SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549


                                    FORM 10-Q

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

                                       OR

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

         For the quarterly period from January 1, 1999 to March 31, 1999


                          Commission File No. 33-47472


                     ANCHOR NATIONAL LIFE INSURANCE COMPANY


      Incorporated  in  Arizona                               86-0198983
                                                            IRS  Employer
                                                          Identification  No.

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


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

     THE  NUMBER  OF  SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK ON MAY
13,  1999  WAS  AS  FOLLOWS:

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





















































<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY

                                      INDEX



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

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

      Consolidated Statement of Income and Comprehensive
      Income (Unaudited) - Three Months Ended March 31,
      1999 and 1998                                                   5

      Consolidated Statement of Cash Flows (Unaudited) -
      Three Months Ended March 31, 1999 and 1998                    6-7

      Notes to Consolidated Financial Statements (Unaudited)          8

      Management's Discussion and Analysis of Financial
      Condition and Results of Operations                          9-25

      Quantitative and Qualitative Disclosures About
      Market Risk                                                    26

Part II - Other Information                                          27



























































</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)


                                                    March 31,     December 31,
                                                         1999             1998
                                              ---------------  ---------------
<S>                                           <C>              <C>
ASSETS

Investments:
  Cash and short-term investments             $ 1,294,949,000  $ 3,303,454,000
  Bonds, notes and redeemable
    preferred stocks available for sale,
    at fair value (amortized cost:
    March 1999, $5,967,365,000;
    December 1998, $4,252,740,000               5,910,805,000    4,248,840,000
  Mortgage loans                                  500,424,000      388,780,000
  Policy loans                                    315,223,000      320,688,000
  Common stocks available for sale, at fair
    value (cost: March 1999, $3,119,000;
    December 1998,$1,409,000)                       5,326,000        1,419,000
  Partnerships                                     54,384,000        4,577,000
  Real estate                                      24,000,000       24,000,000
  Other invested assets                           121,781,000       15,185,000
                                              ---------------  ---------------

  Total investments                             8,226,892,000    8,306,943,000

Variable annuity assets held in separate
  accounts                                     14,936,096,000   13,767,213,000
Accrued investment income                          93,515,000       73,441,000
Deferred acquisition costs                        940,794,000      866,053,000
Receivable from brokers for sales of
  securities                                       11,402,000       22,826,000
Other assets                                       96,988,000      109,857,000
                                              ---------------  ---------------

TOTAL ASSETS                                  $24,305,687,000  $23,146,333,000
                                              ===============  ===============
















































See accompanying notes
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>

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


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

Reserves, payables and accrued liabilities:
  Reserves for fixed annuity contracts       $ 5,387,271,000   $ 5,453,476,000 
  Reserves for universal life insurance
    contracts                                  2,336,399,000     2,339,199,000 
  Reserves for guaranteed investment
    contracts                                    353,152,000       353,137,000 
  Payable to brokers for purchases of
    securities                                    53,937,000               --- 
  Income taxes currently payable                  23,292,000        11,123,000 
  Other liabilities                              200,616,000       160,020,000 
                                             ----------------  ----------------

  Total reserves, payables
    and accrued liabilities                    8,354,667,000     8,316,955,000 
                                             ----------------  ----------------

Variable annuity liabilities related to
  separate accounts                           14,936,096,000    13,767,213,000 
                                             ----------------  ----------------

Subordinated notes payable to affiliates         209,803,000       209,367,000 
                                             ----------------  ----------------

Deferred income taxes                             40,707,000       105,772,000 
                                             ----------------  ----------------

Shareholder's equity:
  Common Stock                                     3,511,000         3,511,000 
  Additional paid-in capital                     378,674,000       378,674,000 
  Retained earnings                              403,648,000       366,460,000 
  Accumulated other comprehensive loss           (21,419,000)       (1,619,000)
                                             ----------------  ----------------

  Total shareholder's equity                     764,414,000       747,026,000 
                                             ----------------  ----------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY   $24,305,687,000   $23,146,333,000 
                                             ================  ================








































See accompanying notes
</TABLE>


                                        4
<PAGE>

<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
            CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
               For the three months ended March 31, 1999 and 1998
                                   (Unaudited)


                                                       1999           1998
                                             --------------  -------------
<S>                                          <C>             <C>
Investment income                            $ 130,357,000   $ 54,502,000 
                                             --------------  -------------

Interest expense on:
  Fixed annuity contracts                      (64,565,000)   (26,859,000)
  Universal life insurance contracts           (30,171,000)           --- 
  Guaranteed investment contracts               (5,158,000)    (4,492,000)
  Senior indebtedness                           (1,273,000)      (152,000)
  Subordinated notes payable to affiliates      (3,453,000)      (764,000)
                                             --------------  -------------

  Total interest expense                      (104,620,000)   (32,267,000)
                                             --------------  -------------

NET INVESTMENT INCOME                           25,737,000     22,235,000 
                                             --------------  -------------

NET REALIZED INVESTMENT GAINS                      884,000      2,297,000 
                                             --------------  -------------

Fee income:
  Variable annuity fees                         66,945,000     47,298,000 
  Net retained commissions                      12,957,000     12,238,000 
  Asset management fees                          9,279,000      7,143,000 
  Life insurance mortality fees                  6,377,000            --- 
  Surrender charges                              4,379,000      1,866,000 
  Other fees                                     3,746,000        662,000 
                                             --------------  -------------

TOTAL FEE INCOME                               103,683,000     69,207,000 
                                             --------------  -------------

GENERAL AND ADMINISTRATIVE EXPENSES            (35,415,000)   (24,451,000)
                                             --------------  -------------

AMORTIZATION OF DEFERRED ACQUISITION COSTS     (27,604,000)   (18,377,000)
                                             --------------  -------------

ANNUAL COMMISSIONS                              (9,088,000)    (4,148,000)
                                             --------------  -------------

PRETAX INCOME                                   58,197,000     46,763,000 

Income tax expense                             (21,009,000)   (16,452,000)
                                             --------------  -------------

NET INCOME                                      37,188,000     30,311,000 

Other comprehensive income, net of tax:

Net unrealized gains on bonds and notes
  available for sale:
    Net unrealized gains (losses)
      identified in the current period         (19,569,000)     1,794,000 
    Less reclassification adjustment for
      net realized gains included in net
      income                                      (231,000)    (2,807,000)
                                             --------------  -------------

OTHER COMPREHENSIVE LOSS                       (19,800,000)    (1,013,000)
                                             --------------  -------------

COMPREHENSIVE INCOME                         $  17,388,000   $ 29,298,000 
                                             ==============  =============















See accompanying notes
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
               For the three months ended March 31, 1999 and 1998
                                   (Unaudited)


                                                          1999            1998
                                              ----------------  --------------
<S>                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                    $    37,188,000   $  30,311,000 
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Interest credited to:
      Fixed annuity contracts                      64,565,000      26,859,000 
      Universal life insurance contracts           30,171,000             --- 
      Guaranteed investment contracts               5,158,000       4,492,000 
    Net realized investment gains                    (884,000)     (2,297,000)
    Amortization (accretion) of net premiums
      (discounts) on investments                    3,847,000        (792,000)
    Amortization of goodwill                          358,000         304,000 
    Provision for deferred income taxes           (54,403,000)       (903,000)
Change in:
  Accrued investment income                       (20,074,000)       (855,000)
  Deferred acquisition costs                      (54,741,000)    (35,463,000)
  Other assets                                     12,511,000      (2,569,000)
  Income taxes currently payable                   12,169,000       4,043,000 
  Other liabilities                                46,622,000     (11,153,000)
Other, net                                        (11,246,000)          3,000 
                                              ----------------  --------------

NET CASH PROVIDED BY OPERATING
  ACTIVITIES                                       71,241,000      11,980,000 
                                              ----------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of:
    Bonds, notes and redeemable preferred
      stocks                                   (2,862,010,000)   (574,978,000)
    Mortgage loans                               (121,189,000)       (577,000)
    Other investments, excluding short-term
      investments                                (155,761,000)            --- 
  Sales of:
    Bonds, notes and redeemable preferred
      stocks                                    1,080,439,000     336,331,000 
    Other investments, excluding short-term
      investments                                   1,519,000        (499,000)
  Redemptions and maturities of:
    Bonds, notes and redeemable preferred
      stocks                                      125,032,000     116,670,000 
    Mortgage loans                                  9,767,000      32,774,000 
    Other investments, excluding short-term
      investments                                   5,683,000         635,000 
                                              ----------------  --------------

NET CASH PROVIDED BY INVESTING ACTIVITIES      (1,916,520,000)    (89,644,000)
                                              ----------------  --------------































See accompanying notes
</TABLE>


                                        6

<PAGE>
<TABLE>
<CAPTION>

                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
               For the three months ended March 31, 1999 and 1998
                                   (Unaudited)


                                                        1999             1998
                                            ----------------  ---------------

<S>                                         <C>               <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Premium receipts on:
    Fixed annuity contracts                 $   397,623,000   $  367,909,000 
    Universal life insurance contracts           18,003,000              --- 
  Net exchanges from the fixed
    accounts of variable annuity contracts     (414,402,000)    (322,133,000)
  Withdrawal payments on:
    Fixed annuity contracts                    (103,126,000)     (52,010,000)
    Universal life insurance contracts          (16,351,000)             000 
    Guaranteed investment contracts              (5,143,000)      (4,165,000)
  Claims and annuity payments on:
    Fixed annuity contracts                     (16,221,000)      (7,818,000)
    Universal life insurance contracts          (18,019,000)             --- 
  Net receipts from (repayments of) other
    short-term financings                        (5,590,000)       6,194,000 
                                            ----------------  ---------------

NET CASH USED BY FINANCING ACTIVITIES          (163,226,000)   __(12,023,000)
                                            ----------------  ---------------

NET INCREASE IN CASH AND SHORT-TERM
  INVESTMENTS                                    (2,008,505)     (89,687,000)

CASH AND SHORT-TERM INVESTMENTS AT
  BEGINNING OF PERIOD                        _3,303,454,000       71,060,000 
                                            ----------------  ---------------

CASH AND SHORT-TERM INVESTMENTS AT
  END OF PERIOD                             $ 1,294,949,000   $  (18,627,000)
                                            ================  ===============

SUPPLEMENTAL CASH FLOW INFORMATION:

  Interest paid on indebtedness             $     1,709,000   $      972,000 
                                            ================  ===============


  Net income taxes paid                     $    67,099,000   $   13,193,000 
                                            ================  ===============








































See accompanying notes
</TABLE>


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

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

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

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

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

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

On  December 31, 1998, the Company acquired the individual life business and the
individual  and  group  annuity business of MBL Life Assurance Corporation ("MBL
Life"),  via  a  100%  coinsurance  transaction,  for  a  cash purchase price of
$128,420,000.  As  part  of this transaction, the Company acquired assets having
an aggregate fair value of $5,718,227,000, composed primarily of invested assets
totaling  $5,715,010,000.  Liabilities  assumed  in  this  acquisition  totaled
$5,831,266,000,  including  $3,413,827,000  of  fixed  annuity  reserves,
$2,317,365,000  of  universal  life  reserves  and  $70,687,000  of  guaranteed
investment  contract  reserves.  The  excess of the purchase price over the fair
value  of  net  assets  received  amounted  to  $113,039,000  and is included in
Deferred  Acquisition Costs in the accompanying consolidated balance sheet.  The
income  statement  for  1999  includes  the impact of the Acquisition.  On a pro
forma  basis,  assuming the Acquisition had been consummated on January 1, 1998,
the beginning of the prior-year period discussed herein, investment income would
have  been $134,248,000 and net income would have been $32,732,000 for the three
months  ended  March  31,  1998.

     This  business  was  assumed  from MBL life subject to existing reinsurance
ceded  agreements.  At  December  31,  1998, the maximum retention on any single
life was $2 million, and a total credit of $5,057,000 was taken against the life
insurance  reserves,  representing  predominantly  yearly  renewable  term
reinsurance.  In  order  to  limit





































                                        8
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

2.     Reinsurance  (continued)
       -----------

even  further  the  exposure  to  loss  on  any single insured and to recover an
additional  portion  of  the benefits paid over such limits, the Company entered
into  a  reinsurance  treaty, effective January 1, 1999, under which the Company
retains  no  more  than  $100,000 of risk on any one insured life.  At March 31,
1999,  a total reserve credit of $4,852,000 was taken against the life insurance
reserves.  With  respect  to  these  coinsurance  agreements,  the Company could
become  liable  for  all obligations of the reinsured policies if the reinsurers
were  to  become  unable  to  meet  the obligations assumed under the respective
reinsurance  agreements.

     Included  in  the block of business acquired from MBL Life is approximately
$250,000,000  of  individual  life  business  and  $590,000,000 of group annuity
business  whose  contract  owners are residents of New York State ("the New York
Business").  On  June  30,  1999,  the New York Business will be acquired by the
Company's  New  York  affiliate, First SunAmerica Life Insurance Company, via an
assumption  reinsurance  agreement,  and  the  remainder of the business will be
acquired  by  the Company via an assumption reinsurance agreement with MBL Life,
which will supersede the coinsurance agreement.  The $128,420,000 purchase price
will  be  allocated  between  the  Company  and  its  affiliate  based  on their
respective  assumed  reserves  at  that  time.

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

3.     Subordinated  Notes  Payable  to  Affiliates
       --------------------------------------------

     On  December  30,  1998, the Company received cash totaling $170,436,000 in
exchange  for  issuance  of  a surplus note payable to SunAmerica Life Insurance
Company,  which has been included in Subordinated Notes Payable to Affiliates in
the  accompanying consolidated balance sheet. This note bears interest at a rate
of  7%,  and  is repayable upon approval by the Arizona Department of Insurance.

4.     Capital  Contribution
       ---------------------

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

5.     Adoption  of  New  Accounting  Standard
       ---------------------------------------

     Effective  October  1,  1998,  the  Company  adopted Statement of Financial
Accounting  Standards  No.  130,  "Reporting  Comprehensive Income" ("SFAS 130")
which  requires  the reporting of comprehensive income in addition to net income
from  operations.  Comprehensive  income is a more inclusive financial reporting
methodology  that  includes  disclosure  of  certain  financial information that
historically  has  not  been  recognized  in the calculation of net income.  The
adoption  of  SFAS  130  did  not  have  an  impact  on the Company's results of
operations,  financial condition or liquidity.  Comprehensive income amounts for
the  prior  year  are  presented  to  conform  to  the  current  year's



































                                        9
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

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

presentation.  Net  unrealized  gains  on  bonds  and  notes  available for sale
decreased  by  $19,800,000  during  the  three  months ended March 31, 1999, and
decreased  by  $1,013,000  during  the  three  months  ended  March  31,  1998.

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

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

Three  months  ended  March  31,
1999:
<S>                                 <C>            <C>           <C>
  Net unrealized losses on bonds
  and notes available for sale
  identified in the current
  period                            $(50,107,000)  $17,538,000   $(32,569,000)

  Increase in Deferred Acquisition
    Cost adjustment identified in
    the current period                20,000,000    (7,000,000)    13,000,000 
                                    -------------  ------------  -------------
                                     (30,107,000)   10,538,000    (19,569,000)

  Reclassification adjustment for
    net realized gains included
    in net income                       (356,000)      125,000       (231,000)
                                    -------------  ------------  -------------

    Total decrease in net
      unrealized gains on bonds
      and notes available for
      sale                          $(30,463,000)  $10,663,000   $(19,800,000)
                                    =============  ============  =============

  Three months ended March 31,
  1998:

  Net unrealized gains on bonds
  and notes available for sale
  identified in the current
  period                            $  1,556,000   $  (542,000)  $  1,014,000 

  Increase in Deferred Acquisition
    Cost adjustment identified in
    the current period                 1,200,000      (420,000)       780,000 
                                    -------------  ------------  -------------
                                       2,756,000      (962,000)     1,794,000 

  Reclassification adjustment for
    net realized gains included
    in net income                     (4,318,000)    1,511,000     (2,807,000)
                                    -------------  ------------  -------------

    Total decrease in net
      unrealized gains on
      bonds and notes
      available for sale            $ (1,562,000)  $   549,000   $ (1,013,000)
                                    =============  ============  =============
</TABLE>

























                                       10
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

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

RESULTS  OF  OPERATIONS

     NET  INCOME  totaled  $37.2 million in 1999, compared with $30.3 million in
1998.  On  December  31, 1998, the Company acquired the individual life business
and  the individual and group annuity business of MBL Life Assurance Corporation
(the  "Acquisition").  The  Acquisition  was  accounted  for  under the purchase
method of accounting, and, therefore, results of operations include those of the
Acquisition  only  from  its  date  of  acquisition. Consequently, the operating
results  for  1999  and 1998 are not comparable. On a pro forma basis, using the
historical  financial information of the acquired business and assuming that the
Acquisition  had  been  consummated  on  January  1,  1998, the beginning of the
prior-year  period discussed herein, net income would have been $32.7 million in
1998.

     PRETAX INCOME totaled $58.2 million in 1999, compared with $46.8 million in
1998.  The 24.5% improvement in 1999 over 1998 primarily resulted from increased
fee  income and net investment income, partially offset by increased general and
administrative  expenses and amortization of deferred acquisition costs ("DAC").





































                                       11
<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, totaled $25.7 million in 1999 and $22.2 million in
1998.  These amounts equal 1.24% on average invested assets (computed on a daily
basis)  of  $8.31  billion in 1999 and 3.52% on average invested assets of $2.53
billion  in  1998.  On  a  pro  forma  basis,  assuming the Acquisition had been
consummated  on  January  1,  1998,  net  investment  income  on related average
invested  assets  would  have  been  1.31%  in  1998.

     Net investment spreads include the effect of interest paid or income earned
on  the  difference between average invested assets and average interest-bearing
liabilities.  Average  interest-bearing  liabilities  exceeded  average interest
bearing  assets  by $79.4 million in 1999, compared with a $108.1 million excess
of  average  invested  assets over average interest-bearing liabilities in 1998.
The  difference  between  the Company's yield on average invested assets and the
rate  paid on average interest-bearing liabilities (the "Spread Difference") was
1.28% in 1999 and 3.29% in 1998. On a pro forma basis, assuming the Acquisitions
had  been  consummated on January 1, 1998, the Spread Difference would have been
1.32%  in  1998.

     Investment  income  (and  the  related  yields  on average invested assets)
totaled  $130.4  million (6.27%) in 1999 and $54.5 million (8.62%) in 1998. Both
the  significant  increase  in investment income and the decrease in the related
yield  in  1999 as compared with 1998 principally resulted from the Acquisition.
The  invested  assets  associated  with  the  Acquisition  included  high-grade
corporate,  government  and  government/agency  bonds  and  cash  and short-term
investments,  which  are  generally lower yielding than a significant portion of
the  invested assets that comprise the remainder of the Company's portfolio.  On
a  pro  forma basis, assuming the Acquisition had been consummated on January 1,
1998,  the  yield  on  related  average invested assets would have been 6.55% in
1998.  The decrease in yield in 1999 also reflects decreased partnership income.

     Partnership  income decreased to $3.2 million (a yield of 50.62% on related
average  assets of $25.4 million) in 1999, from $7.1 million (a yield of 199.51%
on  related  average  assets  of  $14.3 million) in 1998.  Partnership income is
based upon cash distributions received from limited partnerships, the operations
of  which  the  Company  does  not  influence.  Consequently, such income is not
predictable  and  there  can  be  no  assurance  that  the  Company will realize
comparable  levels  of  such  income  in  the  future.

     Total  interest expense equaled $104.6 million in 1999, compared with $32.3
million  in 1998.  The average rate paid on all interest-bearing liabilities was
4.99%  in  1999,  compared  with  5.33%  in  1998.  Interest-bearing liabilities
averaged  $8.39  billion  during  1999  and $2.42 billion during 1998.  On a pro
forma  basis,  assuming the Acquisition had been consummated on January 1, 1998,
the  average rate paid on all interest-bearing liabilities would have been 5.23%
in 1998 and interest-bearing liabilities would have averaged $8.22 billion.  The
decrease  in  the  overall  rate  paid  in  1999  results primarily from the DAC
deferral  of  the  excess  of  certain promotional interest rates offered on the
fixed  portion of the Company's newer products over the ongoing crediting rates.
Without such capitalization of interest, the rate in 1999 would have been 5.24%.

     The  increase  in average invested assets since 1998 primarily reflects the
impact of the Acquisition.  In addition, average invested assets in 1999 reflect
increased  sales  of the fixed account options of the Company's variable annuity
products  ("Fixed Annuity Premiums"), and renewal premiums on its universal life
products  acquired  in  the  Acquisition, partially offset by net exchanges from
fixed accounts into the separate accounts of variable annuity  contracts.  Since
March  31,  1998,  Fixed  Annuity  Premiums  have




































                                       12
<PAGE>
aggregated $1.65 billion.  Fixed Annuity Premiums totaled $397.6 million in 1999
and  $367.9  million  in 1998 and are largely premiums for the fixed accounts of
variable annuities.  Such premiums have increased principally because of greater
sales  of  the  Company's variable annuity products and greater inflows into the
one-year  fixed  account  and the new six-month fixed account of these products,
which  are  used  for  dollar-cost  averaging  into  the  variable  accounts.
Accordingly,  the  Company anticipates that it will see a large portion of these
premiums  transferred  into  the  variable funds.  On an annualized basis, these
premium  amounts  represent  29%  and  70%,  respectively,  of the fixed annuity
reserve  balances  at  the beginning of the respective periods.  The decrease in
1999  Fixed  Annuity  Premiums  when  expressed as a percentage of fixed annuity
reserves  at  December  31,  1998  results  from  the impact of the Acquisition.

     There  were  no  guaranteed investment contract ("GIC") premiums in 1999 or
1998.  GIC  surrenders  and  maturities  totaled  $5.1  million in 1999 and $4.2
million  in  1998.  The  Company  does  not  actively market GICs; consequently,
premiums  and surrenders may vary substantially from period to period.  The GICs
issued  by the Company generally guarantee the payment of principal and interest
at  fixed  or  variable  rates for a term of three to five years.  GICs that are
purchased  by  banks  for  their  long-term  portfolios  or  state  and  local
governmental entities either prohibit withdrawals or permit scheduled book value
withdrawals subject to the terms of the underlying indenture or agreement.  GICs
purchased  by  asset  management  firms  for  their short-term portfolios either
prohibit  withdrawals  or  permit withdrawals with notice ranging from 90 to 270
days.  In  pricing  GICs,  the Company analyzes cash flow information and prices
accordingly  so  that  it  is  compensated  for  possible  withdrawals  prior to
maturity.

     NET  REALIZED  INVESTMENT GAINS totaled $0.9 million in 1999, compared with
$2.3  million in 1998.  Net realized investment gains in 1999 include impairment
writedowns  of  $0.6 million in 1999, compared with $1.5 million in 1998.  Thus,
net  gains  from  sales  and  redemptions of investments totaled $1.5 million in
1999,  compared  with  $3.8  million  in  1998.

     The  Company sold or redeemed invested assets, principally bonds and notes,
aggregating  $1.21  billion  in  1999  and  $485.9  million  in  1998.  Sales of
investments  result  from  the  active  management  of  the Company's investment
portfolio,  including  assets  received  as  part  of  the Acquisition.  Because
redemptions  of  investments  are generally involuntary and sales of investments
are  made  in  both rising and falling interest rate environments, net gains and
losses  from  sales  and  redemptions  of  investments  fluctuate from period to
period,  and  represent  0.07%  and 0.60% of average invested assets in 1999 and
1998, respectively.  Active portfolio management involves the ongoing evaluation
of  asset sectors, individual securities within the investment portfolio and the
reallocation  of  investments  from  sectors that are perceived to be relatively
overvalued  to  sectors  that  are  perceived to be relatively undervalued.  The
intent of the Company's active portfolio management is to maximize total returns
on  the  investment portfolio, taking into account credit, option, liquidity and
interest-rate  risk.

     Impairment  writedowns  include  provisions  applied  to  bonds in 1999 and
1998.  On  an  annualized basis, impairment writedowns represent 0.03% and 0.24%
of  average  invested  assets  in 1999 and 1998, respectively.  For the eighteen
fiscal quarters beginning October 1, 1994, impairment writedowns as a percentage
of  average  invested  assets  have  ranged up to 3.06% and have averaged 0.50%.
Such  writedowns  are  based  upon  estimates of the net realizable value of the
applicable  assets.  Actual  realization  will  be dependent upon future events.







































                                       13
<PAGE>
     VARIABLE  ANNUITY  FEES are based on the market value of assets in separate
accounts supporting variable annuity contracts.  Such fees totaled $66.9 million
in 1999 and $47.3 million in 1998.  The increased fees in 1999 reflect growth in
average  variable  annuity  assets,  principally  due to the receipt of variable
annuity  premiums  and  net  exchanges into the separate accounts from the fixed
accounts  of  variable  annuity  contracts,  partially offset by surrenders, and
increased  market  values.  On  an  annualized  basis,  variable  annuity  fees
represent  1.9%  and  1.8%,  respectively, of average variable annuity assets in
1999  and 1998.  Variable annuity assets averaged $14.32 billion during 1999 and
$10.24  billion  during 1998.  Variable annuity premiums, which exclude premiums
allocated  to  the fixed accounts of variable annuity products, aggregated $1.83
billion  since March 31, 1998.  Variable annuity premiums totaled $484.5 million
and  $412.6  million  in  1999  and 1998, respectively.  On an annualized basis,
these  amounts represent 14% and 17%, respectively, of variable annuity reserves
at  the  beginning  of  the  respective  periods.

     Sales of variable annuity products (which include premiums allocated to the
fixed  accounts)  ("Variable  Annuity Product Sales") amounted to $881.3 million
and  $780.4  million  in  1999 and 1998, respectively.  Variable Annuity Product
Sales  primarily  reflect  sales  of  the  Company's  flagship variable annuity,
Polaris.  Polaris  is  a  multimanager  variable annuity that offers investors a
choice  of  27  variable  funds  and 7 guaranteed fixed-rate funds. Increases in
Variable  Annuity  Product Sales are due, in part, to market share gains through
enhanced  distribution  efforts  and  consumer  demand  for  flexible retirement
savings  products  that  offer  a variety of equity, fixed income and guaranteed
fixed  account  investment  choices.

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

     NET  RETAINED  COMMISSIONS  are  primarily  derived from commissions on the
sales  of  nonproprietary  investment  products  by  the Company's broker-dealer
subsidiary,  after deducting the substantial portion of such commissions that is
passed on to registered representatives.  Net retained commissions totaled $13.0
million in 1999 and $12.2 million in 1998.  Broker-dealer sales (mainly sales of
general  securities,  mutual  funds and annuities) totaled $3.48 billion in 1999
and  $4.30  billion  in  1998.  The increase in net retained commissions and the
decrease  in  sales  principally  reflect  changes  in  sales  mix.

     SURRENDER  CHARGES  on  fixed  and variable annuity contracts and universal
life contracts totaled $4.4 million in 1999 (including $1.0 million attributable
to  the  Acquisition)  and $1.9 million in 1998. Surrender charges generally are
assessed  on  withdrawals  at  declining rates during the first seven years of a
contract.  Withdrawal  payments  totaled $417.4 million in 1999 (including $96.8
million  attributable to the Acquisition), compared with $300.5 million in 1998.
These  payments  represent 7.7% (6.8% attributable to the Acquisition) and 9.8%,
respectively, of average fixed and variable annuity and universal life reserves.
Withdrawals  include  variable  annuity  withdrawals  from the separate accounts
totaling  $298.2 million in 1999 (8.4% of average variable annuity reserves) and
$248.5  million  (9.8% of average variable annuity reserves) in 1998. Consistent
with  the  assumptions  used  in  connection  with  the  Acquisition, management
anticipates  that  the level of withdrawal payments will reflect higher relative
withdrawal rates in the near future because of higher surrenders on the acquired
annuity business.  Excluding the effects of the Acquisition, withdrawal payments
represent  8.0%  of  related  average  fixed  and  variable  annuity  reserves.






































                                       14
<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 $9.3 million on
average  assets  managed  of  $3.67  billion in 1999 and $7.1 million on average
assets  managed  of  $2.79  billion  in  1998.  Asset  management  fees  are not
necessarily  proportionate to average assets managed, principally due to changes
in  product  mix.  Sales  of  mutual  funds,  excluding  sales  of  money market
accounts, have aggregated $1.00 billion since March 31, 1998.  Mutual fund sales
totaled  $295.7  million  in  1999  and $193.9 million in 1998.  The increase in
sales  principally  resulted from increased sales of the Company's "Style Select
Series"  product  and the introduction in June 1998 of the "Dogs" of Wall Street
fund.  The  "Style  Select  Series"  is  a  group  of mutual funds that are each
managed  by  three industry-recognized fund managers.  The "Dogs" of Wall Street
fund  contains  30 large capitalization value stocks that are selected by strict
criteria.  Sales of these products totaled $207.3 million in 1999, compared with
$134.5  million  in  1998,  primarily  reflecting the addition of five new Style
Select  funds, which more than doubled the number of Style Select funds to nine.
Redemptions  of  mutual  funds,  excluding redemptions of money market accounts,
amounted  to  $140.7  million  in  1999  and  $108.9  million  in  1998,  which,
annualized,  represent  15.4%  and  15.6%,  respectively, of average mutual fund
assets.

     GENERAL AND ADMINISTRATIVE EXPENSES totaled $35.4 million in 1999 and $24.5
million  in  1998.  The  increase in 1999 over 1998 reflects the increased costs
related  to the business acquired in the Acquisition. General and administrative
expenses  remain  closely  controlled  through  a  company-wide cost containment
program  and  continue  to  represent  less  than  1%  of  average total assets.

     AMORTIZATION OF DEFERRED ACQUISITION COSTS totaled $27.6 million (including
$4.5  million  attributable  to  the  Acquisition)  in 1999, compared with $18.4
million  in 1998.  The increase in amortization was also due to additional fixed
and  variable  annuity  and mutual fund sales and the subsequent amortization of
related  deferred  commissions  and  other  direct  selling  costs.

     ANNUAL  COMMISSIONS represent renewal commissions paid quarterly in arrears
to  maintain  the  persistency  of  certain  of  the  Company's variable annuity
contracts.  Substantially  all  of  the  Company's  currently available variable
annuity  products  allow for an annual commission payment option in return for a
lower  immediate  commission.  Annual  commissions totaled $9.1 million in 1999,
compared with $4.1 million in 1998.  The increase in annual commissions reflects
increased  sales  of  annuities  that  offer  this commission option and gradual
expiration of the initial fifteen-month periods before such payments begin.  The
Company estimates that approximately 55% of the average balances 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  $21.0  million  in 1999, compared with $16.5
million  in  1998,  representing  effective annualized tax rates of 36% and 35%,
respectively.

FINANCIAL  CONDITION  AND  LIQUIDITY

     SHAREHOLDER'S  EQUITY increased by 2.3% to $764.4 million at March 31, 1999
from  $747.0  million  at  December 31, 1998, due to $37.2 million of net income
recorded  in  1999,  partially offset by a $19.8 million increase in accumulated
other  comprehensive  loss.

     INVESTED  ASSETS  at  March  31,  1999 totaled $8.23 billion, compared with





































                                       15
<PAGE>
$8.31  billion  at  December 31, 1998.  The Company manages most of its invested
assets  internally.  The  Company's  general  investment  philosophy  is to hold
fixed-rate  assets  for  long-term investment.  Thus, it does not have a trading
portfolio.  However,  the  Company  has  determined that all of its portfolio of
bonds, notes and redeemable preferred stocks (the "Bond Portfolio") is available
to  be sold in response to changes in market interest rates, changes in relative
value  of  asset  sectors and individual securities, changes in prepayment risk,
changes in the credit quality outlook for certain securities, the Company's need
for  liquidity  and  other  similar  factors.

     THE BOND PORTFOLIO, which constituted 72% of the Company's total investment
portfolio  at  March  31,  1999,  had  an  amortized cost that was $56.6 million
greater than its aggregate fair value at March 31, 1999, compared with an excess
of  $3.9  million  at  December 31, 1998.  The net unrealized losses on the Bond
Portfolio  in  1999  principally reflect the higher prevailing interest rates at
March  31,  1999  and  the  corresponding  effect  on the fair value of the Bond
Portfolio.

     At March 31, 1999, the Bond Portfolio (excluding $4.5 million of redeemable
preferred  stocks)  included  $5.63  billion of bonds rated by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service ("Moody's"), Duff & Phelps Credit
Rating  Co.  ("DCR"),  Fitch  Investors  Service, L.P. ("Fitch") or the National
Association  of  Insurance  Commissioners  ("NAIC"), and $277.3 million of bonds
rated by the Company pursuant to statutory ratings guidelines established by the
NAIC.  At  March 31, 1999, approximately $5.62 billion of the Bond Portfolio was
investment  grade,  including $1.58 billion of U.S. government/agency securities
and  mortgage-backed  securities  ("MBSs").

     At March 31, 1999, the Bond Portfolio included $285.4 million of bonds that
were  not investment grade.  These non-investment-grade bonds accounted for 1.2%
of  the  Company's  total  assets  and  3.5%  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
March  31,  1999.

     The  table  on  the  following page summarizes the Company's rated bonds by
rating  classification  as  of  March  31,  1999.




















































                                       16

<PAGE>


<TABLE>
<CAPTION>

                                        RATED BONDS BY RATING CLASSIFICATION
                                               (Dollars in thousands)

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


      S&P/(Moody's)               Estimated       NAIC               Estimated               Estimated   Percent of
      [DCR] {Fitch}   Amortized        fair   category   Amortized        fair   Amortized        fair     invested
       category (1)        cost       value        (2)        cost       value        cost       value       assets
-------------------  ----------  ----------  ---------  ----------  ----------  ----------  ----------  -----------
<S>                  <C>         <C>         <C>        <C>         <C>         <C>         <C>         <C>
AAA+ to A-
  (Aaa to A3)
  [AAA to A-]
  {AAA to A-}        $4,331,966  $4,312,567         1   $  366,805  $  365,379  $4,698,771  $4,677,946       56.86%

BBB+ to BBB-
  (Baal to Baa3)
  [BBB+ to BBB-]
  {BBB+ to BBB-}        773,290     761,561         2      183,934     181,308     957,308     942,869       11.46 

BB+ to BB-
  (Ba1 to Ba3)
  [BB+ to BB-]
  {BB+ to BB-}           52,237      49,852         3        8,164       8,000      60,401      57,852        0.70 

B+ to B-
  (B1 to B3)
  [B+ to B-]
  {B+ to B-}            214,290     204,320         4       24,331      16,930     238,621     221,250        2.69 

CCC+ to C
  (Caa to C)
  [CCC]
  {CCC+ to C-}              ---         ---         5        7,875       6,243       7,875       6,243        0.08 

CI to D
  [DD]
  {D}                       ---         ---         6           98          98          98          98         --- 
                     ----------  ----------             ----------  ----------  ----------  ----------             

TOTAL RATED ISSUES   $5,371,783  $5,328,300             $  591,207  $  577,958  $5,962,990  $5,906,268
                     ==========  ==========             ==========  ==========  ==========  ==========             
<FN>

Footnotes  appear  on  the  following  page.


</TABLE>







































                                       17

<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  $277.3  million  of  assets  that were rated by the Company pursuant to
applicable  NAIC  rating  guidelines.







































































                                       18
<PAGE>
     Senior  secured  loans ("Secured Loans") are included in the Bond Portfolio
and  aggregated  $502.8  million at March 31, 1999.  Secured Loans are senior to
subordinated debt and equity, and are secured by assets of the issuer.  At March
31,  1999,  Secured  Loans  consisted  of  $180.8  million  of  publicly  traded
securities  and  $322.0  million  of privately traded securities.  These Secured
Loans  are composed of loans to 84 borrowers spanning 18 industries, with 24% of
these  assets  concentrated in utilities and 12% of these assets concentrated in
financial  institutions.  No  other industry concentration constituted more than
6%  of  these  assets.

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

     MORTGAGE LOANS aggregated $500.4 million at March 31, 1999 and consisted of
132  commercial  first  mortgage  loans  with  an  average  loan  balance  of
approximately  $3.8  million, collateralized by properties located in 29 states.
Approximately 32% of this portfolio was office, 17% was multifamily residential,
12%  was  manufactured  housing,  10%  was industrial, 9% was hotels and 20% was
other  types.  At  March  31,  1999, approximately 29% and 10% of this portfolio
were secured by properties located in California and New York, respectively, and
no more than 9% of this portfolio was secured by properties located in any other
single  state.  At  March  31,  1999,  there  were  eight  mortgage  loans  with
outstanding balances of $10 million or more, which loans collectively aggregated
approximately  25%  of  this portfolio.  At March 31, 1999, approximately 34% of
the  mortgage loan portfolio consisted of loans with balloon payments due before
April  1,  2002.  During  1999  and 1998, loans delinquent by more than 90 days,
foreclosed loans and restructured loans have not been significant in relation to
the  total  mortgage  loan  portfolio.

     At  March  31,  1999, approximately 21% of the mortgage loans were seasoned
loans  underwritten to the Company's standards and purchased at or near par from
other financial institutions.  Such loans generally have higher average interest
rates  than  loans  that  could be originated today. The balance of the mortgage
loan  portfolio  has  been  originated  by the Company under strict underwriting
standards.  Commercial  mortgage loans on properties such as offices, hotels and
shopping  centers  generally  represent  a higher level of risk than do mortgage
loans  secured  by  multifamily residences.  This greater risk is due to several
factors,  including the larger size of such loans and the more immediate effects
of general economic conditions on these commercial property types.  However, due
to the seasoned nature of the Company's mortgage loan portfolio, its emphasis on
multi  family  loans and its strict underwriting standards, the Company believes
that  it  has  prudently  managed  the  risk  attributable  to its mortgage loan
portfolio  while  maintaining  attractive  yields.

     PARTNERSHIP  INVESTMENTS  totaled  $54.4  million  at  March  31,  1999,
constituting investments in eleven separate partnerships with an average size of
approximately  $4.9  million.  These partnerships are accounted for by using the
cost  method  of  accounting  and are managed by independent money managers that
invest  in  a  broad selection of equity and fixed-income securities,  currently
including  approximately  475  separate  issuers.  The






































                                       19
<PAGE>
risks  generally  associated  with  partnerships  include those related to their
underlying  investments  (i.e.  equity  securities  and debt securities), plus a
level  of  illiquidity,  which  is mitigated, to some extent by the existence of
contractual  termination  provisions.

     OTHER INVESTED ASSETS aggregated $121.8 million at March 31, 1999, compared
with  $15.2 million at December 31, 1998.  Other Invested Assets includes $106.6
million  of  seed  money  for  mutual  funds used as investment vehicles for the
Company's variable annuity separate accounts and $15.2 million of collateralized
bond  obligations  and  collateralized  mortgage  obligation  residuals.

     ASSET-LIABILITY  MATCHING  is utilized by the Company to minimize the risks
of  interest rate fluctuations and disintermediation.  The Company believes that
its  fixed-rate liabilities should be backed by a portfolio principally composed
of  fixed-rate  investments  that  generate  predictable  rates  of return.  The
Company  does  not have a specific target rate of return.  Instead, its rates of
return  vary  over  time depending on the current interest rate environment, the
slope  of the yield curve, the spread at which fixed-rate investments are priced
over  the  yield curve, and general economic conditions.  Its portfolio strategy
is  constructed with a view to achieve adequate risk-adjusted returns consistent
with  its investment objectives of effective asset-liability matching, liquidity
and  safety.  The Company's fixed-rate products incorporate surrender charges or
other  restrictions in order to encourage persistency.  Approximately 88% of the
Company's fixed annuity, universal life and GIC reserves had surrender penalties
or other restrictions at March 31, 1999.  At June 30, 1999, this percentage will
decline  substantially  due  to  the  release  of  surrender  restrictions  on
approximately  $5 billion of reserves acquired in the acquisition from MBL Life.

     As  part  of  its asset-liability matching discipline, the Company conducts
detailed  computer  simulations that model its fixed-rate assets and liabilities
under  commonly  used  stress-test interest rate scenarios.  With the results of
these  computer  simulations, the Company can measure the potential gain or loss
in fair value of its interest-rate sensitive instruments and seek to protect its
economic  value  and  achieve  a predictable spread between what it earns on its
invested  assets and what it pays on its liabilities by designing its fixed-rate
products  and conducting its investment operations to closely match the duration
of  the  fixed-rate assets to that of its fixed-rate liabilities.  The Company's
fixed-rate  assets  include:  cash  and short-term investments; bonds, notes and
redeemable  preferred  stocks;  mortgage  loans;  and  investments  in  limited
partnerships  that  invest  primarily in fixed-rate securities and are accounted
for  by using the cost method.  At March 31, 1999, these assets had an aggregate
fair  value  of  $7.72 billion with a duration of 3.3.  The Company's fixed-rate
liabilities  include  fixed  annuity,  GIC  and  universal  life  reserves  and
subordinated  notes.  At March 31, 1999, these liabilities had an aggregate fair
value (determined by discounting future contractual cash flows by related market
rates  of  interest)  of  $7.83  billion  with  a duration of 3.1. The Company's
potential  exposure  due to a relative 10% increase in prevailing interest rates
from their March 31, 1999 levels is a loss of approximately $6.5 million in fair
value  of  its  fixed-rate  assets  that is not offset by a decrease in the fair
value  of  its  fixed-rate liabilities. Because the Company actively manages its
assets  and  liabilities and has strategies in place to minimize its exposure to
loss as interest rate changes occur, it expects that actual losses would be less
than  the  estimated  potential  loss.

     Duration is a common option-adjusted measure for the price sensitivity of a
fixed-maturity  portfolio  to  changes  in  interest  rates.  It  measures  the







































                                       20
<PAGE>

approximate  percentage  change  in  the market value of a portfolio if interest
rates  change  by  100  basis  points,  recognizing  the  changes  in cash flows
resulting  from  embedded  options  such  as  policy  surrenders,  investment
prepayments  and  bond  calls.  It  also  incorporates  the  assumption that the
Company  will  continue  to utilize its existing strategies of pricing its fixed
annuity,  universal  life  and  GIC products, allocating its available cash flow
amongst  its  various  investment  portfolio  sectors and maintaining sufficient
levels  of  liquidity.  Because  the calculation of duration involves estimation
and  incorporates assumptions, potential changes in portfolio value indicated by
the  portfolio's  duration  will  likely  be  different  from the actual changes
experienced  under  given  interest  rate  scenarios, and the differences may be
material.

     As  a component of its asset and liability management strategy, the Company
utilizes  interest rate swap agreements ("Swap Agreements") to match assets more
closely  to  liabilities.  Swap  Agreements  are  agreements  to exchange with a
counterparty  interest  rate  payments  of  differing  character  (for  example,
variable-rate payments exchanged for fixed-rate payments) based on an underlying
principal  balance  (notional principal) to hedge against interest rate changes.
The  Company  typically  utilizes  Swap  Agreements  to  create  a  hedge  that
effectively  converts  floating-rate  assets  and  liabilities  into  fixed-rate
instruments.  At  March 31, 1999, the Company had one outstanding Swap Agreement
with  a  notional  principal amount of $21.5 million.  This agreement matures in
December  2024.

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

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






































                                       21
<PAGE>
     INVESTED  ASSETS  EVALUATION  is  routinely  conducted  by  the  Company.
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  any  collateral,  compliance  with contractual covenants, the
borrower's  recent  financial  performance,  news  reports  and other externally
generated information concerning the creditor's affairs. In the case of publicly
traded  bonds,  management also considers market value quotations, if available.
For  mortgage  loans,  management generally considers information concerning the
mortgaged  property  and,  among other things, factors impacting the current and
expected payment status of the loan and, if available, the current fair value of
the  underlying  collateral. For investments in partnerships, management reviews
the financial statements and other information provided by the general partners.

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

     DEFAULTED INVESTMENTS, comprising all investments that are in default as to
the  payment  of  principal  or  interest, totaled $4.6 million ($3.9 million of
mortgage  loans  and  $0.7  million of bonds) at March 31, 1999, and constituted
less  than  0.1%  of  total  invested  assets.  At  December 31, 1998, defaulted
investments  totaled  $0.7  million of mortgage loans, and constituted less than
0.1%  of  total  invested  assets.

     SOURCES  OF  LIQUIDITY  are readily available to the Company in the form of
the  Company's  existing  portfolio  of cash and short-term investments, Reverse
Repo  capacity on invested assets and, if required, proceeds from invested asset
sales.  At  March  31,  1999,  approximately $2.32 billion of the Company's Bond
Portfolio had an aggregate unrealized gain of $25.8 million, while approximately
$3.59  billion  of  the Bond Portfolio had an aggregate unrealized loss of $82.3
million.  In  addition,  the  Company's  investment portfolio currently provides
approximately  $64.6  million  of monthly cash flow from scheduled principal and
interest  payments.  Historically,  cash flows from operations and from the sale
of  the  Company's  annuity  and  GIC products have been more than sufficient in
amount  to  satisfy  the  Company's  liquidity  needs.

     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







































                                       22
<PAGE>
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.

YEAR  2000

     The  Company  relies  significantly on computer systems and applications in
its  daily  operations.  Many  of  these  systems  are  not  presently year 2000
compliant,  which means that because they have historically used only two digits
to  identify  the  year  in  a  date, they will fail to distinguish dates in the
"2000s"  from dates in the "1900s."  The Company's business, financial condition
and  results  of  operations  could  be materially and adversely affected by the
failure  of  the Company's systems and applications (and those operated by third
parties  interfacing  with  the  Company's systems and applications) to properly
operate  or  manage  these  dates.

     The  Company has a coordinated plan to repair or replace these noncompliant
systems and to obtain similar assurances from third parties interfacing with the
Company's systems and applications.  In fiscal 1997, SunAmerica recorded a $15.0
million  provision  for estimated programming costs to make necessary repairs of
certain  specific  noncompliant  systems, of which $6.2 million was allocated to
the  Company.  In  addition,  SunAmerica is making expenditures which it expects
will  ultimately  total  $12.3  million  to  replace  certain  other  specific
noncompliant systems.  Of these expenditures, approximately $5.0 million will be
allocated to the Company and will be capitalized as software costs and amortized
over  future  periods.  Both  phases  of the project are currently proceeding in
accordance with the plan and were substantially completed by the end of calendar
1998.  Testing  of  both  the repaired and replacement systems is expected to be
substantially  completed by July 31, 1999. However, the Company will continue to
test  all  of  its  computer  systems and applications throughout 1999 to ensure
continued  compliance.

     In  addition,  the  Company  has  distributed  a year 2000 questionnaire to
certain  of  its  significant  suppliers,  distributors, financial institutions,
lessors  and  others  with  which  it  does business to evaluate their year 2000
compliance plans and state of readiness and to determine the extent to which the
Company's  systems  and applications may be affected by the failure of others to
remediate  their  own  year  2000  issues.  To  date,  however,  the Company has
received  only  preliminary feedback from such parties and has not independently
confirmed  any  information received from other parties with respect to the year
2000  issues.  Therefore, there can be no assurance that such other parties will
complete  their  year  2000 conversions in a timely fashion or will not suffer a
year  2000 business disruption that may adversely affect the Company's financial
condition  and  results  of  operations.

     Because  the  Company's  year  2000  conversion is expected to be completed
prior to any potential disruption to the Company's business, the Company has not
developed  a  comprehensive  year  2000  contingency  plan.  The Company closely
monitors  the  progression  of  its plan for compliance, and if necessary, would
devote  additional  resources  to  assure the timely completion of its year 2000
plan.  If  the  Company  determines  that  its  business  is at material risk of
disruption  due  to  the  year  2000  issue  or  anticipates  that its year 2000
conversion  will  not be completed in a timely fashion, the Company will work to
enhance  its  contingency  plans.

     The  discussion  above  contains  certain  forward-looking statements.  The
costs  of  the  year  2000  conversion,  date  which  the  Company  has  set  to





































                                       23
<PAGE>
complete  such conversion and possible risks associated with the year 2000 issue
are  based  on  the  Company's  current  estimates  and  are  subject to various
uncertainties  that could cause the actual results to differ materially from the
Company's  expectations.  Such  uncertainties include, among others, the success
of  the  Company  in identifying systems and applications that are not year 2000
compliant,  the  nature and amount of programming required to upgrade or replace
each  of  the  affected  systems and applications, the availability of qualified
personnel,  consultants  and  other  resources, and the success of the year 2000
conversion  efforts  of  others.

REGULATION

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

     During  the last decade, the insurance regulatory framework has been placed
under increased scrutiny by various states, the federal government and the NAIC.
Various  states have considered or enacted legislation that changes, and in many
cases  increases,  the  states'  authority  to  regulate  insurance  companies.
Legislation  has been introduced 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  developed  several model laws and
regulations  designed  to  reduce the risk of insurance company insolvencies and
market  conduct  violations.  These  initiatives  include  investment  reserve
requirements,  risk-based  capital  ("RBC") standards, codification of insurance
accounting principles, new investment standards and restrictions on an insurance
company's  ability  to  pay  dividends  to  its  stockholders.  The NAIC is also
currently  developing model laws or regulations relating to, among other things,
product  design,  product  reserving  standards  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.

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

     SunAmerica  Asset  Management  Corp.,  a  subsidiary  of  the  Company,  is
registered  with  the SEC as an investment adviser under the Investment Advisers
Act  of  1940.   The  mutual  funds  that  it  markets  are  subject  to


































                                       24
<PAGE>

regulation  under  the  Investment  Company  Act  of  1940.  SunAmerica  Asset
Management  Corp. and the mutual funds are subject to regulation and examination
by  the  SEC.  In addition, variable annuities and the related separate accounts
of  the Company are subject to regulation by the SEC under the Securities Act of
1933  and  the  Investment  Company  Act  of  1940.

     The Company's broker-dealer subsidiary, Royal Alliance Associates, Inc., is
subject  to  regulation  and  supervision  by  the  states in which it transacts
business,  as  well  as  by the SEC and the National Association of Securities -
Dealers  ("NASD").  The  SEC  and  the  NASD  have  broad  administrative  and
supervisory  powers  relative  to  all  aspects  of business and may examine the
subsidiary's  business  and  accounts  at  any  time.  The  SEC  also  has broad
jurisdiction  to  oversee  various  activities  of  the  Company  and  its other
subsidiaries.

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






































































                                       25
<PAGE>
           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  quantitative  and  qualitative  disclosures  about  market  risk  are
contained in the Asset-Liability Matching section of Management's Discussion and
Analysis  of  Financial  Condition  and Results of Operations on pages 20 and 21
herein.


























































































                                       26
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                                OTHER INFORMATION


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

  Not  applicable.

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

  Not  applicable.

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

  Not  applicable.

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

  Not  applicable.

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

  Not  applicable.

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


EXHIBITS

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

  10(a)     Subordinated  Loan  Agreement  for  Equity  Capital, dated March 12,
1999,  between  the Company's subsidiary, SunAmerica Capital Services, Inc., and
SunAmerica  Inc.  ("SAI"),  defining SAI's rights with respect to the 8.5% notes
due  April  30,  2002.

  27        Financial  Data  Schedule.

REPORTS  ON  FORM  8-K

On  January  14, 1999, the Company filed a current report on Form 8-K announcing
its  acquisition  of  a  block  of business from MBL Life Assurance Corporation.

On  January  15, 1999, the Company filed a current report on Form 8-K announcing
the  merger of its ultimate parent, SunAmerica Inc., with American International
Group,  Inc.

On  March 12, 1999, the Company filed an amendment to the Form 8-K in connection
with its acquisition of a block of business from MBL Life Assurance Corporation.






































                                       27

<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  14,  1998     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  14,  1999
-------------------------                                      --------------
      Scott  L.  Robinson       Director  (Principal
                                Financial  Officer)


/s/   N.  SCOTT  GILLIS       Senior  Vice  President  and     May  14,  1999
-----------------------                                        --------------
      N.  Scott  Gillis         Controller  (Principal
                                Accounting  Officer)

































































                                       28
<PAGE>
                     ANCHOR NATIONAL LIFE INSURANCE COMPANY
                             LIST OF EXHIBITS FILED

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

  10(a)     Subordinated  Loan  Agreement  for  Equity  Capital, dated March 12,
1999,  between  the Company's subsidiary, SunAmerica Capital Services, Inc., and
SunAmerica  Inc.  ("SAI"),  defining SAI's rights with respect to the 8.5% notes
due  April  30,  2002.

  27        Financial  Data  Schedule


















































                                       29

<PAGE>