14,566       3         23,830       24,535       37,632      1.35        39,101
B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}              114,644      112,983       4         32,369       32,803      147,013      5.26       145,786
CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}              3,258        2,110       5            ---          ---        3,258      0.12         2,110
C1 to D
  [DD]
  {D}                         ---          ---       6            611          611          611      0.02           611
                      -----------  -----------            -----------  -----------  -----------             -----------
TOTAL RATED ISSUES    $ 1,933,172  $ 1,912,570            $   316,882  $   319,603  $ 2,250,054             $ 2,232,173
                      ===========  ===========            ===========  ===========  ===========             ===========
</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.  A substantial portion of the assets in the NAIC categories were
      rated by the Company pursuant to applicable of 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 $255.0 million at March 31, 1997. 
Secured Loans are senior to subordinated debt and equity, and are secured by
assets of the issuer.  At March 31, 1997, Secured Loans consisted of loans to
74 borrowers spanning 25 industries, with 18% of these assets (at amortized
cost) concentrated in financial institutions and 15% concentrated in the
utility industry.  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
or by the Company or the NAIC, pursuant to comparable statutory rating
guidelines established by the NAIC.

      MORTGAGE LOANS aggregated $189.0 million at March 31, 1997 and consisted
of 35 first mortgage loans with an average loan balance of approximately
$5.4 million, collateralized by properties located in 17 states.  Approximately
23% of this portfolio was multifamily residential, 19% was retail, 16% was
hotel, 14% was office, and 28% was other types.  At March 31, 1997,
approximately 13% of the portfolio was secured by properties located in New
Jersey, 13% by properties located in California and 11% by properties located
in Colorado.  The Company had no concentrations in any other single state or
type of property that amounted to more than 10% of the mortgage loan portfolio. 
At March 31, 1997, there were four loans with outstanding balances of $10
million or more, the largest of which had a balance of approximately $20.5
million, which collectively aggregated approximately 30% of the portfolio.  At
March 31, 1997, approximately 25% of the mortgage loan portfolio consisted of
loans with balloon payments due before March 31, 2001.  During the second
quarter and six 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 March 31, 1997, approximately 30% 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 $72.0 million at March 31, 1997,
including $41.7 million of investments in limited partnerships and an aggregate
of $30.3 million of miscellaneous investments, including policy loans,
residuals, separate account  investments and leveraged leases.  The Company's






                                     18
<PAGE>
limited partnership interests, accounted for by using the cost method of
accounting, invest mainly in equity securities.

      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
designed 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 on when contracts can be surrendered for cash to encourage
persistency.  Approximately 72% of the Company's fixed annuity and GIC reserves
had surrender penalties or other restrictions at March 31, 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 reserves under a variety of
possible future interest rate scenarios.  At March 31, 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 investment 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
March 31, 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
                                     19
<PAGE>
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
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 $5.3 million at March 31, 1997
(at amortized cost, with a fair value of $4.1 million) including $3.8 million
of bonds and notes and $1.5 million of mortgage loans.  At March 31, 1997,
defaulted investments constituted 0.2% of total invested assets.  At
December 31, 1996, defaulted investments totaled $6.5 million which 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 March 31, 1997, approximately $0.8 billion of the Company's Bond
Portfolio had an aggregate unrealized gain of $16.8 million, while
approximately $1.45 billion of the Bond Portfolio had an aggregate unrealized
loss of $34.5 million.  In addition, the Company's investment portfolio
currently provides approximately $23.8 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 states in
which it is authorized to transact business.  State insurance laws establish
supervisory agencies with broad administrative and supervisory powers related
to 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 and other examinations, determining the reasonableness and adequacy
of statutory capital and surplus, regulating the type, valuation and amount of
investments permitted, limiting the amount of dividends that can be paid and
the size of transactions that can be consummated without first obtaining
regulatory approval and other related matters.





                                     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
-------     -----------
10(a)       Subordinated Loan Agreement for Equity Capital, dated as of
            February 19, 1997, between the Company's subsidiary, SunAmerica
            Capital Services, Inc. ("SACS") and SunAmerica, Inc. ("SAI"),
            defining SAI's rights with respect to the 9% note due March 14,
            2000.

27          Financial Data Schedule



No Current Report on Form 8-K was filed during the three months ended March 31,
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:  May 15, 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      May 15, 1997
------------------------    Director (Principal Financial ------------
      Scott L. Robinson     Officer)
                            

/s/   N. SCOTT GILLIS      Senior Vice President and      May 15, 1997
------------------------    Controller (Principal         ------------
      N. Scott Gillis       Accounting Officer)
                            
                                    


























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



Exhibit
  No.       Description
-------     -----------
10(a)       Subordinated Loan Agreement for Equity Capital, dated as of
            February 19, 1997, between the Company's subsidiary, SunAmerica
            Capital Services, Inc. ("SACS") and SunAmerica, Inc. ("SAI"),
            defining SAI's rights with respect to the 9% note due March 14,
            2000.

27          Financial Data Schedule